Lean Six Sigma—Not Just for the Big Guys
No, Lean Six Sigma is not the new diet you saw late last night on that TV infomercial, and DMAIC is not a type of vitamin. Lean Six Sigma has been working its way into organizations for over half a century; however these difficult economic times provide another opportunity to review this process management theory’s relevancy in today’s business world.
A Brief History of the Origins of Six Sigma
In the late 1940s, Dr. W. Edwards Deming was asked by the U.S. Army to assist with a census in Japan. Soon after, he introduced a post-World War II Japan to his Shewhart cycle. The basic steps in this model were: plan, do, check and act; an iterative statistical approach to optimize an organization’s quality control. This methodology eventually morphed with other statistical models to form Kaizen, a Japanese philosophy that pervaded the business community for decades.
At the same time Kaizen was evolving, the now famous Toyota Production System (TPS) was being developed. This system focused on designing out overburden, inconsistency and waste. The latter has become the most familiar since it is also the most tangible and measurable. TPS brought us the concepts of just-in-time and autonomation (smart automation). Many attribute Toyota’s commitment to TPS as a key reason they have ascended to the top of the auto industry.
In 1986, Bill Smith at Motorola began experimenting with the quality control program. While agreeing with predecessors that improvement should be continuous and that this is best done through measurement and control, the team also discovered some key elements were lacking. Specifically, a more rigorous approach to quantifying and monetizing quality control efforts, coupled with a more robust organizational framework to make the impact broader and more sustainable.
What’s Six Sigma All About?
Six Sigma can seem incredibly complicated; however, the Six Sigma mission is quite simple. The enemy of quality is variation, and Six Sigma is the relentless pursuit of eliminating variables. At its essence, Six Sigma refers to the optimal state of a process using continuous data.
"Sigma" refers to the statistical standard deviation between the mean and the nearest spec limit. At Six Sigma, a process with continuous data will encounter three defects per million opportunities. (OK, technically 3.4 defects, but this is similar to the statistic that the average U.S. household has 2.2 children. I’ve yet to deal with a fractional defect or person.)
Six Sigma evolved into two strains of application: technical and commercial quality. Each has its own set of tools to help the practitioner succeed in identifying and controlling variables. There are also two key types of approaches, known by their acronyms DMAIC and DFSS. DMAIC stands for define, measure, analyze, improve and control, and it is used for existing processes. You may recognize some parallels between Six Sigma’s DMAIC and Deming’s Plan-Do-Check-Act.
DFSS denotes Design for Six Sigma and is used to implement an entirely new process. I have used DFSS for system implementations and building organizations.
Six Sigma is not a program for a company to dabble in. An organization must really commit to the concept from senior leadership to the most junior employee. When implemented correctly, Six Sigma becomes its own language when employees encounter a problem.
Businesses that have successfully implemented Six Sigma have training programs in place to ensure everyone is grounded in the fundamentals and tools. They also have a network of experts in roles such as Black Belt, Master Black Belt and Quality Leader. These individuals enforce accountability and maintain the integrity of the program.
Lean Six Sigma–The Next Generation
One of the criticisms of Six Sigma is it can be cumbersome. I became a certified Black Belt while at General Electric and we had something called a 12-step process for quality, which actually had 15 steps (don’t ask!). Each step involved several tasks, often requiring multiple individuals to record or monitor or validate the information. Projects that seemed straightforward on the surface could take months to work through the process. This is the beauty and frustration of Six Sigma.
The program forces one to evaluate the problem systematically and shortcuts are not permitted. The design is done this way to eliminate supposition and guesswork from the ultimate solution. As a Black Belt, I would often hear, "But I’m the expert. I know what’s wrong. Just leave me alone and let me fix it." Sometimes they were right, but more than occasionally there was a bigger issue lurking beneath the surface that bore further inquiry and exploration to achieve the type of results Six Sigma requires.
But not every problem merits teams of resources or months of research. And not every organization has the kind of resources a company like GE does. Hence, Lean Six Sigma is born. The power of Lean Six Sigma is in its simplicity. Key resources are identified and assembled to tackle a specific issue with a specific outcome in mind. The solutions have clear boundaries, such as zero cost and a maximum of 30 days to implement. Essentially, one is required to operate within the current budget and reengineer within the current framework.
A Lean Six Sigma Case Study
While limiting options seems to take some of the "what if" out of the equation, it focuses the team on what is achievable in the near-term. Lean Six Sigma is much more nimble than the original program. Let me share an example of how a Lean Six Sigma process was applied.
In 2006, we discovered some leakage in our payroll organization in the form of overpayments. After gathering more data, the largest opportunity for defect was with overpaying former employees. I was asked to lead a team, and we brought a team together for a three-day meeting. The team consisted of an HR manager from each of the five manufacturing businesses, a quality leader, a finance person and an IT person.
The key to a successful Lean Six Sigma encounter is preparation. Each team member was virtually trained on Lean Six Sigma and each HR manager was supplied with a recent overpayment case and asked to research the case before the meeting. We used several tools, but the one that highlighted the issue was visual process mapping. This process involves the team mapping the process steps using string, which helps highlight do-loops and other suboptimal occurrences.
Quickly the team identified the communication pattern as the issue and the concept of having an employee self-serve their departure from the company was born. At first, this seemed almost antithetical; however–upon further exploration–it made the most sense and fit within the parameters of a solution. As a result, overpayment occurrences were dramatically reduced and, when one did occur, the average dollar amount was less than half.