Lean Six Sigma - Sharpening India's Competitive Edge?

Megan James

India is one of the world’s fastest growing economies, with an interest in Lean Six Sigma and Business Excellence to match. But could there be trouble ahead and will Lean Six Sigma provide the answers?

In a fun article that made the rounds on the Internet late last year, blogger Pete Abilla looked at the geographical locations where Google searches for "Six Sigma" outpaced the number of queries for teenie bop sensation Justin Bieber.

Unsurprisingly, given their booming economies, more than half of Abilla’s top ten "Six Sigma" countries were in Asia and the Indian subcontinent. India itself outpaced the rest – with the number of search queries for "Six Sigma" vastly exceeding that for Bieber.

A bit of fun? Perhaps, but even at IQPC’s own Process Excellence Awards last month in North America, Indian companies and individuals made a strong showing, capturing wins in categories ranging from Best Process Improvement in Transaction and Service to Master Black Belt of the Year.

So why India?

Last decade companies focused on cheaper labour and provision, in cost-driven terms. Business Process Outsourcing (BPO) was de rigeur as companies sought to off load the cost of functions like call centers, payroll, software development, and other support functions. India, with a well-educated, largely English speaking population, was an attractive market, as labour wages remained well below that of developed economies. Indeed the recession only seemed to strengthen the pull for offshoring and outsourcing to the region for global multinationals.

Lean and Six Sigma – methodologies focussed on the twin attributes of efficiency and quality - came to prominence within this cost driven environment, as Indian businesses aimed to provider more efficient service provision at a lower price.

Pundits have been questioning whether India will price itself out of the outsourcing business for years. But, even with strong wage inflation over the latter part of the noughties, Indian firms retained a strong competitive advantage over their counterparts in developed economies offering comparatively low wages and a weaker currency.

However, as European and North American economies struggle under the burden of debt and wage inflation remains depressed – that competitive balance is starting to shift. India’s GDP is forecast to grow 8.4% in 2011, according to latest figures from the International Monetary Fund (IMF), compared to 2.5% growth in what the IMF classifies as Developed Economies.

Additionally, top talent is becoming increasingly expensive and in higher demand for more complex and senior level business activity When you couple this with the recent push back towards nearshoring and supporting local business in the EU and US economies the cost/value equation is shifting slowly.

The question is what role will process excellence and quality play in driving forward and solidifying the Indian economy?

Many businesses regionally are already looking towards value generation, growth and excellence in service provision. Within this a new model for Lean and Process Excellence appears to be emerging, one that is shifting the role of quality and Lean Six Sigma away from short term cost savings alone towards a more long term improvement in delivery. To what extend we can truly stretch the borders between cost and quality is yet to be seen.

We’re launching a study to find out more: Are you a practitioner or business leader in India? Let us know what you think about the role and development of Lean Six Sigma in India!

Have your say in our 2 minute online survey! Click here.