What is Lean Six Sigma?

Lean six sigma is a management approach that combines two powerful management methodologies i.e. Lean Management and Six Sigma. It is all about business results, driven by top management, with a focus on satisfaction of external and internal customers.

What is Lean Management?

The goal in Lean Management is to optimize the use of resources to deliver more value to customers with less effort.

  • Lean manufacturing (or lean management) originated in the Toyota Production System (TPS), which was developed by Taiichi Ohno and Shigeo Shingo around the 1950s. The TPS was created as a way to improve efficiency and eliminate waste in Toyota's manufacturing processes.
  • Lean Management emphasizes the importance of continuous improvement and the elimination of all forms of waste, such as overproduction, waiting, defects, unnecessary motion, over-processing, excess inventory, and unused creativity.
    Lean Management has identified eight categories of waste which are often hidden in the processes being performed by various teams in the organization. For example “the waste of waiting” can be a huge hidden waste – waiting for data, waiting for information, waiting for instructions, waiting for decision from customer or senior, etc.
  • Lean Management involves use of tools like value stream process-mapping, determining standard times for different tasks, improving speed of deliveries and problem-resolution as also removing steps that do not add value in the process.
In short, use of Lean Management increases the value that a customer receives from the organization while eliminating the hidden wastes and maximizing efficiency of the processes.

What is Six Sigma?

Six Sigma is a highly structured methodology for process-improvement. It uses both statistical and non-statistical tools to eliminate process-variation, rejections and defects as these are not liked by customers. Defects, rejections and variation in processes is a result of inconsistent performance, while customers look for long-term consistency in the performance of products and services delivered to them. Some unique and important elements of Six Sigma include:

  • Six Sigma is implemented by cross-functional teams within the organization, in the form of projects aimed at finding permanent solutions to vexing management problems. A clear focus on bottom-line impact in, terms of savings, is a must in every six sigma project. This is measured and validated on completion of the project.
  • Six Sigma methodology links the tools and techniques in a sequential and structured manner using a standardized framework of project-execution in five phases. This framework is popularly known as D-M-A-I-C (Define – Measure – Analyse – Improve – Control).
  • Six Sigma creates strong infrastructure wherein team-members are trained for different levels of proficiency like Champion, Master Black Belt, Black Belt, Green Belt, Yellow Belt and White Belt. (Interestingly the inventors of Six Sigma like Motorola and GE have used the Karate terminology to show the levels of proficiency). These teams become change-agents for achieving process-improvements and cultural changes in the organization.

What is Lean Six Sigma?

In the past, organizations were using methodologies of either Lean Management or Six Sigma. Towards the end of 20th century, people started combining the two methodologies for better results. These days most organizations implement a combination of Lean Management and Six Sigma with following benefits:

  • Competitive Advantage: Organizations that successfully implement Lean Six Sigma projects can gain significant competitive advantage over their competitors. By improving their processes, reducing costs, and delivering higher quality products & services, these organizations can differentiate themselves in the marketplace and win the loyalty of more customers.
  • Employee Engagement: Lean Six Sigma projects involve employees at all levels of the organization in the process improvement effort. By engaging employees in this way, organizations can improve employee morale, job satisfaction, retention rates and ability of the employees to solve business-related problems effectively and continually.
  • Sustainable Results: Lean Six Sigma projects are designed to produce sustainable results over the long term. By continuously monitoring and improving processes, organizations can ensure that their improvements are sustained and continue to deliver value over time.
Overall, Lean Six Sigma implementation helps organizations to improve their efficiency, quality, customer satisfaction, competitive- advantage, employee engagement, and sustainability.

How popular is the use of Lean Six Sigma in the world of business?

Today 82% of the Fortune-100 companies and many other organizations, worldwide are using Lean Six Sigma to continuously improve and sustain their performance. This includes well-known names like 3M, ABB, Boeing, Caterpillar, Cummins, Coca Cola, Dupont, Ford, GE, Honeywell, Motorola, Sony, and many others in the manufacturing sectors.

Although use of Lean and Six Sigma started with manufacturing companies, it is now widely implemented across various service sectors like banks, insurance, supply chain, IT, ITES, healthcare, facility-management and even defence organizations. Some well-known organizations implementing Lean Six Sigma in service sectors include names like Amazon, Accenture, Bank of America, Citibank, Convergys, Credit Suisse, Google, Infosys, Microsoft, Tech Mahindra, Tata Consultancy, Walmart and many others.

By G.K.K. Singh – LSS Guru (Alumnus IITB- IIMC)
Director – Asian Institute of Quality Management