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Written by 91�ֿ� Facilitators John Novak and John Potkalitsky

The Need for Continual Improvement

Today more than ever, organizations are faced with the challenge to reduce costs and increase capacities while delivering increasingly better products and services. Facing global competition in the marketplace, organizations are struggling to be competitive, struggling to be profitable, and most importantly, struggling to survive. Dr. W. Edwards Deming once commented, “It is not necessary to change. Survival is not mandatory.” With the reality of going out of business, organizations in all industries are asking, “How do we change our approach to business to keep us relevant in our industry?” The key word here is CHANGE. Organizations need to embrace a culture where continual improvement is a strategic objective. To be a leader in an industry, continual improvement may not even be enough and innovation will be necessary.

If an organization requires certification to one of the many Quality Management System standards (i.e. ISO 9001) a continual improvement program is mandatory. You must document the measurement and improvement of your processes.

Two very popular methodologies come to mind to address this need, Lean and Six Sigma. Lean and Six Sigma are not new. They have been around for decades. They are proven methodologies that deliver results. For years, many organizations have struggled with the dilemma of which improvement program to use: Lean or Six Sigma. While some continue to debate the issue, others have come to realize that Lean and Six Sigma can work well together to improve processes, increase quality and drive out costs.

What is Lean?

Lean comes to us by way of Toyota and their Toyota Production System. Lean is a systematic approach of eliminating waste and increasing flow so that every process step adds value for both the external and internal customers. The flip side of waste is value. Value is defined by the customers and must meet the following three criteria:

What is Six Sigma?

Six Sigma originated with Motorola in the mid-1980s. Six Sigma is a methodology and a set of tools, including statistical analysis, which focuses on the identification and reduction of process variation. Reducing variation leads to a reduction in product and service defects. Six Sigma Quality correlates to just 3.4 defects per million opportunities.

Which One?

The objective of both these methodologies is process improvement. We constantly get asked the following questions:

1. “Should I do Lean or Six Sigma?”
2. “What should we do first, Lean or Six Sigma?”

Let’s examine the first question. First, let’s compare the two methodologies:

Ask yourself the following questions:

• “Does your process contain waste?”
• “Does your process contain variation?”

If you answered these questions in the affirmative, which most do, you probably need the tools of both Lean and Six Sigma. This being the case, let’s look at two scenarios:

Both outcomes are unacceptable. If you want to achieve the highest level of process performance possible, you need the tools of both Lean and Six Sigma to address the waste and variation, which are present in your processes. Since we agree that we need both, the second question remains:

“Which one should we do first, Lean or Six Sigma?”

A sensible approach is to first use Lean tools to eliminate the non-value-added steps, and then use Six Sigma to reduce variation in the remaining value-added steps. It doesn’t make sense to attack variation in steps that will ultimately be eliminated (see figure below). In the context of an improvement project, both methodologies are used simultaneously to achieve improvements in quality, speed and cost.

From the figure below, you can see that by just reducing the number of steps in the process (1), overall yield increases. We have reduced the number of opportunities to create defects. Once we have reduced the number of non-value-added steps, we can attack the variation that remains (2), which improves process quality and sigma level.

Selecting a Roadmap

Another key element of a comprehensive continual improvement program is the establishment of a process for doing improvement activities. Without a framework, results will be mixed. Individuals and project teams will become frustrated because of a lack of understanding of where to start and the steps to follow. Without a process, improvement efforts may not be directed at the root causes but rather the symptoms of the problems. Additionally, efforts may not be customer focused, resulting in changes that marginally improve customer satisfaction or at worst reduce it. If we don’t understand what the customer values, how will we know what to work on? The answer is, we won’t know.

Lean and Six Sigma use various process improvement roadmaps that guide the improvement efforts in the right direction including:

Here again, you don’t want to limit yourself to one roadmap. The tools of Lean and Six Sigma can be used with both roadmaps. You want to use the roadmap that is best suited to the issues that need to be addressed.

Conclusion

Don’t limit your options when it comes to continual improvement efforts. Lean Six Sigma methodologies and tools have survived the test of time. The bottom line is they deliver process performance results. To quote Dr. Deming again, “We should work on our processes, not the outcomes of our processes.” In other words, if you focus on improving your processes, you will get the results. Focusing on the results will not necessarily produce effective processes. You can achieve results with poor processes. The price we pay is an excessive cost to produce, declining profits, reduced competitiveness and an inability to respond quickly to customer demands.

Stay tuned for our next article, which will go into detail using a roadmap (R-DMAIC-R) that combines the Lean and Six Sigma tools.