Lean Six Sigma

Integration of Lean and Six Sigma Methodologies

Image courtesy of EngageTuOpens in new window Lean Six Sigma is a methodology that relies on a collaborative team effort to improve performance by systematically removing waste and reducing variation. It combines lean manufacturing/lean enterprise and Six Sigma to eliminate the eight kinds of waste: Transporting Inventory Motion Waiting Overprocessing Overproduction Defects Under utilization of employees

Six SigmaOpens in new window seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in (manufacturing and business) processes.

Synergistically, LeanOpens in new window aims to achieve continuous flow by tightening the linkages between process steps, while Six Sigma focuses on reducing process variation (in all its forms) for the process steps, thereby enabling a tightening of those linkages.

In short, Lean exposes sources of process variation and Six Sigma aims to reduce that variation, enabling a virtuous cycle of iterative improvements toward the goal of continuous flow.

Six Sigma is a business process for improving the qualityOpens in new window, reducing costs, and increasing customer satisfaction. This name comes from statistics, where the high level of quality represents no more than 3.4 defects per million.

The goal of Six Sigma is to identify and remove causes of defects. Plan-do-check-act (PDCA) or plan-do-study-act (PDSA) is an iterative method of continuous improvement. It is also related to the improvement cycle DMAIC (define, measure, analyze, improve, and control)Opens in new window. The DMAIC cycle is used for existing products, related to DMADV (define, measure, analyze, design, verify) which is used during product development.

The History of Six Sigma: Motorola Story

The origin of Six Sigma is found at Motorola. In a study of the field life of a product, a Motorola engineer observed that products that were defect-free at manufacturing rarely failed in early use by a customer.

However, products which had failed during production and undergone rework were more susceptible to early failures in the hands of the customer. It was as if those products that were originally made well worked well, while those that originally had a defect might have other defects as well. Catching and fixing one defect did not assure a good product.

It was not enough to find and fix defects, they had to be prevented.

Preventing defects is possible only when the processes that produce the product are set up so that defects can’t or don’t happen. Motorola focused on “how” the work was done in each and every process. If defects were prevented, then there would be no need for rework and quality would be higher. Since there were lots of processes, Motorola developed a measure for Six Sigma work that could be applied to every process.

The measure Motorola developed was called the sigma level or sigma value for each critical-to-quality (CTQ) associated with a process. A CTQ analysis is a way of studying the flowchart of a process to find problems.

The analysis studies inputs and outputs and identifies the steps that influence quality of the process and its outputs.

• If a process is in an ideal state, it’s stable and predictable and meets the CTQs.
• If it’s stable and predictable but doesn’t meet the CTQs, it’s in a threshold state.
• If it’s free from special cause(s), it should be relatively straightforward to move it into an ideal state, perhaps through a DMAIC project.

The sigma level is based on a statistical analysis linking the defects per million opportunities (DPMO) and the capability of the CTO with respect to customer requirements.

A CTQ with 3.4 DPMO is associated with capability value of C_p = 2.0 and C_pk = 1.5 and is considered to have achieved the Six Sigma level.

Motorola successfully applied the concepts, philosophy, and techniques of Six Sigma to the design, developments, and production of the Bandit pager. The quality level of this pager was unsurpassed. Motorola showed that the traditional approach of detecting and fixing defects resulted in CTQs at four sigma level of quality. Six Sigma quality, or 3.4 DPMO, led to elimination of costly inspection and rework, which in turn led to decrease in manufacturing time and increase in customer satisfaction. Customers were happy and Motorola reaped staggering financial savings.

Calculating Process Sigma Values

Process sigma values provide a way of comparing performance of different processes, which can help you to prioritize the projects. The process sigma value represents the population of cases that meet the CTQs right first time.

Sigma values are often expressed as defects per million opportunities, rather than per hundred or per thousand, to emphasize the need for world-class performance. Not all organizations using Six Sigma calculate process sigma values.

Some organizations just use the number of defects or the percentage of orders meeting CTQs to show their performance. Either way, if benchmarking is to be meaningful, the calculations must be made in a consistent manner.

Lean Six Sigma uses the DMAIC phases similar to that of Six Sigma. Lean Six Sigma projects comprise aspects of Lean’s waste elimination and the Six Sigma focus on reducing defects, based on critical to quality characteristics.

The DMAIC toolkit of Lean Six Sigma comprises all the Lean and Six Sigma tools. The training for Lean Six Sigma is provided through the belt-based training system similar to that of Six Sigma. The belt personnel are designated as white belts, yellow belts, green belts, black belts, similar to judo.

Six Sigma and Lean Manufacturing

There are many parallels between the Six Sigma and lean philosophies. Both are focused on the process and process improvements. The techniques of each one complement the other and provide enhanced results.

Comparing the Two Methodologies

Six Sigma focuses on improving existing processes to give results that are essentially defect-free. A CTQ characteristic or CTQ that reaches the Six Sigma level will have only 3.4 DPMO.

There are two ideas at work here: first, preventing defects is more cost effective and reduces the need for inspection and rework; second, all products and services have multiple CTQ characteristics. If each CTQ reaches the six sigma level, then the product or service will work as the customer expects.

The reality is that Six Sigma can lead to an improved process with mechanisms to maintain the improvements, but there are still inefficiencies in the process. All of the benefits of eliminating non-value-added steps may not yet be evaluated or addressed.

Also, the flow throughout an organization that is integral to the pull systems of lean may not have been considered. What we know today as lean manufacturing began with the concepts that Ford Motor Company pioneers at the Rouge facilities in Michigan.

Based on the idea of raw steel coming in and finished cars going out, the Rouge facility had taken production to new heights. Then Toyota look this idea a step further. The brilliance of leanOpens in new window was to move beyond craft and mass production techniques to short runs with essentially no setup time required.

With short runs and small batch sizes, quality problems would be noticed immediately and there would be no backlog of interior parts or materials. Small batches made quality immediately visible and led to quality improvements (See Table X-1).

Waste of time, waste of materials, and the waste of money — all drive the lean concepts. A number of offshoots of the original lean ideas have emerged. Eliminating wasted efforts by removing non-value-added steps in a process has led to value stream mapping (VSM).

Eliminating excess inventory and small batches has led to a “pull” system of production. All of the lean efforts are directed toward removing wastes of various types in the opportunity to achieve reductions in time to market and in costs while improving product quality.

Both concepts focus on the process. Lean techniques may well be the ones to use to achieve the improvement in quality and cost reduction that are the objectives of the Six Sigma initiative.

Six Sigma may well provide the statistical techniques that will take the lean initiatives to the next level. They both are critical and if orchestrated in concert can be much more effective than either one individually (Snee and Hoerl 2003).