I have been getting a lot of questions of late discussing the difference between Lean and Six Sigma and I would like to clarify a few things because many people believe that Lean is about speed and Six Sigma is about quality. Which on the outside may seem correct, however that does not offer the full picture.
When I commenced my career many years ago I learnt Lean with a Japanese company called Fujitsu, very akin to the Toyota way of thinking.
When I learnt Lean, I learnt skills that are now under the Six Sigma umbrella, and Lean Quality tools to be precise.
So, what is Lean?
Lean is many things and it’s not just a toolkit.
Yes Lean is ultimately about speed however it achieves this through INSTILLING QUALITY into the process and doing things RIGHT FIRST TIME!
Lean is a
- Culture, it’s a way of thinking
- It’s a forum for communication
- And it is also about root cause problem solving
However having a focus on speed will ultimately slow things down as corners tend to be cut in the goal to increase throughput. The focus should always be quality first and when you that focus, throughput will naturally improve.
For example before a Lean program, your process could be producing 125 products to actually produce 100 good ones (with 100 being the target). Post Lean Program, your process is producing 105 to produce 100 good. So the net time means you have only produced 105 as opposed to 125 on process line so speed has increased as a result of improvements in quality. And then there is the cost of rework and scrap to discuss, which has reduced dramatically. So though changing your focus to quality ahead of throughput, speed naturally improves.
Many people also use Lean as a way to cut costs, by doing the same at less. When they choose this approach the business shrinks and the business will have major issues.
With that many people use Lean in a negative way and believe Lean to be something negative for their business, and in some industries it is now a dirty word. In fact depending on where I worked I will refer to Lean as operational excellence.
Lean is always a first choice for me with business, Lean teaches you to do things right first time and also to get your team working with a continuous improvement mindset.
So where the Six Sigma fit in?
Yes Six Sigma is a quality tool and it does have its place. Where is this place though?
If you look at what Six Sigma actually means in terms of quality, it talks about having 3.4 defects per million parts produced.
So to achieve Six Sigma level of quality, that is your target. However those your business need that level of quality performance? I would suggest it doesn’t unless you are in one of the following industries
- Aerospace
- Automotive
- Medical device
- Pharmaceutical
And maybe a few more however if you are standard business that delivers quality products typically a world-class manufacturing company will deliver 85% quality.
That other 15% poor quality should be found before it gets to the customer. For a business to achieve 3.4 defects per million level of quality, the resources required will have a substantial negative effect on your bottom line.
So why do many companies talk about Six Sigma? And why do they want it?
Most companies only need Four Sigma or Five Sigma level of quality because the cost of installing programs to achieve Six can’t justify itself..
So this is why I would always choose Lean as a first point.
And again I will say if you’re talking about root cause problem solving, I’ve been doing root cause problem-solving in Lean for the last 20 years.
Lean is by far the most flexible and dynamic system that can be used practically anywhere not only for operational excellence also for business excellence. In fact Lean is essentially a Business Excellence methodology.
Six Sigma is for managing variation within highly regulated industries.
And even within those industries I’ve seen many problems, when a Lean team removes the non-value added activities, thus improving the capacity of the area, I’ve often witnessed a Six Sigma team come in and negate all the savings with a new Six Sigma program.
I am not saying what Six Sigma is doing is wrong however Lean and Six Sigma often work in contradiction to each other instead of being complimentary methodologies.
Any time I’m in a highly regulated environment, I will always challenge the Six Sigma team that when they want to reduce the variation within an area they can only do so once it doesn’t compromise the capacity of that same area.
And with the Lean team also I challenge them so they can only improve the capacity of the area once they don’t compromise the quality. In fact, I recommend the teams work together to see can they achieve both in the same process. This for me is crucial to the success for both the Lean and Six Sigma teams.
Both strategies can offer great improvement for any business, however it is crucial to know when is it appropriate to use each methodology.
When using either tool, there always needs to be a return on your investment. When it comes to using Lean thinking, this is very straightforward to figure out.
When it comes to using Six Sigma principles to reduce variation, more often than not you have to put a business case forward. If you don’t, you’ve added substantial overheads to your bottom line and may have little value to show for it.
So ask yourself, does your business need Six Sigma level of quality? And if it doesn’t, what is the best improvement program for you!
They are both excellent methodologies when used in the right place in the right capacity!
