Integration of Six Sigma and simulations in real production factory to improve performance - a case study analysis

Purpose The overarching objective of this research is to integrate the Lean Six Sigma (LSS) framework with computer simulation to improve the production efficiency of a light-emitting diode (LED) manufacturing factory. Design/methodology/approach Recently, the idea of taking advantage of the benefits of Six Sigma and simulation models together has led both industry and the academy towards further investigation and implementation of these methodologies. From this perspective, the present research will illustrate the effectiveness of using LSS methodology in a real factory environment by using the combination of three simulation methods which are system dynamics (SD), discrete-event simulation (DES) and agent-based (AB) modelling. Findings The hybrid simulation method applied in this research was found to accurately mimic and model the existing real factory environment. The define, measure, analyse, control and improve (DMAIC)-based improvements showed that the applied method is able to improve machine utilization rates while balancing the workload. Moreover, queue lengths for several stations were shortened, and the average processing time was decreased by around 50%. Also, a weekly production increase of 25% was achieved while lowering the cost per unit by around 8%. Research limitations/implications While the case study used was for a LED manufacturing system, the proposed framework could be implemented for any other existing production system. The research also meticulously presents the steps carried out for the development of the multi-method simulation model to allow readers to replicate the model and tailor it for their own case studies and projects. The hybrid model enables managers to navigate the trade-off decisions they often face when choosing advanced production output ahead of continuous improvement practices. The adoption of methodologies outlined in this paper would attain improvements in terms of queue lengths, utilization, reduced costs and improved quality and efficiency of a real, small factory. The findings suggest improvements and create awareness among practitioners for the utilization of quality tools that will provide direct benefits to their companies. Although the multi-method simulation is effective, a limitation of the current study is the lack of micro details within each station. Furthermore, the results are all based on one specific case study which is not enough to suggest and generalized findings. Originality/value This research combines the use of the three main hybrid simulation paradigms (SD, DES and AB) in a unified framework DMAIC methodology. Choosing the right models in DMAIC is important, challenging and urgently necessary. Also, this paper shows empirical evidence on its effectiveness.