Lean Six Sigma

Lean Six Sigma is one of most successful and widely applied business transformation tools across every industrial sector in the past 3 decades. In recent days, with improving awareness of customers, depreciating tolerance towards poor quality, heightened regulatory and compliance requirements, Lean Six Sigma is becoming a must-be in many companies in developed countries and in emerging markets.

In India, it is gaining momentum among many corporate houses in the past decade. Automobiles, Electronics and Banking have already ventured into LSS – improving the quality of our lives. Telecom, medicine, engineering, BPO and more are joining into the band creating huge demand for quality supplies, quality people and quality organizations.

Origin of Lean and Six Sigma in a Nutshell Post-War Demand in Japan

Before the WW2, the Japanese manufacturing industry was known for its cheap and poor-quality products. Because of the devastations faced by Japan in the war, it surrendered unconditionally bringing the war to an end. General Mc Arthur, the chief of Allied Forces in Japan considered the poor quality of Japanese industries as a major roadblock in rebuilding the nation.

The SPC in Action

He was aware of the lessons learned from Shewhart, Deming, and Juran on quality improvement in the US Armoury manufacturing industry during the civil war and the World War II. We had seen the exemplary performance of Western Electric. The US army wanted the help from Western Electric and from Shewhart to apply the SPC to the US armory manufacturing industry. Dr. Shewhart deputed Dr. Deming, who was a statistician and was working for US government, and Juran who was a junior level engineer working with Shewhart.

Training Within Industry (TWI)

In the meanwhile during the 1940s, there was a significant spike in the demand for arms, vehicles, machinery in the US for the Government to cope up with the intensifying civil war and an inevitable partake in the World War II. Hence, the US army has set up rapid skill up-gradation programs for the industrial workforce.

The experts and senior technicians were chosen as trainers and they trained the operative force of their own industry or trade (Training Within Industry). The objective of TWI was to continuously train the people, improve the productivity and quality every day to meet the demands of the nation. Dr. Deming had also contributed to this movement with his expertise in statistics, quality control sampling, and SPC.

Deming & Juran in Japan

Mc Arthur quickly reassembled the industry association in Japan, the JUSE. JUSE invited Dr. Deming and Dr. Juran for lectures and seminars on Statistical Quality Control. Deming started to deliver series of lectures in Japan from the 1950s, and Juran from 1954. Deming started to talk about the quality of business more than the quality of products. He convinced Japanese industries with the concepts of a holistic approach to business.

Deming & The System of Profound Knowledge

Deming’s concepts were readily accepted by the Japanese industries. He introduced the process flow diagrams to visualise the whole picture as a system and PDCA cycle of change management. Even today, the PDCA cycle is known as Deming’s cycle, whereas Deming himself clarified that the PDCA cycle was first used by Dr. Shewhart and to be called as Shewhart’s cycle.

Deming effectively transferred his knowledge and expertise on management, statistics, concepts of continual people engagement towards continual improvement. He developed the 14 principles of management based on these concepts, their further manifestations, and cross-learning in Japan.

Juran and Breakthrough Improvements

Juran spoke about managing the process of manufacturing to achieve highest levels of quality. He also gave a different viewpoint on quality by introducing the concept of customer satisfaction. He encouraged managers and leaders to focus on continually improving the quality of the processes including technical insights on problem-solving.

He argued that the problem solving was the backbone of quality improvement; in order to achieve highest quality products, the organisations need to plan for breakthrough methods to improve the processes. He believed that daily improvements by the operatives might not be sufficient for solving critical problems, because some problems might need higher technical knowledge to understand.

He utilised the principle of prioritisation into the quality domain. He adopted the principle of the Italian economist Vilfredo Pareto – who stated that 80% of a society’s wealth will be in the hands of 20% of the population. Juran translated the economic principle stating that 80% rejections are contributed by 20% of the problems. He named those 20% problems as Vital few problems and the remaining 80% problems as trivial many. For an organisation to reap a quantum jump in the quality, they need to prioritise their problems and to focus only on vital 20% problems.

Toyota and Other Japanese Manufacturers

While the whole Japan was raising their quality of their processes, with equally significant support from the indigenous experts like Kano, Ishikawa, etc., the Toyota motor company was reinforcing its way of production. In fact, Toyota has a history of making their fortune by selling power looms with built in quality – which was the brainchild of Sakiichi Toyoda – the founder of Toyoda Power Looms.

Hence, with the built-in quality or Jidoka as a way of business, Kiichiro Toyoda the son of Sakiichi envisaged that the mass production of the West will not work in resource-starved Japan. He visualised a production floor where the required materials are delivered only at the time of the requirement and at the required quantity – as seen in supermarkets.

He started the journey which was well supported by his factory manager Taiichi Ohno. They adopted Deming’s teaching to complement their thought process in their journey towards Toyota Production System.

Japanese Invading the US Markets

In just a matter of 20 years, Japanese industries rose to the epitome of quality and challenged the mighty US industries – especially in the field of automobile and electronics. The US companies started to react to the threat from Japan. Some of them lobbied with the Government authorities to levy excess import taxes to Japanese products.

Motorola’s Eye-Opening Moment

Bill Smith, the quality engineer of Motorola came out with the hypothesis and proved that the internal reworks in products are causing field failures and warranty claims. Motorola learned the lesson of customer preference for high quality when it lost its television business to the Japanese competitors and sold one of its loss- making TV manufacturing units to Panasonic in 1973, but the Japanese buyer turned the same unit around within a short span and gained a reputation for highest quality among the US customers. So, everyone from the CEO Bob Galvin jumped into the idea and challenged his team to work on reducing the reworks. He recruited Dr. Mikel Harry, who got his doctorate for his research on the application of logic gate filtering into the manufacturing processes.

The DMAIC

The duo – Bill Smith and Mikel Harry with the consulting support of Juran, went on to work on a methodology called MAIC – Measure the reworks of every batch – Analyse the reason for rework – Improve the process by eliminating the reason for rework and control the process so that the changes are maintained.

They achieved what the company wanted. The process quality improved to an appreciable level. Since they both were statisticians, they used the statistical scale – called Sigma Scale – to measure the process quality. Motorola adopted it in a big way which won them the first Malcolm Baldrige Quality Award in 1987.

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Then companies like GE, Unisys etc joined the bandwagon to make Six Sigma as a global movement. The framework evolved as DMAIC to understand the problem in different companies (D – Define).

1. The Philosophies of Lean & Six Sigma

Lean & Six Sigma 180 Degrees Apart

When we talk about 3 Ps – the philosophies, principles and practices, I find Lean and Six Sigma strikingly take pole positions in terms of their philosophies. Naturally, Lean believes in built-in quality. Hence, problem identification, root cause analysis and problem-solving are there in their daily routine from the CEO to the operative force. In the case of Six Sigma, it introduces an effective framework (DMAIC) for the journey of problem-solving.

Lean: Getting money from the Customer Quickly

The other parts of Lean philosophy talk about getting the money for your product or service from the customer as quickly as possible through the flow of material/information and achieving both quality and the flow by empowering people at all levels. So, typical Lean initiatives are not declaring or announcing the improvements in terms of money; i.e., Lean philosophy accepts that not every improvement in the business could directly be measured in terms of money.

Six Sigma: Reduce the Losses Due to Poor Quality of Processes

Whereas in the case of Six Sigma, it mainly focusses on the Cost of Poor Quality. It recommends identifying the major quality problems of an organisation and to implement focused problem-solving projects – in line with Juran’s teaching on breakthrough improvements. I believe that during the initial days of Six Sigma, the causes of problems would have been identified and proved using the collected data. The DMAIC framework is flexible to adapt best practices time to time around the world. Fish-bone diagram, why-why or fault tree analysis were adapted in a later part.

2. Where do they Impact?

Lean looks at the start-to-end of a business chain – value stream optimisation and to be seen as a strategic initiative. When an organisation decides to go lean, it has to start from its strategy.

Normally, changes happen at business processes level first. Effective Lean transformations cannot be initiated, implemented and managed at the functional level or at the departmental level. Lean focuses on what happens between the processes (the waiting time, inventory, transportation, etc., impacting the cash-to-cash cycle). Then moves into the processes. That is why Lean is called as the value chain optimisation methodology.

Bigger the scope of the project, higher will be its effectiveness.

 Figure 3 - Scope of Lean & Six Sigma

Six Sigma focuses on the sub-process levels; looking at what is happening within the process first. We try to bring down the scope of the project, to have laser sharp focus and to reap maximum benefit. Hence, Six Sigma methodology is also known as ‘point optimisation methodology’. Refer Image 55 for the detailed comparison.

Is Lean in Lean Six Sigma Really the Lean?

How do Lean and Six Sigma complement each other? Is it possible to do true Lean projects in Lean Six Sigma or it is only the adoption of Lean by Six Sigma as one of the tools in its kitty?

Though we find from the table that Lean and Six Sigma are taking pole positions in terms of their origin, influences, philosophies, and principles, the overlap happens in terms of practices, i.e., in the application of tools and techniques.

Is It Really Useful to Combine Lean & Six Sigma?

Obviously, the combination is very much useful and effective. But the question is in which scenario? The combination works well in case of Six Sigma projects. As we discussed, Six Sigma framework is evolving continuously by adopting various best practices across the world; and Lean is one of such adoptions. Lean adds to the effectiveness of Six Sigma projects. Lean ably complements the DMAIC in the case of improvements between the processes.

But, I could not visualise the Lean Transformation projects in terms of DMAIC framework. We miss the core of Lean – the cash to cash cycle time – in LSS programs.

Figure <!--[if supportFields]> SEQ Figure \* ARABIC <![endif]-->4<!--[if supportFields]><![endif]--> - Lean and Six Sigma – A comparison

Lean Six Sigma Training

The contents of several of Lean Six Sigma Training programs focus heavily on statistics and point optimisation. With the constraints of time, it will be really impossible to cover the entire contents of Lean along with Six Sigma.

Hence, the training restricts topics to drawing Value stream map (sometimes without even identifying the product family) and straight away to identifying 7 Wastes. I get an impression that the Lean is getting reduced to a mere tool exercises when we utilise it in DMAIC framework.

Figure <!--[if supportFields]> SEQ Figure \* ARABIC <![endif]-->5<!--[if supportFields]><![endif]--> - Lean in Lean Six Sigma

What is True-Lean?

It is not that the combination is at fault, but the nomenclature of Lean Six Sigma do not justify the learning and improvements in terms of Lean. Based on my experience with both extremes – pure Lean consulting and pure Six Sigma consulting – I believe that Lean is more than just doing a project as in the case of Six Sigma. Six Sigma is an effective tool, and no one can doubt its ability to deliver results and its guarantee to success with the efficient DMAIC framework.

By utilising Lean in the framework of DMAIC, the Six Sigma Projects are delivering far more efficient results. But Lean is treated as mere waste elimination exercise or a lead time reduction project in those instances.

Lean is more than just doing a project as in the case of Six Sigma. Six Sigma is an effective tool and no one can doubt its ability to deliver results and its guarantee to succeed with the efficient DMAIC frame- work. But Lean will not fit into the premise of Six Sigma and we strongly believe that Lean Manufacturing is best on its own.

How is True Lean Green Belt different from Lean Six Sigma Green Belt?

As we have seen, Six Sigma is a Point Optimisation methodology, meaning it looks into a point of the value chain and improves that point. Whereas, Lean is applied on the entire value chain.

Without identifying the product family and value stream we cannot implement a true Lean Project. Hence, we structured the True-Lean Green Belt Program that will support True Lean Transformations.

Here, the Philosophy, Principles, and Practices of True Lean are deliberated. The principles cover value, value stream, identifying value streams, choosing the right value chain for Lean transformation. Along with these, we will also see how to develop the future state map supported by Kanban-supermarket, pitch, FIFO lane, and Heijunka.

The support mechanisms of Lean transformation viz., SMED, Kaizen, Problem Solving, Andon, Poka-Yoke, TPM (Autonomous Maintenance and Planned Maintenance), and 5S are also discussed in detail.

Excerpt from the book ‘Getting out of the Maze’ by Mr LS Kannan

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