Getting started with Lean and Six Sigma
What is Lean?
Lean involves the systematic removal of waste from business processes. Typically, an organisation's employees are trained to work in teams and apply a series of tools and techniques. The focus is on identifying value-adding and non value-adding process steps. A value-adding step is defined as anything which the customer is willing to pay for in the transformation of material into customer requirements. The team then streamlines the processes selected for improvement, takes out waste and this activity usually reduces cycle time. The result is faster, slicker processes which enhance customer satisfaction and reduce cost.
What is Six Sigma?
Six Sigma usually refers to a project-based continuous improvement methodology aimed at reducing defects in processes, in manufacturing and service industries. It can be applied in every industry and in every department. Typically a company's employees are trained to work in teams and apply a series of rigorous tools and techniques to improve processes, profitability and customer satisfaction .The Six Sigma methodology can also be applied in not-for-profit organisations to improve service delivery and value for money.
Why do companies need Lean or Six Sigma?
Many companies have issues such as customer complaints, missed deliveries, high costs, lost market share, high staff turnover or low morale. In all these cases Lean and Six Sigma techniques can be applied to good effect.
Will Lean and Six Sigma work in all organisations?
Every organisation has processes. Every organisation has employees with tendencies to do things their own ways, which can lead to misunderstandings, mistakes and rework. Customers want fewer mistakes and things done more quickly. Lean tools will reduce cycle times and mistakes. Six Sigma techniques will find and eliminate defects.
Why use Lean and Six Sigma together?
If Lean techniques are applied alone, and the cycle time of doing things is cut without reducing mistakes, an organisation will just be making defects faster. If only defects are reduced and things take as long as they always did, an organisation runs the risk of remaining uncompetitive.
Is prior experience of continuous improvement necessary before starting to use Lean or Six Sigma techniques?
With the right approach and tailored support, it is possible for organisations to benefit from Lean and Six Sigma with no prior knowledge. Ideas for improvement projects can easily be selected from existing customer and process issues that employees have been coping with for some time. Many successful improvement projects have been delivered using the Six Sigma methodology by employees with no prior knowledge of statistics.
What benefits can be seen from applying Lean or Six Sigma?
More can be achieved with less. The ratio of costs to sales will improve because customers will see improved quality, delivery and lower costs and as a result will be able to give the company more business. Employee turnover will reduce and many non-value added processes will simply disappear. Market share and profitability will increase. Continuous improvement will replace fire fighting. Not-for-profit organisations will improve service delivery and value for money.
How long will it take to see results?
It depends which techniques are used. Improvements with Lean waste removal techniques occur within days or weeks. Problems with unknown, often deep-seated root causes need the patient systematic rigour of Six Sigma problem solving, and training project results will take 3-6 months to show through. More experienced practitioners are able to use the Six Sigma tools to solve thorny problems and achieve sustainable results in 1-2 months.
How much will it cost?
The cost depends on what is expected in return. Establishing a Lean and Six Sigma culture in an organisation provides an excellent return on investment as the improvement projects carried out realise considerable financial benefits. In some organisations a modest initial investment can be increased over time as the benefits are realised.
Is it essential to do projects?
Doing projects is part of the knowledge transfer process. Employees learn the tools and techniques as they apply them to real situations in their organisation. Six Sigma and Lean are practical methodologies - it is not enough just to learn the theoretical principles. Putting the tools and techniques into practice realises considerable benefits and the methodologies become embedded in the organisation's improvement culture.
When can organisations expect to be self sufficient in continuous improvement?
Companies and not-for-profit organisations vary in the time it takes them to be able to manage their own sustainable improvement activities using Lean and Six Sigma techniques without outside support, but on average it is often within 14-20 months. With the right systems in place from the start, self-sufficiency can be achieved earlier.