Digital transformation has become the center of every conversation in business settings due to its many advantages. New technologies and tools are supporting this transformation journey for small and big companies whose goal it is to implement a culture of continuous improvement and maximize efficiency, while growing in today’s fast-paced and competitive environment.
For this digital transformation to be successful, it must be supported by quality control management techniques. One of the most influential methods that has become very popular during the last 30 years is Six Sigma. It’s a proven method that provides an organization with the tools needed to continuously improve business processes towards perfection, while increasing performance, profits, employee morale and the quality of products and services.
What is lean six sigma?
Six sigma is a method that was developed by Motorola in the 1980s when the company had issues satisfying its customers and needed a solution to optimize its manufacturing processes. Lean six sigma is a business improvement strategy that integrates two different approaches: Six Sigma and Lean Manufacturing.
The objective of six sigma is the detection and elimination of the causes responsible for the failures or issues in the processes that affect the critical characteristics of the products or services that are of vital importance for the clients. Its engine is the powerful DMAIC process: Define, Measure, Analyze, Improve and Control.
The lean manufacturing approach seeks to increase the speed of processes by eliminating inefficiencies and optimizing value creation. Lean tools such as SMED, JIT or Standardized Work help increase the flexibility, reliability, productivity and quality of the processes, products and services of companies and organizations in different sectors.
Let’s break down lean six sigma into its respective parts to get a better understanding:
- Lean refers to the agility of a process, the speed at which inputs are transformed into outputs.
- Sigma refers to the Greek letter σ, which stands for standard deviation. In statistics, standard deviation measures the amount of variation or dispersion of a set of values.
- Six sigma is a specific value for this deviation, which implies a rate of 3.4 errors per million opportunities (which is a 99.99966% success rate).
Put simply, lean six sigma is a data-driven methodology that aims to eliminate variation in processes by employing statistical methods to detect issues and identify their cause in order to eradicate them. Process improvement makes it possible to improve the quality and timeliness of product delivery and boost employee productivity and morale. It can be implemented anywhere where variations exist.
Principles of lean six sigma
he lean six sigma method relies on 5 key principles:
1. Focus on the customer
This is based on the expression “the customer is king”. The main goal of a company is to bring maximum benefit and satisfaction to its customers. In order to do that, companies need to get to know their customers and fully understand their needs and what encourages them to buy and stay loyal.
2. Analyze processes and detect issues
Analyzing processes helps companies identify waste areas. Since lean six sigma is a data-driven technique, data collection helps businesses reduce waste and find issues that need to be fixed. In general, manufacturing and business processes have characteristics that can be defined, analyzed and measured, therefore data collection helps identify problems and find their root cause.
3. Eliminate variations and defects
Once the problem is identified, it is time to start making changes to eradicate variations and remove defects. After all, if you control the inputs in a process, you can control the outputs. To achieve that, remove the activities from the process that do not increase or create customer value. This will save the company money and achieve greater quality control and efficiency.
4. Continuous evaluation
In lean Six sigma, continuous evaluation is crucial. This means that even after the company’s eliminated waste, it should keep analyzing its different processes to see if there is room for more improvement. Achieving a culture of continuous improvement requires commitment in the long run from everyone that works at the company. It’s important that managers welcome and listen to the ideas of everyone involved. For the lean six sigma method to yield optimal results, all employees should receive specialized training and fully understand how the method will benefit them and the company as a whole.
5. Ensure a flexible and responsive ecosystem
The core of lean Six sigma is transformation and change. When a deficient process is eliminated, it calls for change in how things are done. Therefore, businesses that wish to implement this method require a flexible and adaptable company culture. A robust culture with slow responsiveness will only cause delays and errors. Employees and departments should be able to adapt quickly and with ease to new processes.
What are the benefits of Lean Six sigma?
Lean six sigma allows a company to have processes under control at all times, to establish measurable variables to analyze the operations of each area of the company, and to define changes or new strategies to improve efficiency. All this results in the creation of a business identity that strives for quality, excellence and continuous improvement.
Lean six sigma also increases the productivity and profitability of the products and services of a company because it focuses on removing waste and reducing variation to achieve process improvements and a greater amortization of investments.
In addition, it helps businesses achieve their objectives through data-driven decisions based on statistical and factual evidence instead of hypotheses. The method benefits both large organizations as well as smaller ones. In fact, smaller companies may need lean six sigma more than larger companies because they need to be much more competitive in order to stay in business.
The Lean Six sigma methodology
There are two main Six Sigma methodologies, DMAIC and DMADV. The principles of Six Sigma are executed through these and each has a set of recommended procedures that need to be executed for business transformation.
DMAIC is the most common methodology associated with Six sigma. It is a data-driven method used to specifically improve existing processes for better customer satisfaction. The acronym is short for: Define, Measure, Analyze, Improve and Control.
This method begins with a customer-centric approach where the problem is defined from a customer’s perspective and the company defines customer needs, requirements and project goals. In this phase, the possible Six Sigma projects are decided and we define which areas they affect, which processes can be improved and who could be in charge of improving these processes.
The second step is where you start to understand your process and begin to collect data on it. Here, we focus on the metrics of the project and the tools that are being used in the measurements. The goal is to quantify our problem and start measuring it in numbers.
In this phase, you have to analyze the data that has been collected. You start digging into the types of variations and defects that occur and where they occur in order to identify their cause. The data and figures related to the processes to be optimized are studied, and cause-effect relationships are sought.
The fourth step determines how the changes made have affected the process. This is where you have to verify if the improvements made have yielded the desired results or not. Try and test out different combinations and relationships between the variables to identify possible reasons and solutions.
The final phase consists of making sure that the goals set in the beginning have been achieved and that the current improvements are sustainable. The Six Sigma team must deliver the documentation that certifies the tasks carried out and procure the necessary tools to maintain the level of efficiency achieved if changes occur in the future.
DMADV is part of the emerging methodology associated with lean six sigma – DFSS (Design for Six Sigma), which is used to design new processes. This method determines from the beginning what the customer wants and ensures that defects and variations are anticipated and eliminated in the initial phase of the process.
The acronym is short for: Define, Measure, Analyze, Design and Verify.
This methodology also starts by defining the customer’s needs as well as the company’s goals for this process.
The second phase consists of measuring the characteristics that are critical to quality (CTQs) along with measuring product and services’ capabilities. It consists of measuring the whole production process capacity and risks.
In this phase, businesses have to analyze the collected data and structure it in order to understand the relationship between different elements in a process.
Based on the analysis, it is time to design a brand new process in order to reach the company’s objectives and underlying fix issues.
The last phase consists of verifying if the designed process works and yields the desired results. For that, a company can complete a pilot run to test the new process and see how it functions and if there are areas of improvements.
During the different phases of both of these methodologies, Six Sigma experts and specialists use numerous tools to measure and analyze processes and their outcomes. Some of the sigma tools and techniques that are used are:
- Root/Cause Analysis also known as The 5 Whys
- Voice of the customer
- Value stream mapping
- Control charts
- The 5S system
- Poka-yoke or Mistake proofing
- Kaizen or Continuous Improvement
How to implement lean six sigma
Lean Six sigma projects can vary considerably from an organization to another depending on the company culture and business setups and goals. An organization has two options:
Implement a Lean Six sigma program
This is more of a non-drastic and unstructured approach. In fact, with this approach, only certain employees are taught to use statistical tools from lean six sigma in order to use them from time to time. Successes due to the use of these tools may occur but they generally do so at a low-level management. There is usually no one assigned to look over the projects. For this method to yield results, upper-management support is necessary.
Create a Six Sigma infrastructure
Instead of focusing on individual tools, this approach provides a process-oriented procedure that teaches employees how to select the right tool at the right time and for what project. Employees receive training from 4 weeks to over 4 months in order to understand lean six sigma and its benefits.
Lean six sigma is a long-term commitment, and treating its deployment as a business strategy rather than a set of tools allows a better analysis of the processes, as well as a more effective use of the time and money invested in training.