Critical Success Factors in Six Sigma Implementation

A Case Study of MNCs in Malaysia

S.Sivakumar and K.Muthusamy
Open University Malaysia, Kuala Lumpur. Malaysia
(sivakumar.suppremaniam@gmail.com)

Abstract - Research objective is to survey Six Sigma

implementation in Malaysian Multinational Corporation
(MNCs) and identify the Critical Success Factors (CSFs)
these companies use in ensuring its successful
implementation. Research is anchored to the method of
exploratory survey conducted via online among MNCs using
Six Sigma in Malaysia. Preliminary findings of influence
breakdown of each CSF results in with Management
Commitment (85%), Absorption (95%), Cultural Influence
(85%), Project/Process Assessment (100%) Training &
Awareness (100%). Detailed statistical analysis concluded
CSFs that have direct impact in Six Sigma implementation
are Management Commitment, Absorption, Project/Process
Assessment and Training & Awareness.Wehave through this
study established a clear guideline on CSFs necessary to
adopt in order to ensure the correct implementation of Six
Sigma in organizations. It is envisaged that local Malaysian
companies will use this thesis findings as reference on the
initiative of implementing Six Sigma methodologies in their
business.

and Idris [8] concluded that though the TQM is a proven

systematic approach to the improvements in global
business, the lack of information and data on CSFs were
hindering the implementation of TQM effectively and
successfully. Thiagarajan [9] concluded that a framework
should provide useful advice in the critical first two to
three years of TQM implementation as a practical and
systematic tool for assessing, measuring, and evaluating
the progress made.
This research is embarked with vision to bring clarity
on productivity methodologies and identify the key
Critical Success Factors (CSFs) that is essential for the
successful implementation of the tools in local
organizations. In ensuring a firm grip on the research
path, this study uses the following procedures [10]:
a)
b)
c)
d)
e)
f)
g)

Key words: Six Sigma, Critical Success Factors (CSFs), Total

Quality Management (TQM), Continuous Improvement
(CI), Research Method (RM)

Assessment of the relevant existing knowledge

Formulation of the concepts and proportions.
Statement of hypothesis
Design of research to test the hypothesis
Meaningful data collection
Analysis and evaluation of the data
Conclusion of the factual findings.

I. INTRODUCTION
II. LITERATURE REVIEW AND THEORETHICAL
FRAMEWORK

Malaysia is visioned to be a fully developed status

country by year 2020 [1]. To achieve the planned
progression there is a fundamental need for the business
organization operating in the country to deliver consistent
and quality productivity throughput. This requirement is a
must to ensure our competitiveness in the business world
which has become more integrated and globalized [2].
Thus there is an increasing need for companies in
Malaysia to embrace global productivity methods and
work cultures that have proven to bring success to MNCs
in their operations around the world as shown in
companies such as GE, Motorola and Toyota [3, 4, 5].
Implementation of productivity tools in multinational
companies in ensuring successful business is well
documented [6]. Two fundamental methods used by these
companies to improve their productivity are to eliminate
waste and to reduce variations in their processes by
applying appropriate productivity tools such as TQM, Six
Sigma and Lean methodologies [7].
Earlier studies into the field of productivity
methodology and tools in Malaysia touched on the
application of TQM in Malaysia. In a literature review
published on TQM implementation in Malaysia by Lau

978-1-4577-0628-8/11/$26.00 2011 IEEE

CSFs is defined as an element that is necessary for an

organization or project to achieve its mission and it is a
critical factor or activity required for ensuring the success
of a company or an organization [11,12]. CSFs are
required to ensure success of an organization; therefore it
must be given special and continual attention to bring
about high performance. CSFs include issues vital to an
organization's current operating activities and to its future
success [13].
The method of identifying CSFs as a basis for
determining the information needs was proposed by
Daniel [11]. The idea mooted was that in any organization
certain factors will be critical to the success of that
organization, in the sense if objectives associated with the
factors are not achieved the organization will fail [14].
Huotari and Wilson [14] wrote that the value of the CSFs
approach is in identifying organizational objectives and
relating the information needs of personnel in various
positions to achieve those objectives. Its further stressed
that proposed CSFs approach should be used as integral
part of thought process methods in determining the needs

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Proceedings of the 2011 IEEE ICQR

of the organization and in contributing to the design of

systems that aid competitive advantage.
Six Sigma was developed at Motorola in 1980 [15].
2000). Wyper and Harrison [16] interpreted Six Sigma as
a useful management philosophy and problem-solving
methodology that is a direct extension of TQM. Further
research studies by Bailey [17] concluded that it is in fact
that Six Sigma has a much better record of effectiveness
than TQM, lean enterprise and re-engineering. Bhuiyan
and Baghel [18] on continuous improvements (CI)
concluded that there is always a need for research in the
field of hybrid CI methodologies that are developed in
present years such as Six Sigma Plus which is a
combination of Six Sigma and Lean tools to ensure
productivity tools effectiveness are continuously
improved to provide improved results to an organization
implementing it.
This research was guided by a theoretical framework as
shown in Figure 1. Its gathered from previous concluded
research studies of fellow researchers in this field [3, 7, 19,
20, 21, 22].

model will be used as benchmarking reference against the

survey results to ensure consistency in processing the data
acquired. Our working hypothesis as such will be:
Hypothesis 1
Ho: Six Sigma implementation successes in Malaysia are
directly impacted by the Management Commitment and
involvements.
Ha: Management Commitment and involvements does not
contribute to Six Sigma implementation success in
Malaysia.
Hypothesis 2
Ho: Six Sigma implementation successes in Malaysia are
directly impacted by the Six Sigma level of Absorption
into the organization.
Ha: Six Sigma level of Absorption into the organization
does not contribute to Six Sigma implementation success
in Malaysia.
Hypothesis 3
Ho: Six Sigma implementation successes in Malaysia are
directly impacted by the Assessment process of all Six
Sigma projects within the organization.
Ha: Assessment process of all Six Sigma projects within
the organization does not contribute to Six Sigma
implementation success in Malaysia.
Hypothesis 4
Ho: Six Sigma implementation successes in Malaysia are
directly impacted by the Training and Awareness.
Ha: Training and Awareness does not contribute to Six
Sigma implementation success in Malaysia.
Hypothesis 5
Ho: Six Sigma implementation successes in Malaysia are
directly impacted by the Cultural Influence.
Ha: Cultural Influence does not contribute to Six Sigma
implementation success in Malaysia.

III. METHODOLOGY
Fig. 1. Theoretical Framework

The path of this research will be anchored to the

method of exploratory study on the topic focusing on web
based survey internet and email corresponded
questionnaire method[7, 20].
The questionnaires developed were look into two main
aspects of the MNCs:

The hypotheses will be analysed as per the following five

CSFs framework:
a) Management commitment involvement , (MC)
b) Six Sigma level of absorption into the
organization i.e. departments, clients and
supplier involvements, (AB)
c) Assessment process of all Six Sigma projects
within
the
organizations.
i.e.
Project
management and selection, reviews, tracking and
after completion monitoring, (AS)
d) Training structure for continuous awareness,
(TR)
e) Cultural Influence, (CI)

a)

b)

The company profile such as duration of operation

and percentage of local content within its operations
etc.
Implementations of Six Sigma application in the
companies.

To ensure the objective of the research is obtained in

timely manner and meets all its goals and to have a
correct basis to design a questionnaire for this survey, we
took out a very valuable guide by Robert [23] an extract
of his guide to design of questionnaire. With this guide,
from the literature review and theoretical framework, a 13
items questionnaire on a Likerts scale of 1 to 5 was
developed.

One resultant output or outcome of this research that is

to be concluded will be which one individual CSF or
multiple CSFs of the abovementioned CSFs will
contribute significantly to the Six Sigma implementation
within the organization. The above mentioned theoretical

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Proceedings of the 2011 IEEE ICQR

IV. RESULTS AND DISCUSSION

A. Pilot run Survey Questionnaire

Figure 2 represents census findings graphically for the

five CSFs. It provides the influence breakdown of each
CSF with Management Commitment (85%), Absorption
(95%), Cultural Influence (85%), and Project/Process
Assessment (100%) Training & Awareness (100%).

To ensure core objective of reducing the amount of

uncertainty in exploratory studies in this research, a pilot
run was done for this questionnaire on four individual
members from different departments in a same
organization. To ensure validity of these replies a Master
Black belt from MNC organisation was interviewed to
help confirm the findings and fine tune the questionnaire
further. Upon confirmation of the questionnaire survey
completion, the questionnaires were then revised to
include all the comments received.
B. Population and Sample Size
This first step helped this research to identify all the
local MNCs in Malaysia and create a reference contact
database for survey deployment. Internet search for
MNCs worldwide using Six Sigma application was done
from which a database of 104 companies was compiled.
The database was further filtered by cross referencing to
their affiliates operating in Malaysia to define the
population size of the subject researched. The cross
reference exercise results a list of 25 companies operating
in Malaysia. These companies were then contacted via
phone to determine the focal contact person for Six Sigma
initiative respectively. Upon completing the interviews
with the focal person identified, the list was reduced to 22
because 3 of these companies only have small sales
offices located in Malaysia.
Due to the small size of the population studied for this
research, further literature studies were undertook to
understand the effect of small population studies and how
other similar studies were conducted and what analytical
methods were used. Sample-size problems are contextdependent, how important it is to increase the sample size
to account for such uncertainty depends on practical and
ethical criteria. Moreover, sample size is not always the
main issue; it is only one aspect of the quality of a study
design[24]. Israel[25]suggests thatusing the entire
population as the sample as census is attractive for small
populations (e.g. 200 or less).Thus we remodelled our
research from a survey to census study.Online
questionnaires were sent to all 22 companies that
represent the entire population from which 20 completed
census responses were received that translates to 91%
return rate [26].

Fig. 2. Graphical Representation of census results

Next, a two-level full factorial designwith five CSFs

(MC, AS, AB, TR & CI) was designed [27].Five factors
powered by two testing produced 32 factorial points
(25=32).
Table 1 summaries the results from the test conducted.
Preliminary finding from this data indicates that Training
and Awareness (TR) has the most significant effect while
Cultural Influence (CI) has the least significant effect. A
graphical analysis was used to understand and identify the
significant of the factors in influencing the data measured.
A normal effects plot in Figure 3 was drawn to
compare the relative magnitude and the statistical
significance of both main and interaction effects. The cutoff line is where the points would be expected to fall if all
effects were zero. The factors that do not fall near the line
usually signal significant effects. These factor effects are
larger and generally further from the fitted line than
unimportant effects. From this graph, the significant
factors are labeled in square block. There are four
significant effects identified graphically, namely MC, AB,
AS and TR. Training and Awareness(TR) has the largest
effect because it lies furthest from the cut off line.

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Proceedings of the 2011 IEEE ICQR

TABLE I
EFFECTS AND COEFFICIENT TABLE

TABLE II
ESTIMATED EFFECTS AND COEFFICIENT FOR SUCCESS
Term

Effect

Constant

Normal Plot of the Effects

Coeff.

54.688

MC

34.375

17.188

0.012

AB

34.375

17.188

0.012

AS

46.875

23.437

0.001

TR

34.375

17.187

0.012

MC*AB

-3.125

-1.563

0.8

MC*AS

-3.125

-1.563

0.8

MC*TR

-3.125

-1.563

0.8

AB*AS

-3.125

-1.563

0.8

AB*TR

-3.125

-1.562

0.8

AS*TR
MC*AB*
AS
MC*AB*
TR
MC*AS*T
R
AB*AS*T
R
MC*AB*
AS*TR

-3.125

-1.562

0.8

-15.625

-7.812

0.215

-3.125

-1.562

0.8

-15.625

-7.812

0.215

-15.625

-7.813

0.215

9.375

4.687

0.45

(response is SUCCESS, Alpha = 0.05)

99
D
95

C
A
E

90

F actor
A
B
C
D
E

80

Percent

Effect Ty pe
Not Significant
Significant

70
60
50
40

TABLE III
ANALYSIS OF VARIANCE FORSUCCESS

N ame
MC
CI
AB
AS
TR

Source
Main
Effects

30
20
10
5
1

-40

-30

-20

-10

0
10
Effect

20

30

40

50

Lenth's PSE = 14.0625

Fig. 3. Normal Plot of the Effects

Next, Cultural Influence (CI) was removed and refits

the model by excluding all related non-significant
interaction terms. Table II summaries the results from the
test conducted. The results concluded that only the main
effects (MC, AS, AB& TR) are significant.
The P column in Table III contains p-values for each
of the possible interaction of the factors that were the
most significant CSFs in the earlier analysis in Table II.
All these factors have p-values less than the level of 0.05;
as such the factors identified are correct as good CSFs for
the successful implementation of the Six Sigma in the
Malaysias MNCs. However, it was observed that there
are no interaction factors which are significant as there is
no evidence that the effect of any factor depends on the
level of any other factor, therefore there is no significant
interaction effect as reflected by the statistical result in
Table III.

DF Seq SS
4

45937.5 9.8

P
0

2-Way
Interactions

468.8

3-Way
Interactions

5937.5 1.27 0.324

4-Way
Interactions

703.1

Residual
Error

16

18750

Pure Error

16

18750

Total

31 71796.9

0.07 0.998

0.6

0.45

In conclusion, a mathematical model was created to

reflect the current research results of the CSFs in Six
Sigma Implementation. The model was created using the
coefficients from Table I to construct an equation
representing the relationship between the response and the
factors. The concluding regression equation is as below:
Six Sigma Implementation Strength = 54.688 + 17.188
(Management Commitment)+ 17.188(Absorption) +
23.437(Assessment) + 17.187(Training& Awareness)

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Proceedings of the 2011 IEEE ICQR

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V. CONCLUSION
The mathematical formula confirms our earlier
hypothetical reference that in order to successful Six
Sigma implementation, these four criterias are essential:
a)
b)
c)
d)

Management Commitment,
Absorption,
Project/Process Assessment and
Training& Awareness

While Training and Awareness, Management

Commitment and Absorption forms the three pillars in the
implementation of Six Sigma stage, continuous
Project/Process Assessment of all stage of implementation
ensures its implementation consistency. By concluding
the above, it also has proven through statistical analysis
that Cultural Influence does not have significant impact to
this implementation phase. It can be concluded that
embracement of productivity methodology such as Six
Sigma in our local organization can be done effectively if
these four CSFs identified as significant are present
consistently.
Six Sigma methodologies as reviewed and concluded
by many fellow researchers and peers will help to position
a business into a prudent competitive Model [3,7].
However its widely also known that most of the
productivity or business improvement model has failed
during or after early phase of implementation mainly due
to lack of understanding of the tools, cultural rejection of
the idea or partial implementations for quick return of the
bottom line savings [3].
It is envisaged that the results from this research will be
used as a foot print for local Malaysian companies such as
SMEs in applying Six Sigma and other best practices
derived from fellow research studies into their business
model. This will help to increase our local SMEs
competitiveness, product quality, lean and efficient
processes. This will in turn make the business more
profitable with prudent cost management [28].
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