In today’s digital era, more and more companies are realising the need to improve their processes to build more sustainable businesses.
In five easy steps, a business can experience significant gains in performance and profits, in employee behaviour, and in the quality of products or services. This strategy is known as Lean Six Sigma. Its purpose is to develop value processes with fewer defects and inefficiencies in order to reduce costs and increase customer satisfaction.
Despite rapid and radical impact of this methodology on large companies around the world, Lean Six Sigma represents decades of innovation in management and manufacturing processes, relying on industrial potential by means of analysis, statistics and quality control.
It was after the Second World War that Japan experienced a boom in terms of economic growth, positioning itself as a benchmark in production processes and quality, even above the United States.
And this is how Toyota emerged, where Sakichi Toyoda, his son Kiichiro and the engineer Taiichi Ohno developed the Toyota Production System (TPS) between 1946 and 1975, inspired by Henry Ford’s production flow. It comprises a set of Jidoka-based techniques , also referred to as automation, and in a nutshell, it is a comprehensive production system that allows reducing costs and expedite the production of high quality automobiles, granting them a great competitive advantage to be able to fulfil the dynamic needs of their customers. Lean principles are derived from this system.
It did not take long for companies in the United States to adopt and innovate these methods and techniques to improve their production processes.
Bill Smith, as a Motorola engineer, developed the Six Sigma methodology for continuous process improvement in the 1980s. It was in 1986 when its CEO Bob Galvin suggested focusing on defects caused by variation in production processes and reissued Six Sigma principles, shaping the Six Sigma Quality Program. This program is based on a set of statistical and analytical tools that would allow to compete directly with Kaizen (or Lean Manufacturing), the business model in the land of the rising sun.
But it was General Electric the one that popularized the Six Sigma methodology, with Jack Welch as director of the company.
With the entry of the new millennium, Lean Six Sigma first appeared in 2001 in the book entitled Leaning into Six Sigma: The Path to Integration of Lean Enterprise and Six Sigma . It was written as a production management guide that details how to combine Lean Manufacturing and Six Sigma to create a drastic improvement in quality and timing.
From that time on, Six Sigma principles have largely spread throughout industries and economic sectors, where no matter the business model or product and its target customers, these principles can also be applied with slight alterations to adapt them to the unique realities of each company and build effective success.
What is Lean?
Lean method is completely focused on analysing processes to eliminate inefficiencies and waste, make workflows smoother, while still delivering value to customers. To do this, Lean uses a Plan, Do, Check and Act (PDCA) method of finding solutions and pave the way for continuous process improvement.
The 5 principles Lean uses to set the stage for proper process analysis and problem solving:
- Define Value: It is paramount to discover what people value more and need.
- Map Value Stream: The goal is to use the stakeholders’ value as a reference point and identify all the activities that contribute to these values. Any activity that do not contribute to customer value are considered waste and should be removed or reduced as much as possible.
- Create Flow: After getting rid of the wastes and inefficiencies from the value stream, ensure that the flow of the remaining steps run smoothly without interruptions or delays.
- Establish value: Control inventory and processes to ensure timely delivery of goods and services to reduce excess inventory waste.
- Pursue Perfection: It makes Lean thinking and continuous process improvement a part of the organizational culture. The company should be a learning organization and always find ways to get a little better each and every day.
What types of waste is it trying to remove?
- Defects: it is a product that is declared unfit for use.
- Over-production: it refers to the product that is manufactured in excess or before it is needed.
- Waiting: it involves delays in the process steps.
- Non-Utilised Talent: it is the waste of human potential and skill.
- Transportation: It is the unnecessary or excessive movement of materials, equipment and tools.
- Inventory: It refers to an excess in products and materials that are not yet processed.
- Motion: It is the unnecessary movement by people.
- Extra-Processing: It is doing more work than is required or necessary to complete a task.
One interesting point is that the acrostic of these items forms the mnemonic DOWN TIME.
Lean can be implemented in almost all areas of the company, reporting short-term benefits with minimal investment with simple tools.
What is Six Sigma?
While on the other hand, Six Sigma is a problem-solving method with its roots in scientific and statistics methods. While Lean uses a PDCA method to identify and eliminate inefficiencies, Six Sigma bases its methods on Define, Measure, Analyse, Improve, and Control (DMAIC) to eliminate defects in products or processes:
- Define: define the problem or project goals.
- Measure: develop metrics and other measures to better understand the problem or the project goal.
- Analyse: collect and study data to identify the root cause of the problem.
- Improve: create solutions based upon observed data and their associated metrics to verify success.
- Control: establish reference points and check to confirm that the solution is still working for continued improvement.
This statistical methodology takes its name from the search for the 6 sigma level between the specification limits of the critical points of the process. In this way, the repeatability of the process increases and unexpected results are avoided.
Its implementation is more laborious, thus it is usually applied only in areas where it offers the best cost-opportunity value, such as the integral production cycle or the technological product development process .
All in all, Six Sigma is about monitoring the supply chain to detect defects, identify problems and solve them in the most effective way possible.
Nature of Lean Six Sigma
While earlier approaches have delivered decades of industrial prosperity, they must adapt as time passes, evolving to fit the current state of the market and business.
Combining both methods gives users a complementary system that offers a deeper look into maximizing customer value while reducing waste and redundancy. This synergy is called Lean Six Sigma and it provides a system that locates all critical points as well as the statistical tools to control them.
Lean Six Sigma is based on a team collaborative effort to improve performance through the systematic elimination of inefficiencies in processes and provides a framework for changing the organizational culture of companies .
Benefits of Lean Six Sigma:
- Scope: the application of Lean Six Sigma principles is valid to any area of the company.
- Wastes removal: it guarantees the elimination of everything that does not add value to the process via quality tools.
- Variation decrease: it makes it easy to track results.
- Quality improvement: it achieves a constant outcome of the process and reduces the variation of this and its defects, which results in an increase in the quality of products and services.
- Costs reduction: it reduces the time and costs that apply directly to the processes.
- Customer satisfaction: it ensures that the company meets expectations and provides complete customer satisfaction.
Lean Six Sigma is perfect for technology companies looking to streamline their processes and deliver the highest possible value to their customers.
Lean Six Sigma aims to boost a continuous quality improvement system, where companies are committed to leveraging their success through providing better products, services and experiences to their customers.
Prioritising Lean Six Sigma should be an important part of the culture of any company in any area. The constant application of Lean Six Sigma principles improves efficiency in order to eliminate variations, inefficiencies, defects and costs.
More than a methodology or tool, it is a mindset that has been established throughout the world as a working lifestyle, being the spark that ignites people’s enthusiasm to foster great positive change.
It is a fact that the implementation of Lean Six Sigma is the first step to work smarter towards your business success. Don’t know where to start? The answer is simpler than you think, contact us, from TEKHNĒ we will help you.
 Toyota Production System: Beyond Large-Scale Production by Taiichi Ohno and Norman Bodek.
 Leaning into Six Sigma: The Path to Integration of Lean Enterprise and Six Sigma by Barbara Wheat, Chuck Mills, Mike Carnell.
 Six Sigma for Electronics Design and Manufacturing by Sammy G. Shina.
 Lean Six Sigma: Process Improvement Tools and Techniques by Donna Summers.
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