This methodology allows companies to significantly optimize their management and production models, based on the orientation towards continuous improvement, the elimination of errors, defects and “waste”, and the improvement of the customer experience.
The current context of high competitiveness that governs international markets requires companies to constantly optimize their internal processes, in order to face the complex challenge of conquering a better positioning with better prospects of success.
This effort implies the need to constantly explore, adopt and apply new strategies and tools for resource and talent management, which allow leaders and professionals to guide profitability and labor productivity towards a path of continuous improvement.
What is Lean Six Sigma?
One of the management tools most used by modern companies to optimize their profitability and productivity in the long term is the methodology known as Lean Six Sigma.
Lean Six Sigma is a structured process improvement methodology that seeks to establish, through statistical tools and data analysis, practical applications for continuous improvement, both in the use of resources and in people and talent management.
For this purpose, it is based on the combination of two widely used techniques in process improvement: Lean and Six Sigma.
The Lean methodology is aimed at eliminating waste inherent to production, with the objective of streamlining and speeding up processes.
The Six Sigma methodology, meanwhile, focuses on improving quality through actions that increase organizational efficiency and prioritize customer requirements.
The common denominator of both methodologies is to reduce defects in production processes and enhance the value of Human Capital as the driving force for improvement.
Consequently, Lean Six Sigma constitutes a transcendental methodological support to enhance the orientation to the achievement of a company’s strategic objectives.
We can achieve this through actions such as:
- Reduction of operating times and costs.
- Increased overall quality.
- Efficient application of available resources.
- Elimination of processes that do not add value (waste).
How is Lean Six Sigma applied?
The conceptual basis of the Lean Six Sigma method lies in three key elements:
- Event: it is a complete production cycle (also referred to as an “opportunity”).
- Defect: It is an event that does not meet the customer’s requirements.
- DPMO: The defect rate per number of events or opportunities.
Starting from this conceptual basis, the objective of Lean Six Sigma is to achieve the lowest possible DPMO. That is to say, that the events have the least number of defects. In this way, we can achieve both the continuous improvement of production processes and maximum customer satisfaction.
In order to reach these goals, we need to apply a proactive approach to analysis and work known as DMAIC (Acronym for Define, Measure, Analyze, Improve and Control). This approach consists of five stages:
Define the problem: Equivalent to stating the problem through a mission statement, a project charter, a customer requirement and a process map.
Measure the current process: During this step, the current data is measured. By examining the process already in place and identifying what is not working, we can begin to find new ways of doing things and implement improvements.
Analyze the cause of the problems: Once we measure all the current data, we must begin to analyze it to get to the root cause of the problems. This analysis of the project structure should continue as long as necessary.
Improve the process: In this step we will propose and implement solutions, make the necessary improvements and create process maps for those new solutions. This will allow us to take steps to implement further corrections and to continue measuring improvements.
Control: Once a new process has been implemented, we must continue to analyze it and make improvements over time.
In this step, it is also important to remember that changes and improvements will only last if employees are committed to continuing to improve and maintain the process.
Process management experts claim that the correct application of the Lean Six Sigma method can achieve a 99.9999966% defect reduction rate. This is equivalent to only 3.4 defects per million opportunities.
What are the key principles of Lean Six Sigma?
The Lean Six Sigma methodology is valid for any company that needs to make its operations more efficient in order to maximize its results, regardless of its size or market segment.
Therefore, the first step towards these objectives is to break cultural paradigms and be willing to evolve.
To perform a process flow analysis that produces the best results in terms of change and continuous improvement, experts recommend keeping 5 key principles in mind.
These principles make it possible to identify more precisely all the areas for improvement in the different areas that make up a company’s production-operational chain.
The 5 principles of Lean Six Sigma are the following:
1. Customer orientation:
The customer experience has to be the company’s priority. This implies delivering a product in perfect conditions and at the moment the customer needs it, neither before nor after.
2. Analytical oriented management:
This principle focuses on the need to minimize the number of products that can be defective, after passing through all manufacturing processes.
3. Improvement of all processes as the final objective:
It involves analyzing all the processes that are part of the production chain, in order to identify and modify the actions that are causing errors in the final product.
4. Involve all workers:
Workers are an active and valuable part of the analysis process. Involving them constantly and proactively will make them feel that their work is as important as any other, which will increase their motivation.
5. Pursuit of perfection:
This principle focuses on eliminating the “7 process wastes” identified by the Lean method. These wastes are as follows:
| Transportation | This refers to improper movement of parts, materials, documentation or information (e.g., email abuse, delays, incidents, damages, losses or unnecessary returns between buyers and suppliers). |
| Inventory | Poor inventory management generates cost increases that often disrupt the normal performance of a company. It also generates bottlenecks and unnecessary waiting times. |
| Movement | It is the physical movement of people operating processes, due to physical distance (for example, searching for information in folder directories or emails, movement of people in an office to perform a job that could be digital, etc.). |
| Waiting | This is any delay caused by the unavailability of resources, people or information (for example, customers waiting for answers to a complaint, processes that are delayed due to lack of internal coordination and decisions that are not made due to lack of data, among others). |
| Overproduction | Consists of doing more than the client needs, or generating or spending more resources than are actually required to meet the objectives. |
| Overprocessing | Is the inefficient use of resources (e.g., printed forms with more data than necessary, excessive meetings and redundant approvals, among other cases). |
| Defects | Are all those tasks that are poorly executed and involve “rework”, e.g., incorrect recording of incidents, code errors and deficiencies in the design of a software, among others. |
Advantages of the Lean Six Sigma method
In a scenario where companies and organizations face new challenges every day, such as changes in consumer behaviors, resource scarcity and cost increases, the Lean Six Sigma method provides the following competitive advantages:
- Process optimization, which translates into better customer experience and increased loyalty.
- More efficient process flows, driving better bottom-line results.
- Defect detection and prevention, which reduces costs and eliminates waste.
- Increased organizational agility and better ability to adapt to daily challenges.
- Reduced lead times, increased capacity and improved profitability.
- Increased Human Capital engagement and accelerated people development.
- Strengthening of a culture of operational excellence.
- Decreased variation in work methods, making it easier to track results.
In addition to that, with all the improvements achieved, it is safe to say that we can obtain an increase in competitive advantages in the market.
Optimizing Lean Six Sigma with technology
The detailed and thorough application of the Lean Six Sigma method can be time-consuming. However, it can be significantly streamlined through the use of specialized technology solutions.
This will enable the company to achieve excellence in its activities in a relatively short period of time, which translates into greater prospects of achieving better market positioning.
DataScope is an essential tool for implementing the Lean Six Sigma methodology, as it allows you to collect data in real time, which is crucial for measuring, analyzing and improving processes.
With DataScope, you can also easily identify areas of waste and variability in your processes, which is fundamental to comply with Lean and Six Sigma principles.
In addition, DataScope allows you to create custom forms to collect specific data, making it easy to implement the DMAIC (define, measure, analyze, improve and control) and DMADV (define, measure, analyze, design and verify) project frameworks.
It also provides data analysis and reporting, enabling organizations to monitor the progress of their continuous improvement projects and make agile, data-driven decisions.
In this way, DataScope facilitates the implementation of Lean Six Sigma by providing the necessary tools to collect, analyze and use data that enables process improvement.
