Six Sigma vs. Lean - Which Improvement Method is Better?
This case study focuses on the two major business improvement methodologies – Six Sigma and Lean. It articulates details, differences, current business scenarios and most importantly the use of new age amalgamation of Lean Six Sigma.
The Difference between Six Sigma and Lean
Six Sigma project is done when the root causes are not known and the solutions are complex while a Lean project is done when root causes are known and solutions are complex. Six Sigma projects range from 3 – 6 months, whereas; Lean projects have a potential to get completed within 45 days. Six Sigma is a data driven methodology which drives variation reduction and shifting of mean/median while Lean focuses on elimination of waste. A Six Sigma project would have several different structured methodologies such as D-M-A-D-V (Define-Measure-Analyze-Design-Verify), D-M-A-I-C (Define-Measure-Analyze-Improve-Control), D-F-S-S (Design-For-Six-Sigma), among others. Lean project would have several different tools such as Poka Yoke, FMEA, Pareto, SIPOC, Heijunka, Kanban, among others.
(The above Cause Solution matrix is used to identify the improvement methodology to be used for solving business problems. A situation where cause is Unknown and Solution is complex qualifies for Six Sigma and a situation where causes is known but solution is complex – a lean methodology is used.)
Business Scenario when Six Sigma and Lean Emerged
It was late 1980s and early 90s when these methodologies gained momentum. The world became global. Telecommunication technology was making breakthrough improvements. Organizations had multiple vendors. Supply chain management had gained complete momentum. Process automation in all sectors was at its peak. Due to globalization, demand was high and supply was comparatively less. Competitors were few (as compared to today). Policies for Foreign Direct Investments (FDI) were getting formed in nations globally. Increasing economic transactions globally enhanced trade and there was no sign of recession.
Factors that led to emergence of Six Sigma and Lean:
Businesses did not have a structured solution oriented methodology
Automations increased output but led to additional scrap and waste
Processes were people dependent and strong focus on process oriented approach was required
Quick response to market demand was needed
Focus was shifting from “output based thinking” to “input based thinking”
Multiple suppliers led to management issues and operational delays
Resource optimization was essential
Focus on waste reduction was mandatory
Current Business Scenario
In the last two decades, the business scenario has completely changed. Globalization is at its peak. Technology has provided us options to stay connected from wherever we are. IPLC, VOIP, Webex, Netmeeting, Video Conference, Intelligent Voice Recorders, among others have become business as usual. Competition has increased multi-fold. The pioneers and market leaders of yesterday are struggling in the industry today. Market demand is driving organizations. Customization as per customer requirement is needed today. Customers have choices available and known at a mouse-click. Breakthrough innovations grab the attention of individuals. New and innovative products are launched overnight. The world is in its true sense – the most fast paced world!!!
What Do We Need Today – Lean or Six Sigma?
Six Sigma usually takes about 3 to 4 months of rigorous efforts to get a project to successful closure. Lean does not take more than 45 days on an average. What we need is something faster, focused on customers and driving innovation.
Thus, the world is now moving towards “Lean Six Sigma” – a combination of Lean and Six Sigma. These projects are fast paced projects and get completed quickly. The focus is on Innovative thinking. Technology is made accessible to the project members for efficient use and successful completion of project tasks. The Champion demands timely solutions which are beyond the box. Customer focus is the only priority of this amalgamation. Project teams are process improvement specialists with knowledge on the process, project management, technology and customer behavior. These projects can take from 10 days to 2 months of completion. Data driven approach is used wherever data is available and value stream mapping is done for maximum processes to identify customer value.
Six Sigma and Lean are both amazing methodologies and today’s process improvement consultants are doing the right thing of amalgamating both these concepts together to serve customers. As the world moves forward, it would continue to innovate and Lean Six Sigma would continue to serve the purpose!!!
