Businesses today must ensure that they are operating efficiently while simultaneously increasing and maintaining customer satisfaction. It’s a challenging commercial environment, with global inflation causing people to be more careful with how they spend their money. It’s safe to say that today’s enterprises have a smaller margin for error than they enjoyed in the past.
Today’s companies turn to proven methodologies to help keep their businesses running smoothly while growing and securing a loyal customer base. For example, many companies use a defined and disciplined set of management techniques called Six Sigma to boost customer satisfaction and profits by streamlining operations, improving overall quality, and preventing defects in every company-wide process.
But there is also a concept called lean Six Sigma methodology, which differs from your standard Six Sigma principles. This article covers the principles of Lean Six Sigma, why they are gaining popularity, and the possible problems businesses may face when adopting Lean Six Sigma principles.
Before we take a very close look at these principles of Six Sigma, let’s define Lean Six Sigma.
What is Lean Six Sigma?
Let’s establish this vital point from the outset: Six Sigma and Lean are two different philosophies. Six Sigma is a data-driven method of project management that uses a five-step process to address issues, ultimately using statistical analysis to reduce defects and product variations.
But Lean, on the other hand, is a process that emphasizes providing customers with the best experience while eliminating waste. Lean relies on a value stream map to outline and record the steps to produce and deliver a product or service. This map is then used to find and eliminate areas where waste exists.
Lean helps to:
a) Improve product or service delivery time
b) Reduce process cycle time
c) Reduce excess inventory levels
d) Eliminate or reduce the likelihood of defects
e) Optimize resources for critical improvements
So, Lean Six Sigma is the fusion of Lean and Six Sigma, combining the two process improvement methodologies into one effective entity. The result reduces waste and product defects while offering a framework for the organization’s cultural change.
Now let’s see what sort of process we get after we combine the principles of Six Sigma with Lean methodology.
Note: The implementation of 5s methodology in Lean Six Sigma can significantly improve workplace organization, efficiency, and productivity
The Key Principles of Lean Six Sigma
The Lean Six Sigma approach consists of five fundamental Six Sigma principles:
Although we may have thankfully drifted away from the misguided idea that the customer is always right, reality tells us that a successful business puts the customer first. Therefore, every service or product must revolve around the customers and their needs. This process requires identifying the customers and what they value.
Map the Value Stream
What does that even mean? Value stream mapping renders the workflow process steps as a flowchart. After all, if you want to improve your processes, you first must identify, document, and get to know all the workflow steps. You can’t change things that you don’t know exist.
Create Flow to the Customer by Removing Waste
Before you add improvements to your workflow, you must identify and remove any existing elements that create waste. There are eight primary types of waste, and we’ll discuss them later. But when you remove waste, you create a continuous flow system in product and service production, which then improves flow to your customers.
Establish and Maintain Communication with Your Team
People are creatures of habit and will unfailingly continue using the same methods of doing things unless informed and taught otherwise. Thus, the business must effectively and clearly communicate new standards and practices to the teams. Additionally, each employee must receive training and feedback on new processes and procedures. You can accomplish this by creating and maintaining a customer support knowledge base, creating process maps that show new workflow changes, and making the entire process readily accessible to employees and stakeholders, contingent on their specific roles.
Create and Foster a Culture of Flexibility and Change
Key Six Sigma principles involve considerable change, so employees must be prepared for it. Change should not only be accepted but welcomed. This culture of acceptance helps organizations to improve continuously, which helps businesses to adapt to the consumer’s ever-changing needs.
The Eight Types of Waste That Lean Methodology Addresses
The third fundamental principle of Six Sigma involves waste, but what do we mean by that term? Here are the eight kinds of waste that Lean Six Sigma principles address. The acronym DOWNTIME can help you remember what they are.
a) D is for Defects. This type of waste refers to the time and effort lost in locating and fixing errors or reworked mistakes.
b) O is for Overproduction. This mistake involves creating more services or products than needed.
c) W is for Waiting. Time-wasting covers unnecessary downtime when staff, equipment, information, or material aren’t ready. This waste also includes overly long startup times.
d) N is for Non-Utilized Talent. This mistake involves the failure to leverage people’s creativity and skills appropriately.
e) T is for Transportation. This waste involves moving products, data, equipment, material, or staff from one place to another but adds nothing valuable to the final product or service.
f) I is for Inventory. Businesses sometimes store or stock information or material that’s either unwanted or unnecessary.
g) M is for Motion. This waste entails needlessly physically moving machines, materials, and personnel, using time and energy.
h) E is for Extra Processing. Process steps that don’t add anything worthwhile to the service or product. This waste includes doing work the customer didn’t ask for.
So how do you deal with these forms of waste? First, you follow these simple steps:
a) Make the waste visible. You can’t eliminate waste you don’t see. Learn the eight forms of waste and look for them.
b) Be aware the waste exists and identify it. Psychologists say that a patient’s first step in recovery is acknowledging that there’s a problem in the first place. In terms of Lean Six Sigma, this means admitting that, yes, a particular practice or obsolete procedure is indeed wasteful.
c) Own up to your part in the waste. So, you’ve spotted the trouble spot and admitted it exists. Now it’s time for the responsible parties to hold themselves accountable for their part in creating or perpetuating the wasteful condition.
d) Measure the extent of the waste. The chief question about waste is its degree. How bad is it, and how costly is it? Establishing this is vital because it helps you make your case to team members, managers, and stakeholders that it must be addressed. Nothing convinces executives to move faster than the words, “This is making us lose a lot of money.”!
e) Reduce the waste or eliminate it altogether. Finally, it’s time to resolve the issue. Put the plan into action, solve the problem, and then maintain an ongoing review and revision process to ensure the matter is solved.
Why Are Lean Six Sigma Principles Gaining Popularity?
Today’s organizations must understand business and customer data. Lean Six Sigma principles provide a competitive advantage and allow more significant opportunities for expansion and innovation. Therefore, Lean Six Sigma professionals are increasingly sought to help businesses properly analyze and process their data.
Lean Six Sigma improves an organization’s effectiveness by defining customers and identifying their requirements. If a business understands its customers and what matters to them, the organization can concentrate its efforts where it will add the most value. And in today’s competitive business climate, this could make all the difference.
Organizations and businesses new and old, of all types and sizes, are adopting Lean Six Sigma because the methodology helps businesses meet goals such as:
a) Customer satisfaction
b) Strengthening the company’s bottom line
c) Higher employee morale and satisfaction
e) Enhanced quality of services and products
f) Improving organizational agility
g) Adapting to and managing change
h) Creating a culture of operational excellence
That’s a decent summary of Lean Six Sigma’s benefits, but there’s another side of the coin, as we’re about to see.
Possible Pitfalls That May Arise During Lean Six Sigma Implementation
No process is perfect, even the best methodologies present pitfalls to the unaware. Lean Six Sigma is an excellent, helpful methodology, but it can lead to mistakes, such as:
a) Focusing on theoretical knowledge rather than its application
b) Focusing on data collection at the expense of driving business intelligence
c) Insufficient focus on resource optimization
d) Defaulting to using static and traditional execution approaches rather than new, dynamic ones
e) Failure to align the organization’s mission and vision with the stated individual goals
Now You Can Learn More About Lean Six Sigma
Thanks to Lean Six Sigma’s increasing popularity, there is an equally greater likelihood that you may run into it at some point in your professional career. That’s why it’s wise to prepare yourself by taking a solid Lean Six Sigma Certification course and getting a head start.
UMass Amherst’s Post Graduate Program in Lean Six Sigma will help turn you into a Lean Six Sigma expert. The course will help fast-track your career in quality management while giving you the valuable Lean Six Sigma skills you need. You will attend masterclasses from Isenberg School of Management faculty and solve real-world business problems with a trio of hands-on projects and several case studies.
The Lean Six Sigma Certification course teaches you:
a) Agile Management
b) Digital Transformation
c) Lean Management
e) Lean Six Sigma Green Belt
g) Quality Management
The courses are aligned with IASSC-Lean Six Sigma and are taught by seasoned industry professionals active in their specialized fields.
Don’t be left behind. Check out this critical course and get better equipped to face the challenges of the 21st-century business world. Take that essential first step today!