Six Sigma Enablers for Incoming Material Quality Improvement and Their Interaction in Supplier Domain for Indian Manufacturing Scenario

Abstract

Material quality is the predominant factor in governing competition in the existing supply chain. Hence, the right quality product at a competitive price has ever existed as it is now. Though the end-users are exploiting maximum benefit from this scenario, the complete value chain is moving towards cost optimization without scarifying the product quality. Every value chain is trying to improve or at-least maintaining the status-quo by creating a strategic supplier relationship program where the close relationship with suppliers helps the organization to avoid the uncertainties related to response time, order stability and incoming material quality, which incidentally responsible for the quick product to market. The incoming materials quality from the supplier is largely governed by process capability at the supplier end with respect to the desired quality standard from the manufacturing organization. In this context, Six Sigma is a widely accepted practice used in the industry in recent days for process capability improvement. Many researchers have studied Six Sigma in various contexts as a process improvement benchmark tool. In this paper, seven Six Sigma enablers are identified and one of the major enabler related to supplier domain; i.e., Supplier management is discussed in detail. The enablers (Proximity, Supplier Performance, Leadership, External Environment, and Supplier Management) those are directly contributing towards supply management are identified, and their interaction is studied through a hypothesized model. Structural equation modeling (SEM) is performed to understand relationship strength among these enablers. The enablers like leadership and supplier performance, exhibit relationship strength at a moderate level with supplier management. The relationship strength for all other enablers is at the minor level yet significant. Mediation does not affect the relationship significantly.