During the past few years, there has been a lot of discussion about Lean Manufacturing and how it should be executed. Before Lean, the hot topic was Six Sigma, and many companies and business experts still employ it faithfully. Other companies are seeking to combine both into their processes. But what the difference between them? How do you know which is right for your company? When? And why?
Lean Manufacturing (or lean production) emerged from Toyota Motor Co. They were expanding on the concept they had learned from Ford Motors and adapting them to their philosophy, which became known as the Toyota Production System in the 1990s. The result is a methodology that focuses on the elimination of waste as an approach to maximizing efficiency. Waste, or "muda," can come through overburdening a system or through uneven distribution of workloads. It also follows a concept of value, which loosely refers to any activity a client is willing to pay.
At its core, Lean methods center on emphasizing whatever adds value by reducing or eliminating anything that doesn't. While other companies will implement lean in their particular way, the value of the system seems proven by the fact that Toyota has since become the world's largest automotive manufacturer.
Six Sigma is a collection of tools and techniques introduced at Motorola in the 1980s and was subsequently adopted successfully and popularized by General Electric. It was registered as a trademark by Motorola in 1993. While lean is more about efficiency, Six Sigma is about improving quality of services, product, and manufacturing processes. It does this by reducing variation to identify the root cause of problems and create greater control. It does this through a data-centric process and mathematical analysis.
The term "Six Sigma" comes from the statistical modeling of business processes that involved achieving a "sigma" rating from the percentage of defect-free output. Motorola's chief innovation was to include financial accountability into these methods. Six Sigma experts are highly trained professionals who follow a series of steps to realize a stated goal.
The goal of lean manufacturing is to improve workflow. Eliminating waste of resources will accelerate the process to create greater production rates in a given time frame and therefore higher value in the process. It involves two core concepts: "just-in-time" manufacturing and the Japanese "Jidoka" principle. "Just-in-time" is inventory based and means eliminating overproduction as a wasteful practice that could lead to expired or obsolete product. "Jidoka" means finding and preventing any error-prone activities in the manufacturing process which could result in defective (wasted) production.
The flow of lean methods is: establishing value; defining value flows; defining process flows; defining pull; improving the process. Increasing speed/reducing waste comes down to eliminating wasted time between activities and task cycles, as well as workflow bottlenecks. The less time you waste, the faster production will be.
The types of waste that create lost time and money include:
Waiting: Whether it's a delay in materials, readiness of the next step, gathering information, instructions, etc., wait times can account for a large proportion of the process cycle.
Overproduction: As mentioned above, this is a waste of time and resources returning minimal value, at best.
Remakes: errors result in defects which must be reworked or discarded.
Travel: Excessive handling and movement of products, equipment, personnel, and materials.
Over-processing: An internal bureaucracy of meetings, data, testing, or approvals that delays progress.
Rigidity: Failing to take advantage of staff talents and experience to improve workflow.
The Lean Manufacturing's goal of eliminating waste can speed up production but doesn't necessarily enforce quality standards. Nor does it take into account the importance of collecting production data for further analysis. Speed as the primary goal increases the chances of errors and oversights leading to inferior products. Six Sigma brings quality to manufacturing.
Six Sigma is a management philosophy built around improving the quality of results by eliminating any variations in the process and is done through research and analysis of data about the entire process or any aspect or phase of it. A Six Sigma project might be devoted to anything from assembly of a specific part to order fulfillment in general. Acquiring process data and measurement is always a vital step. The flow for Six Sigma projects follows DMAIC (Define, Measure, Analyze, Improve and Control), DMADV (Define, Measure, Analyze, Design, and Verify), and lean methods.
By eliminating all variations and streamlining a process, Six Sigma experts look at all the data collected and the sources of that data to establish where errors may be occurring. They can then perform a Root Cause Analysis to suggest ways of eliminating or controlling the cause of the problem. Though eliminating errors from a process does help to increase efficiency, the primary goal of Six Sigma is improving quality.
Lean Manufacturing vs. Six Sigma
While there is some overlap between the two, both are systematic tools ultimately improving profitability through better operations. However, there are also significant differences:
1. Lean methods stress eliminating waste and downtime, while Six Sigma is a tool for quality control through reducing variation in procedures or materials.
2. Lean techniques are for the constant improvement of a process Kaizen; Six Sigma is a philosophy devoted to greater control over processes.
3. Lean improves production by allowing higher output; Six Sigma is about meeting customer expectations.
4. Lean requires re-engineering or re-organizing of processes, while Six Sigma is focused on the quality of the item(s) produced.
5. Lean software tools tend to be visually oriented, where Six Sigma tools are data-driven.
6. Reducing waste with lean methods is a daily task; whereas Six Sigma methods are initiated to address a specific problem.
Training and Experience
Lean training is a less formal, hands-on experience. The emphasis is not on a specific curriculum but the value of practice and problem-solving. Learning comes from participation in a Kaizen, or lean project. Lean methods are employed to handle obvious issues, such as excessive travel or bottlenecks. While some institutions may define different achievement levels for lean production expertise, that's the exception rather than the rule. Lean training commonly varies between one organization and the next.
One of the essential differences between the two methodologies is how the own experts are tried. Six Sigma training is a formal (and expensive) program awarding different levels of competency, such as Green Belt or Black Belt. Six Sigma training typically involves a standard curriculum for various levels and written assessment. Six Sigma is more likely to be employed where the objective is clearly defined, but the problem is not known or open to debate. It's also the preferred method when there are multiple data variables to be assessed in realizing an objective.
Lean or Six Sigma?
In either case, applying these methods requires an established sequence, a definition of the project goal, assessment, suggested improvements, and implementation of calculated changes. Depending on the scope of the problem, either solution could take anywhere from a few days to several months to start realizing definite improvements.
Many companies view lean projects regarding Kaizen and Kaizen events, a continuing solution executed over the course of perhaps 5 days before assessing results. The kaizen teams will vary depending on the issue, but there is usually a team leader acting as a project manager or facilitator. This facilitator will be the leader with the most experience and training in lean tools and techniques. The other team members will be specialists who provide the ideas and feedback required to achieve an effective and acceptable solution.
Usually, there is no official mission statement, and reliance on data and production metrics is less common. Six Sigma requires trained experts, a written plan, and data-centric decision making.
The two methodologies are both structured approaches to problem solving that benefit performance. However, they are different tools and are best used under different circumstances.
When the goal specifically requires eliminating wasted time or resources to improve efficiency, you want to employ lean methods. When the goal is to improve the performance or enhance quality by streamlining procedures and eliminating random variation, you would use Six Sigma tools.
Lean Manufacturing methods can reduce cycle time and make improvements in workplace safety, supply, or better use of storage and floor space. But they don't ensure products pass quality checks. Challenges to sustaining quality standards require the informed analysis of procedures that Six Sigma was architected to do.
From the opposite point of view, ensuring that items or procedures meet or exceed quality requirements in no way ensures that the processes which create them are being performed with anything like optimal efficiency. Often the choice between the two comes down to which production issue is a greater priority - efficiency or quality.
Combination of Methods
Both Lean Manufacturing and Six Sigma can play a vital role in manufacturing improvements. Six Sigma is considered more of a philosophy, and Lean more of a system. Lean concepts, in fact, are part of Six Sigma training. Both strategies used together provide a complementary synergy in addressing both sets of issues.
Since both quality and efficiency are both vital to business continuity, most companies will merge these two practices according to their practices and requirements. Companies regarding each methodology as separate and unique, and preferring one approach over the other, may find themselves accentuating the downside of their particular choice.
Manufacturing teams pushed into either direction by management, or given only specific tools, are forced to make a single choice.
Neither system is perfect in that both serve different if interrelated goals.