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Lean Six Sigma Demystified

Lean Six Sigma
This is the fusion of two complementary business management philosophies, Lean and Six Sigma. Lean thinking, as the name suggests, continually looks for ways to “trim the fat” in a business process. Trimming the fat reduces costs and speeds up the process. Lean uses a few tools (a Value Stream Map or VSM is the most commonly used Lean tool) and is best applied to reduce process cycle times and inventory. The central concept in Lean thinking is that work should be done in a continuous flow,rather than in batches. Batching creates ‘lumps of work’, generates inventory,and leads to bottlenecks. “Fat” or waste in Lean terminology is broadly defined. Lean defines 7 categories of waste:

  • Motion – physical layouts that are not optimized require significant movement of people in order to complete the process. Examples include movements in an assembly operation to obtain parts or tools; or movement required to transmit or receive orders, faxes, approvals etc.
  • Waiting – in operations where work is done in batches, process participants along the chain will inevitably be waiting for while upstream work is completed. This creates uneven workflow and uneven workloads that result in bottlenecks. The typical solution here is to add resources to the bottleneck, rather than addressing the root cause.
  • Overproduction – when work processes are not fully integrated, and are instead done in isolated silos, overproduction is typically the result. One department might be busy processing applications, without regard to a downstream department’s processing capacity. The result is a buildup in ‘inventory.’
  • Overprocessing – this is another artifact of non-integrated processes done in silos.Examples are multiple reviews, unnecessarily complex work steps, redundancies(two different departments doing essentially the same work), logs and reports on the amount of work that has been done.
  • Defects – any outcome that doesn’t meet the customer’s requirement is a defect and is therefore waste; i.e. time, effort, and resources were consumed but the outcome was not a saleable product or service.
  • Inventory –In Lean thinking, work should be done in a continuous flow in response to customer pull. A demand pull system strives to minimize in-process and finished goods inventory, thereby reducing the waste associated with inventory storage, theft, and obsolescence.
  • Transportation – when unfinished work has to be transported to different locations, there is opportunity for delay and error. On a shop floor, an inadequate layout might mean that unfinished products must be transported from stamping, to welding, to painting. Unfinished pieces accumulate at each station waiting for material handlers to move them to the next station.

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