International Journal of Lean Six Sigma

Lean Six Sigma effect on Jordanian pharmaceutical industry’s performance

William Hanna Alkunsol, Abdel-Aziz Ahmad Sharabati, Nidal Amin AlSalhi, Hamza Sultan El-Tamimi,
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William Hanna Alkunsol, Abdel-Aziz Ahmad Sharabati, Nidal Amin AlSalhi, Hamza Sultan El-Tamimi,
(2018) "Lean Six Sigma effect on Jordanian pharmaceutical industry’s performance", International
Journal of Lean Six Sigma, https://doi.org/10.1108/IJLSS-01-2017-0003
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Lean six sigma

Lean Six Sigma effect on effect
Jordanian pharmaceutical
industry’s performance
William Hanna Alkunsol, Abdel-Aziz Ahmad Sharabati,
Nidal Amin AlSalhi and Hamza Sultan El-Tamimi
Received 4 January 2017
Department of Business, Middle East University, Amman, Jordan Revised 5 May 2017
7 July 2017
13 August 2017
Accepted 12 September 2017
Abstract
Purpose – This study aims to investigate the effect of Lean Six Sigma elements on the Jordanian
Pharmaceutical Manufacturing organizations’ business performance.
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Design/methodology/approach – Data were collected from 120 managers out of about 300 managers
by means of questionnaire. After confirming normality, validity and reliability of the study tool, correlation
analysis was carried out, and then multiple regressions were used to test the hypotheses.
Findings – The results show that there is an agreement on high implementation of Lean Six Sigma
variables among Jordanian Pharmaceutical Manufacturing organizations; there are strong relationships
among Lean Six Sigma variables, except between non-utilized talent and transportation; there are strong
relationships between Lean Six Sigma variables and business performance. All Lean Six Sigma variables
have effect on business performance, except extra processing and waiting time.
Research limitations/implications – This study was carried out on the pharmaceutical industry in
Jordan, generalizing results of one industry and/or one country to other industries and/or countries may be
questionable. Extending the analyses to other industries and countries represents future research
opportunities.
Practical implications – Implementing Lean Six Sigma variables in all Jordanian Pharmaceutical
Manufacturing organizations can improve their business performance; also, it can be applied to other
manufacturing industry.
Social implications – The aim of all organizations is to reduce waste, which leads to reserve the natural
resources, which is considered as a corporate social responsibility.
Originality/value – Only few studies related to Lean or Six Sigma have been carried out in pharmaceutical
industry in Jordan. Therefore, this study might be considered as an initiative study, which studies the effect of
both Lean and Six Sigma on pharmaceutical industry in Jordan.
Keywords Business performance, Jordanian pharmaceutical manufacturing (JPM) organizations,
Lean production, Lean Six Sigma, Six Sigma
Paper type Research paper

Introduction
For a long time, quality has been the human being concern. Over the past few decades,
companies experienced dramatic changes in business environment because of globalization
and rapid technology advancement, which led to low cost competition and increased
consumer awareness of quality. Therefore, many tools and methods were setup to clarify the
quality, beginning from quality inspection (QI) to quality assurance (QA) and total quality
management (TQM), which were all developed by Japanese companies. Because of inability
of American companies to rival in global market, American companies initiated strategic International Journal of Lean Six
Sigma
quality management that was adopted by IBM. In fact, Toyota was the first entity to © Emerald Publishing Limited
2040-4166
concern about quality, inventory, low cost and delivery time to maximize customers’ DOI 10.1108/IJLSS-01-2017-0003
 IJLSS satisfaction (Desale and Deodhar, 2014), so Toyota initiated the Just-in-Time (JIT) system for
production, which then developed to Lean manufacturing (LM) system. In the early and mid-
1980s, Motorola engineers decided that the traditional quality levels of measuring defects in
thousands is not accurate; therefore, they developed a system that measures the defects per
million called Six Sigma system. Consequently, they saved billions of dollars by applying
the Six Sigma system. As a result, when the organizations use either Lean Production or Six
Sigma, they are able to develop and improve their business performance. However, if
organizations combine both systems (Lean Production and Six Sigma) together what will be
the result?
A few years ago, a new trend was revealed in which companies tried to merge between
Lean Production system and Six Sigma system, which called Lean Six Sigma. Since 1986,
“The George Group” was the first to integrate Lean with Six Sigma together (Salah et al.,
2010). Lean is a philosophy of continuous improvements, and Six Sigma is a way to meet
quality by measuring ability of enterprise to produce perfectly (Chinvigai et al., 2010), while
the aim of Lean Six Sigma is to maximize shareholders’ value (Laureani and Antony, 2012).
In 1997, British Aerospace Systems tried to combine Lean Management principles with Six
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Sigma, the company named their program Lean Sigma Strategy (Muthukumaran et al.,
2013). Despite their different roots, Lean and Six Sigma share several fundamental common
features including a focus on customer satisfaction, continuous improvement, identification
of root causes and comprehensive employee involvement (Dey, 2014). Using Lean Six Sigma
approaches in health-care processes is rather a new area for research, which was found to be
very useful for improving health-care processes (Jovanovic et al., 2013). Lean Six Sigma
considered as a process that can improve products continuously to achieve high product
quality, competitive costs and reduced delivery times, which leads to customers’ satisfaction
(Muhareb and Graham-Jones, 2014).
One can conclude that it is worthwhile to combine both systems together and study their
effect on organizations’ business performance. Therefore, this study aims to investigate the
effect of Lean Six Sigma elements (defect, over production, waiting time, transportation,
inventory, motion, extra processing and non-utilized talent) on Jordanian Pharmaceutical
Manufacturing organizations’ (JPMO) business performance. The main objective of this
research is to provide sound recommendations to pharmaceutical organizations, as well as
to other industries and decision-makers regarding the influence of Lean Six Sigma
indicators on organizations’ business performance. In addition, its objective is to increase
awareness about improving business performance and profitability and to open this
discussion between academicians and practitioners regarding this hot and contemporary
issue. The current study might be considered as initiative in studying the effect on
combining Lean Six Sigma elements on JPMO. A better understanding of the effect of Lean
Six Sigma elements on the JPMOs’ business performance draws conclusions that can be
beneficial not only for JPMOs but also to other organizations, institutions and decision-
makers. The content also may be of an interest to not only to practitioners but also
academicians who are concerned about reporting and decision-making related to Lean Six
Sigma.

Hypothesis development
Improving, measuring and managing business performance is a worldwide concern. Actually,
it is not limited to one organization, industry or country. Different methods and tools have been
used to improve performance. Yeh et al. (2011) said applying Lean Six Sigma improves
organizations’ processes; Soare (2012) stated that research within quality continuous
improvement displayed a particular interest in recent years. Abu-Hameeda (2013) noted that
 because of the high competition, JPM companies are forced to use quality systems including Lean six sigma
Lean Six Sigma to produce high-quality goods that increase customers’ satisfaction. Junankar effect
et al. (2014) cleared that pharmaceutical industry has to face many major challenges to provide
best performance. Koripadu and Subbaiah (2014) explained how Lean and Six Sigma systems
can be successfully used for taking a proactive problem-solving management steps with higher
profits along with better efficiency and effectiveness. Therefore, this research is tailored to
answer the following main question: Do Lean Six Sigma elements (defect, over production,
waiting time, transportation, inventory, motion, extra processing and non-utilized talent) affect
JPMO business performance? To answer this question, the following null hypothesis has been
developed and tested:
H0. Lean Six Sigma elements (defect, over production, waiting time, transportation,
inventory, motion, extra processing and non-utilized talent) do not have effect on
JPMOs’ business performance, at a # 0.05 (Figure 1).
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Literature review
It seems that there is no clear-cut definition for Lean Production, Six Sigma or even for Lean
Six Sigma. At the same time, there is no consensus among scholars, researchers and
practitioners on the components of Lean Production, Six Sigma and Lean Six Sigma. Lean
Production concerns about eliminating waste, while Six Sigma is a measuring tool to
improve processes and performance. Merging both the methods together may be more
useful than using any one separately.

Definitions and elements of lean manufacturing

Many authors defined LM, but there is a common thing in those definitions that LM tries to
minimize waste. LM is an administration philosophy dedicated to the decreasing of the eight
wastes (Cavallini, 2008). LM is a very powerful tool in defining and reducing waste (Villa, 2010).
LM focusing on solving problems and making changes and it gains acceptance with businesses
of all sizes and markets (Ngo, 2010). Lean philosophy concerns about how to make processes
properly (Soare, 2012). The goal of Lean Management is to improve the performance of
industrial organizations by following two guidelines: the elimination of all waste present in all
processes and placement of humans in the center of the process (Antunes et al., 2013). In this
millennium, the competition in the world market is no longer among companies but among

Independent Variables Dependent Variable

Lean Six-Sigma:
Defect
Over production
Waiting time
Transportation Business Performance
Inventory
Motion
Extra processing
Non-utilized talent

Source: Model developed based on many previous studies such as: Olsen
(2004), Habidin et al. (2012), Zamri et al. (2013), Agus and Iteng (2013), Figure 1.
Study model
Dahman (2013)
 IJLSS global supply chains (Kumar and Kumar, 2013). Two points are considered as weak in lean
system; the first is the lean organization may become very susceptible to the impact of changes,
and the second point is that “Just-in-Time (JIT) deliveries cause congestion in the supply chain,
leading to delays, pollution, shortage of workers, etc.” (Mousa, 2013). Taiici Ohno who
developed the LM system as a method of eliminating waste moved the attention of researchers’
away from the effect of workers’ productivity on craft production towards a more
encompassing production system as a whole (Desale and Deodhar, 2014).
Referring to Lean Production elements, some authors and researchers divided the LM
components into six elements, whereas others considered seven or eight elements.
Cavallini (2008) identified eight elements: wastes over processing, defects, inventory,
motion, waiting time, over production, transportation and lack of creativity. Awaritoma
(2010) described seven wastes: processing, inventory, overproduction, waiting, defects,
motion and transportation. Subramaniyam et al. (2011) mentioned seven elements: excess
production and early production, delays, movement and transport, poor process design,
inventory, inefficient performance of a process and making defective items. Mezouari
et al. (2013) stated three objectives of LM: eliminate waste, speed and less resources and
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intuitive approach to problems solving. Dey (2014) defined seven elements of wastes:
overproduction, inventory, defects, transport, motion, over processing and waiting.
Mezouari et al. (2013) stated three objectives of LM: eliminate waste, speed and less
resources and intuitive approach to problems solving. Desale and Deodhar (2014)
mentioned six goals of LM: increase output flexibility, reduce cycle times, decrease
inventories, benchmark, rise output value through a systematic consideration of
customer requirements and reduce the share of non-value-adding actions.
In summary, LM can be defined as a continuous improvement tool used to eliminate
wastes, which can lead to have better performance results and creating more value for
customers with less resources and lower costs; therefore, Lean’s idea is to maximize
customer value while minimizing waste and cost. In the current study, the elements of LM
will be merged with Six Sigma elements.

Definitions and elements of Six Sigma

Six Sigma is a statistical tool that measures variation in processes. Six Sigma as a term was
presented in the 1980’s by Motorola in a revolutionary effort to decrease defects to the level
of only a few parts per million (Divoky, 2008). Six Sigma system gained huge reputation
after its adoption by General Electric in the mid-1990s (Pulakanam and Voges, 2010). Six
Sigma is a methodology that combines quality elements and enhances its own special
approach to business and supply chain environment (Varzandeh and Kamy, 2010). “Six
Sigma is a tool used to convert management problems into statistical problems, and to find a
statistical solutions then convert it to a management solutions” (Radhakrishnan and
Sivakumaran, 2010). Six Sigma is a business development approach used to eliminate waste,
increase profitability, reduce costs and improve the efficiency and effectiveness of
operations (Weinstein, 2010, p. 572). Six Sigma has three main elements: process
improvement, process design/re-design and process management (Pokharkar et al., 2010).
Six Sigma is about results and increasing profitability through improved quality and
efficiency (Dileep and Rau, 2010). Six Sigma system is essentially used to develop the
performance of an existing process to reach customer satisfaction (Mandahawi et al., 2010).
Six Sigma system is a powerful tool that enables companies to use statistical methods to
meet changing in customers’ expectations (Jaglan et al., 2011). Six Sigma was introduced in
1980 by engineer M. Harry at Motorola to reduce waste and improve performance
(Radhakrishnan and Balamurugan, 2011). Six Sigma is a multidimensional method for
 developing process efficiency and attaining sustainability (AlSagheer, 2011). Six Sigma is a Lean six sigma
quality improvement structure for identified industry (Goh, 2011). Six Sigma is systematic effect
method, which creates a clear discipline to increase market share, profitability, customer
satisfaction by using statistical tools (Yusr et al., 2011). Sigma (s ) is a Greek alphabet that
has converted to a statistical symbol, which is used to define standard deviation (Kaushik,
2012; Micu, 2012). Six Sigma is an operational method that speeds up the progresses in the
business system by several statistical features (Vijay, 2012). Six Sigma is a philosophy to
continuously decrease variation in processes and aim at the removal of defects from every
service, product and transactional process (Ahmad, 2013). It is a robust continuous
improvement approach that depends on statistical ways (Kosina, 2013). Six Sigma is an
improvement strategy that yields dramatic reduction in defects or errors or mistakes in any
process (Reosekar and Pohekar, 2013). Six Sigma is a management philosophy dedicated on
rejecting mistakes, rework and waste (Kabir et al., 2013). Six Sigma is an active approach to
improve the organization’s performance (Jayaraman et al., 2013). Six Sigma is a new quality
management strategy, which is seen as a scientific, systematic, statistical and smoother
method to management innovation (Dhawan, 2013). Six Sigma is a regular strategy to
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eliminate the errors, wastes, to understand the needs of the clients and quality problems to
improve processes (Maleki et al., 2013). Six Sigma is a statistical measure that measures
variation in process around its mean (Khandekar and Sulakhe, 2014). Six Sigma is a
statistical term that measures process in terms of defects compared to perfection (Mutia and
Nyambegera, 2014). Six Sigma emphases on “business success that can be achieved through
continuous effort to reduce variation in process outputs” (Aleem et al., 2014).
Referring to Six Sigma elements, it seems that most authors and practitioners agreed on
six elements of Six Sigma such as Six Sigma is used to improve quality level, customer
satisfaction, market share, employees’ moral, organizational culture, people development
and return on investment (Antony, 2009). Six Sigma is used to eliminate waste, increase
profitability, reduce costs linked with humble quality and improve the efficiency and
effectiveness of operations (Weinstein, 2010). There are six metrics to measure Six Sigma:
risk management, revenue growth, retained revenue, increased capacity, cost reduction and
cost avoidance (DeRuntz and Meier, 2010). AlSagheer (2011) used financial achievement,
zero defect level and competition. Yusr et al. (2011) used Six Sigma to increase market share,
profitability and customer satisfaction by using statistical tools that can lead to a high
performance. Yuksel (2012) used the following measures for evaluating the Six Sigma:
avoiding cost drivers, reducing costs, increasing capacity and growing revenues and risk
management. Reosekar and Pohekar (2013) used customer satisfaction and increased
market share and business profitability. Huang (2013) presented six benefits of Six Sigma:
productivity improvements, cycle time declines, customer relations improvements, market
share increases and defect and cost reduction. Chetiya and Sharma (2014) mentioned seven
deliverables: yield improvement, system improvement, cost improvement, cycle time
reduction, quality improvement, customer satisfaction and defect reduction.
In summary, Six Sigma is a set of statistical techniques used to measure variations
around its mean related to business processes and then reduce these variations, which will
lead to a better business processes performance. The elements of Six Sigma will be
incorporated with LM.

Definitions and elements of Lean Six Sigma

A few years ago, a new trend was revealed in which companies tried to merge both LM
elements with Six Sigma elements, which called Lean Six Sigma. Lean Six Sigma as the
reduction of waste in a system that is producing three or four errors per million
 IJLSS opportunities (Hajikordestani, 2007). Lean Six Sigma is a business upgrading structure that
integrates Six Sigma methodology with the cost saving benefits of Lean Production
(Cavallini, 2008). Lean Six Sigma is a business improvement system that purposes to
maximize shareholders’ value by improving quality, speed, customer satisfaction and costs
(Laureani and Antony, 2012). If wastes need to be reduced or productivity needs to be
increased, then there should be a focus on Lean, and if product variation needs to be
measured, then focus should be on Six Sigma (Stoiljkovi et al., 2011). Lean system and Six
Sigma system has the same method, which is trying to eliminate waste (Lancaster, 2011).
Lean Six Sigma is a cost decreasing mechanism (Zamri et al., 2013). Lean Six Sigma is a
“technique and also an effort that is used to minimize the cost of the process by eliminating
the waste in various service sectors” (Arunagiri and Babu, 2013). Lean Six Sigma is a set of
statistical methods systematized around a rigorous project management (Mezouari et al.,
2013). The advantages of using Lean Six Sigma are as follows: focusing on customer value,
creating standard work sheets, facing work-in-process inventory, process control planning
and monitoring, focusing on reducing variation and achieve uniform process outputs,
focusing on statistical application tools and techniques, facing waste because of waiting,
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over processing, motion and over production (Muthukumaran et al., 2013). Lean Six Sigma is
a well-structured model-based methodology implemented to develop performances, improve
effective leadership and attain customer satisfaction and bottom line results (Enoch, 2013).
Lean Six Sigma is a process that improves services or products continuously to obtain high
product/service quality, competitive costs and eliminate delivery times, leading to customer
satisfaction (Muhareb and Graham-Jones, 2014).
Referring to Lean Six Sigma elements, it seems that the authors and researchers did not
agree on its elements yet; Subramaniyam et al. (2011) defined five elements (faster time to
market, reduction of poor design, reduction of over design, reduction in material cost and
reduction in product development cost). While Berty (2011) introduced seven types of wastes
in production process: transport as moving products not required, inventory as work in
process not being processed, motion people moving more than needed, waiting as waiting
extra time for next process, over production as producing products more than needed, over
processing as bad product design quality and defects as an effort in inspecting and fixing
defects. Also, Stoiljkovi et al. (2011) classified seven wastes in processes as follows: non-
value added processing, inventory, overproduction, waiting, defects, movement and
transportation. Arunagiri and Babu (2013) mentioned various types of wastes such as errors
and defects, wasted motion, unutilized talent, excess inventory processing and complexity,
transportation, delay and wait time and overproduction. Enoch (2013) identified six factors
for Lean Six Sigma implementation: strong leadership, management commitment, adequate
skilled workforce, awareness and understanding of Lean Six Sigma, Customer satisfaction
and finally financial viability and infrastructure.
In conclusion, Lean Six Sigma is a statistical method formed by combining two systems;
LM and Six Sigma aim to reduce variation in processes, as well as to reduce wastes to
develop an efficient and effective process to satisfy customers’ needs. The current study
used eight elements to measure Lean Six Sigma: defect, over production, waiting time, non-
utilized talents, transportation, inventory, motions and extra process.

Business performance
Business performance is a set of management and critical procedures that allows the
management of an organization to accomplish one or more pre-selected goals. In fact,
until now, there is neither consensus about business performance definition nor
agreement among authors, researchers and practitioners about its elements. Therefore,
 there are many definitions and indicators used to measure performance. Jaakkola (2006) Lean six sigma
used financial performance, market performance, customer performance and overall effect
performance. Darabi (2007) used objective, subjective measures like financial and
market-based measures like capacity utilization, market share, profitability, service
quality, customer satisfaction, retention and employees’ satisfaction. Sharabati et al.
(2010) used productivity, profitability and market valuation as elements to measure the
business performance. Zu et al. (2008) used two broad scales, business performance and
quality performance. Quality performance contains seven items such as quality of
product, delivery, process variability, cost of scrap and reworks, equipment downtime,
customer satisfaction and cycle time. Business performance consists of sale, unit cost of
manufacturing, market share, operating income, profit and return on assets. Vilas-Boas
(2009) used three elements for business performance: return on assets, return on sales
and return on equity. Mandahawia et al. (2012) used two indicators to measure the
performance: production rate and overall equipment effectiveness. Agus and Iteng
(2013) measured business performance through the impact on return on sales and
return on investment. August (2013) used financial benefits, growth of the company,
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peoples’ equity, customer satisfaction and productivity.

The current study will measure business performance based on the following indicators:
productivity, profitability and market share but business performance will be analyzed as a
one variable.

The relationship between Lean Six Sigma and business performance

Many researchers studied the relationships between LM and business performance, as
well as between Six Sigma and business performance. While very few researchers
studied the relationships between Lean Six Sigma and business performance, for
example, Olsen (2004) studied the relationship between LM management practices and
financial performance improvement; Parast (2011) investigated the effect of Six Sigma
projects on firm innovation and the effect of Six Sigma on firm performance; Habidin
et al. (2012) explored relationship between Lean Six Sigma and organizational
performance; Zamri et al. (2013) studied the relationship between Green Lean Six Sigma
and financial performance. Agus and Iteng (2013) used JIT and technology and
innovation as elements of the Lean Production to see their effects on the business
performance by measuring return on sales and return on investment, the moderating
effect of the length of lean adoption.
All of the aforementioned studies found a positive effect of applying Six Sigma, Lean
Production and Lean Six Sigma on the business performance (financial and non-financial);
therefore, the study will investigate the effect of applying the Lean Six Sigma elements on
Jordan Pharmaceutical Manufacturing organizations’ business performance.

Previous studies and results

Because of limited space, the current study will present a snapshot from selected previous
studies. This section will focus on the interrelationships among Lean Six Sigma elements
and their effect on business performance.
Obaidullah (2005) found that Six Sigma has been applied in both manufacturing and
service organizations in the UK. Kateeb (2009) showed that there was significant statistical
relationship between Six Sigma changes on mistake reduction, significant statistical
relationship between Six Sigma and time circle reduction in Housing Bank for Trade and
Finance. Reddy and Reddy (2010) showed that rejection rate of bearing rings in
manufacturing facility located at Hyderabad has been reduced from 2.7 to 0.65 per cent and
 IJLSS sigma level of process increased from 4.04 to 4.44. Mandahawi et al. (2010) showed that after
implementing the system the length of hospital stay reduced by 34 per cent and waiting time
by 61 per cent, without any additional staff. Niemeijer et al. (2010) concluded that the
implementation of the system decreased almost 50 per cent of the unfortunate hospital stay
of trauma patients in Trauma Nursing Department. Singh et al. (2010) showed that
implementation lean process in production industry reduced lead-time 83.14 per cent,
processing time 12.62 per cent, work-in-process inventory 89.47 per cent and labor
requirement 30 per cent, and the rise in productivity per operator was 42.86 per cent.
Roth and Franchetti (2010) showed that by using Lean Six Sigma a local manufacturing
company in Northwest Ohio, USA, could identify that 30 per cent of employees’ activities
were not adding any value. They just delayed work and reduced productivity and showed
the optimal employees number which needed for operations. Kumaravadivel and Natarajan
(2011) concluded that Six Sigma approach reduced the frequency of faults and upgraded the
sigma level of the sand casting process, and overall decline of defect rejection in the process
and sigma level of the process increased from 3.32 to 3.47. Yeh et al. (2011) showed that cycle
time of the improved door-to-balloon process decreased by 58.4 per cent. Process cycle
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efficiency increased from 32.27 to 51.81 per cent, and the average days of hospital stay
reduced by three days and saved $4.422m in medical resource. Kuptasthien and
Boonsompong (2011) showed that by following the Six Sigma technique, the defects from
major tombstone capacitor problem decreased from 1,154 to 314 and increased yield output
from 98.4 to 99.66 per cent. Jawadeh (2011) showed that the application of Six Sigma had an
influence on improving the quality health services. Bharti et al. (2011) showed that processes
improved from 2.38s standard to 5.18s standard. Franchetti and Yanik (2011) concluded
that by using Six Sigma approach (DMAIC), manufacturing companies in Northwest Ohio,
USA, could reduce costs and increase capacity of manufacturing. Results showed that
DMAIC approach could reduce costs by nearly US$660,000 per year. Mandahawia et al.
(2012) showed that Lean Six Sigma increased production rate for printing machines by 5 per
cent and for the cutting machines cost by 10 per cent. Goriwondo and Maunga (2012)
showed that the value-added ration improved from 39 to 94 per cent by using the Lean Six
Sigma approach and improvements in cycle times was up to 86 per cent in margarine
manufacturing. Zaman et al. (2013) showed that the use of Six Sigma approach reduced the
defect per million output from 28,356.96 to 1,666.67 and increased the sigma level from 3.41
to 4.43 in a welding electrode manufacturing industry. Kumara and Khandujaa (2013)
showed that applying Six Sigma in SSI helped to improve Z-bench Sigma level from 2.21
sigma to 5.64 sigma and cost saving of 0.01929 million/annum. Venkatesh et al. (2013)
indicated that Six Sigma has contributed to the improved financial status, productivity and
customer satisfaction. Bashir and Al-Tawarah’s (2012) results indicated that using Six
Sigma methodology reduced the downtime by 35 per cent by introducing a new procedure to
deal with any medical equipment for maintenance in Jordanian Hospitals. Bao et al. (2013)
showed that Six Sigma management was able to mechanize, enhance hospital management
and improve service quality. Edaily (2014) showed that adopting Six Sigma and its tools
positively reflects on reducing waste production, improving efficiency and productivity,
decreasing the operational costs and developing the overall company’s competitiveness in
the market. The level of Sigma increased from 3.1 to 3.9. The waste production reduced from
11.55 to 3.5 per cent in Jordanian hospitals. Junankar et al.’s (2014) study reported by using
Six Sigma methodology the defects in manufacturing industry decline from 1,401 to 603.47,
and the Sigma Level upgraded from 4.5 to 4.8.
Franchetti’s (2014) study reported that applying Six Sigma approach (DMAIC) reduced
the cost by US$243,000 per year and increased the capacity of manufacturing company in
 Northwest Ohio, USA. Maleyeff’s (2014) study indicated that Lean Six Sigma practices Lean six sigma
showed the shared common practices that can improve and sustain processes improvement effect
in the public sector in North America. Dey’s (2014) article described how Washington, DC,
District Department of Transportation applied Lean Six Sigma processes and techniques to
transform its on-street parking meter program. The article concluded that applying Lean Six
Sigma processes and techniques gave fruitful results within short period. Result showed
higher customer satisfaction and increased revenue. Based on the aforementioned literature
reviews, we can conclude that all organizations can be benefited from using LM and/or Six
Sigma. Therefore, the current study will explore the effect of Lean Six Sigma on the JPMOs’
business performance.

Study methodology
Study approach and design
The current study is considered as a descriptive and a cause-and-effect study. It aims at
studying the effect of Lean Six Sigma elements on JPMOs’ business performance. It starts
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with literature review and experts’ interviews to improve the currently used measurement
model and explore the Lean Six Sigma profile of the JPMOs. Then, a panel of judges
conducted to confirm the items to be included in the questionnaire. Finally, the survey
carried out and the data collected from the managers working at JPMOs, then the data coded
on SPSS 20. After testing normality, validity, reliability and correlation among Lean Six
Sigma variables and their relationships with business performance, multiple regressions
were applied.

Study population, sample and unit of analysis

At the time on conducting this study, 14 organizations were registered in Jordanian
Association of Pharmaceutical Manufacturers. All of them were targeted to collect data by
using questionnaire, thus negating any need for sampling. The survey unit of analysis is
composing of all managers at three levels (top, middle and operational level) who are
working at JPMO and they are approximately 250 managers.

Data collection methods (tools)

To fulfil the purpose of this study, two types of data have been used: secondary and primary
data. Secondary data were collected from different sources such as journals, working papers,
research studies, thesis, articles and World Wide Web and JPMOs. Primary data were
collected throughout the questionnaires, which build based on previous studies and
developed through panel of judge. Questionnaire was divided into two parts as follows:
independent variables (Lean Six Sigma): defect, over production, waiting time,
transportation, inventory, extra motion, extra process and non-utilized talent, five to six
items measured each variable. Dependent variable (business performance) measured by ten
items. All independent and dependent items were measured by five-point Likert-type scale:
varying from Value 1 (strongly agree) to Value 5 (strongly disagree).

Data collection and analysis

The questionnaires were handed to 180 managers out of 250 managers working in the
JPMOs. Only 128 questionnaires were returned and only 120 questionnaires were suitable
for further analysis; they were from 7 out of the 14 JPMOs, and answers were coded against
SPSS 20 for further analysis.
 IJLSS Validity and reliability
Two methods have been used to confirm validity. Multiple sources of data (as journals,
working papers, research studies, thesis, articles and World Wide Web and JPMOs and
expert interviews) have been used to confirm content validity, and panel of judge has been
used to confirm face validity. While principal component analysis with Kaiser–Meyer–Olkin
(KMO) measure was used to confirm construct validity. Table I shows that factor one for all
independent variables is ranging between 0.784 and 0.869, and KMO is 0.933 with
explanation variance of 70.317 (Cerny and Kaiser, 1977). To confirm reliability Cronbach’s
alpha has been used. Alpha Coefficients more than 60 per cent will be accepted (Sekran,
2003). As shown in Table I, Cronbach’s alpha coefficients for all variables are accepted,
though Transportation and Inventory were on the borderline 0.573 and 0.557, respectively.

Descriptive analysis
Means, standard deviations, t-values, ranking and importance were used to describe
variables:
Table II shows that the average means of the respondents’ perception about the degree of
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implementing the Lean Six Sigma variables are ranging from 4.04 to 4.64, with standard
deviation that ranges from 0.31 to 0.54. Such results show that there is an agreement on high
importance of Lean Six Sigma variables. The mean of the total Lean Six Sigma variables is
4.34 with standard deviation 0.25, which indicates that there is an agreement on high
presence of these variables. Finally, the overall result indicates that there is a significant
implementation of the Lean Six Sigma among JPMOs, where (t = 59.08 > 1.96). Table also
shows that the business performance mean is 4.12 with standard deviation 0.34, which
indicates that there is an agreement on high importance of business performance indicators
and a high significant degree of implementing of the business performance indicators
among JPMOs, where (t = 35.88 > 1.96).

Relationships between the study variables

Table III shows that the relationships among Lean Six Sigma variables are medium to
strong, where r ranged between 0.215 and 0.536, except the relationship between non-

No. of Cronbach’s KMO Bartlett’s Explained

No. Variable items alpha Factor 1 test test variance Sig.

1 Defects 5 0.765 0.859 0.933 28 70.317 0.000

2 Over production 5 0.684 0.810
3 Waiting time 5 0.701 0.869
4 Transportation 5 0.573 0.790
5 Inventory 5 0.557 0.864
6 Motion 5 0.812 0.866
7 Extra processing 5 0.642 0.861
8 Non-utilized 5 0.683 0.784
talent
9 Lean Six Sigma 8 Variables 0.808
10 Business 10 0.748
Table I. performance
Validity and
reliability test Note: N = 120
 utilized talent and transportation, which was weak and not significant where (r = 0.119, Lean six sigma
sig. = 0.195). The correlation between each Lean Six Sigma variables with business effect
performance is strong, since r ranged from 0.425 to 0.656. Finally, the relationship between
total Lean Six Sigma and business performance is very strong, where r = 0.880. This
indicates that it is important to improve all Lean Six Sigma variables together to maximize
the organizations’ business performance.

Testing study hypothesis

Before using multiple regressions analysis, the following tests were carried out: Durbin–
Watson test to ensure independence of errors. If Durbin–Watson test value is about 2, the
model does not violate this assumption. In addition to that, variance inflation factor (VIF)
and tolerance were used to test multi-collinearity. If VIF is less than 10 and tolerance is more
than 0.2, the multi-collinearity model does not violate this assumption.
Table IV shows that Durbin–Watson value is (d = 1.455), which is around 2, the residuals
are not correlated with each other; therefore, the independence of errors is not violated. The
table also shows that the VIF values are less than 10 and the tolerance values are more than
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0.20. This indicates that there is no multi-collinearity within the independent variables of the
study.

Study hypothesis
Multiple regressions were used to test the study hypothesis (H0).
Table V shows that when regressing the eight independent variables against
independent variable, independent variables explain 81 per cent of variation in the
dependent variable, where (R2 = 0.81, F = 52.46, Sig = 0.000). Consequently, H0 is rejected
and the alternative hypothesis is accepted, which states that Lean Six Sigma elements
(defect, over production, waiting time, transportation, inventory, motion, extra processing
and non-utilized talent) have effect on JPMOs’ business performance, at a # 0.05.
Table VI shows that defects have highest effect on JPMO business performance ( b =
0.23, t = 4.27, Sig.=0.00, P < 0.05), followed by motion ( b = 0.22, t = 4.34, Sig. =0.00,
P < 0.05), then inventory ( b = 0.18, t = 3.72, Sig. =0.00, P < 0.05), transportation ( b =
0.18, t = 3.40, Sig.=0.00, P < 0.05), over production ( b = 0.13, t = 2.34, Sig.=0.02, P <
0.05) and non-utilized talent ( b = 0.12, t = 2.39, Sig.=0.01, p < 0.05), consequently.
However, waiting time ( b = 0.10, t = 1.94, Sig.=0.054, P > 0.05) and extra processing

No Item Mean SD t-value Importance Rank

1 Defects 4.64 0.37 47.93 High 2

2 Over production 4.49 0.37 43.98 High 4
3 Waiting time 4.40 0.43 35.84 High 5
4 Transportation 4.43 0.35 44.13 High 3
5 Inventory 4.52 0.31 53.60 High 1
6 Motion 4.29 0.54 26.23 High 9 Table II.
7 Extra processing 4.04 0.41 27.89 High 7 Mean, standard
8 Non-utilized talent 4.18 0.49 26.42 High 8
Lean Six Sigma (Independent Variables) 4.34 0.25 59.08 High
deviation,
Business Performance (Dependent Variable) 4.12 0.34 35.88 High importance and
ranking of study
Notes: t-tabulated = 1.96; N = 120 variables
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IJLSS

variables
Table III.
Bivariate Pearson’s
correlation for study
No. Variables Relationship 1 2 3 4 5 6 7 8 9 10

1 Defects Correlation
2 Over production Correlation 0.536**
3 Waiting time Correlation 0.348** 0.472**
4 Transportation Correlation 0.449** 0.436** 0.422**
5 Inventory Correlation 0.385** 0.363** 0.358** 0.385**
6 Motion Correlation 0.292** 0.459** 0.458** 0.356** 0.405**
7 Extra processing Correlation 0.259** 0.237** 0.277** 0.266** 0.278** 0.360**
8 Non-utilized talent Correlation 0.351** 0.215* 0.278** 0.119 0.284** 0.246** 0.450**
9 Lean Six Sigma Correlation 0.683** 0.710** 0.699** 0.664** 0.655** 0.683** 0.586** 0.556**
10 Business Performance Correlation 0.656** 0.633** 0.573** 0.617** 0.621** 0.635** 0.425** 0.446** 0.880**

Notes: **Correlation is significant at the 0.01 level (two-tailed); *correlation is significant at the 0.05 level (two-tailed); N = 120
 ( b = 0.01, t = 0.32, Sig.=0.74, P > 0.05) were not having significant effect on JPMO Lean six sigma
business performance, at a # 0.05. Practically, Jordanian Manufacturing companies are effect
concerned about how to reduce all wastes whatever their source defects, motion,
inventory, transportation, over production, non-utilized talent and waiting time, as well
as extra processes. However, they believe that waiting time and extra processes do not
have strong effect on business performance as others.

Discussion
Result of this study shows that there is an agreement among respondents on high
importance of all Lean Six Sigma elements and business performance items for the JPMOs.
Results also show that there is an agreement on high implementation of Lean Six Sigma
variables and business performance items. This result is supported by the previous studies,
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Data normality
No. Variables Tolerance VIF Durbin–Watson

1 Defects 0.58 1.70 1.45

2 Over production 0.56 1.77
3 Waiting time 0.64 1.55
4 Transportation 0.61 1.63
5 Inventory 0.68 1.45
6 Motion 0.62 1.60 Table IV.
7 Extra processing 0.69 1.43 Tolerance, VIF and
8 Non-utilized talent 0.68 1.47 Durbin–Watson tests

Table V.
Model r R2 Adjusted R2 F Sig. Regressing Lean Six
1 0.90 0.81 0.79 52.46 0.00 Sigma variables
against business
Note: N = 120 performance

Unstandardized Standardized
coefficients coefficients
Model B Std. Error b t Sig.

1 (Constant) 0.21 0.22 0.94 0.34

Defects 0.17 0.04 0.23 4.27 0.00
Over production 0.10 0.04 0.13 2.34 0.02
Waiting time 0.07 0.03 0.10 1.94 0.054
Transportation 0.12 0.03 0.18 3.40 0.00
Inventory 0.14 0.03 0.18 3.72 0.00 Table VI.
Motion 0.16 0.03 0.22 4.34 0.00
Extra processing 0.01 0.03 0.01 0.32 0.74
Regressing Lean Six
Non-utilized talent 0.08 0.03 0.12 2.39 0.01 Sigma variables
against business
Note: N = 120 performance
 IJLSS such as of Obaidullah (2005), Moosaa and Sajid (2010), Singh et al. (2010) and finally
Kumaravadivel and Natarajan (2011).
Results also indicate that the relationships among Lean Six Sigma variables are
medium to strong relationships, except the relationship between non-utilized talent and
transportation, which is weak and not significant. Moreover, the correlation between each
Lean Six Sigma variable with business performance is strong, and the relationship
between total Lean Six Sigma and business performance is very strong. This result is
supported by the previous studies, such as of Berty (2011), Stoiljkovi et al. (2011) and
finally Arunagiri and Babu (2013).
Finally, results show that Lean Six Sigma variables have effect on business
performance of JPMOs, at a # 0.05. Defects have highest effect on JPMO business
performance, followed by motion, then inventory, transportation, over production and
non-utilized talent, consequently. While waiting time and extra processing were not
having significant effect on JPMO business performance, at a # 0.05. This result is
supported by previous studies, such as of Yeh et al. (2011), Kuptasthien and
Boonsompong (2011), Mandahawia et al. (2012), Goriwondo and Maunga (2012), Enoch
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(2013), Maleki et al. (2013) and Dwivedi et al. (2014).

In the past three decades, the pharmaceutical companies, especially generic companies
subjected to many challenges, such as fast new product development, high competition in
quality and prices and regulatory and registration issues. Therefore, nowadays, many
companies are struggling to retain their places among competitors. In this context, the
managerial implication of this study’s results focuses on reducing waste related to people,
processes and products to improve companies’ performance. The study suggests that
implementing both LM and Six Sigma together to reduce waste and using statistical
measures to develop these three main elements to maximize resource utilization and
improve companies’ performance.
This study provides guidelines for managers to plan and implement Lean Six Sigma
programs to improve companies’ performance and economic profile. A synergy exists
between LM and Six Sigma practices. Six Sigma offer additional measures and practices to
LM to enhance quality improvement. The integration of LM and Six Sigma will insure
continuous improvement of people, processes and products. Implementing Lean Six Sigma
programs need organizational culture changes and readiness of human resources to learn
and work as teams. Moreover, scarce resources should be tailored to enhance management
competencies and build competitive advantages.
Top management readiness to allocate resources for Lean Six Sigma program is crucial
for successful implementation. It needs infrastructure development to support Lean Six
Sigma implementation and enhance human resources outcomes by training, involvement
and empowering to develop competitive advantages. Managers should use measures to
check the Lean Six Sigma implementation development, by effective measuring, reporting
and managing Lean six Sigma practices to ensure that the companies operate to maximize
the use of their assets and at their full potential and to improve their competitive advantage
and performance.
Managers have to develop their own conceptual framework causal relationship between
people, processes, products and performance. The study helps practitioners and decision-
makers to consider alternative production arrangements and techniques that add value and
support competitive advantages. In addition, it helps to design clear concepts that can be
used as indicators and measurements for success. The study also helps managers to develop
appropriate strategies for enhancing regulations and policies that support changes and
development and to overcome shortfalls. Moreover, it helps companies to address the
 obstacles for implementing Lean Six Sigma practices and to identify needed skills, which Lean six sigma
should be built and developed. effect
Finally, Lean Six Sigma techniques help management to be proactive rather than
reactive for decision-making and problem-solving. It also provides better understanding of
the relationships between people, processes, products and performance. Lean Six Sigma can
be applied to any company wherever it works and whatever its size. However, further
research is required to confirm applying the Lean Six Sigma concepts to all pharmaceutical
operations.

Conclusion
The results show that there is an agreement among participants on high importance and
implementation of each Lean Six Sigma variables (defect, over production, waiting time,
transportation, inventory, motion, extra processing and non-utilized talent) and business
performance items, which indicates JPMO realize the importance of the implantation of the
Lean Six Sigma variables.
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The results also indicate that the relationships among Lean Six Sigma variables are
medium to strong relationships, except the one between non-utilized talent and
transportation, which is weak and not significant. This indicates that Lean Six Sigma
variables affect each other. The relationship between each Lean Six Sigma variable and
business performance is strong. In addition, the relationship between total Lean Six Sigma
and business performance is very strong.
Moreover, the current study demonstrates that all Lean Six Sigma variables have an
effect on JPMOs’ business performance. The defect has the highest effect, followed by
motion, then inventory, transportation, over production and non-utilized talent, while
extra processing and waiting time do not have significant effect on JPMO business
performance.
Finally, Jordanian Pharmaceutical organizations strongly believe that implementing all
the waste variables are important and affect organizations’ business performance such as
productivity, profitability and market valuation of stocks.

Study limitations and recommendations

The use of one industry limits its generalizability to other industries. The study was
carried out in Jordan; therefore, generalizing results of one industry and/or
Jordanian setting to other industries and/or countries may be questionable.
Extending the analyses to other industries and countries represents future research
opportunities, which can be done by further testing with larger samples within the
same industry, and including other industries will help mitigate the issue of
generalizing conclusions on other organizations and industries. Moreover, further
empirical research studies involving data collection over diverse countries
especially Arab countries are needed.
The study recommends using Lean Six Sigma as a tool and technique to eliminate wastes
in JPMOs, conduct special training courses on how to implement Lean Six Sigma for
managers and other employees, visiting and analyzing separately all wastes in
manufacturing processes to be able to eliminate waste and reduce production cost. Finally,
assign a Lean Six Sigma champion as specialists to follow Lean Six Sigma profile and
ensure its implementation.
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Further reading
Zhang, Q., Irfan, M., Zhu, X. and Khattak, M. (2013), “Six sigma in synergy with risk management”,
European Journal of Business and Management, Vol. 5 No. 12, pp. 184-188.
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Corresponding author
Abdel-Aziz Ahmad Sharabati can be contacted at: APharmaArts@Gmail.Com

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