Lean Six Sigma, also known as Lean Sigma, is a marriage of two otherwise distinct business management strategies, lean manufacturing and Motorola's Six Sigma system. While the lean manufacturing methodology concentrates on creating more value with less work, the Six Sigma system strives to identify and eliminate defects in product development. As a result, the combination provides a method to accelerate a company's decision-making processes, while both reducing production inefficiencies as well as increasing product quality.
The lean manufacturing business management strategy strives to optimize an organization's production process by reducing costs during product development. It considers the value of a product from a customer's perspective, and questions the necessity of all costs associated with product development. Based on principles derived from the Japanese manufacturing industry, concepts of lean manufacturing became popular after being adopted by the Toyota Motor Corporation.
Three types of waste have been identified by Toyota: muri, which refers to wasteful design; mura, which refers to wasteful implementation; and muda, which refers to wasteful activity. Lean manufacturing places greater emphasis on wasteful activity than on inefficiencies of design or implementation. In line with this, Toyota has identified seven deadly wastes related to activity rather than design and implementation: transportation issues, inventory control issues, unnecessary movement of persons or equipment, faults in time management, overproduction concerns, over-processing, and product defects. Significant costs may be attached to each of these types of waste, and these costs are likely to be passed on to customers, thus decreasing a product's value.
Motorola's Six Sigma business management strategy relies on statistical analysis to optimize an organization's production process. The Six Sigma quality management system is used to measure the number of defects that occur during a process. Subsequently, the system determines how far this number deviates from a desired result. No more than 3.4 defects per million production opportunities is permitted, although a lower nonconformance rate is even more desirable.
By defining, measuring, and analyzing a business's processes, Six Sigma is able to improve the effectiveness of its operations as well as to design products of a quality that is likely to suit the needs of potential customers. Different than lean manufacturing, which eliminates waste in the production process, Six Sigma introduces steps to add value to the production process.
When meshed together as Lean Six Sigma, each of these ideals serves to increase production speed while decreasing production variations. The lean manufacturing methodology is used by an organization's leaders and engineers to fine-tune its daily operations, while the Six Sigma methodology is used to support innovations in the production process. As a result, while lean manufacturing is able decrease production waste, Six Sigma is able to implement procedures to increase product quality.
Lean Six Sigma, therefore, allows managers to effectively address issues of speed, quality, and cost. Rather than just eliminating steps that may appear wasteful or spending months testing a variety of innovative options, it balances the worth of each of the two methodologies from which it originates.