Lean Six Sigma
Assume you are the owner of a restaurant. Which performance indicators would be the most important for you to follow?
Sales revenue, profit, profit margin, costs, share value, booked table ratio, budget…
Assume you are a customer who is looking for a restaurant. What would be your preference criteria?
Location, menu, service pace, ambiance, popularity, parking facilities, prices…
Although the answers above seem to be completely different from each other, we know that the preference criteria that matters for the customer has a direct effect on the performance indicators that are important for the restaurant owner. Moreover, the indicators that the restaurant owner prefers to follow are “lagging” indicators, meaning, they always show the past performance and cannot be altered directly. For example; sales volume, profitability of a specific product. But what matters most for the customer are the improvable and controllable “leading” indicators that will define the future results. For example; service lead time, defect ratio.
It is possible to make a long list of these examples. For example; customer loyalty for sales volume, service lead time for customer loyalty, process capability for service lead time, non-value added activities and delays for process capability…
Lean Six Sigma has two main goals.
First one is to extract and improve the factors that affect the key performance indicators of the company. And the secondary goal which may be equally important is increasing the efficiency. Hence, the main aim of Six Sigma could be defined as designing or improving the processes and products to fulfil the expectations of the customers most effectively. In Lean Six Sigma customer satisfaction and financial return is always balanced.
Basically, to reach this goal;
- Top priority problems should be discovered,
- Most competent people have to be designated to solve these problems,
- Designated people have to be equipped with all the required tools and alternative points of view.
- All the time required should be supplied to these people.
Lean Six Sigma supplies a methodology, a set of tools and a point of view to show how all of the above should be done.
- When looked at from a closer angle, it is made of tools that are already known and proved to work. What makes the difference is how they are brought together, organized, transformed into implementation and supported by management.
- In accordance with the quality evolution, ”, it is the most comprehensive process and product improvement methodology known “so far”.
“However, Lean Six Sigma itself cannot be excused from the fundementals of improvement;”
“Meaning that the methodology itself should be improved and developed according to the changing conditions and needs. Otherwise, a methodology, which is expected to provide advantages, starts to create bureaucracy and problems.
That is why even Lean Six Sigma is not a fixed plan according to Results. It is a foundation that should be thought over and customized for every single company. Many applications and improvements Results has put into use with its own customers are being recognized recently at the websites of well-known international companies leading the industry. It is because many Six Sigma consultants have not yet realized that Six Sigma itself has to be developed and adapted over time. That is why, Results has highly diverse deployment, support and training programs.”
One of the typical mistakes made during Lean Six Sigma deployment in the service industry or in the transactional processes is giving standart training without customizing the content, cases and the point of view distinctive to the service industry. However, point of view and experiences of the manufacturing industry and that of the service industry and the transactional processes are quite different.
Every company’s requirements as well as conditions are different. Results does not organize “open trainings for public attendance” where more than one company receive the same training. All the trainings are prepared and customized for one company only. People attending the training never feel alienated with the content and the case studies of the training program, and they never have to study cases that they do not understand where to use.
In addition to the increasing costs, trainings which are heavier than what the business and the projects require, lead participants to lose time on tools they will probably never use, get bored and demotivated, and hardly focus on the real stuff they need. Regarding this matter, Results has the right solutions that have been well- tried and approved to be more successful than the conventional methods.
In practise, both the name and the content of Lean Six Sigma may change, as is the case in many companies that exercise this methodology, but as always “great minds think alike”.
Lean Six Sigma
- Selects the projects according to the defined criteria (financial return, customer, strategic goals, ease of execution, etc.).
- Focuses on the financial return and results. Does not settle with any regular change, but asks for the proof of improvement.
- Involves the training, coaching, tracking and controlling mechanisms within the projects, since there is a gap between knowing and doing.
- Has all the tools needed for process and data analysis inherently, ensures that they are used at the right stages, but there has to be a customization for every company and even every project.
- Focuses on the root causes. Does not suffice on finding the causes which are apparent at first glance and which are usually dependable on people most of the time.
- Enables the projects close with permanent controlling mechanisms.
- Ensures the uniformity of language. Enables processes to be comparable to each other.
- Whole training goes hand in hand with the project. Thus, attendants have the opportunity to apply what they have learnt into their projects. This enhances the learning and also increases the company’s direct return.
- Results Corporate Productivity Solutions believes that below mentioned subjects have vital importance to ensure success and persistency in all corporate level deployments, and has solutions for this:
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Revealing the change readiness of the enterprise accurately and planning the necessary changes or precautions accordingly, Enabling the effective support and tracking of the management through planned activities, Formation of the required infrastructure and facilitating the use of many supporting management tools, Selection of the right project leaders and team members, Selection of the right start-up projects, Giving the right level of training with the right content
A company may choose to implement Lean Six Sigma in various levels:
As a problem solving technique in some projects selected for strategic or tactical reasons. |
On a regular basis in process/product improvement, development and design projects or in some selected functions. |
As a management tool and problem solving technique that aims to change the point of view, way of doing business of the company and its employees and the corporate culture. |
More on Lean Six Sigma
As a technical term Sigma Level is a measure that shows how well a service or a manufacturing process operates against customer expectations. Six Sigma capability expects a process to produce no more than 3,4 defects per million opportunities. But the concept of Six Sigma is more often used for describing a disciplined, data driven methodology, that is used for improving business performance, and the philosophy behind.
In Six Sigma, customer orientation is integrated into tools more tangible and measurable than the other methodologies. Customers never know the performance averages of the companies; each customer is affected by the unique performance or the problem specific to himself. So, a company’s delivering a service in 3 days on average does not mean much to customers who receive this service in 7 days due to variation.
Six Sigma does not make assumptions on behalf of the customer. Expectations of the internal or external customers -including the ones that are not often mentioned- are gathered from the source with the right techniques, made measurable through specific methods, compared with numerical values, and “profitable” improvements are made towards the customer expectations. In order to achieve that a comprehensive toolbox including advanced data analysis techniques is used.
On the other hand, Lean tools deal with matters such as:
- Non-value added activities (unnecessary controls, approvals, etc.)
- Flow method and pace differences between the desks/processes
- Execution of the same work with different methods in different divisions
- Each division’s target to do its best
- Layout
- Delays and defects between activities
- Transitions and knowledge transfers among divisions
- Filing, transporting
Most of the time processes are not lean. Process Capability is less than 10{ec62db246b4cc8436630f3696621ce1bb108d53f1bac84e2df725bfb7ce384fc}.
If we are to explain this with an example, employees of a company that has a demand supplying period of three days, might achieve that in just one hour if they were to focus on only supplying the customer’s requests without doing any other job and causing any delays. The period between three days and one hour is the range of potential improvement. If 10{ec62db246b4cc8436630f3696621ce1bb108d53f1bac84e2df725bfb7ce384fc} of the total period is value added and 90{ec62db246b4cc8436630f3696621ce1bb108d53f1bac84e2df725bfb7ce384fc} is non-value added, in order to shorten the period, it is more meaningful to detect the non-value added activities first. Eliminating the non-value added steps or decreasing their duration, rather than decreasing the duration of the value added activities, is both easier and provides more improvement in the process cycle time.
The best results are reached when Lean Management and Six Sigma techniques are used together and in a supportive way. While the Lean tools detect the problems and non-value added activities in the flow, Six Sigma increases the capability of each value added step and produces a second input for the lean manufacturing/management techniques.
Especially in transactional processes, the consolidation of Six Sigma with the Lean tools, and the right differentiation of the implementation, tools and the training content for service industry and transactional processes is crucial. Otherwise it is inevitable to face problems.