Lean Six Sigma: What is it & why should I be interested?

Have you read a few things about Lean Six Sigma but don't yet have a thorough understanding to know what it's all about?

Lean Six Sigma is a process improvement and design methodology that combines the principles of Lean and Six Sigma. It is a powerful tool that can help companies achieve significant improvements in their performance and competitiveness by reducing waste, increasing efficiency, and improving customer satisfaction. We will review what Lean Six Sigma is, its history, key principles, and how it can benefit companies.

History of Lean Six Sigma

The history of Lean Six Sigma can be traced back to the 1980s, when Motorola developed the Six Sigma methodology to improve quality control in its manufacturing processes. The company saw significant improvements in product quality and cost savings as a result of implementing Six Sigma.

In the 1990s, Toyota's production system, which is based on the principles of Lean Manufacturing, gained popularity in the manufacturing industry. Lean Manufacturing focuses on reducing waste and increasing flow in production processes, which led to improved efficiency and productivity.

In the early 2000s, the two methodologies were combined to form Lean Six Sigma, which aims to improve organizational performance by reducing waste, increasing efficiency, improving quality, and enhancing customer satisfaction.

Phases of Lean Six Sigma

There are five key phases in Lean Six Sigma: Define, Measure, Analyze, Improve, and Control (DMAIC).

1. Define: The problem or opportunity for improvement is identified, and the goals of the project are established. This stage involves defining the problem, identifying the stakeholders, and creating a project charter.
2. Measure: The current process is measured to establish a baseline for improvement. Data is collected and analyzed to identify areas for improvement. This stage involves identifying the key performance indicators (KPIs) for the process and collecting data to establish a baseline.
3. Analyze: The data collected in the previous stage is analyzed to identify the root cause of the problem or inefficiency. This stage involves using statistical tools to analyze the data and identify the cause and effect relationship between different variables.
4. Improve: Solutions are identified and tested to improve the process. The solutions are evaluated based on their effectiveness and feasibility. This stage involves developing and testing solutions, and implementing the best solution.
5. Control: The improved process is controlled to ensure that the improvements are sustained over time. This stage involves developing a control plan to monitor the process and ensure that the improvements are sustained.

Benefits of Lean Six Sigma for Companies

1. Increased Efficiency and Productivity: By reducing waste and improving flow, Lean Six Sigma can help companies increase their efficiency and productivity. This can lead to cost savings and improved profitability.
2. Improved Quality: By reducing variation and improving processes, Lean Six Sigma can help companies improve the quality of their products or services. This can lead to increased customer satisfaction and loyalty.
3. Enhanced Customer Satisfaction: Lean Six Sigma helps companies to identify and eliminate issues that negatively impact customer satisfaction. This can lead to improved customer retention and repeat business.
4. Reduced Costs: By eliminating waste and reducing variation, Lean Six Sigma can help companies reduce costs and improve their bottom line.
5. Enhanced Employee Satisfaction: Lean Six Sigma encourages employee involvement in the process improvement process. This can lead to increased employee satisfaction and engagement.
6. Drive Innovation: By focusing on process improvement, Lean Six Sigma can drive innovation within an organization. This can lead to new and improved products or services.

In short, process is everywhere!

There is a process to follow when a barista makes your coffee, a fast food restaurant makes your burger or when a retailer sends you a product in the mail. We are surrounded by processes.

Good processes = good experiences and let's call them not-so-good processes = poor experiences.

Companies that understand the value of creating standardized, efficient and effective processes, reap the benefits in revenue generation, cost savings, customer satisfaction, brand loyalty and the list goes on.

Industry Highlight

One great example of a company that grew on the foundation of Lean Six Sigma is Amazon.

When Jeff Bezos recruited Jeff Wilke in 1999 as VP of Operations, Wilke started and lead the Operational Excellence program which utilized Lean Six Sigma. The stock was $3.80 at the end of 1999.

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~ Matt Rebeiro