Lean Six Sigma brings together two management philosophies: Six Sigma, which aims to continuously improve production to eliminate error, and lean manufacturing, which aims to cut wasted use of resources. Where the strategy works, it can lower costs, increase the levels of useful output, and positively change a company's operational culture.
Six Sigma is a business management approach pioneered by Motorola, which holds a trademark on the phrase. The name refers to a mathematical concept based around how likely a production process is to vary from the average, such as making a widget too big or too small, and how likely this variation is to lead to significant problems.
The goal of Six Sigma is to have 99.9996 percent of all units be manufactured without defect. Put another way, that means thirty-three defective units in every 10 million produced.
Some of the basic concepts of Six Sigma are similar to other quality management techniques, based on a continuous cycle of monitoring and improving the manufacturing process. It adds other features and priorities, notably using verifiable data for decision making, emphasizing the need for measurable financial returns from a Six Sigma project, and using a martial arts-style (black belt, etc.) hierarchy of staff responsible for the Six Sigma process.
Lean manufacturing is a philosophy based on the principle that using any resource for a purpose other than improving the value of the final product is wasteful. It thus prioritizes increasing efficiency as the best way to make a company more productive. The concept was pioneered by Toyota.
Lean Six Sigma
Lean Six Sigma brings together lean manufacturing with Six Sigma into a single management philosophy and strategy. This is achieved by using the two ideas to achieve different goals. Lean manufacturing is used to eliminate existing work practices that aren't needed, while Six Sigma is used to create new work practices that can achieve better results.
The primary advantages of Lean Six Sigma come when it achieves the intended outcomes, namely lower manufacturing costs and more efficient production, which combine to increase profitability.
The secondary benefits are procedural. This can include changing a company's culture to make it more reliant on data rather than gut judgments; including staff at different levels in the process, making them feel more valued; and forcing a company to think about the manufacturing process from a variety of perspectives.
As compared with other business philosophies, Lean Six Sigma has the advantage that it is made up of multiple components, each of which carries inherent benefits. This makes it possible to use the strategy on a trial basis, such as on one product or within one department, before easily scaling it company-wide later on.