Chapter 1

Introduction

1.1 Importance of Lean Six Sigma.........................................................................................................2

1.2 Lean Philosophy..............................................................................................................................3

1.3 Six Sigma.........................................................................................................................................4

1.4 The Integration of Lean and Six Sigma............................................................................................5

1.5 Motivation for the report................................................................................................................7

1.6 Organisation of Report....................................................................................................................7

Over the last three decades, industrial organizations have embraced a wide variety of
management programs that they hope will enhance competitiveness. A number of different
approaches focused on the continuous improvement of production processes have emerged
focusing on the increase of productivity and cost reduction. Two currently “hot” process
improvement approaches are Six sigma and lean enterprise theory. The two are related, but
distinct. Lean Manufacturing proposes the elimination of wastes by means of actions that will
enhance the throughput of the production system whereas Six Sigma aims to improve the quality
based on premises such as the reduction of variation, measurement, data collection, focus on the
processes and customer satisfaction.
Hybrid development of the two practices is their fusion, which is termed as Lean Six Sigma
(LSS). As the market environment is rapidly changing with the demand of the end users, the
integration of lean philosophy and six sigma has received significant attention in recent years.
Studies conducted by various authors concluded that the two approaches are influential catalysts
of change when applied in isolation, but if applied in conjunction can prove to be powerful tool.
Aligning the business improvement philosophy of lean thinking and data driven investigations of
six sigma holds huge potential in an approach to organizational change and process
improvement.
Chapter 1 Introduction

1.1 Importance of Lean Six Sigma

Though both the lean paradigm and six sigma are effective approaches for continuous
improvement to achieve operational excellence and enhancing organizational performance but
both the approaches have certain limitations when applied in isolation. Lean majorly focuses on
elimination of non-value added activities and waste (or “muda”) in industry and also on
reduction of total cycle time and lead time with the help of various tool and techniques of
improvement. However, Lean still contains some challenges that face organizations such as the
fundamental shift required in an organization’s culture.
Six Sigma is a statistical methodology that aims to reduce variation in any process, reduce
defects to 3.4 parts per million opportunities and improve product quality in an organization.
These are done through powerful analytical and statistical tools and techniques such as Quality
Function Deployment (QFD), Failure Mode and Effect Analysis (FMEA), Statistical Process
Control (SPC), Design of Experiments (DOE), Analysis of Variance (ANOVA), Kano Model,
etc. Though, the time it appears to take to both implement Six Sigma and for the results to
become visible and also the high cost of Six Sigma training are some barriers for many
organizations to deploy this methodology.
In fact, deploying Six Sigma in isolation cannot remove all types of waste from the process,
and deploying Lean management in isolation cannot control the process statistically and remove
variation from the process. Therefore, the integration of these two approaches gives the
organization more efficiency and helps to achieve superior performance faster than the
implementation of each approach in isolation. Therefore, some companies have decided to merge
both methodologies to overcome the weaknesses of these two continuous improvement (CI)
methodologies when they have been implemented in isolation and to come up with more
powerful strategy for CI and optimizing processes. The fusion of Lean and Six Sigma
improvement methods is thus required because:
 Lean itself 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.
Chapter 1 Introduction

1.2 Lean Philosophy

The core idea of lean is the optimal utilization of resources by reducing waste elements and
standardizing processes to gain efficiency. It is a means of creating more value for customer with
fewer resources. The lean concept can be used for both product and service based industries. It is
a way of thinking and acting rather than a tactic or cost reduction program. Taiichi Ohno and
associates developed the lean approach to manufacturing shortly after World War II at Toyota
motor company. Waste was defined as anything which does not add value to the finished product
or anything other than the minimum equipments, materials, parts, space and time which were
absolutely essential to add value to the product. Later, U.S.A and European companies began
adapting the TPS under the title of Just-in-time (JIT) in order to remain competitive with
Japanese industry. Wastes are identified by value stream mapping (VSM). Traditionally, seven
forms of waste have been identified as over-production, defects, unnecessary inventory, over-
processing, excessive transportation, waiting, and unnecessary motion.
Seven forms of waste have been identified:
(1) Over-production
(2) Defects
(3) Unnecessary inventory
(4) Inappropriate processing
(5) Excessive transportation
(6) Waiting
(7) Unnecessary motion.
The “lean” concept has often successfully allowed companies to deliver bottom-line savings
in production through improves process efficiency. Lean is aimed at reducing waste and adding
value to production systems so that systems performance is significantly improved and a
company “does more with less”. The basic lean philosophy relies on a five phase approach. This
is:
(1) Identify value (from the point of the customer).
(2) Measure the value stream.
(3) Pull on customer demand.
(4) Create flow.
Chapter 1 Introduction

(5) Achieve perfection.

1.3 Six Sigma

Six Sigma was developed at Motorola through the efforts of Bill Smith, a reliability engineer, in
the 1980s .The real turning point in Six Sigma’s popularity came through the work of Jack
Welch, the then CEO of General Electric in 1995. Welch had observed the success experienced
through Bill Smith’s approach and intensely championed and led the Six Sigma methodology in
GE.
Six-sigma can be defined as the measure of quality that strives for near perfection. It uses a
disciplined approach for eliminating defects from any process. The main goal of six sigma is to
increase the profit of an organization by reducing variability, defects and wastes that undermine
customer loyalty. The principle philosophy of six-sigma is to reduce variability and to take
customer-focused data-driven decision. It uses statistical analysis to measure and improve a
company’s operational performance. Six-sigma is strongly associated with the process
improvement methodology that provides the organization structure to support continuous
improvement.
The statistical representation of six-sigma helps us in determining how the process is
performing. The term “Six Sigma” refers to a statistical measure of defect rate within a system.
Underpinned by statistical techniques, it presents a structured and systematic approach to process
improvement, aiming for a reduced defect rate of 3.4 defects for every million opportunities
(DPMO). It is very difficult to attain this standard in many industries but still it can be used as a
measurement to reduce the defect and narrow down the variability.
Six Sigma brings structure to process improvement by providing the user with a more
detailed outline of Deming’s plan-do-check-act cycle by guiding the initiative through a five
stage cycle of define-measure-analyze-improve-control (DMAIC).Each stage has a number of
corresponding tools and techniques such as statistical process control, design of experiments and
response surface methodology, providing the user with an extensive tool box of techniques, in
order to measure, analyze and improve critical processes in order to bring the system under
control..
Chapter 1 Introduction

1.4 1.4 The Integration of Lean and Six Sigma

The phrase “lean Six Sigma” is used to describe the integration of lean and Six Sigma
philosophies. The popularity and the first integration of LSS were in the USA in the George
Group in 1988. However, the term LSS was first introduced into literature around 2000. LSS
teaching was established in 2003 as part of the evolution of Six Sigma. Since that time, there has
been a noticeable increase in LSS popularity and deployment in the industrial world especially in
large organizations in the west such as General Electric and many others and in some small- and
medium-sized manufacturing enterprises (SMEs). Six Sigma complements lean philosophy in as
much as providing the tools and know-how to tackle specific problems that are identified along
the lean journey which is eliminating waste (non-value adding activities) and establishing a
standard. LSS are completing each other and there is an obvious relation between both
methodologies, which makes it possible for the synergy of the two methodologies

Six sigma 1980s TPS 1940s

-Eliminate defects Lean 1990

-Reduce variations in processes
-Reduce quality cost
-Demonstrate hard cash
savings to the bottom-line -Remove waste
-Increase customer satisfaction -Improve efficiency
-Improve Quality -Improve flow
-Use statistical tools -Determine value added
and Non-value added
activities
-Use non-statistical tools

Lean Six Sigma 2000

Powerful strategy for optimizing process with no waste in process or defects in
products, low costs, and increasing bottom line, customer satisfaction and
employee morale
Chapter 1 Introduction

Similarities can again be drawn between lean and Six Sigma, and the need for a culture of
continuous improvement operating at all levels within an organisation. For example, providing
lean with a more scientific approach to quality, so that through the use of control charts,
processes can be kept on target, effectively reducing waste incurred through faulty processing.
Table I summarizes the key lean implementation steps, along with the Six Sigma tools that can
be used as an aid to achieve each task. It can be seen here, that lean and Six Sigma are ideally
suited to be used in a comprehensive methodology incorporating the key elements of both, as
each stage can gain from the respective techniques, both following the Six Sigma road map of
define, measure, analyze, improve, control.

Table 1: Synergies between Lean and Six Sigma

Lean Six Sigma
Establish methodology for improvement Policy deployment methodology
Focus on customer value stream Customer requirement measurement, cross
functional management
Use a project based implementation Project management skills
Understand current conditions Knowledge discovery
Collect product and production data Data collection and analysis tools
Document current layout and flow Process mapping and flow charting
Time the process Data collection tools and techniques, SPC
Calculate process capacity and takt time Data collection tools and techniques, SPC
Create standard work combination sheets Process control planning
Evaluate the options Cause-and-effect, FMEA
Plan new layouts Team skills, project management
Test to confirm improvement Statistical methods for valid comparison, SPC
Reduce cycle time ,product defects, Seven management tools, seven quality control
changeover time ,equipment failures, etc. tools, design of experiments
,

The integration of lean and Six Sigma aims to target every type of opportunity for
improvement within an organisation. Whereas Six Sigma is only implemented by a few specific
individuals within a company, lean levels the empowerment and education of everyone in the
organisation to identify and eliminate non-value adding activities. If the two are actually
Chapter 1 Introduction

implemented in isolation, the outcome can result in neither being done effectively, constrained
by one another’s needs in the organisation.
Both approaches have the same end objective, i.e. to achieve quality throughout, whether it is
customer service, the product, the process or training and education of the workforce. They are
effective on their own, but organisations may well find that after initial improvement, they reach
a plateau; and find it difficult to create an ongoing culture of continuous improvement. To
overcome this, the lean approach must integrate the use of targeted data to make decisions and
also adopt a more scientific approach to quality within the system. Six Sigma, on the other hand,
needs to adopt a wider systems approach, considering the effects of muda on the system as a
whole
Figure shows how each approach can gain from being seen as a single framework, and also the
balance that may be reached if effectively brought together. The horizontal axis represents the
customer’s perspective of value, including quality and delivery performance. The vertical axis
represents the producer’s cost to provide the product or service to the customer. Under either
system, improvements will be made, but these improvements will begin to level off at a certain
point in time. With Six Sigma alone, the leveling off of improvements may be due to the
emphasis on optimizing measurable quality and delivery metrics, but ignoring changes in the
basic operating systems to remove wasteful activities. With lean management alone, the leveling
off of improvements may be due to the emphasis on streamlining product flow, but doing so in a
less than scientific manner relating to the use of data and statistical quality control methods.
Chapter 1 Introduction

1.5 Motivation for the report

Lean six sigma is an integration of the lean manufacturing and six sigma CI techniques which is based
on the DMAIC cycle of six sigma and integration of the techniques from the toolkit of the lean approach
into it. LSS is an emerging field in total organizational improvement in terms of quality, performance,
reducing waste, increasing flow, reducing inventories and increasing process effectiveness. There are
many researches and case studies conducted on the implementation of LSS in various fields. This work
comprises of study of all the researches done so far in the field of LSS implementation in the
manufacturing sector.

1.6 Organisation of Report