• 4 December: Lean Accounting (HPM Consortium, Mississauga, ON)
• 9 December: Lean Leadership (Lean Learning Center, Novi, MI)
• 9 December: Intro to Lean Purchasing (HPM Consortium, Mississauga, ON)
• 9 December:  Rapid Improvement Using Kaizen Blitz (AME, London, OH)
• 12 December: Visual Workplace (AME, Aguadilla, PR)
• 12 December: The Lean Office (HPM Consortium, Mississauga, ON)
• 16 January:  Lean Supply Chain (AME, San Antonio, TX)
• 5 February:  Effective Lean Organization (AME, San Antonio, TX)
• 20 February:  Six Sigma and Beyond (AME, San Antonio, TX)
• 7 October 2003: AME Global Conference (AME, Toronto, CA)

by Bill Lareau, Kaufman Consulting Group
More information: kcg@implementation.com
Reprinted with permission.

Editor's note: download a full copy of this white paper here.

Introduction

Two of the most popular buzz-words in business today are lean and six sigma. There is a great deal of confusion and misunderstanding about the benefits, content, limitations, overlaps and unique characteristics of these two approaches. This white paper provides some guidance through the hype and zealot-infested lean/six sigma marshes of the business jargon jungle. This white paper teaches readers how to properly integrate and apply the best of both methodologies.

Definitions

The term lean manufacturing was popularized in the book, The Machine That Changed the World, written by James Womack, et al, and published in 1990.  Machine detailed the Toyota Production System (TPS), comparing and contrasting it to other, then prevalent, approaches to automotive manufacturing. Thus, lean has become a generic term for a pull (versus push) system of manufacturing/operations and the great many tools and methods that support it. KCG’s Master Jargon Chart of Lean (Figure 1) displays several of these tools and methodologies.

Although the fundamental lean tools are those of the fully developed TPS (circa 1970), they have continued to evolve over the years. The KCG 20 Keys^SM (developed with inspiration from Iwao Kobayashi and customized for various functional work areas) is one important addition. Other terms for lean or pull systems are synchronous, flexible, cellular, just-in-time, one-by-one and so on. The word kaizen is often used in conjunction with, or as a substitute for lean. Kaizen is a Japanese word for small, ongoing (kai) changes for the better (zen). However, kaizen is not the same as lean, but only a part of it.

Six sigma was born within Motorola in 1979 out of frustration with quality problems and refers to six standard deviations (the lower case Greek letter sigma, “s”, is used by statisticians as a symbol for the standard deviation). The model for outstanding quality was arbitrarily set at six sigma (6s), because such a controlled level of performance seemed almost unattainable at the time and thereby set a worthy process performance goal for a world-class organization. A six sigma process would have a distance of six sigma between the mean of the process and the closest specification limit.

What Are the Objectives of Lean and Six Sigma?

The primary thrust of lean is to reduce waste. Taiichi Ohno’s famous seven types of waste are shown in the second column of the KCG Master Jargon Chart of Lean, shown in Figure 1. Lean installs a system that focuses on the elimination of small instances of waste (including people and material waiting, excess inventory, quality issues) in every worker’s area every day, creating a pull system over time. A pull system is a dramatic innovation when compared to traditional push systems. Essentially, lean creates a manufacturing revolution through the cumulative effects of many, many small improvements. Do not be misled by the term small when used in the context of lean. Often, improvements in a work cell or entire manufacturing unit can, in the course of six months to two years, be on the order of magnitude of over 90 percent reductions in cycle time, defects and manufacturing labor with accompanying reductions in floor space of 50 percent or more.

Originally, the primary emphasis of six sigma was heavy on process measurement, analysis and improvement using Statistical Process Control (SPC) methods, design of experiments (DOE, Shainin, etc.) and general problem-solving tools. These tools include cause and effect diagrams, Pareto charts, flow charts, 8-D problem solving (an eight-step method) and so on. Six sigma attacks specific problems with statistical thinking and techniques. The emphasis is on eliminating a problem through rigorous process definition, metric development and measurement, process capability studies, root cause analysis and installation of process improvements. The goal is to achieve (or begin to achieve) dramatic process improvements with an eventual six sigma (or better) objective.

The bottom line on the different objectives of lean and six sigma is this: lean (by any name) installs a philosophy and practice of waste reduction that attacks all of the wastes listed in Figure 1 with the intent to create a self-regulating, pull system that has minimal inventory. Six sigma attacks problems with a range of statistically based, problem solving tools. Six sigma has no inherent pull-versus-push philosophy or inventory reduction foundation built into it.

How Do Lean and Six Sigma Achieve Their Objectives?

The basic assumption of lean is that no process is devoid of waste. Lean operates by installing and applying into each work group in the organization the methods and approaches shown in columns three, four and five of Figure 1. Leads, supervisors and managers conduct the implementation and maintenance of lean. Almost always, these employees need coaching and assistance in overcoming resistance to change, project management, lean principles and the various tools in order to realize benefits in a timely manner. The design of a lean initiative is generally directed by a cross-functional Executive Steering Committee (ESC), which is also coached by a lean expert.

This lean approach, supported by critical structures such as a KCG 20 Keys^SM assessment and improvement plan and Kaizen Action Sheet improvement system in each work group, allows kaizen to operate at the level of every employee. The objective is to install a system that pursues small improvements continuously and automatically in every work group as the “business as usual” work ethic. All employees support a culture in which they clearly understand key metrics and the lean “way” of working (workplace organization and the like), and are able to anticipate and react to small problems with predetermined methods.

As each work group begins to self-manage, the other tools and techniques in Figure 1 begin to be applied selectively. Thus, error proofing (poka-yoke), changeover reductions (SMED: single minute exchange of die), work leveling, and so on are employed as required once the basic kaizen foundation is in place and when process improvement opportunities requiring them are encountered.

Six sigma operates on an “expert model.” The often referred to black belts of six sigma are individuals who have been trained on the six sigma tools. The term black belt was borrowed from martial arts where, depending upon the tenets of the school of study, students earn belts of various colors as they increase their skills. The colors, in ascending order of skill from novice to teacher, typically run from white to yellow to brown to green to blue to red to black to 1^st degree, 2^nd degree and upward black belts.

Over the course of time, training companies and organizations have adopted similar color schemes to identify levels of training in six sigma that are lower than black belt. Thus, there are variously blue, green and yellow six sigma belts in many organizations. A yellow belt (the most common color belt, other than black) typically receives training in basic SPC charting, data collection and problem solving but not in more complex statistical methods, process controls or DOE. Lower level belts are employees who “have regular jobs.” As time allows, they give a little help to black belts on specific projects, usually in their areas. Lower level belts also work on problems in their work areas as their time and/or interests permit.

Black belts are the general practitioners of six sigma. They are trained in both the theory and practice of using statistical thinking, tools and problem solving methods to “fix” a process or problem. Six sigma training typically involves two weeks of classroom training separated by a number of “in the field” weeks during which the trainee works on an actual six sigma project. If the teacher reviews the project as successful, the student is awarded a black belt. Most black belts are awarded by organizations that have developed their own internal programs, so there is a broad range of black belt skills and experience depending upon the rigor of the training.

Six sigma master black belts are individuals who are trained in both typical black belt skills and the “soft” people skills of organizing and running complex, cross-functional problem solving and/or improvement projects. Master black belts lead improvement projects in a business area or unit. They work with business unit or site champions (executive level sponsors) to select and direct projects in a portion of the organization. In a very large organization (with many locations), there is often a full-time six sigma master black belt at headquarters who helps design large projects and provides technical assistance to lower level belts as required. In smaller organizations, an executive with either a master or regular black belt usually provides such assistance on a part-time basis.

Typically, a six sigma project that is designed and directed by a master black belt consists of several individual problem solving and process control endeavors organized as one effort (e.g., to fix the quality problem in the paint department). The desired outcome may be lowered inventory, an in-control (statistically speaking) process, faster cycle times, lower costs, more machine uptime and so on (or all of the above).

Which Approach Contributes the Most?

It’s difficult to determine which approach, lean or six sigma, works best. These days, almost every organization is employing a host of methods, approaches and philosophies in a frenzied scramble to be competitive. Most organizations are doing some of both, although many efforts involving six sigma tools and lean methods are functioning in a non-focused, poorly planned manner. It would be hard to find an organization that is not using some structured problem solving approaches here or there, along with some SPC. And even the most backward organization has been forced by customers to begin to implement some lean techniques.

One of the best known six sigma efforts was conducted at General Electric (GE). While six sigma gets most of the publicly stated credit for GE’s success, GE was aggressively pursuing lean techniques during the same time period. It would be impossible to separate the contributions of each into discrete cause and effect categories, but six sigma is afforded the glory in most organizations. This is due in part to a variety of reasons, including:

1.            It is easy to describe what a black belt does.

2.            Black belt status and the work performed can be associated with specific individuals.

3.            Discrete projects can be trumpeted as victorious examples of the results six sigma can produce.

Aside from the difficulty of deciding what to call it, lean (or pull, or kaizen…) is difficult to explain. The tools and methods displayed in Figure 1 are not easy to describe, particularly to someone lacking basic shop floor terminology. Further, lean has no “heroes” that can be clearly identified (since everybody helps), and its many victories are often unglamorous and small. Yet, every world-class organization is practicing kaizen and elements of lean while many have not trained a single black belt.

What Do Lean and Six Sigma Have in Common?

Figure 2 presents a conceptual illustration of the overlap of lean and six sigma tools and methods. The lean and six sigma “toolboxes” have many common elements; however, since these tools are applied toward the achievement of different objectives, they operate differently.

For example, in the six sigma arena, a problem is pursued as a discrete effort by a black or yellow belt (based on complexity). Root causes are formally determined, metrics developed, process capability assessed, and various solutions tested. When the appropriate solution is found, it is installed.

In the lean school of study, the problem is typically an identified waste that is noticed on routine measurements that are conducted in each work group on a periodic basis. Since all waste is a root cause of some loss, it is attacked automatically. By employing workplace management tools and just-in-time techniques, the waste is reduced. Lean has the benefit of a number of standardized techniques that can be applied within work groups. No “expert” is needed.

How Do Lean and Six Sigma Differ?

While it is easy to see the parallels between both types of problem solving, there is a considerable difference in how lean and six sigma attack problems. Generally, six sigma is better suited for pursuing broad, complex issues that are beyond the grasp of a single work group. Conversely, it makes little sense to wheel the extensive arsenal of six sigma into place to reduce movement waste in a work group; the lean tools of workplace management can easily minimize those wastes without extensive problem definition and/or the use of statistical methods.

Figure 3 presents a comparison of the types of issues/tools and approaches that lean and six sigma employ as a matter of course. Project management issues and tools (how the overall lean or six sigma effort is implemented) have been excluded, as they are dependent upon the leadership of the organization.

Figure 3 – Lean and Six Sigma Issues, Tools and Approaches

*      In the form of KCG 20 Keys^SM

**     Over time, as a result of many small changes

Figure 3 assumes the lean and six sigma efforts being compared are well run and mature (at least six months in operation and aggressively true to their respective disciplines). A few tools (such as cause and effect diagrams and Pareto charts) are used so universally by organizations striving to become better that they are found everywhere. They have been excluded from this analysis, because it is difficult to assign their presence to any specific initiative. It is also assumed that the application of lean techniques to office areas is part of the lean initiative.

At first glance, the comparisons shown in Figure 3 appear to cast six sigma in an unfavorable light, when in fact six sigma is an excellent methodology that will yield tremendous benefits, if applied properly. Yet, like any tool, six sigma has its limits. Six sigma was not designed to create a new philosophy of work from the bottom up with every employee in every work group, or to evolve discrete, unleveled work groups into a smooth, pull system. These characteristics comprise the lean agenda.

The basic pillars of six sigma are exhaustive process measurement, analysis, reengineering and institutionalization. The explicit agenda of six sigma is to fix enough critical processes so that the effectiveness of the organization dramatically improves in the targeted processes and/or areas. The implicit agenda of six sigma is to change enough processes so that a revolution of consciousness about problem solving and statistical thinking occurs.

A black belt applying six sigma is analogous to a surgeon and his/her surgical team working within a third-world country to heal as many people as possible, one surgery at a time. Every surgery is a work of art and the people of the villages and towns rejoice and celebrate the skill of the surgeon. One day a person is near death, and a few days later the patient is up and around.

A team applying lean, on the other hand, is analogous to a public health specialist and/or an agronomist traveling to poor towns and villages and showing the people how to keep their drinking water clean, dig latrines, properly care for infants and increase their crop yields. Everybody benefits a little, but it is hard to see a dramatic change between one day and the next in any one person or the entire village. However, a year later, the changes will be marked, and three to four years later, quite dramatic.

What Are the Typical Barriers to Successful Implementation?

As you might expect, both lean and six sigma fall prey to specific implementation diseases. While the diseases are different, the remedies are much the same: leadership and coaching. It is very difficult to implement change in any organization. Often leaders underestimate the amount of effort required and will dictate a solution by fiat (“Go get lean” or “Go hire six sigma black belts”). Unfortunately, it’s not easy to get everybody to follow through in an organized, cost-effective manner. The lack of follow through is often blamed on the approach, but it’s almost always a failure to lead properly.

The biggest single killers of six sigma are the “executive curb appeal” and the “here come the suits” syndromes. Six sigma can be associated with some of the biggest and more charismatic names in business. The fame of six sigma makes it appear as if results will be outstanding, low cost and fast¾presenting excellent “curb appeal” to executives.

The “suits” syndrome spawns from “experts” riding in on white horses, like the cavalry, dictating solutions to problems that the workers have been faced with for years. However eager and well-intentioned the six sigma black belt, most process workers hate having “experts” come up with an answer, no matter how statistically cogent it is. Many elegantly designed experiments yield great results but never get institutionalized because the area’s work group wasn’t involved with the solution’s design. This is the reason why so many organizations that have spent hundreds of thousands of dollars on six sigma initiatives are now asking, “Why aren’t we getting the results we need.”

Problems inevitably arise from delegating total responsibility for the successful implementation of significant changes to internal or external “experts.” Management must own, lead, coach, direct and maintain all significant initiatives. Six sigma black belts should be utilized as technical advisors. The soldiers and their commanders (management and the employees) must fight the war in every trench, every day.

Lean initiative shortfalls are due to a different leadership issue. Lean requires that the daily behaviors (communication meetings, measuring and tracking metrics, etc.) of each and every work group be changed a little every day. Changing behavior requires formal structure and a micro-process (or worker level) orientation created and supported by management. Without leadership, the initiative lacks commitment and results are not sustained.

What Should My Organization Do?

Which approach is best? It depends on what the specific problem is.  In fact, both lean and six sigma are needed because they do different things. One can’t afford to let big, dangerous process problems and quality issues go unattended until after the installation of lean systems. Conversely, one cannot afford to wait to implement lean techniques if the rest of the market segment is already moving in that direction. Six sigma cannot produce the required results in inventory reduction and cycle time on a sufficiently broad basis fast enough.

The best approach is to launch a lean initiative that will begin to improve all micro-processes. At the same time, develop resources like six sigma black belts or similarly trained reengineering specialists to attack acute, complex issues. Armies win wars by focusing on bold victories, but the armies who have the most, bold victories are the ones who drill and train hardest on their micro-processes each day. Both are critical. In any successful complex system, a great many things are occurring simultaneously, sometimes adding up to more than the sum of their parts, sometimes causing friction. This is as it should be, for from this chaos will emerge the next great wave of improvement methodologies.

Copyright © 2000 The Kaufman Consulting Group, LLC

All rights reserved.

This Kaufman Consulting Group white paper is protected by copyright law. Reproduction, transmission, or incorporation of this information into another work, in whole or in part, by any means without the prior written consent of The Kaufman Consulting Group, LLC is prohibited.

Previous newsletter articles:

• Lean Transformation of the Widget Company - 11/02
• Effective Accounting in a Flow Environment - 10/02
• Lean Is as Lean Does - 9/02
• Culture Change Brings Sweet Dreams to Sealy - 8/02
• Advanced Planning Systems as an Enabler of Lean Manufacturing - 7/02
• Undertaking Lean Strategies in Manufacturing - Never Two the Same - 6/02
• Defining World Class Practices:  An Alternative to Traditional Benchmarking that Achieves Leadership Consensus and Alignment - 5/02
• Creating Lean Leaders - A Hands On Approach - 4/02
• Supply Chain Management:  Cracking the Bullwhip Effect - 3/02
• The Roots of Lean Manufacturing - 2/02
• Lean and Flexible: A Way Forward for High Variety, Low Volume (HVLV) Environments - 1/02
• The Theory of Delays (TOD) - Part II - 12/01
• The Theory of Delays (TOD)   Improving Performance and Profitability in Job Shops and Custom Manufacturing Environments - 10/01

Access past issues of the Superfactory Newsletter.

The Superfactory Newsletter offers monthly news, feature articles, and columns.  Share this newsletter with a colleague.

If you have been forwarded this month's newsletter and would like your own subscription, click here.