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Applying Lean Six Sigma, a good or negative business solution? Part 3

As the global economy hits records lows, many organizations are turning to Lean Six Sigma to try to improve their performance. Is it a bad move? Could it really benefit them?

During the 1970’s, the precursor to what is known today as Six Sigma was being used as a quality improvement tool by a company manufacturing T.V sets. This company impressed Motorola in their ability to produce their TV sets with a 5% defect rate. The then CEO Bob Galvin wanted to introduce the same process throughout Motorola so Bill Smith and Mikel Harry they developed the MAIC (Measure, Analyze, Improve and Control) model which became a roadmap for Six Sigma implementation. Six Sigma aims to reduce the cost associated with the negative impact of variation in business processes. Six Sigma quality is calculated as defects per million opportunities (DPMO). To achieve Six Sigma requires a DPMO of 3.4, which will deliver a 99.99966% yield.

Later, such companies as Unisys Corp, GE, Honeywell and Allied Signal developed and improved Six Sigma from a quality improvement tool to become an integrated management system using the DMAIC model (Define, Measure, Analyze, Improve and Control). These organizations trained key employees to become Six Sigma practitioners known as Green and Black belts. The cost of these training programs was much higher and they are more specialized than when teaching employees about lean principles. A disadvantage of Six Sigma projects is they will often require months to complete over days or weeks to complete a Lean events. There is a cost-benefits tradeoff between choosing whether to implement a Lean or Six Sigma program, however it all depends on the results needed. The rewards are huge if an organization can afford the Six Sigma training costs, which are more expensive than Lean training. There is however, many organizations who will waste their time and money because they do not utilize these new skills in an effective manner.

There was a paradigm shift in the late 1990’s that allowed the merger of Six Sigma and Lean to create Lean Six Sigma (LSS). It is a blending of the Six Sigma DMAIC model with Lean principles from the Toyota Production System (TPS). The Six Sigma belt system was adopted by training organizations who developed the procedures for attaining Lean Six Sigma certification. Several of the Lean training and certification institutions have also implemented a Six Sigma type of belt classification. The cost of training employees to become certified Lean Six Sigma practitioners can be much higher than a standard Lean training program. A business would need to conduct an analysis of the cost versus benefits to determine if Lean Six Sigma training will deliver a better return over Lean training. A litmus test is to determine which of these two programs can deliver results and impact the bottom line. The discussion has now reached a place where we can now ask the question presented at the beginning of this composition. Implementing Lean Six Sigma, a good or bad choice?