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Improving spare parts (MRO) LSS 4.0 project

on MRO
inventory management policies inventory

after COVID-19 pandemic: a Lean

Six Sigma 4.0 project
Jesus Vazquez Hernandez Received 3 August 2023
Facultad de Ciencias de la Comunicaci
on, Universidad Autonoma de Nuevo Leon, San Revised 25 September 2023
27 October 2023
Nicolas de los Garza, Mexico, and Accepted 30 October 2023

Monica Daniela Elizondo Rojas

Instituto Tecnol
ogico y de Estudios Superiores de Monterrey, Monterrey, Mexico

Abstract
Purpose – To redesign the spare parts (MRO) inventory management at Company XYZ’s warehouse,
considering the conditions after the COVID-19 pandemic.
Design/methodology/approach – To address this research project, the authors integrated three
methodologies: action research, Lean Six Sigma (DMAIC) and Cross Industry Standard Process for Data
Mining. These methodologies integrated the Lean Six Sigma (LSS) 4.0 framework applied in this project.
Findings – The spare parts inventory value was reduced by 15%, and inventory turnover increased by 120%
without negatively impacting the internal service level.
Practical implications – Practitioners leading or participating in continuous improvement projects (CIPs)
should consider data quality (data available and data trustworthiness), problem-solving approach and target
area involvement to achieve CIP goals. Otherwise, the LSS 4.0 could fail or extend its duration by several weeks
or months.
Originality/value – This project shows the importance of controlling a target area before deciding to conduct
a LSS 4.0 project. To address this problem, the LSS 4.0 team implemented 5S during the measure phase of the
DMAIC. Also, this project offers significant practitioner and theoretical contributions to the body of knowledge
about LSS 4.0.
Keywords DMAIC, Lean Six Sigma, Business analysis, Maintenance, Kaizen, Industry 4.0
Paper type Case study

1. Introduction
The COVID-19 pandemic has unprecedentedly impacted the global economy, causing
disruptions in various sectors. The government shut down several manufacturing and
service facilities, affecting quality products, facility performances, employee motivation, raw
material supply, product demands and others (Sulistiyani, 2020; Gonzalez-Aleu et al., 2022a).
However, other manufacturing organizations used the COVID-19 pandemic as an
improvement opportunity, repurposing their facilities and reorganizing the manufacturing
facilities to improve process efficiency (Liu et al., 2021; Gonzalez-Aleu et al., 2022a). Three
years after the COVID-19 pandemic, we still see its impact in different ways, such as the
creation of new products or businesses (e.g. ghost kitchens or black kitchens) (Gonz
alez-Aleu
et al., 2022b), the accelerated implementation of digital transformation (Gabryelczyk, 2020)
and business scenarios focused on information technology (Yadav, 2021).
Several journals papers and conference proceedings have been published to increase the
knowledge available about the COVID-19 pandemic impact in our society, such as
manufacturing and service supply chain resilience for automotive and airline industries The TQM Journal
(Belhadi et al., 2021), application of Lean Six Sigma (LSS) to improve supply chain resilience in © Emerald Publishing Limited
1754-2731
healthcare (Hundal et al., 2022), maintaining employee motivation (Wolor et al., 2020), DOI 10.1108/TQM-08-2023-0245
TQM consumer behavior before and after COVID-19 (Zwaka et al., 2021) and inventory
management after COVID-19 (Hasan, 2023). Besides the vast number of publications
generated, from the authors’ perspective, there is still a need for research on inventory
management in the manufacturing industry.
Inventories are critical for supply chain management, impacting production systems
(Kumar et al., 2012; Alnaim and Kouaib, 2023). However, they are also one of the seven wastes
in the Toyota Production Systems. Excess maintenance, repair and operating (MRO)
inventory has become a significant issue for many manufacturing companies. The MRO
inventory is crucial in keeping the plant productive and reducing downtime (Ali et al., 2020).
Nonetheless, excess inventory ties up capital and causes inefficiencies in the production
process. Therefore, inventory control policy has a significant role (Boone et al., 2018).
However, some research studies machine availability and preventive maintenance during the
previous COVID-19 pandemic; Ivanov and Dolgui (2022) emphasized the relevance of quickly
reacting to change because of the COVID-19 pandemic.
A manufacturing company in Latin America (called XYZ), part of an international firm
with seven plants, produces 300 steel tons per day of tubular profiles (square, rectangular and
round) using six production mills with more than six hundred employees. These products
could be used in the construction, automotive and oil-industrial sectors. Additionally,
Company XYZ offers support services to its customers (e.g. cutting, pushing and bending).
By Fall 2021, after the COVID-19 pandemic’s initial impacts, Company XYZ’s inventory value
was 10.55 million USD (including raw material, finished parts and spare parts). The spare
parts warehouse had an inventory value of 2.5 million USD, and more than 50% had not been
consumed in the last 91 weeks. Additional problems included inventory obsolete, damaged
and improper location or quantified. These spare parts decreased company liquidity,
occupied warehouse space and contributed to inventory runaway.
To increase the body of knowledge about lessons learned from disruptive times in the
MRO inventory, the authors conduct the following research that aims to redesign the MRO
inventory control system at the warehouse in Company XYZ, considering the conditions after
the COVID-19 pandemic. A Lean Six Sigma 4.0 (LSS 4.0) project was conducted under an
action research methodology to achieve this goal.
The remaining sections of this paper are organized as follows: First, the theoretical
findings about spare parts, quality 4.0 and LSS will be included in the literature section.
Second, the methodology section explains how the LSS 4.0 framework was created using
action research, DMAIC and Cross Industry Standard Process for Data Mining (CRISP-DM).
Third, the results section shows findings from every step of the LSS 4.0 project. Lastly,
theoretical and practitioner contributions are addressed in the discussion section, defining
research limitations and future research.

2. Literature review
The literature review was conducted to obtain the main knowledge available that helps to
support the theoretical and practitioner contributions of this research.

2.1 The COVID-19 pandemic

The World Health Organization declared the COVID-19 pandemic in February 2020, creating
a new world economic crisis, closing services and manufacturing organizations for weeks
unemployment, poverty rate increase and closed services organizations (Buheji et al., 2020;
Barlow et al., 2021). This situation showed us a need for preparation for day-to-day operations
disrupted events. It is estimated that only 20% of the organizations had contingency plans for
events of this magnitude (Euromonitor, 2020). Therefore, the triple helix actors (companies,
education institutions and governments) had to work together to preserve life and economic LSS 4.0 project
stability. Some of the drastic actions implemented include but are not limited to, lockdown, on MRO
manufacturing operations repurposing (e.g. producing health equipment, masks and air
ventilators) and improving process efficiency.
inventory
Conducting a title (COVID-19) and abstract (manufactur*) search in Scopus, the authors
found nearly two thousand publications (articles, conferences, book chapters and books)
addressing different topics, COVID-19 impact in manufacturing organizations and the
lessons learned from these disruptive times. Although the purpose of this research is not to
give an extensive understanding of the literature available about COVID-19 in
manufacturing organizations, the authors believe that it is important to have a brief
review of some of the publications related to how manufacturing organizations work to
repurpose or innovate in their production facilities, improve process efficiency and overall
reflections:
(1) Repurposing and innovation. Gonzalez-Aleu et al. (2022b) described how a kitchen
equipment manufacturing organization identified a new niche in the market due to
customer change behavior and developed a business plan to introduce a new
production line for ghost kitchens or black kitchens. Deshmukh and Haleem (2020)
assessed Indian manufacturing to tackle the issue of enhancing manufacturing
competitiveness after the pandemic, in which an increased level of automation and
implementation of Industry 4.0 stands out.
(2) Improve process efficiency. Gonzalez-Aleu et al. (2022a) integrated a Kaizen event
optimization model to increase forklift utilization from 44% to 80%. Previously, the
organization had to fire around 30% of the workforce. Aktar Demirtas et al. (2023)
confirmed that Kaizen and 5S applications reduce wastage rates and stoppages in the
production systems, which created a more efficient and sustainable workplace
producing personal protection equipment PPE in Turkey. The method used in this
case is LSS, and the results were a total stoppage reduction of 42.4% and a production
increase of 10.55% per month. Alvarez-Placencia et al. (2020) presented the
development and improvement resulting from implementing inventory
management practices during the COVID-19 pandemic in a Mexican company,
using an ABC study, analysis of historical demand and lead time, to implement a
minimum and maximum inventory control policy. The implementation of the
improvement increased the service level up to 5%.
(3) Overall reflections. Kumar et al. (2020) discussed the production and operations
management challenges of the pandemic, including inventory planning, and
proposed policy strategies for improving the resilience and sustainability of the
system. Mishra et al. (2021) identified in Indian manufacturing organizations that LSS
implementation during COVID-19 is not yet a matter of urgency or priority for some
organizations. Frederico et al. (2023) contributed to the body of knowledge about
effectively measuring supply chain performance during disruptive times. Bastas and
Garza-Reyes (2022) identified that manufacturing organizations are striving to
respond to the COVID-19 challenge by conducting different initiatives, such as
digitalization and software application, retention policies, employee isolation and
alternative sourcing approaches.
These same publications suggest the following future research opportunities: validation of
the contention actions taken to prevail (e.g. utilization of LSS and implementation of digital
transformation) and conducting similar studies to other manufacturing sectors and
countries.
TQM 2.2 Lean Six Sigma 4.0
Culot et al. (2020) defined Industry 4.0 as a concept that encompasses many technologies and
applications (e.g. Internet of things, cyber-physical systems, visualization technologies and
extensive data analysis) implemented about different characteristics (e.g. process integration,
real-time information transparency, and predictability) and performance objectives (e.g.
productivity, flexibility, and quality). Industry 4.0 has a strong presence between academics
and practitioners from Germany and China, with a low presence in countries from Latin
America, such as Mexico (Liao et al., 2017; Gonzalez-Aleu et al., 2019a).
Since the introduction of this concept in the academic and practitioner world, several other
buzzwords have been created, such as Quality 4.0 and LSS 4.0. Escobar et al. (2021) consider
Quality 4.0 as the fourth wave in the quality movement: (1) Statistical Quality Control, (2)
Total Quality Management, (3) Six Sigma and (4) Quality 4.0. This last fourth wave uses the
Internet of Things, big data and artificial intelligence to solve a new range of engineering
problems to meet quality design requirements, quality of conformance and quality of
performance (Escobar et al., 2021; Sony et al., 2021). However, the human touch is present in
the processes. Organizations implementing Quality 4.0 mentioned extensive data drive
programs, productivity improvement and cost savings as some of their motivations (Sony
et al., 2021). On the other hand, some main barriers are organizational culture, lack of
knowledge and lack of resources (Sony et al., 2021).
There are four LSS waves (Antony et al., 2023). The first wave, LSS, integrates the concept
of Six Sigma (process variability and standardization) with Lean Thinking (waste reduction)
and uses the DMAIC roadmap (define, measure, analyze, improve and control). The second
wave, integrating LSS and Green, aims to improve environmental sustainability and
sustainable performance. LSS 2.0 has appeared since 2002. The third wave, called the LSS
holistic approach (LSS 3.0), considered that improvement systems can design, implement and
sustain improvement in any environment and business. In the fourth wave (LSS 4.0), with the
arrival of the Internet of Things, digitalization and big data, organizations can conduct
predictive analytics instead of only descriptive analytics (Arcidiacono and Pieroni, 2018).
Some of the benefits of integrating LSS and Industry 4.0 are but are not limited to cost
reduction, generating minimal waste, improving forecasting and demand management and
big data, which will benefit all phases of DMAIC (Antony et al., 2023).

2.3 Maintenance, repair and operating (MRO) management

The primary function of inventory is to serve the customer. The inventory may be processed
raw material, process inventory, finished goods, MRO items or service parts that are carried
in a distribution system. When the term customer service is used, it must be thought of from
the customer’s viewpoint, considering factors such as availability in the correct quantity,
time, place and cost (Toomey, 2012).
Maintenance materials management is often referred to as spare parts or MRO
management. It involves a diverse list of materials such as cables, electronic components,
motors, lubricants, nuts and bolts, specialized spare parts, standard spare parts, etc. MRO
management encompasses various aspects, ranging from the physical organization of the
MRO warehouse to inventory policy decisions (Pintelon and Van Puyvelde, 2006). The MRO
inventory plays a crucial role in keeping the plant productive and reducing downtime (Ali
et al., 2020), but maintenance is one of the highest production costs in manufacturing
organizations (Ali et al., 2020). In the spare parts industry, service is related to the availability
of machines being supported (Bailey and Helms, 2007). The MRO inventory has irregular
demand, so forecasting its demand is a difficult task compared to the regular demand
inventory. Therefore, it is uncertain because its consumption depends on unpredictable
maintenance activities.
 One of the main reasons for the spare parts demand irregularity is the supplier lead time LSS 4.0 project
variability, and this demand fluctuation can be reduced by age-based replacement of spare on MRO
parts in plant maintenance. The inventory and demand management of spare parts is more
critical than the components used in the assembly of finished products due to rapid
inventory
technological innovations, time or responsiveness (because of the responsive product support
process, 23% of spares become obsolete every year) and the demand for spare parts (which
tends to show a lumpy pattern). Therefore, MRO inventory management is complex due to
the materials’ complexity and diversity. Many classification approaches can be taken based
on demand frequency, repairability, engineering type, physical properties, risk of
obsolescence, failure behavior, criticality, etc. (Wisner et al., 2018).
ABC classification is a method for managing inventories currently adopted in most
industrial units. Inventory is classified into various categories based on their importance,
namely their value and frequency of replenishment during a period (Smith and Hawkins,
2004). The ABC inventory control system is a useful tool to determine which inventory should
be counted more frequently and managed more closely and which others should not. ABC
analysis is often combined with the 80/20 rule or Pareto analysis. According to Wisner et al.
(2018), the ABC inventory analysis can be expanded to assist in identifying obsolete stocks
and provide valuable insights into whether a company is stocking the correct inventory. This
can be achieved by conducting two separate ABC analyses and comparing the results.
The first step involves classifying inventory into A, B and C groups based on annual
inventory dollar usage. This classification clearly explains which items contribute the most to
the inventory value and sales. Next, a second ABC analysis is done, based on current or
on-hand inventory dollar value, to classify again into A, B and C groups. This analysis helps
determine the actual value of the items currently stocked by the company. The critical step in
this process is the combination of the two ABC analyses, creating an ABC inventory matrix.
The items should have the same classification letter in both analyses. Otherwise, the
company is stocking the wrong items. For example, if there is an item B for inventory usage
and B for current inventory that means that the inventory matches sales. However, suppose
an item is classified as A in terms of Inventory usage but falls into the C category in the
current inventory analysis. In that case, it suggests that item A is being understocked. On the
other hand, if items classified as C based on annual inventory usage are showing up as A and
B items based on current inventory value, and some B items in terms of inventory usage are
similarly showing up as A items in current inventory value; this indicates that the company
has current inventories for its B and C items that are too high and is incurring excess
inventory carrying costs. Such discrepancies may also exhibit excessive obsolete stock if the
inventory turnover ratios are very low.
Other MRO inventory analyses are the Statistical Reorder Point and the Continuous Review
Policy Min/Max. The Statistical Reorder Point model assumes the lead time of a product is
constant. In contrast, the demand during the delivery lead time is unknown but can be specified
using a normal distribution (Management Sciences for Health, 2012). The Continuous Review
Policy Min/Max is an ordering technique that requires a continuous review and the generation
of a replenishment order whenever the inventory position drops below the defined minimum
reorder point. In contrast to the fixed order quantity found in the statistical reorder point, the
order quantity in this technique is variable, sufficient to raise the inventory level to a maximum
predetermined amount. The technique is called a Min/Max system because the inventory
position should always be a quantity located between the minimum and maximum stocking
values. The Continuous Review System implies that the physical inventory is always known.
The only uncertainty is the magnitude of demand during the delivery lead time; thus, the only
safety stock required is for potential stockouts during this period.
Besides that, inventory is considered in the Toyota Production System as one of the seven
wastes, and there is a lack of publications addressing inventory problems using LSS. For
TQM example, Cheng (2017) applied LSS to reduce the stock cost using three inventory models (basic
fixed order quantity model, economic order quantity model and two-bin approach); Saad (2018)
created a business strategy using LSS to optimize and reduce inventory values; and Tettey et al.
(2016) apply DMAIC in healthcare operations to improve inventory management. Therefore,
the authors contributed to the body of knowledge about inventory management by describing
an LSS 4.0 project in a tubular profile manufacturing company (called Company XYZ).

3. Methodology
To address this research project, the authors integrated three methodologies. First, in the
action research method, one or more of the research team members participated in the process
of investigating people’s everyday problem life and coming up with an effective solution
(Stringer, 2007) using seven steps: (1) collect relevant information, (2) describe the current
situation, (3) explore and analyze, (4) interpret findings, (5) create an action plan, (6)
implement solutions and (7) evaluate solutions impact. Considering that both authors will be
strongly involved in analyzing and implementing solutions, the authors used action research.
Second, according to ASQ (2023), LSS is a fact-based and data-driven philosophy of
improvement that is rooted in the commitment to preventing defects rather than detecting
them. This philosophy prioritizes customer satisfaction and tangible financial outcomes by
actively minimizing variations, waste and cycle time within processes. LSS uses the DMAIC
as a problem-solving methodology (define, measure, analyze, improve and control). LSS 4.0
consists of integrating Industry 4.0 and LSS, highlighting topics such as big data analytics
(BDA), simulation and optimization of handling and storage (Sordan et al., 2021). Third, the
CRISP-DM is a methodology for data mining projects and consists of six iterative phases
(Schroer et al., 2021): business understanding, data understanding, data preparation,
modeling, evaluation and deployment. Some authors recommend the application of CRISP-
DM in data mining projects that follow a structured plan–do–check–act (PDCA) cycle
problem-solving methodology (Guruler and Istanbullu, 2014).
With the presence of high historical data, researchers could apply different tools to
conduct predictive analytics; evaluate solutions using simulation models; and implement
predictive, prescriptive and machine learning models. Vazquez-Hernandez et al. (2023)
integrated DMAIC and CRISP-DM to conduct an LSS 4.0 project to increase defect
identification in a manufacturing organization. An adapted version of this framework is used
in this LSS 4.0 project (see Figure 1). Each step will be addressed in the result sections.

4. Results
DMAIC is a problem-solving methodology extensively used in quality improvement projects
to reduce variability and defects. It comprises five phases: define, measure, analyze, improve
and control. DMAIC can be applied to many types of organizations and processes; when
applied to inventory management projects, it offers a systematic and structured approach to
identify and address problems, understand root causes and generate improvements related to
inventory control. The following sections explain the activities done throughout this project
applying the DMAIC methodology.

4.1 Define
The purposes of this phase include defining the business’s current state, defining the
organization’s problem, planning activities and LSS4.0 project goals. These aims were
achieved as shown in the following steps:
 Lean Six Sigma 4.0 (LSS 4.0) Project LSS 4.0 project
on MRO
Define Measure Analyze Improve Control inventory
Select CIP, CIP leader, Iden fy relevant data, Diagnose the current Iden fy poten al Define control plan,
CIP team, CIP goal, assess data quality, situa on and iden fy solu ons, assess poka-yokes, SPC,
and CIP resources and assess process varia on solu ons impact, training, document
(including data). measurement system. causes using implement solu ons, improvements in
descrip ve and and determine quality system, and
inference sta s cs business impact. document project and
lessons learned.
Business Data
Modeling
understanding understanding

Predic ve
Data prepara on Evalua on Deployment
analy cs

LSS 4.0 Project Leader (Researcher): weekly mee ngs with LSS 4.0 project team

LSS 4.0 Facilitator (Lead researcher): monthly mee ngs with LSS 4.0 project team

LSS 4.0 Facilitator and Project Leader: monthly mee ngs with project customers and other
stakeholders
Figure 1.
CRISP-DM steps DMAIC steps Ac on research
Research methodology
Source(s): Figure by authors

(1) Defining the business’s current state. Company XYZ is one of five manufacturing
facilities that integrated an international corporate group (called Steel Corporation
Group) with more than 50 years in the market. Steel Corporation Group began an
Industry 4.0 initiative in Company “A” (one out of six companies) and successfully
conducting an LSS 4.0 project to improve defect detection in 2022. Therefore, the Steel
Corporation Group leaders decided to conduct a second LSS 4.0 in Company XYZ
linked to the organization’s priorities to have management support (Shankar, 2009).
As the authors mentioned in the introduction section, Company XYZ produces 300
steel tons per day of tubular profiles using six production mills with more than six
hundred employees. These products could be used in the construction, automotive
and oil-industrial sectors.
(2) Defining Company XYZ’s problem. The spare parts warehouse (MRO—maintenance,
repair and operations) had an inventory valued at 2.5 million USD; more than 50% of
the list had not been consumed in the last 91 weeks. Additional problems include
inventory obsolete, damaged and improper location or quantified. In this scenario, the
project is highly relevant for the organization because the excess inventory decreases
the company’s liquidity by having a large part of its assets in inventory. Making
improvements in inventory management practices was critical during the COVID-19
pandemic since the company was facing a constrained market, and optimizing
inventory would provide liquidity to the company. The value of the spare parts
inventory was close to 20% of the total value of the plant’s inventory, which is
considered excessive since it consumed space that should be used for finished
products. Figure 2 shows the SIPOC for a better understanding of the MRO inventory
management.
(3) Planning LSS 4.0 project activities. Analyzing the SIPOC (see Figure 2), the authors
and the Steel Corporation Group stakeholders decided to include seven members from
TQM Suppliers Inputs Process Outputs Customers

Vendors providing parts,supplies, and Receive incoming

Fullfilled Internal
parts,supplies, and equipmen received inventory
maintenance and departments, such as
equipment from suppliers maintenance and
repair requests
Store inventory in operations
Maintenance or appropiate locations Shipped inventory to
repair requests internal customers
Manage inventory
Accurate inventory
levels
tracking and
reporting
Replenish stock when
needed

Process maintenance
requests

Picking inventory for

orders
Figure 2.
MRO inventory Track inventory
transactions
management
Source(s): Figure by authors

Company XYZ in this project: purchasing department (four members), inventory

department (one member), IT department (one member) and maintenance department
(one member). Company XYZ allowed these seven members to spend between 20%
and 30% of their time in the LSS 4.0. Additionally, one of the authors has the LSS 4.0
project leader role, and the other author is the LSS 4.0 facilitator. The warehouse and
shipment leader was the customer for this project. After a kickoff meeting, the
completed team created a project chart (see Figure 3). Meeting frequency was defined
as Figure 1 shows.
(4) Defining the LSS 4.0 project goal. Historical data were used to gather information
about the current state of the MRO inventory. There are 4,112 different codes of spare
parts on the MRO Inventory, for which the total monetary value is $2,551,742 USD, of
which 1,225,000 USD had not been consumed in the last 91 weeks. The value of the
spare parts inventory was close to 20% of the total value of the plant’s inventory.
Inventory turnover was estimated at 0.44 turns per year, which means that materials
took an average of 829.5 days to be consumed, and approximately 57% of spare parts
inventory is slow-moving. The average benchmark values for spare parts investment,
turnover and slow-moving inventory are 0.8%, two turns per day, and 5%,
respectively (Herbert and Wakeland, 2018). Herbert and Wakeland (2018) suggested
targets for these metrics: 1% (spare parts investment), four turns per day (turnover)
and 10% (slow-moving inventory). Therefore, the LSS 4.0 team used these values as
the LSS 4.0 goals.
A summary of the define phase is shown in Figure 3. Once the define phase was complete, the
LSS 4.0 team understood the data collection instruments in the next section.

4.2 Measure
The measure phase aims to assess data quality and measurement system. To achieve this
aim, the LSS 4.0 team conducted four main activities. First, relevant data were identified,
including spare parts consumption, spare parts inventory level and supplier response time.
 Lean SixSigma 4.0 ProjectCharter January 2022

1. PROBLEM BACKGROUND 7. DELIVERABLES & VISION OF SUCCESS

1. Company XYZ’s inventory value at the end of 2021 > $10,550,000 USD 1. MRO Cri cally Matrix and Iden fy Cri cal & Obsolete Material
2. MRO inventory in the warehouse at the end of 2021 > $2,400,000 USD 2. MRO warehouse 5S´s Kaizen event
• From those > $1,250,000 USD have no consump on in the last 91 weeks. 3. Define MRO inventory KPI and implement a visual scoreboard
• MRO inventory is near to 20% of total inventory assess value of the plant.
3. Evidence suggests a lack of alignment between preven ve maintenance programs and MRO inventory level (to 8. RESOURCES
be confirmed during the project). • LSS 4.0 team mee ng on a weekly basis and LSS 4.0 stakeholder mee ng on a
4. COVID-19 pandemic could affect MRO warehouse performance monthly basis.
5. There is no inventory classifica on for correc ve or preven ve maintenance. • LSS 4.0 team members will des nate between 20 to 30 percent of their me in this
6. There is a lack of ergonomics condi ons in the warehouse, including ligh ng and carrying. project
• One full- me external leader
2. GOALS • One part- me external facilitator (five hour per week)
Based on a benchmarking from different industries (Herbert and Wakeland, 2018), the LSS 4.0 proposed the • Access to current and historical MRO inventory data
following ini al goals: • Equipment: Personal Protec ve Equipment
• Decrease the Total Inventory Asset Value from 20% to 10%
• Increase Inventory Turns per Year by 0.44 to 1. 9. PROJECT SCHEDULE
• Decrease the Slow Moving Inventory from 57% to 10%.

3. SCOPE 4. RISK (COUNTERMEASURE)

• Clean and dy up the MRO warehouse, including
discharge damaged, obsolete and overstocked
spares.
• Simulate the MRO inventory levels for the top spares
• High: Incorrect classifica on of cri cality on MRO
that could stop Company XYZ produc on. (Involve
the maintenance department in the LSS 4.0 project)
• Medium: Lack of personnel me for Kaizen. (Assign
between 20 to 30 percent of LSS 4.0 team member
me in this project, and use two external leaders)

5. CUSTOMERS/STAKEHOLDERS 6. TEAM MEMBERS

• Produc on, maintenance and IT departments
• Opera on Management Director
• Facilitator: External
• Team leader: External
• Cross-func onal team members: Purchasing
department (four), inventory department (one), IT
department (one), and maintenance department
(one).

Source(s): Figure by authors

inventory
LSS 4.0 project
on MRO

project chart
Lean Six Sigma 4.0
Figure 3.
TQM These databases come from different departments. Therefore, the second activity was to
understand all the information collected and unify the same frequency (weekly information)
for each unique spare part. Third, to assess data quality, the LSS 4.0 facilitator conducted an
inventory accuracy study using a randomized stratification sample with 70 spare parts. The
percentage of inventory accuracy obtained was 86%, nine percentage points below the
benchmarking recommendation (Herbert and Wakeland, 2018). This information surprised
stakeholders, and they decided to increase the percentage of inventory accuracy before
continuing with the LSS 4.0 project. Hence, the LSS 4.0 facilitator conducted a 5S’s Kaizen
event in the spare part warehouse for nine days in Spring 2022:
(1) Kaizen planning (four days). Some activities performed on these days were
elaborating training materials, selecting team members (six frontline employees
from the spare part warehouse), assigning a war room for Kaizen event team
meetings, defining a time chart and defining a temporary obsolete warehouse.
(2) Day 1. On the first day, the Company XYZ operation director did the kickoff meeting,
the facilitator conducted a team integration exercise and trained the Kaizen even team
in topics such as teamwork, leadership, Lean philosophy and tools, Kaizen and 5S.
(3) Day 2. The facilitator explained the problem background and the spare parts
warehouse’s situation. This information is the same as mentioned in the previous
sections of this paper.
(4) Day 3. The following “S” were implemented: sort (Seiri), set in order (Seiton) and shine
(Seiso). At the end of the third day, the Kaizen event team identified 210 obsolete spare
parts valuable at $280,691 USD.
(5) Day 4. The last two “S” were implemented. To standardize (Seiketsu) and sustain
(Shitsuke) the improvement actions, two work instructions were documented in the
Company XYZ ISO 9001 quality management system. The standardized document
explains the new way of managing the spare parts warehouse. The sustain document
describes who and how to conduct 5S audits, frequency, report format and the
notification of their results.
At the end of the Kaizen event, the percentage of inventory accuracy was 90%. The
percentage of inventory accuracy was measured twice a week using a randomized
stratification sample with 70 different spare parts, obtaining 95% and 98% of inventory
accuracy in the third and fourth weeks, respectively. Because of the increased value in the
inventory accuracy, since the fourth week, this metric was measured once a week and the
stakeholders decided to continue with the LSS 4.0 project.
Because of this Kaizen event, the Company XYZ leader team agreed with the following
two (instead of the initial three) LSS 4.0 project goals: (1) reduce the value of the spare parts
inventory from 17.8% ($2,271,051 USD) to 10%; and (2) increase inventory turnover from 0.5
to four turns per year. Always maintain the internal service level.
The fourth and last activity in the measure phase was database preparation. From the
4,112 total spare parts, 210 were removed as obsoleted, remaining 3,902 spare parts. A
consolidated database was created for these spare parts, including information such as spare
parts consumption, inventory level and supplier response time. This database was the
primary source of information for the next phase.

4.3 Analyze
The data collected in the measure phase were analyzed to identify the root causes impacting
the low performance of the LSS 4.0 project goals. These goals are calculated using spare parts
cost and the amount of spare parts in inventory. Of the 3,902 spare parts, 1,954 have not been LSS 4.0 project
consumed in the last 106 weeks, but they are not obsoleted. Therefore, the LSS 4.0 team on MRO
conducted three main analyses using only 1,948 spare parts as follows:
inventory
(1) Spare parts cost analyses. Two different Pareto analyses were performed: total cost,
volume and unitary cost. First, the value for the 1,948 spare parts in inventory is
$948,443 USD, and 83% ($791,056 USD) of this value is concentrated in the 20% of the
spare parts (390 unique spare parts). Second, 91% of the unitary spare parts cost
($295,755 USD) is concentrated in 20% of unique spare parts numbers (390).
Comparing the top 100 spare parts per total cost vs cost per unit (see Table 1), 13 spare
parts appear in both lists, valuable at $144,335 USD, representing 15% of the total
cost. Most of these spare parts are motors or motor components; one article is valuable
at $82,053 USD (25%). Therefore, the total and unitary spare parts cost inventory in
Company XYZ is highlighted in a small set of spare part numbers.
(2) Spare parts consume analyses. Four analyses were performed to understand spare
parts consumed in Company XYZ. First, the Pareto analysis shows that 96% of the
volume of the spare parts (217,793) is concentrated in 20% of unique spare parts
numbers (390). Also, 216 of the 1948 (11%) unique spare parts numbers have only one
article. The top 10 spare parts with more volume include miscellaneous such as nuts
and staples with a relatively low value ($7,623 USD), strips and seals for strips
($13,961 USD) and lubricants ($25,483 USD). Second, an ABC analysis was conducted
using spare parts consumed (see Table 2). Of the 1,948 spare parts, 167 were classified
as “A” (9%), 342 as “B” (18%), and 1,439 as “C” (74%). Third, a lead time ABC analysis
shows that 1,109 spare parts were classified as “A” (57%), 427 as “B” (22%), 368 as “C”
(19%) and 44 (2%) spare parts the Company XYZ did not has information about the
supplier response time. Fourth, integrating both ABC analyses, Table 3 shows that
most spare parts are in the classification C-A from spare parts number and cost. This

Top 100 spare parts total cost Top 100 spare parts cost per unit

SP510 SP526 SP173 SP553 SP179 SP510 SP550 SP628 SP684 SP168
SP001 SP527 SP539 SP554 SP012 SP512 SP530 SP565 SP687 SP726
SP511 SP528 SP174 SP555 SP568 SP517 SP538 SP632 SP522 SP629
SP512 SP004 SP007 SP556 SP569 SP518 SP580 SP634 SP551 SP633
SP513 SP529 SP540 SP557 SP570 SP519 SP539 SP635 SP695 SP730
SP514 SP530 SP541 SP010 SP571 SP521 SP588 SP636 SP171 SP735
SP168 SP531 SP542 SP558 SP572 SP528 SP594 SP568 SP700 SP567
SP515 SP532 SP543 SP559 SP573 SP514 SP541 SP571 SP638 SP737
SP516 SP533 SP544 SP560 SP574 SP511 SP599 SP546 SP702 SP739
SP517 SP169 SP545 SP561 SP575 SP534 SP600 SP574 SP579 SP740
SP518 SP534 SP546 SP562 SP576 SP536 SP545 SP647 SP709 SP744
SP519 SP535 SP547 SP563 SP577 SP520 SP606 SP657 SP581 SP746
SP002 SP170 SP175 SP176 SP578 SP523 SP552 SP583 SP615 SP595
SP520 SP536 SP548 SP011 SP579 SP524 SP610 SP558 SP617 SP758
SP521 SP537 SP008 SP564 SP580 SP540 SP613 SP671 SP710 SP525
SP522 SP171 SP549 SP565 SP581 SP526 SP532 SP678 SP621 SP175
SP523 SP005 SP009 SP177 SP180 SP542 SP616 SP603 SP716 SP561
SP524 SP538 SP550 SP566 SP181 SP547 SP560 SP184 SP717 SP562
SP003 SP172 SP551 SP178 SP182 SP513 SP623 SP604 SP720 SP765 Table 1.
SP525 SP006 SP552 SP567 SP582 SP529 SP627 SP531 SP585 SP563 Top 100 spare parts
Note(s): Spare parts in the top 20 from total cost and cost per unit are showed in italics total cost and cost
Source(s): Table by authors per unit
TQM means the product is used between one and eleven weeks in a row, and the suppliers
take more than 21 days to supply the spare part.
(3) ABC Inventory turns per year. This analysis is achieved by comparing two ABC
Analyses: first, by annual inventory dollar usage, and next, by current or on-hand
inventory dollar value. In this approach, there are five different outcomes: Inventory
matches sales, understocking A, understocking B, overstocking B, and overstocking
C. When the ABC classification matches both scenarios, the inventory matches usage
and on-hand, but there can also be cases when an item is overstocked or
understocked. This ABC analysis shows that in 63.1% of the cases, inventory
matches usage and on-hand. Nevertheless, one of the main issues the plant has in their
MRO Inventory is overstocking the wrong type of products, specifically,
overstocking C products, which represent 20% of the cases. While it is also an
issue, understocking products are less common than overstocking. Overstocking
inventory happens when carrying excessive quantities of items beyond what is
required for maintenance. This leads to tying up working capital in inventory and
reducing the availability of funds that could be used for other business activities that

Criteria
Classification Usage Criticality Lead time

A 167 16 1,109
B 342 19 427
Table 2. C 1,439 9 368
ABC summary Not available 0 1,904 44
analysis per criteria Source(s): Table by authors

Usage Lead time Spare parts (number) Spare parts (USD)

A * 1 1,225.14
A A 78 49,440.99
A B 55 14,796.56
A C 33 45,691.97
B * 1 42.40
B A 192 109,397.62
B B 89 6,212.69
B C 58 12,099.39
B A 2 921.49
C * 42 11,279.91
C A 808 433,202.28
C B 283 32,305.10
C C 264 161,224.95
C A 11 14,474.57
C C 5 6,675.82
C A 13 25,040.39
C C 4 1,350.72
C A 5 19,233.84
Table 3. C C 4 3,828.17
ABC analysis for usage Total 1,948 948,443.99
and lead time Source(s): Table by authors
 generate revenue. It also consumes valuable storage space, creating inefficiencies in LSS 4.0 project
material handling and increasing the risk of obsolescence and spoilage (see Table 4). on MRO
Overall, there are five findings identified: (1) the total and unitary spare parts cost inventory inventory
in Company XYZ is highlighted concentrated in a small set of spare part numbers (13 spare
parts appear in both lists valuable at $144,335 USD, representing the 15% of the total cost); (2)
spare parts volume is highly concentrated in a small number of spare parts (96% of the
volume of the spare parts is concentrated in 20% of unique spare parts numbers); (3) most of
the spare parts is used between one and eleven weeks in a row; and the suppliers take more
than 21 days’ supply the spare part (41% spare parts number and 46% spare parts total cost);
(4) Company XYZ does not have information to measure spare part criticality; and (5) an
important spare parts numbers are overstocking (20%). Therefore, Company XYZ has
problems with expensive spare parts inventories, spare parts suppliers with large lead time,
and overstocking inventories. After conducting a cause–effect analysis, the LSS 4.0 team
validated two root causes. First, there are no scorecard metrics for inventories. Company XYZ
measured none of the seven spare parts metrics suggested by Herbert and Wakeland (2018).
After the measure phase, the company only measures inventory accuracy. Second, there are
no inventory policies. After several interviews with stakeholders related to production,
warehouse, maintenance, purchasing and production planning, the LSS 4.0 concluded that
there are no work instructions describing who and how to monitor spare part inventory levels
or any effort for supplier development.
The improve phase describes the action implemented by the LSS 4.0 to address these two
main root causes.

4.4 Improve
After understanding the main inventory management issues, solutions were identified,
implemented or simulated. First, spare parts inventory management policies were
implemented based on industry best practices and the organization’s specific needs. This
was done by calculating new Min–Max values for each item based on a continuous review
approach with probabilistic demand and constant lead time.
In contrast to the fixed order quantity found in the statistical reorder point (ROP), the
order quantity in this technique is variable, sufficient to raise the inventory level to a
predetermined maximum quantity. To calculate ROP, the LSS 4.0 team used Equation 1 and
followed these steps: (1) the first step to use historical demand data to calculate the demand

Annual inventory dollar Current or on-hand inventory dollar

usage value Conclusion

A A Inventory matches usage and on

hand
A B Understocking A
A C Understocking A
B A Overstocking B
B B Inventory matches usage and on
hand
B C Understocking B
C A Overstocking C Table 4.
C B Overstocking C ABC analysis: annual
C C Inventory matches usage and on inventory dollar usage
hand vs current on-hand
Source(s): Table by authors inventory dollar value
TQM variability for each item; (2) the lead time for each item was determined, which is the time
between placing an order and receiving it; (3) to determine the minimum quantity, which was
calculated using the standard statistical reorder point formula: the average demand during
the order’s delivery lead time plus the desired safety stock; and (4) to determine the maximum
quantity adding to the ROP a safety stock. There are several common methods for calculating
the maximum inventory level. The service level approach uses the formula: Maximum
Inventory Level 5 Reorder Point þ Safety Stock.
ROP ¼ dLT þ Z σ dLT (eq.1)

where

d LT ¼ Average daily demand 3 delivery lead time

Z σ dLT ¼ safety stock
Z σ dLT ¼ Customer service level safety factor 3 Stand: dev: of dLT

Instead of implementing a new ROP for all the 1,948 spare parts, the LSS 4.0 team selected 20
MROs and conducted a simulation. The criteria used to select these spare parts were the
usage category “A” (using more than 50 weeks in a row) with the three different categories for
supplier lead time (see Table 5). The mix of spare parts included industrial rags, lubricants,
pints, personal protection equipment, wood and others. The simulation with the new
inventory policies shows that stockout (internal service level) is reduced by 40%, the
inventory level is reduced by 23% and the number of orders is reduced by 18%. Therefore,

Without inventory policies New inventory policies (simulation)

Spare Lead Max Number of Max Number of
code Usage time Stockout inventory orders Stockout inventory orders

SP002 A C 105 4,275 17 0 5,643 13

SP015 A A 384 371 33 220 981 10
SP024* A B 1 248 9 0 248 23
SP027 A B 2,100 3,525 26 1,587 3,525 28
SP031 A B 559 1,034 29 178 1,034 29
SP033 A A 198 395 15 0 501 9
SP036* A B 90 1,230 14 0 717 28
SP037* A A 0 16,483 8 0 10,334 13
SP043 A B 1,235 2,185 33 1,117 2,660 32
SP056 A A 6 103 11 0 91 15
SP057* A A 0 17,243 4 0 9,782 11
SP058 A B 808 1,758 37 253 2,090 27
SP067* A A 3 110 2 3 105 9
SP069 A C 7 48 15 0 48 12
SP074 A A 23 25 42 14 63 10
SP076* A C 0 352 2 0 352 4
SP082 A B 31 33 48 14 69 19
SP088* A C 6 34 6 0 29 11
SP103 A A 0 586 3 0 287 6
Table 5. SP119 A B 76 111 46 10 203 18
Reorder point (ROP) Total 5,632 50,149 400 3,396 38,762 327
simulation results Source(s): Table by authors
the LSS 4.0 team implemented these new inventory policies (without any change) in seven LSS 4.0 project
spare parts and monitored these parts for one month (see Table 5, spare parts with “*”). The on MRO
performance metrics for these seven spare parts were a 97% reduction in stockout, a 40%
reduction in inventory level and a 120% increase in orders. Additionally, the improvement
inventory
mentioned reduced the inventory value of these spare parts by 27%. Considering the
implementation was successful, the LSS 4.0 team created an implementation plan for the
remaining 1,941 spare parts for one year. The warehouse leader was responsible for following
up on the implementation of these new inventory policies.
After a slow implementation process, Company XYZ hired one employee to speed up the
application of the new inventory policies. The inventory policies were implemented in the
remaining 1,941 spare parts in February 2023.
On the other hand, to address the second root cause, the lack of inventory performance
metrics (KPI), the LSS 4.0 project facilitator and leader worked with different stakeholders to
select from Herbert and Wakeland (2018) the most relevant performance metrics for
Company XYZ. Then, a master document was created with the following information:
equations, information source and the employee responsible for collecting and calculating the
information (see Table 6). Table 6 was documented in Company XYZ’s internal procedures,
and the performance metrics were shown in the leader meetings.
Once the improvement actions were implemented, the LSS 4.0 team defined the following
activities to monitor and control the inventory management process.

4.5 Control
The control phase was conducted while the inventory policies were implemented. Once the
new inventory levels were assigned to a new spare part, this part was monitored (controlled)
in the system by the warehouse department. Information from three different spare parts is
presented as follows: First, SP173 is a machinery tool with usage level B and lead time level A.
In this spare part, the current parameters were 24 (minimum) and 40 (maximum), while the
new parameters were 23 (minimum) and 30 (maximum). The average inventory reduction at
the moment of the documentation of this paper is 25%, with a 100% service level (no
stockouts). The cost reduction inventory was $19,012 USD. Second, SP415 is another
machinery tool with a usage level of C and a lead time level of A. In this spare part, the current
parameters were 30 (minimum) and 100 (maximum), while the new parameters were 30
(minimum) and 70 (maximum). The average inventory reduction at the moment of the
documentation of this paper is 24%, with a 100% service level (no stockouts). The cost
reduction inventory was $79 USD. Third, SP009 is a seal for a strip with a usage level A and
lead time level A. In this spare part, the current parameters were 28,000 (minimum) and 40,000
(maximum), while the new parameters were 19,640 (minimum) and 33,000 (max). The
difference in average inventory is 28%. The cost reduction inventory was $21,521 USD.
Figure 4 shows the inventory pattern for SP173 without and with the new inventory policies.
In April 2023, the LSS 4.0 team presented project status to Company XYZ leaders. They
agreed to close this project with the following LSS 4.0 project goals results: Inventory value
was reduced by 15% (March 2023 inventory value: $1,930,470 USD) and turns around
inventory increased to four turns per year (March 2023–0.97 turns per year). Additionally,
inventory accuracy was maintained between 90% and 96%.
Therefore, the last four actions conducted in this LSS 4.0 project were (1) new inventory
policies were documented in a Company XYZ internal procedure and a control plan (as an
employees’ decision tool instrument); (2) Table 6 was documented as work instruction; (3) all
the stakeholders involved with the procedure, control plan, and work instruction were trained
in these documents; and (4) all DMAIC phases were documented in a large document format
for future reference.
 metrics
TQM

Table 6.
Inventory performance
Performance Baseline Goal Data collection
No metric name Frequency (2021) (2022) Equation Description Data Source responsible

1 Percentage of Monthly Not 7.4% Spare parts with Spare parts with stock Number of parts Warehouse MRO
stockouts measured stock out/Total out with stockout service report Warehouse
number of spare assistant
parts Total number of spare Total number of Warehouse MRO
parts spare parts service report Warehouse
analyst
2 Percentage of Weekly 95% 95% Spare parts with an Spare parts with an Physical Warehouse Warehouse
inventory accurate inventory/ accurate inventory: inventory Cycle Counting Cycle
accuracy Total number of Number of spare parts Sampling Counting
spare parts that match the physical Physical Audit Team
included in the inventory with Record ERP MRO Warehouse
study inventory records inventory inventory Cycle
report Counting
Team Leader
Total number of spare Total number of ERP Cycling Warehouse
parts included in the spare parts Counting Cycle
study included in the Sampling Counting
study Team
3 Inventory Monthly Not 2 Spare parts Spare parts purchased Spare parts ERP MRO MRO
turnaround per measured purchased price/ price purchased price purchasing Warehouse
year Spare parts on report analyst
hand price Spare parts purchased Spare parts ERP MRO MRO
price purchased price purchasing Warehouse
report analyst
4 Replacement Monthly Not 0.8% Total MRO Inventory value in MRO Inventory ERP MRO MRO
assess value measured Inventory Value/ MRO as a percentage value in US inventory and Warehouse
Total Inventory of the total inventory Dollars vs Total cost report analyst
(RM, WIP and FG) value Inventory value
Value

(continued )
 Performance Baseline Goal Data collection
No metric name Frequency (2021) (2022) Equation Description Data Source responsible

5 Slow-moving Monthly Not 10% Number of Number of inventory Spare parts last ERP MRO MRO
inventory measured inventory items not items not issued for date issued purchasing and Warehouse
issued for three- three-years inventory analyst
years/total number report
of inventory items Total number of Spare parts ERP MRO MRO
inventory items quantity inventory Warehouse
report analyst
Source(s): Table by authors
inventory
LSS 4.0 project
on MRO

Table 6.
TQM 30

25
INVENTORY LEVEL

20

15

10

0 10 20 30 40 50
PERIODS
Without inventory policies
(a)
40

35
INVENTORY LEVEL

30

25

20

15

10

0
0 10 20 30 40 50

PERIODS
With the inventory policies
Figure 4. (b)
Inventory levels during Note(s): Initial inventory (blue line), reorder point (yellow line), order up to maximum
the control phase (continue green line), and final inventory (dash green line)
for SP173
Source(s): Figure by authors

5. Discussion
Project success could be measured with hard and soft outcomes, such as achieving the project
goals and stakeholders’ perception of the impact in the target area (Gonzalez-Aleu et al., 2019b).
From the authors’ perspective, this LSS 4.0 project partially succeeded in hard outcomes and LSS 4.0 project
was fully successful in soft outcomes for the following reasons. First, one out of the two LSS 4.0 on MRO
project goals were achieved when the project was closed: reduce the value of the spare parts
inventory to $2,271,051 USD (March 2023: $1,930,470 USD) and increase inventory turnover to
inventory
four turns per year (March 2023–0.97 turns per year). Second, the LSS 4.0 project was initially
expected to be finished in May 2022. Still, several situations, such as the lack of data
trustworthiness and the implementation of 5S, negatively impacted the project duration
(January 2022 to April 2023–16 months). Third, a new employee was hired to implement and
control inventory policies. The second and third reasons suggested an opportunity for
improvement from project management resources. Fourth, from the stakeholders’ perspective,
this project was a success. It is perceived as positively impacting the working area and the
sustainability of the actions implemented. Figure 5 shows two inventory performances now that

Figure 5.
LSS 4.0 project goals
performance June 2023
TQM this paper is written (July 2023), observing that the LSS 4.0 project goal is improving: spare parts
inventory value is $1,866,161 (USD), and the turnaround per year is 1.13 turns per year.
From the practitioner and theoretical perspective, there are several lessons and
contributions that this LSS 4.0 project offers to increase the body of knowledge.
Practitioners leading or participating in continuous improvement projects (CIPs) should
consider data quality (data available and data trustworthiness), problem-solving approach
and target area involvement. This LSS 4.0 project was delayed because of a severe lack of
data and data trustworthiness. When this project began, Company XYZ did not have a single
inventory performance metric; the data available was split into different databases, and some
of these data were not trustworthy. The team decided to follow the DMAIC problem-solving
with CRISP-DM integration; however, the LSS 4.0 project lost valuable time implementing
corrective actions (e.g. 5S and inventory accuracy metric). Therefore, the utilization of a high
volume of historical data (more than 90,000 records in two databases) to conduct predictive
and prescriptive analytics using simulations as part of the LSS 4.0 project, helped the team to
decide if inventory policies could work.
The authors believe that an agile approach could be a better problem-solving approach
when an organization is conducting a CIP in a process that is not in control or without
performance metrics. Several decisions were made related to maintenance and warehouse
departments. The active involvement of employees from this target area during the LSS 4.0
benefited the improvement action implementation and sustainability.
From the theoretical perspective, the authors highlighted four findings: COVID-19 impact,
MRO inventory management, critical success factors (CSFs) for CIPs, and the LSS 4.0
approach. First, when the organization returned to its regular operations after the COVID-19
pandemic, employees identified problems in several of the seven plants. These problems
included a lack of quality and missing inventories in MRO, as well as in final products.
Therefore, the Industry 4.0 initiative in Company XYZ was born to respond to the COVID-19
challenge as Bastas and Garza-Reyes (2022) suggested. The first LSS 4.0 project was focused
on identifying weld defects using picture analysis in real time (Vazquez-Hernandez et al.,
2023). This second LSS 4.0 project represents the continuous efforts of the organization to
integrate Industry 4.0 concepts using predictive and prescriptive analysis. Second, the
analysis section of the DMAIC approach was based on the recommendations from Wisner
et al. (2018) and Smith and Hawkins (2004), the authors used ABC inventory classifications
such as frequency, obsolescence, criticality and inventory value. Also, after the
implementation of some of the metrics recommended by Herbert and Wakeland (2018), the
MRO inventory management was satisfactorily controlled. Third, Gonzalez-Aleu and Van
Aken (2016) identified 52 CSFs for CIPs. In this LSS 4.0 project, the authors used an action
research approach, documenting their observations during their weekly and monthly
meetings as part of their roles as project leader and project facilitator. From this information,
the authors found that data availability, data trustworthiness, stakeholder representation
and general management support were the CSFs with the most impact on the project. Fourth,
LSS 4.0 projects are part of the LSS fourth wave. With the arrival of the Internet of Things,
digitalization and big data, organizations can conduct predictive analytics instead of only
descriptive analytics (Arcidiacono and Pieroni, 2018). However, the authors find it
challenging to perform this analysis in companies in the early stages of implementing
Industry 4.0 initiatives, such as Company XYZ. On the other hand, Antony et al. (2023) stated
that some benefits of integrating LSS and Industry 4.0 are improving forecasting and demand
management, and big data will benefit all phases of DMAIC. The authors support this
statement with the following two pieces of evidence. This LSS 4.0 project focused on
improving new inventory policies for spare parts, obtaining outstanding results. Once the
databases were fixed, these helped the maintenance department implement improvement
actions and control spare parts inventory performance metrics during and after the LSS 4.0 LSS 4.0 project
project. on MRO
From a research point of view, there are two main limitations. First, this LSS 4.0 project
included information from one out of the seven companies that integrated the headquarters;
inventory
therefore, results could not be generalized. Second, considering the lack of data
trustworthiness and the MRO inventory metrics, it is impossible to validate Company
XYZ’s conditions before and during the COVID-19 pandemic, which could be important to
assess. Future research lines should include, but not be limited to, the rollout the MRO
inventory policies to other companies of this headquarters, assess LSS 4.0 impact in
organizations with more mature Industry 4.0 implementations, and CIPs in the Industry 4.0
era using an agile problem-solving approach.

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Further reading
Emerald Publishing (2023), “Call for Papers. COVID-19, the management of epidemics and the boader
impact on society”, available at: https://www.emeraldgrouppublishing.com/about/our-stance/
covid-19-latest-research-publishing-opportunities/calls-papers-covid-19 (accessed 22 June 2023).

Corresponding author
Jesus Vazquez Hernandez can be contacted at: jvazquezh79@gmail.com

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