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Equation
Development of structural model for Lean
equation model for Lean Six Six Sigma
system
Sigma system incorporated with
sustainability considerations 687
Ben Ruben R. Received 12 November 2018
Revised 17 March 2019
Department of Mechanical Engineering, 12 July 2019
Sri Krishna College of Engineering and Technology, Coimbatore, India, and Accepted 13 January 2020

S. Vinodh and Asokan P.

Department of Production Engineering,
National Institute of Technology, Tiruchirappalli, India

Abstract
Purpose – The study aims to describe the development of a structural measurement model using structural
equation modeling technique to validate the association that exists between Lean Six Sigma (LSS) and
sustainable manufacturing strategies.
Design/methodology/approach – Both LSS and sustainable manufacturing aim at improving the
firm’s business competitiveness which forms a strategic link that benefits the manufacturing organizations.
The study aims to investigate the relationship among constructs that leads to operational excellence while
deploying LSS and sustainable manufacturing strategies in organizations.
Findings – Empirical data needed for the study are collected from experts belonging to various industries
that are implementing both LSS and sustainable manufacturing practices. Later statistical estimates
(hypotheses) are being formulated to confirm the developed measurement model. Based on the obtained
results after analysis of the structural model, the statistical estimate is either being accepted or rejected.
Results of this study reveal that there exists a strong correlation between LSS and sustainable manufacturing
factors that leads to organizational performance.
Research limitations/implications – Additional indicators could be included to deal with
technological advancements in sustainable manufacturing.
Practical implications – The study has been done with regard to Indian automotive component
manufacturing organizations scenario. Hence, the inferences derived have practical relevance.
Originality/value – The development of structural model for the Lean Six Sigma system with
sustainability considerations is the original contribution of the authors.
Keywords Structural equation modelling, Lean Six Sigma, Organizational performance,
Sustainable manufacturing
Paper type Research paper

1. Introduction
Lean manufacturing and Six Sigma are two powerful business strategies that facilitate
waste elimination and defect reduction, respectively (Arnheiter and Maleyeff, 2005; Wang
and Chen, 2012; Laureani and Antony, 2017). Lean Six Sigma (LSS) is the International Journal of Lean Six
Sigma
strategy facilitating combined benefits (Cheng and Chang, 2012). LSS aims at improving the Vol. 11 No. 4, 2020
pp. 687-710
performance of a process by reduction of wastes and activities that does not add © Emerald Publishing Limited
2040-4166
any value to the customers and also by reducing the number of defective parts DOI 10.1108/IJLSS-11-2018-0123
IJLSS (Furterer and Elshennawy, 2005; Timans et al., 2016; Gupta et al., 2018). Sustainability has
11,4 become one of the vital goals of manufacturing organizations because of the paradigm
change necessitated by our society to focus on economic activity impacts, such that the
manufacturing firms require to exhibit major focus for environment and society in their
actions (Jayal et al., 2010; Faulkner and Badurdeen, 2014; Aboelmaged, 2018). Operational
excellence is the transaction of the business strategy to yield maximum results more
688 consistently and reliably. LSS is a significant approach for facilitating process efficiency and
effectiveness which results in increased customer satisfaction and enhanced bottom line
results. Sustainable manufacturing focuses on the development of products using
economically viable methods that reduce negative environmental issues while conserving
resources. Both LSS and sustainable manufacturing strategies aim at achieving operational
excellence by providing tangible and quantifiable results that improves the system’s
performance. Table I shows relation between different indicators of sustainable
manufacturing and how they are related to LSS methodology.
Sustainability of LSS is one of the most challenging aspects for many firms that have
adopted this approach. It is also important to break down the deployment process into
modules such as Assessment, Monitoring, Sustainability and Expansion and to apply
necessary tools to ensure operational success (Arcidiacono et al., 2016). Recently,
manufacturing organizations have been recognizing the importance of LSS strategy with
sustainability concepts (Cherrafi et al., 2016). Certain research studies are being reported in
the context of LSS with sustainability considerations (Cherrafi et al., 2016; Garza-Reyes et al.,
2017). LSS concepts are also being integrated with Industry 4.0 paradigm as LSS strategies
helps in optimizing the waste resources and improves process quality (Arcidiacono and
Pieroni, 2018). Most of the LSS tools depend upon data to understand in depth problems as
data is necessary to drive any process improvement. This is considered as one of the core
ideas of Industry 4.0. Automotive component manufacturing organizations that have been
implementing integrated LSS strategy with sustainability considerations to achieve
integrated operational benefits (Fadly Habidin and Mohd Yusof, 2013).
The present study describes the development of a structural model using structural
equation modeling (SEM) technique to analyze and study the association between LSS and
sustainability measures and their integrated effect in improvising the organizational
performance. For this purpose, a structural model comprising of 7 constructs and 28

Sustainable manufacturing
indicator Lean Six Sigma benefit

Energy consumption Defect reduction reduces total energy wasted on failed production. Usage of
statistical tools also monitors the energy levels and prevents overconsumption
of resources
Material efficiency Material consumption is being reduced because of reduction in overall defects
and improvement in process efficiency
Solid waste and emissions Solid waste is reduced because of defect reduction. This eliminates the overall
Table I. emissions caused because of its disposal
Water use The total water consumption level gets reduced as there is a reduction in
Relationship between
defects Water quality is also improved because of implementation of LSS
different indicators of process improvement actions
sustainable Social sustainability Because of deployment of defect reduction strategies, customer satisfaction
manufacturing and levels gets improved and product safety features also gets improved because
Lean Six Sigma of deployed improvement actions
indicators have been developed. Seven constructs selected for this study include Employee Equation
Management, Defect and waste management, Business Strategy, Safety Aspects, model for Lean
Environmental Performance, Economic Performance and Organizational Performance. Each Six Sigma
construct include indicators which are of reflective type. A partial least squares (PLS)-based
SEM approach was adopted for this study for performing the analysis. A questionnaire was
system
designed in line with the selected indicators and was used for conducting the survey for data
collection. Input data pertaining to the analysis was collected from 65 automotive 689
component manufacturing firms that implements both LSS and sustainability concepts. The
data has been collected from experts of manufacturing organizations. The practical
inferences are being derived.

2. Literature review
The review has been performed on development of structural models in Lean
manufacturing, Six Sigma, LSS and sustainable manufacturing scenarios and SEM
applications in other manufacturing domains. The review was useful in understanding
about SEM applications and also helped in gaining a better understanding about different
modeling approaches and their factors that describe the study.

2.1 Development of structural models on Lean manufacturing, Six Sigma, Lean Six Sigma
and sustainable manufacturing
This section describes the development of structural models performed on various business
improvement systems and about interrelationships among their constructs and indicators.
Interpretive Structural Modeling (ISM) and SEM are widely used modeling approaches
available in literature. ISM is used for analyzing the factors and barriers, and SEM is used
for finding the contextual relationship that exists between different constructs of the
systems. Table II presents the literature review conducted on modeling studies on Lean
manufacturing, Six Sigma, LSS and sustainable manufacturing. The review was mainly
performed to find the important factors and constructs of LSS and sustainable
manufacturing and to gather insights on the application of SEM technique that has been
applied on various domains pertaining to the research theme.

2.2 Application of structural equation modeling in manufacturing domain

This section discusses SEM applications in other manufacturing domains. Literature review
conducted on SEM applications with respect to manufacturing domain is discussed in
Table III.

2.3 Research gaps

On analyzing the review, it is recognized that various authors have developed structural
models using SEM approach for analyzing the relationships among factors of Lean
manufacturing, Six Sigma, LSS, TQM and sustainable manufacturing. It is also evident that
SEM is a powerful statistical technique for finding the interrelationships among the factors
that defines a system. To the best knowledge of the authors and also based on the review
performed in Section 2.1, no concrete research has been performed to analyze the
relationship between LSS and any other business improvement strategies that leads to
organizational performance. In line with this gap, the present study is performed to
investigate the relationship among the factors that leads to operational excellence while
deploying LSS and sustainable manufacturing strategies through a systematic analysis.
 11,4

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Table II.

Sigma and
sustainable
manufacturing
studies in Lean, Six
Review on modeling
Research study Domain Approach Important factors/constructs Findings

Soti et al. (2010) Six Sigma ISM Quality maturity level of the Recognized 11 enablers of Six Sigma in line with expert
organization, Statistical thinking, views and authorized using questionnaire survey
committed workforce, technical ISM-MICMAC is applied to generate structural
competence association among recognized enablers
Study revealed that factors, namely, effective top
management leadership role, availability of funds,
availability of expertise training are crucial in deploying a
Six Sigma project
Kumar (2013) Lean ISM Top management commitment, Recognized 18 enablers of lean manufacturing system in
manufacturing employee involvement, funds line with expert opinion. ISM-MICMAC is used to derive
availability structural association among recognized enablers and for
prioritization. Results proved that relative cost benefits
and resource availability are the most crucial factors that
have to be considered while implementing a lean project
Vasanthakumar et al. Lean ISM A strong understanding of the Modeled factors influencing lean remanufacturing
(2016) remanufacturing current product and process practices using ISM MICMAC technique
designs, a strong top management Twenty factors are identified from expert opinion based
commitment with proper on 35 Indian automotive component remanufacturers
strategy selection, competent work Factors, namely, lack of green, lean and statistical
force and Proper visibility of thinking, least process lead time and low inventory levels
projects using visual controls are identified as most dependent factors for ensuring lean
remanufacturing practices
Vinodh et al. (2016) Lean sustainable ISM Control over defects, internal Recognized 25 influencing factors for lean sustainable
system expertise, Complexity in design to systems with reference to survey conducted among Indian
reduce, reuse, recycle, or reclaim, automotive component manufacturing firms. ISM
effective safety measures and MICMAC is used to derive structural relationship between
ergonomics measures recognized enablers
Enablers, namely, top-management commitment in
implementing amalgamated lean sustainable
manufacturing, government support to implement
environmental friendly policies, training courses,
acquiring cleanest technologies are most crucial in
developing an integrated lean-sustainable system
(continued)
Research study Domain Approach Important factors/constructs Findings

Kumar et al. (2016) Green LSS ISM Poor usage of infrastructure of Done a study to recognize important barriers influencing
organization and floor space, application of Green LSS
inappropriate part standardization Twenty-one barriers were recognized and MICMAC
and analysis was done to derive priority. Based on the
scheduling, customer non- analysis it was found that the barriers, namely, lack of
involvement in greening programs, expertise training program, lack of real support of
noneffective time management management, fund constraints and poor quality of human
resources are identified as the most dominating barriers
for implementing a green LSS system
Fotopoulos and Psomas TQM SEM Quality practices of top Developed a structural model to analyze the correlation
(2010) management, employee among TQM factors and organizational performance.
involvement, customer focus, Research shows that the identified constructs
quality tools and techniques significantly impact firms’ performance with reference to
their internal procedurescustomers, market share and so
on
Vinodh and Joy (2012b) Lean SEM Management responsibility Developed a structured model based on PLS method to
manufacturing leanness, manufacturing find the relationship among the constraints for successful
management implementation of lean manufacturing concepts
leanness, manufacturing strategy The results obtained after analysis showed how lean
leanness, and technology manufacturing practices are connected for improving the
workforce leanness organizational performance of manufacturing firms
Vinodh and Joy (2012a) Sustainable SEM Environmental sustainability, Conducted a study to recognize the critical factors for
manufacturing economic sustainability and successful application of sustainable manufacturing
societal sustainability concepts
A structured model based on PLS-SEM was used to
examine the relationships among the identified constructs.
Based on the analysis, it was found that there exist a
strong correlation between constructs and each construct
individually or together with other construct contribute
towards enhancing the sustainable performance of the
manufacturing firms
(continued)
Six Sigma
model for Lean

691
system

Table II.
Equation
 11,4

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Table II.
Research study Domain Approach Important factors/constructs Findings

Sin et al. (2015) Six Sigma SEM Socialization, externalization, Six Done a study to recognize the relation among knowledge
Sigma project success, and knowledge creation process in a Six Sigma project
organizational performance using SEM approach. Studies revealed that Six Sigma had
positive impact on organizational performance
Raja Sreedharan et al. LSS SEM Impact of Lean Six Sigma, Designed a structural model to examine the awareness of
(2016) acceptance towards Lean Six LSS implementation in manufacturing firms
Sigma, top management Results suggested that the identified LSS constructs have
commitment, Lean Six Sigma a strong correlation among them and help in creating
implementation awareness on LSS implementation in Indian
manufacturing firms
 Application
Research study domain Hypothesis statement Modeling Findings

Cox et al. (1998) Safety in Attitudes to organizational variables Developed a structural model to find Results proved that a significant
Manufacturing (safety management and safety the relationship between correlation exist between
standards and goals) will effect organization’s commitment and organization’s commitment and
environmental (physical work safety culture that prevails in safety culture in determining
environment and workplace hazards) manufacturing environment workplace safety
evaluation Safety measures were modeled in
Attitudes to group process variables terms of three factors, namely,
which will, in turn, have some impact on management initiatives for safety,
individual responsibility and level of, quality of safety training and their
and involvement in, safety activity personal actions for safety
Tan (2001) Product design Supplier assessment strategy Applied structural equation Results showed that supplier
and significantly impact quality modeling technique to analyze the evaluation and JIT strategies were
development management strategy effects of supplier assessment, JIT, correlated and affected the quality
Supplier assessment and just-in-time and quality management strategies management strategy used, which in
(JIT) strategies are significantly on NPD and development turn influenced the NPD and
correlated A survey instrument in the form of a development strategy
JIT strategy significantly affect quality questionnaire was designed based The data also revealed that JIT
management strategy on the constructs strategy directly affects the NPD and
An effective supplier assessment development strategy
strategy significantly influences the new
product design (NPD) and development
strategy
JIT strategy vitally impacts NPD and
development strategy
quality management strategy vitally
impacts NPD and development strategy
Lin et al. (2005) Supply chain QM practices and supplier participation Identified a set of factors that impact Results suggested that quality
management are considerably connected the performance of supply chain and practices are significantly correlated
The level of supplier participation created a measurement model to find with supplier participation strategy
practice positively influences the degree the influence among the factors and this influences tangible business
of organizational performance using multivariate statistical testing results, and levels of customer
QM practices and supplier selection are methods satisfaction
(continued)

applications in
Table III.
Six Sigma
model for Lean

manufacturing
693

Review on SEM
system

domain
Equation
 11,4

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Table III.
Application
Research study domain Hypothesis statement Modeling Findings

significantly correlated
The level of supplier selection practice
positively enables the degree of
organizational performance
The extent of QM practice positively
enables the degree of organizational
performance
Supplier participation and supplier
selection are extremely connected
Roberts et al. Operations In making decisions, OM researchers Demonstrated how SEM theory can A decision tree for modeling
(2010) Management should consider the following issues: be used to develop operationalized formative constructs in PLS and
Exploratory techniques are well-suited measurement models to find the Maximum Likelihood (ML) SEM was
for establishing the significance of a relationships among its factors developed
relationship The study helped in strengthening
Confirmatory techniques enable global theoretical and empirical models of
tests of “fit” of a well-specified operations research and provided a
theoretical model to the observed data deeper infusion about hypotheses
Confirmatory techniques can be applied related to advanced operations
to develop theory derived from management theory
established sets of constructs
3. Structural equation modeling Equation
SEM is a modeling technique based on statistics that is used to examine the relation among model for Lean
constructs and latent variables that tend to form a system (Hox and Maas, 2001). It is also
used to analyze the relation among improvement initiatives and performance outcomes of a
Six Sigma
system (Bandalos, 2002). SEM comprises a set of mathematical tools, statistical methods and system
computer algorithms for performing the operations of PLS, path analysis, confirmatory
factor analysis, path modeling and latent growth modeling for obtaining the relationships
among variables (Barrett, 2007). Because of its effectiveness and flexibility in determining 695
the results of multiple dependencies in single analysis, SEM is preferred over other
statistical methods by practitioners and researchers (Henseler et al., 2015). SEM can be
viewed as a theory that states the explanation and consistency in a statistical way reflecting
the actual scenario. SEM uses two class of variables: endogenous and exogenous variables.
Endogenous and exogenous variables correspond to dependent and independent category,
respectively. SEM includes two model types: Measurement model and Structural model. The
measurement model depicts the fact that specifies how measured latent variables represent
the stated theory. The structural model delineates the relationships among different
constructs of the system. Because SEM analyses the casual relationships between constructs
and variables, it is also called as casual modeling.
The present study uses the application of PLS-based SEM to derive the relationships
among constructs and latent variables. PLS-based SEM provides better consistency and
model reliability compared to path analysis (PA)-based SEM and CFA-based SEM as it
enables approximating complex cause–effect relationship models with latent variables
where the inputs are collected based on survey or individual’s decision (Sarstedt et al., 2014).
SmartPLS software module was deployed for creating the structural model and
measurement model and to analyze the relationships between constructs to infer results.
Based on the input data, the structured model is developed and research hypotheses which
resemble the theoretical statements are being framed. The developed structural model is
tested for its reliability and validity by computing the test measures that include composite
reliability, Cronbach’s alpha and average variance extracted (AVE).

4. Methodology
The methodology comprises three steps: domain identification, instrument development and
data collection and analysis. The conceptual model developed in this study consists of 7
constructs and 28 latent variables that leads to improvement in organizational performance
on application of LSS incorporated with sustainability aspects. Further the stated
hypotheses are tested for their acceptance by checking the path value and t-statistic value.
SmartPLS is one of the widely used software module for PLS-SEM, and is recognized both
by academicians and practitioners (Wong, 2013). This section briefly discusses about the
methodological procedure involved in the development of structural model for analyzing the
relationships of the constructs that enables the organizational performance of automotive
firms by applying LSS incorporated with sustainability aspects.

4.1 Domain identification

Based on the identified constructs, latent variables that describe the necessity of each
construct were formed. These latent variables are also called as indicators which play a vital
role in defining the outcome of each construct. This two-level classification is useful while
defining the inputs for each construct and latent variables. The constructs and their
indicators were selected based on analyzing the literature. The selected constructs are
previously used by various researchers for defining the performance of LSS and sustainable
IJLSS manufacturing systems. The reason for selection of constructs from the literature is that
11,4 already the constructs have been validated from its point of application and provided the
necessary outcome. Such constructs that explicitly reflects the integration of LSS with
sustainability considerations were selected. The contribution is defined in selection of
indicators pertaining to each construct. Each construct has a predefined set of indicators
that directly relates the core outcome of each construct. The constructs that leads to
696 organizational performance by applying LSS incorporated with sustainability aspects
considered for this study include Employee Management (C1), Defect and waste
management (C2), Business Strategy (C3), Safety Aspects (C4), Environmental Performance
(C5), Economic Performance (C6) and Organizational Performance (C7). Each construct has a
predefined set of indictors that directly relate the core outcome of each construct. The
indictors for each construct were framed such that it includes both quantifiable metrics of
LSS and sustainable manufacturing. For example, the construct Employee Management
(C1) has four latent variables: Strong employee spirit and coordination (I11), Employment of
skilled and adaptable workforce (I12), Providing training and technological assistance to
employee (I13) and Institutionalizing rewarding and recognition schemes (I14). All these
latent variables together contribute in enhancing the performance of the construct C1. The
identified constructs used in SEM application are basically elements comprising of latent
variables or indicators. The constructs either individually or in a relation will lead to a core
outcome, i.e., Organizational Performance. The identified constructs C1-C6 are related to
both LSS and sustainability measures as the core objective is to analyze the effect of the
constructs to enable the construct C7. The constructs, namely, Employee Management (C1),
Defect and Waste management (C2) and Business Strategy (C3) reflects LSS measures in
combination with sustainability measures. The constructs Safety Aspects (C4),
Environmental Performance (C5) and Economic Performance (C6) are considered as the
measures for sustainability. The construct C7 is a combined effect that can be attained by
other constructs, C1-C6. Execution of corporate social responsibility (CSR) related initiatives
is named one of the indicators of Business Strategy (C3) as it has become mandatory for the
business units to spend on CSR initiatives. CSR activities have become a core part of
business strategy and company culture. All the identified indicators solely support its
constructs in forming the relationship that directly relates the core outcome of each
construct. The indictors for each construct were framed such that it includes both
quantifiable metrics of LSS and sustainable manufacturing. Table IV shows the developed
conceptual model with the description of each construct and its associated indicators.

4.2 Instrument development

To obtain the inputs for each latent variable, the indicators have to be converted in the form
of a questionnaire to ensure that each indicator is assigned with a quantifiable input. For
achieving this, all 28 indicators were converted to a question format comprising 28
questions. For providing better understanding and readability to the framed questions, the
questions were reviewed by a panel of experts from academia and industry. This review
was performed to make subsequent modifications to the questions that are not clear and
partially vague, and to make them crisper and more quantifiable such that the respondent is
clear about questions and will be able to answer the questions with confidence. The selected
latent variables in this study are mostly easily measurable and provide better
understanding to the respondents. A ten-point Likert’s scale has been used to measure each
variable. The minimum scale value represents the option “Strongly Disagree” and
maximum scale value represents “Strongly Agree.” The scale value range 0-2 represents
“Strongly disagree,” 3-4 represents “disagree,” 5-6 represents “neutral,” 7-8 represents
 Equation
Construct Description Indicators
model for Lean
Six Sigma
Employee management The integrated system must be less Strong employee spirit and system
(C1) dependent on systems and more cooperation
Soti et al. (2010; dependent on intelligence and Employment of skilled and
Vinodh and Joy (2012a, opportunism of employees adaptable workforce
2012b), Vinodh and Joy, Employees must be multi-skilled and Providing training and 697
2011) flexible. Capability, involvement, technological assistance to
commitment, and empowerment of employee
personnel within the company are the Institutionalizing rewarding and
critical factors in accomplishing both recognition schemes
operational and sustainable goals
Defect and waste The manufacturing facility and Fulfillment of customer requirement
management (C2) setups must support waste reduction Incorporation of prevention –
Antony and Banuelas and should facilitate flow detection techniques
(2002) The manufacturing set-ups should Costing system with focus on value
Arnheiter and Maleyeff be flexible with minimum addition
(2005), Sin et al. (2015) changeover times and workplace Environmental waste monitoring
should be kept clean and uncluttered Minimal rejection rates
to create a workplace that maintains
order and discipline
Proper waste monitoring and defect
reduction programs must be conducted
to ensure operational improvements
Business strategy (C3) The strategic business goals must Strategic goals to support
(Antony, 2004; Sin et al. support both operational and sustainable business practices
(2015), Raja Sreedharan sustainable needs Building long-term business
et al. (2016) Sustainability measures must be viability
linked with all business functions Integrating sustainability across
and long term business viability different business functions
must be ensured while creating new Execution of CSR-related initiatives
business operations
Safety aspects (C4) The firm must take utmost care for Incorporation of safety features into
Veleva et al. (2001), Shah ensuring work place safety products
and Ward (2003), Jayal The hazardous functions must be Creation of injury free workplace
et al. (2010) properly monitored and the firm Compliance with safety standards
should stick on to the government Appropriate disposal scenario
regulations regarding safety aspects
Safety measures must be incorporated
both at process and product levels
Environmental The environmental impact because Adoption of Life Cycle Assessment
performance (C5) of different pollution should be Minimal resource consumption
Jayal et al. (2010), within the prescribed range Environmental impact monitoring
Vinodh and Joy (2012a, Mass of the restricted disposals and Prevalence of energy audits
2012b), Joung et al. noise level generated from the
(2013) company must be within the
prescribed norms
Minimizing the number of defects
and rejections leads to reduction in
material and resource consumption
which improves the environmental Table IV.
performance Developed constructs
(continued) and their indicators
IJLSS
11,4 Construct Description Indicators

Economic performance The costing system must focus on Investment on technology and
(C6) recognizing value adding and non- infrastructure
Veleva et al. (2001), Jayal value adding costs and kaizen Costing system with focus on value
et al. (2010), approach of product pricing must be addition
698 Vinodh and Joy (2012a, followed in finalizing the cost of the Cost of poor quality accountability
2012b), Joung et al. product Percent of GDP spent on research
(2013) Cost must be allocated for enhancing and development
the eco performance of the product
and as well the working
environment
Organizational Successful implementation of both Minimized waste and defect
performance (C7) LSS and sustainability must reduction
Antony and Banuelas improve both the operational and Improved sustainable performance
(2002), sustainable performance of a firm Improved cost saving
Arnheiter and Maleyeff which leads to improvement in
(2005), Vinodh and Joy, organizational performance
2011; Sin et al. (2015) Organizational performance of a
firm is achieved by minimizing the
number of wastes and defects and by
reducing its associated impacts
which tend to improve the
Table IV. sustainability metrics

“agree” and 8-10 represents “Strongly Agree.”. Because the evaluation follows a five-point
scale, even values are fixed for each response to attain ease of computation. Table V shows
the excerpt of the questionnaire used in this research.

4.3 Data collection and analysis

For conducting this study, Indian automotive component manufacturing organizations were
selected as the target case sector. In the recent times, concepts of LSS and sustainable
manufacturing concepts are widely being practiced and adopted in Indian automotive
manufacturing scenario (Cherrafi et al., 2016). This was the motivating factor for carrying
out the study for the target sector. Based on selective sampling, 100 automotive and
automotive component manufacturing firms were selected from the databases of the
Directory of Indian Automotive Industrial Portal and Automotive Component Manufactures
Association. The automotive manufacturing firm as a whole was considered as the research

Strongly Strongly
Questions related to the constructs disagree Disagree Neutral Agree agree

Does a strong employee spirit and cooperation 2 4 6 8 10

exist?
Table V. Does the costing system focus on value addition? 2 4 6 8 10
Excerpt of the Are CSR related activities executed? 2 4 6 8 10
questionnaire used in Is investment made on infrastructure development? 2 4 6 8 10
survey Are energy audits conducted frequently? 2 4 6 8 10
analysis unit. A survey-based instrument was used as the assessment tool for collecting Equation
responses from target population. The questionnaire was sent as email to the respondents of model for Lean
the case organizations. The respondents were identified as Champions and Master Black
Belts who are employed as process and implementation managers in the case organization.
Six Sigma
The respondents were selected such that they possess a wide knowledge in LSS and system
sustainable manufacturing concepts and have prior experience in implementation of LSS
and Sustainable Manufacturing concepts. While responding the survey tool, the
respondents have to provide details regarding plant size, number of years in business 699
operation and their experience and position in the case organization. At the end of the
survey, 65 complete questionnaires were returned and were found to be useful for
performing the analysis. The response rate was found to be 65 per cent. The whole analysis
was performed using SmartPLS software module. The adequacy of the sample size was
checked by performing factor analysis, and the value was found to be 0.82. This infers that
the sample size is reasonable and is comfortably recommended for performing the analysis.
For further adequacy checking and to find the outliers of the sample data, Kaiser–Meyer–
Olkin (KMO) test was also performed. Results showed that there are no traces of outliers and
the value was found to be 0.80. This value infers that the considered sample size is adequate.
Table VI presents the details of the conducted survey for data collection
The collected data is used as the input for defining the indicators after creating the
structural model using SmartPLS software. After transferring the data, file containing input
values to the structural model, hypotheses are being stated before performing the actual
analysis. The hypotheses are basically assumptions that are created to support the
developed structural model. The stated hypotheses are being tested for its validity after
arriving at the measurement model. For this study, six hypotheses are being stated
considering all the constructs. The hypotheses are being stated based on the assumption
that all the constructs either individually or together leads to organizational performance.
The stated hypotheses for this study are:

H1. Employee management, defect and waste management, business strategy, safety
aspects, environmental performance and economic performance lead to
organizational performance.
H2. Business strategy leads to organizational performance.
H3. Business strategy leads to defect and waste management.
H4. Business strategy leads to economic performance.
H5. Environmental performance leads to safety aspects.

Target population under study Indian automotive component manufacturing organizations

Population census 100 firms

Geographical area India
Data collection method Structured survey received and sent through email
Sample size 65 returned questionnaires
Time frame June-December 2016
Respondent profiles Champions and Master Black Belts who are employed as process and Table VI.
implementation managers in the case organization Details of the
Response percentage 65 conducted survey
IJLSS H6. Defect and waste management and environmental performance lead to
11,4 organizational performance.
The stated hypotheses are based on the conclusions derived from the literature that details
about the selected constructs and its relationship with LSS and sustainable manufacturing
practices. Also the hypotheses are framed depending upon the correlation and influences
that tests the moderating effect between the selected constructs. Figure 1 shows the
700 developed structural model and the proposed hypotheses using Smart PLS software module.
The following steps are involved in building the structural and measurement model using
SmartPLS software module:

Data preparation: The data collected based on the survey is compiled and saved as a
data file. The column elements represent the response values and these value are
imported to the SmartPLS data pane using import data command

Project creation: After importing the data, a new project which represents the
present is being created. Initially the constructs are theoretically defined before the
creation of the actual structural model.

Building the structural model: Based on the designed conceptual model, the
structural model comprising of constructs and latent variables are being built.
The present study involves the participation of 7 constructs and 28 latent variables.
The latent variables are connected with each construct using the arrows which
portray their relationships. Similarly, the relationships among the constructs are
also being created using the arrows which is based on “leads to” criteria. The
developed structural model is based on a reflective measurement scale as all the
latent variables are correlated and interchangeable.

Figure 1.
Developed structural
model

Path model evaluation: After the development of the structural model, the input data Equation
file is being assigned to the structural model. Based on the assigned input value, the model for Lean
outer model, inner model and paths obtain certain values which represent the
composite reliability value, AVE value and path values, respectively. Similarly
Six Sigma
other values such as Cronbach’s alpha, t-value, p-value and goodness of fit values system
are obtained for the measurement model using bootstrap procedure.

Checking reliability and validity: The obtained measurement model has to be re-run 701
to ensure that composite reliability values for all the constructs satisfy the specified
criteria. Later reliability tests are also performed to validate the stated hypothesis
and to obtain standardized “t”-values. The reliability of the model is checked based
on the obtained composite reliability values, and model validity is ensured by
checking the obtained AVE value.

5. Reliability and validity tests

Indicator reliability and internal consistency reliability are two vital reliability constraints to
be verified. These reliability values are calculated in SmartPLS module. On performing this
action, the reliability values appear on both the inner side and outer side of the structural
model. The indicator reliability and internal consistency reliability are found on the inner
side of the model, and path values are found on the outer side of the model. In SmartPLS,
indicator reliability is calculated as Cronbach’s alpha value, and internal consistency
reliability is calculated as composite reliability value. The indicator reliability and internal
consistency reliability values need to be more than 0.7 to accept the construct. The model
reliability is found by computing the AVE values and correlation of latent variables. These
values are computed by using the bootstrapping command found in SmartPLS module.
Bootstrapping is basically a non-parametric approach that is applied to verify whether
coefficients such as outer weights, outer loadings and path coefficients are vital by
approximating standard errors for the estimates. This is achieved by using the command
Calculate Bootstrapping PLS algorithm. The convergent validity and discriminant
validity which is represented by AVE values and correlation of latent variables must be
greater than 0.5. For correlation of latent variables, the square root value of AVE of each
latent variable must be greater than the correlations between latent variables. The
developed measurement model showing Cronbach’s alpha value, path values and factor
loading value for the constructs is shown in Figure 2.
On observing the obtained reliability and validity values, it is found that both reliability
constraints (indicator reliability and internal consistency reliability) and validity constraints
(AVE values and correlation of latent variables) satisfy the acceptance criteria, i.e., reliability
values must be more than 0.7, and validity values must be more than 0.5. These values infer
that the constructs have a strong correlation between them and they individually or jointly
help in achieving the leads to constraint, i.e. organizational performance in this study.
Table VII shows the obtained parameter values for the constructs after bootstrapping.
Table VIII shows the results obtained after performing correlation of latent variables
between the constructs to find the square correlations of each latent variable. Results proved
that the square correlation value of each construct was measured over 0.9 which proves the
existence of a strong correlation. In most of the combinations, the correlation value was
found to be greater 0.7 which indicates very strong correlation and in some combinations,
the correlation value ranged in between 0.55 and 0.69 which also indicates a strong
correlation (Fornell and Larcker, 1981). Overall, all constructs exhibited a strong correlation
as it satisfies the base criteria.
IJLSS
11,4

702

Figure 2.
Developed
measurement model
using Smart PLS

6. Goodness of fit
The goodness of fit is fundamentally an index which measures the reliability of the
measurement model. Goodness of fit of the developed structural model is tested using
SmartPLS software module. PLS-SEM is based on measures revealing the model’s
predictive competence to verify the model’s quality. The measures are compared with the
recommended values, and if this criteria is met, the model is expected to ensure a good fit.
The Goodness of fit measures that can be computed using SmartPLS are chi-square test
value, normed fit index (NFI), root mean square residual (RMR) and standardized root mean
square residual (SRMR). These measures are computed for the completed structural model
after performing validity and reliability tests. The adjusted chi-square value was computed
as 1.98. For accepting a structural model, the chi-square value must be less than 3.00. As this
criterion has been met, the model represents a good fit. Other goodness of fit measure values
for NFI, RMR and SRMR were found to be 0.95, 0.06 and 0.06, respectively. The
standardized marginal values for the specified measures must be greater than 0.90 ( 0.90
for NFI) and less than 0.08 (#0.08 for RMR and SRMR). Because the developed
measurement model satisfies the specified criteria for all goodness of fit measures, the
developed model exhibits a good fit and it can also be concluded that the discussed LSS and
sustainable manufacturing constructs of this study lead to organizational performance.
Table IX shows the obtained goodness of fit values for the developed model.

7. Results and discussions

After conducting the validity and reliability tests, the stated hypothesis has to be
tested to ensure whether the developed structural model fits the survey data collected
Enabler Indicator Factor loading AVE Composite reliability Cronbach’s alpha
Equation
model for Lean
Employee management I11 0.823 0.630 0.690 0.887 Six Sigma
I12 0.783
I13 0.637 system
I14 0.517
Defect and waste management I21 0.846 0.616 0.841 0.902
I22 0.713 703
I23 0.937
I24 0.946
I25 0.765
Business strategy I31 0.819 0.766 0.845 0.923
I32 0.956
I33 0.785
I34 0.823
Safety aspects I41 0.820 0.558 0.812 0.857
I42 0.836
I43 0.888
I44 0.786
Environmental performance I51 0.847 0.597 0.886 0.917
I52 0.939
I53 0.904
I54 0.854 Table VII.
Economic performance I61 0.714 0.581 0.816 0.863 Determination of
I62 0.846
AVE, composite
I63 0.823
I64 0.883 reliability and
Organizational performance I71 0.883 0.569 0.833 0.858 Cronbach’s alpha
I72 0.931 value after
I73 0.713 bootstrapping

from automotive component manufacturing firms. This is done by computing “t”

value for the hypotheses paths. Based on the obtained t-values, it is clearly evident
that the hypothesized model fits the survey data. According to the standard statistical
table, observed “t” value must be greater than 2 for accepting a hypothesis. This
criterion has been met by all stated hypotheses for the developed structural model.
This proves that there exists a strong correlation among LSS and sustainable
manufacturing constructs and all of them lead to organizational performance. These
findings are consistent as the path relation, and its values are found to be significant
as it fulfills the required criteria. This leads to acceptance of the entire stated
hypothesis and makes the developed structural model valid. Therefore a strong
correlation exists among following criteria:

(H1) Employee management, defect and waste management, business strategy,
safety aspects, environmental performance and economic performance lead to
organizational performance ( b = 0.907; t = 35.867);

(H2) Business Strategy leads to organizational performance ( b = 0.595; t = 12.432);

(H3) Business strategy leads to defect and waste management ( b = 0.110; t =
10.535);

(H4) Business strategy leads to economic performance ( b = 0.112; t = 8.437);

(H5) Environmental performance leads to safety aspects ( b = 0.642; t = 13.468); and
 11,4

704
IJLSS

variables
Table VIII.
Correlation of latent
Employee Defect and waste Business Safety Environmental Ec onomic Organizational
management management strategy aspects performance performance Performance

Employee management 0.941

Defect and waste 0.578 0.949
management
Business strategy 0.649 0.770 0.960
Safety 0.555 0.505 0.674 0.925
aspects
Environmental 0.548 0.687 0.884 0.778 0.957
performance
Economic performance 0.689 0.556 0.865 0.5773 0.505 0.928
Organizational 0.778 0.837 0.905 0.615 0.812 0.555 0.926
performance

(H6) Defect and waste management and environmental performance lead to Equation
organizational performance ( b = 0.905; t = 18.560). model for Lean
The results obtained after the analysis for the proposed hypotheses are shown in Table X. Six Sigma
The identified constructs used in SEM application are basically elements comprising of system
latent variables or indicators. The constructs either individually or in a relation will lead to a
core outcome. The identified constructs are related to both LSS and sustainability measures
as the core outcome is to analyze the effect of the constructs to enable organizational 705
performance. The hypotheses are framed considering the relationship among constructs.
Because all the hypotheses are significantly accepted, it proves that each construct has a
positive relationship on other constructs and each construct either individually or in
combination contribute to improve the organizational performance. LSS is a collective
business improvement method that focuses on systematic identification and elimination of
wastes and defects associated with producing a product or delivering a service. LSS strategy
compliments sustainability initiatives by providing benefits pertaining to resource
consumption which is usually observed in a small scale. Integrating LSS with sustainability
concepts helps the firm to attain sustained operational benefits and creates an
organizational culture that institutionalizes combined benefits. The results of the
hypotheses also justify the contextual relationships and validate the developed structural
model

8. Conclusions
Integrating LSS with sustainable manufacturing strategies helps manufacturing
organizations to inculcate an organizational practice that institutionalizes sustainable
benefits along with operational benefits. The core strategies of LSS mainly focus on
addressing the enablers of cost, quality and customer demands and do not explicitly focus
on environmental waste reduction unless there exist a need. This article presents the
development of PLS-based SEM structural model to investigate the performance of LSS
strategy with sustainability considerations for automotive component manufacturing
organizations. The inputs required for computing the output scores were collected based on
survey from 65 automotive component manufacturing organizations. A total of 7 constructs
and 28 indicators that represent both LSS and sustainability measures were collected
from literature. Employee management, defect and waste management, business strategy,

Table IX.
Goodness-of-fit measures Chi-square test NFI RMR SRMR
Goodness of fit
Recommended value # 3.00  0.90 # 0.08 # 0.08 measures for the
Model value 1.98 0.95 0.06 0.06 developed model

[Link]. Hypotheses Standardized loading “t”-value Results

1. C1 ! C2 ! C3 ! C4 ! C5 ! C6 ! C7 0.907 35.867 Accepted

2. C3 ! C7 0.595 12.432 Accepted
3. C3 ! C2 0.110 10.535 Accepted
4. C3 ! C6 0.112 8.437 Accepted Table X.
5. C5 ! C4 0.642 13.468 Accepted Results of the
6. C2 ! C5 ! C7 0.905 18.560 Accepted structural model
IJLSS safety aspects, environmental performance, economic performance and organizational
11,4 performance are the major constructs considered in this study. Six hypotheses that reflect
the goal of the study were stated theoretically and were investigated. Based on the obtained
t-statistic value and results based on reliability and validity tests, the hypotheses are being
validated. Following inferences are being derived based on the conduct of the study:

There exists a strong correlation between LSS and sustainability constructs.
706
The constructs environmental performance, economic performance and business
strategy are strongly correlated.

Integrated implementation of both LSS and sustainability strategies improves the
organizational performance of manufacturing firms.

The main contribution of this study is the derivation of a structural model to analyze the
relationship between LSS and sustainability measures. A survey-based questionnaire was
also developed to collect the collective response from experts belonging to automotive
manufacturing regarding implementation of LSS and sustainability practices. The
significant influence on organizational performance by the identified LSS and sustainability
constructs were also studied. The developed SEM model could further be validated with
respect to other manufacturing sectors. Also, additional indicators and hypotheses could be
considered in line with technological and managerial advancements of Lean Six Sigma and
sustainable manufacturing. The unique contribution of this study is the derivation of a
structural model to depict the contextual relationships among various constructs and
indicators for LSS with sustainability considerations through a systematic analysis. The
study ascertains the relationship between LSS and sustainability and adopts a structural
model and a set of hypotheses that highlights the relationship among different constructs of
LSS and sustainability. The data collected from the automotive component manufacturing
organizations were analyzed and are validated empirically. The developed model was
subjected to statistical tests to find out the extent to which it satisfies the provided data. The
results justify the relationships among constructs and provides path for integrated
deployment of LSS and sustainable manufacturing strategies. The present study provides
better understanding of relationship between LSS and sustainable manufacturing
constructs and help mangers of manufacturing organizations to make effective decisions
pertaining to integrated implementation of LSS and sustainable manufacturing
methodologies. Benchmarking of results of present study along with prior studies that deal
with the application of SEM approach with respect to different systems is shown in
Table XI.

8.1 Limitations of research and future scope

One of the limitations of this research work is about the bias that exists among
respondents because of factors such as geographical location and technology
availability. It is important to test the reliability of the responses and internal
consistency testing methods must be deployed to validate the responses. Because the
present research study uses Smart PLS for analyzing the data; separate consistency
tests were not conducted as the software module has reliability checks and other default
consistency checks built in during analysis. The questions were designed and
segregated in such a way that the respondent provides an unbiased response after
clearly understanding about the relationship question and framed hypothesis. The
developed structural model for LSS implementation with sustainability considerations
is developed based upon inputs provided by experts belonging to case organizations
Research study Focus of the study Dominant constructs No. of constructs No. of hypotheses Goodness of fit measure

Fotopoulos and TQM Quality practices of top management, employee 9 3 1.26

Psomas (2010) involvement, customer focus, quality tools and
techniques
Vinodh and Joy Lean manufacturing Management responsibility, manufacturing 5 10 1.32
(2012a, 2012b) management, manufacturing strategy, and
technology and workforce leanness constructs
Vinodh and Joy Sustainable Environmental sustainability, economic 3 3 1.22
(2011) manufacturing sustainability and societal sustainability
Sin et al. (2015) Six Sigma Socialization, externalization, Six Sigma project 7 3 0.92
success, organizational performance
Raja Sreedharan LSS Impact of Lean Six Sigma, acceptance towards 4 3 1.78
et al. (2016) Lean Six
Sigma, top management commitment, Lean Six
Sigma implementation
Present study* Lean Six Sigma with Employee management, defect and waste 7 6 1.98
sustainability management, business strategy, safety aspects,
considerations environmental performance, economic
performance and organizational performance
Six Sigma
model for Lean

study along with

results of present
Benchmarking

prior studies
707

Table XI.
system
Equation
IJLSS and the implications might vary depending upon the infrastructure and technology
11,4 adopted by the organizations under consideration. In future, more number of constructs
and indicators could be developed, and the interrelationships can be validated through
stating more research hypotheses. The scope of integration of LSS and sustainable
manufacturing strategies exists both in manufacturing and service firms. Proper
leveraging of LSS with sustainability concepts yield better results that enhances both
708 operational and environmental performance. Before actual deployment of the
integrated strategy, the firm should analyze its performance based on defects, resource
consumption, environmental management, quality aspects and should choose the
appropriate tools for smooth implementation. As automotive manufacturing firm
experiences all the above issues, the present study has been conducted considering the
responses from automotive sector. The constructs and indicators used in this study are
generic such that the developed model can be validated for all organizations that
include service and heterogeneous manufacturing firms. As both the methodologies
have produced proven results, this integration would provide incremental benefits and
improvements irrespective of the nature of the organization. Also, the developed
structural model can be statistically tested using more advanced and recent modeling
techniques by the conduct of study in diversified industrial sectors. The developed
structural model will be useful to practitioners to recognize the integration of LSS with
sustainability considerations and would facilitate choosing the right strategies during
implementation. The constructs used in this model will be more useful for adoption in
manufacturing organizations and would yield better results. The formulated
hypotheses are also theoretically validated and a significant correlation exists among
the constructs. In line with theoretical insights gathered from the structural model, a
deployment framework that integrates LSS and sustainability measures can be
developed for attaining integrated benefits to attain practical relevance. This study
analyzes the structural relationships between LSS and sustainability measures from an
empirical viewpoint and tests its applicability in real-time manufacturing environment.

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Corresponding author
S. Vinodh can be contacted at: vinodh_sekar82@[Link]

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