Many of you reading this blog are undoubtedly recognized experts regarding Lean Six Sigma methodologies, tools, and applications.
I, however, continue to receive requests both nationally and internationally to explain the origins of these improvement methodologies; their differences and similarities; which to use for success; and the strategic advantages of each.
For practical matters, Lean Six Sigma can be traced to Motorola in the United States in 1986. It was created to compete with the Kaizen business model in Japan. Ever since World War II Japan was experiencing an economic boom and Japanese products at the time had a higher quality than American ones.
Again, for practical matters, the concept of Lean was developed by Toyota executive, Taiichi Ohno who first identified the seven types of muda (waste). Of course the Toyota Production System was born, and from there multiple other improvement processes such as World Class Manufacturing (WCM) followed.
Six Sigma and Lean have become two of the most widely recognized and effective methods for creating breakthrough improvement. Both have also evolved from the basis of prior methods such as Dr. Juran’s Universal Sequence for Breakthrough Quality Improvement, Dr. Shewhart’s and Dr. Deming’s PDCA Cycle and, as mentioned, Toyota’s specialized focus on driving out waste. Lean and Six Sigma both take different approaches in the quest for greater effectiveness, efficiency and cost reduction.
Six Sigma typically focuses on identifying and meeting the needs of customers first, and the organization or business second. In this way, revenues increase and costs decrease, improving results.
Lean, by contrast, is the process of optimizing organizational systems by eliminating or reducing the “waste” within them. Anything that does not offer value is considered waste. Lean methods and tools can provide significant improvements in organizational efficiency. Lean has experienced a continual rebirth in manufacturing-based industries, as well as in service and healthcare-based organizations. Lean is not a replacement for Six Sigma or vice versa. It focuses on different problems.
Organizations worldwide are under continuing pressure to control costs, maintain high levels of safety and quality, and meet growing customer expectations. This breakthrough improvement process has been adopted by many large organizations, like Samsung Electronics, General Electric and smaller organizations, like Molex (electronics), A. Schulman (plastics), J. R. Simplot (food processing), and Highmark (insurance) to name a few, as the most effective method for achieving these and other goals.
Lean Six Sigma is quite simply the integration of Lean and Six Sigma methodologies. Lean focuses on efficiency, and Six Sigma focuses on how effectiveness can lead to faster results. Together they are more powerful than either method applied independent of the other. A successful Lean Six Sigma deployment depends on a clear understanding of roles, responsibilities, structures and training requirements of the employee.
Lean and Six Sigma – or Lean Six Sigma – provide a comprehensive set of methods and tools that enable organizations to improve quality and reduce costs – all for the ultimate goal of continuous value creation for the customer. Certainly, these are strategic advantages for any company. However, there are five additional benefits that Lean Six Sigma companies enjoy:
- Strategic Planning. Strategic planning is driven by an organization’s mission and vision statements, with the mission statement focused on why the organization exists and the vision statement articulating what the organization hopes to achieve. The very best strategic plans translate the vision statement to quantifiable and measurable objectives, such as increasing market share or reducing employee turnover. Lean Six Sigma can accelerate the pace at which those objectives are achieved.
- Productivity. As organizations reduce waste and variation from their processes, the noticeable effect is that it increases employee productivity. This happens for several reasons. First, with less waste and less variation, there is less rework. When you get it right the first time, you don’t spend time fixing errors.
- Employee Satisfaction. With increased employee productivity comes increased employee motivation, as well as higher employee satisfaction. Employees who don’t have to fight through poorly designed processes, devise workarounds to get things done, or spend time on non-value-adding steps are more motivated and happier. This isn’t the only employee benefit. As organizations embed Lean Six Sigma into the fabric of their companies, employees naturally become more attuned to identifying waste and variation, as well as seeking opportunities to improve quality and create additional customer value.
- Customer Loyalty. Imagine a company that was adept at creating customer value, reducing defects, reducing variation in its products and services, increasing features and benefits, offering a high variety of options at little to no additional cost, and increasing the speed at which the products and services were delivered. That company would certainly enjoy high customer satisfaction, which translates to equally high customer loyalty and retention.
- Supply Chain Management. What mature Lean Six Sigma companies usually discover is that to continuously improve processes, suppliers must eventually become integrated into their quality improvement initiatives. To fully reduce waste and variation in your processes, your suppliers must reduce the waste and variation in their processes, too.
Whether with the customer-based approach of Six Sigma, or the more speed-focused strategy of Lean, many organizations around the world are succeeding in achieving performance breakthroughs where they had failed before. This is even more the case with the combination of both into the Lean Six Sigma methodology. Smart companies recognize this as not simply a “fix” to one-time problems, but truly a new way of doing business.
Your organization must not debate which to do first, but rather determine how to do both. When you do, you will join the ranks of many globally successful companies.