How do you decide whether Six Sigma or Lean Six Sigma is better for you?
Like Six Sigma, Lean is a tool used by businesses to streamline all kinds of processes – manufacturing, production and even service processes. The main emphasis of Lean is on cutting out non value added or unnecessary steps in the creation of a product so that only steps that directly add value to the product are taken. As far as Lean methodology is concerned, the only way to determine if something has value or not is to consider whether a customer would be willing to pay for it. Any part of the production that does not add value is simply removed from the equation, leaving a highly streamlined and profitable process in place that will flow smoothly and efficiently.
While Lean promotes rapid business processes the problem that arises from it is a lack of quality. It doesn't matter how many forms are completed or calls are taken if the data and information captured is not up to par. Simply completing activities rapidly, without check marks fosters an environment prone to errors and often requires rework. This is where Six Sigma becomes essential to business process management.
The Six Sigma methodology is a quality tool that emphasizes reducing the number of errors in a process. It focuses on identifying variation in the types of data inputs, and looks at Root Cause Analysis to determine the source of errors. Today, Six Sigma plays a key role in the leadership of an organization, and its wide-scale implementation can help a company to achieve real and measurable results.
One thing I have noticed in few Six Sigma projects is the use of statistical sledgehammers; vast amount of data gathering and statistical analysis when there was a practical solution available with a simpler analysis. On the other hand, Lean practitioners would work a project and leave it sub-optimally improved and do little to attack variability.
The two methodologies did seem at opposite ends of the normal curve.Many practitioners argue that the best approach to creating the most efficient and effective business structure requires incorporating both Six Sigma and Lean principles. However it would be worth while to point out right at the outset that if a single organization propagates both these ideologies but by different set of practitioners, it could potentially lead to a culture of white collared thinkers (Six Sigma) vs blue collared doers (Lean).
It does seem that the best approach would be to have a set of people trained on both Six Sigma and Lean principles. The additional investment that an organization needs to make to cross pollinate the learning between Lean and Six Sigma are minimal, specially when you consider the benefits of the cross pollination. Belts need to be trained in both arms to solve process issues. It extends the training pipeline for a SS BB by about 1-2 weeks to incorporate Lean, but the ROI for that minimal amount of time is significant. If it doesn’t happen, and you’re indoctrinated in a certain discipline, that’s the only thought process that you can use to solve a problem.
The Key Principles of Lean Six Sigma
Lean Six Sigma is a powerful, proven method of improving business efficiency and effectiveness. Some of the key principles of Lean Six Sigma are:
- Customer defines Value
- Visualize the Value Stream (this is similar to process mapping but identifies value added and non value added activities)
- Manage, improve and smooth the process by using concepts of Pull & Flow
- Remove Non-Value-Added steps and waste.
- Use data to identify sources of variation
- Aim for Perfection by equipping the people and Standard work
- No process is ever perfect – there is always scope for Continuous Improvement.
Understanding Value with Lean Six Sigma
When we try to improve processes and create "value" for the customer, remember that in your customers’ eyes, value is what they’re willing to pay for:
- The right products and services
- At the right time
- At the right price
- At the right quality
For a step to be value-added, it must meet the following criteria:
- Does your customer care about the step? Visualize a restaurant with a glass barrier where your customer can see everything that you do. Will he be willing to pay for this step?
- Does the step physically change the product or service in some way, or be an essential prerequisite for another step? The step only counts if it was done right the first time. Mistakes and rework are costly!!
Try to remove those steps that don’t meet these criteria, but recognize that you may want to retain some non-value-added steps, perhaps for regulatory or financial reasons. We have seen many instances where value added steps comprise less than 5% of the total cycle time and 95% is Waste.
To ensure process and organizational success a combination of both Lean and Six Sigma are needed. Together Lean and Six Sigma work through process mapping to model and automate the most efficient, quality workflows possible, allowing your company to maximize productivity, while eliminating waste and reducing costs.