Lean Six Sigma

Lean Six Sigma

Introduction

Lean Six Sigma is a management improvement method that has been adopted by most major companies in the world seeking efficiency, minimal waste and high customer satisfaction. Large scale companies, whether in product or service provision, incur their greatest losses in process resource waste. Minimizing the amount of resources wasted would, therefore, mean improved profits for the company. In using Lean Six Sigma to improve a company’s management and profits, great focus is aimed at the working team/machinery, and the product or service end user (Shankar, 2011). Ultimately, the customer is king, and their satisfaction should be the company’s aim from the very start. Lean Six Sigma combines two management methods, Lean and Six Sigma, to come up with a winning method for streamlining company processes and production.

History

Lean was first developed by Edward Deming, while working for Toyota as part of the Toyota Production System. Lean was mainly aimed at waste reduction using data to steadily identify and eliminate it. Data is collected and used to analyze the business process, which in turn highlights the weak points that result in resource waste. Perhaps the greatest adjustment in company production was to focus on the client. With customer needs in mind, the company shifted from designs that they thought worked best, to designs that the client preferred. Elimination of parts that do not add value to the client, though they seem good to the designer, and inclusion of more of the client’s requirements minimized probability of rejection of the end product (Emerald, n.d.). This move alone saw product waste reduce a great deal, since the customer got what they needed.

Six Sigma was developed in the 1980s at Motorolla Company by Bill Smith. Being a quality engineer, Bill’s aim was improve quality and measurement systems, reducing variations of the end product as much as possible. He sought elimination of process errors by ensuring that the system worked in a precisely predictable manner every time. In doing so, the end products were all similar, with minimum wastage of raw materials. In this manner, he eliminated system errors that resulted in profit sucking scrap material, repeat work, redundant tests and ultimately, gross client dissatisfaction. Moreover, the system was designed in such a way that reverting to the old system was difficult for the operators and product developers.

Objectives

The major objective of Lean is to eliminate waste. Lean methodology identifies waste in three main categories. Muda refers to pure waste or word that adds no value to the system. Mura refers to unevenness in the work flow process, creating a variation that would have to be compensated for elsewhere in the flow. Muri concerns overburdening resources beyond the normal workload they can handle. These three types of waste have their projected effect in faulty end products, variable results for the same process or application of abnormally high resources for the product. Such waste ends up costing the company in profits (Greycampus, 2019). Lean methodology, therefore, seeks to eliminate waste in all three categories.

Six Sigma’s main objective, on the other hand, is to minimize production error by ensuring little to no variation in the production process. The precise predictability of a Six Sigma compliant process guarantees pristine result of the production process every time. The main focus of production is customer satisfaction. Six Sigma compliant productions ensure that all customers have the same experience with the product across the board. The similarities and differences between Lean and Six Sigma create a powerful product management system when combined (Taghizadegan, 2010). The similarities allow them to well integrate into a workable force, while the differences ensure that all available process improvement options are fully explored. Lean Six Sigma’s objective then becomes a customer satisfaction oriented production process that creates minimum waste and product variation, while improving on production efficiency and resource utilization.

Lean Six Sigma Methodology

Continuous improvement in Lean Six Sigma methodology follows five phases with the acronym DMAIC (Isixsigma, 2019);

• Define

The first step is to set the desired operative boundaries for the product. Clear goals are set as how the product is expected to perform from the customer perspective, ensuring that the customer experience does not change or degrade with use. Feedback data from customers provides a large amount of information that guides the definition of the ideal product. Every team member should be clear on the definition of a quality end product to ensure minimal deviation from it. This sets the goal in their minds to work together to produce and replicate the desired product.

• Measure

At this stage, the team measures its current ability, performance and product according to the defined ideal. The capability to step up to the ideal is also measured, together with the current frequency and cause of production problems. Quantity of manufacture waste, resource waste and varied performance of the products are measured. The data acquired feeds into the next stage.

• Analyze

Following the measurement of system performance, products are analyzed to determine the part of the process that the variation originates. Root causes of variations, waste and product problems are identified. This step not only looks at the end product for the problem, but goes back to every step of the production process, identifying and noting the sources of errors. Recommendations are then made for every part that requires replacement, fixing or service to either erase the problem or improve the system’s performance.

• Improve

This stage implements the recommendations of the analysis stage by adjusting the process to correct variations. From the product design, all the way through the manufacture process, until the end product is achieved, the system is redesigned, serviced, adjusted and subsequent testing performed. Tests are done while taking data to feed into more adjustments until the ideal design is achieved with minimal resource wastage.

• Control

Once the production system is improved and checked for ideal performance, all supporting systems are updated and implementation of the process correction suggested. The end product is then checked and sustainability of the changes assessed. Quality control measures are put in place that ensure mistakes are either near impossible or immediately noticeable and corrected before the production advances too far.

Case Study: The Coca-Cola Company

Project

The Coca-Cola company is known to have a huge range of brands that ensure most customer refreshment tastes and needs are met. In 2005, following an observed market niche, Coca-Cola launched the Coke Zero brand. The aim was to satisfy the market segment that loved the refreshing taste of Coke but had one problem or the other with sugar intake. Coca-Cola designed this brand to have a similar taste to the original coke, but use artificial sweeteners instead of actual sugar.

Project Objectives

• To explore the sugar-free market segment.
• To use Coke Zero as the pilot brand for other zero sugar brands.
• To create a sugar-free taste that is as close as possible to the original Coke.

Challenges

Coca-Cola’s greatest challenge on this project was to use artificial sweeteners to create a sugar free drink with a taste that is almost indistinguishable from the original. A slight change in the ingredients making a product can cause a great change in how it tastes. The probability of market rejection of such a product is high in this case.  Customers tend to keep to a brand due to loyalty and nostalgia. To create a zero sugar Coke that maintained the same reaction in a customer as the original with-sugar Coke required excellence.

A challenge of almost equal capacity to the first was to come up with the zero sugar drink whose production would not incur an extra cost. Presenting it at the same cost as the original would go a long way in encouraging product acceptance and absorption in the market. Cost reduction would, therefore, begin all the way from the newly developed formula using affordable ingredients. It would be easier to convince the customer of a ‘same great taste’ in the new product as in the original if the price of the new product was the same as the original.

Conclusion

Lean Six Sigma is a data dependent and customer oriented management system. It is a two-part combination system that focuses on resource waste reduction, customer satisfaction and minimal product variation. This system not only addresses the end product, but studies the entire production system. The anomalies discovered are adjusted and changed until a prime end product that meets the customer’s needs is achieved at minimal cost and with minimum waste. Lean Six Sigma management system applies to all types of industries, both product and service based. Application of Lean Six Sigma ensures maximum realization of profits through lean application, effective use and enabling efficiency of the available resources.

References

Greycampus. (2019, September 26). Retrieved from https://www.greycampus.com/blog/quality-management/a-brief-introduction-to-lean-and-six-sigma-and-lean-six-sigma.

Shankar, R. (2011). Process improvement using Six Sigma: A DMAIC guide. Sibiu: MSC Solutions.

Taghizadegan, S. (2010). Essentials of Lean Six Sigma. Burlington: Elsevier Science.

The integration of Six Sigma and lean management. (n.d.). Retrieved from https://www.emerald.com/insight/content/doi/10.1108/20401461011075035/full/html.

What Is DMAIC? (2019, January 16). Retrieved from https://www.isixsigma.com/new-to-six-sigma/dmaic/what-dmaic/.