SCDigest: Is “Lean Six Sigma” the Winning Approach to Manufacturing and Supply Chain Improvement?

Discussion
Aug 04, 2008

By SCDigest Editorial Staff

Through a special arrangement, what follows is an excerpt of a current article from Supply Chain Digest, presented here for discussion.

Traditionally, many companies have adopted “Lean” and “Six Sigma” as their primary approach to operational improvement in their supply chains, or in some cases used both but as fairly independent tools. Increasingly, however, companies are seeing the benefit of combining the two techniques into a more integrated strategy that uses the best of each approach, which can be highly complementary. Many believe this “Lean Six Sigma” strategy is the best way to improve overall supply chain results and tackle process improvement more holistically.

Lean has traditionally been associated with the elimination of waste in business processes. Originally focused on improvement on the factory floor, it has since been used in some cases to power broader supply chain improvements. European retailer Tesco, for example, used Lean principles to engineer improved store replenishment processes.

Six Sigma is a quality improvement methodology that in general seeks to reduce process and results variation. Originally focused on improving the quality of manufactured components, the approach has also been expanded for use in improving almost any business process. Drug wholesale McKesson, for example, has used Six Sigma to improve a variety of supply chain processes, such as inbound trailer cycle times and pick face replenishment efficiency.

There are several principles that drive the strategy of bringing Lean and Six Sigma together:

  • Lean cannot bring a process under statistical control.
  • Six Sigma alone cannot
    dramatically improve process speed or reduce invested capital.
  • Both enable
    the reduction of the cost of complexity, but in complementary ways.

The two methodologies can interact and reinforce one another, and there is much evidence that total improvements in a process is larger if Lean and Six Sigma are implemented together.

“The opportunity is to reduce the variability in value-adding processes,” said SCDigest editor Dan Gilmore. “Lean should eliminate the non-value added process steps, and then Six Sigma can be applied to tighten up the execution of those processes.”

So, from a Lean perspective, what Six Sigma adds is the ability to reduce process variability. From a Six Sigma perspective, what Lean adds is often greater process and cycle time velocity, as well as lower operating costs. It can also be said that Lean focuses on reducing Time variability, while Six Sigma focuses on reducing Process variability. Lean tends to generate more “Quick Fix” solutions, while Six Sigma takes a more “Root Cause” approach.

Companies that have focused on either Lean or Six Sigma as a primary strategy to the exclusion of the other, or that use both but as very separate tools, should consider whether there is opportunity to deliver better results from a Lean Six Sigma strategy.

Discussion Questions: Do you think combining Lean and Six Sigma is usually the best total approach or are they better used separately to solve different problems?

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5 Comments on "SCDigest: Is “Lean Six Sigma” the Winning Approach to Manufacturing and Supply Chain Improvement?"


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Kai Clarke
Guest
13 years 9 months ago

These are great supply and logistical tools for both process and statistical improvement, but are really great tools in business as well. The article hints at this, but none of these should be used exclusively or at the detriment of the other. The real question, is what is the price of including these as part of a company’s supply chain and manufacturing process control? When doesn’t this make sense and what are these exclusionary factors, since there is always a cost of implementation and resource offset that needs to be considered?

Mark Lilien
Guest
13 years 9 months ago

Often Six Sigma simply becomes another Full Employment Act for consultants, operating via the latest “silver bullet solution” fad adopted by management. How many businesses attempt fad solutions instead of just hiring the right folks in the first place and then empowering them appropriately?

Camille P. Schuster, Ph.D.
Guest
13 years 9 months ago

Lean and Six Sigma processes are both helpful and important. One used to the exclusion of any other thinking will only provide incremental benefit to the company. They each focus on different issues, both sets of which are important.

However, even using only both of these will result only in incremental benefits for the company because the other half of the paradox needs to be addressed–consumer demand. If the products and services being created don’t provide value to the consumers from their point of view, a lean and six sigma certified manufacturing and distribution only gets products to the market that consumers don’t want in an efficient manner. All three pieces need to be addressed.

David Biernbaum
Guest
13 years 9 months ago

Lean is fine as long as the brand continues to have an ample boost of protein. Six Sigma is a valuable approach if it isn’t Greek to those down line that are charged with execution for the new processes.

John Wilkerson
Guest
John Wilkerson
13 years 6 months ago

I agree with the author’s operational definition of Lean Six Sigma. Lean Six Sigma combined with change management and strategic planning is the best approach to designing an effective continuous improvement initiative. Why would one add two additional steps to a traditional Lean Sigma program? Simple, strategic planning and change management adds the required structure for culture shift and long term management acceptance.

Lean Six Sigma is the right tactical tool for supply chain and manufacturing improvements. I recommend adding the above methodologies to increase the program’s success.

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