Lean Management and Six Sigma: How do they differ?

There’s a seemingly eternal debate that takes place in organizations regarding the difference between Lean Manufacturing and Six Sigma and if they are mutually exclusive. Toyota, in particular, is an organization which uses Lean Manufacturing methods, with a well known focus in the Toyota Production System (TPS). Lean Manufacturing focuses on eliminating waste, optimizing the time invested in processes and improving material and movement flows, among others. Taiichi Ohno -father of the TPS- stated that the essence of said production system was to shorten the time between receiving a customer’s order and the time to receive the income from the products or services provided.

Six Sigma has been defined in several ways. According to one of those definitions, it is a business strategy and philosophy around the idea that organizations can gain a competitive advantage by reducing defects in their manufacturing processes and business processes. There are several explanations from the points of view of purists when it comes to Six Sigma and Lean Manufacturing:

  • From the perspective of continuous improvement, Six Sigma reduces the variability of processes and Lean Manufacturing reduces waste.
  • Six Sigma has, as a fundamental objective within a process, to yield 3.4 defects per million opportunities, while the Lean Manufacturing focuses on improving process flows.
  • Six Sigma focuses on improving the cost of non-quality and Lean improves operating costs.
  • Six Sigma has a learning curve much steeper than that of Lean Manufacturing.
  • Six Sigma uses various approaches to improve processes, while Lean mainly uses Value Stream Mapping.
  • The duration of a Six Sigma project is usually 2 to 6 months, and in Lean it’s of about a week to 3 months.
  • The data is the main engine in a Six Sigma project, while demand is the main driver of Lean.
  • In the Six Sigma methodology, projects are more complex than Lean Manufacturing projects.
Toyota Production System_david kiger_Toyota Material Handling Europe
Image courtesy of Avi Alpert at Flickr.com

Should Six Sigma and Lean coexist in any organization?

The answer to this question is evident: it’s a “yes”. The Lean approach must precede and coexist with the application of Six Sigma methods. Lean provides stability and repeatability in many basic processes. Once the processes are stable, much of the variation due to human intervention disappears, and thus the data collected to support the activities of Six Sigma are much more reliable and accurate. Lean and Six Sigma can be represented as a solid line with the Lean Six Sigma in the middle of both.

The main problems of businesses can be divided into categories such as lots of waste; a great need to minimize inventories and redundancies; the need to improve workflows; the need to accelerate the process; and the existence of human error.

That being the case, Lean tools should be used to simplify processes. If the processes are complex, they’ll require highly trained and qualified work teams to perform the activities of said processes. Therefore, the processes should be simplified as much as possible and Lean tools offer the possibility to do this. Increase speed, which is a very important factor for the customer. If the speed in the manufacture of a product or component is improved, this has a direct correlation with customer satisfaction. Improving the flow; since if the flow of a product during the manufacturing stage is not optimized for greater efficiency, we can find bottlenecks, increased downtimes and more. Therefore, whenever possible, Lean tools should be used to improve flows within our processes. Minimize inventories, which are critical aspects of processes. Large inventories not only lead to higher storage costs, but also lead to the deterioration of raw materials and more. Similarly, smaller inventory levels can lead to stops in production lines due to non-availability of raw materials when they are required. Anti-error processes, since Lean is actually used to reduce or eliminate human errors in production processes.

However, if the challenges facing the organization have attributes such as the existence of quality problems; processes developed with excessive variation; complex problems occur; the identification of the root causes is convoluted, and numerous technical considerations; then, in these cases, the tools offered by the Six Sigma methodology should be used to minimize variations in processes; apply scientific problem solving; design robust projects; focus on quality issues; and using technical methodologies.

Most organizations recognize that they have a combination of both toolkits. The use of Lean Six Sigma reflects a more holistic and synergistic approach. If a specific problem requires only Lean tools or only Six Sigma tools for its resolution, then this is perfectly acceptable, while the application of Lean Six Sigma is a new paradigm that provides a much wider selection of approaches to the resolution of a particular specific problem.

A growing number of organizations (manufacturing, services, hospitals, municipalities, military, insurance, among others) have unified their efforts in implementing a Lean Six Sigma approach. The mechanisms of these combinations vary widely. The most effective approaches include management and participation of senior management, the involvement of qualified specialists, teamwork, ongoing training of team members, project management, a humane treatment of people, a comprehensive methodology for solving problems and mechanisms to implement the appropriate tools.

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