What is Lean Six Sigma?

What is Lean Six Sigma? 

Imagine you're the manager of a supermarket chain. You've noticed that two things need your immediate attention. The first issue is how to handle the different kinds of waste that you encounter at your supermarket. The next one requires you to address the supply chain issues at the supermarket, which are causing delays to the morning delivery of milk, leading to customer dissatisfaction and attrition.  

These problems can be solved by incorporating two of the most popular quality management methodologies in the world, Lean and Six Sigma. One is famous for its ability to handle waste, and the other one known for process improvement.  

But what if there was a methodology that combined the concepts of both Six Sigma and Lean? One that could solve all your issues? Well, there is! Lean Six Sigma.  

Before we dive into Lean Six Sigma, let's take a closer look at its parent methodologies.  

What is Lean? 

First off, Lean. Lean focuses on providing value to the customer, eliminating waste, continuous improvement and reducing cycle time. Lean and Six Sigma both aim to handle waste. But, what is this waste?  

Waste is any step or action in the process that a user does not gain any value from. In short, things that users wouldn't want to pay for. Why would a consumer want to pay extra for the additional truck that was required to deliver milk to the supermarket, just because the other one broke down?  

This waste can be divided into eight categories. Let's have a look at each of them.  

What are the 8 types of waste? 

1. Transportation: this waste refers to the excess movement of people, tools, inventory, equipment and other components of a process than it is required to. 
2. Inventory: this waste occurs due to having more products and materials than required. This can cause damage and defects to products or materials, greater time for completion, inefficient allocation of capital, and so on. 
3. Motion: this refers to the time and effort wasted due to unnecessary movement of people, equipment or machinery. This could be sitting through inventory, double data entry, and so on. 
4. Waiting: this can be time wasted waiting on information instructions, materials or equipment. 
5. Overproduction: this is the waste created due to producing more products than required. 
6. Overprocessing: it refers to more work, more components, or more steps in a product or service than required.  
7. Defects: this is the waste originating from a product or service that fails to meet customer expectations. 
8. Skills: this waste refers to the waste of human potential, underutilizing capabilities and delegating tasks to people with inadequate training. 

What are some examples of Lean Tools? 

For years now, many systems have emerged that use the lean methodology to identify and handle the different kinds of waste. Some of the more popular and effective ones are JIT (just-in-time), 5s, and Kanban.  

The JIT methodology focuses on reducing the amount of time the production system takes to provide an output, and the response time from suppliers to customers.  

5s is another methodology that focuses on cleanliness and organization while improving profits and efficiency.  

Kanban is also another popular methodology to achieve Lean. It is a visual method to manage tasks and workflows. Kanban enables users visualize the workflow to identify issues in the process and fix them.  

These methodologies help in optimizing the waste production and are often used together to maximize results. 

So that's the first problem solved. Now, let's have a look at how you can improve this supermarket’s supply chain efficiency. For that, let's have a look at the other part of Lean Six Sigma, Six Sigma.  

What is Six Sigma? 

Six Sigma is a set of tools and techniques that are used for process improvement and removing defects. Let's see how Six Sigma makes that possible. 

Six Sigma has two major methodologies: DMAIC and DMADV. Let's have a closer look at DMAIC, since Lean Six Sigma uses the DMAIC methodology of Six Sigma.  

DMAIC is an acronym for define, measure, analyze, improve and control. It is used to improve existing products and processes so that it can meet the customers' requirements.  

In the define phase, you determine what the goals of the project are. In this case, you want to reduce the amount of time taken to deliver milk from the warehouse to the supermarket, so that it is stocked on the supermarket shelves before 8:30 in the morning.  

In the measure phase, you measure the performance of the current unaltered process. The milk truck leaves at 7:30 a.m. in the morning and can take one of three routes: A, B or C. Route A is currently the preferred one as it takes only 60 minutes to reach the supermarket, compared to the routes B and C, which take 70 and 80 minutes respectively.  

In the analyze phase you find out why the defects exist, since routes B and C were school bus routes. By reducing the starting time by 1 hour, at 6:30 instead of 7:30, meant avoiding the traffic. Routes B and C now take 40 to 45 minutes to reach the supermarket route. Route A still takes the milk truck one hour to get to the supermarket, even when the truck leaves at 6:30 a.m.  

In the improve phase, performance can be improved by addressing and eliminating the root causes. Now that you've realized that advancing the milk pickup by an hour and changing the route to Route B can save time, you change the process accordingly, providing your workers with ample time to stock the milk into the shelves before the morning rush.  

And finally, in the control phase, you make regular adjustments to control new processes and future performance. You continue to monitor the delivery times and try out alternate routes to continually improve the process and ensure even faster delivery.  

This process changes led to reduced man-hours and cost, enhanced sales and customer retention.  

What are the benefits of Lean Six Sigma? 

The Lean Six Sigma methodology offers many such benefits to businesses. Let's take a look at some of them. 

1. Increase in profits 
2. Standardized and simplified process  
3. Reduced errors 
4. Employee development 
5. Value to customers 

And that is Lean Six Sigma for you.