Anecdotal data affirms that companies applying Lean Six Sigma in their operations not only deliver higher quality products and services, but also obtain superior financial results. The goal of this research was to empirically verify anecdotal data. The study proposed to analyze a group of publicly traded manufacturing companies with the intent of verifying if a correlation exists between companies being lean and the attainment of superior returns on investments. The researcher performed a series of statistical tests comparing key Financial Performance Indicators (FPI) extracted from annual reports (10-K) from a large pool of companies. The outcome of this study showed that superior financial rewards result from a systematic application of lean and quality tools. At the conclusion of this thesis we verified that companies having a business model that stimulates a high level of communication between them and their markets - because they are lean - obtained substantially higher financial advantages when compared to companies that still followed a more traditional mode of production. The results also revealed that lean companies obtained on average Return on Invested Capital (ROIC) 10% higher than mass producers. Therefore, companies wanting to strategically invest their capital should consider Lean Six Sigma as a source of competitive advantage. Another strategic insight derived from this study was the recognition of signs of a smart business. Potential investors should look for the presence of lean and quality improvement programs as one sign that capital is being wisely invested to generate value. Another sign is how well historically ROIC have performed against Weighted Average Cost of Capital (WACC). The research revealed that, on average, lean companies had ROIC of 16%. Assuming that the hurdle rate (WACC) for most companies is near 10%, having ROIC of 16% is an incentive to become lean, thus allowing such companies to create value for their shareholders. Finally, we learned that many factors affect ROIC, namely, brand equity, market positioning, patents, core competency, innovation, leadership, etc. However, the presence of a Lean Six Sigma program in a manufacturing business was a strong positive factor impacting ROIC.

The productivity advances generated from lean manufacturing are self-evident. Plants that adopt lean are more capable of achieving high levels of quality, shorter lead times, and less waste in the system. While it seems logical that higher levels of productivity and quality, as is common in lean companies, should result in positive financial performance, the research community has failed to establish the financial profitability of lean. Those researchers who have studied the financial returns issue report varying results. The goal of this research was to determine if a connection exists between lean and financial success and to discover why so many researchers are finding mixed results. Information Velocity (IV) was theorized to provide the solidifying link between lean and financial performance. Measured by combining the environmental volatility with a company's leanness, IV measures how fast a company can transmit information from the market into a customer-satisfying product in the hands of the consumer. This study analyzed over 530 publicly-traded manufacturing companies to validate the following hypotheses: 1) there is a positive relationship between leanness and financial returns, 2) there is a negative relationship between environmental volatility and financial returns, and 3) there is a positive relationship between IV and financial returns. Regression models were run in various combinations to determine the effect of lean, environmental instability, environmental unpredictability, and IV on financial performance indicators such as return on sales (ROS), return on assets (ROA), and quarter-closing stock price. The outcome of this study showed that financial rewards do result from lean, which positively affected financial performance in almost all scenarios. Environmental instability always negatively correlated with financial returns, and IV mostly shows a positive effect, but with mixed results. Lastly, IV does not explain why researchers find mixed results on the profitability measures of lean. The results of this thesis highlight the significance of implementing lean manufacturing, especially in a dynamic environment. As the instability in the environment increases, profitability decreases. Therefore, an increase in leanness by boosting inventory turns can compensate for the volatility and create enhanced productivity measures and financial results.

Planetens resurser utnyttjas inte på ett ansvarsfullt sätt och för att uppnå en hållbar utveckling behöver en förändring ske i hur dessa resurser konsumeras och produceras. Ett företag som arbetar för att använda sina resurser mer effektivt och minska sin negativa miljöpåverkan är Aurobay Sweden AB.  Aurobay tillverkar drivlinor för interna hybrid- och förbränningsmotorer och använder skärande bearbetning i delar av sin produktionsprocess. Till den skärande bearbetningen används skärvätska vilket behöver filtreras för att kunna återanvändas. Företaget använder en filtreringsprocess med filterduk för att separera spånor från skärvätskan. Aurobay vill minska sin förbrukning av filterduk och skaffa en bättre förståelse för hur företagets filtreringsutrustning kan nyttjas bättre i framtiden.  Ett experiment genomfördes för att utvärdera hur en förändring av cykeltid påverkade mängden spånor som transporterades bort från filtreringsutrustningen. Resultatet visade att mätningar behöver genomföras under en längre period eftersom externa faktorer kan ha en påverkande effekt. Efter en nulägesanalys av utnyttjandegraden på några av företagets filtreringsutrustningar kunde det konstateras att den kunde vara så låg som 15 %. Genom att öka cykeltiden som filtreringsutrustningarna filtrerar kan utnyttjandegraden höjas och förbrukningen av filterduk minskas med 26 %. Utan ytterligare investeringar kan Aurobay minska kostnaderna för att köpa in ny filterduk och hantering av den förbrukade. / The planet’s resources are not being utilized responsibly, and to achieve sustainable development, changes are needed in how these resources are consumed and produced. Aurobay Sweden AB is one such company working to use its resources more efficiently and reduce its negative environmental impact.  Aurobay manufactures drivetrains for internal hybrid and combustion engines and for some of its production process machining is used. Cutting fluid is used in this machining process and it needs to be filtered before reuse. Aurobay utilizes a filtration process with filter media to separate chips from the cutting fluid. Aurobay aims to reduce its use of filter media and seeks to gain a better understanding of how the company’s filtration equipment can be optimized for future use.  An experiment was conducted to assess the impact of changing the filtration equipment’s cycle time when it comes to remove chips from a filtration process. The results indicated that measurements need to be conducted over a longer period as external factors may have an influencing effect. After an analysis of the utilization rate on some of the company’s filtration process equipment, it was found that utilization rates could be as low as 15 %. The utilization rate can be improved by increasing the cycle time which the filtration equipment operates, and the consumption of filter media can be reduced by 26 %. Without additional investments, Aurobay can reduce the costs for both purchasing new filter media and removal of the old one.