Why Lean is Replacing Six Sigma - and Lean Six Sigma Isn't

By Tamara Wilhite posted 12-20-2020 09:39:01 PM

  

This article originally appeared on Hubpages.

The History of Six Sigma Versus Lean Engineering

In the 1980s and 1990s, Six Sigma quality was, to put it succinctly, a big deal. There was concern in the US that companies needed to reach Japanese levels of quality to compete with Japan (ironically achieved by the advice of industrial engineering pioneers like Deming and Juran who were ignored in the US for years). Since the Great Recession started and arguably never ended, Lean has grown in prominence and may supplant Six Sigma as a priority. Let’s look at the reasons why.

Why Lean is Growing in Importance

The Great Recession of 2007 started with the housing bubble bursting, leading to a spike in unemployment, high levels of underemployment and financially squeezed consumers. The slight recovery since then led to a hollowing out of the middle of the market, where growth was mostly at the luxury end and cheap end. In such a market, making a product good enough for the consumer is more important than a perfect one unless you’re in the luxury / premium market. And the luxury/premium market can make its markup from perceived shortages, good branding and other methods that don’t necessarily cost more money to create.

For every other business and operation, the race was on to lower costs in order to stay in business. They needed to lower costs whether it was reducing wasted material, idle time on the shop floor or eliminate overtime in order to stay in business when sales declined. Or they needed to implement Lean principles to reduce cycle time to get production levels up at lower prices per unit. In some cases, Lean engineering meant reducing the number of machines and processing steps required to make something so that the factory needed less of everything to stay running, or it even managed to put together a more flexible factory so that it could switch between products more rapidly.

Economic factors also impeded the very idea of implementing Six Sigma projects in some areas. For example, if quality was good enough for customers, the money spent improving quality was better spent paying down debt, making acquisitions or saving for a potentially worse fiscal quarter. If quality of a product was declining relative to customer expectations or a multi-faceted problem, it might be cheaper to simply kill the product line than try to invest money to improve its quality and then try to salvage the reputation with customers.

Six Sigma declined in importance except for the few areas where perfection is critical, such as medical device manufacturing where even a few failures risks the financial survival of the operation. To quote Scott Adams, “quality is one of the luxuries you can afford when the marketplace is spraying money in your direction and you have time to tinker”. Then there is the fact that streamlining operations like reducing material handling and processing steps can indirectly raise quality levels by reducing the number of defect opportunities in the first place.

Lean engineering projects did bring the potential of increased branding in a way Six Sigma quality couldn’t. If your Lean implementations reduced waste or resource usage, it could lead to green branding that would generate a higher premium in the marketplace or better positioning with certain customer demographics.

Will Lean Six Sigma Grow in Importance?

Lean Six Sigma is an attempt to merge Six Sigma quality with lean philosophies. There are several reasons why lean will remain far more important than lean six sigma.

First and foremost is simplicity; lean six sigma is a complicated endeavor, and if you’re motivated to improve your bottom line by using less labor, materials or time per product/service delivered, you want the simpler solution – Lean Engineering. The more complex the project, the more likely it will fail, and if you’re driven by economic factors to implement Lean principles, you can’t afford a complicated project that has greater odds of being a waste of money.

The second reason LSS won’t gain ground is that quality has lower return on investment than saving time, money and resources if the market won’t pay more for higher quality products. There is no point to invest resources in a project that produces leaner operations and higher quality if you won’t see higher profits for the effort. Conversely, a lean engineering project that does reduce costs or shorten cycle time to increase throughput almost always has a high ROI, and you don’t have to worry about what the market will bear.

The third reason Lean Six Sigma won’t grow in importance relative to Lean or Six Sigma is the fact that it attempts to merge two different goals – higher quality levels and more efficient operations – while businesses are more likely to simply go with the project type based on their goal of today. If they want to focus on quality, they’ll run through several Six Sigma projects, not LSS. If they want to streamline operations, they’ll usually go with Lean engineering or Lean management projects, not LSS.

For these reasons, Lean projects will be undertaken far more often than Lean Six Sigma ones, instead of switching from a Six Sigma emphasis to LSS.

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Comments

02-04-2021 12:48:05 PM

Tamara,

I cannot share your enthusiasm for Lean.  Nor for Lean Six Sigma or Lean Sigma or Integrated TOC Lean Six Sigma (iTLSS) and now Operational Excellence.  Are we IEs desirous of destroying our professional reputation and standing out there? 

Lean is derived from the Toyota Production System .  TPS was reported first by a famous IE, Prof. Richard Schonberger, and dubbed "World Class Manufacturing".  I prefer to see TPS as "Toyota IE" and distinguish it from "Textbook IE" which is what the IE community continues to revere, despite industry having rejected it in favor of TPS (or Lean) decades ago.

I have not worked at Toyota so I never got to learn "Toyota IE" as an insider.  Nor did I work in industry for the first 22 years of my career, so I did not even experience IE in the real world.  I just stuck to the obsolete IE taught out of our textbooks to this day and did research to publish-or-perish, and not to advance the state of the practical application of IE science.

I think of Lean as being what a bunch of non-IEs at MIT determined to be the IE that Toyota pioneered and evolved to this day.  That being said, I think Lean is the IE that IEs do not know or accept as being IE perhaps.  Every aspect of Lean is correct and puts a lie to its analog that is discussed in our IE textbooks. 

But, on the positive side, it just takes a little tweaking of "Textbook IE" with a relevant infusion of OR, Data Science, Statistical Analysis and other quantitative methods --- and we get a modern-day "Textbook IE" that would work really well in the real world also.  It would obviate the need to swear by one or other buzzword that the community gravitates towards.

So my position is that IISE needs to stop this constant embrace of one buzzword after another because it is harming the reputation of both the profession and the professionals who now must compete in the job market with "fake IEs".  Lean needs to disappear and the IE embodied by Lean (hopefully the entire "Toyota IE" BoK) needs to be spliced/fused into the IE BoK.

If you desire, I could share with you several comparisons between "Toyota IE" and "Textbook IE" such as Single Piece Flow, Standard Work Combination Chart, Value Stream Mapping, Kanban System, etc.

All this being said, I am just a learner learning the IE that Toyota pioneered but has never completely taught to the outside world.

Respectfully,
Shahrukh

12-21-2020 05:53:57 PM

I agree with you in many ways.

In fact, a year ago, I formed and started a company CloserToLean-Six Sigma Consulting.

I went for a Lean training in Kentucky, USA many years ago.  The host company was the "Go to" for many Toyota suppliers, even those based outside the Bluegrass State.  (The Bluegrass Automotive Manufacturers Association, BAMA, had expanded its membership to include OEM suppliers well beyond the periphery of Toyota's car assembly plant.)

I also attended weeks of Six Sigma Black Belt and Lean Six Sigma Green Belt training programs.  One of my trainors (who is also in the business of certifying different belts - Master Black Belt, Black Belt, Green Belt levels) has a requirement for all BB candidates: Score 100% in all the quizzes or tests for the statistical software he recommended.

In my understanding, Toyota did not have that requirement for their team members--in Toyota and the host plant for my lean training, every team member is supposed to think "The Toyota Way" of continuous improvement.  I suggest that not everyone, not even too many, can perfect all the quizzes for a higher level Statistics course. But every team member can contribute to a never-ending continuous improvement campaign.

Everyone can make either smaller or bigger contributions to the lean, as we move closer and closer to a lean state.  But then, we need not exclude Six Sigma thinking. We can be "closer to lean," but also apply the Six Sigma methodology where and when appropriate.

In the IISE Operational Excellence Division, we kind of married "lean and six sigma." I am fine with that, it's need not be either or.