Revitalizing Six Sigma with Lean

Arvind Korde
Sunil Mishra
July 2003
When Six Sigma does not live up to expectations 1
How Lean and Six Sigma complement each other 6
Integration approaches: What works, what doesn't 9
How to integrate Lean and Six Sigma 13
Conclusion 21
Contents
Many companies have discovered that the performance improvement program
known as Six Sigma can help them increase productivity by reducing variation in
business processes. In many industries, especially manufacturing and basic
materials, Six Sigma is perceived as an established and dependable method for
extracting profits and raising quality of process output. So many people have
been trained in the Six Sigma vocabulary and problem-solving approach that the
program has turned into a brand. A cottage industry of specialty consulting
shops and training academies has sprung up, preaching the Six Sigma gospel.
Managers who have acquired a robust Six Sigma skill-set carry their knowledge
with them when they change jobs or change companies, disseminating the
approach still further. In the past few years the Six Sigma methodology has been
extended to service industries where processing is a core competency, such as
retail banking and insurance. And recently Motorola, the company that gave birth
to this methodology in the 1980s, well before it was popularized by General
Electric, has announced that it will re-embrace Six Sigma and instill its principles
through every level of the company.
While Six Sigma has been successful in delivering results at a handful of well-
known companies, it has been less successful at many other companies. It has
not lived up to its reputation as a silver bullet. Indeed, many companies have
been disappointed not only in the level of results achieved but also with the
slower-than-expected pace of benefits realization. And even the successful ones
may experience a slowing of the pace of improvement as the program matures,
raising fundamental questions about when Six Sigma methodology is most effec-
tive as well as efficient, and how to take it to the next level.
There are several reasons for the lack of effectiveness. Many times the culprit
is poor execution of the program including superficial leadership, lack of a
robust infrastructure, and a disconnection of line management from the program.
However, a more fundamental reason for disappointing results may lie in the rigid
process-prescriptive nature of Six Sigma. It forces teams to go through the
DMAIC process (Define, Measure, Analyze, Improve, Control) to find the root
causes and the solution, even in cases where the problem may not be new and
when a tried-and-tested solution may already be readily available in the business
world.
When Six Sigma does not
live up to expectations
1
Six Sigma is a powerful performance improvement program, but its inability to
short-circuit the DMAIC process and go directly for the solution in cases where
solutions exist unnecessarily slows it down. To realize the formidable potential
of Six Sigma, it needs to be accelerated and strengthened by the infusion of
selective subject matter expertise.
Lean, a widely used synonym for the Toyota Production System, offers exactly
such a collection of prescriptive solutions for a variety of problems. Imagine how
dynamic the improvement process could be if the problem-solving teams no
longer needed to proceed through the same five-step DMAIC process, starting
with diagnosing the problem and bringing in the Black Belts to work their statis-
tical magic, when this is not warranted. Instead, with the addition of Lean, teams
could, in certain situations, size up a problem and apply a series of prescriptive
solutions right away. No need to figure it out all over again unless necessary!
It is no surprise, therefore, that many a Six Sigma company has sought to add
Lean to its Six Sigma repertoire. Many operational consultants are touting "Lean-
Sigma" programs. The difficulty, however, is that the approaches to date have
been too simplistic and of the "Add-five-days-to-your-black-belt-training-and-you-
will-be-Lean" variety. These do not take into account the nuances, the strengths
and weaknesses, and the execution challenges of each of these powerful
methodologies before seeking to bind them together.
Lean itself has been around longer than Six Sigma. Numerous companies in
addition to Toyota have derived significant benefits from it. At the same time
many others who climbed on the Lean bandwagon have met with little success.
Part of the problem once again can be attributed to poor execution, but more fun-
damentally, many fail to understand all the subtleties of Lean; they never invest
enough energy to truly launch themselves on the Lean journey. It must be
acknowledged that Lean in its entirety is less well-understood and less effec-
tively branded than Six Sigma and is harder to transmit to the broad organiza-
tion. (That has been part of Six Sigma's appeal and wide application not only
does its financial bottom line focus resonate powerfully with CEOs, its method-
ology can also be explained and taught quickly). How then should a company go
about adding Lean to its Six Sigma initiative?
2
That is the theme of this essay: how companies that are already fully invested in
Six Sigma can introduce Lean methods to amplify and supplement it. In some
cases Six Sigma will have started to plateau, in others the company may not be
getting the full benefit from its improvement efforts. We are not recommending
dumping Six Sigma in favor of Lean; we are saying that selected elements of
Lean may significantly accelerate and increase the benefits gained from per-
formance improvement. Each program has its shortfalls as well as its strengths.
The challenge for the sophisticated corporation is to diagnose its own cultural
and procedural weaknesses, and to meld the elements from Six Sigma and Lean
that most effectively redress them.
In the pages that follow we will present an in-depth methodology for doing just
that. We will show how companies can layer Lean into their comprehensive per-
formance-improvement regimens so that it fits comfortably on the Six Sigma
infrastructure that has already been put in place.
3
4
Brainstorming
Affinity diagrams
Multi-voting
Hypothesis testing
Pareto charts
Fishbone
Master
BIack BeIts
(fuII time)
Support key line executives
Responsible for project
selection, training/coaching
of Black Belts and reporting
progress
BIack BeIts
(fuII time)
Lead improvement
projects through
DMAC cycle
Receive 4 weeks of
up-front training
Green beIts
(part time)
Provide Black Belts
with support to get
projects done
Receive less
intensive training
2) StatisticaIIy-focused probIem soIving tooIs 3) Dedicated and certified resources
3. Focuses on reduction in variation of key metrics
2. Drives measurement and data-driven analysis of metrics that are critical to customers
1. Creates standardized, disciplined problem solving approach used across company
AII Six Sigma improvement efforts optimize processes by reducing variation
Define the
problem
Measure the
problem
Define Measure AnaIyze Improve ControI
Analyze
and identify
the gap
dentify and
implement
solutions
Track and
review
progress
D M A I C
1) Prescriptive ProbIem SoIving Process- "DMAIC"
KEY ASPECTS OF SIX SIGMA
5
Standardized work
5S and workplace organization
Visual control techniques
Pull Systems
Kanban
SMED
OEE
Policy deployment
Etc.
2) Broad set of prescriptive soIutions
for improvement 3) Cascaded metrics to drive improvement
3. Relentless focus on continuous improvement by teams
2. Clear definition of a current set of operations and a perfect end state (or target state of
improved operations)
1. Holistic notion of a manufacturing system: management system, operating system,
mindsets and behaviors
1) System wide focus on quaIity, deIivery and cost, grounded in core beIiefs
Lean Manufacturing aIways incorporates an eIement of system redesign.
KEY ASPECTS OF LEAN
Waste
Variability
Flexibility
Elimination
of waste
Control of
variability
Flexibility and
synchronization
to market demand
KP's
Quality
Cost
Delivery
Line #8 Line #5 Line #61
OTD
Scrap
OEE
We think substantial benefits can accrue to companies that layer in Lean to
enhance and supplement existing performance improvement programs based
around Six Sigma. Both are outstanding performance transformation approach-
es. When blended together each complements the other along several key
dimensions.
Six Sigma fosters a strong performance culture by offering:
A highly scalable infrastructure with dedicated resources
Common language and methodology that can be applied generically to all
problems - manufacturing as well as non-manufacturing
Fact-based rigor and a comprehensive set of statistical and non-statistical
tools demanded by the DMAIC (Define, Measure, Analyze, Improve, Control)
process
Focus on financial results
That said, it can be hard to sustain the early gains of Six Sigma, for these rea-
sons:
Six Sigma utilizes a problem-solving process that focuses on the project at
hand. It does not do well in tying all projects tightly into an integrated per-
formance improvement plan aimed at a well-articulated end state.
Six Sigma tends to be process-prescriptive and not content-prescriptive. It
does not incorporate known solutions to standard business problems. Six
Sigma tells practitioners what process to follow to pursue a specific oppor-
tunity for improvement. But it offers no suggestions as to what the solutions
might be, even if the problem is common with existing solutions that have
been used successfully by others in the past.
Six Sigma employs an elite resource model in that it does not quickly pro-
mote widespread involvement of the shop floor and front line in performance
improvement. The highly trained cadre of black-belt experts swoops in to
solve the problem of the day and then moves on to the next assignment.
6
How Lean and Six Sigma
complement each other
These black belts have been culled from the top 1 percent of employees, who
are believed to be the most innovative and aggressive people in the compa-
ny. Some of their technical skill set gets shared with the green belts in the
organization, but the black belts tend to ride a separate track. This can inhib-
it continuity and the accretion of subject-matter expertise within the organi-
zation.
A performance management system built around project metrics can become
disconnected from key business objectives. And the successes of numerous
discrete projects can lull senior executives into a state of complacency so
that they lose sight of strategic issues and game-changing moves that are a
vital part of business success. In theory all Six Sigma projects are supposed
to be clearly connected to the strategic business objectives through a critical-
to-quality cascade down to all levels of the organization. (Critical-to-quality ele-
ments are those vital few characteristics of a product or service that are
absolutely essential for customer satisfaction. A product or service that does
not deliver these characteristics at a very high level creates customer unhap-
piness and in the technical language of Six Sigma is called a defect.) In prac-
tice, unfortunately, this connection is often broken by the countervailing force
of financial targets. The result is that even when companies are able to
achieve their Six Sigma financial goals, they may not reach a similar impact
on quality and customer satisfaction.
Senior managers who learn to blend Lean principles into an existing Six Sigma
program can successfully bridge these gaps. Lean provides a holistic systems
perspective and a smorgasbord of operating practices, tools, and techniques,
and invites more front-line participants into the problem-solving process. Its
inherent holistic orientation will drive a more robust selection of projects strate-
gically aligned with a longer-term view. Lean's prescriptive solutions will avoid
reinventing the wheel with each project and will lead to better and faster solu-
tions. If companies can skip the discovery phase of DMAIC, so much the better.
By applying the elite resources on the toughest problems and by involving peo-
ple on the shop floor in team problem solving, Lean generates a continuous
improvement mentality, which quickly penetrates all levels down to the shop floor.
And Lean cascades the operational metrics down to the front line, ensuring focus
7
on overall key performance indicators. Based on benchmarks, Lean implemen-
tation results can be impressive: 30 percent to 60 percent gains from inventory
reduction; 10 percent to 30 percent from throughput increases; 20 percent to
40 percent from floor space reduction; 10 percent to 30 percent from capacity
increases; and 30 to 50 percent from quality and productivity improvement.
Finally, we feel that an incumbent Six Sigma capability in turn will help to accel-
erate the usual Lean gains. Implementation of Lean can proceed faster using Six
Sigma infrastructure. The dedicated resources will enable better program trac-
tion. In truly difficult operational situations, the statistical rigor of DMAIC will pro-
duce better root-cause problem solving. While both programs are tied to finan-
cial results, Six Sigma contains an explicit cost-reduction methodology that top
executives like. It's useful to be able to set a target of, say, a $250,000 expense
reduction and know that it can be met through Six Sigma. In Lean the financial
targeting is less explicit but the focus on operational metrics (key performance
indicators) makes it more meaningful to the front line and is a better foundation
for continuous improvement.
8
LEAN AND SIX SIGMA CAN BE COMPLEMENTARY
Synergies
Between
Lean and
Six Sigma
Lean ShortfaIIs
Difficult to understand
Difficult to scale
Rigor can suffer
Weak tie to bottom line
Top management
understanding is
superficial
Lean Positives
Holistic and system
oriented
Front-line involvement
Standard practices
KP deployed to all levels
End-state driven
project selection
Prescriptive solutions
Six Sigma Positives
Common language
Scalable infrastructure
Fact-based rigor
Bottom-line oriented
Top management
relates to it easily
Six Sigma ShortfaIIs
Project centric
Elitist
Rigid process
KP disconnect
No prescriptive
solutions
As mentioned before, we are not the first to suggest that Lean and Six Sigma
can profitably be combined. Numerous consulting firms have outlined some vari-
ant of "Lean Sigma." But most of these approaches simply add training, usual-
ly classroom time for black belts, and in our view lack the depth and insight nec-
essary to meld two such complex programs. The fault lies in their failure to
acknowledge the intrinsic strengths and weaknesses of each program. Often
they try to force fit Lean into the shoes of DMAIC, simply viewing lean as a tool-
kit rather than a complete operating system. They do not take into consideration
the fact that even though customer satisfaction and a fast-action problem-solv-
ing style are emphasized in each, Lean and Six Sigma approach the goal of sus-
tained improvement in fundamentally different ways. Only through a profound
understanding of these differences can companies preserve the richness of
each approach and select the best that they have to offer. Having previously dis-
cussed how these approaches are complementary, we will now outline the key
differences between the two and implications thereof to a sound integration
approach.
Lean's essential principles are reducing waste, synchronizing flows, and manag-
ing variability, whereas Six Sigma focuses on reducing variation. In Lean, the proj-
ect selection is driven by systemic value-stream mapping and clear articulation
of the end-state. Six Sigma uses a rigorous project selection process as well,
but it lacks the holistic product line/value stream perspective. This can result in
multiple disconnected projects being executed very well but without as large an
impact on the whole. The project selection methodology, therefore, must reflect
system level considerations.
Lean cascades metrics down to the front line and involves those workers in ongo-
ing problem-solving. Six Sigma, on the other hand, tries to keep the strategic
business objectives connected to the projects through a disciplined CTQ flow-
down process. But its laser-like focus on financial benefits can result in projects
that do not improve quality. It is important that the performance management
system be re-examined to benefit from lean metrics and performance dialogue
reaching the front line. In addition, its problem solving may not routinely reach
the front line. Good Six Sigma programs have strong dedicated infrastructure
and resources. Lean typically doesn't.
9
Integration approaches:
What works, what doesn't
Most importantly, Lean builds on a host of time tested prescriptive solutions for
a myriad of problems, whereas Six Sigma prescribes a problem-solving process
but not solutions. Simply adding Lean tools to the DMAIC toolkit will not take
advantage of Lean solutions.
Let us expand on that notion in an example using inventory reduction. If the goal
is to improve customer delivery performance and reduce inventory, the problem
could be solved either by Lean methods or Six Sigma processes. Using Six
Sigma one would invoke DMAIC and devise a solution that works well, but this
approach would take a lot of time, effort, and resources. An expert in Lean man-
ufacturing would take a more systemic look at the problem across the whole
value stream of assets from the point of customer demand backwards to raw
material. The notion of synchronization of material and information flow across
the entire facility would be examined and begin to immediately address some of
the following fundamental questions.
10
SIX SIGMA AND LEAN APPROACHES ARE FUNDAMENTALLY DIFFERENT
Driving
PrincipIe
Project
SeIection
ProbIem
SoIving
Performance
Management
Infrastructure &
InvoIvement
An integrated operating system of
principles, practices, tools and techniques
A structured improvement methodology using
a standard approach and statistical tools
Operational KPs cascaded
to front line
Prescriptive Solutions
One piece flow
Pull System
SMED
Standardized work
Lean experts
Team leaders
Natural teams
Systematic value stream mapping
Current state and future state
Reduce waste
Synchronize flows
Manage variability
Root cause
analysis
Process mapping
Basic analytic
tools
Prescriptive Processes
DMAC
DMADV/DFSS
Statistical Approaches
DOE
Gauge R&R
Project metrics
Driven by key issues and
problems in current processes
Reduce variation
Black belts, MBBs, GBs
Six-Sigma project support
Ad hoc teams
LEAN SIX SIGMA
They have only a few elements in common
1) What is the takt time and customer demand rate for production? 2) What is
actual daily demand and variation? 3) What is the lead-time to replenish? 4) How
many finished good types are there? 5) Where should we hold inventory and how
much? 6) What type of pull system and kanban controls can we use for sched-
uling? A few other basic questions would likely follow as well. The nature of lean
presents a prescriptive way and set of solution tools to begin addressing the goal
of inventory reduction quickly by immediately attacking the known root causes of
large inventories.
Here is a simpler example: Let's say we want to reduce changeover time on a
machine or process. Again, we could derive a shorter changeover process using
DMAIC, with the difficulties noted above. Or we could just follow the standard
six-step process in Lean Manufacturing called SMED, for Single Minute Exchange
of Die: 1) Measure change over time, 2) Separate internal from external time,
3) Strip out external time and execute before machine shut down, 4) Reduce
adjustment related time, 5) Reduce any remaining internal time, and 6) stan-
dardize the new process. This prescriptive solution to the problem will lead
directly to quick improvement.
Once again, Lean proceeds on the assumption that these problems have been
encountered before and have been solved using specific tools. In a pure Six
Sigma environment, the team, not having access to a pre-existing world-class
solution, will in many cases reinvent the wheel through the DMAIC process.
Indeed, it runs the risk of coming up with a square wheel or a wheel that just
does not roll along as well. It will be very important, therefore, not only to pro-
vide the practitioners the tools but also to give them a roadmap specifying when
to use which tool.
If all this seems almost too pat, there is a complication we must add. These
content-rich Lean approaches are not as intuitive and readily understood as the
generic Six Sigma approach. This has clear implications for capability building.
First, top management needs to acquire an adequate understanding of the
basics of Lean and know how to use it most skillfully within the organization.
Second, the company needs to develop practitioners with deep practical capa-
bilities and the confidence to execute them on the shop floor. This may well
mean that the initial classroom training will have to to be supplemented by true
11
Lean experts until a critical mass of expertise develops within.
Of course Lean's greatest strength is its inherent capability to initiate and carry
out a full transformation within an organization. The whole notion of Lean as
practiced by Toyota and other Lean companies is that it represents a holistic
approach to performance improvement, not merely a set of independent proj-
ects. Lean causes such a change by complementing the manufacturing system
solutions with fundamental shifts in mindsets and behaviors, which evolve from
widespread involvement and accountability for performance. Eventually, Lean cre-
ates a new culture, altering how the organization addresses problems big and
small, how daily routines are managed, and how continuous improvement is sus-
tained. All this has strong implications for the breadth and depth of capability
building.
The understanding of these nuances must be coupled with the knowledge of typ-
ical pitfalls in implementing Lean or Six Sigma. These obstacles range from top-
management alignment, level of resources, method of filling the project pipeline,
performance management system, to middle-management acceptance, and the
way the program is deployed. The integration architecture will need to explicitly
define actions to avoid these pitfalls.
12
SIX SIGMA AND LEAN INTEGRATION MUST CONSIDER TYPICAL PITFALLS
Lacks vision
nadequate critical mass
Not driven by
end state
KPs not defined
or cascaded
Weak
Tool centric
Top management
Lean PitfaIIs
Resources
Project seIection
Performance management
MiddIe management support
and ownership
DepIoyment
Lacks involvement
Elite resource model
Not connected to
line management's
real priorities
Project metrics
disconnected
from CTQs
Weak
Project centric
Six Sigma PitfaIIs
We have studied Six Sigma and Lean programs at numerous companies over the
last several years. Based on our experience we conclude that a tactical inte-
gration of the two represents the next level of performance improvement and
achievement for Six Sigma programs. Further, such an integration has not been
successfully attempted at any large-scale Six Sigma organization that we know
of. We believe that a successful integration of the two programs would consist
of five elements:
1. Program readiness: Does your Six Sigma program provide a strong platform
to add Lean?
2. Project selection and solutions decision roadmap: How should you think
about selecting from the multitude of Lean and Six Sigma tools for address-
ing each type of problem?
3. Organizational capability building: What lean capabilities must be developed
across the organization?
4. Performance management: How should performance management change
under an integrated Lean and Six Sigma approach?
5. Implementation plans: What would a tactical integration rollout look like?
Let's examine each of these building blocks in detail.
1. Program readiness: The organization should undertake a diagnostic to deter-
mine if the current Six Sigma program is robust enough to serve as a springboard
for adding subject-matter expertise in the form of Lean. Such an assessment
should respond to three overarching themes:
How robust and well designed is the company's Six Sigma initiative? The
questions in this section will illuminate such elements as leadership com-
mitment and alignment, caliber and training of the dedicated resources, pro-
gram design, inculcation of common language, aligned performance rewards,
and degree of linkage to performance management.
What concrete results have been achieved so far, financially and oper-
How to integrate
Lean and Six Sigma
13
ationally? Measure these in terms of projects completed, financial impact,
and specific operational improvements on key metrics.
Is Six Sigma embedded into the DNA of the organization? If so, how have the
culture, mindset, and behaviors of the organization been changed by Six
Sigma? This yields insight into how to carry the program forward. Will the
organization be able to muster the support and enthusiasm to lift it to the
next level?
In addition, in organizations that have already attempted to introduce Lean, it will
be helpful to conduct a Lean diagnostic in selected plants to gauge the effec-
tiveness of the program. This exercise should yield one of three possible
results:
The Six Sigma infrastructure is solid and Lean can be layered in right away.
The Six Sigma program is robust enough to start filling in with Lean but sev-
eral shortfalls in the basic program will need to be simultaneously
addressed.
The Six Sigma program needs to be strengthened before any Lean elements
can be introduced.
2. Project selection and solutions decision roadmaps: Many consulting firms
have been tempted to treat the Lean/Six Sigma integration in a very simplistic
fashion. They generally suggest a limited augmentation of the Six Sigma class-
room training and attempt to shoe-horn the Lean tools into the DMAIC frame-
work. On its face, this approach can seem very appealing, but it will fall short of
achieving the true benefits of Lean/Six Sigma integration. It does not address
systemic end-to-end solutions. It forces all problem-solving through the DMAIC
discovery process when additional investigative rigor is unlikely to enhance the
solution, instead of taking advantage of Lean's time-tested prescriptive recom-
mendations. And it ignores even the good habits promoted by Lean. Such estab-
lished frameworks as 5S (five Japanese concepts for setting up and maintaining
an efficient functional workplace) will have to be rediscovered. Furthermore,
Lean's value-stream mapping technique induces a systemic long-term view of a
14
potential end-state that can drive rigorous identification and sequencing of criti-
cal projects.
Therefore, we suggest that a clear two-step process should be used: First, iden-
tify and prioritize projects. Second, choose the right problem-solving approach for
each project. To identify appropriate projects, companies should use multiple
inputs, including manufacturing strategy, value-stream mapping, basic operations
assessment, and brainstorming idea generation. The prioritization of projects
should consider the current state and the target end state, and follow a path of
maximum benefit and least resistance to the target future state.
As regards the right problem-solving approach, manufacturing operations prob-
lems typically fall into four basic categories on the Lean/Six Sigma playing field,
based on whether the root cause is known and the nature of analysis required
15
PROBLEMS CAN BE CLASSIFIED INTO FOUR CATEGORIES
ExampIes RationaIe
Where the problem requires
no further analysis and can
be addressed by sound,
well-defined practices
Where the problem and
solutions are systematic
and involve redesign of
multiple steps, complex
processes, or flows
Where root causes are very
clear and can be addressed
by time-tested Lean
prescriptive solutions
Where root causes are
unclear and likely to require
significant data-driven
analysis and unique
solutions in a cross-
functional effort
Job instruction
Visual management
Key metrics display and
tracking
Plant layout redesign
Scheduling systems
Material and information
flow changes
Change-over reduction
Overall equipment efficiency
Standardized work
Cycle time variation
Scrap and rework
Process fluctuations
Lean basic
tooIs
Lean system
design
Six Sigma
DMAIC
Just do it
Determine
best
approach
to identify the solution. Each requires a distinctly different problem-solving
approach, from proceeding to implementation forthwith, to engaging in a full-
fledged Six Sigma project at the other extreme.
3. Organizational capability building: We strongly believe that it is important to
build on the training and resource infrastructure of Six Sigma. However, we also
believe that a simplistic solution of adding tool-centric Lean training modules to
the Six Sigma curriculum and targeting that mainly at the black belt population
will not achieve the desired results, for several reasons:
The confidence to deploy Lean's prescriptive solutions often comes from
longer and deeper subject matter expertise.
Senior management will need to develop a deeper understanding of Lean to
be able to walk the talk.
Frontline associates and leaders will play a significant role in institutionaliz-
ing Lean practices, as well as in sustaining continuous improvement.
A tool-centric approach will miss the system design capability needed to drive
the program direction.
For these reasons we think the subject matter expertise required for prescriptive
solutions demands expert assistance beyond classroom training. In the execu-
tive suite, senior leaders need an adequate understanding of Lean to provide
appropriate vision and reinforcement. On the shop floor, training in basic tools
and sound practices must reach front line associates to enlist their full support
and cooperation. And throughout, training will need to transcend the basic Lean
toolbox to generate a sense of the potential benefits to be gained from overall
systems design aimed at defining a future state. How the complex interaction
of man, machine, material, and information should work together to achieve the
maximum improvement possible will have to be considered.
To make Lean really take root and flourish in an organization that is already com-
mitted to Six Sigma, we offer these capability-building imperatives:
Define key operational performance indicators for the organization as a whole
16
17
CREATE A SEQUENCED DELIVERY TO MATCH THE
ORDER OF PROJECT ROLL OUT
TypicaI Action Sequence Key KnowIedge Points
Create Lean
awareness
Design CS/FS,
seIect projects
DepIoy Lean tooIs
Stability
Flow
Standardized work
Pull
Sustain
improvements
ImpIement just-do- it
basic eIements
Basic concepts
Overall approach
Value stream mapping
System design
Waste reduction
5S
Visual controls
Production tracking
OEE
Root cause problem solving
SMED
PM
Basic flow of material &
information
Cell layout
Material location
Takt time
Line balance
Flow
Loops
Kanban
Level production
Performance management
and improvement goals
Overall maintenance
and cascade them down to the front line to trigger the organizational pull for
Lean capability building.
Create a Lean expert role to ensure that deep expertise is available to sup-
port implementation.
Ensure adequate capability building at each level from top management to
the front line to enable them to fulfill their required roles in Lean implemen-
tation.
Schedule just-in-time delivery of in-depth training modules right before recipi-
ents need them to implement specific actions, rather than delivering them
months before they can use them.
Utilize multiple training methods for optimal learning and retention, with the
objective of developing a few systems-designers and many field-capable indi-
viduals who can apply basic lean tools.
Implement rollout waves in quick succession for speedier results, starting
with simpler problems across all units, rather than exclusively following a
model line serial approach to rollout.
4. Performance management: Lean can enhance an existing operational per-
formance management system, but the specific contribution that Lean can make
and the actions necessary to capture this contribution depend on how robust a
company's performance management system is to start with and how the Six
Sigma program fits in the framework. An effective performance management
system starts with a clear aspiration. Supporting metrics are then tied to value
drivers and cascaded to all levels. There are aggressive targets, clear accounta-
bility, open performance dialogue, and visible consequence management - both
positive and negative.
Six Sigma can improve a strong performance management system by enhancing
several elements, such as the cascading of financial targets and baking them
into budgets, ensuring timely performance dialogue via project reviews, and hold-
ing people accountable for project performance. It is important, however, to state
Six Sigma's limitations as well. It can be hard to see the integrated picture when
18
the thrust of the program is so project-centric. Also, Six Sigma's financial orientation
projects have specific financial goals may divert attention from operational metrics.
Likewise, these metrics and the dialogue about performance improvement don't always
reach the front line uniformly. And financially oriented projects can be disconnected
from operational critical-to-quality measurements.
Companies generally fall into two categories: those that had strong management in
place, to which Six Sigma has added rigorous project tracking, and those with weak per-
formance management for which Six Sigma has become the de facto and incomplete
substitute.
In the former case, Lean can enhance the system further by translating the key per-
formance indicators into operating metrics to the front line - an ideal situation. It can
also change the performance dialogue at the frontline to the real time discussion of
KPIs and root causes. Finally, the operating performance dialogue now can be more
standardized around achievement of goals for SQDC safety, quality, delivery, and cost.
The latter situation, where companies are hindered by weak performance management
systems, will require careful handling. Six Sigma is likely being used here as a surro-
gate for the performance management system, but will not be successful in fully replac-
ing it - largely due to its project-centric versus organizational-performance focus. In
general a strong core performance management system can be built from scratch by
using the basic elements of Lean philosophy. The added enhancements from the Lean
arsenal should not be attempted ahead of corrective actions in the core performance
management process.
5. Implementation plans: As is by now evident, the tactical integration of Lean onto a
Six Sigma program is not a trivial exercise. In order for the implementation to proceed
smoothly a fair amount of thought must be given to the program architecture and com-
munication. Assuming that a company's Six Sigma program is ready to add Lean, the
typical sequence for a multi-operation company will look something like this:
Six Sigma diagnostic
Overall program architecture development including a communication and rollout
plan
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KPI development and cascading
Project selection at a chosen plant
Training and capability building
Pilot demonstration
Enterprise-wide rollout implementation
Communications implementation
Tracking and performance management
Activities to sustain improvements
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Many companies have embraced Six Sigma as their performance transformation
vehicle. Six Sigma is a powerful program bringing with it a dedicated resource
infrastructure, common language and process improvement methodology, fact-
based rigor, and focus on financial results. However, Six Sigma is essentially
process-prescriptive and not content-prescriptive (and therefore not as effective)
in situations where known solutions to familiar business problems could be
speedily deployed. As a result, after strong initial results, many Six Sigma pro-
grams need to be augmented with content solutions to sustain the rate of
improvement. Many companies turn to Lean principles to provide the required
boost.
The complementary nature of Lean with Six Sigma is widely recognized by com-
panies and consultants alike. The proposed and practiced training-centric inte-
gration approaches tend to be too simplistic. They fail to realize the full poten-
tial of integrating Lean and Six Sigma. Each program has its own nuances and
riches, which must be preserved. A thoughtful program architecture addresses
the problem in multiple dimensions. These include: ensuring the right platform
for Lean addition, selecting projects from a systemic point of view, deploying the
right tools for the right class of problems, creating appropriate capabilities
throughout the organization, and strengthening the performance management
system. The challenges are not trivial, but the rewards can be handsome if a
thoughtful approach is followed.
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Conclusion