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Six Sigma and Lean Thinking

Lean Thinking focuses on identifying value-adding activities and streamlining processes by eliminating waste. The five basic steps of Lean are: 1) identify value-creating activities, 2) map the value stream, 3) eliminate non-value-adding activities, 4) allow customers to pull products/services, and 5) continuously improve processes. Unlike Six Sigma, Lean does not require extensive mathematical analysis and is well-suited to mature, slow-growth industries where processes can be visualized.

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Arjun Vinayakumar
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60 views12 pages

Six Sigma and Lean Thinking

Lean Thinking focuses on identifying value-adding activities and streamlining processes by eliminating waste. The five basic steps of Lean are: 1) identify value-creating activities, 2) map the value stream, 3) eliminate non-value-adding activities, 4) allow customers to pull products/services, and 5) continuously improve processes. Unlike Six Sigma, Lean does not require extensive mathematical analysis and is well-suited to mature, slow-growth industries where processes can be visualized.

Uploaded by

Arjun Vinayakumar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Six Sigma and Lean Thinking

Lean Thinking
 What is Lean Thinking?
 As the name implies, it is a mindset -- a way of viewing the
world.
 Lean is about focus, removing waste, and increasing customer
value.
 Lean is about smooth process flows, doing only those activities
that add customer value and eliminating all other activities
that don’t.
 Adding value is another way of saying generating revenue.
 If it doesn’t generate revenue then it must add cost, not value.
 Sounds easy doesn’t it, after all, this is what we do every day…
or is it? Let’s see.
Lean Thinking

Lean Thinking is about smooth process flows, doing only the


things that add customer value and eliminating other
activities that don’t (Waste). 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
 Lean Thinking is ideal for mature (energy), slow growth
(automotive), low transaction industries (small business) or an
organization where mathematical tools are not common.

 Lean begins to use systems thinking and considers all of the


process interactions

 But lean is still a reductionism approach focused on eliminating


waste (cutting costs).

 What is needed is to balance the resources released through


Lean or Six Sigma improvement programs with an increase in
throughput and need for resources. Otherwise you enter a cost
cutting, job losing cycle and your process improvement program
will grind to a halt.
Six Sigma Vs Lean Thinking

Program Six Sigma Lean Thinking


View of Waste Variation is waste Non-value add is
waste
Application 1.Define 1.Identify Value
2.Measure 2.Define Value Stream
3.Analyze 3.Determine Flow
4.Improve 4.Define Pull
5.Control 5.Improve Process
Tools Math-Statistics Visualization

Focus Problem focused Process flow focused


Six Sigma Vs Lean Thinking

 Six Sigma is problem focused with a view that process


variation is waste.

 Lean Thinking, on the other hand, is focused on process


flow 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 value


stream mapping, to understand the process flow.
Lean Thinking

 If you are in a mature, slow growth, low transaction, or non-math


business then Lean Thinking will work real well for your
organization.

 Six Sigma and Lean use two different approaches to get the same
end result – process improvement.

 The Theory of Constraints (throughput improvement) takes the


concepts of Lean Thinking to another level of systems thinking
Lean Thinking

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 -Example
 For example, let’s take a look at the most fundamental cycle
within a lean operation, the order-to-delivery cycle.

 The top level activities, in sequence, are taking an order, building


the order, and delivering the order.

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

 In a lean operation we could have the customer enter their own


orders; products made on demand, so we would have no backlog
or inventory, and then product could be shipped overnight for
minimal shipping delay
Lean Thinking -Example

 Companies with very short order-to-delivery cycles (and not using


inventory as a buffer) are lean operations. Lean operations have a
strong cash cycle.

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


Lean Thinking

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
Transaction business.
Six Sigma

Six sigma is all about variance reduction. By variance, we are


referring to the amount of control you have over your
processes. Another way to look at it is how good you are at
or forecasting the future outcomes of a given process. Six
Sigma 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 learning
loop or PDCA.

Scientific and numbers-based organizations can benefit the


most from Six Sigma. If you are in a high technology, high
transaction, or expensive error environment then Six Sigma
could work very well for your organization.

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