Lean Six Sigma – It’s Not Just for Manufacturing Businesses Anymore
By: Greg Murrer
“Lean Six Sigma” represents the marriage of two complementary principles: Lean Manufacturing and Six Sigma problem solving analytics. The principal of Lean Manufacturing found its origin in the Toyota Production System first developed for the automotive industry in the 1970s. Toyota’s objective was to produce high quality products utilizing a manufacturing model that eliminates inefficiency. On its most fundamental level, Lean theory recognizes that inefficiencies are embedded in any manufacturing process. These inefficiencies typically include delays, unnecessary movements, incorrect processing, defects, over-production and excess inventory. Once identified, elimination of inefficiencies results in an increase in production rates, a reduction in errors and defects and ultimately, enhanced profitability. Corrective action may be as simple as realigning work flow, creating manufacturing cells, eliminating steps or ordering raw materials on a just-in-time basis. The symbolic expression of this approach is “Work Better, Not Harder”.
The identification of process inefficiencies is the first step in Lean theory. This is frequently approached by “mapping” every element of an existing process and characterizing the elements as value added or value subtracting ( described as “Value Stream Mapping” or “Process Mapping”). Time delays or nonproductive loops for example are inefficiencies that need to be designed out of a process, if possible. This may be easier said than done if the root cause of the inefficiency isn’t readily identifiable. This is where the diagnostic tools of Six Sigma come into play.
“Six Sigma” is an expression of production excellence. It literally translates into 3.4 defective parts per million of parts produced. It is a standard that many businesses strive to achieve but few accomplish. Most businesses would be happy to achieve Five Sigma (233 defects/million) or even Four Sigma (6200 defects/million). The birthplace of Six Sigma was the U.S. semi-conductor industry where extraordinary efforts were made in the 1980s to dramatically reduce the frequency of product defects.
An entire industry has been built around Six Sigma consulting, designed to guide corporations through a maze of analytical tools and methods all aimed at pinpointing the root causes of manufacturing defects. Six Sigma is all about the graphic demonstration of collected data (e.g. Linegraphs, Pareto Charts, Ishakawa (Fishbone) Diagrams) employed to ferret out those root causes. Applying these tools to inefficiencies revealed through Lean Manufacturing process analysis can quickly solve the riddle of the whys and wherefores of an unprofitable process.
As every industry strives to increase profits in challenging times, a rebirth of Lean Six Sigma is occurring in of all places the Services Industry. Service businesses including banks, hospitals, schools, municipal governments and even law firms are embracing these techniques, challenging time honored methods of procuring and delivering services. By committing key members of their staffs to Value Process Mapping and dissecting all core service processes, they hope to wring out inefficiencies resulting in superior service delivery to their customers.
If you operate a service business, don’t dismiss the application of Lean Six Sigma to improve your processes and enhance your bottom line. Expertise abounds in the consulting community, but a word to the wise: Start small with a pilot project and build the visibility and credibility of Lean Six Sigma from within your organization.