Bendell_AReviewSixSigma_71299

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A review and comparison of sixsigma and the lean organisations

Tony BendellCentre of Quality Excellence, The University of Leicester, Leicester, UK

Abstract

Purpose – The purpose of the paper is to review and compare six sigma and the lean organisationapproaches to process improvement. The basis for combination and compatibility is evaluated and aholistic approach proposed.

Design/methodology/approach – The examination is based on the author’s extensive practicalconsulting and training experience with diverse six sigma, lean and business process improvementprogrammes in numerous companies across Europe and worldwide, as well as theoreticaldevelopment of his previous published work.

Findings – The paper contends that the current literature on the compatibility and combination of six sigma and lean is limited and disappointing when examined for a common model, theoreticalcompatibility or mutual content or method, but that they can be effectively combined into one system.

Research limitations/implications – The study is experience-based and not supported by aspecific-quantitative investigation.

Practical implications – Companies pursuing six sigma and lean implementation programmesneed to carefully examine how the proposed initiatives relate to each other and other initiatives beforefully committing, or at least to review the programme, to enable sensible programme design andmanagement.

Originality/value – This paper focuses on six sigma and lean programmes in practice, rather thanthe theoretical basis or motivationally based argument.

Keywords Quality, Six sigma, Production improvement

Paper type General review

IntroductionTwo currently “hot” process improvement approaches are six sigma and leanenterprise theory. The two are related, but distinct. Six sigma focuses on the reductionand removal of variation by the application of an extensive set of statistical tools andsupporting software, whilst lean thinking focuses on the reduction and removal of waste by process and value analysis. Both methods have origins in aspects of Japaneseimprovement practise, but have been to a large extend molded in North America.An area of overlap in Poka Yoke/mistake proofing since human errors cause bothunwanted variation and waste. Lean manufacturing, now extended to lean serviceoriginated in Japan in Toyota. In contrast, six sigma is an America packaging of a

statistical approach widely used in Japanese industry.There have been attempts to combine the two methodologies under titles such

as “Lean Six Sigma” or “Lean Sigma”. Often, this alleged combination is no morethan a “philosophical” or near-religious argument about professed compatibility of approaches. In reality these are practical examples of incompatibility and evenconflicts between the approaches that have lead to suboptimal processes and processimprovement programmes. To what extent then are the two approaches compatibleand how can they be effectively combined in one system?

The current issue and full text archive of this journal is available at

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This paper reviews the origins and nature of the six sigma and lean approaches toprocess improvement, identifying their individual and joint strengths and limitations.A comparison is made of the two approaches and of the argument for and againstcombination discussed. The basis for compatibility is assessed and holistic approach

to combination into a six sigma – lean methodology is proposed.

The six sigma approachThe professional and academic management and engineering press has been givingincreasing attention to six sigma. Bendell (2000) reviewed the origins of the six sigmaapproach. Bendell and Marra (2002) analysed the method, Bendell and Corke (2001)amongst others focussed on particular deficiencies and criticisms of the approach, andBendell (2002a) considered whether application in Europe was qualitatively different.Originating in Motorola and highly developed within GE and many others, theapplication has now spread across manufacturing, design and transactional areas.See, e.g. Harry and Schroeder (2000) and Breyfogle (1999). Applications in the service

sector have focused, in particular, on financial services, travel and more recently thepublic sector.The approach has proved itself highly effective in terms of delivering cost

savings and, increased customer satisfaction. The approach is based uponproject-by-project improvement, with projects lead by full-time improvementengineers or managers termed “Black Belts” or part-time improvers (minimum20 per cent) often from supervision referred to as “Green Belts”. These make useof an impressive arsenal of statistical tools within the DMAIC projects phases of define, measure, analyse, improve and control. Initial Black and Green Belt projectsare selected prior to training and projects are typically not signed off, nor Blackand Green Belts certified, until target financial savings are independently verified.This process ensures that the transfer of method to first application is effectively

implemented.Typically, six sigma is a strategic, company-wide, approach. By focussing on

variation reduction, projects have the potential of simultaneously reducing cost andincreasing customer satisfaction. However, whilst the rhetoric of six sigma emphasisescustomer focus, observation and discussion strongly suggest that typically themajority of projects have a “Cost-Down” focus that does not directly impact oncustomer satisfaction and hence are suboptimal. Previous work by the author hascontrasted traditional “Cost-Down Six Sigma” with “Profit-Up Six Sigma” andidentified further opportunities to extend the six sigma model.

In many ways, despite what some in Europe have identified as “American hype”there is nothing fundamentally new in six sigma. It is just a very clever package withall or almost all of the right ingredients, and a project and company-wide infrastructure

to hold the programme together to make sure it delivers the desired payback. It focusesaround Juran’s concept of project-by-project improvement with clear responsibilitiesand authority; and before and after performance measurement, typically on a costbasis. It also relies (for its power) on the use of approximately 140 statistical tools andconcepts to effectively define, measure, analyse, improve and control variation.The DMAIC project methodology is particularly effective for manufacturing andsimple transactional processes – especially when an additional T: “transfer” stage isadded at the end to spread the learning to other areas.

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Clever too is the training approach, whereby Black and Green Belt candidates havea project selected prior to training, work on it between the training modules (whichtypically last four days and are three to four weeks apart) and subsequently need todemonstrate externally validated savings/payback before having their initial projects

signed off and achieving Black or Green Belt status. Typically, a Black Belt will trainfor 20 days and a Green Belt 10-15 days, but the integrated project approach ensuresthat the transfer of theory to application takes place quickly and effectively. Anotherkey ingredient is the on-site mentoring, whereby experienced “Master Black Belts”provide support to their less experienced colleagues within a rigorous reportingframework.

The lean organisation John Krafcik, first employed the word “Lean” to describe the new productiontechniques introduced by Taiichi Ohno at Toyota after World War II. He wasstudying developments in the automobile industry as part of the MIT International

Motor Vehicle Programme lead by Daniel Roos, James Womack and Daniel Jones.The work was published in their book The Machine that Changed the World (Womack et al., 1990). They referred to the group of techniques pioneered byToyota which they extended into their ideas of Lean Thinking (Womack and

Jones, 1996).Womack and Jones identify five key principles of the lean organisation:

(1) the elimination of waste (or muda);

(2) the identification of the value stream;

(3) the achievement of flow through the process;

(4) pacing by a pull (or kanban) signal; and

(5) the continuous pursuit of perfection.

To achieve these principles, it is common to include a combination of techniques fromapproaches such as just-in-time, the theory of constraints, and total qualitymanagement, catalogues the techniques that can be useful in implementing lean.However, the use of techniques alone does not in itself constitute being a leanorganisation.

Lean can be summarised as the systematic pursuit of perfect value through theelimination of waste in all aspects of the organisations business processes. It requires avery clear focus on the value element of all products and services and a thoroughunderstanding of the detailed operations of the business processes by which theproduct or service is provided (the “Value Stream”).

As Womack et al. (1990, p. 13) put it:

Mass-producers set a limited goal for talks themselves – “good enough,” whichtranslates into an acceptable number of defects, a maximum acceptable level of inventories, a narrow range of standardized products. To do better, they argue, wouldcost too much or exceed inherent human capabilities. Lean producers, on the other hand,set their sights explicitly on perfection: continually declining costs, zero defects, zeroinventories, and endless product variety. Of course, no lean producer has ever reachedthis Promised Land – and perhaps none ever will, but the endless quest for perfectioncontinues to generate surprising twists.

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Comparing strengths and limitationsIn common with other business improvement approaches six sigma and lean have, notsurprisingly, been subject to a number of criticisms. From relatively obscure in-housecompany specific programmes, six sigma and lean training have become ill-defined

commodities with many different public offerings; one effect of this has been dilution,with a number of supposed six sigma training programmes including a greatlyreduced statistical basis, toolsets and training days and lean practitioner trainingvarying greatly in approach, toolkit and duration.

Regardless of their duration and coverage, however, the vast majority of six sigmaprogrammes have one common feature: they all focus on the use of statisticaltechniques and other “left-brain” tools such as Failure Modes and Effects Analysis.Lean training is also often mainly founded on left-brain thinking. This may be both thegreat strength and the great weakness of much of six sigma and lean methodology.

Although, often neglected, “right-brain” thinking, creativity and innovation cancontribute greatly to successful six sigma and lean implementation. There are manysimple and appropriate right-brain tools. The real issue, however, is the integral holisticuse of the right and left brain: whilst the left brain is useful for certain key six sigma andlean aspects and tasks, the right brain is crucial for others. For example, the “define”“improve” and “transfer” stages of six sigma projects clearly involve right-brainactivity, innovation and creativity. The right brain is also crucial for the key Black andGreen Belt roles of team leadership, idea generation and mentoring. In lean thinking thisseparation of left and right brains corresponds to the systems focus of some Americanapproaches to lean, in contrast to the people focused Japanese approach.

Another key deficiency of six sigma and lean is the frequent lack of a formal link topolicy deployment. The six sigma “gospel” says that it is fundamentally aboutcustomers – customer expectation and customer satisfaction. Jack Welch, former CEOof GE, for instance, is on record as saying that the six sigma approach has taught GE

employees about the importance of fulfilling and surpassing customer expectations.The authors’ experience of talking to Black and Green Belts, however, suggests adifferent view – the major driver in project selection is “cost down”. Similarly withlean, it is possible to forget the fundamental business strategic objective and getdominated by immediate cost down driver.

In the six sigma and lean models, “cost down” is not necessarily at the expense of “quality down” as it may have been historically. Rather, by concentrating on control andreduction of variation and waste and hence defectivity, cost can be reduced and customersatisfaction simultaneously increased. Sometimes, however, all the real internal emphasisis on cost. In spite of this, there is much more to the customer satisfaction dimension thancost reduction. The institutionalisation of six sigma or lean to the “cost down” modelresults into narrow a focus on the traditional toolkit and approach to implementation.

Consequently, major improvement opportunities may be missed.Going beyond “cost down” requires managers to think beyond the cost elements of

improvement projects, such as the typical 3:1 recurring return on investment ratiooften looked for and quoted in six sigma. Clearly, whilst it is important, “cost down”should not be the sole driver of projects. The issue here is that cost represents animportant aspect of process efficiency – but does not, in itself, answer the effectivenessquestion as to whether you are providing the right product or service. Profit isgenerally a better focus, but itself may also be inadequate. See Bendell (2002b).

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Also there is evidence to suggest that to date the European development andexperience of six sigma and lean have been qualitatively different than that in the US.For example, a survey at the IQPC London Six Sigma Forum in 2001 implied that theuse of six sigma was seen as less strategic at the corporate level than in the US.

As well as the common strengths and limitations discussed above, it is apparent fromsection 2 and 3 that each of the two approaches has distinct strengths and limitationsrelative to each other. In particular, six sigma may be criticised for a potential tendencytowards complexity of technique and analysis, whilst lean may be criticised for potentialnaı̈ve simplicity. In reality, there apparent weaknesses are also strengths, since bothsimple and sophisticated tools are sometimes needed. Clearly, properly implemented sixsigma should perform well as an approach if the business issue being addressed is reallya variation one, associated with coping with variation in demand or loading, or variationin resource availability or performance. It is not the ideal approach for dealing withproblems of chronic waste or systematic under resourcing, for which lean methodologyis more appropriate. In contrast lean as a methodology is not primarily designed forvariation problems and lean programmes often focus on naı̈ve removal of all waste,

without regard to the difficulty this can create for the control phase, which is sofundamental a part of six sigma DMAIC methodology.

Combination and compatibilityThe literature on the compatibility and combination of six sigma and lean is limited and,moreover, disappointing when examined for a common model, theoretical compatibility ormutual content or method. Often, thisalleged combination is no morethan a “philosophical”or near-religious argument about professed compatibility of approaches. In reality, theseare practical examples of incompatibility and even conflicts between the approaches thathave lead to suboptimal processes and process improvement programmes. One suchexample has been referred to in the previous section whereby simplistic waste walks used

in some lean programmes attempt to remove all sources of waste, without realprioritisation, hence creating a major problem in the six sigma project “Control” phase,when the practicality of controlling for all these sources may be questionable.

Whilst such attempts to combine the two methodologies under titles such as“Lean Sigma” and “Lean Six Sigma” may thus be questionable, it would be clearlydesirable if a single process improvement-based approach was available whicheffectively combined the approaches. Some attempts to do this exists in which one of the two approaches is taken as the “dominate” one, and the other approach as an“subordinate” one. For example, a number of major in-company six sigma programmesrelegate lean to the level of a group of additional tools, and merely teach them to Blackand Green Belts as part of their training. The opposite is not so common, but some leanconsultants have started claiming six sigma to be part of the lean approach.

Clearly, “subsiderisation” is not particularly a good approach, since bothapproaches have unique features and benefits, which only more effectivecombinations would retain. To what extent then are the two approaches compatibleand how can they be effectively combined into one system?

An holistic methodology for “Six Sigma – Lean”Both six sigma and lean have at heart the business process and the processimprovement approaches. An holistic model and methodology should thus retain this

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at its heart (Figure 1). The route through their approaches should depend primarilyupon the issues that the organisation is facing and its nature, as well a being influenced

by the organisation’s and individuals aspirations and perceptions.

For many organisations, a natural starting point for business process improvement

has been simple process thinking and mapping as a bonus for improvement (Figure 2).The next step depends on organisational interest and business imperatives. Customer

or market pressure may require ISO9001:2000 certification. Concern as to adequate

qualified human resource to support process delivery may simply pursuit of a standardsuch as Investors in People, whilst six sigma and lean are natural solutions to key

questions as to whether chronic waste or variation problems are dominate.The directions shown in Figure 2 are not, of course, mutually exclusive. However,

the diagnostic questions are useful to help identify the likely primary direction. The

route chosen should reflect primary needs.Whilst the above diagrams provide the basis for an holistic model and approach, the

nature of that approach needs further definition, which should encapsulate and contain

the common desirable features of six sigma and lean. These include:. strategic;

. not just systems approach – integrated people and systems approach;

. involvement and participation (not just specialist functions, e.g. operations

research);

. deployed change agents with line reporting;

. results-focussed;

. measurement and “tool” based; and

. integrated training and deployment.

Figure 1.A holistic model forbusiness processimprovement

Process Waste

Reduction

(Lean)

Process Variation

Reduction

(Six Sigma)

Process Error

Reduction

(Poke Yoke)

Basic Business

Process

Improvement

(e.g. Process Mapping)

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References

Bendell, T. (2000), “What is six sigma?”, Quality World , January, pp. 14-17.

Bendell, T. (2002a), “Experience of six sigma in Europe: is European six sigma different?”, Proceedings of GBATA, Conference Rome, June.

Bendell, T. (2002b), “Policy deployment and six sigma”, Proceedings of MAAOE 3rd International Research Conference on Organisational Excellence, University of

Paisley, Scotland, 11-13 September .

Bendell, T. and Corke, N. (2001), “Using your brain”, Quality World , January, pp. 28-30.

Bendell, T. and Marra, T. (2002), “Six sigma analysed”, Quality World , April, pp. 16-18.

Breyfogle, F.W. III (1999), Implementing Six Sigma: Smarter Solutions Using Statistical Methods,Wiley-Interscience, New York, NY.

Harry, M. and Schroeder, R. (2000), Six Sigma: The Breakthrough Management Strategy Revolutionising the World’s Top Corporations, Century Double Day, New York, NY.

Womack, J.P. and Jones, D.T. (1996), Lean Thinking , Simon and Schuster, New York, NY.Womack, J.P., Jones, D.T. and Roos, D. (1990), The Machine that Changed the World , Rawson

Associates/Macmillan Publishing Company, New York, NY.

About the authorTony Bendell has held the Chair of Quality and Reliability Management at the University of Leicester since 1998, set-up with funding from Rolls-Royce plc. and initially jointly in theUniversity’s Department of Engineering and Management Centre. In January 2002, the new

Figure Typical “S

Sigma – Leanorganisational route ma

ISO9001: 2000

Market Pressure?

Lean

OrganisationChronic

Waste?

Process Mapping

and Simple

Improvement

Variation

Problems?

Six

Sigma

Investors in People

People Issue?

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Centre of Quality Excellence was established at the University with Professor Bendell asDirector. The centre runs two MSc programmes by distance learning and in-company on themanagement of quality excellence and on customer service management. A new campus-basedMSc in Engineering Management is planned. Tony is also an experienced consultant and trainer

working with numerous large and small companies including Rolls-Royce, BT, Motorola,Marconi, Edexcel, Network Rail, the Learning and Skills Council and the public sector in the UKand abroad. As Managing Director of Services Ltd in Nottingham, one of the three largest BritishQuality Foundation licensed training and consultancy organisations, he has trained six sigmaBlack and Green Belts, as well as Senior Management Champions and advised on the design anddeployment of six sigma, the EFQM excellence model, benchmarking, ISO 9001:2000 and leanprogrammes in large and small manufacturing and service organisations in the UK andworldwide.

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