Why Does Lean Need Six Sigma?

April 30, 2017 at 10:42 am Leave a comment

As robust as Lean is for dealing with lead time and non-value added costs, there are several critical problems that generally are not addressed in the seminal books on Lean.  Six Sigma provides robust solutions to these problems, which explains why Lean needs Six Sigma.Lean needs Six Sigma

First, Lean does not explicitly prescribe the culture and infrastructure needed to achieve and sustain results. Most Lean resources are mute on the infrastructure needed to successfully implement Lean initiatives and achieve and sustain Lean speed. It is true that many companies that have implemented Lean have been driven to develop an infrastructure similar to that of Six Sigma, but they did it as hoc, rather than use the prescriptive structure contained in Six Sigma. Companies that only apply Lean are sometimes unable to deploy it across the whole organization and sustain results because they lack the well-defined Six Sigma cultural infrastructure to generate senior management engagement, formalize training, secure dedicated resources, and so on. Thus the progress of Lean has been dependent on individual initiative. Many successful Lean implementations regress when a new manager takes over.  Six Sigma is less susceptible (though not immune to) this problem: it asserts that there is only one set of stakeholders whose interests alone must be served. Every book on Six Sigma discusses, in detail, how to sustain infrastructure; virtually no book on Lean even addresses the issue.

Second, Customer Critical-to-Quality needs are not front and center. In requiring the identification of what is “value-added” in a process, Lean does incorporate some element of customer focus, but it is introspective in its approach. The person creating the value stream map makes the decision as to whether an activity is value-add or not. In contrast, Six Sigma prescribes numerous places in improvement methods where the voices of the customers and suppliers must be included. It uses Customer Critical-to-Quality as a key metric and requires a means of capturing the VOC in the Define phase of DMAIC. Simply put, the customer is not front and center in Lean, yet is ever-present in Six Sigma. Most descriptions of Lean methodologies dive into the Improve phase (in DMAIC terminology), going right to solutions and jumping over Define and Measure. Without a prescribed Define step to understand how big the problem is, and a Measure phase to quantify the size versus the resources, people often have bitten off more Lean than they can chew, or lost themselves in a frenzy of Lean improvement events.

Third, Lean does not recognize the impact of variation. Lean does not possess the tools to reduce variation and bring a process under statistical control. Six Sigma views elimination of variation as key and provides a whole arsenal for attacking variation (from statistical process control to design of experiments). For example, allowing an acceptable defect rate of 2% to move to a 10% defect rate can increase lead times and WIP substantially. In other words, the speed and cost gains of Lean can be erased instantly by an increase in variation. An increase in defects is not the only source of variation that increases lead times and WIP. Variation in the demand for an offering and variation in the time it takes to perform an activity that creates that offering both have a major impact on process lead time, which Lean does not directly address. Variation has little effect on processes operating at low capacity. But most service organizations function at or near full-capacity, and that is when variation has a major impact on how long the work (or a customer) has to wait ‘in queue.” Customer-facing service processes often experience a lot of variation in demand because there is no control over when customers will contact us. The lesson? The larger the variation in input, the more excess capacity is needed. If there is either low variation or demand can be controlled in some way (which is more likely achieved with an internal process), then one can operate at a higher capacity without risking excessive delays.

In conclusion, anything that reduces productivity rates will result in long lead times, as people tend to remain “locked on” on type of task longer than is required to meet immediate customer demand. Lead times can be dramatically reduced by using Lean tools to allow task transitions with minimal impact on productivity. One of the primary sources of the learning curve is the complexity of the tasks performed. The larger the number of different tasks, the less often they will be repeated, and the steeper the learning curve. Thus, complexity reduction prevents, while Lean Six Sigma cures, the learning curve problem.

Contents of this article taken from the book “Lean Six Sigma for Service” by Michael L. George.

Entry filed under: Dan Trojacek.

About Me The Lean Enterprise: What is it and Why is it essential to business survival in the new millennium?

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