Lean Six Sigma — simple summary.
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Every business or general endeavor seeks to optimize its value creation process. The six sigma process introduced by Bill Smith in 1986 at Motorola seeks to do just that [1]. Combined with the principles of lean manufacturing of Japanese origin this creates the in the beginning of the millennium highly popularized lean six sigma process. The cause of that popularity can be traced back to Jack Welsh’s adoption of six sigma at General Electric in 1995 to great success [2].
So what is it exactly?
The lean portion refers to a short and waste free process. Six sigma emphasizes the goal of minimal variation of the product or service from the mean. More specifically, the aim is for 99.99966% percent of the output to fulfill expectations.
Essentially, it’s a process to optimize the magic triangle of business; to achieve minimal cost, maximum speed and consistently good quality.
Quality
Six sigma is meant to take care of the quality. The specific goal is to fulfill the Critical to Quality Characteristics (CTQs) of the product. 99.99966% of the produced goods or services should fall within the tolerance interval.
The idea is that even in processes with 99% quality the remaining 1% fault is often very costly, and avoiding these would save the company up to 30% of the cost [2]. For a business producing 1000 yoghurt cups a day, it’s a difference of wasting around 3500 cups a year or with six sigma specifications just 1 cup a year. So aiming for a higher quality rate can be beneficial.
So how does one arrive to six sigma quality? By following the DMAIC cycle. The DMAIC cycle is based on the classic Deming cycle PDCA — Plan, Do, Check, Act. It consists of five stages — clearly Defining the CTQs, accurately Measuring the current quality, Analyzing those measurement, finding the areas and techniques to Improve and lastly Controlling the new process to cement the solution [2].
Time and Cost
The concept of lean processes is meant to be combined to save time and cost.
When we say time we mean the time to market (TTM), the time and associated labor needed for production, the time product takes to reach the consumer and the reaction time of the business to market movements. It’s evident that in speeding up those processes lies tremendous value.
Cost refers to the resources spent on the product in general. Saving on the cost increases the margin on the produced goods and services which could lead to lower prices to consumer.
It’s common sense that improving those factors will lead to healthier companies and lean processes are meant to achieve just that. These include a variety of techniques and methods like Just-In-Time Production (JTT) famously implemented at Toyota in the 1960s [4], which saves on storage costs and avoids oversupply. Additionally, visual management can be used to effectively convey information and standards to employees. It’s also important that the lean principles are integrated in the companies values. For example, having the philosophy of constantly striving for perfection should lead to continuous optimization of the production process and therefore directly save time and cost. Similarly, designing an effective workplace environment is essential.
Innovation
Criticisms of the process being too rigid and therefore opposed to innovation has lead to the extension from lean six sigma to Design for Six Sigma (DFSS). This adds the DMADV cycle to the tool box which aims to develop new products and services with the lean six sigma principles in mind from the very start. It consists of Defining the scope of the project, create the Measurement metrics of interest, Analyze ways to deliver on those metrics, Design the product or service and lastly Verify its merit.
Criticism
While there are many examples in the past of lean six sigma of companies benefiting greatly from adoption lean six sigma, like for example Xerox in 2004 [7], it also garners many arguably valid criticisms.
The reason being that there are many other examples of companies who adopted six sigma and yet failed to observe any benefits [6]. Companies like 3M and home depot quickly dropped their efforts due to those reasons [8]. The suspicion being that six sigma hampers creativity.
Another opinion is that the cost of implementing lean six sigma itself outweighs the benefits it may bring. In our example of the yoghurt cups it might be that optimizing the production such that the 3500 cups a year are saved requires a diligent production process that increases the cost further.
Summary
Lean Six Sigma provides processes and principles to optimize the production and design of products and services. While there are many examples of successful implementation of those techniques and methods, there are also many criticisms and failures. As a student of the natural sciences this comes as no surprise. While the goals and motivations are clearly defined, and the processes and tools are relatively well specified, there is no way to control and compare concrete implementations within companies. Researching the topic it appears as so explicit lean six sigma is still present to this day but has had its peak around the turn of the millennium.
References
[1] Tennant, Geoff (2001). SIX SIGMA: SPC and TQM in Manufacturing and Services. Gower Publishing, Ltd. p. 6. ISBN 0–566–08374–4.
[2] Töpfer, Armin (2009). Lean Six Sigma. Springer-Verlag Berlin Heidelberg. ISBN 978–3–540–85059–5
[3] What is DMAIC? — GO Productivity Lean Six Sigma (retrieved 23.4.2021)
[4] Ohno, Taiichi (1988). Toyota Production System: Beyond Large-Scale Production. CRC Press. ISBN 978–0–915299–14–0.
[5] The Five Kinds of Six Sigma Projects: Process Design — SixSigma.us (retrieved 23.4.2021)
[6] S. Albliwi, J. Antony, S. Abdul Halim Lim, and T. van der Wiele, “Critical failure factors of Lean Six Sigma: a systematic literature review,” Int. J. Qual. Reliab. Manag. Vol., vol. 31, no. 9, pp. 1012–1030, 2014
[7] Xerox stakeholder downloads (retrieved 23.4.2021)
[8] S. S. Chakravorty, “Six Sigma failures: An escalation model,” Oper. Manag. Res., vol. 2, no. 1–4, p. 44, 2009
