Lean Manufacturing and Six Sigma: Group 43
We have learned in class about why it is so important to manage
effectively and efficiently. As managers we need to make sure that we run our
company efficiently so that we can use our resources in a wise and cost effective
manner. Likewise, we must make sure that we are effective so that our
organization can achieve its goals by making the correct decisions and carrying
them out. Two successful managing practices that have been implemented are
lean manufacturing and six sigma. We will begin by discussing the general
concepts of each managing style, continue by comparing and contrasting both of
the styles and conclude by giving examples of each implemented successfully
and unsuccessfully.
Let us first learn the basic concepts of lean manufacturing and six sigma.
The Lean Enterprise Institute says the core idea of lean manufacturing, “is to
maximize customer value while minimizing waste” (lean.org). In order to achieve
this goal, lean organizations focus management processes on optimizing the flow
of products and services rather than optimizing separate departments.
Eliminating waste through the value streams means less human effort, time and
capital are spent, and focus can be on the consumer’s desires. The ultimate goal
in lean manufacturing is zero waste. Six Sigma is also a business strategy
designed to help an organization achieve its goals. The basic concept of Six
Sigma is using statistical data to make management decisions and the
methodology is defined by 5 DMAIC steps; Define, Measure, Analyze, Improve
and Control. Six Sigma helps companies achieve quality by eliminating defects in
the entire product cycle. By eliminating defects in the inputs, Six Sigma increases
performance in the organization and decreases variations in its products or
outputs. When implemented successfully Six Sigma reduces defects in outputs,
improves employee morale and increases the quality and consumer satisfaction
of products or services.
Comparing and contrasting both concepts, the things that lean and six
sigma target to change are completely different but their goal is the same. Lean
manufacturing focuses on getting rid of waste in the inputs of production and
make the manufacturing process more efficient and quicker. Six sigma focuses
on decreasing the deviation of the outputs and decreasing waste on the output
end. Six sigma aims to be more effective in the marketplace by resonating more
with customers. Lean and six sigma are the same in that they aim to do the
same thing, decrease waste and maximize financial profits (asq.org).
Both of these thought processes’ main goal is to decrease waste within
the company either in decision making or in manufacturing. Lean elects to try
and decrease waste in more visible ways, things like inventory, usage of space
and safety. It attacks the surface problems that are easily visible, but may not be
easily repaired. Six sigma processing tries to decrease waste in ways that aren’t
easily seen and are more in the output of the product. Six sigma sees variation
in the product output as waste and tries to eliminate that variation while
improving overall performance.
Financial profits and maximizing those are also key components of both
lean manufacturing and six sigma. Again, they aim to do it in slightly different
ways, but hope to achieve the same outcome, higher profits. Lean aims to put
downward pressure on cost by eliminating unnecessary inputs to the
manufacturing process and the decision making process, making the cost
lower. Six sigma also aims to put downward pressure on cost, but in a different
way. Six sigma’s goal is to reduce variation in the output of the product and
making the output very predictable. This low variation in output means that the
company knows that there is going to be very little outliers in term of the quality
of the output and decreases waste cost on outputs that are less than optimal.
The goals of Lean Manufacturing and Six Sigma are equivocal, however
the means to this end are very different. As “Six Sigma is [the] philosophy of
process management[,] developed by Motorola in the 1980s that uses statistical
methods to minimize errors”(smallbusiness.chron); Lean Manufacturing’s “basic
usefulness is in providing the tools to identify and eliminate waste throughout the
manufacturing process, thereby increasing efficiency and
profit”(smallbusiness.chron). These methods are often times taught together and
used in tandem in order to utilize the advantages of both in a process referred to
as Lean Six Sigma. Utilizing both is effective due to the differences of the
methods. As Six Sigma strives to eliminate errors and variation as it “addresses
both the production and design of the product”(Hudqik), Lean looks to eliminate
“waste and streamline[s] the process of delivering the product or service”.
Lean’s roots are based out of Japanese manufacturing from the late
1980s to early 1990s and in turn is most known for its usage by Toyota. It’s
process of eliminating waste throughout the production cycle, which in turn
provides a better quality product while increasing profit and production by
reducing production cost and time stems from a multitude of principles and
methods. These include: “Kaizen – The principle of continuous improvement
based on employee suggestions; Kanban – Customer demand "pulls" the
product through the production process; TPM – Total productive maintenance is
used to reduce equipment downtime; TQM – Total quality management
continually improves product and service quality; 5S – Improving quality and
efficiency through cleaning up and getting organized; SMED – The principles of
Single-Minute Exchange of Die reduce the time needed to change a machine or
production line to produce a different product; Poka-yoke – Used to eliminate the
possibility of errors”(Hudqik).
Six Sigma is a more narrow view of the overall goal of raising profits and
lowering waste and errors while Lean is a more broad take. Six Sigma was first
introduced by Motorola in the 1980s and operates in real time using the unit
“Sigma” to measure the distance or “Deviations” from the standard, which
evolves over time in the manufacturing process. Six Sigma’s quantitative
approach “focuses on improving quality in manufacturing using data collection
and measurement, with the goal being to eliminate errors and variation. The
result is improved product quality”(Hudqik). In order to address both production
and product design, two methods are used by Six Sigma. These two approaches
are as follows: “DMAIC is the Six Sigma acronym for the five steps used to
improve an existing process or product. These are: Define the Project — This is
usually a problem to be solved. What are the goals, resources and limits of the
project? Measure – Collect data about the current system or process. Analyze
the Data — To find the root cause of the error. Improve – Design and implement
changes that will eliminate the error. Some techniques that are used include
design of experiments, poka-yoke and standard work. Control – Provide a
system that allows monitoring and adjustments to maintain and improve on what
was accomplished”(Hudqik). “DMADV is the Six Sigma methodology used to
improve an existing product or service, or for the creation of a new product or
service. The steps in DMADV are: Define – Establish the methods to be used
and the goals of the project. Measure — Identify characteristics such as those
that are critical to quality (CTQ), required capabilities, production process
capabilities and limits, and potential risks. Analyze – Develop and test design
alternatives. Design – Select the best alternative, based on customer
requirements. Verify – Verify the design meets the goals of the project and make
adjustments based on feedback and new data”(Hudqik).
There are many companies that use lean manufacturing or six sigma to
meet their quota and to operate an efficient or effective business, but there are
just as many or even more companies out there that try to use lean
manufacturing or six sigma and fail.
For example, Ford Motor Company recently tried to operate its
manufacturing plants very similarly to that of Toyota’s plants. Ford even started
to see an improvement once they started using lean manufacturing, but this
process did cause a major issue for them. Because Ford was more concerned
with quantity over quality, they had a “recall of 4.5 million cars in one month and
16 million cars since 1999” (Wakabayashi). Ford was not as worried about the
quality of their cars so they did not notice the fire hazardous cruise control
deactivation switch implanted in millions of their cars. Even though Ford
increased productivity, the execution of lean manufacturing ultimately failed
because did not pay enough attention to quality and detail.
Companies that pay a little more attention to quality and detail usually find
themselves using six sigma to develop their growth. The Home Depot tried
switching to a six sigma manufacturing style and they did see an increase in
profits, but the results overall effected the company negatively. The Home Depot
noticed that they were making a lot more money, but the style of manufacturing
had lowered employee culture in the stores and customer satisfaction. With the
reduction of employee culture and customer satisfaction, “the company dropped
from a top spot among major retailers to the bottom in 2005. Profitability soared,
but the stock price plummeted” (Del Angel & Froelich). The execution of six
sigma ultimately failed because Home Depot became too focused on quality and
lost track of the customer.
Works Cited
Del Angel & Froelich. “Six Sigma: What Went Wrong?” CRM Magazine. Web. 25 Oct.
2015. <
http://www.destinationcrm.com/Articles/Columns-Departments/The-TippingPoint/Six-Sigma-What-Went-Wrong-51394.aspx >.
Hudqik, Steve. “Applying Lean Six Sigma Methodology”. Reliable Plant. Graphic
Products. Web. 25 Oct. 2015. < http://www.Hudqik/Read/30141/lean-six-sigma >.
Wakabayashi, Daisuke. “How Lean Manufacturing Can Backfire”. The Wall Street
Journal. 30
Jan. 2010. Web. 25 Oct. 2015. <
http://www.wsj.com/articles/SB1000142405274870434310457503291021725724
0 >.
“What is Lean?”. Lean Enterprise Institute Inc.Web. 25 Oct. 2015 <
http://www.lean.org/WhatsLean/ >.
“What is Six Sigma?”. American Society for Quality. Web. 25 Oct. 2015 <
http://asq.org/learn-about-quality/six-sigma/overview/overview.html >.
Wood, Lang. “Lean Manufacturing Vs. Six Sigma”. Small Business. Chron. Demand
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Web. 25 Oct. 2015 <http://smallbusiness.chron.com/lean-manufacturing-vs-six-sigma43179.html>.