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Blog post 25 Feb 2022

What is Lean Six Sigma?

What is Lean Six Sigma?

In some business circles, a debate has been going on, comparing Lean principles with Six Sigma to prove an advantage of one or the other system. While it may be more practical to choose one of the two for implementation in certain companies, the two systems can be incorporated together. Incorporating Lean principles and Six Sigma leads to higher business efficiency and effectiveness than focusing on one system exclusively. The Institute of Project Management provides you with this quick overview of both methods, as well as the one combining them.

what is lean six sigma

What is Lean?

Lean is a way of thinking about the creation of the needed value but with less resources and waste. Lean is a practice that consists of continuous experimentation with a goal to achieve perfect value with zero waste.

The main focus of lean is on the customer. It consists of two processes - thinking and practice. Thinking concerns defining what the customer values or what problem they need solved. Once that is done, the practice, meaning, the actions that directly and indirectly create value for the customer can begin.

Managers and workers are trying to achieve the goal of increased quality and flow while decreasing time, effort and cost by experimenting and learning along the way. Therefore, such an organisation that is using lean thinking and practice is highly adaptive to its environment.  The organisation is constantly trying to understand the customer and look for better ways to provide the value they want.

Since each product or service is the result of a process, gaining the skills required to remove waste or inefficiency is crucial for the organisation's growth.

Brief History of Lean

The first person to integrate an entire production process was Henry Ford. Back in 1913, he created what he named flow production by merging consistently interchangeable parts with standard work and moving conveyance. But this revolutionary break had one problem- the inability to provide variety. Later on, in the 1930s, it occurred to Kiichiro Toyoda, Taiichi Ohno, and others at Toyota that a series of simple innovations might make it more possible to provide both continuity in process flow and a wide variety in product offerings. They revisited Ford’s original thinking and invented the Toyota Production System. This system shifted the focus of the manufacturing engineer from individual machines and their utilisation, to the flow of the product through the total process.

What are the 5 Lean Principles?

Lean is simple to understand and, when employed properly, quickly shows the results. There are five core principles of the Lean approach for achieving those results:

  1. Define value from the perspective of the end customer.
  2. Identify all phases in the value stream for each product family, and eliminate those that do not add value wherever possible.
  3. Assemble the value-creating activities in a precise order so that the product flows smoothly toward the buyer.
  4. Allow customers to extract value from the next upstream operation when flow is introduced.
  5. As value is defined, value streams are found, wasted stages are eliminated, and flow and pull are introduced, repeat this process until perfect value is created with no waste.

Later on, these five principles were simplified to three: Purpose, Process, People.

What are the 8 Wastes of Lean? 

Originally, lean had only seven wastes that were developed by Taiichi Ohno, the Chief Engineer at Toyota, as part of the Toyota Production System (TPS). The 8th waste, unused talent, was added in later in the 1990s. This waste of non-utilised skills of workers was added when the Toyota Production System was adopted in the Western world. The acronym TIMWOOD then became TIMWOODS:

  1. Transportation
  2. Inventory
  3. Motion
  4. Waiting
  5. Overproduction
  6. Over-Processing
  7. Defects
  8. Underutilised Skills
8 wastes of lean listed along with graphics

What is Six Sigma?

Six Sigma is a data-driven disciplined approach and technique used to identify and eliminate flaws or defects in any process, from manufacturing to transactional and from product to service.

The Six Sigma methodology's main goal is to create a measurement-based strategy that focuses on process improvement and variation reduction through the deployment of Six Sigma improvement projects. Two Six Sigma sub-methodologies, DMAIC and DMADV, are used to accomplish this.

The first acronym stands for five words describing five consecutive phases of the development - define, measure, analyse, design, verify. The second one, DMAIC is also for the following steps: define, measure, analyse, improve and control.

These two methodologies differ in the last two phases. Improving rather than designing is the fourth step when it comes to an existing process. Likewise, a verification of a pilot run in case of a new project gives way to a broader, long-term, and regularly performed control of already established products, services, or processes. The choice on which one will be used depends on the character of a project:

  • DMADV methodology is for projects which are focused on the creation of a new product, service, or process design
  • DMAIC methodology is for projects that aim for the improvement of an existing product, service, or processes.

Brief History of Six Sigma

Six Sigma was first introduced in the 1980s as a set of tools geared to process improvement. The term itself comes from the rating of manufacturing process maturity, expressed by the Greek letter sigma. Motorola, an American communications company that developed six manufacturing goals, registered them as Six Sigma tools. Six Sigma is named after a statistical concept where a process only produces 3.4 defects per million opportunities (DPMO). Six Sigma can therefore be also viewed of as a goal, where processes consistently encounter fewer defects.

What are the 6 Sigma Principles? 

To help ensure the success of Six Sigma, keep these principles in mind:

  • Reducing variation of processes leading to stability in results
  • Clearly defined, measurable, analysed, and controllable characteristics of the business processes
  • A strong commitment to quality improvement shared by all levels of the given organisation
  • Clarity of focus on measurable profit
  • Emphasis on quality management and leadership in the organisation
  • A commitment to verifiable data and methods in the decision-making process

The goal of these principles can be described in terms of increase and reduction. Any project incorporating Six Sigma principles should experience an increase in profits and customer satisfaction, reducing costs, pollution, and process cycle time.

What is the Main Difference between Lean and Six Sigma? 

There are quite a few similarities between the two methodologies. For both, the value is defined by the customers through their direct experience. Data is collected to assess performance. Both approaches are widely used in different fields, far beyond the original manufacturing domain, and their implementation leads to waste and variation reduction.

On the other hand, the differences between Lean and Six Sigma are complementary. While Lean principles focus on reducing or eliminating waste, Six Sigma’s focus is on variation. In both cases, the efficiency is improved. Where Six Sigma uses statistical analytical techniques, Lean relies on visual techniques. Process changes are implemented through a revised value stream map in Lean processes, while Six Sigma implements changes by modifying setup procedures and measurement systems.

The Combination of Lean and Six Sigma 

lean six sigma combination graphics

Lean Six Sigma is kind of self-explanatory; It is a combination of the strategies of Lean and Six Sigma. It merges principles from both methodologies, creating a new one for Lean Six Sigma which is to help improve the efficiency and quality of the process.

Lean Six Sigma Principles 

Just like the two methodologies that are combined to make this one, Lean Six Sigma projects are also led by its principles. Those principles are enabling the deployment of Lean Six Sigma within the organisations. The Lean Six Sigma principles are the following:

1. Focus is on the customer 

At the center of any lean six sigma deployment should be aligning the bussiness processes with what a customer finds satisfactory. The goal of implementing any change you want should be to provide the customer with as many benefits as possible. That can be done by establishing what standard of quality the customer or market demands.

2. Define the problem and focus on solving it

When introducing new changes a lot of organisations make the mistake of doing too much simultaneously, losing the focus of the initial problem. Getting caught up with all the possibilities of improvement, they don't realise that what is actually needed is to do a real assessment of what matters the most to the customer and stakeholders. Gathering data that shows where a specific problem area lies is necessary because in order to sovle it, you have to define the problem first.

3. Eliminate inefficiencies

Once the problem is identified, it is time to look for ways to decrease defects. A lot of the time, this can lead to mistakes and waste. Differentiate between non-value added and value-added steps in the bussiness process. A lot of non-value adding steps lead to unnecessary mistakes and waste. By streamlining or removing theses functions you can achieve quality control and efficiency. Apply a philosophy of eliminating, simplifying, or automating processes and support them with consistent measurement of the outcomes so they can be further improved.

4. Communicate and align people

Consistent and efficient communication and Lean Six Sigma training are key to achieving success with any change, especially with the deployment of Lean Six Sigma. It is a requirement for Lean Six Sigma that all team members are acquainted with the Lean Six Sigma process, Lean Six Sigma tools and Lean Six Sigma techniques. They need to know the goals of the project and are informed about its progress. Because o all the changes happening during the implementation of new tools and techniques, management has to make sure they reduce the risk of projects failing and ensure the entire process is running smoothly.

5. Be flexible and adaptable

The process that is identified as inefficient has to be refined or removed so that change can be implemented and improvement made. Even tho, sometimes, this process can be challenging, it results in a leaner, stronger and more competitive company - something every bussiness leader strives for. To make the change possible, organisational structure and management philosophies must be aligned to the new realities. Because the markets are changing fast and often, it is crucial to keep an eye on what customers might demand in the future. That is why it is important to keep the business processes capable of dynamic shifts as well as to build an organisational culture that is adaptable and agile.

Lean Six Sigma Belt Levels 

The Lean Six Sigma Belts are indicators of different stages of knowledge, skill and experience in a process improvement practitioner’s development. Belt training has several different levels, labelled by the colors:

5 belt levels of lean sigma  shown in the pyramid structure

White Belt 

A White belt has a basic understanding of how Lean Six Sigma works. They are able to communicate potential issues and relevant points to those working on process improvement projects. This position is usually for everyone in the organisation that has received Lean Six Sigma training when Lean Six Sigma was first introduced into the organisational culture. This helps everyone to get on board with the changes that will happen.

Yellow Belt

Yellow belt individuals have a strong foundation in Lean Six Sigma. Yellow belt can contribute to process improvement projects and report to and support green belts. Most often yellow belts are people who work on the Lean Six Sigma project but they do not lead it.

Green belt

This level is aligned with the project manager role as Lean Six Sigma Green Belts can manage process improvement projects. and they are the ones that are driving the process improvement initiatives forward. Six Sigma green belt can implement Lean Six Sigma successfully but for that, usually, it takes more green belt individuals.

Black belt

Lean Six Sigma black belt individuals drive cross-functional process improvement projects. Black belt has deep knowledge of Lean and experience with working Lean Six Sigma and process improvement and because of that, they function as a mentor to the belt levels bellow them.

Master Black Belt

Master black belts are very advanced Lean Six Sigma practitioners. They help strategise and lead process improvement across the organisation. They are involved with the high-level strategy for streamlining, savings, and sustainable improvements. They oversee the application of Lean Six Sigma across an entire organisation and devise the strategy for future initiatives.

Champion

A champion is someone who is part of the organisation’s leadership team and someone who is fully invested in nurturing and supporting a Lean Six Sigma culture. Executives can function as both champions and Six Sigma practitioners, but that does not mean all champions need to do this. It is necessary for all leadership within an organisation to be champions in order for Lean Six Sigma to succeed fully.