Lean Six Sigma takes the best concepts from two of the top management techniques: the Lean method and Six Sigma. By combining these two methods, you can reduce variations, decrease defects, eliminate waste and improve efficiency based on data and not guesswork. That is why this technique is quickly being adopted by companies around the globe that operate in all kinds of industries, including IT, health care, manufacturing, finance and the military.
TL;DR (Too Long; Didn't Read)
The seven Lean Six Sigma principles are the perfect blend of the 10 combined principles from both the Six Sigma and Lean methods.
Six Sigma and Lean Methods
Some of the three most popular management techniques are Six Sigma, Lean and Total Quality Management.
Six Sigma has been around since 1986 and is well known as an effective method to solve problems. Its ultimate goal is to use a five-step approach to reduce product variations and defects using statistical analysis.
The Lean method is built around eliminating waste while also providing the best possible experience for the customer. The Lean method defines eight kinds of waste: transportation, nonutilized talent, motion, extra processing, waiting, defects and overproduction.
Total Quality Management Method
There are concepts similar to Lean and Six Sigma in Total Quality Management, which is the oldest method of the three. However, while TQM can be used to find the cause of problems and to develop solutions, it does not provide a good analytical way to measure whether you have correctly identified the causes and whether the solution is effective, so you are largely left evaluating its effectiveness for yourself.
TQM is somewhere in between the Lean method and Six Sigma, as it looks to eliminate or reduce errors in manufacturing, improve supply chain management, make the customer experience better and ensure that employees are properly trained, holding all parties accountable for the overall quality of a product.
The Lean Six Sigma Technique
The Lean Six Sigma process combines techniques from both Six Sigma and the Lean method to come up with a methodology that values defect prevention over detection, aiming to improve the bottom line and customer satisfaction by reducing waste, decreasing variations, standardizing a work flow and ensuring a competitive advantage for the company.
Like TQM, this method aims to hold everyone accountable for his role, to reduce rather than detect problems and to create a better-established standard of production. It also relies on the statistical approach of Six Sigma to help drive everything by facts and results rather than leaving the user to determine the effectiveness of the method on his own.
This technique was created in the early 2000s and is rapidly increasing in popularity among all project management techniques, as it combines the best aspects of TQM, Six Sigma and Lean all in one effective methodology.
The Lean Six Sigma Principles
Whereas Six Sigma and Lean are each based on five principles, the new, combined method is based on seven principles. The seven Lean Six Sigma principles are:
- Focus on customer needs.
- Understand the value stream.
- Streamline your processes.
- Eliminate waste and simplify.
- Use facts and reduce variation.
- Make improvements based on data.
- Prepare your team.
These seven principles are the perfect blend of the 10 combined principles from both the Six Sigma and Lean methods, eliminating any duplicate entries and streamlining the concepts just like the process aims to do for project management.
Focus on Customer Needs
Work with your customers to develop a written list of things that the customer considers to be critical to quality. Be sure to document these in a way that can be measurable so you can use them to create process measures against which you can weigh your performance.
Since only 10 to 15 percent of process steps actually add value, and these often only represent 1 percent of your total process time, it is important to know what your customer actually wants and needs from your product or service. This is the best way to start reducing waste and speeding up your processes while still ensuring that your customers stay happy with your product or service, saving you money and helping you retain business at the same time.
Understand the Value Stream
The value stream is the entire process behind getting your product or service to the customer and getting paid for it. For example, if you have a manufacturing company where customers order custom items online, the value stream would include all the steps starting with the customer going to your website and ordering a product, the customer paying for the product, the product being created, the product being shipped and the customer receiving the order. Documenting your value stream is critical in order to ensure that every step in the process adds value or ensures that the product or service meets the critical-to-quality standards you set up in the first principle.
When you map this process, it's important to be as detailed as possible so you can fully identify all steps involved and understand exactly how your business operates. This requires actually going where the work is completed and spending time there to see how it is actually done, not how it should be done on paper. Collect data on what is happening, including not only how everything is completed but how long each step takes.
Ability to Analyze Problems and Create Effective Solutions
You want to be able to analyze the problems you need to address and create effective solutions to correct them. Be sure to be on the lookout for actions that add value and actions that do not add value in order to analyze every part of the product or service process, from customer orders to payment to creation and so on. Also, remember to always be sure to consider how individual products are created, not batches, as this can help you look for problems with overproduction or bottlenecks in the process.
Streamline Your Processes
Once you have fully documented the value stream, you can work to manage, improve and smooth out the process flow. Identify all steps in the process that do not add value and figure out how to either remove them or at least ensure that they do not slow down the processes that do add value.
Be sure to consider timing as well. If a product is consistently created too early and simply sits on the shelf for months, it is not doing anyone any good during that time frame.
Eliminate Waste and Simplify
You have already streamlined things so every step flows into the next more efficiently. Now, recognize any wastes or redundancies in your value stream. If you realize that your manufacturing plant could make smaller parts with the scraps from larger parts, then consider how much you could save by reducing your waste. Take inspiration from how lumber yards are able to sell sawdust, which is essentially just a waste byproduct, as a pet supply or a cleaning supply.
Even if you can't turn your literal garbage into a revenue stream, try to reduce waste and eliminate things that do not add value to your final product or do not meet your critical-to-quality standards. For example, if you have employees who have a lot of down time waiting for the production process to reach them, you might find a way to have them work on other aspects of production, thus reducing their wasted time and speeding up the overall production time.
Be sure to look at all eight forms of waste defined by the Lean method: transportation, nonutilized talent, motion, extra processing, waiting, defects and overproduction.
Use Facts and Reduce Variation
Manage by fact by using data to come to accurate conclusions and develop workable solutions that will actually solve the problem. Rather than jumping to conclusions and making assumptions, spend time collecting data when you find problems and use control charts to interpret the data correctly and know how and when to take action.
Control charts can be particularly useful in helping you reduce variation from your standard (and now more effective) processes. After all, you didn't just spend time streamlining, simplifying and eliminating waste only for the processes actually used in your value stream to be completely variable and less efficient than they should be. By using data to analyze the facts, you can understand how these variations occur and the right way to reduce them.
Make Improvements Based on Data
Don't just use data to reduce variations. You should also collect, analyze and use data to make further improvements to both your product or service and the value stream itself. The famous DMAIC of Six Sigma should be used regularly to evaluate your situation. This means defining, measuring, analyzing, improving and controlling. Whenever a new process needs to be designed, look to Six Sigma's DMADV: define, measure, analyze, design and verify.
Whatever you're doing and whatever you're considering improving, remember to always use data to better understand the problem and analyze the potential solutions. Never jump to conclusions or the simplest solution and always take a systematic approach. The best way to do this is by breaking your problems into small, bite-sized chunks rather than trying to tackle massive issues all at once.
Prepare Your Team
You can develop all the new processes in the world, but if you don't properly train your team to follow your new processes, nothing will change. It's not just a matter of telling your employees the new methods, though. You also need to ensure that they can actually challenge and improve the processes as well as solve potential problems that may arise. Remember that while you spent a lot of time analyzing the value stream and presumably even talking to your team, they are the ones who actually work in the value stream every day, so it's entirely possible that they will see problems you never imagined.
Take their expertise into account and let them help you to further streamline the processes and eliminate waste. You don't always need to take their suggestions, but you should always listen to what they have to say, and if an emergency comes up during production, you should be able to trust them to solve the problem or at least manage it until you arrive on the scene.
The Lean Six Sigma method isn't just a one-and-done technique. It is something you should be consistently working on so you are always striving to streamline your processes and reduce waste based on data. By engaging your employees in the process and educating them in the Lean Six Sigma techniques, you are helping to ensure that your team is working on improving things along every step of the value stream.