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Lean Six Sigma for Dummies (a Primer on CI)

What are Lean and Six Sigma?
Too often, writers of Lean topics assume their readers grasp the subject matter as easily as they do. This article, on the other hand, is intended for people who have trouble spelling “Lean.”
The word “Lean” is commonly defined as “the elimination of waste.” But it has recently taken on a wider connotation that also includes “having a mindset of continuous improvement (CI)”—the idea of always looking for opportunities to make the things we do better, faster, cheaper. The word’s more modern definition also incorporates the idea of creating a CI culture in organizations and having all people participate in the changes. Imagine how much further an organization can progress when everyone is involved in CI, rather than just the CI leader or a small team!

 The term “Six Sigma” is defined as reducing variation in processes. Variation is the reason why even when you follow your grandmother's recipe for making tomato sauce, it comes out slightly different every time you make it. The variation comes from differences in the ingredients, the utensils used, the amount of time it simmers, and the temperatures used in making the sauce.

Lean and Six Sigma are both CI methodologies that have the same goal: to improve processes and reduce cost. They have some overlap in the tools used to achieve the goal, but they approach the task in different ways.

How Does Lean Work?
Lean is focused on process tools. A process is a collection of activities with an output of value to a customer. A common process, for example, is making a product in a manufacturing environment. But there are many processes in the business world. Creating a quote, entering an order, scheduling, invoicing, and creating month-end financial statements are all processes in the business world.  Common goals when improving processes include reducing errors and shortening the time to complete an operation, also known as ‘cycle time’.

Lean looks at the flow of work in a process and separates the steps into Value-Added (VA) and Non-Value-Added (NVA) categories. One goal of Lean is to identify NVA activities, or wastes, and come up with ways to reduce or eliminate them. It does this by first identifying the wastes inherent in any process. Collectively, these are known as “the 8 Wastes” and are discussed in detail in the article “Lean and the 8 Wastes Part One - Definitions.”  You can view it by clicking here

Waste is everywhere. It occurs for many reasons, such as not having enough information, not having the right tools, or not understanding the purpose of a task. Once we identify wastes in a process, we can utilize Lean tools to help eliminate them. Common wastes include excess inventory, over-processing, (doing more than is necessary to complete a task), waiting, and the waste of people.

When we talk about the waste of people, we’re really referring to the waste of their thoughts, skills, and ideas. Want to make sure Lean improvements actually stick? Include those who work in the process in the planning and implementing of such improvements. They know what they require to perform a job well, as well as what would make that job better (easier, faster, cheaper), whether it be tools, supplies, or information or the layout of parts and workstations.

One of the simplest Lean tools is Standard Work—understanding the task at hand and the requirements of the next customer or process. Then we develop the single best way to complete the job and define it. Now when different people do the job, they can do it in the same, best way, every time.

5S

Another tool that works closely with Standard Work is 5S, a method of workplace organization. It is a tool that defines what items, supplies, or tools are needed to do a job and then makes sure the items are available for use in well-defined locations that anyone can find. It’s like working in a very organized kitchen with standard locations for all the items needed to prepare a meal. Contrast that with working in a disorganized kitchen and having to open every cabinet or drawer to find the right tool, only to eventually realize (after wasting time searching) that the item is missing.  5S is a fundamental improvement tool - often used in conjunction with other tools, like setup reduction, cellular, and one piece flow.

When we work on improvements, we use data in the form of cycle times, setup times, or defects to understand the current condition of the process. Then we apply Lean principles to the process to develop a target condition. Once we know where we are and where we want to be, it is easy to determine what we need to do to achieve the future state. Lean commonly uses the PDCA methodology, popularized by W. Edwards Deming. It stands for Plan, Do, Check, Act, and is a method of planning improvements, implementing them, checking on the results, and acting on what we have learned. A future article will address this approach to solving problems.

What about Six Sigma?
Six Sigma is more data-driven and utilizes DMAIC, which stands for Define, Measure, Analyze, Improve, and Control. DMAIC is a good way to manage any project, and will be explored further in a future article. The formula Y = f (X) is at the heart of the Six Sigma methodology. The “Y” is the output of a process or the outcome we would like to achieve. Six Sigma adherents strongly believe that the critical inputs (the “X’s” in the process) and the process itself [f ( )] determine the condition or quality of the output. Six Sigma uses statistical tools to determine the critical inputs into any process and controls them to ensure a good outcome or project “Y.” The thinking is diagrammed below in the figure.

Six Sigma Methodology and Tools Graphic

Let’s use the kitchen metaphor again to illustrate the Y=f(X) formula. We can define the Y, or desired output, as a cake that everyone will enjoy. To achieve this output, we would focus on the critical inputs, or X’s, into the process, which include fresh ingredients in the right quantities and a thick pan so the cake won’t burn. F(X) in this case would be the process of transforming these critical inputs into a good cake, such as the temperature of the oven, where we place the pan in the oven, the baking time, and the methods used to determine when the cake is complete. Even with the proper ingredients, if we don’t bake the cake for the appropriate amount of time, then the result (Y) will not be tasty.

A lot of effort in Six Sigma is placed on understanding the components—both inputs and process settings—that deliver the good cake. We then use statistical tools to determine which components have the greatest influence on the quality of the cake. A concept known as “operational definitions” allows us to clearly define what makes for fresh flour or high-quality chocolate. From there, we can take qualitative descriptions (“fresh” or “high-quality”) and turn them into quantitative definitions that we can measure against. An operational definition for “fresh flour” could include the age, storage methods, or storage locations.  Without a standard operational definition, then people will develop their own informal definitions, all of which vary slightly.  This can lead to differences in the outcome of a good cake.  This may seem like a trivial example to many people, but this is exactly the type of thinking that commercial bakers must engage in to be successful, and the ideas are applicable to all types of processes.

At the end of a Six Sigma project, one of the outcomes is a more-consistent and flavorful cake every time. It would achieve this by specifying the type of ingredients, how they should be handled and stored, and closely specifying the correct oven temperature for a given amount of cake batter using a specific type of pan. By having all of these items defined, it becomes easier for everyone to prepare a similar quality cake without being a baking expert.

How Lean and Six Sigma Work Together
Lean and Six Sigma work together by looking at the process under investigation and reducing waste inherent in the current process quickly. These ideas also use the deeper understanding of the inputs and outputs using data-driven methods and help ensure that variation is reduced. Instead of asking, “Should I use Lean or Six Sigma to improve my processes?” the question becomes, “What Lean Six Sigma tools do I need to efficiently and effectively improve my processes?”

So, Lean really is the overarching CI strategy that enlists the aid of all people in a process to work on making things better.  It is part of what drives the "culture" of an organization.  Six Sigma is like a scalpel designed to solve specific problems that resist the application of Lean tools.  

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