In the fast-paced environment, there is a fierce competition among the companies to do better, to bring out high-quality products, less time to market, and provide at a less price with high profitability. For these attributes, companies are constantly innovating and finding new methods to improve the processes and to make a profit. They explore new management techniques, leadership, and various other methodologies. However, to produce an efficient and optimal product with superior methods there are only time tested methods of lean and six sigma which stands out as the best among various other methodologies.
Explanation of Lean Principles
Lean methods are used to reduce waste. Six Sigma aims to reduce variation and produce high-quality products. Lean six sigma is the combination of these two approaches to the reduction in waste and to produce high-quality products at a lower cost. There are 8 types of waste to reduce in the production cycle. There are 5 key principles in the lean six sigma practice which are explained further in this article.
Why lean principles are required
Lean six sigma is needed for 5 basic reasons. However, it is a proven and powerful method for businesses to improve efficiency and effectiveness.
Lean six sigma method is a data-driven method for improvement that considers defect elimination over defect findings and is a fact-based method.
Lean six sigma has 5 basic qualities
- Takes less time to market for the products or the services
- Eliminating the wastage of the inventory
- Eliminating the chance of defect
- Added values are optimized.
- Has fewer iterations and cycle time for the processes
Six sigma is quite different for lean. Six Sigma is a project management concept that emerged in 1986 with 5 steps like DMADV and DMAIC methodologies. The goal or the target of the six sigma is to remove or eliminate the variations in the processes and thus improve the quality.
This is data-driven and is based on statistical methods. Since it uses mathematics and statistics it is highly effective.
The lean methods are the reduction in nonvalue-added methods or the waste reduction methods in the processes. There are 8 wastes in the processes according to the lean methodology. They are
- waiting for time
- extra processing
- non utilized talents /resources
5 Key Lean principles
Lean six sigma is the combination of the lean principles to reduce waste and six sigma principles to produce high-quality products by reducing the defects and the variations in the products or services of processes.
The 5 lean principles are as follows,
1) Focus on the customer - This is one of the very important principles. Whatever businesses you are in today you need to agree that without customers there is no survival and there is no business. So it is important that whatever decision you make, it is important to consider the customer first. Always have a mission and vision for the organizations by putting the customer first.
2) Add value to the processes, products, and services - First of all, evaluate the current processes. Document the workflow and evaluate, which provides the value and which does not. Remove the ones or the things which do not produce value.
Identification of the value adds and nonvalue adds things are one of the methods in the lean six sigma methodologies. One of the methods of doing this is to make flow charts or flow diagrams. This will exactly help you to see which the important steps are and which are not.
The value stream map helps you in this. For example, the value stream map for car manufacturing will highlight about purchasing the parts, assembly of the parts, quality check, delivery, and distribution, etc.
The next step is to identify the root cause of the problems or bottlenecks. The root cause of the problems or the bottlenecks in the processes can be found by cause and effect diagram or also called a fishbone diagram based on its appearance as shown above. In the service industry, the root causes can be divided into 4 P's are Policies, Procedures, people, and plant/technology. In the IT industry, it can be divided into Plans, Procedures, Resources, and technology. In this way, you can find the root cause of the problem.
Another way to find the Root Cause Analysis is by 5 why's you need to dig deeper and ask questions from the first why to second and so on till you find the root cause of the problems.
3) Remove the non-value-added steps and remove waste -In lean six sigma, the two beneficial steps are removing the variation in the processes and removing waste.
There are 5 steps in removing wastes as per the lean principles
- Step 1 – Identify the waste by making it visible. There are a various waste as already discussed such as defects, waiting, transportation, non-utilized talents, overproduction, motion, extra processing, and inventory.
- Step 2 – Try to find out the waste. For example, at the hospital, if you are kept waiting, then it is a waste. This can be rectified, by hiring more people, or scheduling correctly or sorting the patients more efficiently.
- Step 3 – Be accountable for the waste. Everyone in the team and the organization needs to make sure that the waste is removed from their work.
- Step 4 - Measure waste. You need to ensure that you have change processes in place and execute them even if it is a very trivial waste. So measure the waste and check how large or small it is and remove it.
- Step 5 - Reduce or eliminate waste. This can be done by changing the process or adding new resources, or through the change in locations or offering new products or services, etc.
Reduce variations and defects by standardizing the processes. Different ways can be adopted to eliminate the variations. They are as follows,
- Process documentation – Always ensure you make the standards and document them.
- Ensure you share and establish the best practices – You need to communicate with the team all the best practices and also document them
- Ensure you create the checklists and share it with everyone – This is to ensure that everyone has the checklist and follows them
- Training – Training is one of the important steps and everyone must undergo the training
- Make and use the templates and forms – This eliminates the confusion in reports, logging the errors, and connecting with the customer.
- Automate – Automate that is error-prone, monotonous, and repetitive.
4) Communication – Have effective communication in place. This is the duty of the management team. People resist changes and you need to effectively communicate the standards and the best practices. Create a knowledge base for everyone to see, update the customer inputs, the processes documents must be accessible to everyone, and create process maps for every process, and to all.
5) Cultural changes and flexibility - Make everyone understand and accept the changes in best practices and standards. This can be done by analyzing the data. Lean six sigma is about analyzing the data by quantifying and examining the data. There are three key things and they are, know the bottom line, know the data, and keep adjusting the processes.
After learning what is lean six sigma, you would like to explore more and to learn more. We recommend that you take Six Sigma Green Belt Certification online training to master lean principles and take your organization to the next level. StarAgile is the pioneer institute and has excellent consultants in these areas. We suggest that you take StarAgile’s online training which is interactive and can be taken from anywhere at any time that suits your convenience.