‘Lean’ and ‘Six Sigma’ Aren’t Just Supply Chain Buzzwords
Posted in: HR
The press, consultants and executives use terms such as ‘Lean’ and ‘Six Sigma’ interchangeably, but what do they really mean and how applicable are these concepts to your operations?
At the most basic level, ‘Lean’ is the practice of minimizing waste in a process while ‘Six Sigma’ is an approach focussed on minimizing errors. While there is overlap between these two goals, focussing on one can actually lead to problems with the other. For example, a single-minded focus on reducing errors (Six Sigma) by inspecting at every stage of the process will introduce unnecessary steps; the waste of having non-value adding steps in a process. The complete opposite of ‘Lean’!
‘Lean’ and ‘Six Sigma’ share many of the same goals, approaches and outcomes. Do the job better, faster and at lower cost with fewer worker injuries. Key foundational concepts underlying any ‘Lean Six Sigma’ implementation include:
- VOC – Voice of the Customer: You need a clear understanding of what your customers want, what you have promised them and how well you deliver against those needs and promises. Not all customers are alike, so you need to segment them into groups and understand their unique needs and how well you are delivering against those needs.
- Process Mapping using SIPOC: Processes need to be well understood and consistently applied to minimize errors and waste.
- Establishing a Continuous Process Improvement mentality: Dr. W. Edwards Deming, considered to be the founder of Continuous Process Improvement hypothesized that most quality problems are “in the process, not the person”. He established that fully 96% of problems were built into the process and only 4% the fault of the employees! Getting the process right is critical to both ‘Lean’ and ‘Six Sigma’.
- Root Cause Analysis: It is alarming the amount of work and disruption that can result from solving the wrong problem. Tremendous effort is often elegantly applied to solving the wrong problem. Care and considerable effort needs to be done before any process improvement projects are started to determine the root cause or causes of the problem. I have personally fallen into this trap by spending months revamping an order picking process to reduce errors only to discover that the root cause was errors inherent in the replenishment process. Luckily, a quick fix to the replenishment process gave the desired result with improved picking efficiency as an added bonus. The old adage ‘Be careful what you wish for’ certainly applies here!
- Process Control Strategies: There are a wide variety of process control strategies ranging from ‘Easy to Change/Hard to Sustain’ through ‘Hard to Change/Easy to Sustain’ that will give progressively better results over the longer term. For example, verbal instructions are easy to do, but hard to sustain consistently while written procedures take more effort to put in place and maintain, but yield greater benefits in terms of consistency, adaptability and trainability.
While ‘Lean’ and ‘Six Sigma’ are very different in terms of their goals; waste reduction and error reduction, respectively, they overlap and can be mutually-supporting when implemented together. Fewer errors result in less re-work and the necessity for inspection, for example. Well defined, documented ‘Lean’ processes not only reduce waste, but also minimize the likelihood of error. The underlying concepts and implementation tools are complimentary in both approaches. At the end of the day, call it ‘Lean’, ‘Six Sigma’ or whatever, the goal is higher customer satisfaction while minimizing time, cost and effort.