Lean Roadmap Newsletter

Lean Roadmap Newsletter

Becoming a World Class Organization

28th Edition

The topics for this edition are:

Is There a Difference Between Lean and Six Sigma? When Should I Use Lean? When Should I use Six Sigma?

As a Follow-up to the Last Newsletter - What do You do When the Company does all the Right Things and You Still have a Brick Wall to Change?

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Is There a Difference Between Lean and Six Sigma? When Should I Use Lean? When Should I use Six Sigma?

Are You Struggling with What to Use When? Here are the Answers!

by Vince Fayad

There is very little difference between Lean and Six Sigma and anyone who thinks differently is very confused. Any company who is in the process or has already implemented a system of continuous improvement, should understand that they must have a system and they must use the tools of that system to improve the business.

Let us start with Six Sigma. We must understand that in the Six Sigma world there is a difference between "Six Sigma" and "6σ." The term Six Sigma represents a comprehensive management system. As a management system, Six Sigma asks questions like, "What are those characteristics that are Critical to Quality, Critical to Customers, and/or Critical to the Business?" Simply or mathematically stated, "y = f(x) or y is a function of x." Six Sigma companies use this process to identify what are the most important things to focus on and then they use the Six Sigma toolbox to improve those characteristics, features, or processes.

The term "6σ" [σ is the Greek Character for Sigma] is used to denote process control and capability. Once a company uses "Six Sigma" to determine what is important, they then use the tools to bring the process into statistical control and then make it more capable. The enemy of 6σ is variation. The more variation there is in a process the less predictable it is. The 6σ facilitators use a structured problem solving methodology known as DMAIC [pronounced dah-may-ick and stands for: Define, Measure, Analyze, Improve, and Control] to stabilize and improve a process. A process has achieved a 6σ level of quality when it is only producing 3.4 defects per million opportunities.

Lean, like Six Sigma, is a comprehensive management system. Lean uses a more systematic [in the author's opinion] management system or planning tool in the form of Hoshin Kanri or Policy Deployment. Policy Deployment is the tool the Lean World uses to identify the most important things on which the company should focus.

Lean, like Six Sigma, then uses a set of tools to attack the identified opportunities. The toolboxes are somewhat different in that Lean focuses more on the flow or lack of flow of information and material. The enemy of Lean is waste. Waste restricts the flow of information and/or material in any process. There is much overlap in the toolboxes of Lean and Six Sigma. Lean does have a component of Structured Problem Solving which attacks systemic process problems but is not nearly as "sophisticated" as the Six Sigma toolbox.

The simple fact is that to improve any business you must have both. Every organization must bring their processes into statistical control, make them capable, and shorten the time it takes to transform raw material into cash from customers.

The author remembers a time he was sitting in his hotel room in Appleton, WI when he received a phone call from a customer that needed help. We met in the hotel lobby and they began to discuss how they wanted to turn a particular manufacturing process into a process cell - make it Lean and speed up the process flow. Somewhere in the discussion they happen to mention that there was a 25% defect rate at almost every step in the process. After about an hour of explaining to me what they wanted to do, they stopped and looked at me and wondered why I was not saying anything [very uncharacteristic of this author]. The author simply asked, "Why would you want to speed up a process that has a 25% defect rate?" The author pointed out the fact that all you are going to do is produce more scrap faster. The response was, "Yes, but we will be more on-time!"

Both Lean and Six Sigma have a planning component to them. The planning component is the thing that is most often overlooked by many businesses. Most companies just want to implement the tools of Lean and/or Six Sigma. They HOPE [hope is not a strategy] by implementing the tools something good will happen. In general, things do get better over the short term, but it is not sustainable. Without the planning component, there is no connection between the tools and the business objectives of the organization. Thus, Lean and/or Six Sigma become something we do in addition to our already busy, hectic work schedules.

The only real difference between Lean and Six Sigma is an emotional one. The tools in the Six Sigma toolbox tend to be more confusing or complicated to use by the average workforce. For example, things like SPC [Statistical Process Control], ANOVAR [Analysis of Variance], and DOE [Design of Experiment] are not easy tools to understand and implement throughout an organization. In the Lean toolbox, we talk about things like Set-Up Reduction, Process Cells, and Total Productive Maintenance. Lean tends to have tools that are more easily understood by the average workforce and thus are easier to use by teams of people.

Other Process related tools or Structured Problem Solving tools such as: Value Stream Mapping, SIPOC's, Pareto Charts, Histograms, Fishbone Diagrams, 5 Why's, Brainstorming [to mention a few] are just as effective in solving systemic process problems and are shared by both disciplines. These simpler tools are also more conducive to teams empowered to improve their own processes - SDWT [Self Directed Work Teams].

Proponents of Lean must understand that before they can streamline a process they must bring it into statistical control and the process must be capable. One of the Eight Forms of Waste in Lean is scrap and rework, which the Six Sigma tools or Structured Problem Solving tools are designed to attack.

Proponents of Six Sigma must also understand that once they bring a process into statistical control and make it capable they must improve the velocity of the process. There is no point in making perfect product quality if the finished product is going to sit in inventory or WIP for days or weeks. Six Sigma people must use the Lean tools to create a "pull" system through their factories.

Wisdom is defined as knowledge rightfully applied. The truly wise organizations understand that to be successful you have to have a plan. The plan is based on the business objectives or goals of the organizations. The tools are only used to attack those opportunities that hinder a business from achieving its business objectives. Generally speaking the things that hinder businesses from achieving its goals are due to inconsistent processes and/or the lack of flow. The tools of Lean and Six Sigma are designed to achieve both a consistent, predictable process that creates value for the customer at a pace that meets customers' demand.

As a Follow-up to the Last Newsletter - What do You do When the Company does all the Right Things and You Still have a Brick Wall to Change?

When "Command and Control Syle" Management Habits are Deeply Engrained, Adopting Lean Behaviors can Very Difficult!

by Larry Rubrich

Identifying the brick walls can be difficult because often their actions are not generally overt. In the Lean planning meetings they all shake their heads and say, "yes, yes, we need to implement Lean in our company." When they return to their area of responsibility they tell their people, "no, nothing has changed, just keep doing it the way we have always done it."

As a Plant Manager/General Manager, I found it extremely difficult to "read" these brick walls in advance of their actually stopping change. Some people have the intuitive skill of being able to read this developing brick wall in face-to-face conversation. Obviously, the earlier you can discover the brick wall, the better.

The 90-Day Rule

Once you have identified the Lean implementation "brick wall" disguised as the supervisor or middle manager, what is the next step? Apply the 90-day rule. This is when you sit down with this individual and review the company's reason(s) and urgency for the Lean implementation or "trip." Using the context of a trip, the discussion can go something like this: the company is going on a train ride to become World Class. As a valuable member of our organization, you need to be on this train. To obtain a ticket to board this train for our World Class journey, in the next 90 days there are specific new behaviors you must acquire, and specific old behaviors that must be left behind. A discussion, definition, and measures of the new and old behaviors then occurs. Follow up meetings, to discuss the progress in eliminating the old behaviors and adopting the new ones, are essential and scheduled (not less than every two weeks). At 90 days, both parties should know what the decision on the boarding pass is.

If someone had asked us 25 years ago if everyone could change, we would have very optimistically said yes. Ultimately, our experience, supported by the literature, says no. What we need is to have open and honest dialogue with the identified brick walls and present choices, options, and consequences.

Some people might be critical of the short length of time we recommend to adopt the new behaviors. Our experience has been that if people will not move seriously to adopting the new behaviors in 90 days, giving them six months or two years will not make any difference. The worst part is that, while they are not changing during this six-month to two-year period, these supervisors/middle managers can seriously disrupt your Lean implementation. Depending on their position and the size of the company, they might even cause it to become a program of the month.

Dealing with "brick walls" is difficult because some of these management associates were trained and promoted in the old "command and control" management style by the company. They could have even excelled at this style of management because, for them, being "in-charge" and telling people what to do was an ego or power trip.

Now we want them to support two-way communication, empowerment, visual communication and scheduling, and self-directed teams. We want them to learn how to coach and mentor. Making this conversion, from a 80's style that gave them raises and promotions, can be very difficult. To paraphrase John Kotter, author of Leading Change, it's like telling someone to quit drinking, smoking, and go on a diet all at once.

Summary

There will be roadblocks, barriers, and brick walls encountered on the World Class journey, and all of them will be people - management people. Remember to communicate, communicate, communicate to this group: the reason for implementating Lean, how the business will change, and how their roles will change. Review the no-layoff policy. It applies to them also.

Prepare, with the help of your H.R. manager, your version of the 90-Day Rule in advance of the brick walls showing themselves (we can promise you there will be some). Act in a fair, honest, and timely fashion to avoid the high costs of stalling the implementation.

Next Edition

The Importance of Standard Work and Daily Management
Team Facilitator - An Essential Role