April 4, 2017
One of the fundamental goals of enterprises is to increase efficiency and Lean Six Sigma – a methodology that combines different types of analytical processes to target waste and decrease variance in a given business process – helps businesses accomplish those goals. Hudson has been consistent in applying the ideology of Lean Six Sigma to better improve how our clients conduct their business, as it’s one of the most comprehensive systems for streamlining business processes and finding cost-saving measures within the framework of traditional business practices.
While the term “Lean Six Sigma” connotes inaccessible technical jargon, the methodology is quite simple. It’s actually a hybridization of two existing ideologies: “Lean” manufacturing – which has been extended to other types of companies beyond the manufacturing sector – and “Six Sigma,” a relatively newer form of business optimization. Understanding each of these processes and how they interact is crucial to getting proper value from Lean Six Sigma.
Lean is sometimes referred to as lean production, and it’s focused on eliminating waste within a system. It’s a zero-sum problem: Lean determines that a process that’s not directly adding value to the customer in some form is inherently wasteful. Originally derived from the Toyota Production System, Lean focuses on seven types of business processes conducive to waste: transportation, motion, inventory, waiting, overproduction, over-processing, and defects.
Of course, some of those processes are inevitable consequences of doing business – for example, many companies can’t survive without transporting goods – but the goal of Lean is to ask whether the elements of each specific process are adding value to the customer or not. If not, efficiency will likely be increased if that process is eliminated. If businesses are transporting products or resources without adding value, that transportation is a form of inefficiency and the business would be better off without it.
Six Sigma has slightly different objectives than Lean, but it essentially seeks to improve the quality of business outputs by identifying defects and preemptively changing them to produce more uniform (or, phrased differently, less variable) outcomes in a given process. Six Sigma stresses continuous testing to produce predictable processes that are easily quantifiable, with concrete data to track the decrease of variability. Generally, teams – which have team leaders who are well-versed in the nature of Six Sigma – with discrete objectives are assembled with specific tasks in mind, and they utilize a wide variety of statistical tools and methodologies to help accomplish those tasks.
A fundamental aspect of Six Sigma methodology is DMAIC (an acronym that stands for “define, measure, analyze, improve, control”), a data-driven philosophy that emphasizes stability in business processes. While DMAIC is not necessarily exclusive to Six Sigma, it’s undoubtedly a crucial element of how Six Sigma proceeds in practice. First, potential sources of defects are identified and defined, then performance is measured and analyzed, improvements are made by altering the root causes of inconsistency, and there’s a new degree of control over process performance.
If it seems like “Lean” and “Six Sigma” have similar, overlapping goals, it’s because they do – and that’s why the term “Lean Six Sigma” has rose to prominence. It’s important to embrace the two separate purposes – reducing processes that don’t contribute to added value and standardizing processes that may have unwanted variability – even if they’re parallel objectives. Hudson understands that it’s critical to incorporate both “Lean” and “Six Sigma” methods into our consulting services, which is why we brand the services we provide as being motivated by “Lean Six Sigma.” We ensure that the most comprehensive methods of analysis are utilized in order to best deliver value to our clients, which is why we’ve embraced Lean Six Sigma.