Tie Lean Six-Sigma To Tangible Business Impact

Managers, professionals and executives have long been on a quest to find the perfect tool for becoming effective at their jobs, as well as for making their organizations effective.

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Lean Manufacturing was developed, in part, to provide a methodology for achieving optimum flow of materials and products through manufacturing while reducing waste. Six Sigma, named from the statistical analysis of a normal distribution curve indicating the number of “standard deviations” from the mean, strives to reduce variability. Some have thought that if each is good, why not combine them. So, Lean Six Sigma was developed to provide the best of both worlds.

Mark George, managing partner in the Process and Innovation Performance Group at global consulting firm Accenture, based in Dallas, says, “Lean Six Sigma has come a long way. Today, organizations are more focused on business outcomes than they are on tools and techniques—business leaders have less tolerance for wide-scale training programs. Around the globe, the theme of ‘effective execution’ reverberates. In fact, all recent studies of global CEOs (chief executive officers), as researched by the Conference Board, indicate that execution excellence is their overwhelmingly greatest concern. Accenture has found that only through an architected focus on simplicity, speed and discipline can true execution excellence be achieved.”

George finds the Lean Six Sigma framework is still a vital and pragmatic component of this approach—it is necessary, but not sufficient. “Its powerful, yet generally reactive approach to problem-solving must be complemented by a proactive and deliberate road map of transformation toward a defined end-state—achieved in part through Performance Management,” he contends.

Some think that excellence is a destination. But that can lead to a false sense of arriving at perfection. George says, “Achieving true execution excellence is a journey requiring continual management and refinement. Organizations today realize that structure (operating models) and execution are deeply intertwined. True transformation and competitive advantage requires a concerted effort to optimize both and align them with business strategy and market dynamics. The most successful firms today understand the interrelationships among structure, process, offerings and customers and their effects on profitable growth. Without this understanding, the costs of complexity go unchecked and can often destroy shareholder value faster than Lean Six Sigma can help create it.”

Tools approach

If you look back a couple of decades, companies frequently took a tools-based approach to business process improvement—thousands of companies embarked upon initiatives with the implementation of a single methodology, such as Total Quality Management (TQM), Total Productive Manufacturing (TPM) or Continuous Flow Manufacturing (CFM), which was based on the Toyota Production System (TPS) (which later evolved into Lean Manufacturing) and Six Sigma. “By around 2002,” George continues, “the majority of firms around of the globe began to embrace Lean Six Sigma as a way to simultaneously improve quality, cost and speed. Literally hundreds of thousands of Black Belts and Green Belts have been trained on its tools and concepts. Many legacy programs unfortunately only measured success by the number of people trained and the number of projects in process. In later years, Lean Six Sigma programs were tied more closely to tangible business impact and shareholder value creation.”

News this summer detailing the woes of Toyota’s product design and manufacturing initially generated some negativity toward Lean in the mass press. Eventually, even Toyota’s executives admitted straying from the principles that brought the company world-wide acclaim. That was just one further example that these tools are like walking staffs to help you along the journey to operational excellence, not a tent along the river where you can rest in perfection.

Gary Mintchell, gmintchell@automationworld.com, is Editor in Chief of Automation World.

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