Integrating Lean and Six Sigma for Breakthrough Process Improvement
Why Lean / Six Sigma?
Lean / Six Sigma is an integration of two powerful improvement methodologies, Six
Sigma quality improvement and Lean productivity improvement. Many companies have
attempted one or the other of these improvement strategies, some companies have
tried both, but few have integrated the two practices into a single approach for
achieving continual improvement.
Each methodology has strengths and weaknesses. Six Sigma has proven extremely valuable
in helping organizations achieve internal quality improvement and increased customer
satisfaction. Lean has proven valuable for achieving improvements in on-time delivery,
labor, material and equipment productivity; and for improving the rate of return
on capital employed.
One of the criticisms leveled at Six Sigma is the lack of alignment that sometimes
exists between overall business strategy and the process improvement projects selected.
Too often process owners (Six Sigma Champions) select projects that benefit themselves;
or other internal customers while failing to address the problems that effect external
(paying) customers. Lean practitioners often criticize Six Sigma programs for wasting
resources addressing relatively minor process issues while ignoring the larger more
critical system issues that constrain the process from achieving breakthrough levels
of performance improvement.
One of the criticisms leveled at Lean is the lack of a systematic process for deploying
the Lean technologies. Too often Lean is an orphaned strategy that becomes the flavor
of the month.
For the past 20 years companies in the US have used kaizen events as the method
for becoming lean. These kaizen events, lasting a couple of days or maybe a week,
achieve improvements and cost savings in the work areas studied; however, many times
these improvements are not integrated into the overall production system, and the
gains realized and enthusiasm generated are lost when the kaizen event is over.
Thus, many companies who claim to have implemented Lean have merely established
isolated islands of improvement within their predominantly mass production systems,
complete with all seven types of waste.
Recently, a new planning tool, value stream mapping, has been developed to help
organizations plan, organize and lead the transformation to Lean as a management
system rather than as a collection of isolated techniques. We have incorporated
the value stream mapping process into our strategic planning and project management
processes to help our clients integrate both Lean and Six Sigma improvement projects
and to achieve the critical strategic goals and objectives established by the company
Value Stream Mapping
One of the great advancements in Lean Manufacturing was the development of Value
Stream Mapping. Prior to the development of value stream maps, Lean practitioners
used a techniques-oriented approach to implement Lean Manufacturing. First it was
cells, then kanbans, then the Five S's; and, finally quick changeovers. Organizations
attempted one improvement technique after another with no real vision that Lean
is a system of management and not a collection of disparate techniques.
Lean practitioners now use value stream maps to plan and organize the transformation
from Mass producer to Lean producer. Value Stream Maps document the flow of information
and material from customer order through delivery of completed product or service.
A current state value stream map is drawn to describe the flow of information and
material under current process conditions. A future state value stream map is then
created that describes how this process will be improved through application of
Lean thinking concepts and Lean Manufacturing practices. The gap between current
and future state performance provides a means for measuring the impact of the transformation
on critical process performance measures. Process efficiency improvements measured
as: increased percentage of value-added work, reductions in dock-to-dock leadtime
and reductions in inventory and labor costs can be determined from this gap analysis.
The gap analysis between current and future state also identifies the specific projects
that will be necessary to move from current to future state. These continual improvement
projects can then be prioritized and scheduled within the framework of the overall
breakthrough transformation project.
Value stream maps provide the roadmap for developing processes with Six Sigma quality
and lean productivity. Linked scorecards provide the measurement and monitoring
processes that drive continual improvement.
In their book, The Balanced Scorecard, Kaplan and Norton describe a methodology
for measuring, monitoring and improving organizational performance. They argue that
Managers must develop a set of performance measures that are balanced across four
key categories, linked by vision and strategy. The four key categories are: financial,
internal business process, customers and employee learning and growth. This approach
requires managers to translate their vision and mission statements into objectives
and measures in each of these four critical areas. By doing so, they will create
a logical link between the performance improvement projects and the company's strategies
for long-term growth and prosperity.
Managers interested in measuring, monitoring and driving continual improvement of
process effectiveness and efficiency must develop a set of measures (scorecards)
that translate the continual improvement strategies into actions (projects) and
align those improvement projects with company goals and objectives (profits).
At our company, we have created a set of scorecards for balancing and linking Lean
and Six Sigma improvement projects with the overall company goals and objectives.
We call these scorecards the Five P's. The Five P's are: profitability, products,
processes, projects and people.
Profits are enhanced when Products are improved. Products improve
when the Processes that produce those products are improved. Processes are
improved Project-by-Project and in no other way. Projects are successful
when People grow and develop.
The five P's scorecard links the personal growth and development of employees to
specific Lean and Six Sigma projects and links those lean and Six Sigma projects
to improvements in process performance. The improvements in process performance
(achieving Six Sigma quality and lean productivity) are linked to improved product
quality and value (as perceived by customers) which in turn is linked to improved
profitability from increased sales and improved margins.
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Excelerated Six Sigma® or Unified Lean/Six Sigma® please contact:
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