What are the Key Benefits of Lean Six Sigma?
This is the first question EVERY client asks before they get started on the LSS journey, or in other words, what’s in it for me ?
Why is Lean Six Sigma thinking so prevalent in the modern current economies? To remain competitive, agile and the lowest cost producers, providers and streamlined business, getting rid of waste and being highly sustainable is key for survival and thriving in this new economy.
Lean Six Sigma thinking is exactly what the name sounds like – it is about ‘cut to the bone’, fat-trimmed, streamlining operation and organizations.
Authors Womack and Jones define lean thinking as a set or collection of ‘efficiency tools’ that you can unleash in your business to save money, reduce cost and waste and deliver consistent and effective service that is affordable and pleasing to your customers. It is about vision and tools for reducing variability and cutting down on waste, being efficient and running a smooth and competitive, even profitable operation, well.
The thinking was initially championed by pioneers like Toyota and it was eventually adopted by the Japanese automakers as the principle upon which they wanted to build, run and grow their businesses. Only a little later, will the Western world catch onto the value and potential of this approach to their respective organizations and operations.
Some have referred to Lean Six Sigma as flow productions, line operations, value streams, Kaizen (which we will get to later). In any Lean Six Sigma process and approach there are a couple of things to pay attention to. There is discipline, planning, rigor, scientific approach and statistically-based tools required and applied to make this business paradigm fit, work and last.
Lean Six Sigma will help you in your business take a serious look at visible causes and effects in your business. Aspects that could get some attention could include things like:
- waiting or queues
- broken machines or tools (missing)
- dirt and clutter
- Variation … and many others.
Things that we can see that is obvious waste or inefficiencies attract attention and demand action. This is where Lean Six Sigma steps in and makes the difference. It deals with the problems that we can actually SEE and do something about.
True to its Japanese origin there are lots of ‘legacy’ terminology here, one of which is MOST appropriate as we start this discussion on lean tools and the implications for your business:
It is referred to as MUDA, essentially meaning WASTE. In any process and business there are EIGHT forms of MUDA/WASTE present:
Making products, delivering service that no-one wants OR NOT MEETING USER NEEDS (useless)
- DEFECTIVE products or flawed services (mistakes)
- Making too much of something (overproduction)
- Unnecessary processing (non-value added steps)
- Unnecessary movement of people
- Unnecessary movement of things
- Waiting or queuing
There are many reasons people would want to use Lean Six Sigma in their organization or business
- breakthrough performance
- increased quality
- shorter cycle times
- creating shareholder value
- applying the principles throughout every level of the organization
When you focus on any improvements for production and profit you will have to pay attention to the saying ‘time is money’ and ‘quality matters’. These two principles and fundamental pillars for Lean Six Sigma will reward you greatly if considered in all aspects and areas of your business.
- Achieve cost reductions on your terms
- Cut lead/wait times within a short period of time, in a planned fashion using lean tools to get you there!
- Cut down on processing time from start to finish, from the moment and order is placed to when it is shipped and delivered, (also called cycle time).
- Improve your quality and customer referral rates
Through using Lean Six Sigma, you can in effect combine business improvement with business strategy. YOU WILL NEED BOTH TO BE SUCCESSFUL and GET RESULTS THAT LAST.
There are ways that you can decide which specific approach or major projects can have the MOST impact on your bottom line, strategy and overall financial priorities.
Get rid of delays, waiting times, obstacles, bottlenecks and unnecessary waste hindering expedient, reliable, efficient and affordable products and services.
Cutting costs and saving money is at the very heart of Lean Six Sigma thinking. It is a philosophy and practical business strategy that will reward greatly and even increase shareholder value significantly.
The tools and approaches we will be discussing and highlighting as part of this process, will be enlightening and inspirational. They are effective and they work. They complement and reinforce efficiency and streamlined operations, with measurable returns to your pocket and bottom line!
The reason we are all in modern-day business at all, is to earn return! It has to pay to do business, otherwise why do it at all?
In a time when businesses have to keep up with all the constant changing and evolving world or exciting, global business, agility and adaptability is key. Everyone is talking about the ‘organic’, collaborative workplace where we all work together well towards mutual goals.
Business, transactional and production efficiencies are an essential part of success, processes and outcomes that will serve and enable all of the above.
- There is the definite potential to significantly cut costs, waste, be more efficient, increase shareholder value and profits.
- Tools, utility and processes are needed to effect these outcomes.
- These approaches and tools can help you leverage and position your business, above mediocre and stand out from the crowd, in that quality matters.
Lean Six Sigma has helped the big guns like GE and Toyota lower cost, cut waste and improve how they utilize their resources, quality and time. What are you leveraging to keep your company competitive?
If you are paying close attention to time and quality in your business, then Lean Six Sigma is for you.
Reducing waiting times, bottlenecks, cycle and lead times all matter to both the business and the customer
Variation in the time it does take to complete any given process (or steps within a process) causes variation and has to be dealt with to ensure customer satisfaction.
The favourite example is delivery ‘windows’ and managing expectations around that. Lean Six Sigma is about MORE than identifying and dealing with defects. It goes beyond cause and effect and gets rid of the little jackals in the vineyard, with the potential for causing the most damage.
To make your operation and business reliable to your customers is a top priority and Lean Six Sigma, thinking, approaches and tools can help.
In our modern economy BOTH speed and reliability makes the difference. What was the gold standard yesterday, quickly becomes the entry-level requirement and prerequisite, in a highly competitive market. To stay on top, you need to be able to adjust and deliver consistently.
Reducing overhead cost, variation and inventory is at the heart of Lean Six Sigma.
Some business metrics that are often-times used to gage a business’ performance is on time delivery and reduction in lead time. Scrap and rework, other forms of waste are good indicators too. Speed and quality often suffer in our fast-paced business, yet the consumer of the present and the future will be increasingly demanding and insisting on both as BASIC service!
Companies typically improve at a slow pace. Change takes time. Lean turbo-charges these improvement efforts and underpins with some muscle, the processes and outcomes undertaken.
High quality, high speed and low cost is what you are after with lean six sigma tools, thinking and manufacturing.
If you are after sustained value creation in your business then Lean Six Sigma is the answer and solution for you. Often-times combined with process and business improvement tools like Six Sigma.
You will find as you start out on this path, that lean thinking is sometimes really quite counter-intuitive and brilliant, yielding great results, applying simplistic method and wisdom to process and outcome.
Lean Six Sigma requires a strong sense of leadership and leading by example will be required. If you are in fact looking for a niche and competitive edge in your business, THIS IS IT!