Lean & Six Sigma: What are they? and What's the difference? Let's do this...

Let's make it clear...

There is a lot to be said about Lean and Six Sigma. Often spoken about, but not necessarily as often understood. What I'm looking to do with this blog is shine some insight into some relatively simple topics that invariably get made more complicated the more extensively you look at them.

Six Sigma and the "99% problem"

Six Sigma is the oldest of the methodologies originally adopted by Motorola in the late 1980s but caught fire once adopted by GE (at the second attempt) in the mid-1990s and has remained ever-present since. Six Sigma is essentially the emphasis on reducing variation within a process. Essentially ensuring the ability to run any process within a specific minimum and maximise tolerance, to allow for a consistent and reliable process that produces minimal errors or defects. This is not specific to manufacturing, the principles can be applied to any industry or process. A great way to explain the concept is through the "99% problem". While in the day-to-day 99% would often seem great i.e. 99% of the time it works (every time), when you apply the same statistic to critical or high throughput processes the consequences can be dire. For example, a 99% effective electricity supply would equate to approx no electricity for 85 hours every year while a Six Sigma-engineered process (99.9996%) would only equate to no electricity for a total of 9 minutes every 5 years.

Why is Lean different?

Lean manufacturing or Lean became more popular in the early 2000s. It is different to Six Sigma in the sense that it is much more concentrated on driving out waste (or non-value-added activities) from processes while championing the standardisation of work and value stream mapping. Contrary to earlier business fads instead of promoting concepts such as batch production and increasing capacity through more operators and equipment, Lean used tools such as value stream mapping to focus on specific areas of processes to relieve bottlenecks and promote ideas such as single-piece flow. This caused a dramatic shift in businesses' approach to production as it floated the idea of removing cost to improve margins and improve EBITDA and therefore increase profit rather than continually chase higher and higher turnover at a higher cost.

The two concepts are different in their origins and their application of the specific tools associated. However, they have now become synonymous as Lean Six Sigma methodology. This is because effective process improvement requires aspects of both, working effectively and sustainably by increasing process control while driving out waste.

Where to start...

Often businesses that are looking for a culture transformation will often start with Lean principles as a basis for their improvements. It is not costly to start and often by utilising some of the tools such as standardisation and daily management businesses can see dramatic improvements in terms of organisation, process time and utilisation of assets. This is because there are typically lots of 'low hanging fruit' available in the first instance lessening the need for any major processes analysis required using the Six Sigma methodology.

When the problem is more complex (and less Just Do It) the framework for operating Lean Six Sigma is called DMAIC. An acronym for Define-Measure-Analyse-Improve-Control. These are different project stages that include a toll gate at the end of each iteration to either continue the improvement project or recap the project stage. In the same sense, PDCA (Plan-Do-Check-Adjust) works. Each stage has a relevant set of tools that guide practitioners through potentially complex problems to successful achievement.

They are chalk and cheese, but go together like cheese and wine...

Therefore, to wrap up there are key differences between Lean and Six Sigma, they are not alike in their concepts although they work incredibly effectively together because of the methodical approach that can be taken to any problem in any business. Lean specifically looks at reducing waste in a process while Six Sigma looks at reducing variation, sometimes the answer is one and sometimes it is both. For any business looking to start its own business transformation or standardise its continuous improvement methodology contact us to talk about the 'VA Foundations of Continuous Improvement' and start your journey.

Let us know in the comments below the challenges in your business stopping you from adopting Lean and Six Sigma.