Lean Six Sigma for Beginners
Six Sigma Basics
Six Sigma focuses on defects from variation. In statistics, the "sigma" is used to identify variation. Companies that adopt Six Sigma as a philosophy seek to reduce variation in the business processes that cause waste and inefficiencies. A business operating at three sigma will produce 66,807 defects per million opportunities, while Six Sigma produces 3.4 defects per million. Which business would you want to buy your products or services from?
Many successful companies, such as Motorola, use Six Sigma. In addition to Six Sigma’s powerful technique for finding the root cause of defects, Motorola developed practical ways to use the theory of Six Sigma to achieve a 10-fold improvement in quality, cost and service in five years. Six Sigma is an organization structure for continuous improvement, which includes Champions, Black Belts and Green Belts. Combined with a focus on prioritizing projects based on financial and customer impact, Six Sigma can transform a culture through continuous improvement.
Lean focuses on speed and inventory. Lean manufacturing is the generic version of the Toyota Production System that focuses on sources of waste: transportation, inventory, movement, work in progress (WIP), over production, over processing and defects. Improvements are made by working to reduce waste through a five-step process:
- Identifying customer value
- Mapping the value stream
- Creating flow
- Seeking perfection
- Pulling based on demand
Lean needs the root cause analysis and culture changing structure of Six Sigma, and Six Sigma needs the speed, waste elimination and simplicity of solutions from Lean. Together they form a continuous improvement methodology that cannot be ignored—Lean Six Sigma.
What is Lean Six Sigma?
Lean Six Sigma is a blend of the two most powerful improvement methods of the past 20 years: Lean and Six Sigma. It is a unique analytical business process that enables companies to drastically improve their profitability by designing and monitoring everyday business activities in ways that minimize waste and resources. There are several important areas that must be met for a Lean Six Sigma program to be successful.
Critical Success Factors
- Leadership commitment: A senior leader who can set priorities, commit resources, break down barriers, overcome resistance and is committed to improving profitability is necessary for Lean Six Sigma to work.
- Focused resources: Six Sigma Black Belts—employees formally trained as internal experts—should be placed in full-time roles focused on applying Six Sigma tools and strategies to one or two high-priority projects.
- Common tools and language: Training needs to be used to develop common language, knowledge, tools and problem-solving approaches throughout the organization.
- Disciplined project approach: Regular project reviews should be conducted with process owners, Champions and senior management.
- Bottom-line business measures: The bottom-line financial impact of every Six Sigma project must be measured and reported.
Who Benefits From Lean Six Sigma?
Many benefit from a Lean Six Sigma program. Some include:
- Customers:As Lean Six Sigma projects are completed and process capability improves, customers see an increase in the value they receive.
- Stockholders: Removing variation from manufacturing and business processes dramatically reduces operating costs by eliminating the cost of rework and requirements for capacity, staffing and capital. For example, Allied Signal Inc. has realized savings of $2 billion since adopting Six Sigma as a strategy to avoid bankruptcy during this challenging economic period.
- Employees: Employees learn new skills and improve performance on the job with Lean Six Sigma, which leads to growth and prosperity.
- Suppliers: Sources of variation often include raw materials or components. With specific knowledge suppliers are able to go back to their factory and identify and eliminate the root cause of the variation. This reduces the cost for the supplier.
It is a way for businesses to improve, to reduce waste and to become more successful. Like Six Sigma and Lean, Lean Six Sigma is not just another passing fad.