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Abstract
Handicraft production has complexity in its product, as well as manufacturing processes. Especially in case of Small and Medium Enterprises (SMEs), the production characteristics are chaotic and hard to control. Several problems can be pointed out, e.g. line unbalance, excessive stock, improper work assignment, ambiguous workflow,… Such a production system with these flaws incorporated cannot be reliable and effective. However; in Vietnam, this situation is common due to the small size of business operation, large number of workers, and cheap price for labour hour. The problems sometime are hiding due to the incompetence of management. In this paper, an operating model for Vietnamese SMEs’ handicraft production is proposed, bearing the concepts and principles of Lean - Six Sigma philosophy. A case study is conducted in a SME handicraft manufacturing firm in Vietnam, indicated effective results toward a more productive manner, which is systematic and controllable, providing its management quick response to customers’ demand meanwhile keeping the investment as lean as possible.