Management methodologies Lean and Six Sigma origin from world-class industries. Lean was mainly developed at Toyota in the late 1980s, whereas Six Sigma was developed at Motorola and GE, in the same decade. When both methodologies for continuous improvement are applied correctly, impressive results await. However, in international management literature Lean and Six Sigma seem to be used as synonyms. Or in contraction, as a third methodology: Lean Six Sigma. To avoid further confusion, what is the difference between Lean and Six Sigma? And is it possible to integrate both?
Let’s start with Lean. The basic idea is to maximize customer value while minimizing waste. As a CEO or COO in a Lean organisation, you understand customer value and you’re focused on improving this value. As a Lean thinker, you strive to optimise the flow of products and services through entire value streams. Eliminating ‘waste’ is an important principle in Lean. With the 7 Wastes Model you’re able to define, analyse and eliminate non-value adding activities like overproduction, conveyance, waiting and unnecessary processing. Consequently, the efficiency of your manufacturing process will increase, as well as the EBITDA of your company.
7 Wastes Model
However, Lean isn’t a short-term cost reduction program. It’s the way your company operates. We recommend you involve your employees in the optimisation of their process, workplace and way of working. Your management team would also need training to implement Lean and the 7 Wastes Model effectively. To manage your expectations, it took Toyota years and years of Japanese discipline for the effective development and application of the Lean tools.
Understanding Six Sigma isn’t as difficult as it may seem. There is only one focus: eliminating defects and reducing variability in your processes. The result is an improved customer perception by less defect products delivered and less variability in the delivery. DMAIC (Define, Measure, Analyse, Improve, Control) is one of the main Six Sigma tools. You start this 5-step approach with getting a clear view of the customer, of what is critical for the customer and how this could be measured best (the Y).
No short cuts
Next you evaluate your measuring system: what is its accuracy regarding the objectives you aim to achieve. Based on statistical tools and analysis you define the influencing factors (the Xs). Then you focus on improving these Xs. In a last step, you make sure that these improvements are sustainable. There are no short cuts if you implement Six Sigma in your organisation. You can’t only focus on key leverage points, thinking the method is fully implemented. You must walk the walk, otherwise you fail to reach your goals.
Lean and Six Sigma
Confusingly, you regularly read about ‘Lean Six Sigma’ in all sorts of contexts. Many times, the contraction is by mistake and the author means Lean or Six Sigma. Nevertheless, the good news is: it’s indeed possible to integrate both management methodologies and enhance processes and results even more. Now, you might ask yourself how. Simply start with Six Sigma to assure a data based analysis. Look at real transactional data to identify defects and variability in your processes. Define thoroughly what the main issues are and go from there. During the Improvement stage of DMAIC, you can apply the Lean tools to improve value and reduce wastes across silos.
With this approach, the core strength of Six Sigma is used for a data based analysis, in combination with the core strength of Lean for a pragmatic and efficient solution, implemented by employees working in optimised processes. Both tools enhance each other and focus on sustainable results.
Frank Oudshoorn is business process consultant at R&G Global Consultants.