Understanding and Implementing Lean Six Sigma

Lean Six Sigma is a methodology widely used in business to improve processes, reduce waste, and enhance quality. It combines two distinct approaches: Lean and Six Sigma. As a business owner, you know that the cornerstone for business growth is continuous improvement of your operations. Lean Six Sigma helps you achieve exactly that. First, let’s break down standard Six Sigma.  

Six Sigma 

Developed by Motorola in the 1980s, Six Sigma is a set of techniques and tools for process improvement. Six Sigma gets its name from the statistical concept of “Sigma.” It represents the standard deviation of a population of data points. Six Sigma is positioned as a level of performance where processes operate with minimal variation, ultimately leading to high quality and consistency. It seeks to improve the quality of output by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, mainly empirical, statistical methods, and creates a special infrastructure of people within the organization (like “Black Belts” and “Green Belts”) who are experts in these methods. 

Six Sigma focuses on minimizing defects by reducing a process’s variation and improving the quality thereof. The quality standard can be achieved using statistical tools and techniques to measure and analyze a process’s performance and identify improvement areas. The goal is to achieve a high level of process capability or reduce defects to 3.4 per million opportunities (DPMO). The belief is that if a process variation reaches the 3.4 DPMO, the process becomes highly reliable and consistent. The number comes from the standard distribution curve, a bell-shaped curve representing the distribution data in many real-world situations. Managing this variance is called variation control. Variation control is essential to your bottom line and achieving consistency with outputs, which ultimately improves customer satisfaction and makes your process more predictable. 

Lean

Lean is a systematic methodology for waste minimization within a manufacturing system without sacrificing productivity. It has its origins in the Japanese manufacturing industry and is closely associated with the Toyota Production System (TPS), which was developed by Toyota executive Taiichi Ohno and engineer Shigeo Shingo in the mid-20th century.  

Lean focuses on eliminating waste and improving flow in business processes. Waste here doesn’t just mean physical waste; it refers to anything that doesn’t add value to the customer. Lean identifies seven types of waste: overproduction, waiting, transport, inappropriate processing, unnecessary inventory, unnecessary motion, and defects. By removing these wastes, Lean aims to streamline processes, reduce costs, and improve efficiency. 

The core principles of Lean are derived from the TPS and can be summarized as follows: 

• Identifying Value: Understanding what the customer really needs and values. This helps in focusing efforts on things that truly matter. 
• Value Stream Mapping: Analyzing the flow of materials and information currently required to bring a product or service to the consumer. This step involves identifying every step in a work process and eliminating those steps that do not add value. 
• Creating Flow: After the waste has been removed from the value stream, the next step is to ensure that the remaining steps flow smoothly without interruptions or delays. 
• Establishing Pull: Ensuring that products are created at a rate determined by customer demand. In a pull system, work is only pulled if there is a demand for it, reducing overproduction and inventory. 
• Pursuit of Perfection: Continuously improving processes and systems within the organization to achieve the most efficient level of operation possible. 

Lean thinking has been widely adopted beyond the automotive industry and is now applied in healthcare, software development, service industries, and government sectors, among others. It’s a customer-centric approach that seeks to deliver high-quality products and services efficiently and effectively by continuously identifying and eliminating non-value-adding activities. 

Putting It Together: Lean Six Sigma  

When combined as Lean Six Sigma, these methodologies focus on both efficiency (Lean) and effectiveness (Six Sigma). The goal is to create a high-quality product or service quickly and efficiently by streamlining processes and reducing variations and defects. Businesses of all sizes and across various sectors use Lean Six Sigma to improve their operations, which can lead to cost savings, better customer satisfaction, and overall business growth. 

Lean Six Sigma is often symbolized by a belt system, similar to martial arts, to denote levels of expertise: White Belt, Yellow Belt, Green Belt, Black Belt, and Master Black Belt. Each level represents a different degree of training and understanding of Lean Six Sigma principles. 

How Can Lean Six Sigma Benefit Your Business? 

The goal of Lean Six Sigma is to achieve higher levels of efficiency and quality by streamlining business processes and eliminating activities that do not add value. It is a double whammy of operational excellence.  

Let’s walk through an example to better illustrate Lean Six Sigma. Let’s say you have a healthcare facility that wants to improve patient appointment scheduling. Using the regular Six Sigma, you analyze the data and find out that the appointment scheduling process has a high variation of wait times, which leads to patient dissatisfaction. Next you use statistical tools to identify the source of the variation and implement improvements accordingly to reduce the wait times.  

On the other hand, in a parallel world, your healthcare company adopts a Lean Six Sigma approach instead. You not only work on reducing those pesty wait times, but you also eliminate non-value-added steps in the process. With Lean, you identify redundant paperwork and manual data entry that does not contribute to patient care. In the process, you took care of two birds with one stone. You eliminated waste and reduced variation to achieve a more streamlined and efficient appointment scheduling process, all while maintaining the utmost quality of patient care. As you can see, Six Sigma is good; Lean Six Sigma is better. 

Get Started with DMAIC 

First, you must define your scope and goals. This begins with implementing DMAIC. DMAIC is a data-driven, structured problem-solving methodology that is a core part of the Six Sigma approach. It stands for Define, Measure, Analyze, Improve, and Control. The purpose of DMAIC is to improve, optimize, and stabilize business processes and designs. Here’s a brief overview of each phase: 

1. Define: This initial phase involves clearly defining the problem or project goals. It includes identifying the customer requirements, project scope, and objectives. This step sets the direction and targets for the improvement project. 

1. Measure: In this phase, you collect data to establish baseline measurements on the current process. This helps in understanding the existing system’s performance level and serves as a point of comparison for future improvement efforts. Key metrics are identified and data collection methods are established. 

1. Analyze: During the Analyze phase, the data collected in the Measure phase is thoroughly examined to identify the root causes of the problem. This involves using statistical tools to interpret data and find patterns, trends, or anomalies that could point to the cause of the inefficiencies or issues in the process. 

1. Improve: Based on the analysis, solutions are developed to eliminate the root causes of the problem. This phase involves generating ideas, selecting the most appropriate solutions, and then implementing these changes. It often involves pilot runs or simulations to test the solutions before full-scale implementation. 

1. Control: The final phase ensures that the improvements are sustained over time. This involves implementing control systems, such as process monitoring and control charts, and establishing standard work procedures or policies. The goal is to maintain the gains achieved through the project and ensure that the process does not revert to its previous state. 

DMAIC is a cyclical process, meaning that after the Control phase, the Define phase begins again as part of a continuous improvement effort. It is widely used in various industries for quality improvement, problem-solving, and process optimization.  

Once you are reliably implementing DMAIC, you’ll want to continue gathering and analyzing data. If you don’t track metrics properly or have the tools available to complete this variance measurement, Lean Six Sigma could be much harder to implement. If you are in business and doing reasonably well, you should have some output data to analyze. If your business is smaller and not tracking these sorts of things, you should start there first.  

A Solutions Mindset

With data in hand, focus on solutions. You can start with one small process at a time, or take on a more major process overhaul. Whether you dip in a toe or dive in headfirst, Lean Six Sigma will benefit your business. Avoid getting mired down in negativity, focus on improvements, and your customers (and you!) will see a positive difference.