Operational excellence is the goal of every organization — but it shouldn’t be a destination. The very definition of continuous improvement implies that the journey to excellence is never-ending, which means that the framework for change needs to allow for long-term iteration and adaptation.
Lean and Six Sigma are two such methodologies for management and work that feature different focuses and approaches. When deployed in tandem, Lean Six Sigma creates an efficient, productive work environment that benefits all levels of an operation — from upper management and supervisors to frontline workers and the end customer.
Let’s dive into the principles, benefits and implementation tips to know when introducing Lean and Six Sigma to your workforce.
What Is Lean?
Lean is perhaps the best-known approach to continuous improvement in manufacturing. Lean is a systematic approach to work that seeks to eliminate or reduce activities that do not add value to a process. Various tools and proven approaches such as Training Within Industry (TWI), Standardized Work and Kata have historically been applied to eliminate waste and develop a lean culture in manufacturing. Lean, however, is increasingly applied to industries beyond manufacturing, such as health care and transportation.
Lean has its roots in the Toyota Production System (TPS) and was officially defined by researchers James Womack and Daniel Jones, who went on to co-author many books on the subject of work and management. Jones is the founder and chairman of Lean Enterprise Academy, based in the U.K., and Womack is the founder and Senior Advisor of the Lean Enterprise Institute.
As defined by Jones and Womack, effective Lean management promotes a never-ending cycle of improvement and waste removal designed to:
- Increase production
- Decrease downtime
- Improve products and services
- Eliminate process and product defects
- Streamline inventory
- Make the best use of your workforce’s skills
- Encourage workers to identify areas for improvement
Before we explore the principles of Lean, let’s define value and waste.
What Is Value in Lean?
Value in Lean is anything the customer is willing to pay for. This can apply to more than the end product — value can be assigned to the time it takes to create the product, the need your product fills for the customer, and any feature that enhances the customer’s experience or exceeds their expectations. When you’re trying to identify or measure the specific value your organization provides to the customer, consider these questions:
- What does our customer want?
- What would enhance the customer’s experience?
- What service are we providing that leads the customer to want to have a relationship with us?
- What makes the customer want to pay for our service?
No matter what your workforce or leadership values about your organization, remember: In the Lean workplace, the customer defines value.
What is Waste in Lean?
Waste is any activity in a process that does not add value.
Lean waste is identified by the organization in an effort to eradicate non-value-adding activities. Taiichi Ohno, architect of the TPS, first defined the seven industry wastes as:
- Excess Processing
Toyota later added an eighth waste, non- or under-utilized talent, which created the acronym DOWNTIME.
The 5 Principles of Lean
The Lean approach to work is grounded in five basic principles that help to crystallize an organization’s specific wastes and value:
- Define the customer’s value
- Identify and map the value stream
- Create a value stream that flows without interruption or waste
- Establish a pull for your customers that prioritizes timely and accurate delivery
(Pull: Flow based on the effects downstream activities have on upstream activities)
- Relentlessly pursue a waste-free value stream through continuous improvement
It’s important to understand exactly what this fifth principle means so as not to create extra work or non-value-adding activities.
“[Perfection involves] a relentless pursuit of a perfect, waste-free value stream through a healthy dissatisfaction with the status quo,” says Scott Laundry, Senior Project Manager at TDO (Train Develop Optimize). “But,” he adds, “we can’t let being perfect get in the way of being better. So little bits of movement forward towards perfection every day are more important than trying to get there in one fell swoop.”
Organizations who adopt Lean principles as a quick-fix solution may find that they struggle to achieve results and might abandon the initiative altogether. Laundry says that this stems from a misunderstanding of — or misplaced emphasis on — waste. But isn’t waste the whole driving force behind Lean?
Waste is what Toyota talked about, and that’s what people focused on because it was visible and easy to understand,” Laundry explains. “When many people first study Lean, they think, ‘Oh, I get it. We’re going to go on waste hunts!’ But that’s not how Toyota actually did it.
Mike Rother, author of ‘Toyota Kata’ has said that Toyota eliminates waste as a result of striving to reach a goal. Toyota managers coach a pattern (or Kata) for asking Where do we need to go? and What’s in our way of getting there?, then encouraging experimentation to overcome those obstacles. When learners (workers) reach their goal, they can point to the wastes that were naturally removed as a result. “The intent of Lean waste reduction is not to eliminate wastes in a random, recreational way,” says Laundry. “It’s: get where you need to be, and on the way, you will find you remove waste.”
TWI Kata training focuses on making small, rapid changes that add up to large, organization-wide improvements over time. As Taiichi Ohno said, “Every day little up, some days big up.” Therein lies the key to success in Lean.
What Is Six Sigma?
Six Sigma takes a data-driven approach to workplace improvement. It was developed by Motorola engineer Bill Smith in 1986, who sought to ensure his company’s processes could produce work that was 99.99966% free of defects.
In Six Sigma, quality management experts use statistical and empirical methods for improvement in project teams. The project goals are typically to reduce variation and remove defects in processes to hit specific target outcomes. These targets could be a reduction in workplace injuries, a reduction in carbon emissions or an increase in customer satisfaction ratings. Implementing Six Sigma often involves developing a structured hierarchy of expertise within the organization, with practitioners’ proficiency signified by titles such as Black Belt or Green Belt — similar to martial arts ranking systems. Six Sigma often requires outside experts to lead training sessions wherein they teach the tools and project frameworks.
DMAIC and DMADV
Six Sigma approaches problem-solving using one of two frameworks. The first is designed to address an existing process that isn’t performing to desired levels, and goes by the acronym DMAIC:
- Define the problem
- Measure the current process, gather data, establish a baseline and validate measurement capability
- Analyze the data to identify waste and root causes of defects in the existing process
- Improve the process
- Control the process by determining how the improvements will be communicated to the relevant users
If an organization needs to create a new process or product, it can use the DMADV framework:
- Define goals and deliverables of the process
- Measure the factors that are critical to the end goal
- Analyze and identify high level concepts that will best meet the customer’s expectations, then select one to refine
- Design a new process in detail that will meet the customer’s expectations
- Verify that the customer’s needs are met through the newly designed process or product
DMAIC and DMADV form the core of Six Sigma, but they can be implemented as stand-alone approaches to improvement without the statistical trappings of Six Sigma.
Lean vs. Six Sigma
Lean and Six Sigma are often mentioned in the same breath and even combined, as we’ll discuss in the next section. Before we move on, let’s briefly compare the two:
|Focus on customer value||Focus on reducing variation and defects|
|Waste reduction or elimination||Improving and establishing processes|
|Focus on daily incremental improvements||Focus on project-based frameworks|
|Value stream management||Strategic and financial-based project selection|
|Plan Do Check Act (PDCA) experimental cycles||Quantitative techniques|
|Standard Work||Statistical Process Control|
|Helps increase flow and throughput||Helps standardize processes|
|Reduces costs||Reduces costs|
|Ensures stability of processes||Improves delivered quality|
|Companywide engagement||Develops “experts”|
What Is Lean Six Sigma?
When combined, Lean and Six Sigma form a powerhouse for waste reduction and process quality improvement. Lean principles tackle waste, while Six Sigma principles focus on variation prevention rather than detection. Six Sigma provides a statistical, data-driven element that Lean lacks, while Lean mitigates some of the hierarchical structure of Six Sigma that may not fit with a company’s culture.
The key cornerstones of Lean Six Sigma are customers, processes and employees.
Lean Six Sigma Principles
Lean Six Sigma combines the philosophies of the two approaches to create a master list of principles:
- Focusing on delivering customer value
- Defining roadblocks to consistent quality
- Eliminating inefficiencies
- Communicating and aligning people
- Maintaining flexibility and adaptability
Why Combine Lean & Six Sigma?
Although there is overlap, at a fundamental level, Lean and Six Sigma each feature elements that the other does not; depending on the industry, one approach may be more effective than the other.
However, since both strive to change an organization’s overall culture, it’s natural to combine them. Six Sigma’s focus on creating an internal hierarchy of experts may not fit into an organization’s culture, but the group effort of identifying waste in Lean brings balance. Together, the two create a multi-pronged approach to improvement that operates on multiple levels, leaving no stone unturned when it comes to streamlining processes and delivering more value.
Benefits of Lean Six Sigma
Though an organization may focus on one set of principles more than the other, the combination of Lean and Six Sigma ensures ultimate consistency. Lean Six Sigma has been shown to:
- Improve efficiency to increase output
- Simplify and standardize processes
- Improve bottom-line profits
- Help meet and achieve business goals
- Increase customer satisfaction and brand loyalty
- Reduce costs
- Optimize resources (both human and financial capital)
- Increase product quality
- Decrease error
- Improve employee performance and satisfaction
- Provide scalability
- Improve technology deployment
Tips for Implementing Lean Six Sigma
“There is sometimes a use for experts, right? If you want to improve, it’s good to have a mentor, a teacher or an expert on tap,” says Laundry. He equates this kind of guided skills-building to learning a sport: even Tiger Woods, one of the best golfers in the world, has multiple coaches.
“Not everybody needs to know a lot about statistics to do continuous improvement, but there are some things that using statistical tools can be very useful for,” Laundry says, regarding Six Sigma techniques. “If you don’t have those experts, you’re not going to be able to achieve the same level [of success].” Due to the Dunning-Kruger effect, self-taught organizations often overestimate their proficiency when they start implementing Lean Six Sigma.
Even with experts on hand, there are certain implementation pitfalls that organizations succumb to. These include:
- A focus on theoretical knowledge over practical application
- A perception of outside trainers as a triage team whose job it is to “fix” the organization
- A focus on data collection without research
- Attempting to shoehorn new strategies into existing frameworks
- A lack of alignment between your organization’s mission and workers’ or teams’ individual goals
- Failure to sustain improvement activities over the long term
To this final point, Laundry emphasizes that occasional or brief improvement sessions — three times a month, or one hour a week — will be virtually ineffective at creating any change. Forming a long-term relationship with a certified coach can sustain your workers’ momentum and empower them to maintain an active role in their team and individual improvement.
The purpose of an expert is to help you avoid the potholes in the road and to accelerate your time to competence,” Laundry says. “So the goal is not to always have the expert do it for you. The goal is for the expert to help you develop capabilities so that you can do it yourself.
To learn more about how a certified coach can help jumpstart your Lean initiative, start a conversation with the TWI Institute today.