Lean Vs. Six Sigma - Largentum Lean Revenue Optimization LRO consultants
The use of lean has been applied in many organizations as a way to implement changes in process and six sigma has been used by companies to perform process improvements. Which approach is right for your business and what is the difference? Learn the difference between lean and six sigma video.
Lean concepts were initially formulated after World War II when Dr. Edward Deming was asked to introduce ideas to help rebuild the Japanese manufacturing sector. The concepts that Dr. Edward Deming provided were not as well accepted in the USA because the established manufacturers enjoyed world dominance and saw little need to change. The Japanese economy was in need of rebuilding and was open to any ideas that would provide benefit to its capabilities.
Lean takes an approach that is based on making small incremental improvements that can add up to a much larger impact across the business. Basic statistically tools like statistical process control (SPC) can be used to determine if a process is within control limits or outside of control limits. As manufacturing automation become more dominate in building products it became even more important to establish a standard process that was repeatable and efficient. A well known concept, referred as 5S, illustrate the lean concept. 5S is in reference to Sort, Set in Order, Shine, Standardize, and Sustain. A good visual for this approach is to think of a messy factory storage room that contains parts. It would take a large of amount of time to find the right part if the storage was unorganized. If you sorted the parts, put them on shelves for easy access, cleaned the workplace, made a standard for each part type location, and maintained this approach, you would see a significant cycle time improvement.
Lean is all about trying to make fast incremental improvements that improve your operations through cost reduction or efficiency.
Six Sigma was created by Motorola in 1986s as a solution to stop an eroding market share of its paging business. They experienced high levels of defects that resulted in higher cost and customer dissatisfaction that they needed to address in order to prevent market share lost form Asia based competitors. Six Sigma used the normal distribution in statistics to address how many defects could be tolerated. Six Sigma represents a utopia goal of only 3.4 defects per million parts, which covers 99.99966% of the normal distribution curve. The concepts around six sigma require more detailed training, referred to as belt training, including a master black belt, black belt, green belt, and yellow belt trained professionals. Motorola shared this best practice with the rest of the world through Motorola University and trained premier companies, such as GE, who utilized this approach. Under Jack Welch's leadership GE took six sigma to a new level by achieving astronomically business performance results across the company.
Six Sigma has numerous applications but a good mental model is the DMAIC process, which, is Define, Measure, Analyze, Improve, Control. the DMAIC process is used to make improvements in process by utilizing a rigorous improvement methodology that heavily involved statistics and change management. Projects are typically in the 3 to 6 month rage but can be as short as a month and as long as a full year.
In about 2005 companies such as Motorola started to introduce a hybrid approach to business transformation called Lean Six Sigma. This approach uses Lean concepts within business and provides a comprehensive project approach, as described in the six sigma methodology. The basic concept is to use lean tools as an addition to the DMAIC process and accelerate the time to complete the lean analysis, where applicable.
Lean, Six Sigma, and Lean Six Sigma are all viable approaches to business transformation. Our recommendation is to use Lean when you are first applying improvements to your business and then utilize Six Sigma as your core methodology. As you become familiar with both disciplines your ultimate goal should be to utilize Lean Six Sigma which offers the best combination of all methodologies.