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Joseph A. DeFeo

Six Sigma

The Chicken or the Egg: Six Sigma and Lean

Companies debating the relative merits of these practices should instead learn to combine both

Published: Thursday, April 7, 2011 - 12:08

How many times have you heard, “Lean is in and Six Sigma is out” from a colleague? The funny thing about this is that I used to hear the same thing 23 years ago. Only then it was, “Lean is in, and quality improvement teams are out.” Little has changed since then. Everyone is looking for a simple answer to cost reduction and quality improvement. My biggest concern, and it should be yours, is that both are needed, not one or the other. It is not about which came first, or which is better or even easier. It is about what problem your organization is facing today. Do you have customer dissatisfaction, product or service complaints, defects, high cost of failure? Or are you trying to improve speed and throughput, and reduce cost of waste? These are the questions one needs to ask before arguing about whether to use lean or Six Sigma.

Organizations have a number of methods available to deal with process and performance problems. Six Sigma and lean have become two of the most widely recognized and effective methods for creating breakthrough improvement. Both have evolved from the basis of prior methods, such as Joseph M. Juran’s universal sequence for breakthrough quality improvement, Walter A. Shewhart’s and W. Edwards Deming’s plan-do-check-act (PDCA) cycle, and Toyota’s specialized focus on driving out waste. Lean and Six Sigma both take different approaches in the quest for greater effectiveness, efficiency, and cost reduction.

Six Sigma: improvement by putting customers first

The quality improvement methods on which many Six Sigma projects are based—define, measure, analyze, improve, control (DMAIC) and define, measure, analyze, design, verify (DMADV)—focus on identifying and meeting the needs of customers first, and the organization or business second. In this way, revenues increase and costs decrease, improving results.

Lean, by contrast, is the process of optimizing organizational systems by eliminating or reducing the “waste” within them. Anything that does not offer value is considered waste. Lean methods and tools can provide significant improvements in organizational efficiency. During the past decade, lean has experienced a rebirth in manufacturing-based industries, as well as service- and health care-based organizations. Lean is not a replacement for Six Sigma or vice versa. It focuses on different problems. It is typically an internally focused means of cost reduction. It is badly needed but should work in concert with a systematic Six Sigma practice.

More than just a formal program or discipline, Six Sigma has become an operating philosophy that can be shared beneficially by everyone: customers, shareholders, employees, and suppliers. Fundamentally, it is also a customer-focused methodology that drives out customer dissatisfaction, raises levels of quality, and improves the financial and time performance of organizations to breakthrough levels. The term “Six Sigma” means to attain a target for quality that is close to perfection, to achieve 3.4 defects, errors, or mistakes, whether that involves the design and production of a product or a customer-oriented service process.

Many large organizations have experienced great success employing Six Sigma and lean Six Sigma methods. Today, many organizations combine lean and Six Sigma as their improvement methods of choice. These methods help both traditional manufacturers of goods, as well as producers of services and information, to improve their bottom lines and increase customer satisfaction.

Lean: improvement by waste reduction

Lean in particular is based on creating a “pull system” to produce faster, rather than the traditional “push systems” used by most organizations. One of the main goals is to always pull from the customer demand, not push to the customer.

Lean methods and tools have made their way into most industries. A method that was used in manufacturing to reduce waste is now used to improve cycle time, flow, and velocity, improve workplace department performance, and reduce waste in hospitals, insurance companies, and financial services. Value-stream mapping is another important lean tool. It maps and documents all the tasks (material and information flow) and the metrics associated with them (cycle time, costs) within a process, including inherent waste. This provides the guidance to select the right problems and solve them as process improvement projects. There is a standardized approach and set of tools, such as rapid improvement events or kaizen (a Japanese word for “improvement”), to attack embedded wastes and increase the velocity of a process. Improving velocity exposes the problems—or waste—so that they can be eliminated, thereby making the processes faster, better, and cheaper.

6S (actually called 5S, but we add one more S for safety) is an abbreviation for “sort, set in order, shine, standardize, sustain, and safety.” It’s a lean tool for achieving a highly effective workplace that is clean, well-organized, and standardized to enable all employees to perform to the best of their ability. The benefits of an efficient workplace include prevention of defects, prevention of accidents, and elimination of time wasted searching for tools, documentation, and other elements to produce goods or services.

One key component of being lean is the need to create “value” as seen from the eyes of the customers. The operational definition of value is the benefit the customer gains from using the product or service. Value is created by the customer. Providing value to the customer is why the producer exists. Lean starts with defining value in terms of products or services and customer benefits provided at the right time at an appropriate price. Anything that does not provide value to the customer can be considered waste.

Lean Six Sigma: the chicken-or-egg phenomenon

In the Six Sigma methodology, the two primary methods are DMAIC to improve processes and products, and DMADV to help ensure that products and processes function well starting with the voice of the customer through to the delivery of goods.

The DMAIC steps are:
• Define the problem as clearly as one can (for DMADV, define the design goals)
• Measure the current level of performance and the voice of the customer
• Analyze collected data to determine the causes of the problem or the failures of existing designs
• Improve by selecting the right solutions to solve the problem or create new designs
• Control to hold the gains, for both the improved process or newly designed goods/services

 

Organizations worldwide are continuously under pressure to control costs, maintain high levels of safety and quality, and meet growing customer expectations. This improvement process has been adopted by many large organizations, like Samsung Electronics, GE, and smaller organizations like Molex (electronics), A. Schulman (plastics), J. R. Simplot (food processing), and Highmark (insurance) to name a few.

Lean Six Sigma is quite simply the integration of lean and Six Sigma methodologies. Lean focuses on efficiency, and Six Sigma focuses on how effectiveness can lead to faster results than either method applied independently of the other. A successful Six Sigma deployment depends on a clear understanding of roles, responsibilities, structures, and training requirements of the employee.

In the case of lean, it is not enough to just believe that: “If we eliminate the nonvalued waste, we will be lean.” This is only one aspect of a lean organization. Although the elimination of waste is the goal of lean, the Toyota Production System defines three types of waste: muri or overburden, mura or unevenness, and muda or nonvalue-added work. To properly manage outcomes in a lean organization, you must ensure that all three types of waste are managed and controlled. This will create the model for cultural transformation from a batch-and-queue operation to an operation with synchronous flow, team-based activities, and a true focus on the customer mindset.

Competitive pressures, compounded with increased customer expectations with respect to quality, service, and price, have prompted many businesses to seek creative solutions. Lean implementation provides the tool kit and the methodology for organizations to focus on getting the right things, to the right place, at the right time, in the right quantity to achieve perfect workflow while minimizing waste and being flexible. The value proposition from lean implementation includes increases in customer satisfaction, cost reduction, and increase in shareholder value. Lean implementation increases operating profit and decreases inventory and capital expenditures.

The rise of certification

The introduction of Six Sigma led to the introduction and rapid growth in the certification of Six Sigma “Belts.” This was largely due to a lesson learned from the total quality management (TQM) era. During TQM, many so-called experts were trained in the “methods of TQM.” Unfortunately, few were trained in the tools to collect and analyze data, and so could not benefit from the TQM program.

This was why Motorola introduced a core curriculum that all Six Sigma practitioners needed to learn. That evolved into a certification program that went beyond the borders of Motorola. As a result, there are many “certifiers” that will provide certification as a Master Black Belt, Black Belt, Green Belt, and so on. Most certifications state that the person is an “expert” in the skills of Six Sigma, or lean, or both. Certification did lead to improved performance but also to some weak experts due to a lack of oversight of the certifiers, many of which were consulting companies or universities not well-versed in the methods or tools of Six Sigma and lean. Certification must be based on legitimacy to be effective. Having too many firms certifying Six Sigma Belts will only lead to a weaker certification process.

No matter what organization you use to certify your experts, here are some lessons learned about certification:
• One project is not enough to make someone an expert
• Passing a written test that is not proctored is no guarantee the person who is supposed to be taking the test is actually taking it
• If you get someone in your organization to sign off on the success of the Belt project, you need independent evidence that the person is knowledgeable about the methods of Six Sigma
• Select a reputable certifying body

 

Whether with the customer-based approach of Six Sigma, or the more speed-focused strategy of lean, many organizations are succeeding in achieving performance breakthroughs where they had failed before. This is even more the case with the combination of both strategies into the lean Six Sigma methodology. Smart companies recognize that this is not simply a “fix” to one-time problems, but truly a new way of doing business.

Your organization must not debate which came first, but rather how to do both. When you do, you will join the ranks of many globally successful companies.

Discuss

About The Author

Joseph A. DeFeo’s picture

Joseph A. DeFeo

Joseph A. DeFeo is president and executive coach with Juran. He is recognized worldwide for his training and consulting expertise which enables organizations to achieve superior results. For additional information, visit www.juran.com.

Comments

Did I really read it wrong?

Joe said Six Sigma was customer focused and lean "is typically an internally focused means of cost reduction."

He should be stating this as his opinion as opposed to being a statement of fact. 

 

True... but

Mark,


 


True. However, the article also stated that "One key component of being lean is the need to create 'value' as seen from the eyes of the customers. The operational definition of value is the benefit the customer gains from using the product or service. Value is created by the customer."


 


So, put your observation and my observation together and what you get... I think... in my perhaps naive opinion... is lean is involved in both efficiency and creating value as viewed from the customer (as opposed to just internal efficiencies). I am pretty sure that is what the article is saying. Otherwise, I think Joe would simply have made it all one sided--all efficiency. See my point? Six Sigma and lean both have the same goal. Perhaps Joe himself will weigh in on this.

The Odd Couple - Lean and Six Sigma

Starting out the discussion of it is about the problem that you are having today (not taken literally) is more important than the methodology that you choose to use is spot on. It is about what is need and what makes sense for your business problem. Certain companies because of their culture or makeup will adapt to certain methodologies easier. It is the company culture that chooses the tool. It cannot be forced upon a company. When someone declares we are going to be Lean, that scares me. I much prefer them to start with the tools of Lean and apply them to certain projects or problems. If it flourishes leave it grow and if it gains momentum feed it. Continuous Improvement is a good thing.

However, Joe I think you do a dis-service to both Lean and Six Sigma by defining them and limiting them to a brand as you understand it. I also think @RAJohnson does that by basically limiting a tool once he puts it in his toolbox. Sort of defeating the purpose of continuous improvement. However, I agree that every methodologies tries to develop itself into a culture which I have never understood. 

Toyota may have always understood what Lean was and Motorola/GE may have understood Six Sigma.  It seems like such an “Odd Couple” that the rest of us have married the two together in the Lean Six Sigma world.  Where the culture of Toyota explained as Lean regretfully became branded as waste reduction. The methodology of Six Sigma became branded as variation reduction. Both branding attempts allowed for ease of understanding and were significant contributors to aiding the brand development in the 90's. Without this, they may not be alive today. However, this is not the “brand” as they are today.  

I agree with @MGraban when he questions Joe saying Lean is not as customer focused as Six Sigma. Lean is the most customer focused of all the methodologies that I am familiar with and because of it is the one that has been adapted by Agile and the "Lean Software" communities because the other methodologies don't work for them. The reason being is that Lean adapts to handling uncertainty and/or knowledge work better than the others. For example, Scrum and Kanban the two most prevalent tools of the software community are directly from Lean or TPS teachings.

Six Sigma and Lean share many of the same tools. But they are extremely different. One embraces uncertainty and the other despises it. For example, I believe Six Sigma tools can be very useful in  defining and providing structure in a marketing environment. But putting those tools to practice in the everyday sales cycle would be a disaster. So which is more customer focused? The one that is doing or the one that is observing? An “Odd Couple” indeed.

lean is customer focused

First off, I agree that Lean and Six Sigma can work well in concert. I believe they are different, yet related, methodologies (as opposed to being a blurred-together "lean six sigma" or "lean sigma."

 

In your introduction, you talk about how Six Sigma is customer focused, implying that Lean is not.

 

Maybe I read you wrong, but I couldn't disagree with that more.

 

Lean is, by its definition and use at Toyota, extremely customer focused. Jim Womack and others say value is defined by the customer.

 

Six Sigma often gets turned on its head and becomes the internal cost-cutting system, instead of the customer-focused quality improvement approach that it should be.

 

I'm also, frankly, tired of the misinformation about Lean only focusing on efficiency, as you state here.

Look at Toyota - they clearly emphasize that the dual pillars of TPS/Lean are flow AND quality: 

http://www.toyota-global.com/company/vision_philosophy/toyota_production...

It's common misinformation from Six Sigma consultants to say you need Six Sigma for quality. Both Lean and Six Sigma should be focused on overall effectiveness, which includes quality AND flow which leads to lower cost.

May have missed the point

Hi Mark,


 


I've read Joe's article a couple of times after reading your comment and I think I agree with your statement "Maybe I read you wrong..." I think you did.


 


What I took away from Joe's article is that lean and Six Sigma both work toward the same thing... customer satisfaction. Whether it is through the use of lean tools or Six Sigma tools (and frankly, isn't there a whole lot of blurring between the tool sets?) the goal in the end is to produce a product or service that meets the customer's needs. I agree with Joe and commenters BUSINESS901 and RAJOHNSON that both skill sets and methodologies are needed. I do agree that for a while, a long time ago, there was this distinction drawn between lean and Six Sigma with lean being more the efficiency thing. But from my vantage point, that idea has been long gone for at least 5 to 10 years and no current consultant (including the folks at Juran Institute, I'm sure) see one or the other as more customer focused, just different tools to the same end.


 


Remember "transactional lean?" The term has been around for eons (well... eons in quality-management-jargon years anyway). Rath and Strong described transactional lean as "[helping] organizations eliminate waste and focus on understanding 'value' from the standpoint of the customer." So... the idea of lean as a means to creating customer value has been around a long time and is pretty widely embraced today.


 


An observation: Lean and Six Sigma seem to be almost always used together (lean Six Sigma) to the point that I'm not sure many lay persons -- consultants excepted :-) --would recognize what the two terms would mean if taken alone.

Lean vs. Six Sigma v.s ....

To me it seems all the discussion about methodologies is akin to choosing a tool from a toolbox.  Confounding matters is the large push from consultants that "rebrand" the methodology (rename the tool) so that they can "add value". 


 


At its basic function, a tool has it's best use when used for it's intended purpose. When used for another purpose, the results are lackluster at best.  The proverb of "if the only tool you have is a hammer, all problems look like nails" comes to mind.


 


For "Lean", I have long held the view that "lean = the ruthless elimination of waste" and "Six Sigma = the systematic elimination of variation".  So If I have a customer or business issue that has "waste" as a root cause (or problem) I would take out my "Lean" toolbox and start addressing the issue.  If I have a variation issue (a waste by the way....so in my limited view of the world...one drawer in my "lean" tool box!), I go to my "Six Sigma" tools and fix my problem.


 


This thinking holds for all of the methodologies I have come across.  By treating any new concept as a new tool in my box, I gain flexibility, variety, and ability to react to problems that arise.  Another benefit is I get to see "new" tools that are simply "rebranded" older tools.  This helps keep my box manageable and I don't get caught up in trends that look to be different ("look and feel" of improvement) and can continue to concentrate on improving the customer experience, delighting customers with quality, exceeding delivery expectations while maximizing return to the company (keep the heart and soul intact!)


 


just rantings from a farmer/woodworker turned engineer working in and on businesses for 20+ years.....

Interesting perspective upon tools

 

Here is a short video I made all about the danger of tools                                                                        

http://www.thesystemsthinkingreview.co.uk/index.php?pg=18&backto=1&utwkstoryid=322                                                                               

 

I hope that you enjoy it

 

Spam

Way to spam with an irrelevant and self-promotional video.

Spam

Spam? Or a highly relevant comments about tools which is what RAJONSON is writing about                 

QUOTE At its basic function, a tool has it's best use when used for it's intended purpose. When used for another purpose, the results are lackluster at best.  The proverb of "if the only tool you have is a hammer, all problems look like nails" comes to mind END QUOTE