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Impact of Tariffs on the SMBE Marketplace

Increased Costs: Tariffs raise the price of imported materials and goods, forcing SMEs to absorb higher expenses or pass them on to consumers, often with limited flexibility compared to larger firms.
Supply Chain Disruptions: Dependence on global suppliers leaves SMEs vulnerable to delays and shortages caused by tariffs, exacerbating operational inefficiencies.
Competitive Disadvantages: Retaliatory tariffs and domestic cost pressures weaken SMEs’ ability to compete globally and locally against larger, more resilient corporations.
Growth Opportunities: Some SMEs benefit from tariffs by tapping into demand for domestic goods, though this requires adaptation and is limited to specific sectors. (Click in the body of this paragraph to read the entire article)

Tariffs, which are taxes imposed by governments on imported or exported goods, have long been a tool of economic policy aimed at protecting domestic industries, generating revenue, or influencing trade balances. In the United States, tariffs have had a significant impact on small to medium enterprises (SMEs), defined as businesses with fewer than 500 employees. These companies, which account for roughly 99% of all U.S. businesses and employ nearly half of the private-sector workforce, often lack the resources of larger corporations to adapt to the economic shifts caused by tariffs. This report explores the multifaceted effects of tariffs on SMEs, focusing on cost increases, supply chain disruptions, market competitiveness, and opportunities for growth.

One of the most immediate and pronounced effects of tariffs on SMEs is the increase in operating costs. When tariffs are levied on imported goods, the price of raw materials, components, or finished products rises, directly impacting businesses that rely on global supply chains. For example, during the U.S.-China trade war initiated in 2018, tariffs on Chinese goods such as steel, aluminum, and electronics components increased costs for SMEs in manufacturing, construction, and technology sectors. Unlike large corporations that can negotiate bulk discounts or shift production overseas, SMEs often have limited bargaining power and flexibility. A 2019 survey by the National Federation of Independent Business (NFIB) found that 39% of small business owners reported higher costs due to tariffs, with many forced to absorb these expenses or pass them on to consumers, risking customer loss in price-sensitive markets.

Supply chain disruptions represent another significant challenge for SMEs under tariff regimes. Many small businesses depend on imported goods or materials that are either unavailable or cost-prohibitive to source domestically. Tariffs can delay shipments, create shortages, or force SMEs to seek alternative suppliers, all of which introduce inefficiencies. For instance, the Trump administration’s tariffs on Canadian lumber in 2017 raised construction costs for small homebuilders, who struggled to find affordable domestic substitutes. These disruptions disproportionately affect SMEs because they typically lack the capital reserves or diversified supplier networks of larger firms. A 2020 U.S. Chamber of Commerce report estimated that tariffs disrupted supply chains for 46% of small businesses, leading to production delays and lost revenue.

The competitive landscape for SMEs is also altered by tariffs, often to their detriment. While tariffs aim to protect domestic industries, they can inadvertently weaken small businesses in global markets. Retaliatory tariffs imposed by other countries—such as the European Union’s response to U.S. steel tariffs in 2018—raise the cost of American exports, hurting SMEs that sell overseas. Agricultural SMEs, like small soybean farmers, saw export markets shrink when China imposed retaliatory tariffs, with exports dropping by over 50% between 2017 and 2019. At home, SMEs face stiffer competition from larger firms that can better weather tariff-related cost increases or shift to domestic suppliers. This dynamic can erode SMEs’ market share, as they struggle to maintain pricing parity with bigger competitors.

Despite these challenges, tariffs can create opportunities for some SMEs, particularly those positioned to capitalize on domestic production. By making imported goods more expensive, tariffs can incentivize consumers and businesses to “buy American,” potentially boosting SMEs that produce goods locally. For example, small manufacturers of textiles or machinery parts saw increased demand during periods of high tariffs on foreign competitors. Additionally, SMEs that adapt by reshoring production or innovating to reduce reliance on imports can gain a competitive edge. However, this benefit is not universal—only about 10% of small businesses reported revenue gains from tariffs in a 2021 NFIB survey, suggesting that such opportunities are limited to specific industries and require significant upfront investment.

In conclusion, tariffs present a complex mix of challenges and opportunities for SMEs in the United States. Rising costs and supply chain disruptions often strain their limited resources, while shifts in competitiveness can threaten their market position. Yet, for a minority of adaptable firms, tariffs can open doors to new domestic markets. Policymakers must weigh these impacts carefully, as SMEs remain a cornerstone of the U.S. economy, driving innovation, employment, and community stability.

Lean Six Sigma Tools

This paper reviews Lean Six Sigma and the benefits produced by using the DMAIC process. The advantages of the process include more efficient business processes and products that benefit the company. Lean Six sigma tools include stratification, histograms, tally sheets, fishbone analysis, Pareto, scatter diagram, and control charts. These tools were defined considering their application in a case study. The third component of the LSS Tools assignment is how qualitative, quantitative and mixed methods research are evident in a LSS process.  

Keywords: Lean Six Sigma, DMAIC, qualitative, quantitative, mixed method

Introduction

This report on Lean Six Sigma tools involves a definition of the quality process tools. This encompasses the DMAIC process. These definitions are followed by including the possible benefits of using Lean Six Sigma. To augment the DMAIC component’s definitions, seven tools were identified that are used to manage and document a DMAIC process. They include stratification, histograms, tally sheets, fishbone, Pareto, scatter diagram, and control charts. These tools were defined and the use of the tools in a case study are reported. The third segment of the report included the way in which qualitative, quantitative and a mixed method research effort would be evident in a Lean Six Sigma process.

LSS and Possible Benefits

Lean Six Sigma is composed of the five elements that make up the DMAIC acronym (George, 2005). It is a structured problem-solving methodology used throughout business. The letter D stands for define. This means having a scholarly approach to providing a clear definition of the problem under review from multiple perspectives. M stands for measurement, which incorporates definitions, data acquisition, and a clear understanding of the inputs and outputs. A stands for analyze. This phase requires a definition of the inputs, in addition to understanding the root causes and their impact. The letter I represents the improvement phase of the DMAIC process. This constitutes developing potential solutions and evaluating the best options. Then the full-scale implementation is installed. The control function, represented by the letter C means developing standard operating procedures and monitoring the process to ensure its effectiveness.

The Lean Six Sigma process has been studied to determine the benefits of using it in a manufacturing process in South Africa. Mabotja & Mavutha (2024), report that the process can address customer complaints about the quality of orders and the timely delivery of the products. The process can also improve operations, procedures and communication issues. The solutions provided by the Six Sigma process improve customer satisfaction.

LSS Tools, Characteristics, and Uses

Lean Six Sigma tools include stratification, histograms, tally sheets, fishbone, Pareto, scatter diagram, and control charts (George, 2005). Stratification means to divide the data into categories that include groups, divisions and levels that aid in the comprehension of the problem under study. This tool would be used in the analysis phase of the process. A histogram or frequency plot produces a bar chart that represents the frequency of the event discovered in the investigation. This aids in directing the focus of the researcher. A check sheet is a form that is used to collect and aid in categorizing data. The quantitative data can be subjected to statistical analysis tools to indicate statistical validity or confirm the null hypothesis. A fishbone diagram aids in identifying the root causes that cause a problem (Uluskan, 2019). It literally looks like a fish skeleton when depicted on paper. This tool aids with a conceptualization of the cause-and-effect relationship between the cause and the problem. The Pareto principle states that 80% of the influence or result will emanate from only 20% of the root cause (Jum’a & Basheer, 2023). This knowledge and application help the researcher eliminate wasted time investigating potential causative factors that do not produce a significant impact. A scatter diagram represents the values from two sets of variables from a set of data. This visual chart will aid the researcher with the relationship between the two selected variables. This can provide a verification of correlation or of no relationship between the values. A control chart aids with understanding how the process changes over a period. A repetition of the process will aid in the validity of the study and promote use of the improvements and controls in real-world applications (Wang & Tsung, 2022).        

Application of Lean Six Sigma Through All Types of Research

Due to the depth and range of Lean Six Sigma demonstrated by the DMAIC process, it is highly probable that qualitative, quantitative, and mixed research methods will have a bearing on case study research and business solutions. The following discussion will systematically review the three research methods and report on the research and business solutions applicability. Qualitative research seeks results by answering open ended questions about missing information or gaps in the existing research findings. This allows the researcher to draw inferential conclusions about the results from literature reviews, interviews, observations and focus groups as a method of obtaining qualitative information (Aguzzoli et al., 2024). In the case of a flexible design using qualitative methods – single case study, the use of multiple publications adds to the reliability of the reported information. This aligns with the define and measure aspects of the DMAIC process well. In business applications, it is wise to draw information from multiple sources to avoid making a short-sighted, uninformed decision. Understanding the current situation considering a historical context, current trends, and with an understanding of the technology available means that obtaining qualitative information is essential before proceeding with a proposed business solution.   

Quantitative research methods are the core of measuring and analyzing data to infer causative factors. This means that two of the five DMAIC elements are in play when a researcher employs a quantitative research method to analyze a data set. Big data has become an essential factor in the analysis of buying trends and the subsequent inventory adjustments necessary to meet customer expectations (Sahoo, 2022). This form of business intelligence means that quantitative research and analysis are an integral aspect of business solutions in retail and large business to business transactions.

A mixed methods research report integrates qualitative and quantitative research methods to provide a publication that employs these methods to deliver a trustworthy article. In a business context the use of Lean Six Sigma, which entails using both methods, should deliver a superior business decision (Sá et al., 2022). From an empirical perspective, both qualitative and quantitative research is used to make sales and marketing decisions to facilitate the most efficient management of an organization.

Conclusion

This review of Lean Six Sigma Tools (LSST), required a definition of LSST and the benefits derived from using the process. This means defining the DMAIC acronyms and associating a benefit with their use. DMAIC stands for define, measure, analyze, improvement, and control. The second segment reveals seven LSST tools that aid in the discovery, data acquisition and measurement phases of the process. Each tool identified is associated with a contribution to a case study. The third segment of the paper delivered a discussion regarding qualitative, quantitative, and mixed methods research. These three research methods were analyzed in respect to their bearing in a LSST process. Their influence on case study research and potential business solutions is included. Each research method has its benefits and drawbacks. Each method should be given the scrutiny necessary to produce a viable document worthy of reliable business solutions.

References

Aguzzoli, R., Lengler, J., Miller, S. R., & Chidlow, A. (2024). Paradigms in qualitative IB research: trends, analysis and recommendations. Management International Review, 64(2), 165-198. https://doi.org/10.1007/s11575-024-00529-5

George, M. L., Maxey, J., Rowlands, D. T., & Upton, M. (2004). Lean six sigma pocket toolbook (p. 282). New York, NY, USA: McGraw-Hill Professional Publishing.

Jum’a, L., & Basheer, M. E. (2023). Analysis of warehouse value-added services using pareto as a quality tool: A case study of third-party logistics service provider. Administrative Sciences, 13(2), 51. https://doi.org/10.3390/admsci13020051

Mabotja, T. P., & Mavutha, W. (2024). Effect of Lean Six Sigma on order fulfilment process: evidence from manufacturing companies in Gauteng, South Africa. International Journal of Research in Business and Social Science (2147-4478), 13(3), 54-65. https://doi.org/10.20525/ijrbs.v13i3.2952

Sá, J. C., Vaz, S., Carvalho, O., Lima, V., Morgado, L., Fonseca, L., … & Santos, G. (2022). A model of integration ISO 9001 with Lean six sigma and main benefits achieved. Total Quality Management & Business Excellence, 33(1-2), 218-242. https://doi.org/10.1080/14783363.2020.1829969

Sahoo, S. (2022). Big data analytics in manufacturing: a bibliometric analysis of research in the field of business management. International Journal of Production Research, 60(22), 6793-6821. https://doi.org/10.1080/00207543.2021.1919333

Uluskan, M. (2019), Analysis of Lean Six Sigma tools from a multidimensional perspective. Total Quality Management & Business Excellence, 30(9-10), 1167-1188. https://doi.org/10.1080/14783363.2017.1360134

Wang, K., & Tsung, F. (2022). Bayesian cross-product quality control via transfer learning. International Journal of Production Research, 60(3), 847-865. https://doi.org/10.1080/00207543.2020.1845413