What is Lean Six Sigma? [Explained]
This blog of Terminal stack explains a management concept used to improve business processes effectively based on different tools and methods. Let’s dive into this concept and gain as much as you can for your business.
What is Quality Management Technology?
Quality Management deals with measuring and maintaining the quality of a product or services provided and aims to make them more efficient and effective for customers.
To keep it simple, here are some basic terms:
- Quality: It is a measure of excellence and also a state of being free from defects, deficiencies, and significant variations.
- Quality Management: It is a process that ensures the quality of a product or service throughout its life cycle.
- Quality Management Technology: It consists of a variety of tools used to measure and monitor the delivery of customer services. A company’s quality management technology is as good as the system they use to monitor their quality.
There are some modern times techniques and systems that are used for quality management. And they are very crucial for achieving the business goals of a company. Some of them are Kaizen, 5S, Six Sigma, Lean, etc.
Lean Six Sigma
Lean and Six Sigma were originally two different business philosophies and management tools to optimize processes. Today most companies like Amazon, Dell, Wipro, etc combined two methodologies and implemented Lean Six Sigma. The Blend of Lean( it aims to eliminate waste) and Six Sigma(it aims to reduce variation) creates a practical approach towards improvement. The combination of the DMAIC method with waste reduction serves the best for the company. The various forms of waste are:
- Defects: Products that don’t meet quality standards.
- Overproduction: When supply exceeds customer demands.
- Waiting Process: Bottle-neck and downtime.
- Non-Utilized Talents: Ineffectively using human resources.
- Transportation: Inefficient shipping methods.
- Inventory: Holding on to a surplus of product or raw material.
- Motion: Unnecessary moving of product, material, or people.
- Extra-processing: Doing more than needed.
Now, let’s understand them individually.
What is Six Sigma?
Sigma stands for Standard deviation, so Six Sigma stands for 6 standard deviations.
Six Sigma(6σ) gives you the tools and techniques to determine:
# What is making the manufacturing process slow?
# How do you eliminate delay?
# How to improve the process and fix further issues along the way?
6σ aims to reduce the time, defects, and variability experienced by processes in an organization. It reduces defect rate to 3.4 defects per million defect opportunities, by eliminating causes of variation. 6σ also focuses on developing a clear understanding of customer requirements. It increases customer loyalty towards the brand and improves employee morals leading to high productivity.
The Six Sigma methodology endorses two concepts: DMAIC & DMADV
|Used to improve existing products and processes.||Used to create a new product or service from scratch.|
|DEFINE: In this stage, you determine what issues you’re facing, what are the opportunities for improvement, and what are the customer requirements.||DEFINE: This stage defines customer requirements, based on feedback, historical data, and industry research.|
|MEASURE: In this stage, you determine how the process is performing currently. That is, collect the data based on the current scenario.||MEASURE: In this stage, you use the data collected in the previous stage to create a detailed description of the measures to be taken.|
|ANALYSE: In this stage, you study the collected data. That is, determine what caused the defect or variation in the process.||ANALYSE: In this stage, the product or service is analyzed to find out better ways to reach the desired results. That is, areas of improvement are determined and tested.|
|IMPROVE: This stage focuses on improving the manufacturing process by making effective changes. And also ensure that all the defects are addressed.||DESIGN: In this stage, the points noted in previous stages for the betterment of products or services are executed.|
|CONTROL: In this stage, you carry out regular adjustments to control new processes and further performance of the company.||VERIFY: Here your expectations from the product are compared with the reality you reached.|
Now let’s learn about the methodology that accelerates Six Sigma, which is Lean.
What is Lean?
Lean is a methodology that aims to improve efficiency and effectiveness by eliminating waste. It focuses on creating valuable output with fewer resources and less waste. In simpler words, it removes the part of the process that does not bring value to the customer.
Lean is applied mainly when a business undergoes transition like initializing or expanding.
The main objective of lean is to:
- Deliver value from the customer’s perspective.
- Eliminate waste
- Continuously improve your processes.
Lean management is based on four principles:
- PULL: It states that rather than producing as much as possible, customer demand pulls goods and services through the manufacturing process. It minimizes overproduction, inventory (list of goods in stock), and working capital.
- ONE PIECE FLOW: It tells you to focus on one single task at a time. It minimizes work-in-progress, interruptions in the process, and waiting time of customers. Hence, it results in increased flexibility and improves quality.
- TAKT: It’s how fast you have to manufacture a product to meet customer demand. Takt allows us to balance work content and achieve a flow of quality work.
- ZERO DEFECTS: Mistakes occur, but according to lean a company must not pass on defects from previous steps. That is, mistakes must be corrected before going on.
Now, imagine what if you can access the best of both worlds, that is, Lean and Six Sigma combined as Lean Six Sigma. So, here we go with some of the applications of Lean Six Sigma.
Applications of Lean Six Sigma:
- Identify ways to increase the production capacities of present equipment.
- Improve on-time-delivery aspect.
- Reduce cycle time for hiring and training new employees in an organization.
- Get better sales forecasting ability.
- Minimize quality or delivery problems with suppliers.
- Better logistics.
- Improved customer service quality.
Thanks for reading.