What is Lean Six Sigma?
Lean Six Sigma is a methodology that combines the principles and practices of Lean Manufacturing and Six Sigma to improve processes, reduce waste, and increase efficiency and effectiveness in an organization.
Lean originated with Henry Ford’s Model T assembly line. In this manufacturing process, vehicles were moved toward assemblers instead of the conventional method of assemblers moving toward vehicles. This technique facilitated a greater volume of output from the manufacturing activity by employing workers with relatively lower skills thus increasing profitability.
In the decade of 1950-60, Toyota took Lean to the next level. In this development, Ford’s mass production assembly line was adapted to a leaner automobile production process, which encompassed small workgroups and employed workers with multi-functional skills along with the application of the Just-in-Time (JIT) methodology that helped in better customization with fewer defects.
Table of Content
- 1 What is Lean Six Sigma?
- 2 Benefits of Lean
- 3 Principles of Lean Six Sigma
- 4 How to Achieve Overall Reduction of Lean Six Sigma
- 5 Sub-activities of Lean Six Sigma
- 6 Lean Vs Mass Production
Benefits of Lean
Lean works on the principle to do more with less where less can mean less human effort or less equipment or less time required, etc. Some common benefits of lean are:
- Reduced Turnaround Time (TAT)
- Increased productivity and output
- Lower inventory needs, cost, and wastage
- Reduced waste in all activities
- Increased employee engagement
- Improved employee and customer satisfaction
Lean and Six Sigma are complementary management concepts, and the concept of Lean Six Sigma combines the benefits of both the Lean and Six Sigma methodologies. Lean is a concept that identifies and aims to reduce or even eliminate different kinds of waste in organizational activities. There are eight kinds of waste also known as muda. These wastes are classified.
Lean Six Sigma aims at obtaining a seamless flow of a process by filling the gaps between consecutive process steps. In a nutshell, the objective of lean is to expose various causes of process variation while Six Sigma focuses on the reduction of process variability which enables a continuous cycle of improvement.
The Lean Six Sigma methodology is also implemented using the DMAIC process similar to that of Six Sigma. The DMAIC toolkit of Lean Six Sigma consists of all the tools that are used in Lean and Six Sigma.
Principles of Lean Six Sigma
Lean thinking is a book written by James J. Womack and Daniel T. Jones in the 1990s. This book talks about the lean manufacturing system based on the Toyota Production System. According to Womack and Jones, there are five principles of Lean Six Sigma as follows:
- Identify Value
- Understand the Value Stream and Create a Value Stream Map
- Create Flow
- Establish Pull
- Seek Perfection
The first principle of Lean Six Sigma implementation is to define what is meant by value. This is done by customers because they are the ones who need to define what a product or service means and what kind of value for them.
Understand the Value Stream and Create a Value Stream Map
Under this principle, the project team needs to identify and map all the end-to-end actions, processes, and functions that are required for converting inputs into outputs and for eliminating waste. The activity of creating a map at this stage is called Value Stream Mapping (VSM). The process map contains information regarding time, quality, inventory, and resources such as the number of people, space, and distance traveled.
After all, wastes have been eliminated, the remaining value-creating steps must flow. Alternatively, we can say that creating a flow involves the successful completion of targeted activities and tasks along the value stream so that the movement of a product from design to launch and order to delivery takes place seamlessly without any unwarranted stoppages.
The customer’s pull for value-based items cascades to the lowest levels of suppliers which results in the organization employing Just-in-Time systems. It is a bidirectional movement of production and delivery-related instructions that move from downstream to upstream activities.
A product is said to be ‘pulled’ within the various steps of processes at a rate at which it is demanded by the customer. An absence of a need/ demand by the customer in the downstream system signals an upstream supplier to not produce anything till the customer gives a signal.
It is the state of elimination of all waste in the value stream. After eliminating waste, the project teams need to ensure a continuous process of improvement to attain perfection.
How to Achieve Overall Reduction of Lean Six Sigma
One of the important strategies for Lean Six Sigma implementation is a technique called Setup Reduction. Setup reduction is utilized for level load balancing which is a strategy for lean deployment. The time-lapse for change between the first good item of the new order and the last item of the previous order is called setup time. Setup reduction activity includes four sub-activities.
The four activities of setup reduction activity– Preparation, Replacement, Location, and Adjustment – are acronymized as PRLA. Setup activities can either be external or internal. The type of activity, external or internal, should be noted at the time of analysis. Internal setup activities are those which require the process to be shut down at the time of setup.
Thus at the setup time for internal setup activities, no orders can be run. On the contrary, external setup activities are those in which the process can be carried out even when the setup is happening. External activities are considered offline. If internal activities can be converted into external activities, the total setup time can be reduced and it is known as an incredible reduction.
Total setup time can be reduced by adopting the following approaches:
- Categorize All Setup Activities Into Internal or External
- Convert Internal Activities Into External Steps (Wherever Possible)
- Focus on Reducing Time for the Remaining Internal Steps
- Eliminate Adjustments
Categorize All Setup Activities Into Internal or External
Internal setups are done when the process is inactive while external setups can be carried out even when the process is operating.
Convert Internal Activities Into External Steps (Wherever Possible)
Setup time can be decreased by reducing the non-operational time of the process which is related to the number and time of internal steps. Hence, the person/team who is conducting the VSM activity should convert as many internal steps into external steps as possible. For example, if a customer’s room in a hotel can be prepared while the payment is being processed at the counter, the total cycle time of the customer’s settling down gets reduced comfortably.
Focus on Reducing Time for the Remaining Internal Steps
After converting internal setup activities into external setup activities, there remain certain internal setup activities that need to be carried out while the process is operational. Efforts should be concentrated to reduce the time needed for the completion of such of these activities which can potentially lead to a delay in the overall process.
For example, if a hotel has a policy that the customer’s luggage cannot be moved unless he/she makes the payment, the hotel should try to reduce the time it takes to take payments.
Process improvement is a vital aspect of Six Sigma and it involves making adjustments to fix issues and effective waste reduction to optimize costs. Corrective action needs to be carried out on the detection of a problem to avoid unnecessary delays in production and fault recurrence. Effective process control can be used to eliminate the need for adjustments.
Sub-activities of Lean Six Sigma
This sub-activity is further broken down into sub-sub-activities that are associated with obtaining or storing tools and aids that may be necessary to carry out a process. For example, continuing with our earlier example of hotel payment, switching on the Internet to receive credit card payment, retrieving the room tariff list, and starting up software for room allocation are all sub-sub-activities that are a necessary part of the preparation sub-activity to carry out room allocation and shifting process in a hotel.
Preparation time can be reduced by some of the following methods:
- Departments can be further segmented into work cells which helps reduce the time required for moving the finished product to the next step in the process.
- Frequently used tools and equipment should be stored near the place of work.
- Create a culture of always ready to go. Operational software and operating instructions, and reference material should be immediately accessible.
A replacement sub-activity includes sub-sub-activities that are related to the addition or removal of items or tools that are used in the process. Continuing with the example given above, some tools that may be used and replaced in the billing process at the hotel counter can be loading paper in the copy machine, credit card machine, etc.
Tasks and sub-sub-activities under location sub-activity are related to positioning or placement during setup. Examples include setting the phone line on the billing desk, the computer on the desk, etc. The time associated with location activities can be reduced by mistake-proofing the process, i.e. the use of Poka Yoke.
Adjustment sub-activity includes sub-sub-activities that are carried out to ensure correct process settings. If there is a process control in place, adjustment time can be effectively lowered. Robust design methods help in improving the repeatability of the process and thus help in the adjustment time reduction.
Lean Vs Mass Production
Mass production is a type of manufacturing methodology under which products are manufactured on a mass scale. Lean production, on the other hand, is a manufacturing process where the production of goods or services is determined based on current trends.
Some differences between lean and mass production are:
- The focus of mass production is to churn out manufactured goods in bulk lots. On the other hand, lean production focuses on producing goods in smaller batches according to the demand inputs from customers.
- In mass production, goods are produced in bulk but not all of them are sold immediately. Therefore, the company is required to keep them stocked in its warehouses, from where they are sent to market intermediaries or distributors who in turn supply them to retailers.
On the other hand, there is a minimal requirement for stockpiling in lean production. The company opting for lean production generally supplies directly to the customer. However, still, a market intermediary may be required as a contact point between the company and the customer.
- Mass production is planned based on a multitude of complex factors including the product price in the market, competition, inventory levels, distribution time, etc. Due to these factors, mass production needs to be carried out strategically at the enterprise level. Lean production is simple and easy because the number of units to be manufactured is derived based on market demand. Production schedules are simple and easy to plan in lean production.
- In mass production, due to a considerable time lag between the manufacture and sale of goods, the manufacturing cycle and the sales cycle are separate issues. But in lean production, the manufacturing cycle and the sales cycle are heavily interdependent as there is a direct relationship between demand and production.
- Mass production is a “push” type of process, i.e. finished products get pushed to the market. In contrast, lean production is a “pull” process, i.e. customers take charge of the process and pull the product based on their demand. Thus, we can say that mass production is supply-oriented, whereas lean production is demand-oriented.
- In mass production, a huge volume of waste is generated, whereas minimal waste is produced in a lean production process.