Why YOU Need Lean Six Sigma – Part 7
The Five Critical Deliverables
The five critical deliverables of a correctly implemented Six Sigma programme are:
Improved service reliability. Providing consistency of performance and delivering the service right the first time
Improved responsiveness. Providing timeliness of the response and readiness to provide the service when the customer wants it
Improved assurance. Creating trust and confidence in the customer base
Reduced expenses. Improving the effectiveness and accuracy of business processes
Increase revenue. Understanding what your customers want, when they want it, and what is the right price
Millions of dollars are spent on the hidden cost of variation – defects and waste, and this variation usually comes from not having access to information.
The Six Sigma methodology helps organizations identify what they do not know and emphasizes what they should know. It provides a road map for taking corrective action to reduce those errors and rework that will ultimately cost the organization money, opportunities, and customers.
Robust processes that produce lower error rates directly impact overall productivity, customer satisfaction, and profitability.
Lean
Lean is a philosophy focused on shortening the timeline between customer requests and service delivery by eliminating waste.
Lean will ensure that every activity in-process step adds value to the end product or service.
This methodology defines waste as any activity that adds time and cost but does not improve the fit, form, or function of the service or product delivered to the customer.
The graphic below shows the nine types of waste:
The core objective of Lean is the creation of perfect value for the customer, and to attain it, an organization needs to:
- Understand customer’s needs and wants
- Identify waste elements that affect the performance and quality of the service or product
Once you know both your customer’s needs and areas of waste will allow you to create processes that deliver excellent value. This eliminates the need to inspect the defects at the end stage.
Removing waste from the entire process reduces human effort, space, defects, capital and time when delivering a service. This translates into a faster response to customer needs at a lower overall cost to the organization.
Management will need to change its focus to attain perfect value creation. So instead of optimizing separate technologies, assets, and vertical departments, management has to maximize the flow of products and services throughout the entire value stream.
Management must look at the end-to-end flow that brings a product or service to the customer. Once that flow is understood, waste and redundancies can be eliminated. The main deliverables of Lean, when deployed correctly, are:
- A reduction in work processes (WIP), or the backlog
- Increase productivity
- Increase process capacity
- Improved area or organizational layouts for optimization
- Standardized operations and processes
Lean Six Sigma
As far back as 1913, Henry Ford developed his assembly line system by focusing on standardization and removing waste from the car manufacturing process. Fast forward to today, and the world of quality has converged on the principles known today as Lean and Six Sigma.
Lean has a simple approach that focuses on improving the speed and efficiency of processes while providing breadth in problem-solving.
Six Sigma, by way of contrast, is more sophisticated and offers a method for drilling deep into complex issues. It also has a very structured approach to problem-solving that is absent in Lean.
So, Six Sigma is about enhancing the quality and accuracy of processes by reducing variation, while Lean focuses on achieving faster response times by eliminating waste.
You have already seen, therefore, that these methodologies offer complementary toolkits because they help address the root cause of different business challenges.
For example, if your goal is to reduce the account opening cycle time, Lean principles can help identify areas of waste to be eliminated.
On the other hand, if your goal is to reduce credit card losses, Six Sigma tools provide a better fit with understanding root causes.
I will describe implementing Lean Six Sigma successfully in a future article.
If you are starting to see how Lean Six Sigma can implement incredible value to your organization, not to mention your career, then you will want to keep a close eye on the launch of my forthcoming flagship video training system – Lean Six Sigma Masterclass
- This will allow you to qualify for the Lean Six Sigma Green Belt Practitioner Level!
