NC State of Business

Organizations often seek opportunities to improve their competitive advantage within their respective industries. Many organizations struggle to accomplish this goal without the use of a systematic approach to improve their organizational performance as it relates to quality products or services. Lean and Six Sigma are proven quality techniques that can help improve organizational performance. Although most organizations want to improve quality and cut costs, the deployment and implementation of continuous improvement methodologies is commonly viewed as a daunting undertaking.

For various reasons, some organizations focus their efforts on implementing Lean concepts, while others focus their efforts towards the implementation of Six Sigma methodologies. Lean is considered to be a systematic approach of eliminating waste in all processes of an organization and is based on the Toyota Production System (TPS). The term Six Sigma was coined by engineers at Motorola in the 1980’s which focuses primarily on reducing variation within a manufacturing or business process. Six Sigma improvements are based on a structured problem-solving methodology which requires project management skills.

Many organizations seem to find the appropriate balance of integrating both Lean and Six Sigma within their organizations to achieve optimal improvement performance. The term Lean Six Sigma represents this collaborative approach. By incorporating the tools and concepts of Lean into the structured DMAIC (Define, Measure, Analyze, Improve and Control) framework of Six Sigma, organizations are reaping the benefits of two very powerful and effective quality improvement methodologies.

Recently I was asked whether formal Quality Management Systems like ISO 9001, and programs like Lean and Six Sigma can work together effectively. Many people think that there are conflicts between the goals of ISO 9001 and the goals of Lean and Six Sigma. In reality, the goals of the three programs are generally the same – to continually improve processes, remove waste and non-value added activities, reduce process variation and enhance customer satisfaction.

We know that a quality management system like ISO 9001 (or AS9100, TS16949, etc.) provides the basic framework for managing a company’s processes as an integrated system with the goal of enhancing customer satisfaction. The standard requires that the processes must be defined and “criteria and methods” must be determined to “ensure that the operation and control of the processes are effective.” The standard also requires that the quality management system be continuously improved and suggests potential sources of improvement will come from the corrective and preventive action (CAPA) programs. This is where Six Sigma and Lean programs can add value and be integrated into the ISO 9001 program.

Six Sigma emphasizes the Define, Measure, Analyze, Improve, and Control (DMAIC) process for continual improvement. The focus of DMAIC is to define potential process problems, measure the processes to determine the critical factors which affect process performance, analyze the data and look for root causes, improve the process by implementing actions to fix the root cause problems and implement controls to “sustain the gains”. It is not much of a stretch to see that a well managed Six Sigma process would provide potential preventive actions for the CAPA program and could be a method to solve some of the recurring Corrective Actions.

Actually, in analyzing the language of the ISO 9001 standard, you will find that it has some terms in commom with the DMAIC process. There is a section in the standard titled “Measurement, analysis and improvement” which is the middle three steps of the DMAIC process. Control is required throughout the standard, specifically addressing monitoring and measurement activities and the use of monitoring and measurement equipment to provide the “controlled conditions” necessary for the effective operation of the processes. A Define focus is implied throughout the standard in determining the processes and their interactions, defining the root causes of problems and potential problems, and in reviewing the data collected for potential process problems.

So how does lean fit in? We know that Lean is focused on eliminating waste and non-value added steps in processes. Exploring the language of the standard again, we can find where the company is required to determine the processes needed for the quality management system and their application, sequence and interaction throughout the organization. Lean tools like Value Stream Mapping could be a robust way to address this requirement. We can look at the control of non-conforming materials requirements to see the importance of eliminating the waste of rejected parts. The Corrective/Preventive action program requirements seek to further eliminate waste by identifying and correcting product or process problems. Overall ISO 9001 requirements for Customer Focus and Continual Improvement align with the Lean enterprise focus on satisfying the customer and continuous improvement.

Integrating your ISO 9001, Lean and Six Sigma programs will align all your process improvement initiatives and increase the success of your business management system. This should lead to common goals instead of conflicting goals and, in the long run, increase the effectiveness and efficiency of your organization.

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” Charles Darwin

How is your organization adapting to the changes we face in today’s economy? I recently finished reading How Toyota Became #1: Leadership Lessons from the World’s Greatest Car Company (David Magee, 2007). Given today’s condition of the automotive industry, it may seem odd to look towards it for leadership lessons. However, this book does provide interesting insights into how leadership has influenced the success of Toyota.

I was particularly fascinated by the chapter entitled Cultivate Evolution. The bottom-line from the Toyota experience is that growing requires a willingness to evolve. This seems pretty obvious. We seek to continuously improve our organizations. Consequently, we desire that everyone in the organization is flexible and accepts change.

Taiichi Ohno, the father of the Toyota Production System, is quoted in the book as saying ‘something is wrong if workers do not look around each day, find things that are tedious or boring, and then rewrite the procedures’. How is your organization? Is there anything wrong? Are people accepting the current way of doing things or proactively seeking improvements?

Getting everyone to look around each day for new ways of doing business suggests an engrained culture of adaptation and regeneration. Therefore, leaders must be willing to:
• Model the behavior. Do you personally find new ways to do things?
• Encourage a willingness to take responsibility and ownership of making things better
• Empower, let go, or other similar words that mean providing employees the authority to make changes. This includes changing structures or organizational duties that may impede decision-making.

How does your leadership style affect your ability to cultivate evolution? As Darwin pointed out, it is not the strong or intelligent that survive, but those most adaptable. That is a lesson from Toyota’s evolution…. and given today’s economy, evolution is essential for an organization’s survival.

Magee, D. (2007). How Toyota Became #1: Leadership Lessons from the World’s Greatest Car Company. New York: Penguin.

This week I happened to be working as a Lean Six Sigma facilitator. It was the second week of a client’s on-site Green Belt training series. One of my favorite activities is when we hear team presentations from our training lab as well as presentations from the new and in-process company projects.

After several days of introducing powerful data analysis and optimization tools such as hypothesis testing and design of experiments, we ask the program participants to display and explain how they defined, measured, analyzed, improved, and controlled the problem process presented to them at the start of the training.

Since the tools are new, we always see interesting ways teams attempt to apply them and interpret results. I can never remember this exactly, but there is a good story our Lean Six Sigma team manager often tells about how a large statistical analysis software firm executive describes two key aspects of a project.

When you are collecting and analyzing the problem processes, reading graphs, making discovery and judgments, and developing solutions; he relates that to the work of a crime scene investigator. It is really all about knowing what you are doing technically, ruling out possibilities, getting to a root cause, and identifying solutions.

On the other hand, when it is time to present your results to management, he says you must be similar to a prosecuting attorney often putting on a case for investing thousands of dollars now to save millions over time. Weak and confusing presentations can often discredit months of great Lean Six Sigma work. Executives often care little about multiple presentation slides of complex graphs from statistical packages even though the Black Belt or Green Belt practitioner will carry great pride in his or her proper use of a critical analysis tool.

Lean Six Sigma presentations are not unlike any other displays of information for discussion. We must work very hard to consider practical concerns of the audience. Although the “devil may be in the details”, it is okay to leave him there and put more effort into your interpretation as to what must now be done to realize those bottom-line savings. You did promise them at the beginning of your project...