Luận văn thạc sĩ Kỹ thuật công nghiệp: Integrating ISO 9001: 2015 standard and lean six sigma tools into a quality management system: The case study of a furniture manufacturing company

VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY

HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY

PHAN LE MINH PHUONG

INTEGRATING ISO 9001:2015 STANDARD AND LEAN SIX SIGMA TOOLS INTO A QUALITY MANAGEMENT

SYSTEM THE CASE STUDY OF A FURNITURE MANUFACTURING COMPANY

Major code: 8520117

MASTER’S THESIS

HO CHI MINH CITY, July 2023

THIS THESIS IS COMPLETED AT

HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY – VNU-HCM

Supervisor: Dr Nguyễn Vạng Phúc Nguyên Examiner 1: Dr Lê Đức Đạo

Examiner 2: Dr Đỗ Thành Lưu

This master’s thesis is defended at HCM City University of Technology, VNU-

Master’s Thesis Committee:

1 Chairman: Assoc Prof Dr Đỗ Ngọc Hiền 2 Secretary: Dr Lê Song Thanh Quỳnh 3 Reviewer 1: Dr Lê Đức Đạo

4 Reviewer 2: Dr Đỗ Thành Lưu 5 Member: Dr Trần Quỳnh Lê

Approval of the Chairman of Master’s Thesis Committee and Dean of Faculty of Mechanical Engineering after the thesis being corrected (If any)

CHAIRMAN OF THESIS COMMITTEE HEAD OF FACULTY OF MECHANICAL ENGINEERING

i VIETNAM NATIONAL UNIVERSITY HO CHIMINH CITY

HOCHIMINH CITY UNIVERSITY OF TECHNOLOGY SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom - Happiness

THE TASK SHEET OF MASTER’S THESIS

2170119

8520117

I THESIS TITLE:

Integrating ISO 9001:2015 Standard and Lean Six Sigma Tools into a Quality Management System The Case Study of a Furniture Manufacturing Company (Tích hợp Tiêu chuẩn ISO 9001:2015 và các công cụ Lean Six Sigma vào Hệ thống quản lý chất lƣợng của công ty sản xuất đồ gỗ nội thất)

II TASKS AND CONTENTS:

Create a concept map for integrating the quality management system of a furniture manufacturing company with the ISO 9001:2015 Standard and Lean Six Sigma methodology

Establish a methodology to implement the integrated system of ISO 9001:2015 and Lean Six Sigma tools into the furniture manufacturing company's quality management system

III THESIS START DAY: 06/02/2023

IV THESIS COMPLETION DAY: 11/06/2023

V SUPERVISOR: Dr Nguyễn Vạng Phúc Nguyên

(Full name and signature)

DEAN OF FACULTY OF MECHANICAL ENGINEERING

(Full name and signature)

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ACKNOWLEDGEMENTS

Firstly, I would like to express my sincere gratitude to my thesis advisor Without his invaluable help and dedicated involvement at every step of the process, this thesis would not have been possible

Secondly, I would like to extend my heartfelt thanks to all the teachers in the Department of Industrial Engineering who have enthusiastically imparted a wealth of knowledge to me during these two years

Lastly, and most importantly, I would like to express my deepest appreciation to my husband and my two children for their unwavering support and assistance throughout my journey of studying and writing this thesis I take full responsibility for any errors or inadequacies that may be present in this work

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ABSTRACT

ISO 9001:2015 and Lean Six Sigma methodologies are widely adopted by companies worldwide nowadays While there have been studies integrating these approaches into a single framework, they have generally remained at a generic level without delving into specific sectors In Vietnam, there is a growing need to implement ISO 9001:2015 and Lean Six Sigma as a means to assess a company's readiness to join the global supply chain However, many small and medium Vietnamese companies are facing difficulties in applying the above systems due to the lack of available guidance to facilitate the integration of these practices

This research focuses on developing an integrated system of ISO 9001:2015 and Lean Six Sigma tailored specifically for the furniture manufacturing industry The aim is to enhance the industry's capabilities and improve its competitiveness in the market Building upon previous integration frameworks, this research provides a detailed examination of each ISO 9001 requirement and identifies the appropriate processes and Lean Six Sigma tools to complement them

The proposed integrated system has undergone review and been accepted for implementation at a furniture manufacturing company It is specifically designed for the furniture manufacturing industry, enabling the application of ISO 9001:2015 and Lean Six Sigma with greater ease and efficiency It also reduces the risk of misapplying ISO standards and Lean Six Sigma tools

This tailored integrated concept map can be further developed and extended to other leading industries in Vietnam, such as textiles, footwear, and food processing By doing so, it will contribute to improving the competitiveness of Vietnamese companies in the market

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TÓM TẮT LUẬN VĂN THẠC SĨ

Hiện nay, hệ thống quản lý chất lượng theo tiêu chuẩn ISO 9001:2015 và phương pháp Lean Six Sigma được các công ty trên toàn thế giới áp dụng rộng rãi Mặc dù đã có những nghiên cứu để tích hợp các cách tiếp cận này thành một hệ thống duy nhất, nhưng chúng vẫn dừng ở các mô hình chung chung mà không đi sâu vào bất cứ lĩnh vực cụ thể nào Tại Việt Nam, nhu cầu triển khai ISO 9001:2015 và Lean Six Sigma như một cách thức để đánh giá mức độ sẵn sàng tham gia chuỗi cung ứng toàn cầu của một công ty ngày càng tăng Tuy nhiên, nhiều công ty vừa và nhỏ của Việt Nam đang gặp khó khăn trong việc áp dụng các hệ thống trên do thiếu các tài liệu hướng dẫn thực hiện tích cả tiêu chuẩn ISO 9001:2015 và các công cụ Lean Six Sigma vào hệ thống quản lý hiện có của công ty

Nghiên cứu này tập trung vào việc phát triển một hệ thống tích hợp ISO 9001:2015 và Lean Six Sigma được thiết kế riêng cho ngành sản xuất đồ nội thất Mục đích là để tăng cường khả năng và nâng cao khả năng cạnh tranh của nó trên thị trường Dựa trên các mô hình tích hợp đã đề xuất trước đó, nghiên cứu này thực hiện xem xét chi tiết về từng yêu cầu của ISO 9001 và xác định các quy trình và công cụ Lean Six Sigma thích hợp đáp ứng các yêu cầu của tiêu chuẩn, qua đó từng bước hình thành hệ thống quản lý tích hợp

Hệ thống tích hợp đề xuất đã được xem xét và được chấp nhận để triển khai tại một công ty sản xuất đồ nội thất Hệ thống được thiết kế đặc biệt cho ngành sản xuất đồ nội thất, cho phép áp dụng ISO 9001:2015 và Lean Six Sigma một cách dễ dàng và hiệu quả hơn, giúp làm giảm nguy cơ áp dụng sai các tiêu chuẩn ISO và các công cụ Lean Six Sigma

Mô hình khái niệm tích hợp phù hợp được hình thành trong nghiên cứu có thể được tiếp tục phát triển và mở rộng sang các ngành công nghiệp hàng đầu khác ở Việt Nam, chẳng hạn như dệt may, da giày và chế biến thực phẩm Qua đó sẽ góp phần nâng cao năng lực cạnh tranh của các doanh nghiệp Việt Nam trên thị trường

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THE COMMITMENT OF THE THESIS’ AUTHOR

I hereby declare that the master’s thesis titled ―Integrating ISO 9001:2015 Standard and Lean Six Sigma Tools into a Quality Management System The Case Study of a Furniture Manufacturing Company‖ is the research work that I have personally undertaken and completed I received scientific guidance from Dr Nguyen Vang Phuc Nguyen at Ho Chi Minh City University of Technology to support and guide me in writing my thesis The results of this study have not been published in any other separate studies I have followed the appropriate rules and guidelines when incorporating results and quotations from other authors' documents into my essay The citations and references from books, newspapers, and websites have been presented in accordance with the reference list of the thesis

Author

Phan Le Minh Phuong

Chapter 2 LITERATURE REVIEW 4

2.1 ISO 9001:2015 Quality management system Requirements 4

2.2 Lean & Six Sigma methodology 7

2.3 The integration between ISO 9001:2015 and Lean Sigma 9

Chapter 3 INTRODUCTION OF RESEARCH SUBJECT 13

3.1 Introduction of Minh Duong Furniture Corporation 13

3.1.1History 13

3.1.2Company’s achievements: 13

3.1.3Company organization 14

3.2 Minh Duong’s Quality management system 14

3.2.1Current documentation system 14

3.2.2Gap analysis 16

Chapter 4 METHOD 21

4.1 ISO 9001:2015 Standard and Lean Six Sigma Methodology Integration Model 21

4.2 Approach ISO 9001:2015 Requirements and Applicable Tools 22

4.2.1ISO 9001:2015 Requirements 22

4.2.2 24

4.2.3Lean Six Sigma Tools and Strategic Tools 24

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Chapter 5 ANALYSIS OF ISO 9001 REQUIREMENTS AND SUGGESTED LEAN

SIX SIGMA TOOLS ON QUALITY MANAGEMENT OPERATIONS 33

5.1 Context of the organization (ISO Clause 4) 33

5.2 Leadership (ISO Clause 5) 37

5.3 Planning (ISO Clause 6) 39

5.4 Support (ISO Clause 7) 44

5.5 Operations (ISO Clause 8) 46

5.5.1Operational planning and control (Clause 8.1) 46

5.5.2Requirements for products and services (Clause 8.2) 47

5.5.3Control of externally provided processes, products, and services (8.4) 47

5.5.4Production and Service provision (ISO Clause 8.5) 48

5.5.5Release of products and services (ISO Clause 8.6) 51

5.5.6Control of nonconforming outputs (8.7) 51

5.6 Performance evaluation (ISO Clause 9) 51

5.6.1Monitoring, measurement, analysis, and evaluation (9.1) 51

5.6.2Internal audit (ISO Clause 9.2) 53

5.6.3Management review (ISO Clause 9.3) 54

5.7 Improvement (ISO Clause 10) 55

5.7.1General (ISO Clause 10.1) 55

5.7.2Nonconformity and corrective action (ISO Clause 10.2) 55

5.7.3Continual improvement (ISO Clause 10.3) 57

Chapter 6 A PROPOSED DESIGN of integrated QMS and LSS 59

6.1 Propose the Integration Approaches of ISO 9001:2015 and Lean Six Sigma methodology into Minh Duong’s quality management system 59

6.2 Propose Integrated QMS Process matrix 60

6.3 Designation of Operating procedures for the Integrated QMS 64

6.3.7Nonconforming product management 88

6.3.8Scheduling and Order management 89

6.3.9Purchasing and Supplier management 92

6.3.10Document and Change management 94

6.4 Overall Process metrics 97

Chapter 7 CONCLUSIONS AND RECOMMENDATIONS 105

7.1 Conclusions 105

7.2 Recommendations 105

REFERENCES 107

VITA 110

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TABLE OF FIGURES

Figure 2.1: Amount of ISO 9001 certified companies 7

Figure 2.2: Development history of Lean & Six Sigma (Perdana, 2008) 8

Figure 3.1: Minh Duong organization chart 14

Figure 3.2: Minh Duong Documentation System 15

Figure 3.3: Minh Duong process interaction chart 16

Figure 3.4: Compliance status 17

Figure 3.5: Minh Dương KPI monitoring system 17

Figure 3.6: Post Painting quality inspection 19

Figure 4.1: ISO 9001:2015 Standard and Lean Six Sigma Methodology Integration Model 22

Figure 4.2: The structure of ISO 9001:2015 Standards in PDCA Circle 23

Figure 4.3: Power and Interest Grid 25

Figure 4.4: Turtle diagram 28

Figure 5.1: Power and Interest Grid 37

Figure 5.2: Quality Policy 38

Figure 5.3: Risks/opportunities management process 41

Figure 5.4: High-level process chart 42

Figure 5.5: Quality objectives and Plan 44

Figure 5.6: Improvement project prioritiser 57

Figure 6.1: The Concept map of Proposed Integrated Quality Management System 60

Figure 6.2: Manufacturing process flowchart 65

Figure 6.3: Manufacturing process flowchart with clouds 66

Figure 6.4: Fishbone diagram 67

Figure 6.5: 5Why analysis 68

Figure 6.6: Containment actions 69

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Figure 6.7: Manufacturing process - Turtle diagram 70

Figure 6.8: 3 C Follow Up Chart 72

Figure 6.9: Daily/weekly compliance checklist 72

Figure 6.10: Post painting rework rate 76

Figure 6.11: Procedure template 77

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TABLE OF TABLES

Table 2.1: Definition of quality 6

Table 2.2: Summary of research on integrating ISO 9001:2015 and LSS methodology 9

Table 3.1: Quantity of Production output versal Total work in progress 19

Table 5.1: PESTLE Analysis 34

Table 5.2: SWOT Analysis 35

Table 5.3: List of interested parties' needs and expectations 36

Table 5.4: Delegation of Authority 39

Table 5.5: Organization’s Risks and Opportunities 40

Table 5.6: Outsourcing process – Requirements and Explanation 47

Table 5.7: Control of Production - Requirements and explanations 49

Table 5.8: Monitoring, measurement, analysis, and evaluation 53

Table 5.9: Internal audit management – process information 53

Table 5.10: Internal audit management – process metrics 54

Table 5.11: Internal audit management – process information 56

Table 5.12: Internal audit management – process information 56

Table 6.1: Propose Integrated QMS Process matrix 61

Table 6.2: List of applicable ISO 9001 requirements for Manufacturing process 65

Table 6.3: Containment to quickly fix the process 68

Table 6.4: Manufacturing process – Competence requirements 73

Table 6.5: Manufacturing process metrics 74

Table 6.6: Manufacturing support process vs ISO 9001 Requirements 77

Table 6.7: Facility / Equipment / Tooling management – process information 78

Table 6.8: Facility / Equipment / Tooling management – process metrics 79

Table 6.9: Labor management - process information 80

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Table 6.10: Labor management - process metrics 81

Table 6.11: Material management – process information 82

Table 6.12: Material management – process metrics 83

Table 6.13: Technical management – process information 84

Table 6.14: Technical management – process metrics 84

Table 6.15: Quality control – Process information 85

Table 6.16: Quality control – Process metrics 87

Table 6.17: Nonconforming product management – process information 88

Table 6.18: Nonconforming product management – process metrics 88

Table 6.19: Order management vs ISO 9001 Requirements 89

Table 6.20: Order management – process information 89

Table 6.21: Order management – process metrics 91

Table 6.22: Purchasing vs ISO 9001 Requirements 92

Table 6.23: Purchasing and Supplier management 92

Table 6.24: Purchasing and Supplier management – process metrics 94

Table 6.25: Document and Change management vs ISO 9001 Requirements 94

Table 6.26: Document and Change management – process information 94

Table 6.27: Document and Change management – process metrics 96

Table 6.28: List of prototype operational process 96

Table 6.29: Overall Process metrics 97

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LIST OF ABBREVIATIONS

International Organization for Standardization ISO

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A common difficulty preventing those Vietnamese companies to be accepted into the world-famous furniture brand supply chains is that they do not have a mature management system that could assure the consistent quality of products and competitive product cost while still maintaining social accountability By the implementation of ISO 9001: 2015 Standard (ISO 9001), a manufacturing company could meet the prerequisite condition to be a subcontractor for many famous supply chains ISO 9001 could help to deliver the product with consistent quality and the application of Lean Six Sigma (LSS) methodology could help tackle the cost-saving objective However, even though many companies try to implement both ISO 9001 and adopt LSS but only a few of them succeed

1.2 Problem description

Vietnamese Small and Medium Enterprises (SMEs) face difficulties in applying ISO 9001:2015 as well as adopting Lean Six Sigma The companies have struggled to maintain the quality system after implementing the ISO and have not been able to explore all of its benefits There are three main reasons for this issue Firstly, the generic features that make ISO 9001 and LSS applicable to all enterprises, now become a difficulty for Vietnamese companies due to resource restrictions The lack of resources with good knowledge and proper skills to deploy ISO 9001 and LSS leads to a system failure as defined by Iguchi et al (2015) Secondly, the

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lack of discipline in the workforce makes it more difficult and costly to implement and maintain the system as the company must arrange more resources in facilitating, supervising, and auditing to keep the system working Thirdly, top management’s mindsets and commitment are crucial as the employee will shadow the leader’s behavior In many failed cases, top management was not taking their role fully [4], [5] Generally, there are objective difficulties that prevent Vietnamese SMEs from participating in the supply chains of world-renowned furniture brands and they need support to be able to move forward The failures in the implementation of ISO 9001:2015 & adoption of LSS methodology by Vietnamese SMEs make them struggle and fight hard to be competitive in the market

There have been various research studies on the integrated systems of ISO 9001:2015 and LSS methodology over the last few years However, these studies focus on developing integration frameworks rather than specifically addressing the implementation of the integrated system for a specific subject in real life

1.3 Research goal

The thesis goal is to establish a custom-built integrated system between ISO 9001:2015 and Lean Six Sigma tools at a specific manufacturing company for exploring all possible benefits of implementing those systems with minimal resources

The objectives that need to be achieved as a complete sign of this research is below:

 Develop a model for integrating ISO 9001:2015 Standards and Lean Six Sigma methodology in a furniture manufacturing company

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 Design a method for implementing the integrated systems between ISO 9001:2015 Standard and Lean Six Sigma tools into a quality management system of a furniture manufacturing company

1.6 Research structure

The thesis is divided into seven chapters After the Introduction in Chapter 1, The Literature review in Chapter 2, and The Introduction of the research subject in Chapter 3, the method for establishing an integrated system is presented in Chapter 4 The proposed integrated system is in chapter 5 where all measures for the integration are detailed for implementation The conclusion and recommendation are discussed in chapter 6 of the thesis The schedule of tasks done during the thesis study period is presented in the last chapter.

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CHAPTER 2 LITERATURE REVIEW

This chapter aims to present a brief discussion of the quality management system ISO 9001:2015 Standard, Lean Six Sigma methodology as well as the integration between ISO 9001:2015 Standard and Lean Six Sigma

2.1 ISO 9001:2015 Quality management system Requirements

The first term for discussion is Quality Quality has been defined in several different ways and there is not any universal definition of quality exists Reeves & Bednar, (1994) summarized some popular quality definitions, strengths, and weaknesses in Table 2.1:Definition of quality When viewed from a consumer’s perspective, it means meeting or exceeding customer expectations [7] According to ISO 9000 Standard, quality is the degree to which a set of inherent characteristics of an object fulfills requirements [8] In this research, we use the definition by ISO 9000 Standard

Fulfilling customer’s requirements is crucial to the existence of an organization, so there must be a means to manage quality That is when the term Quality management system appears Compared with many different definitions of quality, QMS are defined quite uniformly The Quality management system is composed of all the organization’s policies, procedures, plans, resources, processes, and delineation of responsibility and authority, all deliberately aimed at achieving product or service quality levels consistent with customer satisfaction and the organization’s objectives When these policies, procedures, plans, and so forth are taken together, they define how the organization works and how quality is managed [7] This is also similar to the definition by ISO that the quality management system is a set of interrelated or interacting elements of an organization to establish policies and objectives about quality, and processes to achieve those objectives [8]

ISO 9001 is the most popular quality management system used all over the world, which was first published in 1987 by International Organization for Standardization (ISO) The standard was based on the BS 5750 series from British Standard Institution (BSI) [9] ISO 9001 sets out the criteria for a certified quality management system that can be used by any organization, large or small, regardless of its field of activity ISO 9001 Standard employs the

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process approach, which incorporates the Plan-Do-Check-Act (PDCA) cycle and risk-based thinking [10] In the latest version, ISO 9001:2015, its core elements are standardized by Annex SL, a high-level structure of ISO Standard This will help companies implement ISO 9001:2015 easily and integrate with other ISO Management Standards [11] Nowadays, there are over one million companies and organizations in over 170 countries certified to ISO 9001 [12] No organization is required to implement ISO 9001, except some governments or companies demand their suppliers must be ISO 9001 certified or at least conform to ISO 9001 The standard defines what organizations have to be complied with but does not dictate how to do it Organizations must define the level of conformance by themselves When an organization seeks registration, it must look for an accredited registrar firm to verify its conformance to ISO 9001 [7]

In short description, ISO 9001:2015 Standard is an international standard that specifies requirements for a QMS Potential benefits to an organization of implementing this standard are the ability to consistently provide products and services that meet customer and regulatory requirements, facilitating opportunities to enhance customer satisfaction; addressing risks and opportunities associated with its context and objectives; the ability to demonstrate conformity to specified quality management system requirements [10] Research by V Nguyen (2019) shows that the number of Vietnamese enterprises granted ISO 9001 certificates is not high This certification rate is not only significantly lower than developed countries but also lower than neighboring countries like Thailand, and Malaysia (Figure 2.1:Amount of ISO 9001 certified companies)

In this thesis, terms and definitions related to the quality management system are used as defined in the International Standard ISO 9000:2015 Quality management system – Fundamentals and Vocabulary [8]

 Quality is “the degree to which a set of inherent characteristics of an object fulfills requirements”

 Management system is “a set of interrelated or interacting elements of an organization to establish policies and objectives and processes to achieve those objectives"

 Quality Management System is part of a management system concerning quality

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 Requirement is a need or expectation that is stated, generally implied, or obligatory  Documented information the information contains on the media that required to be

controlled and maintained by an organization

Table 2.1: Definition of quality

Quality is excellence

Strong marketing and human resource benefits

Universally recognizable - mark of uncompromising standards and high achievement

Provides little practical guidance to practitioners

Concept of value incorporates multiple attributes

Focuses attention on a firm's internal efficiency and external effectiveness

Allows for comparisons across disparate objects and experiences

Difficulty extracting individual components of value judgment

Questionable inclusiveness

Quality and value are different constructs

Quality is conformance to

specifications

Facilitates precise measurement Leads to increased efficiency Necessary for global strategy Should force disaggregation of consumer needs

Most parsimonious and

appropriate definition for some customers

Consumers do not know or care about internal specifications

Inappropriate for services

Potentially reduces organizational adaptability

Specifications may quickly become obsolete in rapidly changing markets

Internally focused Quality is

meeting and/or exceeding expectations

Evaluates from customer's perspective

Applicable across industries Responsive to market changes All-encompassing definition

Most complex definition Difficult to measure

Customers may not know expectations Idiosyncratic reactions

Pre-purchase attitudes affect subsequent judgments

Short-term and long-term evaluations may differ

Confusion between customer service and customer satisfactions

From the success of Motorola, many organizations started using Six Sigma, and the most famous one was General Electric under Jack Welch’s leadership, who popularized the Six Sigma method Six Sigma is a disciplined, data-driven methodology for eliminating defects in any process To achieve six sigma quality, a process must produce no more than 3.4 defects per million opportunities Six sigma principles are process improvement, statistical methods, customer focus, attention to processes, and a management system focusing on high-return improvement projects that result in continuous improvement and significant financial gains [14]

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Figure 2.2: Development history of Lean & Six Sigma [15]

On the other hand, Ford’s technique with the production flow had moved world manufacturing from centuries of craft production to mass production Largely as a result, the United States soon dominated the global economy [16] After World War II, in Japan, Toyota company tried to introduce Ford’s mass production system in their factory but suffered resistance from employees Then Toyota made a significant decision to work within its organization to improve productivity Eiji Toyoda and Taiichi Ohno, two engineers at Toyota credited with the development of the so-called Toyota Production System based on what was obtained from the West and the two pillars of Just-in-Time & autonomation With many initiatives on the ways of developing its system such as the Pull system, Kanban, Kaizen, and SMED…, The Toyota Production System excelled and become the world’s benchmark for manufacturing organizations all over the world with the name Lean manufacturing [17] Lean manufacturing is a manufacturing philosophy that focuses on delivering high-quality products at the lowest price and at the right time Lean manufacturing focuses on eliminating waste or non-value-added activities Lean basic principles on improving workflow, decreasing setup

2.3 The integration between ISO 9001:2015 and Lean Sigma

Together with the popularity of ISO 9001:2015, Lean & Six Sigma has become well-known within the SMEs community and in the academic environment In Vietnam, we usually see TQM applied in big corporates like Coca-Cola, Ford, and Toyota…while local SMEs implement ISO 9001 Plenty of them also try to adopt Lean and Six Sigma to save costs for the organization by eliminating waste and preventing non-quality Researchers are working on the integration between ISO 9001 Standard, Lean & Six Sigma as listed in the Summary of research on integrating ISO 9001:2015 and LSS methodology

Table 2.2: Summary of research on integrating ISO 9001:2015 and LSS methodology

Chiarini 2011 How the application of lean methodology affects and formalize into ISO 9001 documents

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Karthi et al 2011 Obtain knowledge from previous research to evolve a roadmap for implementing Lean Six Sigma through ISO 9001:2008 standard-based QMS

Karthi et al 2012 The implementation of Six Sigma model via the ISO 9001 standard-based quality system

Bacoup et al 2014 Propose method to lead manufacturing or service companies to certification without creating more documentation

Marques et al 2016 Integrate LSS program and ISO 9001:2015 by making use of the high-level structure defined in Annex SL

Wirkus & Chmielarz

2018 Defined concept of integration of QMS and chosen Lean tools based on literature analysis and experience of the authors Fonseca &

Domingues

2018 Assess CI performance within Portuguese ISO 9001 certified organizations toward the adoption level of Kaizen, Lean and Six Sigma

Veena & Prabhushankar

2019 Define gap exists in implementation of Lean, Six Sigma and ISO 9001:2015, then develop a method to fill the gap

Sá et al 2022 Integrate Lean tools and ISO 9001:2015 in a way that the QMS to become more practical and dynamic, reinforcing the creation of value for the organization

Yusof & Lee 2022 Optimize the quality of the macarons products via the integration of Six Sigma and ISO 9001:2015 Quality Management System

Karthi et al (2012) studied the implementation of the Six Sigma model via the ISO 9001 standard-based quality system The authors stated that a fault identified by an ISO 9001-based quality management system, especially through the conduct of audits, is restored by carrying out a Six Sigma project The achieved Six Sigma results could be sustained through the documentation of results, development of procedures, and work instructions of the Quality management system which is compliant with ISO 9001 These authors also mentioned that the way of implementing Six Sigma through ISO 9001:2000-based quality management system could be suitable for SMEs as it required minimum effort Research conducted by Chiarini (2011) during 9 years on 107 companies in Europe concluded that the application of lean methodology affects the document system Value Stream Mapping, lean metrics, 5S, and takt

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time are the most used lean principles or tools, and 5S, Jidoka, and Total preventive maintenance (TPM) are those that have been more formalized into ISO 9001 documents Marques et al (2016) propose ways to integrate Lean Six Sigma program and ISO 9001:2015 requirements by making use of the high-level structure defined in Annex SL and try to link LSS Tools with applicable clauses of ISO 9001:2015 Other authors look into the gap that exists in Lean implementation, Six Sigma methodology, and ISO 9001:2015 QMS by considering the dimensions such as objective; focus; management; organization; resource requirement; training; framework/model, and documentation, then a framework is developed which integrates all the three methodologies to fill the gap [23] Karthi et al (2011) defined the integration of LSS with the ISO 9001 standard and proposed a road map for implementing LSS through ISO 9001 (version 2008) Wirkus & Chmielarz (2018) defined the concept of integration of QMS (already implemented in the organization) and chosen Lean tools The concept has been developed based on literature analysis and the experience of the authors

Different from the hunger to implement ISO 9001:2015 and LSS at the beginning, SMEs gradually found a heavy burden in implementing many tools & standards while lacking resources to manage and maintain the system There is a proposed model for integrating Lean tools and requirements of ISO 9001:2015 which allows the QMS to become more practical and dynamic, reinforcing the creation of value for the organization [26] Bacoup et al (2014) proposed a methodology that leads manufacturing or service companies to certification without creating more documentation It guarantees agility and flexibility in the day-to-day management of the company and induces lower costs and reduced times This methodology provided a new way of tackling the implementation of ISO Standards in a company which was helpful to solve the resource and skill restrictions to implement ISO 9001:2015 and LSS by SMEs Yusof & Lee (2022) worked on a specific case which is a macaron manufacturing company to optimize the quality of the macaron products via the integration of Six Sigma and ISO 9001:2015 Quality Management System Fonseca & Domingues (2018) assess the level of utilization of Kaizen and other CI methodologies within Portuguese ISO 9001-certified organizations by checking if there are statistical differences in the level of adoption of Kaizen, Lean, and Six Sigma

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In general, most of the research outcomes are the generic integration framework and haven’t been tested on a real object Some researchers work on a specific case but still now yet provide a detailed roadmap or guideline to implement the integrated system This research continues the route by developing those frameworks and putting them into real life in a specific type of manufacturing organization, which is a furniture manufacturing company.

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CHAPTER 3 INTRODUCTION OF RESEARCH SUBJECT

3.1 Introduction of Minh Duong Furniture Corporation 3.1.1 History

Minh Duong Furniture Joint Stock Company was established on 12/12/2002 by Mr Duong Minh Chinh as Chairman and Mr Duong Minh Dinh as General Director, under the name Minh Duong Co., Ltd with 100% capital Vietnam The company is registered to operate in many business fields, but mainly focuses on exporting and processing furniture On 11/12/2007, Minh Duong changed its name to Minh Duong Furniture Joint Stock Company, licensed by Binh Duong Department of Planning and Investment

During the past years, Minh Duong has received a lot of support and advice on Quality and Production Management from professional organizations such as Mekong Support Fund, Cooperation and Development Project from Denmark, the Netherlands With continuous efforts to expand business, improve revenue and reach more markets, within 10 years, Minh Duong has become one of the leading companies in Vietnam in the field of domestic export the seventh With head office and top management in Binh Duong province, Vietnam, Minh Duong directly employs more than 2,000 employees

The company's main products include living room, bedroom, dining table and chairs, TV cabinet, tea table We specialize in rubber wood, pine wood, oak wood, ash wood

3.1.2 Company’s achievements:

With the vision of "becoming the most competitive and reliable furniture manufacturing company in Vietnam with customers around the world", the company defines its mission as follows:

 Provide high quality products with competitive price

 Continually improve technology to provide a wider range of products  Guaranteed on-time delivery

 Provide professional customer service

 Continuously upgrade the management system to improve operations

15 3.2 Minh Duong’s Quality management system 3.2.1 Current documentation system

The scope of Minh Duong's quality management system covers 8 departments: Sales, Purchasing, Planning, Technical, Maintenance, Quality, Production, and Human Resources This year, ERP systems have been installed in the Sales, Planning, Accounting, Purchasing, Human Resources, and Planning Departments The company has also been certified with ISO 9001 since 2010 There are 47 documented processes, 112 templates, and organizational charts, as well as job descriptions available for all departments and nearly every position The documentation system is managed on shared drive and accessed privileges as in Figure 3.2:Minh Duong Documentation System Interaction between processes is defined as a requirement by ISO 9001:2015 and displayed in Figure 3.3:Minh Duong process interaction chart

Figure 3.2: Minh Duong Documentation System

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Figure 3.4: Compliance status

Figure 3.5: Minh Dương KPI monitoring system

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Business performance is evaluated daily on Production Output, Defect rate, Stock, and Receivables… Data presented in graphs and charts is visible to recognize its trending (Minh Dương KPI monitoring ) However, there is lack of action on the monitoring data as goals are not established and monitored Setting goals and striving to achieve the targets, combining the closed monitoring by this system would be a powerful tool to improve business performance

The processes to fulfill customer’s requirements (PKH-QT-01/02/03), which starts from the time Planning department issues the production plan for an order, reveals that it takes 6 weeks for an order to run through all process steps before it is ready for shipment The reason for 6-week long cycle is due to its habit of planning on a weekly basis, which means materials for a whole week are pushes into production without caring the amount of work-in-progress (WIP) currently stay on the lines nor the consumption at each stage Detail scheduling and progress monitoring at production team is not implemented as the consequence of productivity data’s insufficiency and lacking manpower to collect The production is in a Push mode, a reverse into Pull mode could help reduce total 6-week lead time A shift from a 6-day production batch (one week) to 3-day will reduce both the amount of work in process and lead time Data showing long cycle and high WIP in production are presented in Quantity of Production output versal Total work in progress

Another process to review is the Production Controlling process The nature of wooden furniture manufacturing is craftmanship, mostly depending on the worker’s skills and the quality of material input After each step in the manufacturing process, the semi-products are checked by operators and reworked if defective However, the defect rate check by the Quality Control inspector at the end of the Painting line is always approximately 50% (Post Painting quality inspection) which means the in-process inspection at Production is not effective

The process to manage skill and competence for people doing work that affects the performance and effectiveness of the quality management system is unavailable There are skill charts and skill evaluations in the Production area, but not practiced regularly Rationale for the skill set of a particular position is not clear, mostly based on supervisor’s experiences and not implemented for all required positions Competencies and skills of operators at rework and checking station is prerequisite condition to assure the quality of products coming out from these

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stations before going into painting process The high defect rate after Painting (Figure 3.6:Post Painting quality inspection) is a direct consequence from lack of skill and competence management process

Table 3.1: Quantity of Production output versal Total work in progress

Figure 3.6: Post Painting quality inspection Week Manday

Post painting(USD)

Finish goods(USD)

WIP (USD)

Day of WIP19

241 13,010 15,361 566,342 3717

224 18,371 17,734 630,831 3616

213 18,256 18,298 641,213 3515

226 17,865 19,065 679,260 3614

244 16,535 17,918 743,153 4113

253 18,107 19,899 747,185 3812

245 17,637 18,759 720,845 3811

236 19,151 19,263 677,597 3510

246 18,188 17,813 682,477 389

234 24,045 13,944 759,974 558

236 18,972 20,004 775,004 397

236 17,040 17,779 777,702 44

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The process to manage skill and competence for people doing work that affects the performance and effectiveness of the quality management system is unavailable There are skill charts and skill evaluations in the Production area, but not practiced regularly Rationale for the skill set of a particular position is not clear, mostly based on supervisor’s experiences and not implemented for all required positions Competencies and skills of operators at rework and checking station is prerequisite condition to assure the quality of products coming out from these stations before going into painting process The high defect rate after Painting (Figure 3.6:Post Painting quality inspection) is a direct consequence from the lacking of skill and competence management process

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CHAPTER 4 METHOD

This study obtains the output from previous studies about integrating ISO 9001: 2015 Standard and LSS methodology Combining the current business situation with the author's own experience, a set of Lean Six Sigma tools are selected and utilized to ensure that relevant requirements of the quality management system and its objectives are met Regarding the two research objectives identified in Chapter 1, this study is divided into two stages, which are: i Select a model of Lean Six Sigma is built on the foundation of ISO 9001:2015 and is applicable to furniture manufacturing, ii To approach the requirements of the ISO 9001 standard and Lean Six Sigma tools in preparation for the integration to be carried out in the next chapter of this thesis

4.1 ISO 9001:2015 Standard and Lean Six Sigma Methodology Integration Model

The first inputs for the proposed integrated system development are from previous research Among them, the ideas of integration of LSS tools and ISO 9001:2015 interface [26] and linkage of the organization planning level with PDCA method, ISO 9001:2015 requirements, and possible implementations of Lean tools [30] are the most remarkable one and are referenced for developing the proposed integrated system The target of this study is about processes and system, so PDCA approach is chosen in structuring the design, while DMAIC (the structured problem-solving method used in Lean Six Sigma, stands for Define, Measure, Analyze, Improve, and Control) is referenced in the planning of measurement, monitoring, and evaluation of process’s performance for the future improvement activities

The second inputs are the chosen of applicable Lean Six Sigma tools based on the author’s own experience that aligns with the research subject’s characteristic, which is a furniture manufacturing company (will be mentioned in short form as “Business” or “Company”) After inputs are processed, the theory framework of the integrated management system is established as in ISO 9001:2015 Standard and Lean Six Sigma Methodology Integration Model

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documents and records (7.5) Guidelines and requirements for company operation are stated in Clause 8 Together with Clause 7, they are considered the "Do" phase in the PDCA cycle Clauses 9 (Performance Evaluation) and 10 (Improvement) take on the roles of "Check" and "Action," where various actions are implemented to monitor, measure, analyze, and evaluate the effectiveness and efficiency of the QMS The actions outlined in Clause 10 aim to make necessary improvements to ensure the QMS achieves its intended results

Figure 4.2: The structure of ISO 9001:2015 Standards in PDCA Circle

In the Standard, the term "shall" indicates a requirement that needs to be fulfilled, while "documented information" represents a policy or procedure that needs to be established, maintained, or a record to be retained as evidence of the activities The Standard is reviewed for all instances of "shall" and "documented information" Each occurrence of "shall" or "documented information" is an action, the establishment of a procedure, or the retention of a record to fulfill the requirements of the Standard

In summary, the authors walk through the following 4 steps in completing this thesis:

1 Conduct a search to find relevant keywords related to ISO-based requirements and documented information

2 Identify Lean Six Sigma (LSS) tools that align with the ISO-based requirements and documented information

4.2.2 Lean Six Sigma Tools and Strategic Tools 4.2.2.1 Strategic Tools

 PESTEL:

PESTEL is a useful analysis tool that helps businesses know the "big picture" of the business environment in which they operate, thereby identifying potential opportunities and threats in it PESTEL consists of 6 elements:

 Political (politics)  Economic (economics)  Social (social)

 Technological (technology)  Legal (legal)

opportunities for the project or business