What is Lean Six Sigma

What Is Lean Six Sigma?

Lean Six Sigma is a powerful management system designed to improve operational efficiency through the systematic application of the two most popular quality management methodologies: Lean and Six Sigma.

Lean is primarily focused on eliminating waste, while Six Sigma is focused on identifying the causes of problems and improving processes. These two methodologies are the perfect combination of tools and techniques to improve the efficiency of the process and the quality of the final products or services to create value for customers.

How Did Lean Six Sigma Start?

The first anecdotal evidence of Lean shows it was present in the shipbuilding industry in Venice. The manufacturing of ships during the 15th century was so complex that it would take a whole year to build one. The processes were disjointed and lacked efficiency. However, when the Venetians decided to optimize their construction time and methods by standardizing work processes and certain material flows, they were able to reduce the time taken to build one ship from a year to less than two weeks.

In 1799, Eli Whitney came up with the concept of interchangeable parts in the firearms industry. He used standardized sets of parts that could easily be assembled and disassembled, resulting in faster changeover times and uniformity of the product.

The Lean concept was formally developed during the early 1900s by married couple Frank and Lillian Gilbreth. After recognizing the link between efficiency and waste, they pioneered the idea of waste elimination to increase efficiency. They became efficiency experts and started a consultancy agency, dedicating themselves to research in this area. They subsequently passed on their knowledge to others, ensuring the longevity of Lean’s effectiveness as a management model.

Although scientific management traces its origins to the time-and-motion study pioneered by the Gilbreths, Frederick Winslow Taylor advanced the idea and approach to improving efficiency on the job and is credited with being the first to develop a scientific study of work.

However, the first person who truly integrated this concept into the manufacturing system was Henry Ford. He was persuaded that interchangeability and manufacturing workflow facilitation were necessary to boost productivity.

Proceeding with the concept of lean manufacturing, the Japanese also adopted a number of techniques from Taylor’s methods and applied them to their own manufacturing processes. Toyota team members realized that a series of simple innovations could improve the quality management process and invented the Toyota Production System. After WWII, the company started using concepts such as just-in-time manufacturing, which enabled Toyota to become the most profitable car manufacturer in the world.

In the 1980s, a young engineer Bill Smith who worked at Motorola proposed the concept known as Six Sigma, which roots itself in statistical analysis and is derived from “Six Standard Deviations,” which helps minimize the number of defects or flaws. He proposed to minimize the amount of variation every time the company makes a new product to get more consistent and improve its quality. Motorola developed the methodology with new standards, which helped them save billions of dollars and become known around the world.

During the 2000s, the two different Lean and Six Sigma methodologies became one unique process. Both methods seek to improve efficiency in various markets and sectors by working with companies to ensure they are running as smoothly as possible.

Reducing Waste (TIMWOODS)

Lean Six Sigma methodology aims to produce high value at lower costs by focusing on reducing waste. But what is ‘waste’? Waste is any step or action in a process where the customer does not gain any value and is unlikely to pay for. There are eight categories of waste:

1. Transportation: Excess movement of people, information, inventory, and other components of a process or poor workplace organization can cause this type of waste.
   
   
2. Inventory: Inventory, materials, or information that exceed process requirements and are sitting idle can hinder the production of products or service delivery in a just-in-time manner.
   
   
3. Motion: Ergonomic issues, poor process documentation, and poor workplace organization cause unnecessary movement of people, information, or equipment, adding more value to the process but wasting time and effort.
   
   
4. Waiting: Downtime lost waiting for information, instructions, materials, or equipment which occurs when interdependent actions are not perfectly synchronized.
   
   
5. Overproduction: Waste resulting from producing more products than is required, faster than is required, or before they are needed.
   
   
6. Overprocessing: Any excessive effort in production, such as more components, a higher quality than necessary, or more steps in the process than necessary that do not add value.
   
   
7. Defects: Loss of value due to scrap, repairs, and reworking a product or service that fails to meet customer expectations.
   
   
8. Skills: Waste of human potential by underutilizing capabilities and delegating tasks to people with inadequate training.
   
   

The five phases of Lean Six Sigma process improvement

The DMAIC tool is a five-step technique to identify and correct inefficiencies in a process in order to improve existing products and respond to customer demands. Let’s go over each of these phases:

1. Define: Define the objectives/goals and timeline of a project.
   
   
2. Measure: Measure the effectiveness of the process as they are.
   
   
3. Analyze: Identify the root cause of the existing problems.
   
   
4. Improve: Address and eliminate issues that arise in root cause analysis to improve process performance.
   
   
5. Control: Make regular adjustments and monitor new processes to measure future performance and ensure sustainability of changes.

After the final phase, your organization can assess the full impact of the changes in terms of effectiveness, error reduction, cost reduction, productivity, increased profitability, and client satisfaction.

Lean Principles

A commonality of businesses of all sizes is to increase value for their customers. So, how do you improve your value proposition and create value? One way you can achieve the desired result is by using Lean principles. The application of these methods cuts through the difficulties that can arise in large companies, allowing them to focus their resources on what really matters. According to James P. Womack and Daniel T. Jones (authors of Lean Thinking), “Lean thinking begins with a conscious attempt to precisely define value in terms of specific products or services, with specific capabilities, offered at specific prices, through a dialogue with specific customers.” Five basic principles will help increase the value of your business from a customer perspective.

1. Identify Value: Define the value of products or services that your customers expect through a dialogue with them.
   
   
2. Identify the Value Stream: Defining the value creation flow allows us to see and eliminate any wasteful activities in a process. At this stage, you have to identify the specific actions and people involved in delivering the final product or service, from receipt of demand to delivery to the customer.
   
   
3. Create Flow: Once the activities that do not add value have been identified, it is necessary to remove as many of them as possible so that the process runs smoothly. Eliminating waste creates flow, and in turn, flow exposes waste, which underlies continuous improvement.
   
   
4. Establish Pull: By adopting a pull system, your company only creates as many products as required to meet customer demand. That means work is produced only when there is demand for it. Such a system will help optimize company resources and reduce the risk of overproduction by keeping all team members focused on the right tasks at the right time.
   
   
5. Strive for Perfection: The key to sustaining the improvements you have achieved is to never stop improving. Don’t stop there once you’ve achieved results, as new problems may arise. The solution for the project team will be the ‘Plan, Do, Check, Act’ (PDCA) model to control, protect, and continually improve the process.
   
   

Lean Six Sigma Process Improvement Techniques

Six Sigma and Lean offer tools and techniques for workflow organization that focus on controlling, solving problems, and seeking improvements to remove defects and waste. Let’s take a look at the most popular of these:

1. Kaizen: The Kaizen technique aims to continuously improve quality, work processes, corporate culture, productivity, leadership, and other aspects of the company.
   
   
2. KANBAN: Kanban is a task management system in which all stages of a project are visualized on a Kanban board. Team members can see the current state of a task at any given time. The purpose of this approach is to make the project visible, track the status of work readiness, and control the workload of team members.
   
   
3. Poka-Yoke: Poka-Yoke, also known as Zero Defects, is a method or device that helps avoid errors in the production process or detect them at an early stage so that they do not occur in the following process as errors.
   
   
4. 5S: The five-step method is used to organize the workspace and is designed to create ideal working conditions for optimizing operations, maintaining order, and saving time and energy. All unnecessary tools and other objects are removed from the workplace, and necessary items are placed in easily accessible places for those who need them. The process helps standardize work processes and minimize any unnecessary movements. The standards set should be used by all employees.
   
   
5. Just-In-Time (JIT): The JIT technique aims to reduce overstocking and helps companies produce only what is necessary, in the required quantity, at the required time, and with the required level of quality.
   
   
6. Jidoka: Jidoka helps avoid overproduction and prevent defective products. Intelligent programs can detect problems such as equipment malfunctions, defects in product quality, or delays in work performance, immediately stopping the process and signaling for assistance.
   
   
7. Heijunka: The Heijunka method aims to balance production in terms of quantity and assortment. The total volume of orders over a certain period is established to produce the same quantity and assortment each day. It reduces the amount of waste that arises due to fluctuations in customer demand.
   
   
8. Value Stream Mapping: Creating a flowchart that illustrates the sequence of steps in a process and how the products or services are delivered helps to analyze and optimize the whole process to identify its weak points and make improvements.
   
   

Benefits of Using Lean Six Sigma

• Increased process efficiency: Steps in a process that do not add value are identified and removed or replaced, saving time and focusing on activities that add value.
  
  
• Increased team engagement: Involving employees in the process and changes encourages them to contribute and share their ideas on how to improve the workflow.
  
  
• Strong customer relationships: Providing products and services specific to customer needs creates added value for the brand and attracts more customers.
  
  
• Simplified processes: Identifying and eliminating waste and weaknesses in processes makes the workflow easier to manage.
  
  
• Reduced bottlenecks: Continuous improvement, monitoring, and standardization of processes allow for early anticipation and elimination of bottlenecks, keeping the workflow running smoothly.
  
  
• Cost reduction: Implementation of Lean Six Sigma methodology leads to increased productivity, reduced production time, decreased overproduction, and reduced errors, resulting in lower unnecessary costs and higher profits.
  
  

The Lean Six Sigma Levels

Lean Six Sigma consultants can have varying levels of competence and understanding in the application of the relevant methods. The responsibilities of specialist consultants are determined by the level of certification achieved, which can be divided into four levels:

• Yellow Belt
  Yellow belt consultants will be familiar with the methodology and its tools, will understand the company’s goals and objectives, and participate in addressing problems.
  
  

• Green Belt
  Green belt consultants will take on the role of leaders of small teams with a more detailed understanding of the methodology, they can manage small projects, maintain documentation, analyse the process, and be responsible for monitoring and sustaining achieved results.
  
  

• Black Belt
  Black belt holders will be professionals whose main role is to optimise processes and improve the performance of the business as a whole. A black belt consultant that can explain the Six Sigma philosophy and principles can also be a leader and mentor for green belt consultants.
  
  

• Master Black Belt
  A master black belt holder will be a member of the organisation’s senior management, this is the highest level of certification and this consultant usually has the most authority in the company during the change management process. This level of consultant will define the strategy for Lean Six Sigma implementation in the organisation and is responsible for setting and promoting the business goals for a project.