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How Can Lean Six Sigma Change Your Business?

by alex. (follow)
Business (103)      Management (27)     

Business Change
Image source: Flickr - tamuc

Lean and Six Sigma are two separate but closely related methodologies that enable companies to dramatically improve efficiency and quality. In a nutshell, Lean focuses on eliminating waste and increasing speed, whereas Six Sigma's main area of focus is on eliminating defects and improving quality. Combined, the two techniques become Lean Six Sigma, a methodology which is designed to deliver the 'best of both worlds.'

Though the techniques were originally designed for manufacturing operations, Lean Six Sigma can be implemented in nearly any company. Even firms which provide only services -- and which never design or build a single product -- find Lean Six Sigma useful. At the same time, achieving results with Lean Six Sigma requires dedicated effort and a certain level of patience.

Companies who apply it purely as a way of saving money, or who assume it is a 'cookie cutter' type solution that can be applied without thinking, tend to see it fail. On the other hand, properly applying Lean Six Sigma has powerful effects.

Why implement Lean Six Sigma?

The rewards of a well implemented Lean Six Sigma methodology can be truly remarkable. For example, Lean Six Sigma greatly improves the amount of value delivered to the customer: service quality, delivery speed, and product quality all go up. This creates more value for the customers, driving new business to the company.

Workforce morale and productivity also go up, as does the company's competitive stance. While the productivity improvement as a result of Lean Six Sigma-optimised processes is to be expected, surveys have shown that implementation also increases employee satisfaction and attitudes inside the workplace. Even those outside the company are affected: partners, vendors, and customers all find themselves drawn to the success and excellence exhibited by Lean Six Sigma-powered operations, which makes the company more competitive in effectively every aspect of its operations.

The benefits go further, too. Lean Six Sigma makes operations much more flexible and nimble, able to fluidly change their strategic positioning in the face of changing conditions. Unanticipated changes to the economic or business climate are much less of a problem.

Part of the reason for all this is the way Lean Six Sigma improves innovation. If management and personnel don't have to constantly solve problems or overcome minor challenges, it's possible to think in a much more innovative fashion. Rather than producing an unwieldy bureaucracy of standards, Lean Six Sigma standardises processes in such a way that project management, problem solving, personnel training, and other operational aspects are streamlined and simplified.

Finally, the most obvious benefit is to the bottom line. Lean Six Sigma experience a boost to the bottom line both because they save money (due to reduced waste) but because higher customer satisfaction as well as fewer returns means greater profitability. Many companies have been able to document annual Lean Six Sigma savings on the order of $2000 to $250,000 -- per improvement. Those figures do not include the added value generated by enhanced reputation, increased sales, and better customer goodwill.

What does it take to implement Lean Six Sigma?

As a rule, organisational dedication to the implementation are key to its success. Organisations simply must feel they have a compelling reason to implement Lean Six Sigma, and members of senior management must be wholly committed and invested in achieving Lean Six Sigma.

Part and parcel of this is that the organisation must be ready to invest qualified and appropriate resources for the Lean Six Sigma initiative. Necessary resources might be materials, employees, technologies, or all of the above, and both participants and stakeholders will need to work together in a team fashion. At the same time, team members must have the ability to take on initiatives without constantly needing to get approval and evaluation.

The organisation must also be able to commit sufficient resources and time to training -- this in particular is crucial to a positive outcome.

Finally, the organisation must recognise that change is for the long term. Rather than prioritising improvements which produce quick change, it must focus on those that produce the greatest quality impact. The overall feedback loop aspect is also pivotal to long-lasting incremental improvement, it cannot be bypassed.

How does Lean Six Sigma training work?

Training for Lean Six Sigma tends to follow the 'belt' model. Depending on a person's responsibilities, they may be need just an introduction to the concept, or they may go through training all the way up to Lean Six Sigma Black Belt, which is suited for team leaders, managers, Senior Engineers, and similar personnel.

Ultimately, however, the focus is less on having a full set of 'belts' and more on ensuring your business and your employees are equipped with the tools they need to be successful.

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