Lean Six Sigma increases the focus on Lean approaches with less emphasis on the statistical rigor included in the Six Sigma methodology alone.

—H. J. Harrington

Lean Six Sigma is a synergistic process that creates a value stream map of the process identifying value add and non-value add costs, and captures the Voice of the customer to define the customer Critical To Quality issues. Projects within the process are then prioritized based on the delay time they inject. This prioritization process inevitably pinpoints activities with high defect rates (Six Sigma tools) or long setups, downtime (Lean tools), with the result often yielding savings of $250,000 and a payback ratio between 4-1 and 20-1.

—Michael George
Lean Six Sigma expert and one of the founding fathers*

As with most new concepts, each has evolved from a previous concept. Total Quality Control is an expansion of the quality assurance concept. Total Quality Management (TQM) is an expansion of the Total Quality Control concept. Process redesign is an enlargement and expanded use of some of the key Total Quality Management concepts, applying them to the service and support processes. The Six Sigma methodology just set a new performance standard using tools that were part of the Total Quality Management concepts. The metaphor of “standing on the shoulders of giants” is often used to illustrate the notion of building upon the systems and programs that are already in place, as opposed to “reinventing the wheel.” While it is considered by most experts essential for a company to create familiarity with both Lean and Six Sigma disciplines by training employees, it is even more important to incorporate an integrated Lean Six Sigma philosophy into the company in order to change the culture.

The Lean concepts were based upon Henry Ford’s production process that was refined in the early 1900s and which became part of Total Quality Management and the Six Sigma methodologies. The Lean Six Sigma (LSS) methodology increases the focus on Lean approaches, with less emphasis on the statistical analysis requirements normally included in the Six Sigma methodology. The Six Sigma approach was directed at reducing variation, but most of the real contributions were made related to the elimination of no-value-added activities (elimination of wastes). The LSS methodology focuses on waste reduction with less emphasis on reducing variation. It recognizes nine forms of waste, which are an expansion of Taiichi Ohno’s original seven wastes. The nine forms of waste are:

1. Overproduction
2. Overprocessing
3. Motion
4. Transportation
5. Inventory
6. Waiting
7. Underutilized employees
8. Defects
9. Behavior

Taiichi Ohno was the father of the Toyota Production System and the creator of the original “seven deadly wastes.” Ohno’s training and insight led him to the conclusion that Toyota’s productivity should not be any lower in any way than that in the Detroit and European automobile manufacturers’ shops. As a worker and supervisor, he set out to eliminate the waste and inefficiencies in the part of the production process that he could control the results for, and these efforts ultimately led to the core beliefs of the Toyota Production System (TPS). Over the past 30 years, several elements of the TPS system have become adapted and adopted in the Western world, like muda (the elimination of waste), jidoka (the injection of quality), and Kanban (the pull system of just-in-time inventory stock control). For more information, see Guide to Management Ideas and Gurus, by Tim Hindle (Economist Books; Profile Books, London, UK). This guide has the lowdown on more than 50 of the world’s most influential management thinkers, past and present, and over 100 of the most influential business-management ideas in one volume.

Often just giving new terms or new names to already established approaches rekindles interest in that approach. This is evident in the recent enthusiasm of using Japanese terms for American established terms. For example, using the word muda (the Japanese word for waste) or Kaizen (the Japanese term for continuous improvement) can revive the executive team’s interest because it is not viewed as the same old thing.

To avoid any confusion, let’s start out by offering our basic operational definitions of Lean, Six Sigma, and Lean Six Sigma.

• Lean: The Lean methodology is an operational philosophy with a focus on identifying and eliminating all waste in an organization. Lean principles include zero inventory, batch to flow, cutting batch size, line balancing, zero wait time, pull instead of push production control systems, work area layout, time and motion studies, and cutting cycle time. The concepts are applied to production, support, and service applications. Lean focuses on eliminating waste from processes and increasing process speed by focusing on what customers actually consider quality, and working backwards from that.
• Six Sigma: The Six Sigma methodology is a business-management strategy designed to improve the quality of process outputs by minimizing variation and causes of defects in processes. It is a subset of the TQM methodology with a heavy focus on statistical applications used to reduce costs and improve quality. It sets up a special infrastructure within the organization that is specifically trained in statistical methods and problem solution approaches that serve as the experts in these approaches. The two approaches that these experts use in their problem analysis and solution activities are Define, Measure, Analyze, Improve, and Control (DMAIC) and Define, Measure, Analyze, Design, and Verify (DMADV).

  Six Sigma aims to eliminate process variation and make process improvements based on the customer definition of quality, and by measuring process performance and process change effects.

• Lean Six Sigma (LSS): The LSS methodology is an organization-wide operational philosophy that combines two of today’s most popular performance improvement methodologies: Lean methods and the Six Sigma approach. The objective of these approaches is to eliminate nine kinds of wastes (classified as defects, overproduction, transportation, waiting, inventory, motion, overprocessing, underutilized employees, and behavior waste) and provide goods and services at a rate of 3.4 defects per million opportunities (DPMO).

Note: Six Sigma, Lean, and LSS are all methodologies that contain a number of tools, techniques, and concepts that are designed to improve organizational performance.

Throughout this book, in keeping with common practice, the Six Sigma methodology, the Lean methodology, and the LSS methodology will also be referred to as just Six Sigma, Lean, and/or LSS.

It is important to note that Six Sigma, Lean, and LSS methodologies are all organization-wide operational philosophies/strategies with accountability and strategic focus. The real value of LSS starts to show when it is integrated with the organization’s strategic plan, helping to implement that plan with a focus on the end-use customers. In order to achieve the true benefits of LSS, projects will cross organizational boundaries and be focused on business processes. Sustained strategic results can be achieved when this is done. When applied to a business process, the benefits obtained move the organization toward world-class performance in that business process.

At the heart of all successful LSS programs is an effective infrastructure that translates the strategic goals and activity areas of the organization into specific short-term action plans that maximize value and provide proper governance and management, along with the monitoring of results.

It may surprise you to learn that Lean came before Six Sigma. Since the very earliest production systems management has fought to eliminate waste. Near perfection, on the other hand, was not a requirement for most consumers. Functionality for most consumers was the meet requirements quality standard that provided the maximum value (cost versus quality) to the consumer. The father of the Lean Production Systems, as we know them today, was Henry Ford Sr. There are very few of our products and methodologies that are truly breakthrough approaches. Almost all of our approaches are evolutionary rather than revolutionary. The Lean approach was born in the early 1990s with F.B. Gilbreth’s time and motion studies, where he believed that there was one best way of doing everything. This, in conjunction with Henry Ford Sr.’s Lean Production System, started the Lean focus. Toyota made use of this as a foundation and improved upon it to develop Toyota’s manufacturing system. Today’s approaches to Lean are based upon Toyota’s very successful manufacturing system.

In 1974 Motorola sold its TV production and design facilities to Matsushita, a Japanese manufacturer. Motorola had been one of the early developers of the TV concepts and one of the leading manufacturers under the brand name of Quasar Electronics, Inc. It promoted its TV as a TV with the work-center drawer for easy repair. Matsushita restructured the manufacturing process, applying Total Quality Control to it. As a result, internal and external defect rates and cost were decreased significantly. (See Figure 1.1.)

This major turnaround in the Quasar brand name reflected poorly on Motorola’s reputation. In addition, Motorola’s other operations were losing market share at a very rapid rate. In 1981, William J. Weisz, Motorola’s COO, directed that all processes within the company should show a 10-fold improvement within 5 years. To do this, Motorola embraced the TQM concept. In 1986 Weisz required all measurements to improve by a factor of 10, this time in just 3 years. This called for a radical change in the way Motorola’s processes functioned. To bring about such a drastic change, Motorola implemented what it called the Six Sigma Program. The program set an objective for all processes to statistically perform at an error rate no greater than 3.4 errors per defect per million opportunities. Six Sigma Quality became popular in the United States immediately following Motorola winning the 1988 Malcolm Baldrige National Quality Award. The information package that Motorola distributed to explain its achievements stated: “To accomplish its quality and total customer satisfaction goals, Motorola concentrated on several key operational initiatives. At the top of the list is Six Sigma Quality, a statistical measure of variance from a desired result. In concrete terms, Six Sigma translates into a target of no more than 3.4 defects per million opportunities. At the manufacturing end, this requires robust designs that accommodate reasonable variation in component parts while providing consistently uniform final products. Motorola employees record the defects found in every function of the business and statistical technologies are made part of each and every employee’s job.”

FIGURE 1.1

Results of TQC on Quasar’s performance.

Also during the early 1990s Motorola’s Six Sigma methodology was gaining momentum, as GE was promoting it as one of its major improvement drivers. Although Six Sigma was originally designed as an approach to reduce variability, quality professionals and consultants added to the basic statistical approaches a number of additional techniques that focus on process improvement. (See Appendix C for a list of Six Sigma Green Belt tools.)

Motorola’s initial focus was on reducing variation in a single measurement. (See Figure 1.2.) Although the concept of focusing on reducing variation was a sound one, Motorola continued to lose a major portion of its market share. By the time GE embraced Six Sigma, it realized that the major gains from a performance improvement initiative would be reached by focusing on streamlining the processes by reducing cost and cycle time. As a result, the Six Sigma program was expanded to focus on setting new levels of performance. (See Figure 1.3.)

FIGURE 1.2

Results of focusing on variation reduction.

FIGURE 1.3

Results from redesigning a process to set new performance levels.

Along with this new emphasis came a new set of measurements focusing on cost reduction, decreased cycle time, inventory turns, etc. As a result, the basic Six Sigma approach of Define, Measure, Analyze, Improve, and Control (DMAIC) was modified with the addition of an approach of Define, Measure, Analyze, Design, and Verify (DMADV). With Six Sigma roots based upon variation reduction and the manufacturing environment, many of the Lean tools became part of the Six Sigma body of knowledge.

With the economy in the United States changing from a production to a service economy, the focus on performance improvement transferred from the manufacturing process to the service and support areas in the early 1980s. This resulted in a great deal of focus on reviewing the support and service processes and redesigning them to make them more efficient, effective, and adaptable. Process redesign methodologies roots stem from the poor-quality cost studies that IBM conducted in the indirect (support) areas during the 1970s. This evolved into the business process improvement methodologies that they developed during the early part of the 1980s. These approaches were further defined and developed by Ernst & Young and published in the 1991 book entitled Business Process Improvement—The Breakthrough Strategy for Total Quality Productivity and Competitiveness, published by McGraw-Hill, New York.

Additional depth was added to the process improvement focus when Michael Hammer and James Champy published their 1993 book entitled Reengineering the Corporation, published by Harper Business, New York. The basis of these methodologies was the elimination of no-value-added (NVA) activities from these critical business processes. These approaches, which were developed to redesign or re-engineer processes, became key building blocks in the Six Sigma methodology during the 1990s.

The end result is that over the years Lean and Six Sigma have been viewed and utilized as distinctly separate methodologies to analyze and improve processes. Rather than employing them separately, however, many process gurus now advocate a merger of the two for more dramatic process improvement. While we agree that this merger or marriage is valid, project leaders of process improvement efforts that forcibly combine the two methodologies without understanding what they are trying to improve will achieve limited success. In the final analysis, process professionals must first understand their level of process maturity to choose the appropriate blend of Lean and Six Sigma methods and tools, and employ some type of hierarchy or Belt System to help make the marriage last.

Due to the heavy focus on statistical applications and extensive amount of time and training that was required to prepare individuals to use these tools, a unique organizational structure was established that allowed different titles to be used in support of the successful deployment at GE. It created an innovative recognition system called Black Belt Program to support its Six Sigma Quality Program. Individuals progressed through various expertise levels as follows:

• Blue Belts: Individuals who are trained in basic problem solving and team tools, thereby establishing a common improvement approach throughout the organization. All employees should be at a minimum at the Blue Belt level.
• Yellow Belts: Individuals who have been trained to perform as members of Six Sigma Teams. They are used to collect data, participate in problem solving, and assist in the implementation of the individual improvement activities.
  (Note: The Yellow Belt level was added on later to account for those who would become members of the Six Sigma Teams and assist with the process mapping, data gathering, brainstorming, communications, and implementation of solutions.)
• Green Belts: Individuals who have completed Six Sigma training, are capable of serving on Six Sigma project teams, and managing simple Six Sigma projects.
• Black Belts: Individuals who have had advanced training with specific emphasis on statistical applications and problem-solving approaches. These individuals are highly competent to serve as on-site consultants and trainers for application of Six Sigma methodologies.
• Master Black Belts: Individuals who have had extensive experience in applying Six Sigma and who have mastered the Six Sigma methodology. In addition, these individuals should be capable of teaching the Six Sigma methodology to all levels of personnel and to deal with executive management in coaching them on culture change within the organization.

These definitions have changed over time. It’s now accepted that Green Belt training is different and less complex than Black Belt training. The same levels of expertise are used to distinguish background levels for LSS methodologies. Although the basic theory behind Six Sigma involved everyone in the organization, in many organizations that was not the case. In these organizations the Six Sigma initiative was made up of a few highly trained Green Belts or Black Belts whose total objective was to solve problems that would result in large savings to the organization. In many cases the Black Belts were expected to save the organization a minimum of $1 million a year or they would be reassigned. In these cases big improvement opportunities were acted upon and solved within 2 to 3 years and there was no need for the Black Belts’ service anymore. As these major problems were solved, many executives began to realize that everyone needed to focus on the elimination of waste, not just in the production areas, but also in the support areas. This has resulted in LSSGB and LSSBB becoming facilitators of waste reduction as well as problem solvers. It also focuses the organization on waste reduction versus reducing variation. (Note: LSS does not ignore measurement where it is required, but does not rely upon it absolutely as Six Sigma does.)

LSS builds upon the technical competency structure that was developed for Six Sigma. The following are the competency titles and requirements related to the LSS methodology.

Lean Six Sigma Black Belt (LSSBB)

One LSSBB for every 100 employees is the standard practice. (Example: A small organization with only 100 employees needs only one LSSBB or two part-time LSSBBs.)

LSSBBs are highly skilled individuals who are effective problem solvers and who have a very good understanding of the most frequently used statistical tools that are required to support the LSS system. Their responsibilities are to lead Lean Six Sigma Teams (LSSTs) and to define and develop the right people to coordinate and lead the LSS projects. Candidates for LSSBB should be experienced professionals who are already highly respected throughout the organization. They should have experience as a change agent and be very creative. LSSBBs should generate a minimum of US$1 million in savings per year as a result of their direct activities. LSSBBs are not coaches. They are specialists who solve problems and support the LSSGBs and LSSYBs. They are used as LSST managers/leaders of complex, simple, and important projects. The position of LSSBB is a full-time job; he/she is assigned to train, lead, and support the LSST. They serve as internal consultants and instructors. They normally will work with two to four LSSTs at a time. The average LSSBB will complete a minimum of eight projects per year, which are led by the LSSBB himself/herself or by the LSSGBs that they are supporting. The LSSBB assignment usually lasts for 2 years.

A typical LSSBB spends his/her time as follows:

• 35% running projects that he/she is assigned to lead
• 20% helping LSSGBs who are assigned to lead projects
• 20% teaching either formally or informally
• 15% doing analytical work
• 10% defining additional projects

The LSSBB must be skilled in the following six areas:

• Project management
• Leadership
• Analytical thinking
• Adult learning
• Organizational change management
• Statistical analysis

Most of LSSBB training focuses on analytical skills, so selecting the LSSBB often is based solely upon the candidate’s analytical interests. This is all wrong. Other traits to look for in selecting an LSSBB are:

• Trusted leader
• Self-starter
• Good listener
• Excellent communicator
• Politically savvy
• Has a detailed knowledge of the business
• Highly respected
• Understands processes
• Customer focused
• Passionate
• Excellent planner
• Holds to schedules
• Motivating
• Gets projects done on schedule and at cost
• Understands the organization’s strategy
• Excellent negotiation skills
• Embraces change

LSSBBs should be specialists, not coaches. It’s important to build a cadre of highly skilled LSSBBs. However, they shouldn’t be placed in charge of the managing and improvement process. LSSBBs are sometimes responsible for managing individual projects, but not directing the overall improvement process; that should be the job of management.

For organizations that do not have an LSSMBB, the LSSBB is responsible for working with the executive team to bring about a cultural change in the organization where waste is not accepted and excellence is the standard for everyday operations.

The American Society for Quality (ASQ) recommends a 4-week class to train LSSBBs. Typical subjects that are covered are:

1. Define and measure phase tools
2. Introduction to Minitab
3. Introduction to iGrafx
4. Lean overview
5. Probability concepts
6. Basic statistics
7. Documenting the process
8. Measurement systems evaluation (gauge R&R)
9. Basic statistics and introduction to process capability
10. Advanced process capability concepts
11. Process simulation
12. Graphical analysis
13. Project management
14. Program and training expectations
15. Analysis phase tools
16. Failure modes and effects analysis
17. Central limit theorem
18. Confidence intervals
19. Introduction to hypothesis testing
20. T-tests
21. Hypothesis testing with discrete data
22. Power and sample size
23. Correlation and regression
24. Logistic regression
25. Testing for equal variances
26. Analysis of variance (ANOVA)
27. Nonparametric statistics
28. Analyze phase deliverables
29. Design of experiments
30. Full factorial designs
31. Fractional factorial experiments
32. Simulating designed experiments
33. Creating future state maps
34. Center points in two-level designs
35. Response surface designs (supplement)
36. Analyzing standard deviation
37. Statistical process control
38. Husky bracket exercise (Lean/flow and work-in-process (WIP))
39. Design for Six Sigma
40. Creating acceptance sampling plans
41. Standard work
42. Statistical tolerancing
43. Mistake proofing
44. Developing control plans

Lean Six Sigma Blue Belt

All employees should be trained as LSS Blue Belts as a standard practice. LSS Blue Belts are the normal workforce and may never be assigned to a LSST. However, they need to be part of the LSS culture and know how to apply LSS concepts to their day-to-day activities. They will receive 2 to 3 days of training covering the following subjects:

• How teams function
• What the Six Sigma processes are about
• How Six Sigma applies to them
• How to define who their customers are
• The seven basic problem-solving tools
• How to flowchart their process
• Area activity analysis
• How to participate in the suggestion program
• How to participate in “quick and easy Kaizen”

It is very important to note that once the major problems and opportunities have been addressed by the LSSTs, the organization’s LSS culture is sustained through the LSS Blue Belts using area activity analysis, suggestion programs, and quick and easy Kaizen.

LSS Blue Belt activities drive continuous improvement throughout the organization. Their efforts should result in a 5 to 15% improvement in all the organization’s measurements.

There are five phases that an LSS improvement project must go through:

• Phase I: The selling phase
• Phase II: The planning and training phase
• Phase III: The rollout phase
• Phase IV: The measurement of results phase
• Phase V: Sustaining the concept and holding the gain phase

Phase V is a very difficult, but the most important, phase, and the one that has been the least successfully completed. With methodologies like TQM, Six Sigma, and LSS to have a lasting effect within any organization, it needs to change the habit patterns for the employees and management. It is easy for an individual to do the in thing. During the rollout phase the changes are very visible. Big successes are celebrated. Everyone is getting credit for helping to implement the project. But with time (i.e., 1 to 3 years) the excitement wears off. Management stops following up to see that the changes are still working. Disruption in the status quo forces everyone’s attention on other things, and the gains that were made through the LSS initiative begin to disappear. For example, we once visited a client to check on how the LSS initiative was still working 2 years after implementation. We were shocked to see that much of the effort that was put in to making the transformation was wasted. The in-boxes in the support area that were completely empty at the end of the day 2 years ago are now piled high with paper. The production area that was spotlessly clean is now in disarray and dirty. And this was just a superficial view that any observer would notice. Without continuous focus on the elimination of waste it is awfully easy for management and the employees to slip back into their old bad habits.

This handbook focuses on the tools and techniques that make up the tools of the trade for LSSGBs and LSSBBs. But the most difficult part of the job for these highly trained technical people is mastering the organizational change management methodology that is required to transform the culture within the organization to one where waste of any kind is not tolerated and excellence is accepted as meets requirements. Success for an LSSBB or an LSSMBB is not measured by the dollars saved—that is only a temporary measurement. The real measurement of the success of the LSS program is a permanent change in the culture within the organization.

The process of incorporating LSS as a key component of an organization’s change infrastructure requires more than just training, for it takes a strong infrastructure built to support all projects and change initiatives from the ground up. LSS programs, when all is said and done, are a path to business excellence.

As we have discussed in this chapter covering the marriage of Lean and Six Sigma, both approaches have a few shortcomings that were especially evident a few years ago, before so many previous programs merged into the LSS program as we know it today. As a result, LSS evolved, getting stronger than some of the “giants” that had come before it.