Six Sigma Blog

Understanding the principles of ‘Lean’ and 'Six Sigma'

Do you know what ‘Lean’ is in business processes? Have you tried incorporating lean principles into any of your business processes to ward off the cost incurred via non-value and redundant processes?

Lean principle is a set of defined rules that assist in speeding up any business process by cutting off the redundant and non-value adds processes which unnecessarily emaciate quality time. Lean principles start with by finding the lead time involved in any business process. ‘Lean’ principles constitute tools and mechanisms to avoid non-value add processes thereby speeding up the pace of the current project.

Six Sigma is a methodology that operates on DMAIC principle thereby solving defects existing in a business process. It does not however contain any tool to accelerate the process under consideration.

In brief, Lean principles reduce the lead time and speed up the process while Six Sigma practice helps in ensuring the quality of the business process.

Read one of our previous post on 'Lean Six Sigma' to know how companies have embraced the concept of Lean Six Sigma to cut out waste and increase productivity while sustaining quality!

Incorporating Lean Principles into Six Sigma

By Priya Venkatesh, Staff Writer

Do you want to integrate lean principles and six sigma processes? Are you not clear with the thin line between six sigma and lean principles? Read on to know more details.

The steps that involve in the incorporation of lean principles to six sigma business processes can be summarized as follows:

• Try to stretch the malleable business processes and start applying lean principles to the stretched business process.
• Resolve the defects that are currently present in the business process.
• Make sure that the consistency in quality of the defect removal is taken care of while moving on to the removal of the next defect.
• If in case the business process is not malleable, try solving the defects by applying six sigma tactics and then start applying the lean principles.

Read one of our previous post titled "Applying Lean Manufacturing to Six Sigma" to know more on applying lean principles to Six Sigma processes in detail.

Driving Value through Lean Six Sigma

Now companies have acknowledged that Six Sigma and Lean share a common objective: to create value-based end-customer requirements. Recently, I had written a post titled "Applying Lean Manufacturing to Six Sigma" that talked about Lean and Six Sigma. Six Sigma has stimulated the concept that if a process lies within six standard deviations of the mean, production quality is definitely guaranteed. However, quality alone is not enough for the process.

The ability to eliminate process waste in the supply chain while delivering Six Sigma levels of quality will win the current race. If you keep a close watch on industry activities, you will find that there is rush among enterprises for achieving Six Sigma and lean standards in their organizations.

Lean Six Sigma in Corporate Sector

Lean Six Sigma is quickly gaining popularity among Defense and civilian agencies. It started as a tool for improving manufacturing in car factories. Now it has morphed into a symbol of corporate efficiency. In the recent years, Lean Six Sigma has turned into the latest government catchphrase for eliminating waste and reducing errors.

It is believed that in the next two to five years, there will be a significant increased push in the civilian agencies to adopt these approaches. Lean Six Sigma can help identify waste through its systematic way of looking at problem areas such as defects and wait times. Most organizations implementing Lean Six Sigma focus on training leaders with the expectation of getting them on board before launching a broader initiative. To know more about Lean Six Sigma in business world, read my previous article titled "Lean Six Sigma".

Identifying Six Sigma Steps

Organizations can make huge profit, if they learn to think in terms of Lean. Lean is based on the philosophy of eliminating waste. Lean shortens the time between the customer order and shipment. There are several steps that provide a strong foundation for any organization that wants to incorporate Lean into its operations. These steps are:

• Value
• Value Stream
• Flow
• Pull
• Perfection
• Replication

Lean thinking can be started by giving due consideration to value, which is customer's ultimate requirement. The value of any products or services is defined by customer needs and not by any non-value added activity. Hence, customer is always prepared to pay for the operations that transform the product in a meaningful way.

Read my previous post titled "Why Six Sigma Has Become the Most Powerful Improvement Tool?" to know more about Six Sigma.

Applying Lean Manufacturing to Six Sigma

A few days ago, I came across a discussion forum, which emphasized on applying Lean Manufacturing to Six Sigma. Participants on that forum strongly argued in favor of this, which made me think over the issue deeply. I found that there are continuing questions about the relationship between Lean Manufacturing and Six Sigma techniques. Now, companies believe in stretching the process applying Lean techniques.

Lean Manufacturing with Six Sigma solves the problems of deviation from the standards and ensures maintenance of the improved status using Six Sigma techniques. If the system and processes are poor, Six Sigma techniques should be applied to solve some of the problems. Industries that will largely benefit from applying Lean Manufacturing to Six Sigma belong to ITES, Banks, Insurance companies and Hospitals.

Why Lean Manufacturing and Six Sigma Fail?

Many Lean Manufacturing or Six Sigma begins with much fanfare. However, most of them fizzle out within the first six months. There are ways to avoid this. However, many people who introduce these initiatives are not willing to do what is really required to ensure success. The current trend suggests that most businesses have not been able to capture or sustain the benefits of a lean transformation.

Lean manufacturing represents a fundamental change and most businesses have pursued change in a tactical manner. They must adopt effective strategies to pursue this change. If Lean Manufacturing and Six Sigma fail, this is due to the lack of true senior management commitment and understanding of the change process. The ultimate responsibility of the success of any change program, whether it is Lean Manufacturing or Six Sigma, falls on the shoulders of the most senior leadership on the site. If the leadership fails, all programs and projects follow suit.

Lean Accounting Performance Measures

When the enterprises implement lean manufacturing, they might feel the need for Lean Accounting Performance Measures. Lean Manufacturing helps companies identify and reduce waste and giving them extra capacity. This is vital for small manufacturers. Traditional accounting is a marker of financial performance. However, companies also it to measure overall performance.

Lean Accounting Performance Measures are designed to give today's companies the information they need to make the right decisions. They do not replace the traditional accounting. Rather, they work in tandem so that the changes in processes and in accounting can work together into the future. While traditional accounting is still absolutely necessary for measuring financial performance, Lean Accounting Performance Measures are meant to provide additional information.

Lean Six Sigma in Distribution Channel

Lean Six Sigma initiatives help in enhancing competitive performance with strong economic returns. Distribution channels play important role in implementing the Lean Six Sigma initiatives. Lean Six Sigma also enhances the relationship that exists between the manufacturers and dealers. It is important to note that both share a common goal of creating and delivering outstanding value to the end users.

Lean Six Sigma deployments require cooperation, trust and a sense of partnership between various distribution channel entities. All channel systems must align in a most efficient manner to provide these values. Lean Six Sigma lets organizations in creating a delivery system that requires the cooperation and partnering of all distribution channel entities.

Benefits Provided by Lean Manufacturing

It is often noticed that Lean practitioners ignore the true potential of the Lean technology. They fail to recognize that Lean technology can bring in creating a Lean environment so that a simple review of Lean Manufacturing will help in identifying the key areas for growth and development. Most Lean practitioners follow a multi-step process for achieving the Lean goal of any organization. Lean Manufacturing also takes care of Value Chain and Flow Production. It builds value chain maps for the high volume products of the companies and removes non-value added activities.

Lean manufacturing process also improves the production by reducing setup times. It also make the cycles faster. Lower volume products with variable demand may actually contribute more to the process. There is segregation between the products and the creation of production cells. It raises a question whether production cells are required for Lean or not. The original concept of eliminating the waste is caused by non-value added tasks. Now Lean practitioners have IT solutions, which simply the whole process.