INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
Optimization of Non-value Added Headcounts in Inventory Control:  
A Case Study in an Electronics Manufacturing Company  
Vu Phuong Nam, Le Duy Khanh, Nguyen Thien Duy, Do Ngoc Hien*  
Department of Industrial & Systems Engineering, Ho Chi Minh City University of Technology  
(HCMUT), 268 Ly Thuong Kiet Street, Dien Hong Ward; Vietnam National University Ho Chi Minh  
City (VNU-HCM), Linh Xuan Ward, Ho Chi Minh City, Vietnam.  
*Corresponding Author  
DOI: https://doi.org/10.51583/IJLTEMAS.2025.1411000050  
Received: 18 November 2025; Accepted: 27 November 2025; Published: 08 December 2025  
ABSTRACT  
Manufacturing companies are highly concerned with non-value added (NVA) activities that are unnecessary or  
wasteful from the customer’s perspective, and the employees who are responsible for these activities are  
considered as NVA headcounts. Consequently, this study aims to use the Define – Measure – Analyze – Improve  
– Control (DMAIC) process to solve this problem for an Electronics Manufacturing Company. It showed how  
to analyze the data and then defined that the Inventory Control process has the most NVA headcounts to start  
with the improvement, the SIPOC Model Diagram (SIPOC) was brought out to measure the target process.  
Useful methods like Cause and Effect Diagram (CED), 5 Whys, and Time Study Snapback (TSS) were used to  
analyze and indicate the root causes. In the improving stage, a new Inventory Control matrix was developed to  
reduce 13 NVA headcounts and save approximately 78000$ per year for the company. The study also listed out  
the activities that would have to do to maintain the project’s effectiveness.  
Keywords — DMAIC process, Lean Six Sigma, Non-Value Added, SIPOC Model Diagram, Cause and Effect  
Diagram, Five Whys, Optimization Headcounts.  
INTRODUCTION  
Implementation of Lean Six Sigma in manufacturing is an effective way of allowing organizations to attain their  
objectives and has better competitiveness in the market.  
Lean manufacturing is a management philosophy derived from the Toyota Production System (TPS). It is a  
systematic approach to identify and eliminate wastes (or non-value-adding activities) through continuous  
improvement by flowing the product at the pull of the customer in the pursuit of perfection [1]. It focused on  
reducing the cycle time to become more responsive to customer demand and using fewer resources, lowering  
costs, and increasing productivity, profit.  
Six Sigma as a powerful business strategy has been well-recognized as an imperative for achieving and sustaining  
operational and service excellence [2]. Lean Six Sigma is the application of Lean techniques to increase speed  
and reduce waste, while employing Six Sigma processes to improve quality and focus on the Voice of Customer  
(VOC) [3]. Therefore, Lean Six Sigma together are proven methodologies that increase efficiency, effectiveness,  
and quality, resulting in continuous improvement to increase value for the customer as on Fig. 1.  
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INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
Fig. 1 The benefits of using Lean Six Sigma  
THE DMAIC METHODOLOGY  
The Lean Six Sigma process is broken down into five interconnected stages: Define, Measure, Analyse, Improve,  
and Control (DMAIC), as described in Fig. 2. This sequence makes the process systematic, fact-based, and data-  
driven. The DMAIC process is the centerpiece of the Six Sigma problem-solving methodology and it is  
recommended for the systematic handling of any project [4].  
At the definition step, a problem is identified, and it is determined which aspect of a particular process is to be  
improved. Back door method is used to discover wastes. Current operating conditions are identified, where  
processes were done. They would be separated in detail as operations, so their purposes are determined.  
Operations are classified whether they add value or do not add value to the products. Actually, root causes of the  
wastes (no-value added operations) are determined.  
At the measurement step, a baseline is developed of how that system, process, or issue is on functioning. Non-  
Value- Added headcounts (NVA HCs) are measured, in which they do not add any values to the products. They  
operate non-value- added operations such as waiting, moving, supporting, and correcting activities. The rates of  
NVA HCs are determined, which could help identify where should be focused on improvement. In addition,  
SIPOC (Supplier – Input – Process – Output – Customer) diagram is used to measure the studied process.  
Fig. 2 DMAIC methodology.  
At the analysis step, the root causes of the problem are analyzed by using the data gathered during the  
measurement phase. Cause and effect diagram (Ishikawa Diagram) and 5-Why analysis tool are used. Root causes  
of waste of headcounts are identified.  
Step 4 is the improvement process, in which changes are defined and implemented during this phase.  
Improvement plan is suggested in detail. The Product-Process-Quality-Time (PPQT) matrix was used to  
determined standard times, where relative information such as necessary operations, demands, daily available  
working time, available time in the demand period, and so on is determined and calculated.  
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INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
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ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
The number of observations is determined as following equation:  
2
2
n = (zs) = (zs)  
(1)  
̅
ax  
e
where:  
z = standard normal distribution value at the expected confidence interval (95%).  
s = standard deviation  
a = accepted percentage of the error  
x̅ = mean of sample  
e = accepted error  
Observed time (OT) is determined by equation (2)  
∑
xi  
OT =  
Normal time is calculated as following:  
(2)  
n
NT = OT * PR  
(3)  
(4)  
where: PR is performance rating (%)  
Finally, standard time would be determined as:  
ST = NT * AF = NT * (1+ A)  
where:  
AF: Allowance percentage based on job time  
A: Allowance time  
It provides required information to identify the percentage of NVA HCs.  
Finally, control is the handover to the process owner who commissioned the project and makes sure the result is  
maintained.  
Case Study  
The case study is developed in an electronics manufacturing company. It demonstrates how a systematic  
methodology is used in carrying out the improvement processes through the Lean Six Sigma concept. A suitable  
process improvement methodology based on Six Sigma is needed to ensure proper and systematic process flow  
to achieve improvement [5]. The methodology was adopted in a phase-by-phase approach and the detailed  
discussion of each phase is given as follows.  
Define  
Demand is expected to increase in the coming years. For this reason, it is considered important to find a way to  
reduce the cost, provide an attractive price to customers, and increase the competitive advantage in the market.  
Reducing waste is an ideal way to lower costs and the collected data indicates that the rate of non-value-added  
headcounts in the company in the quarter 2 of the last year was very high (Fig. 3), Therefore, this study would  
focus on this element to achieve the goal of reducing cost.  
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INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
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ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
Fig. 3 Overview %NVA HC in Q2 of the last year  
Another data collection plan was developed to break down the percentage of NVA headcounts in detail and see  
which department it was coming from.  
Measure  
A data collection plan was developed to break down the percentage of NVA headcounts in detail and see which  
department it was coming from and below is the result (Fig. 4).  
Fig. 4 %NVA HCs data breakdown  
The NVA HCs rate is 33% of the total direct labor in the factory. Out of a total 33% of the NVA headcounts,  
11.9% came from the Support team. For the Support team, the majority of the NVA headcounts is direct labor  
under Inventory Control, accounting for 8.6% of the total direct labor of the factory.  
Continuously to break down the percentage of NVA headcounts in Inventory Control, Process Receiving was  
defined as a potential candidate for improvement as on Fig. 5. Although the AMT REEL process had highest  
percentage of NVA HCs, it was not managed by inventory control department. Therefore, the second highest one  
was focused on, which is receiving process as potential for improvement.  
Fig. 5 %NVA HCs in Inventory Control  
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INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
Also, SIPOC diagram was used to measure the current Receiving process as on Fig. 6. The warehouse and  
industrial engineering team would be responsible to improve the process as directly suppliers. SIPOC shows that  
the inputs such as operator, computers, pallets, and raw material directly affect the process.  
Fig. 6 SIPOC diagram of Receiving process  
Analyze  
Fig. 7 The Cause and Effect Diagram  
In this stage, the Cause and Effect Diagram and 5-Why Analysis are used to identify the root causes, resulting in  
Fig. 7, and Fig. 8. Because sizing headcounts is not reasonable, percentage of NVA in receiving process is  
unexpected high. The reasons are determined as on Fig.8.  
Finally, the study concluded that the current Receiving process had no tool to do the Headcount Sizing. It led to  
waste a large amount of manpower and did not know how to optimize the tasks among them.  
Fig. 8 Five-Why analysis  
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INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
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ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
Improve  
After determining the root causes, a list of potential countermeasures and how to evaluate them, and the  
Implementation Plan was carried out as on Fig. 9. The activities for improvement of the receiving process would  
be assigned to relative departments, the predicted results were identified, and the time to complete them were set  
up.  
In this stage, the Product-Process-Quality-Time (PPQT) matrix was used to calculate the standard working time  
of each task in the Receiving process. The suggestions to optimize the HCs to achieve the goal of reducing NVA  
HCs were summarized as on Fig. 10.  
Fig. 9 Improvement plan  
Fig. 10 PPQT matrix for Receiving process  
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INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
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Fig. 11, and Fig. 12 show us the results after applying the PPQT matrix actions to the Receiving Process. The  
percentage of NVA HCs was reduced from 2.37% to 2.15%.  
Fig. 11 Results after applying the PPQT matrix in the Receiving process  
Fig. 12 Visualizing Results after applying the PPQT matrix in the Receiving process  
With this result, 78000$ per year was saved and the cost of the factory was obviously reduced according to it as  
on Fig. 13.  
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Fig. 13 Cost saving of this project  
Control  
This phase is the longest stage of the DMAIC cycle, which requires considerable levels of commitment and  
involvement by the team responsible for the project and the headcount.  
The NVA HCs ratio was reached the target. Now, the responsible owner has kept following up on the daily  
routine. This task belongs to the Warehouse department, with help from the Industrial Engineering team to assist  
in monitoring the factors and improving output and yield performance through monthly reviews. Also, the PPQT  
HCs Sizing data cycle should be documented for future usage and reference.  
CONCLUSIONS  
This research expands the theoretical foundation for combining Lean and Six Sigma by studying and analyzing a  
practical application of the concept. Eventually, it provides a way to successfully apply Lean Six Sigma into  
practice. Detailing the practices of the five phases of DMAIC, the Six Sigma empirical study and describes how  
to reduce NVA HCs in the manufacturing company step by step. It contributes much for the company take  
advances in increasing the competitive ability. The same methodology can be extended to numerous other cases  
in the industry.  
This case study emphasizes on the importance and the relevant impact that the implementation of Lean Six Sigma  
philosophy can have on improving the processes of a company. Thus, the implementation of this management  
paradigm is a way that aims to achieve considerable improvements in the effectiveness and efficiency of the  
processes carried out by an organization and it can be an important contribution to the company’s growth and to  
establishing a distinguished position in the market. It was also demonstrated that the DMAIC cycle is an organized  
and effective methodology for defining and implementing improvement opportunities, creating at the same time  
a global mentality of continuous improvement.  
ACKNOWLEDGEMENTS  
We acknowledge Ho Chi Minh City University of Technology (HCMUT), VNU-HCM for supporting this study.  
REFERENCES  
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ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
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