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Lean Six Sigma DeMYSTiFieD
By Jay Arthur
The McGraw-Hill Companies, Inc.Copyright © 2011Jay Arthur
All rights reserved.
What Is Lean Six Sigma?
Lean Six Sigma, simply, is a set of methods and tools that help companies create a competitive advantage by becoming faster, better, and cheaper than their competition. Lean helps companies cut the time it takes to meet to customer demands. Six Sigma helps find and fix the mistakes, errors, and defects involved in every aspect of delivering what the customer wants. Together, they are a powerful toolkit for maximizing productivity, profitability, and growth. Just as any other toolkit, Lean Six Sigma can't do everything. Lean Six Sigma won't make you more innovative, but it can help you deliver high-quality innovations faster. And you don't have to know every tool in the toolkit to start making dramatic improvements. A handful of tools help companies of all sizes slash turnaround times and defects by leaps and bounds.
In this chapter, you will
Get an overview of Lean Six Sigma
Debunk the manufacturing versus service question
Identify the three big leaks in cash flow
Discover your hidden fix-it factory
Learn the universal improvement process
I have spent 21 years working in various parts of the Bell System—one of the best cash cows of the last century. In the 1990s I led improvement teams that, in a matter of months, saved $20 million in postage expense and $16 million in adjustment costs. Other teams reduced computer downtime by 74% in just 6 months. Since then, I've helped other companies find ways to save $25,000 to $25 million per project or more. And you can too, using the power of Lean Six Sigma.
Has your business grown into a cash cow? Are you comfortable with your current level of productivity and profitability? Or do you still have a nagging feeling that they could be much higher? Well they can be, and here's why.
When someone mentions the Aborigines of Australia or the Bushmen of Africa, it's easy to think, how primitive! But businesses around the world aren't much more advanced than these cultures. Businesses often rely on headmen or rainmakers (the shamans of business) to deliver the profits.
When we think about these primitive cultures, we often think of Stone Age tools like flint knives and arrows. When I go to conferences and see the improvement stories offered by attendees, they all use primitive tools, sometimes just words, sometimes a line graph or a bar chart.
I'd like you to consider that most businesses are still in the Stone Age when it comes to using data to manage and improve processes. Few use control charts or histograms to measure performance and improvement. Few use Pareto charts to identify opportunities for improvement. None use Excel's pivot tables to find million dollar improvement projects. Most are content with their primitive methods, but they are in danger from the businesses willing to embrace the methods and tools of Lean Six Sigma. Once a competitor gains a lead in speed, quality, or cost, it's hard to catch up. The fast eat the slow.
At the other end of the spectrum, statisticians are building starships of advanced charts and tools that no one is ready to use. They endlessly debate the merits of one control chart over another. And all this statistical mumbo jumbo frightens potential users of Lean Six Sigma and SPC. They're afraid someone will challenge whatever chart or statistic they use and they won't know how to defend their choice.
So they don't do anything at all.
Stone Age and Space Age Tools
Gut feel, trial and error, and common sense are primitive tools of the Kalahari or Outback, not the tools of operational excellence. Similarly, futuristic tools invented by statisticians hoping to leave their mark on the world are inhibiting the spread of Lean Six Sigma.
There's a handful of methods and tools that will solve over 90% of the common business problems. Isn't it time to make it easy for these primitive business tribes to embrace these tools?
What do I think are the essential tools? The ones I use most of the time are
XmR control chart to show performance over time
Pareto chart to identify improvement opportunities
Histogram to analyze deviation from target
Ishikawa (fish bone) diagram to show cause and effects
Value stream map to identify delays between process steps
Go to www.qimacros.com/demystified.html to download the QI Macros Lean Six Sigma SPC software for Excel that makes drawing these charts effortless.
The QI Macros provide easy, affordable access to tools (download your 90-day trial from www.qimacros.com/demystified.html). Everything else is overkill for these primitive corporate tribes. Get them comfortable and feeling safe in the use of these tools and then we can begin to add in the others.
To create successful businesses and an unstoppable economy, we need to make it easy for every business to adopt the methods and tools of Lean Six Sigma, not just the ones with deep pockets and lots of time on their hands.
Virtually all companies grow from wobbly start-ups into cash cows using trial and error and common sense. Current methods of conducting the business developed in an ad hoc fashion, reacting to problems without much forethought. The bad news about this ad hoc, trial-and-error method of adaptation is that most companies stop improving when they reach 1%, 2%, or 3% error levels in marketing, sales, ordering, and billing.
At least once a week I hear from some poor employee who's been told to investigate Lean Six Sigma. They lament that it's their job to find and fix problems in the business. The business is already successful. Earnings are already up for the year. Why would they need Six Sigma to do what they already think they're doing well?
I call this the foolishness of the five senses. Just because your five senses let you detect problems and patterns at one level, you think that they'll work at even more subtle levels of detection. They won't. As patterns and problems become less frequent and more subtle, they become less and less detectable.
For your five senses to detect all of the varying levels of problems in your business you would need
The awareness of a world champion poker player to detect all of the opposing player's "tells"
Here's my point. Your normal sensory apparatus isn't up to the task of finding and fixing the more subtle problems that affect your job, department, or business. Like a doctor using an EKG or MRI, you need the right kind of tools to help you detect patterns you cannot detect with the naked eye.
Sure, every once in a while a problem will happen frequently enough with sufficient unpleasantness to trigger some action. You'll feel good about that, but you'll have missed the huge opportunities that lie just below the surface of your detection capabilities.
That's why you need control charts, Pareto charts, histograms, and control charts: to help you detect hidden patterns and problems.
Control charts are like an EKG; they show the pulse of your business processes over time.
Pareto charts are like an MRI; they help you slice the problem into clearly observable patterns.
Control charts and histograms have the added benefit of showing expected variation tha
Excerpted from Lean Six Sigma DeMYSTiFieD by Jay Arthur. Copyright © 2011 by Jay Arthur. Excerpted by permission of The McGraw-Hill Companies, Inc..
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