The Birth Of Lean Sigma

What happens when two complementary approaches, Six Sigma and lean, marry?

The manufacturing community has been pursuing the concept of continuous improvement in one form or the other since long. From basic quality principles like Demmings to the more recent Six Sigma, various concepts have been adopted. Simultaneously, principles of lean manufacturing have also been applied to improve business.

Often, manufacturing companies pursue multiple improvement initiatives, which lead to confusion in priorities and shortage in resources. Efforts to implement these initiatives have often been divided, thus depriving companies of the complete benefits. Some companies have merged the principles of lean and Six Sigma to minimise this division of efforts and resources. A new approach called Lean Sigma emerged as a result.

The core principles

The principles of lean help to identify the non-value added activities of production or support services in a company. Lean principles enable a company to reduce overall lead times (from concept to cash) and give it the competitive advantage to respond to market changes. Lean initiatives are often implemented through the Kaizen concept, where cross-functional teams are guided by business improvement objectives. Six Sigma implies 3.4 defects for one million opportunities. It aims to reduce variations in processes by identifying the variables and choosing those that deliver the most consistent output to meet varying demands of customers. Both concepts use process mapping, flow charts, check sheets, histograms and performance run charts, cause and effect methodology and are highly customer focussed.

What is Lean Sigma?

Lean Sigma competently integrates the two complementary approaches, namely lean and Six Sigma to achieve operational excellence in any business. The main principle of Lean Sigma is to incorporate the tools and measurement of Six Sigma during a company’s conversion to lean manufacturing, utilising the Kaizen methodology. The precision of Six Sigma, combined with the speed and agility of lean, results in streamlined and balanced production lines and produces excellent improvement solutions in the never-ending quest for better, cheaper and faster business processes.

Lean Sigma works to achieve optimum value flow through the aggressive identification and elimination of non-value added activities. Cycle times are reduced and defects eliminated. Travel distances, inventories, set up times, equipment downtime, material wastages, rework and other wastes of the “hidden factory” are attacked. The focus is on the value delivered from a customer’s perspective.

In order to ensure success, Lean Sigma should be implemented company-wide with a top-down approach. Companies must identify the challenges and train people involved in the various processes in the principles of Lean Sigma.

Maytag Corporation is a leading manufacturer of home appliances based in the US. It implemented Lean Sigma in an attempt to reduce costs and production space, improve product quality and take new products to the market faster. In 1999, it set up a new production line at Atlantis in the US to manufacture a new range of washing machines. Branded as Neptune, the new washing machine was designed to deliver savings of up to $100 in the average family utility bill. The machine consumed 20% less water and was an instant hit among consumers.

The new production line designed on the lines of Lean Sigma utilised space, which was one third of that used by Maytag’s other conventional production plants. Further, Maytag achieved substantial savings on equipment, inventory and labour hours. It also cut production costs by 55%. Thus, Lean Sigma helped Maytag to achieve savings worth millions of dollars.

Maytag believes that with the Lean Sigma process in place, switching over to future product lines will be simpler and quicker. Its efforts to stay ahead of competition have paved way for its customers to order an appliance and receive it within a short span of five days!

By combining two disciplines to form a power process for achieving business excellence, Lean Sigma can help companies to provide customer-focussed products and services at higher quality levels faster and at lower prices. It enables companies to evolve into flexible manufacturers of highly customised products in a globally competitive market. Many world-class manufacturers are now considering the competitive benefits of Lean Sigma, which brings together the best of two worlds, namely, Lean and Six Sigma!

Related reading :

1. The lean Sigma approach. Wader, M.; Manufacturers’ Digest.

2. The Marriage of Sigma and Lean. Smith, B. & Dean, B.; Managing Times.

3. “Lean sigma” synergy. Sheridan, H. J.; Industry Week.

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