Lean Six Sigma is a method that relies on a collaborative team effort to improve performance by systematically removing waste and reducing variation. It combines lean manufacturing/lean enterprise and Six Sigma to eliminate the eight kinds of waste (muda): Defects, Over-Production, Waiting, Non-Utilized Talent, Transportation, Inventory, Motion, and Extra-Processing.
Lean Six Sigma not only reduces process defects and waste, but also provides a framework for overall organizational culture change. By introducing Lean Six Sigma, the mindset of employees and managers change to one that focuses on growth and continuous improvement through process optimization. This change in culture and the mindset of an organization maximizes efficiency and increases profitability.
In order to successfully implement Lean Six Sigma, a combination of tools from both lean manufacturing and Six Sigma must be used. Some of these tools include kaizen, value-stream mapping, line balancing, and visual management.
Waste is defined by Fujio Cho of Toyota as "anything other than the minimum amount of equipment, materials, parts, space, and workers time, which are absolutely essential to add value to the product."
Different types of waste have been defined:
- Defects: A defect is a product that is declared unfit for use. This requires the product to either be scrapped or reworked, costing the company time and money. Examples include a product that is scratched during the production process and incorrect assembly of a product due to unclear instruction.
- Over-Production: Over-production refers to product that is made in excess or made before it is needed. Products should be produced as they are needed following the Just-in-time manufacturing philosophy in Lean. Examples include creating unnecessary reports and overproduction of a product before a customer has requested it.
- Waiting: Waiting involves delays in process steps and is split into two different categories: waiting for material and equipment and idle equipment. Examples include waiting for authorization from a superior, waiting for an email response, waiting for material delivery, and slow or faulty equipment.
- Non-Utilized Talent: Non-Utilized Talent refers to the waste of human potential and skill and is the newest addition to the eight wastes. The main cause of this waste is when management is segregated from employees. When this occurs, employees are not given the opportunity to provide feedback and recommendations to managers in order to improve the process flow and production suffers. Examples include poorly trained employees, lack of incentives for employees, and placing employees in jobs or positions that do not utilize all of their knowledge or skill.
- Transportation: Transportation is the unnecessary or excessive movement of materials, product, people, equipment, and tools. Transportation adds no value to the product and can even lead to product damage and defects. Examples include moving product between different functional areas and sending overstocked inventory back to an outlet warehouse.
- Inventory: Inventory refers to an excess in products and materials that aren't yet processed. This is a problem because the product may become obsolete before the customer requires it, storing the inventory costs the company time and money, and the possibility of damage and defects increases over time. Examples include excess finished goods, finished goods that cannot be sold, and broken machines scattered on the manufacturing floor.
- Motion: Motion is unnecessary movement by people. Excessive motion wastes time and increases the chance of injury. Examples include walking to get tools, reaching for materials, and walking to different parts of the manufacturing floor to complete different tasks.
- Extra-Processing: Extra-processing is doing more work than is required or necessary to complete a task. Examples include double-entering data, unnecessary steps in production, unnecessary product customization, and using higher precision equipment than necessary.
The acrostic of these items forms the mnemonic DOWN TIME.
What has today to become Lean Six Sigma can be traced to Motorola in the United States in 1986. Six Sigma was developed within Motorola to compete with the Kaizen (or lean manufacturing) business model in Japan. As a result of Six Sigma, Motorola received the Malcolm Baldridge National Quality Award in the year 1988.
In the 1990s Allied Signal hired Larry Bossidy and introduced Six Sigma in heavy manufacturing. A few years later, General Electric's Jack Welch consulted Bossidy and began Six Sigma at General Electric. At this point, Six Sigma became more widely accepted and known in the manufacturing world.
During the 2000s Lean Six Sigma forked from Six Sigma and became its own unique process. While Lean Six Sigma developed as a specific process of Lean Six Sigma, it also incorporates ideas from lean manufacturing, which was developed as a part of the Toyota Production System in the 1950s.
The first concept of Lean Six Sigma was created in 2001 by a book titled Leaning into Six Sigma: The Path to Integration of Lean Enterprise and Six Sigma by Barbara Wheat, Chuck Mills, Mike Carnell. The book was developed as a guide for managers of manufacturing plants on how to combine lean manufacturing and Six Sigma in order to dramatically improve quality and cycle time in the plant. Wheat, Mills, and Carnell narrate the story of a company who was skeptical about implementing Lean Six Sigma, but as a result of doing so was able to successfully improve the quality and efficiency in all aspects of business.
In the early 2000s Six Sigma principles expanded into other sectors of the economy, such as Healthcare, Finance, Supply Chain, etc. While different sectors of the economy sell different "products" and have different "customers", Lean Six Sigma principles can still be applied with slight alterations in wording and processes.
Lean Six Sigma is a synergized managerial concept of Lean and Six Sigma. Lean traditionally focuses on the elimination of the eight kinds of waste/Muda classified as defects, over-production, waiting, non-utilized talent, transportation, inventory, motion, and extra-processing. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in (manufacturing and business) processes. Together, Lean aims to achieve continuous flow by tightening the linkages between process steps while Six Sigma focuses on reducing process variation (in all its forms) for the process steps thereby enabling a tightening of those linkages. In short, Lean exposes sources of process variation and Six Sigma aims to reduce that variation enabling a virtuous cycle of iterative improvements towards the goal of continuous flow.
Lean Six Sigma uses the DMAIC phases similar to that of Six Sigma. The five phases include Define, Measure, Analyze, Improve, and Control. The five phases used in Lean Six Sigma are aimed to identify the root cause of inefficiencies and works with any process, product, or service that has a large amount of data or measurable characteristics available.The DMAIC toolkit of Lean Six Sigma comprises all the Lean and Six Sigma tools.
The different levels of certifications are divided into belt colors, similar to judo. The highest level of certification is a black belt, signifying a deep knowledge of Lean Six Sigma principles. Below the black belt are the green and yellow belts. For each of these belts, levels skill sets are available that describe which of the overall Lean Six Sigma tools are expected to be part at a certain Belt level. These skill sets provide a detailed description of the learning elements that a participant will have acquired after completing a training program. The skill sets reflect elements from Six Sigma, Lean and other process improvement methods like the theory of constraints (TOC) total productive maintenance (TPM). In order to achieve any of the certification levels, a proctored exam must be passed that includes various questions on Lean Six Sigma and its applications.
How Lean and Six Sigma come together
Lean Six Sigma utilizes concepts from both Lean and Six Sigma to cut production costs, improve quality, speed up, stay competitive, and save money. From Six Sigma, companies benefit from the reduced variation on parts. Also, Lean saves money for the company by focusing on the types of waste and how to reduce waste. The two processes come together into Lean Six Sigma, creating a well balanced and organized solution to save money and produce better products.
Although Lean and Six Sigma are different processes, they are complementary and share many similarities that allow them to flow together seamlessly. First, both Lean and Six Sigma stress the fact that the customer defines the value of a product or service. This means that when processes are examined, the importance or necessity of steps in the process should be examined through the eyes of the customer. Also, Lean and Six Sigma utilize process flow maps in order to better understand the flow of production and identify any wastes. Furthermore, both rely on data to determine which areas of production need improvement in efficiency and to measure the success of improvements. Finally, as a result of implementing Lean and Six Sigma, efficiency typically improves and variation decreases. Efficiency and variation go hand-in-hand, with improvement in one resulting in an improvement in the other.
Lean and Six Sigma have many similarities but are different processes and were developed for different purposes. The first difference between the two methods is problem identification. While Lean focuses the problem of inefficiency around the eight wastes, Six Sigma focuses on identifying sources of variation to reduce inefficiency. In addition, Lean and Six Sigma use different tools. While Lean uses more data visualization tools, Six Sigma uses more numerical and analytical-focused tools.
The similarities between Lean and Six Sigma allow for simultaneous functionality on the same product or process, while their differences allow the benefit of having a vast amount of analytical tools at the one's disposal.
Benefits of Lean Six Sigma
Lean Six Sigma provides various benefits for organizations. It not only saves money, but also changes the attitude of employees and the functionality of the organization. Through implementation of Lean Six Sigma, organizations can expect the following beneficial outcomes:
- Increase in Profit: As a result of eliminating waste and improving the quality of production, Lean Six Sigma reduces costs for organizations and increases profitability. General Electric reportedly experienced a profit-cost savings exceeding $2 billion.
- Standardized and Simplified Processes: With the help of value stream mapping, Lean Six Sigma eliminates wastes in processes and unnecessary steps to stream-line production. The processes are simplified so that they are easier to follow and less likely to lead to error. The simplified processes will also reduce time, leading to a decrease in overhead costs.
- Decrease in error: With the simplification in processes steps and a detailed investigation into the main causes of error and waste in the organization, Lean Six Sigma drastically reduces errors such as defects and miscalculations.
- Employee Performance/Development: Lean Six Sigma stresses the importance of the ideas and observances of individual employees to the overall success of an organization. With Lean Six Sigma, the feeling of self-importance and significance increases among employees and leads to an increase in motivation and better job performance.
- Value to Customer: Lean Six Sigma allows companies to improve their processes and the quality of their products. In turn, they are able to produce more products at a cheaper price with less error. Customer satisfaction will increase, which will then lead to an increase in customer loyalty.
Tools for Lean and Six Sigma
Lean: Kaizen (Continuous Improvement), Value Stream Mapping, 5S System, Kanban, Mistake proofing (Poka-yoke), Productive Maintenance, Set Up Time Reduction, Reduce Lot Sizes, Line Balancing, Schedule Leveling, Standardized work, and Visual Management.
Six Sigma: Recognize, Define, Measure, Analyze, Improve, Control, Standardize, and Integrate.