Understanding Lean Sigma

All organisations think about improving the way their business runs. Improving customer response times, Quality levels and reducing costs. We all know that doing this makes a business more agile and responsive to customer needs.

 

However, in order to do this, we need to understand that a stepped change in performance is normally required. oftern,some level of improvement in the way the business operates can be achieved quite quickly, but without the busilding blocks being in place sustainment is short lived. Long term fixes need to be identified and and ideally improvement activities should not be a one off, There needs to be a continuous drive for change.

 

Continuous Improvement (CI). is the most commonly used terminology for this type of change. It encompasses both physical and cultural improvements in the way a business operates.

 

Lean Sigma is the ideal tool to make this happen, but in order to undersand why Lean Sigma is so powerful, let's look at how it works.

 

 

 

Lean and Six Sigma are both different methodologies and both embrace the objectives of Continuous Improvement. Lean is primarily associated with the removal of waste within business process whilst Six Sigma concentrates on improving quality through the reduction of variations found within all in processes.

 

 

Lean

Lean to many, is an all-encompassing term. But a Lean operation is best described as one which has minimal waste within its processes. It’s focus is on only have processes that add value to the customer. In other words, processes that the customer is willing to pay for. This is achieved through identification and the elimination of waste which normally goes un-noticed. Normally waste is divided into 7 categories for identification purposes; Transportation, Inventory, Motion, Waiting, Over Production, Over Processing and Defects.

Lean is about the identification and the elimination of this waste, whilst meeting the requirements of the customer whilst improving the overall efficiency of the organisation. At a second and more important level, Lean seeks to develop a culture to both sustain gains and relentlessly look for more opportunities to improve,

 

When considering deploying Lean into an organisation or business, you need to consider the 5 Lean principles on which the philosophy is based.

 

1. Identify Customers and Specify Value

 

In reality, only a small percentage of the time and effort in an organisation puts in actually adds value for the end customer. I may seem hard to believe, but in many cases can be as low as 1% or even lower. Targeting the waste through defining Value for a specific product or service from the customer’s perspective is the goal.

2. Identify and Map the Value Stream

 

Having understood what your customer actually requires, you then need to identify how you are delivering (or not) that to them. A Value Stream is the entire group of activities across the breadth of the organisation that is required to delivery of the service or product. This should be mapped, understood and assessed.

3. Create Flow by Eliminating Waste

 

Having understood the current situation using your first Value Stream map, the first action is to identify and remove waste from the process in the correct sequence and levels to start to create flow. Lead-times should start to drop, Quality levels should start to rise and the overall cost of the operation should start to fall.

4. Respond to Customer Pull

 

When the process starts to flow smoothly, focus should the turn to ut understanding the demand from your customer and then putting in place processes to respond to true customer demand. Producing only what the customer wants, when they want it, to the correct levels of Quality n is the key objective.

5. Pursue Perfection

 

Normally in steps 3 and 4, creating flow and pull the processes will have been reorganized. The gains made can be significant as all the steps in the process link together more smoothly. It is through this process that waste becomes more visual and evident. The challenge at this point is to keep driving for further improvement. It should be recognized that waste at some level will always exist in every process, so there are always further opportunities for improvement..

The success Continuous Improvement of this is dependent upon behavioral change, where everyone involved in the process are engaged and truly understand the benefits of Lean. Leaders, Managers and staff from very department need to constantly review processes and eliminating waste. This will provide the organisation with substantial efficiency gains and lead to significantly improve customer service and opportunities for growth. Sustainability is key.

 

Six Sigma

Whilst Lean mainly focuses on the adding value to the customer through the elimination of waste, Six Sigma is centered on improving the quality of the service and/or product by reducing process.

The main methodology is DMAIC (Define, Measure, Analyse, Improve, Control) This is a more structured approach based on Deming’s Plan-Do-Check-Act (PDCA) cycle.

The term Six Sigma relates to a target a defect ratio of less than 3.4 defects per million opportunities, which is a theoretically the optimum quality level before cost ( not safety) becomes a prohibiting factor to achieving a higher level.

Six Sigma and its very structured approach is achieved through the knowledge and expertise which is normally recognized through a hierarchy of ‘Belts.’ Normally starting with Yellow Belts as the first step on the ladder, followed by Green Belts then Black Belts and leading ultimately to Master Black Belt. Teams are formed within the organisation following training at a given level.  It is not uncommon for a medium to large organisation to have a pool of ‘Belts’ – at different levels – whose objective is to work with the Six Sigma Champion (often the sponsor) in delivering business improvement.

Six Sigma has also has a very complex toolset that allows statistical analysis of multi variables to be analysed and solutions developed. This also means excellent levels of process control need to also be in place to sustain gains if the full benefits of Six Sigma as to be realized.

This approach works very well for very complex processes, normally ones that have a whole series of variables to control. It must be considered that this level of training is both costly and time consuming and not every organisation requires this level of interaction.

 

 

Lean Sigma

Lean Sigma is really the best of both worlds. It used is a combination of both Lean and Six Sigma toolsets. It takes the physical and cultural concepts of Lean and the structured approach of Six Sigma and uses them both in such a way that any organisation can benefit from quickly with minimum training costs and lead-time.

It allows a Continuous Improvement program to grow .Once the concepts have been introduced to an organisation’s workforce, the improvement process can start. People can get involved with the minimum amount of training. Clearly a control structure is still required and this is provided using a simplified version of the DMAIC process provided by the Six Sigma methodology .