Lean Six Sigma
So - you want to boost your efficiency?
Maybe you want to make your team more productive.
Or perhaps you’re looking to supercharge profitability.
There are plenty of options out there.
“Try this tool!”
“Use this technique!”
But knowing which one will work for you?
It’s as tough as running the business itself!
You need a methodology that makes sense.
You need a methodology that identifies and solves problems.
You need a methodology that you can trust with training and certifications.
You need Six Sigma.
“Wait - what’s that?”
Six Sigma is a set of tools and techniques that improve business processes.
It aims to identify and remove the causes of manufacturing defects.
But it can be applied to just about any sector and process.
Because it’s rooted in statistics.
No, you don’t need a maths degree to decode it.
But it was a team of maths whizzes that we helped a few years back.
We worked with an accounting firm based in Glasgow in 2019.
And we were mostly successful making them more efficient.
They wanted instant fixes, like automation software.
(We knew how to do that.)
However, their efficiency would improve with every new feature…
And then stop.
These solutions will only take you so far.
You need a strategy that pushes the boat beyond the harbour.
So, we introduced the director to Six Sigma.
She was obsessed.
We had her team trained up in no time.
Soon after that, we were laying out the DMAIC methodology…
And talking ‘em through Kaizen.
We helped them identify the problem process and got to work.
4 months passed and guess what?
They were reporting a 27% increase in efficiency!
Wait till you hear how much we saved them in 16 weeks.
Want to see those numbers on your own spreadsheets?
Then keep reading.
This article will give you the lowdown on:
What Six Sigma is
Whether your business needs it
The benefits of Six Sigma
A guide to the tools and methodologiess
And the companies that swear by it
Talk to the Process Mapping Experts!
What Is Lean Six Sigma?
How Does Lean Six Sigma Work?
A (Very) Brief History Of Lean Six Sigma
What Are The Benefits Of Lean Six Sigma?
What Can Lean Six Sigma Do For My Business?
3 Companies That Successful Used Lean Six Sigma
First, let’s define Six Sigma.
This is a set of methods and tools that improve business processes.
It does this by removing waste and minimising variation.
This means the quality, accuracy and speed of product delivery improves.
Six Sigma uses statistical methods to detect problems.
It then uses the data-driven insights obtained to improve processes.
Six Sigma experts are often brought in to manage the project.
But you don't need to be an expert.
Anyone can learn how to apply the tools and techniques themself.
So you know what it is.
But why is it called ‘Six Sigma’?
This is where things get complicated.
The term originates from the statistical modeling of manufacturing processes.
The more mature a process, the fewer defects it will produce, right?
Manufacturing processes that only produce 3.4 defects per 1,000,000 opportunities are ‘Six Sigma quality’.
Still with me?
A ‘sigma’ is a measure of standard deviation.
Something within -6/+6 of the centreline of a control chart shows little deviation from the standard.
That means the process is well-controlled.
Most of the products are produced to standard specifications.
Therefore, the process is accurate.
There are several different sigma levels.
Each has a different number of allowed defects per million.
I’ve already mentioned that Six Sigma is a set of methodologies and tools.
But what are they?
First, the methodologies.
There are two methodologies:
DMAIC - it incrementally improves existing processes
DMADV - it optimises new products and processes
We will talk about them in-depth later.
Second, the tools.
Six Sigma practitioners use them to measure and analyse processes.
The most popular ones include Root Cause Analysis, CTQTree and Process Mapping.
At the heart of this toolset are the Six Sigma principles.
Continuous improvement efforts are essential to achieve predictable process results.
Business processes can be defined, measured, analysed and controlled.
Improving processes involves the entire organisation.
If you can control the inputs, you can control the outputs.
Evaluating business processes continuously is crucial.
Minimising variation cuts costs and boosts efficiency.
So, we’ve covered the basics.
Now we just need to define what ‘lean’ means.
Lean Six Sigma is a methodology that combines Six Sigma and lean manufacturing.
It aims to eliminate the 8 types of waste:
It incorporates additional tools, like Kaizen and Value Stream Mapping.
Now you know what it is, we can go into how it actually works.
Let’s start with the methodologies.
I’ve already mentioned that there are 2 different methods.
First, there’s DMAIC.
It is the most popular Six Sigma methodology.
And it follows a pretty simply acronym:
D - define the needs of the customer, the requirements of the project and its goal
M - measure the aspects of the current process
A - analyse the data collected from measuring the process
I - improve the process and then test and verify the changes work
C - control the process to ensure errors are avoided
The other option is DMADV.
D - define the needs of the customer or the company goals
M - measure Critical To Quality (CTQ) characteristics, product capabilities, process capabilities and risks
A - analyse the data collected from measuring the process
D - design the new process
V - verify the design with a test run and hand over the new process to the process owner
What about the tools used in Six Sigma?
I thought I’d explain the most popular ones in detail.
This is a graph that tracks how a process behaves overtime.
It helps leaders contextualise upswing and downswings.
It helps businesses understand variations instead of doting on averages.
Post-its at the ready…
This is a visualisation method that shows the progress within a process.
Work is only taken on when the capacity permits it.
Here’s how it works:
A chart is drawn up with sections labelled ‘backlog’, ‘in progress’, ‘reviewed’, ‘in test’ etc.
Different post-its are then put onto the chart and moved as a process progresses.
This flow mapping follows products through a process until it reaches the customer.
It is a visual tool that shows the individual steps and flow of materials and information.
A Critical To Quality Tree identifies the needs of the customers.
It then translates the information into product and process requirements.
All you need to do is:
List the customer’s needs
List the ‘drivers’ - characteristics your customers will consider
And list the requirements to fulfill the customer’s needs
There’s a vast array of tools and techniques to choose from.
But who implements them?
Technically anyone can put these methodologies to work.
However, Six Sigma is known for its rigorous training and certification.
Typically, it is introduced to a business by trained practitioners.
They are certified according to different levels.
The different levels take inspiration from the martial arts concept of belts.
The executives select the champions.
They ensure Six Sigma is implemented correctly throughout the organisation.
And they mentor the black belts.
Master Black Belts
They advise on the Six Sigma practice and identify new projects.
They also mentor the black belts and green belts.
They are responsible for executing the methodology correctly.
They focus on statistical analysis and mentor the green belts.
They implement the Six Sigma recommendations.
Sometimes they also lead projects.
They have a basic knowledge of Six Sigma.They participate in minor ways, such as creating process maps or helping with small improvements.
They are new to Six Sigma.
Certification for this level requires only a few hours of training.
Sounds complicated, right?
Remember when I said anyone could implement Six Sigma?
Well, a few months ago we started working with an online book retailer.
They said they wanted to speed up their core business processes.
Namely the process of orders being fulfilled and data sent to the warehouse.
Their employees were still doing this manually!
Every day they would input orders into a spreadsheet…
Email confirmations to the customers by hand…
And then send the spreadsheet at the end of the day to the warehouse manager.
They were burning cash.
So, we offered one of our process workshops.
They loved it!
We helped show them their process in-depth.
And they immediately saw the problem.
After we fixed it with some automation software, they came back for more.
We’d already saved them $3,000 in their first month of using our software.
But they really liked the idea of finding problems and solving ‘em.
After all, it had worked pretty well for them.
So, we brought them in for another workshop.
And we talked them through Kanban Boards, Kaizen and the principles of Six Sigma.
We focused our attention on identifying the 8 wastes.
So, when they find a problem, they know what the cause is.
Then, all they have to do is come to us for the solution!
Six Sigma can transform your business’ future.
But now we’re looking into the past.
The story 100 years ago with Walter Shewhart, an engineer and statistician.
Shewhart proved that three sigma from the mean is the point where a process requires correction.
Many different engineers and consultants would follow up on this thesis, coming forward with their own takes on this over the years.
But it was Bill Smith of Motorola that coined the term ‘Six Sigma’.
Motorola pioneered the concept, setting it as a goal for its manufacturing in the early 1990s.
By 2005, they attributed Six Sigma to over $17bn in savings.
A few years after Motorola trademarked Six Sigma, other major corporations made it part of their strategy.
Honeywell and General Electric took the lead in 1995.
By the late 90s, two-thirds of the Fortune 500 were using Six Sigma to reduce their costs and improve quality.
In 2001, a new approach to Six Sigma was conceived.
Barbara Wheat, Chuck Mills and Mike Carnell wrote the book Leaning into Six Sigma: The Path to Integration of Lean Enterprise and Six Sigma.
It guided manufacturers through combining lean manufacturing and Six Sigma to improve cycle time.
As the noughties progressed, the principle expanded from manufacturing into other areas of the economy.
In 2011, the International Organization for Standardization (ISO) published a standard that defined Six Sigma.
Today, many different organisations and universities have their own certification programmes on offer.
We think Six Sigma is pretty darn great.
(In case you didn’t notice.)
And here’s why:
It comes laden with benefits that are devoted to your business future.
Being able to understand problems and fix them is essential for agile businesses.
But there are a lot more advantages that tag along, such as:
Higher customer satisfaction
An improved bottom line
Better employee satisfaction
Still not convinced?
Then let’s go through ‘em.
#1 - It reduces your business’ waste.
Time, resources and money.
They’re pretty important to your business, right?
Wait - no.
Six Sigma’s main objective is to cut down on the waste of time, resources and money.
It aims to produce more with fewer inputs.
Efficiency isn’t just about the speed of the process.
And it isn’t just about productivity.
It’s also about ensuring resources are being allocated effectively.
#2 - It can improve your time management
It’s a basic productivity tip.
Set out your goals in writing and you’re more likely to achieve them.
That’s what’s so great about Six Sigma.
To keep in accordance with its principles, employees need to present their aims.
And with a hierarchical flow between different belts, communication is at its peak, too.
These are the perfect conditions for productivity.
#3 - Your customer loyalty will increase
Six Sigma encourages businesses to investigate what’s going wrong…
Pull the data surrounding the issue…
And then brainstorm the solution.
If you can do this with your customer-facing services, you can’t go wrong!
Customer satisfaction will continue to get better and better.
This is the most important benefit we see with our clients.
One of our biggest clients is a dairy manufacturer based in Essex.
They produced vast quantities of food for grocery stores up and down the country..
Their turnover was in excess of $10m per year.
But a few months back their revenue slumped.
One of their products was being pushed out of the market by a competitor.
The competitor had faster machines, lower costs and a higher quality product.
“How did they do it?”
Doesn’t matter how they do it.
What matters is that they weren’t.
So, we went back to their drawing board and introduced them to a concept called the 8 wastes.
We found 3 in that process alone.
They finally had something to pin their concerns on.
They fixed the problems and their sales bounced back.
#4 - It elevates employee motivation
Who doesn’t want to be more motivated in their job?
After all, that’s what pinpoints your productivity.
Six Sigma creates a hierarchy of fully engaged and connected workers.
This is because employees become reliant on each other.
A system that encourages teamwork and upskilling can effectively boost motivation.
#5 - It lowers your costs
We all know increasing efficiency is the best way to decrease spending.
But by following fact-based decisions, you can improve quality and maximise profits.
Higher quality products increase sales.
Fewer errors means less correction.
And data-driven insights foolproof any strategic risk you might take.
Six Sigma can obviously do a lot for your business.
Basically, it can make each and every process faster and more efficient.
But it’s a bit vague, isn’t it?
You don’t want to put your business in the hands of sweeping statements.
You want details.
You want evidence.
You want to see Six Sigma in action.
And that’s exactly what I’ve done.
I’ve created a list of opportunities Six Sigma can provide for each industry or department in your business.
Improve inventory management
Reduce operations time and cost
Improve furniture finishing quality and consistency
Boost production yield
Sales and marketing
Reduce order cycle time
Improve the effectiveness of marketing
Enhance sales support efficiency
Speed up discharge time
Improve the efficiency of medication dispensing
Reduce bio-hazardous waste
Supply chain management
Improve cycle time
Enhance the effectiveness of corrective action process
Boost supplier communication
Optimise school transport systems
Improve the curriculum
Streamlining hotel supply inventory management
Improvising the purchasing and logistics process
These are just a handful of processes Six Sigma can take care of.
But if you’re still stuck for inspiration, stick around…
Bank of America
They have 66 million customers under their belt.
That means they have a lot of large processes constantly ticking over.
They needed to make sure their efficiency was up to speed.
That’s why in 2011 it adopted Lean Six Sigma methodologies.
Upper management realised they could assess operational performance and improve customer satisfaction.
They now focus heavily on customer data.
With Six Sigma they managed to slash problems like:
Issues with customer statements
Slow complaint processing
Customer satisfaction went through the roof!
They’re the world’s largest manufacturer of construction equipment.
And their biggest business secret is open to the public.
For the last 20 years, they’ve been using Six Sigma.
They use it to analyse problems, make the fix and improve their growth.
Today, they still utilise step-by-step metrics to monitor their profitability.
Ford Motor Company
In the late 1990s, this car manufacturer was struggling.
There was a wave of complaints against its product quality.
It had even fallen behind its rival, General Motors.
This was threatening its profitability.
But instead of overhauling its processes, it merely redefined them.
They introduced Six Sigma to help reorient them as a consumer products organisation.
Here’s an example of how they used Six Sigma:
Many Ford Mustang owners were struggling to close the hood due to a latch problem.
During car assembly, any errors are treated on the spot.
Or, they’re rejigged in a process rework after assembly.
It allowed their team to look at the interactions between components…
And deduce the true root cause of the issue.
So - do you reckon Six Sigma could work for you?
Of course you do.
You should now know:
How Six Sigma can serve your business
And how to implement it
But if you’re still not sure, we can help.
Discover how your company can reach hyper growth with the power of automation.