If you’re seeking a process improvement model to improve KPIs and financial performance, your research will no doubt have led you to the terms 'Lean' and 'Six Sigma'. Even 'Lean Six Sigma'.
But what's the difference between Lean and Six Sigma? And how do you determine which can help your business?
In this blog post, we help clear the mist by discussing each approach in turn.
Six Sigma is a methodology, a defined system, that provides people with a structured method for fixing complex and chronic problems.
It seeks to identify and eliminate root cause(s) of problems, thereby greatly reducing the probability that an error, or defect, will occur. It examines processes and makes them more precise, so that products and services can be delivered that are capable and reliable.
The roots of Six Sigma date back to the 18th century and Carl Frederik Gauss, who introduced it as a statistic to describe the standard deviation. The actual term was coined in 1980 by Motorola engineer Bill Smith, who used it as an approach to improve the quality and capability of processes and products.
The Six Sigma improvement model; Define, Measure, Analyse, Improve, and Control (DMAIC) specifies the following sequence of steps for understanding and improving a process:
- Define the problem, goals, customer requirements and the business case for change;
- Measure the process accurately to determine current, baseline performance;
- Analyse and determine the root cause(s) of the problem;
- Improve the process by eliminating or reducing the probability of root case recurrence;
- Control and sustain the improved performance by monitoring the process.
To use Six Sigma, designated individuals within your organisation become specialists to drive improvement efforts. They can be trained as yellow belts, green belts, black belts and master black belts.
Lean is a philosophy, a theory that acts as a guiding principle for the behaviour of people for improving processes.
Lean (also known as Lean Production, Lean Enterprise, and Lean Thinking) focuses on reducing time spent on activities that add no value to the customer or business. The aim is to make small, incremental changes in processes to improve speed, efficiency and quality.
It was first pioneered by Ford in the early 1900’s, but more famously it can be attributed to Taiichi Ohno’s articulation of the Toyota Production System (TPS).
Ohno identified seven types of waste ('muda' in Japanese) that add no value to the customer or business:
- Defects/errors - work that has been completed but must be reworked because it doesn't meet customer or business requirements;
- Over production - producing unnecessary materials or products surplus to requirement;
- Waiting - idle time caused by waiting for materials, information, people, or equipment;
- Inventory - excessive 'work in progress' or overstocking of supplies or products;
- Transportation - transporting materials between locations unnecessarily;
- Motion - time wasted on excessive motions, e.g. physically moving between processes;
- Over processing - processes with more steps than necessary or performing tasks not required.
Lean focuses on eliminating this 'waste'. You may be producing extra parts 'just in case' or moving parts for changeovers . By eliminating these non-value-adding processes you free up more time and resources to create more value for the customer.
Deploying a Lean approach involves five key principles:
- Define value from the customer's perspective (what are the customer requirements?);
- Create the value stream (what are the activities needed to make the product or deliver the service?);
- Create flow (how can we make the process flow through the value stream with no delays?);
- Use pull scheduling (make the product only when the customer wants it);
- Pursue perfection (eliminate all forms of waste from the process).
Lean and Six Sigma
Putting the two approaches together has significant benefits.
You'll be equipped with a comprehensive toolkit for tackling problems. So when faced with a problem you can pull on the right tool from the Lean and Six Sigma toolkit to address it.
By combining the statistical tools and systematic defect reduction strategies of Six Sigma, and the customer focus and waste elimination inherent in Lean, your process improvement efforts have a high probability of success.
Manufacturing companies around the world have seen the benefits of combining the two approaches. Volvo, Pfizer, Tesco, Texas Instruments and the Royal Navy - just to name a few.
With the right training and the right leadership Lean and Six Sigma can dramatically improve the performance of your people, profits, processes, and customer experience.
Talk to us today about the different training options for you and your team.