Always This Lean Thing — I Mean, What Is It Anyway? Something To Do With Six Sigma?
Let’s start with a confession: I am not a Lean expert, yet. I just recently started studying Lean and have so far managed to get certified as Six Sigma White Belt and Lean Specialist. So I am only just beginning my journey to become a Lean Expert — and that is exactly why I am the right person to explain what Lean is.
Before diving deeper into the world of Lean, let me explain it briefly: Lean is common sense depicted in Japanese terms. To explain it in a bit more detail, it is a continuous development process which aims to streamline production, service or any processes with removing so called “waste”. Waste is all the useless and annoying everyday stuff that makes you work slower or more inefficiently and what you may not even notice. Waste might be recognized by a worker who thinks or complains out loud: “What’s the point in this?”
What is Six Sigma?
While Lean concentrates on waste reduction, Six Sigma tries to reduce variation in the end product or service or in the process itself. In other words, Six Sigma development projects aim to make the product or service received by the customer to have as little variation as possible. Six Sigma ensures, that each and every pizza in your local pizza parlour has the exact same amount of cheese every time, hence making it possible for the customer to get what they expect, and also that the pizza entrepreneur would be able to keep track and anticipate in more detail in the consumption of cheese. So, with Six Sigma the pizza place owner can avoid extra costs and extra inventory.
Let’s spend another moment with Six Sigma before dwelling into Lean. Besides, often these go side-by-side and hand-in-hand, and many might even consider them the same thing. In detail Six Sigma is a level of near perfection, that is 99.99966 %. Pretty accurate! In practice it means that for every million events (for example one million manufactured pens) there is 3.4 defects (i.e. 3.4 pens have some sort of defect). Where on Earth do you need this sort of accuracy, one might ask.
Real World Six Sigma Examples
Compared to a Sigma level lower, Five Sigma (accuracy 99.97 %, not too bad either), where there are 233 defects per million events, Six Sigma is insanely more accurate. For example: 10,416 million flights are flown annually in USA. When operating at the Six Sigma level this means 35.41 defects annually, while at Five Sigma you would have 70 times more defects, that’s with 2,426 flights every year — even though operating at 99.97 %. That really is something!
How about the hospitals? 51.4 million surgeries take place in USA annually (according to The Council for Six Sigma Certification). At Six Sigma level that means only 174 defect a year (or three defects weekly). At Five Sigma’s 99.97 % it means 11,976 errors every year (230 a week, roughly 3 errors every two hours). That’s quite a bunch of potential losses of life! So how about raising our levels up to 99.99966 %.
Let’s take one more example. On 2013 Cyber Monday, Amazon delivered 36.8 million orders — that’s on one single day. If estimated that each defect in a delivered order costs USD 35, at Six Sigma level that leads to a loss of roughly USD 4,400 (125 defects) and on Five Sigma level to a loss of more than USD 300,000 (8.574 defects). That pays quite a lot of monthly salaries on the Amazon warehouse. Don’t you think Amazon aims for Six Sigma level in their deliveries?
So what? In a massive scale like this — how many Amazon-size organizations are there, anyway? — errors multiply exponentially, but how about your local pizza place, where they might get 100 customers daily? Operating at Six Sigma level, the pizza place can go through in average 9 years before a single defect in their pizzas.
That is not the point, though. The point is to recognize the possible failures and risks in the production process, evaluate the importance of each step as a part of whole and improve continuously the process so that there would be as few mistakes as possible at least in the critical steps of the process. On other words, Six Sigma, like Lean, encourages organizations to inspect their processes and procedures in more detail with relevant metrics. Which, for example, is more important for your local pizza place, having the exact same amount of cheese every time, or delivering the pizza quickly?
When taken again a slightly broader view than a pizza place, we might get some perspective for why it is important to measure your cheese thoroughly. McDonald’s restaurants around the globe and the whole service process and concept is equal — although you might find variation in details, such as which sauces they offer. Therefore, the customer can pretty accurately anticipate what to expect when they order a Big Mac in any part of the World.
The McDonald’s production process uses the Just-in-Time method (JIT). The process of preparing a hamburger only starts after the customer has placed their order. This eliminates the need for inventory of already prepared hamburgers, which anyway go bad quite fast after preparation. And the customer always gets a freshly baked burger! Before implementing the JIT in the preparation process, McDonald’s had the most common hamburgers prepared and stored in a heating area from where they were thrown out if not sold. This can also be considered a demand-based pull model, as opposed to push, where a factory produces an endless amount of products which it then has to sell for whatever way and price possible.
As some sort of re-cap, I might conclude that it is vital to recognize the weakness in a process and improve the process continuously. Easy. This is the base of Lean-thinking — as I’ve understood it so far. You don’t need 99.99966 % accuracy in everything you do, if lesser is enough for a required outcome. What required means, I’ll leave for each organization to find out themselves.
The Lean Process
So, what is Lean process in practice? Let’s have an example to illustrate. A chocolate factory invested in a new packing machinery worth USD 1 million. It worked perfectly, increased efficiency and so on. Until a couple weeks later when the Factory Manager received alarming information: some of the sold chocolate boxes were empty! She then asked for the manufacturer of the machinery to come and fix it. We’d love to, they said, and the cost would only be another 300 000 dollars.
Furious, the manager rushed to see the machine and thus — perhaps unknowingly — started the Lean process. She then asked the machine operators what they thought of the new machinery. They were delighted of how good it was, until the Manager explained the situation of empty chocolate boxes. One of the operators quickly said he has a solution, and on they went with his idea. He marched to the local convenience store and bought two table fans. He then set them up at full speed next to the conveyor belt. The strong airflow flew the empty boxes away from the belt and the problem of empty boxes was solved with minimal effort.
Lean-methods often have Japanese names
The example process depicted above used Lean methods with funny-sounding Japanese names. The Manager used Genchi Genbutsu method when she went to see the machine. Genchi Genbutsu translates roughly to go and see yourself. Then the operator used the Poka-Yoke method with the fans. There you minimize the chance of a mistake to happen. Poka-Yoke was originally called Baka-Yoke, but as that translates to fool- or idiot-proof, they changed it to Poka-Yoke, mistake proofing.
Everyday examples of Poka-Yoke can be the different shapes of cable heads to ensure you don’t shove them to a wrong cable port, the beeping sound that tells you to secure your seatbelt and the tiny knot on the tip of the rope of your jogging pants, which ensures the rope won’t disappear inside the pants.
A Brief Look At The Birth Of Lean
Let’s take a look at the Lean history. It was born when a young man by the name of Sakichi Toyoda (1867–1930) patented the automatic loom (used to make carpets) at the age of 23. He made them to ease the work of his mother. The term Jidoka was coined. Jidoka means automation with human touch: Toyoda’s loom automatically stopped when a thread snapped and needed human intervention to restart. That way the same person could keep an eye on multiple looms at the same time instead of one person operating one loom at a time, hence making the working more efficient.
A little sidenote here. Yes, the automatic loom made some employees less needed and yes, I’m sure some people lost their jobs (in this process, unfortunately, they turned out to be so called “waste”). Automation and robotics have since their introduction taken jobs from people, but — according to Yuval Noah Harari in 21 Lessons for the 21st Century — at he same time have added at least one new job for every “destroyed” job. So, let’s let the development evolve and try to keep up. Now, back to the topic at hand.
Having grown older, Mr. Toyoda sold his loom business to England and started an automobile business. Toyota was born and have ever since continuously developed their production. The basic operation methods at Toyota include a process where every person at a manufacturing plant is allowed and encouraged to stop the production line if they notice an error, and then that error will be fixed as soon as possible — if it is something that should be fixed of course. An estimate dictates that the production of a single Toyota car from scratch to an end product takes less time than what it takes at a German manufacturing plant to fix the problems of a car once it is “ready”. If you are more interested in what Toyota does, try searching for ”Toyota Production System”, ”The Toyota Way” or ”Taiichi Ohno”.
Henry Ford Developing Lean
The Lean methodology was also developed by an American car enthusiast, Henry Ford (1863–1947). For him it was important to make the cars easy to build and fix. The first Ford models were pretty much serviced by anyone with a wrench as the changing of parts was made so easy. The Ford production line decreased costs and increased efficiency, so the cars could be sold at a lower price — by the way, at the same time Ford shortened the working day at their plants from 9 hours to 8 and doubled the salaries, so the workers would be able to purchase what they themselves had manufactured. Pretty smart, I’d say. (When Ford later kept increasing the efficiency in the 1950’s and many lost their jobs, a company official showed the modern factory to an automobile workers’ union’s representative Walter Reuther. The company official asked how is Reuther planning to get the robots to pay union fees, to which Reuther answered: “How are you going to get them to buy Fords?”)
This was a fairly superficial look into Lean. I, the author, who have not spent too many hours in studying it, know more than what I wrote, so it is quite easy to get started with Lean philosophy. Lean has various terms from Kaizen to FIFO and Kanban to ENVA, and everyone more interested can start studying deeper with the multiple free or on-demand online courses found online.
Oh, what about the White Belt I so proudly mentioned in the beginning? Six Sigma has multiple levels of knowledge from White Belt through Yellow and Green up to Master Black and eventually Champion — depending on your level of know-how and understanding. The Certified Black Belt holder knows the history of Lean and Six Sigma and understands some basic concepts.
Following sources (among others) were used in creation of this article:
- Bruce Williams: Six Sigma for Dummies
- Dmitri Iarandine: Agile and Lean and What Do They Mean
- Håkan Ivarsson: 50 Shades of Lean
- Yuval Noah Harari: 21 Lessons for the 21st Century
- The Council for Six Sigma Certification: Six Sigma — White Belt Training Manual
- AIGPE: Lean Management Training and Lean Specialist Certification
- AIGPE: Lean Management Training and Lean Expert Certification
Even though I’ve tried my best, there might ne some errors in the text. Those errors are at the author’s responsibility and above-mentioned sources should not be blamed on them. Please let me know if you find an error and I’ll fix it.