In this down economy, companies are jumping onto the Lean Six Sigma bandwagon to improve their performance. Is it a bad move? Could it really benefit them?
The development of Six Sigma started during the 1970â€™s. It was being used as a quality improvement tool by a company manufacturing T.V sets.
This company impressed Motorola in their ability to produce their TV sets with a 5% defect rate. The then CEO Bob Galvin wanted to introduce the same process throughout Motorola so Bill Smith and Mikel Harry they developed the MAIC (Measure, Analyze, Improve and Control) model which became a roadmap for Six Sigma implementation.
Six Sigma aims to reduce the cost associated with the negative impact of variation in business processes. Six Sigma quality is calculated as defects per million opportunities (DPMO). The standard for achieving Six Sigma quality is 3.4 DPMO. This will return a yield of 99.99966%.
Later, such companies as Unisys Corp, GE, Honeywell and Allied Signal developed and improved Six Sigma from a quality improvement tool to become an integrated management system using the DMAIC model (Define, Measure, Analyze, Improve and Control). Many organizations began to train their key employees to become Six Sigma Green and/or Black Belt practitioners. Teaching employees about the application of lean principles is much less expensive and complex than Six Sigma training programs.
Six Sigma projects will often take months, whereas Lean events are typically completed in 3 to 5 days. The cost versus benefits between implementing a Lean or Six Sigma program will be very much influenced by the type of results needed. An organization can reap huge rewards over the long term if they can support the more expensive Six Sigma training costs. However, if it trains people and does not use their newly acquired skills effectively, it is a waste of time and money.
The late 1990â€™s saw a shift towards the alignment and integration of Lean principles and Six Sigma to create what is known today as Lean Six Sigma (LSS). It is a blending of the Six Sigma DMAIC model with Lean principles from the Toyota Production System (TPS). Businesses that established the Lean Six Sigma training and certification protocols decided to use the same belt color scheme as the Six Sigma system. Today, many Lean training/certification companies have adopted a Six Sigma style belt system. Training employees to become certified Lean practitioners is much less expensive than Lean Six Sigma training and certification. An organization would need to do a cost-benefit analysis to determine if the payback for the Lean Six Sigma training is a more viable choice over the Lean training.
A litmus test is to determine which of these two programs can deliver results and impact the bottom line. The discussion has now reached a place where we can now ask the question presented at the beginning of this composition. Is Lean Six Sigma healthy or harmful for a business?