What is Lean Six Sigma Methodology ?
If you want to learn the key concepts of process improvement, you are in the right place. Ensuring high quality and improving customer satisfaction is often difficult for the companies. Therefore companies and organizations are looking for the ways of increasing productivity, solving problems and decreasing costs. A collaborative team effort is much needed to improve decision making for this purpose. Six Sigma principles provide a framework to improve the quality of a process or product. In this article, we will answer “What is Lean Six Sigma Methodology” and discuss how Lean Six Sigma differs from Six Sigma.
Lean Six Sigma is a technique that combines the methods of Lean and Six Sigma to eliminate the eight kinds of waste in order to improve performance. The purpose of Lean Six Sigma is to improve the quality and the efficiency of the process considering customer’s requirements. Although both Six Sigma and Lean Six Sigma principles focus on improving customer satisfaction, there are some differences between their methodologies. In order to understand their difference, the term “Lean” should be analyzed first.
What is Lean?
Lean is a problem-solving tool of eliminating wastes and removing wasteful activities that don’t add value to the process. By the help of this problem-solving tool, only the activities which add value to the process can be considered. Activities can be categorized by their values in the process. Lean focuses on maximizing customer value by using fewer resources.
Many people think that lean is applicable only for the manufacturing industry. This is a misconception. Lean is applicable to all the business processes within the organization. Because lean principles provide a way of decision making for the organization.
Value Added vs Non Value Added Activities
Value is something that a customer is willing to pay.
Non-Value Added Activity
Non Value Added Activities do not add any value to the process.
Value-Added Activities add value to the process.
Value Enabling Activities
Value Enabling Activities are activities that do not add value directly to a process, they must be performed to allow Value-Adding Activities later on.
What are the Eight Kinds of Wastes ?
Waste can be anything except the materials and resources that can add value to an activity. Therefore the high amount of materials, overproduction, idle time, manpower more than needed, machinery more than required can be classified as wastes.
Lean six sigma seeks to eliminate eight kinds of wastes. Seven of the wastes are directly related to production and the waste “Non-Utilized Talent” is related to employee’s capabilities. The seven wastes (muda) are devised by Taiichi Ohno “the father of the Toyota Production System”.
By the help of Lean tools, The Eight Kinds of Wastes which are below can be eliminated. “DOWNTIME” is the acronym for The Eight Kinds of Wastes.
• Defects: Defects are the errors and mistakes in the products that make employees lose time to fix.
• Over-Production: Producing more than the demand of the customer
• Waiting: Waiting is the time between the two production phase. (Mostly between previous and the next step). Waiting causes workforce loss.
• Non-Utilized Talent: Refers to utilize the employees below their capabilities or they are assigned to tasks that can be done by someone else more efficiently.
• Transportation: To move the product from someplace to another place. The unnecessary transportation of the product is costly and causes time loss.
• Inventory: Excess storage space and purchased materials more than the needed cost to the organization. Excess inventory increases handling costs.
• Motion: Unnecessary movement of resources, materials, equipment, and supplies from one location to another is a costly process and it causes time loss.
• Extra-Processing: Extra Processing of Over Processing means doing more than the customer’s requirements.
Lean Six Sigma combines the methods of Lean and Six Sigma in order to improve the quality and efficiency of the process.
The initial step of this method is to remove the waste in a process by using lean methods. After this, the Six Sigma tools are used to improve the process.
Benefits of Using Lean Six Sigma Methodology
Lean principles provide a framework for an organization to improve both service and manufacturing processes by eliminating eight kinds of wastes. Most of the organizations suffer from low-quality processes and high costs. Lean principles provide methods to overcome the most common industry problems.
Below are some of the benefits of this methodology
- Determine the Non-Value Added Activities or Processes
- Eliminate Wastes
- Determine the Defects and Problems that Cost Organization
- Use the Organizational Resources Effectively
- Increase Customer Satisfaction
- Reduce Operational Costs
- Improve Decision Making
- Improve Productivity
- Increase Efficiency
- Increase Organization’s Profit
- Improve Collaboration and Employee’s involvement in the process
- Increase Revenues by Increasing Production
Difference Between Lean Six Sigma and Six Sigma
- Lean Six Sigma is not only used for quality improvement but also for creating a continuous improvement system.
- Lean Six Sigma focuses on the bias for action but Six Sigma Methodology focuses on the bias for statistical analysis.
- Lean is a continuous and on-going approach and changes as the technology and the other factors change. On the other hand, Six Sigma Methodology is a project-based or customer-based approach.
- Lean Six Sigma uses methods to eliminate wastes but Six Sigma Methodology does not use lean methods.
- Six Sigma is based on reducing process variation. On the other hand, Lean Six Sigma is based on eliminating wastes.
The Lean Six Sigma is a methodology that combines process speed with quality. On the other hand, Six Sigma focuses on improving the quality of goods or services by reducing variance in the production process. Both methodologies provide a system for organizational culture. In order to ensure process and organizational achievement, both Six and Lean Sigma principles should be used.
Over 20 years in portfolio management, streamlining business processes, and systems integration. Utilizing best practices: PMI, Scrum, Agile, Kanban, Lean/Six Sigma, CMMI, ITIL and MOF. Extensive experience in managing in cross functional environment, getting to the root of the problem, bringing stakeholders together to resolve them. Vice President at Force3M Training.