Quality Management Model Based on Lean Six

Sigma for Reducing Returns of Defective

Clothing Articles in SMEs from the Clothing
Industry

Maday Pacheco-Bonilla1 , Carlos Cespedes-Blanco1 , Carlos Raymundo2(B) ,

Nestor Mamani-Macedo2 , and Francisco Dominguez3
1 Ingeniería de Gestión Empresarial, Universidad Peruana de Ciencias Aplicadas, Lima, Peru
{u201214473,pcincces}@upc.edu.pe
2 Dirección de Investigación, Universidad Peruana de Ciencias Aplicadas, Lima, Peru
{carlos.raymundo,pcsinmam}@upc.edu.pe
3 Escuela Superior de Ingeniería Informática, Universidad Rey Juan Carlos, Madrid, Spain

francisco.dominguez@urjc.es

Abstract. Even though there is a high demand for clothing articles in the market,
they do not meet quality standards. This can be appreciated after the clothes
are washed and dried and the study revealed that over 20% of the items were
returned each month. This occurs when the acquisition of raw materials is focused
exclusively on the price. Thus, there are no requirements for compliance with any
technical specifications that would enable the production process to be equipped
with quality raw materials. Additionally, the absence of control over the quantity
of consumables based on demand generates reprocessed inventory, thus damaging
the fabric. Therefore, the proposed model was made through the Lean Six Sigma
method to reduce waste and meet client requirements. The results were a decrease
in returns by over 16.5% and an increase in productivity by 28.5%.

Keywords: Lean Six Sigma · Just in time · 5S · Clothing and manufacturing

industry

1 Introduction

In Peru, the clothing industry is one of the main sources of employment, accounting for
463,000 jobs. Additionally, it generates over 7.4% of the country’s GDP [1]. SMEs have
the biggest stake in the business sector at 99.4%, with a high number of them concentrated
geographically in La Victoria, where major conglomerate Gamarra is located. Gamarra
is one of the Peruvians’ favorite shopping areas for clothing, as it offers a wide range
of designer products at low prices [1, 2]. Despite an increase of 12% in Gamarra’s sales
between the years 2016 and 2018, most businesses are facing financial difficulties [1].
According to the National Association of Industries (SNI), production in the clothing

© The Editor(s) (if applicable) and The Author(s), under exclusive license
to Springer Nature Switzerland AG 2020
J. I. Kantola et al. (Eds.): AHFE 2020, AISC 1209, pp. 470–477, 2020.
https://doi.org/10.1007/978-3-030-50791-6_60
 Quality Management Model Based on Lean Six Sigma 471

sector suffered a steep 4.3% drop in 2017 [1, 2]. This was substantiated by the Gamarra
clothing SMEs themselves, who stated that their sales had dropped by 70%, and that they
had to offer discounts of up to 40% on the original prices of their clothing. The reason
for their losses is the influx of Chinese imports and the introduction of “fast fashion”
brands in shopping centers [3].
Nevertheless, even though there is great demand in the country, Peruvians are not
satisfied because quality standards are not being met. A study shows that the main factors
considered at the time of acquiring or buying clothes are quality (47%) and price (22.4%)
[2]. The requirements of clients change over time, thus increasing their demands and
expectations. In view of this, Peruvian SMEs are under constant pressure from clients
and competitors to make quality products at the lowest cost. However, both Chinese
merchandise and fast fashion are of poor quality.
The study identified that the reasons for this effect are related to aspects ranging
from the acquisition of the raw material to their handling during the final stages of the
production process. Most SMEs buy their consumables on the basis of how reasonable
the price is rather than how good the quality is, so as to avoid impact on sale prices.
However, even if they were to consider quality the main criteria, the fabric suppliers
themselves do not certify that they are delivering products that meet quality standards.
Apart from producing their own products, suppliers also purchase their fabrics in other
Chinese importing companies, which exists a 40% risk in the future show effects on the
garments after washing Another factor that has an impact on the fabric is in the clothing’s
production process. By not taking into account the exact figures for production and
demand, the surplus stock must be kept in a warehouse. This affects the fabric because
there is lack of knowledge on how to store it and the specific care needed for each type
of material. Furthermore, not levelling production creates an inventory of in-progress
clothing articles. Thus, there is a higher risk that the fabric might show dimensional
alterations and twisting.
In view of this analysis, it was decided that these poor conditions be reported to each
company that had over 20% of merchandise returns on an average each month. These
garments are considered a waste for SMEs because there is no way to fix them. Even
if there was, they would not have enough time to carry out the process. Therefore, this
leads to overhead costs, waste of time, and bad reputations for businesses. Consequently,
it was proposed that a quality-management model based on the combination of the
Lean Manufacturing and Six Sigma tools be applied in clothing SMEs, given that the
authors conclude that they achieved a positive impact on waste reduction and customer
satisfaction for meeting quality requirements.

2 State of the Art

2.1 Quality-Management Model in Clothing SMEs

Quality management (QM) practices are tools, techniques, and strategies of continuous
improvement of quality, normally driven by the need to achieve customer satisfaction
[4, 5]. Its implementation, however, requires the full engagement of all the members
of the organization, including the top management, which is critical in making sure the
472 M. Pacheco-Bonilla et al.

practices are implemented effectively in several aspects of the products, processes, and
services [4, 6].

2.2 Lean Quality-Management Model in Clothing SMEs

Lean is one of the most powerful improvement approaches aimed at providing manu-
facturers with a new competitive advantage through the systematic identification and
reduction of waste [6, 7]. This satisfies the customers’ demands in the shortest possible
time period. adding better quality at a lower cost. With proven success in large compa-
nies, Lean has become more attractive for many SMEs around the world, encouraging
the introduction of said methodology to improve productivity and efficiency in compa-
nies. However, due to financial and resource limitations, as well as the time constrains
that SMEs face, the application of all the Lean initiatives may not prove successful [6,
9].

2.3 Six Sigma Quality-Management Model in Clothing SMEs

The Six Sigma model is mainly a methodology of improving the capacity of commer-
cial processes through the use of statistical methods to identify and reduce or eliminate
process variations [9, 11]. Thus, it is useful in problem-solving and providing a valuable
approach for measurement. With its statistical base and the correct use of methodologies,
it can be helpful in improving the quality of both the product and the process [9, 11].
As a project-based management approach, the array of Six Sigma applications is also
progressing from defect reductions in the processes, products, and services in an orga-
nization to becoming a business strategy aimed at achieving a better understanding of
customers’ requirements, as well as commercial productivity and financial performance
[10, 12].

2.4 Lean Six Sigma (LSS) Quality-Management Model in Clothing SMEs

Many different approaches centered on the continuous improvement of products and the
production processes have emerged, which are focused mainly on productivity incre-
ment and cost reduction. Among them, Lean Manufacturing and Six Sigma have been
acknowledged as viable alternatives to improve processes and the product or services
in this manner [13, 14]. These are complementary methodologies: Lean seeks to opti-
mize processes by streamlining their workflow and eliminating waste while emphasizing
speed and efficiency, while Six Sigma seeks to eliminate process variations to minimize
defects, thus highlighting quality. Although different improvement approaches, they
are still compatible, because they focus on customer satisfaction, emphasize a process-
oriented view, and help reduce costs [13, 15]. This provides a positive financial impact
on the company along with meeting customer’s expectations [15].

3 Contribution
3.1 Quality-Management Model
In the model’s proposal, the Lean Six Sigma methodology will be developed as its
main approach with JIT and 5S techniques through the DMAIC model. As per the
 Quality Management Model Based on Lean Six Sigma 473

study performed, this will be materialized through the acquisition of good quality fabric
consumables which will not suffer great alterations after being washed and dried, which
means that in case there is some dimensional alteration and/or twisting, the fabrics
will stay within a certain level of tolerance which varies depending on the type of textile
material. This will contribute to eliminating storage of fabric consumables and in-process
clothing inventory which also have an impact on the clothing. Above all, in the sewing
process, adding a piece that has been affected in any way would in turn impact the
alignment of the garment. Furthermore, the VSM, Tack time, and Heijunka will serve
as supporting tools to determine the exact quantity and time it takes to produce an order,
thus eliminating idle times in production. Figure 1 shows the model focused on the textile
and clothing industry.

Fig. 1. Quality management model based on Lean Six Sigma

3.2 Implementation of the Model

One of the problems that cause the greatest financial impact on companies in the garment
industry are the returns of garments due to defects in their fabric consumables. The type
of textile material can be different in each company, as well as the production process.
For this reason, the following workflow is proposed that allows a complete analysis of
the company, from the collection of information to the implementation of the model. The
contribution of this project will be the interaction of the manufacturing tools adjusted
with the application of the DMAIC model (Fig. 2).

3.3 Quality and Production Indicators

To access the model’s success, quality indicators, as well as productivity indicators will
be used to determine the impact on the distribution of the new process of production
(Table 1).
474 M. Pacheco-Bonilla et al.

Fig. 2. Model implementation phases

Table 1. Quality and production indicators

Indicators Description Formula

Client rejections Measures the amount of returns by clients Resturned amount × 100
Total Sent
Quality performance Measures the volume of compliant Compliant products
products Total production × 100

Compliant products
Work-force productivity Measures the contribution from the work M. H. Worked
force to the volume of compliant products

4 Validation

4.1 Just in Time

(1) Development of supplier selection criteria: The criteria of SME buyers located in
Gamarra were taken into account so as not to affect their unit costs. Table 2 shows
their respective ranges. In this case, the type of material is cotton and its tolerance
is ±5%.

Table 2. Development of supplier selection criteria

Criteria Range
Quality 5% > x > −5%
Price 12.5 soles > x
Flexibility 3 colors > x
Availability 60 m > x > 50 m
Delivery time 2 days > x
 Quality Management Model Based on Lean Six Sigma 475

(2) Measurement of input quality: for this, the Lockuán method will be applied [16],
and comparisons will be made for each company that offers the same fabric design
(Table 3). It should be noted that washing and drying are not performed for each
sample separately but rather all together.

Table 3. Measurement of quality of inputs

Quality-measurement Dimensional Twisting

results alteration
Wide Long
Company 1 −6% −4% −2%
Company 2 2% −2% 4%
Company 3 −2% −4% 2%

(3) Supplier evaluation: Once the companies outside of the tolerance range for each
color are discarded, the service from the suppliers is then evaluated with its pertinent
criteria and deliberation, shown in Table 4. Finally, the one with the highest score
is chosen, which would be Company 2 on color 1.

Table 4. Supplier evaluation

% Comp. 2 Result Comp. 3 Result

Quality 35% 4 1.4 3 1.05
Price 25% 3 0.75 4 1
Flexibility 20% 5 1 3 0.6
Availability 15% 3 0.45 3 0.45
Delivery time 5% 5 0.25 5 0.25
Total – 3.85 – 3.35

(4) Supplier performance measurement: The measurement will be based on the failures
of the batches of fabric over the total received. The result should not be less than
90%, as it would increase your costs. In addition, there is no return or resize of the
defective fabric.

4.2 Results
After applying the proposed tools of the model in the production area, the Table 5 shows
the results obtained. Given the increase in productivity as an effect, it increased its sales
without altering its costs as a result, it increased approximately 10% in its profitability
compared to the months of October to December of the years 2018 and 2019.
476 M. Pacheco-Bonilla et al.

Table 5. Current and achieved indicators

Indicator Before After

Client rejections 20.97% 4.4%
Quality performance 79.03% 95.5%
Work-force productivity 22.23% 26.10%

5 Conclusions
The model was successful in reducing returns by eliminating twisting and dimensional
alteration defects that were taking place after washing and drying the garment. This
was therefore reduced to 4.4%, showing a 95.4% increase in quality performance. Fur-
thermore, the model had a positive impact on the search for materials and reduction of
transportation time (86%) resulting in a reduction of 28.5% in the production cycle time.
Increase in production capacity and quality assurance of their products permitted a pos-
itive impact of 13.99% on sales between October and December 2019. It also resulted
in costs savings of 9.33%, thereby increasing profitability.

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