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Gregg Profozich

Lean

What Are Lean and Six Sigma? Part 1

Small and medium-sized manufacturers can improve their safety, quality, delivery, and costs with these methodologies

Published: Thursday, February 11, 2021 - 13:03

The manufacturing world, across industry sectors, has witnessed significant improvements in productivity and competitiveness during the past couple of decades as a result of continuous improvement (CI) methodologies. Two of these methodologies that are recognized as having broad applicability are lean manufacturing and Six Sigma.

In fact, some practitioners have combined these CI philosophies and tool sets into lean Six Sigma. Many smaller and medium-sized manufacturers (SMMs) have learned that making the organizational commitment to master the concepts of lean and Six Sigma methodologies can transform their business, leading to improvements in safety, quality, delivery, and cost.

By mastering lean and Six Sigma methodologies, SMMs can create a more efficient and sustainable business, and drastically improve their top and bottom lines.

What is lean or lean manufacturing?

Lean is a continuous improvement methodology that focuses on the elimination of any steps within a business or work process that does not contribute to “value” as defined by the customer. It is a systematic process for improving flow within a system by eliminating nonvalue-added activities that hinder the flow of value to the end customer. Using lean methodologies, the business organization and manufacturing processes are optimized so as to generate the value that the customer requires while creating the least amount of waste. All waste is essentially unnecessary cost, so its elimination results in increased efficiency, productivity, and profitability.

Lean manufacturing is understood in three distinct areas:
• An overall business strategy
• A philosophy for continuous improvement
• A continuous improvement toolkit

Lean is a way of thinking about an organization in terms of how products and services are produced and delivered, and how to continuously improve the work processes—from product concept and design through manufacturing, sales, fulfillment, and back-office functions. Lean delivers the most benefit when its principles, philosophy, and tools are employed outside the “four walls” of a given company and extended across a value chain of both upstream and downstream suppliers.

Lean is guided by a set of five principles and three perspectives.

Principles of lean thinking:
1. Identify what is of value to the customer
2. Understand the flow of that value through the organization
3. Improve the flow of value through the organization
4. Let the customer pull that value through the organization as needed
5. Seek perfection

The three perspectives that are at the core of the principles of lean thinking are:
1.See from the perspective of the customer
2.See from the perspective of the part, product, or service.
3.See from the value stream perspective (i.e, end to end)

What is Six Sigma?

Six Sigma is a set of tools and techniques used to improve processes by reducing the variation in their output in order to reduce errors.

The fundamental objective of the Six Sigma methodology is to implement a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. Six Sigma can be described as a methodology that uses statistical tools to identify and eliminate defects in any process. The goal of Six Sigma is to improve the quality of your output. By tracking and analyzing data, and performing statistical analysis, changes to an existing process are identified that, once made, will result in improved output. This improvement can come in the form of reduced defects, increased throughput, and more efficient processes—all of which reduce the cost of the product or service being provided.

Six Sigma looks at the variations that are taking place in the process and in the variation in the output of the process. The goal of Six Sigma is to reduce the variation (waste) because in reducing the variation, the more quality product is produced using the same or fewer resources.

Six Sigma is usually understood by three distinct elements:
1. A strategy of continuous improvement
2. A set of statistical tools that are applicable to addressing variation in any process related to producing a product or providing a service.
3. A method to define the degree of quality a process can achieve.

The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve a Six Sigma conformance, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect.

Lean Six Sigma

Lean Six Sigma looks at issues leading to reduced business performance from different perspectives:
• Lean can be thought of in the macro sense—it focuses on making waste in the business and manufacturing processes visible.
• Six Sigma can be thought of in the micro sense—it focuses on waste that is embedded in processes, and equipment and cannot be made visible without the use of statistical tools.

In both cases, once waste is identified, resources can be dedicated to remove it. As such, lean and Six Sigma work well together for many SMMs needs. Lean improvement methods are less expensive to implement than the statistical-based Six Sigma methods. As such, many firms can make major improvements for years using only lean before having to invest in the training and tools used in Six Sigma.

First published on the CMTC Manufacturing Blog.

Discuss

About The Author

Gregg Profozich’s picture

Gregg Profozich

With degrees in Business Administration in Finance and Business Economics, Gregg Profozich is the Director of Advanced Manufacturing Technologies at the CMTC.

Profozich is a skilled leader with over two decades of experience across manufacturing, operations, supply chain, strategy execution and information technology. Drawing on his background across fortune 500 companies, start-ups and consulting, he is experienced in pioneering new tools, approaches and services to assist SMMs improve their global competitiveness.

Comments

Lean for Service Industries

In service industries, most of the "waste" involves delays between steps in a process (e.g., how long does a patient have to wait to see a doctor?)

I call this the 3-57 Rule: employees are working on product or service for only 3 minutes out of every hour, leaving 57 minutes of delay. Trying to speed up your people (e.g., doctors and nurses in healthcare) will only impact a minute or two out of every hour.

The 15-2-20 Rule says that for every 15 minutes of delay eliminated, you will double (2) productivity and increase profits by 20%.

Eliminating delays also reduces defects by 50%.

In manufacturing, most of the delays have been eliminated on the factory floor, but the service delays (ordering, invoicing, purchasing, scheduling, etc.) still remain.

In any flowchart or value stream map, focus on the arrows between steps, not on the steps themselves.

Make your product faster, not your people.

What Are Laen and Six Sigma?

Why would an organization commited to Lean require Six Sigma. It would seem redundant.

In your point 3 - Improving flow, you don't mention that Lean organizations incorporate TQM (quality at the source) which is a major factor in increasing flow.

Also, point 5 - Seeking Perfection suggests to me the target is zero defects. Not 3.4 per million.

Your thoughts?

Six Sigma Eliminates Defects and Deviation

Lean Accelerates Speed by eliminating delays.

Six Sigma eliminates the remaining defects and deviation.

You need both Lean and Six Sigma. (And you will need innovation to keep from becoming obsolete.)

Why not zero defects?

How many defects, mistakes and errors do you want in your healthcare? The Institute for Healthcare Improvement (www.ihi.org) estimates that one patient out of every two suffers some form of preventable harm. The IHI also estimates that out of a $3 trillion dollar healthcare spend, $1 trillion is waste

Healthcare has a Zero Harm initiative to achieve zero defects.

I have proposed a Trillion Dollar Prescription to help healthcare cut costs by $500 billion by 2025.

Lean is not just speed

This tired trope about Lean being about speed is still incorrect.

Where does Toyota say TPS is only about speed? Nowhere.

TPS (and Lean) are about flow and quality at the source.

Carving out (or implying) that Six Sigma is the only method for reducing defects is incorrect and insulting to Toyota, a company that doesn't use Six Sigma in manufacturing, but manages to produce world-class quality.

Toyota has been exceptional for a long time

Toyota started long before "Lean Six Sigma" even existed. Their culture makes the magic.

Trying to start being Toyota is not possible for service industries, because they don't have decades of foundation to support it.

You cannot get to the end state instantly. You have to start somewhere and build the mindset and processes to achieve it.

Using the tools of Lean Six Sigma can start you down the road, but it takes perserverance to get anywhere near Toyota.