add notes - six signma vs lean

7/30/2019 Add Notes - Six Signma vs Lean

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Six Sigma and Lean Thinking


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Lean Thinking

What is Lean Thinking anyway?

As the name implies, it is really a mindset -- a way of viewingthe world.

Lean is about focus, removing waste, and increasing customervalue.

Lean is about smooth process flows, doing only those activitiesthat add customer value and eliminating all other activitiesthat dont.

Adding value is another way of saying generating revenue.

If it doesnt generate revenue then it must add cost, not value.

Sounds easy doesnt it, I mean after all, this is what we doevery day or is it? Lets see.


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Lean Thinking is about smooth process flows, doing only thethings that add customer value and eliminating otheractivities that dont (Waste). There are five basic steps inassessing lean operations:

1. Identify the activities that create value

2. Determine the sequence of activities (also called the valuestream)

3. Eliminate activities that do not add value

4.Allow the customer to pull products/services

5. Improve the process (start over)

Lean Thinking


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Lean Thinking is ideal for mature (energy), slow growth(automotive), low transaction industries (small business) or anorganization where mathematical tools are not common.

Lean begins to use systems thinking and considers all of theprocess interactions

But lean is still a reductionist approach focused on eliminatingwaste (cutting costs).

What is needed is to balance the resources released through

Lean or Six Sigma improvement programs with an increase inthroughput and need for resources. Otherwise you enter a costcutting, job losing cycle and your process improvement programwill grind to a halt.

Lean Thinking


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Six Sigma Vs Lean Thinking

Program Six Sigma Lean Thinking

View of Waste Variation is waste Non-value add iswaste

Application 1.Define

2.Measure3.Analyze

4.Improve

5.Control

1.Identify Value

2.Define Value Stream3.Determine Flow

4.Define Pull

5.Improve Process

Tools Math-Statistics Visualization

Focus Problem focused Process flow focused


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Six Sigma is problem focused with a view that processvariation is waste.

Lean Thinking, on the other hand, is focused on processflow and views any activity that does not add value as

waste.

Six sigma uses statistics to understand variation.

Lean uses visuals: process mapping, flowcharting, and valuestream mapping, to understand the process flow.

Six Sigma Vs Lean Thinking


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If you are in a mature, slow growth, low transaction, or non-mathbusiness then Lean Thinking will work real well for yourorganization.

Six Sigma and Lean use two different approaches to get the sameend result process improvement.

The Theory of Constraints (throughput improvement) takes theconcepts of Lean Thinking to another level ofsystems thinking

Lean Thinking


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There are five basic steps in assessing lean operations:

1. Identify the activities that create value

2. Determine the sequence of activities (also called the value

stream)

3. Eliminate activities that do not add value

4. Allow the customer to pull products/services

5. Improve the process (start over)

Lean Thinking


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For example, lets take a look at the most fundamental cyclewithin a lean operation, the order-to-delivery cycle.

The top level activities, in sequence, are taking an order, buildingthe order, and delivering the order.

The activities that do not add value are such things as: orderentry, backlog, inventory, and shipping delays

In a lean operation we could have the customer enter their ownorders; products made on demand, so we would have no backlogor inventory, and then product could be shipped overnight forminimal shipping delay

Lean Thinking -Example


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Companies with very short order-to-delivery cycles (and not usinginventory as a buffer) are lean operations. Lean operations have astrong cash cycle.

In general, the shorter the cycle the leaner the operation.

Lean Thinking -Example
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Lean uses systems thinking and considers all of the process

interactions, while utilizing the 5S system of organization.

Unlike Six Sigma, it does not require a lot of mathematical

analysis and works well for mature, slow growth or low

transactionbusinesses.

Lean Thinking


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Six sigma is all about variance reduction. By variance, we arereferring to the amount of control you have over yourprocesses. Another way to look at it is how good you are ator forecasting the future outcomes of a given process. SixSigma uses a scientific approach called DMAIC to analyze a

specific problem. DMAIC stands for Define, Measure, Analyze,Improve and Control, which is also known as the learningloop or PDCA.

Scientific and numbers-based organizations can benefit themost from Six Sigma. If you are in a high technology, hightransaction, or expensive error environment then Six Sigmacould work very well for your organization.

Six Sigma

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