Lean Six Sigma Methodologies and Organizational Profitability: A Review of Manufacturing SMEs in Nigeria

doi:10.4236/ajibm.2013.36066

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American Journal of Industrial and Business Management, 2013, 3, 573-582

http://dx.doi.org/10.4236/ajibm.2013.36066 Published Online October 2013 (http://www.scirp.org/journal/ajibm)

573

Lean Six Sigma Methodologies and Organizational

Profitability: A Review of Manufacturing SMEs in Nigeria

Okpala Kenneth Enoch

Department of Financial Studies (Accounting), Redeemer’s University, Redemption City, Nigeria.

Email: [email protected]

Received August 3rd, 2013; revised September 3rd, 2013; accepted September 13th, 2013

cense, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

ABSTRACT

Manufacturing small- and medium-size enterprises (MSMEs) are reluctant to the implementation Lean and Six sigma

methodologies (LSS) all the over world. This is traced to the impeding factors which seem stronger than motivating

factors coupled with lack of proper documented evidence of LSS’s successful implementation in many MSMEs. This

paper investigated the influence of LSS on the profitability of MSMEs in Nigeria. The population of the study consists

of 450 manufacturing SMEs with 2250 employees. The sample frame is made up of 225 MSMEs with 1026 staff se-

lected at random upon which copies of structured questionnaire were administered. 1002 valid responses received were

analyzed. Pearson product moment correction (PPMC) confirmed the formulated propositions with negative association

between awareness, achievement CSFs and LSS implementation and the profitability level of MSMEs. The result ob-

tained shows that LSS implementation among MSMEs in Nigeria is almost none existing and has no influence on the

profit level. The study recommended that CEOs of MSMEs should undertake training on LSS to enable them to provide

a strong leadership and support the initiative, LSS consultants should be engaged to help drive the quality improvement

approach and MSMEs should focus on the impeding factors to reduce the effect on the LSS implementation and achieve

continual quality improvement, customers’ satisfaction, increase sales volume at a minimized cost to attain targeted

market share and profit level.

Keywords: Lean Six Sigma; Critical Success Factors; Manufacturing SMEs; Impeding Factors; Profitability

1. Introduction

Profitability is the key motive behind every economic

investment. Most financiers invest in business to address

the issue of wealth maximization and shareholders’ eco-

nomic welfare [1]. Due to the complexity and the level of

financial outlay involved in the establishment of large

company, some investors resort to small or medium size

firms (SMEs) which grow over time into medium or

large organizations as the case may be [2]. The definition

of SMEs varies globally with key criteria being number

of employees and turnover of company [3]. In the UK

and Europe, SMEs are firms with less than 250 employ-

ees according to European Commission in 2003 while

Australian Bureau of Statistics in 2001 restricted SMEs

to those firms having 200 employees or less. The Central

Bank of Nigeria in its monetary policies circular No. 22

of 1988 described SMEs as those enterprises which has

annual turnover not exceeding = N = 500,000. Experts

maintained that no matter the definitional problem of

SMEs, the concept and its contributions remained the

same all over the world [4]. SME is a vital force in any

nation and it is regarded as the engine of economic

growth and development [5]. The sector has made sig-

nificant contributions to Nigeria economy through help-

ing the government to achieve some of its macro-eco-

nomic objectives and enhancing growth and development

[6,3]. Their significance is obvious in creating new com-

petition, reducing poverty, generating gainful employ-

ments for employable citizens and boosting national

turnover and GDP development [7,8]. Though the aware-

ness of the contribution of SMEs is becoming prevalent

among nations, their importance is greatly undervalued

[9]. Today, most governments are focusing on SMEs as a

means of providing solutions to some economic prob-

lems. Application of Lean Six Sigma (LSS) for estab-

lishing continuous quality improvement especially in the

manufacturing subsector, is recently on the increase in

the advanced countries and to a large extent seems to

have become a permanent approach adopted by organi-

zations that want compete globally and have financial

Lean Six Sigma Methodologies and Organizational Profitability:

A Review of Manufacturing Smes in Nigeria

574

stability. LSS represents an amalgamation of two im-

provement concepts that have been used by large or-

ganizations with standing success story such as Motorola,

General Electric, Honeywell and many others [10]. Lean

manufacturing was initiated in Japan at a time when SSM

has been successfully tested and benefits established. The

initial concern was that since both programmes operate at

different aspect of a manufacturing organization with the

similar goals, how could both approaches be merged to-

wards one improvement methodology? [11]. Snee sug-

gested that LSS experts should rather focus on the inte-

gration of the approach to ensure that both the production

line and management achieves total quality improve-

ments rather than unfruitful debate. Studies conducted on

LSS methodologies were particularly designed for large

organizations [11] but this research is carried out to study

the relevance and the direct application of LSS to SMEs.

This triggered off the need to probe the underlying prin-

ciples behind the approach to establish how quality ma-

nagement affects profitability in manufacturing SMEs’

context.

1.1. Statement of Problem and Research

Hypotheses

Poor profitability of SMEs has been traced to derisory

human capital in production and management units, ob-

solete technologies, lack of adequate finance and inabil-

ity to apply modern management techniques [5]. The

issues of modern management techniques limitation such

as the implementation of Lean and Six Sigma pro-

grammes in many ways affected the quality of products

and management services which in turn have reduced

SMEs organizational share of market through customers’

dissatisfaction [12] and influenced the resulting profit [11].

Previous studies on LSS implementation in manufactur-

ing SMEs in UK, The Netherland, Australia, and Bel-

gium are well documented in the literature [11,13,14]

however to the best this researcher‘s knowledge, there is

little or no study conducted to link LSS implementation

to organizational profitability which prompted this re-

search work to enable harmonization and proper docu-

mentation. The major objective of this paper is to assess

the effect of LSS implementation on profitability of

manufacturing SMEs in Nigeria. Subsidiary objectives to

be investigated include: 1) to establish the level of

awareness and understanding of LSS implementation in

manufacturing SMEs in Nigeria and 2) to examine the

critical success and impeding factors from a manufactur-

ing SMEs standpoint in Nigeria. In order to accomplish

the objectives set for the study, the research questions

raised to be addressed are: RQ1: what is the degree of

awareness and understanding of LSS implementation in

Nigeria manufacturing SMEs? RQ2: how does the

achievement of critical success factors (CSF) motivate

the LSS implementation in manufacturing SMEs in Ni-

geria? RQ3: to what extent has LSS implementation in-

fluenced the profit level of manufacturing SMEs in Ni-

geria? The formulated hypotheses are H01: There is no

significant association between awareness and LSS im-

plementation in Nigeria MSMEs H02: critical success

factors have not significantly motivated LSS implement-

tation in Nigeria manufacturing SMEs H03: LSS imple-

mentation has not significantly influenced profitability of

manufacturing SMEs in Nigeria.

1.2. Model Specifications

There are two key criterion variables upon which this

study needs to focus. They are of LSS implementation

and profitability of manufacturing SMEs in Nigeria. The

predictor variable—Quality Improvement referred to as a

Lean Six Sigma—LSS is (Y), while Profitability is (X).

In order to test the hypotheses, the Regression analysis

model below is developed by the researcher. The moder-

ating variables are listed as equation below:









1234 5

0123 45

YfX;XfX,X,X,X,andX

YX XCBSXMCXSRXWPXCS



 

(1)

YXCBS



(2)

YXMC



(3)

YXSR



(4)

YXWP



(5)

YXCS



(6)

In order to test the hypotheses H03, which is the sub-

ject matter of the research, a multiple regression model

for this study is given as:

123

YCBSMC

WP CS5

qiqi qi

qi qi









(7)

where: Y = Lean Six Sigma Methodologies; CBS = Cur-

rent Business System; MC = management commitment;

SR = size of resources; WP = workers participation; and

CS = Customers’ satisfaction. Y = 1, if LSS positively

influence profitability in Nigeria and If not Y= 0

1.3. Basis of the Study

The basis of this study is to evaluate the association be-

tween LSS implementation of manufacturing SMEs and

the resulting profitability. The effect of the moderating

factors such as the CSFs is also considered an explana-

tory variable predicting profitability of manufacturing

SMEs. In addition, LSS implementation result is directly

related to impeding factors which limit the achieve-

Lean Six Sigma Methodologies and Organizational Profitability:

A Review of Manufacturing Smes in Nigeria

575

changes towards better quality products and services,

more rapid result as well as more productive workers and

higher profit margin which will benefit all stakeholders

[16]. Lean manufacturing was a Japanese invention, in-

spired by a plant tour of Ford Motors in the 1950s. After

watching an American assembly plant build cars in a

more efficient way, two Japanese executives developed

the Toyota Production System (TPS). This approach pro-

pelled Toyota from a modest domestic firm to a global

car giant. While most of the car industry suffered from

dwindling economy, Toyota recorded a net income in-

crease of 23.2% in the interim account of September

2003 in comparison with the same period of the previous

financial year from 8% increase in turnover [17]. Lean

manufacturing became popular after the publication of

the books “The Toyota Production System” [17,18]. Lean

ideologies expanded beyond Japanese car making to

other industries and around the world. Today, most ma-

nufacturing multinational organizations in Europe,

ments. If a company focuses on the improvement of the

quality of products and work flow through management,

there will be customers’ satisfaction leading to increase

in turnover, cost minimization and a higher level of prof-

itability attainment. It is therefore assumed that if manu-

facturing SMEs make quality improvement a priority,

desired profit level would be achieved.

2. Review of Related Literature

2.1. Theoretical Framework

The theoretical foundation of this study is based on the

work of Snee [11] which states that the Lean six sigma is

a well structured theory based methodology implemented

to improve performances, develop effective leadership,

achieve customer satisfaction and bottom line results.

Lean manufacturing and six sigma together became very

powerful and eliminates waste in each aspect of produc-

tion and management procedures. It applies tools and

techniques of both Lean manufacturing and six sigma

(DMAIC and DMADV) in manufacturing business en-

vironment to achieve quality and bottom line results. The

major reason for implementation of LSS is to provide a

foundation for quality improvement, competitive pricing

and increase profit margins. Lean Six Sigma is a business

strategy and methodology that increases process per-

formance resulting in enhanced customer satisfaction and

improved bottom-line results [15]. The conceptual model

for LSS and profitability is shown in Figure 1 below.

Asia and other continents are using lean programs es-

pecially U.S. carmakers taking a lead. Other industries

are waking up to the new opportunity [11,5]. Six sigma is

a logical and methodical approach designed to achieving

disciplined quality improvements in areas critical to the

success of any service-oriented organization—manage-

ment procedures [13]. It was originally developed by

Motorola in 1986 and used to win the 1988 Malcolm

Baldrige National Quality Award and within the first five

years, achieved profit level of $US2.2 billion [19]. SSM

became well known after Jack Welch made it a central

focus of his business strategy at General Electric in 1995

and the approach became a leading procedural quality

improvement programme [20]. SSM is used to achieve

total quality management (TQM) when added to the cur-

rent business system (CBS). This can be expressed ma-

thematically as:

2.2. Lean Six Sigma Methodologies

Lean manufacturing (LM) and six sigma methodology

(SSM) are separate and unique programmes that have

similar goals and end results. The combination of LM

and SSM into a batch gave birth to single methodology

referred to as Lean Six Sigma (LSS) which yields maxi-

mum result [10]. Adopting and implementing LSS is akin

to the implementation of change management process in

manufacturing environment. The manufacturing side

(Lean) and procedural side (Six Sigma) will bring about

a methodology capable of infusing positive significant

CBS + SSM=TQM (8)

The combination of Lean and Six Sigma principles in

manufacturing efforts is to ensure flawless product qual-

ity and repeatable execution which will help producers to

deliver value to customers in a repeatable manner. This

Current Business

System (

CSM)

Six Sigma

Methodolo

ies

(

SSM

)

Lean manufacturing

(LM)

Lean Six

Sigma (LSS)

Profitability

Total Quality

Management.

(TQM)

Figure 1. Conceptual framework of LSS and profitability. Source: Author’s conceptualization 2013.

Lean Six Sigma Methodologies and Organizational Profitability:

A Review of Manufacturing Smes in Nigeria

576

technical marriage of two quality management appro-

aches—Lean manufacturing (LM) and Six sigma me-

thodology (SSM) can be expressed mathematically as:

LM + TQM=LSS (9)

If the two are actually implemented in isolation, the

outcome can result in either being ineffectiveness or con-

strained by one another’s needs and could also create two

subcultures within the organisation competing for the

same resources [21]. Any attempt to implement only one

of the processes, will drag the manufacturing organiza-

tion into grievous production and management dilemma

in the sense that when production is streamlined, man-

agement may not understand the reason behind additional

costs and when management is restructured, production

area does not understand the changes. Therefore a com-

bination and simultaneous implementation of both pro-

grammes is essential so that LM targets changes in pro-

duction line while SSM works on process flow through

management [10]

2.3. Critical Success Factors and Challenges to

Implementation of LSS in Manufacturing

SMEs

Critical Success Factors (CSFs) are those factors which

are critical to the success of any organisation in the sense

that if objectives associated with the factors are not

achieved, the organisation will fail woefully [7,22]. Stu-

dies conducted in the UK and Australian shows that there

is a huge gap between the perceived CSFs and practice

which has resulted in the poor organizational perform-

ance of SMEs. The factors identified as critical in the

success of manufacturing SMEs LSS implementation are:

1) Strong leadership; 2) management commitment; 3)

adequate skilled workforce; 4) awareness and under-

standing of LSS; 5) Customer satisfaction; 6) financial

viability & infrastructure. Lastly collaboration with gov-

ernment bodies and local universities or research outfits

to learn more about the development in the field of qual-

ity management [3,23]. The barriers impeding the im-

plementation of LSS include: 1) Lack of resources; 2)

Lack of training; 3 internal resistance [12,14,24,25]; 4)

lack of knowledge and poor employee participation and 5)

lack of top management commitment [23,26].

2.4. Manufacturing SMEs and Product

Improvement

Standing on the definition of SMEs in Nigeria context

according to Central Bank of Nigeria’s monetary policies

circular No. 22 of 1988, it means that manufacturing

SMEs are those enterprises producing goods within

various sectors and whose turnover is not more than = N

= 500,000. They are found mostly in food, cloth making,

plastic manufacturing, woodwork and iron fabrication

industry. In manufacturing sector, consideration of prod-

uct design is essential before adopting any improvement

process because the design may create some problems if

not well handled. 70% of the costs of a product are

locked up at the design stage. The opportunity for manu-

facturing cost savings through better technology, genuine

materials, and processes is tremendous and should be

captured before process improvements [27]. Product im-

provements can come about through standardization of

the product, common subassemblies and parts, utilization

of the principles of design for manufacturing (DFM),

design for assembly (DFA), flattening of bills of materi-

als, and seeking advantages for the product line through

the theory of inventive problem-solving (TRIZ). Imple-

mentation of all the above is within the content of lean

which reducing waste in inventory and production [3].

2.5. The Impact of Lean Six Sigma on

Profitability

The benefits of LSS initiatives to the implementing SME

organizations is based on the elimination of waste and

errors in production line and procedural workflow; en-

sure flawless product quality, improvement on the exist-

ing system; delivery of value to customers in a repeatable

manner leading to satisfaction. These benefits have direct

association with profit maximization. Elimination of

waste will reduce production cost in terms of materials,

time saving in workflow while improved quality encour-

ages consumption, enhances sales volume and organiza-

tional share of market. Profit is a function of costs mini-

mization and sale volume and this can be expressed as

equation below:





P=f CQM+SV (10)

where cost minimization embodies flattering cost materi-

als, labour and direct expense and sales volume is in re-

sponse to customers’ satisfaction and market price. Four

major studies conducted were done in Belgium, Australia,

UK and The Nederlands. All of them showed a high key

performance metrics after the implementation of the LSS

by manufacturing SMEs. However, the realization of

benefits in the Netherland SMEs is slight less compared

to their Australian and UK counterpart [12]. One of the

challenges reported by SMEs in Europe was difficult to

quantify benefits from LSS. According to Kumar [3], it

was suggested that manufacturing SMEs should involve

Accounting and Finance Department staff in carry out

the cost-benefit analysis (CBA) before and after the LSS

implementation to track the level of improvement in their

established performance metrics. The competitive ad-

vantage is a source for sustainable success of the organi-

zations. Sustainable success of an organization is

achieved through its ability to meet the needs and expec-

Lean Six Sigma Methodologies and Organizational Profitability:

A Review of Manufacturing Smes in Nigeria

577

tations of its customers and other stakeholders in the long

term [28].

3. Methodology

Research Design: This research adopted a mix method

of literature review approach and a across sectional sur-

vey of manufacturing SMEs in Nigeria as used in An-

dreea, Sorin & Mihai [15]. A structured approach was

adopted to investigate the published literature regarding

lean six sigma from the well established research data-

bases which include: Emerald, Google scholar, Science

direct and EBSCO host as adaptation of the method used

by Qun, Xiaoning and Mahmood [29]. A total of 62 re-

search papers were reviewed and the criteria for the lit-

erature selected for investigation are: 1) articles pub-

lished in English language only; 2) lean manufacturing,

six sigma methodology or combination of both; 3) They

are either theories and case studies and 4) the content

scope of the study involved 10 years between 2003 to

2012. Survey research method which is a classical me-

thods for researchers to statistically validates research

questions and hypothesis the field of Quality Manage-

ment [8,27,30], was used for data gathering from re-

spondents through a structured questionnaire [31,32].

Population: The total population of this study is made

up of 450 SMEs as shown in Table 1 that meets the fol-

lowing criteria: 1) should be a manufacturing organiza-

tion; 2) have employees of 200,000 or less; 3) have turn-

over not exceeding = N = 500,000; 4) have established a

system with common infrastructure; 5) must have normal

departments with management team comprising five key

officers as follows: Management Director, General man-

ager, Accountants, Production Manager, and Administra-

tive Manager. Giving a total population of 2250 employ-

ees purposively selected to represent their organization as

stated in Table 1. These firms were extracted from the

database, directories of manufacturing SMEs associa-

tions and register of Manufacturing Association of Nige-

ria (MAN)

Participants: The sample frame consists of 1026 staff

representing 50% located in three major zones North,

East and Western part of Nigeria. Two industrial cities

from each zone of the country are: Lagos (Lg) and

Ibadan (Ib) from West, Abuja (Ab) and Kaduna (Kd)

from the North and Anambra (An) and Port Harcourt (Ph)

from the East. The employment of sample population of

50% is to have excellent result according to Comfrey &

Less [33] and the total valid responses of 1002 shown in

Table 2 were received representing 98% which is con-

sidered excellent.

Table 1. Population of the study (Manufacturing SMEs) by Zone.

Zone PMC Ab Kd An Ph Lg Ib Total Percent. (%)

1 Northern Zone 34 16 50 11%

2 Eastern Zone 146 25 171 38%

3 Western Zone 165 64 229 51%

Total 34 16 146 25 165 64 450 100%

Source: Field work, 2013.

Table 2. Summary of response from the sample frame distributed by Zone.

Zone PMC Ab Kd An Ph Lg Ib Total Percent. (%)

1 Northern Zone 71 32 103 10%

2 Eastern Zone 322 58 171 38%

3 Western Zone 383 136 229 52%

Total 71 32 322 58 383 136 1,002 100%

Source: Field work, 2013.

Lean Six Sigma Methodologies and Organizational Profitability:

A Review of Manufacturing Smes in Nigeria

578

4. Results and Discussion

4.1. Test of Statistical Hypotheses

Table 3. Summary of test results.

Test Results

Hypo. NO Statement of Hypothese RQ

Cal “r” LS (x)Infer.

Degree of Corr. Decisions

There is no significant association

between awareness and LSS imple-

mentation in Nigeria MSMEs

1, 2 & 3 −0.16 0.5 r < x Negative Accept H0 Do not accept H1

Critical success factors have no

significantly motivated LSS mple-

mentation in Nigeria SMEs

4, 5 & 6 −0.15 0.5 r < x Negative Accept H0 Do not accept H1

LSS implementation has not signifi-

cantly influenced profitability o

manufacturing SMEs in Nigeria

7, 8, 9, 10,

11 & 12 −0.14 0.5 r < x Negative Accept H0 Do not accept H1

Source: Field work, 2013.

4.2. Discussion of Result in Table 3

Hypothesis 1: hypothesis 1 tested the relationship be-

tween awareness of LSS and its implementation and was

tracked by question 1, 2 and 3 of questionnaire adminis-

tered: What is the level of awareness and understanding

of LSS methodology in Nigeria manufacturing SMEs?

What is the degree of LSS implementation in your or-

ganization? And how many years experience do you

have gain in LSS implementation? Table 4 shows a total

of 1002 valid responses received and analyzed with 898

low and 71 slightly low to rank 1st and 2nd. In Table 5,

the calculated “r” of −0.16 at 5% level of significance

shows an absolute lack of awareness and understanding

of LSS among manufacturing SMEs in Nigeria. There-

fore the null hypothesis which states that there is no sig-

nificant association between awareness and LSS imple-

mentation in Nigeria MSMEs is accepted and alternate

rejected. This total ignorance of the concept is responsi-

ble for the little or no implementation of the programme

and this was confirmed by question 3 of questionnaire

which asked the respondents to state the number of years

experience gain in the LSS programme implementation

process. Apart from three respondents, none had any

experience on approach. The three respondents that voted

high and slightly high were staff of manufacturing SME

that is a subsidiary of large parent companies in USA and

Europe. From the data collected and analyzed, the corre-

lation between LSS awareness and implementation in

MSMEs in Nigeria is negative. It means that only few

MSMEs representing 1.2% of the source list have actu-

ally implemented LSS. Some of the reasons apart from

lack of awareness and understanding are: managements

are afraid of the unknown, staff resistance to change

management, lack of skill workers with knowledge of

LSS and no expert to drive the initiative. This result is in

agreement with the opinion of Kumar and Antony;

Kumar, Khurshid, Manoj, Timans, et al.; Qun et al.

[12,26,29].

Hypothesis 2: This linked CSFs to the implementation

of LSS and was tracked by Questions 4, 5 and 6 of ques-

tionnaire administered. Out of 1002 valid responses re-

ceived and analyzed, 860 were low and 78 slightly low to

rank 1st and 2nd as shown in Table 6 which signified the

presence of demotivation. From the questionnaire ad-

ministered and responses received, all the CSFs are con-

sidered important but because management failed to

achieve them, the implementation of LSS failed woefully.

This is evident by the calculated “r” of −0.15 at 5% level

of significance shown in Table 7. Null hypothesis 2

which says that critical success factors have not signifi-

cantly motivated LSS implementation in Nigeria manu-

facturing SMEs is accepted and alternate not accepted.

This result confirmed the opinion of Rockart, Yusof and

Aspinwall [7,22]. In Nigeria, manufacturing SMEs were

unable to provide strong leadership, management were

not committed due to fear, adequate skilled workforce

with understanding of LSS concept are not available, in-

adequate resources and infrastructure to achieve the pro-

gramme prevailed. All these militated against LSS qual-

ity improvement approach and as a result, customers’

satisfaction was not achieved leading to market failure

and poor profitability level. Few MSMEs attempted im-

plementation but were constrained by few workers doing

multiple tasks and were afraid of transformation hence

resisted and frustrated the change management. The re-

sult obtained is in accordance with studies conducted in

the UK and Australian which shows that there is a huge

gap between the perceived CSF and practice leading to

MSMEs poor organizational performance [23,25].

Hypothesis 3: This is captured using multiple ques-

tions 7 to 12 with average response computed to achieve

the result in Table 8. Questions 12 was used to track the

proposition and out of total of 1002 valid responses re-

Lean Six Sigma Methodologies and Organizational Profitability:

A Review of Manufacturing Smes in Nigeria

579

ceived 408 were average slightly low and 225 average

low to rank 1st and 2nd Table 9 shows the calculated “r”

of −0.14 at 5% level of significance which confirms that

non LSS implementation was responsible for the 14%

negative variation in profitability level—losses of MSMEs.

The null hypothesis which says that there is has no sig-

nificant association between LSS implementation and

profitability of manufacturing SMEs in Nigeria is hereby

accepted and the alternate not accepted.

4.3. Contribution to Knowledge

To the best of the researcher’s knowledge no study has

been able to link LSS implementation to profitability in

manufacturing SMEs in Nigeria. Therefore, this explora-

tory research result has contributed to knowledge in this

direction. It is obvious that Nigeria MSMEs are neither

aware nor had understanding of LSS implementation,

CSFs achievement failed woefully and the envisaged

profitability level from the programme is not achieved.

5. Findings

Based on the result in the above section, the following

findings were obtained: 1) there is no awareness and un-

derstanding of LSS among manufacturing SMEs which is

one of the factors responsible for no implementation; 2)

CSFs such as adequate resources, expertise, management

support, and committed workers were not achieved; 3) In

Nigeria, most manufacturing SMEs’ quality management

experience is limited to ISO 9000 certification which

should have been the beginning of quality improvement

journey. These findings are in agreement with research

conducted in UK, The Nederlands and Australia [6,7,26];

4) The study also revealed that the contribution of quality

management is not in any way significant due to little or

no implementation of LSS; 5) most firms stated that Ni-

geria have no expert to drive continuous improvement

effort. This is in agreement with the opinion of Thomas

and Webb [34]; 6) ISO standards facilitates basic under-

standing towards quality management and encourage the

continual improvement leading to adoption of advanced

Q M methodologies such as LSS [12]; 7) The study also

revealed that customer complaints which is the most ac-

tive feedback mechanism in the advance countries are

ineffective in Nigeria environment. The findings reported

in this study are in agreement with academic literature

and the opinion of Antony et al.; Kumar and Antony and

Achanga et al. [14,26,35]

6. Conclusion

The study concluded that since the LSS manufacturing

SMEs have not been implementation in MSMEs in Nige-

ria, the approach could not moderate profitability. The

study therefore recommends that: 1) CEOs of MSMEs

should undertake training on quality improvement to

enable them to provide a strong leadership and support

the initiative; 2) LSS consultants should be employed to

help them drive the quality improvement; 3) MSMEs

should focus on the impeding factors to reduce the ef-

fect on the LSS implementation. This will help achieve

continual quality improvement, cost minimization, cus-

tomers’ satisfaction, increase in sales volume and achieve-

ment targeted profit.

7. Limitations and Directions for Further

Studies

One of the challenges reported by SMEs in Europe was

the difficulty experienced in measuring and quantifying

the benefits flowing from LSS implementation [3]. The

author did not cover lean accounting therefore suggested

that further study be conducted on it. This will enable the

determination of the benefits of Lean activity by ap-

praising the value stream and establishing the level of

improvement and their performance metrics [3]

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Lean Six Sigma Methodologies and Organizational Profitability:

A Review of Manufacturing Smes in Nigeria

581

Appendix 1

Hypothesis 1

H0: There is no significant association between awareness

and LSS implementation in Nigeria M SMEs

H1: There is significant association between awareness

and LSS implementation in Nigeria M SMEs

Table 4. Summary of responses on key issue linking awareness and LSS implementation in MSMEs in Nigeria.

Sample Strata High (6) Slightly High (5) Medium (4)Slightly Low (3)Low (2)No Influ. (1) No Opin. (0)Total

Zone - North 0 0 2 9 58 2 1 72

Zone 2 - East 1 1 4 24 377 7 4 418

Zone 3 - West 0 1 3 38 463 5 2 512

Total 1 2 9 71 898 14 7

1002

Percentage (%) 0.1% 0.2% 0.9% 7.1% 89.6% 1.4% 0.7% 100%

Ranking 7th 6

th 4

th 2

nd 1

st 3

rd 5

Source: Field work (2013). Question 1, 2, and 3 of the questionnaire administered.

Table 5. Calculation of correlation.

Options High (6) Slightly High (5) Medium (4)Slightly Low (3)Low (2)No Influ. (1) No Opin. (0)Total

Points (x) 6 5 4 3 2 1 0

Response (y) 1 2 9 71 898 14 7

1002

xy 6 10 36 213 1796 14 0

2075

x2 36 25 16 9 4 14 0

104

y2 1 4 81 5,041 806,404 196 49

811,776

Source: Field work (2013).



 









 

 

22 22

7 2075211002

7 104217811776104

14525 21042651765170.1615 16%

40345

7284415682432 108162875671616

Nxyx y

rNxx Nyy

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



Hypothesis 2

H0: Critical success factors has not significantly moti-

vated LSS implementation in Nigeria manufacturing

SMEs

H1: Critical success factors have significantly moti-

vated LSS implementation in Nigeria manufacturing

SMEs

Table 6. Summary of responses on key issue linking CSF to LSS implementation in MSMEs in Nigeria.

Sample Strata High (6) Slightly High (5) Medium (4)Slightly Low (3)Low (2)No Influ. (1) No Opin. (0)Total

Zone - North 2 2 4 10 50 2 2 72

Zone 2 - East 5 8 2 23 369 5 6 418

Zone 3 - West 7 3 4 45 441 9 3 512

Total 14 13 10 78 860 16 11 1002

Percentage (%) 1.4% 1.3% 1.0% 7.8% 85.8% 1.6% 1.1% 100%

Ranking 4th 5

th 7

th 2

nd 1

st 3

rd 6

Source: Field work, (2013). Question 4, 5 and 6 of the questionnaire administered.

Lean Six Sigma Methodologies and Organizational Profitability:

A Review of Manufacturing Smes in Nigeria

582

Table 7. Calculation of correlation.

Options High (6) Slightly High (5) Medium (4)Slightly Low (3)Low (2)No Influ. (1) No Opin. (0)Total

Points (x) 6 5 4 3 2 1 0

Response (y) 14 13 10 78 860 16 11

1002

xy 84 65 40 234 1720 16 0

2,159

x2 36 25 16 9 4 14 0

104

y2 196 169 100 6,084 739,600 256 121

746,526

Source: Field work, (2013).



 











  

22 22

7 2159211002

7 104217746526104

15113 21042592959290.1533 15%

38687

7284415225682 108162875214866

Nxyx y

rNxx Nyy

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

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







Hypothesis 3

H0: There is no significant association between LSS implementation and profitability of MSMEs in Nigeria.

H1: There is significant association between LSS implementation and profitability of MSMEs in Nigeria.

Table 8. Summary of responses of questions 7 to 12.

QN Questionnaire H SLH M NO SL L NI

7 My management is committed to LSS implementation 15 25 67 324 556 10 5

8 Workers participation on LSS implementation is high 9 8 41 411 509 9 15

9 Size of resources is adequate to implement LSS 1 2 5 325 626 32 12

10 LSS has improved MSMEs customer satisfaction 6 5 100 279 566 12 34

11 LSS is responsible for high sales volume achieved 2 2 5 6 105 869 13

12 LSS is responsible for MSMEs high profitability 1 2 4 3 87 802 103

Total 34 44 222 1,348 2448 1,734 182

Average 6 7 37 225 408 289 30

Ranking 7th 6th 4

th 3

th 1

st 2

nd 5

Source: Field work, (2013).

Table 9. Calculatio n of correlation.

Options High (6) Slightly High (5) Medium (4)Slightly Low (3)Low (2)No Influ. (1) No Opin. (0) Total

Points (x) 6 5 4 3 2 1 0

Response (y) 6 7 37 225 408 289 30

1002

xy 34 37 148 674 816 289 0

1,998

x2 36 25 16 9 4 14 0

104

y2 1,156 1,369 21,904 454,276 665,856 83,521 0

1,228,082

Source: Field work, (2013).



 









 

  

22 22

7 1988211002

7 1042171228082104

13986 21042705670560.1421 14%

49640

7284418596574 108162878585758

Nxyx y

rNxx Nyy

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