Six Sigma vs. Lean Management 

Efficiency is no more something that a company or organization strives towards. It is now accepted as a part of how a business process is created to run. Achieving better and higher levels of efficiency is what every business is now looking at. Every process, including production and manufacturing will have a certain level of inherent redundancy. While not readily apparent, they will always be in the system. Identifying these spillovers and redundancies is what lean and Six Sigma are all about. How different are they though?

Six Sigma

Six Sigma is all about the quality of deliverables. Introduced by Motorola in the 80s, the methodology that is used is basically bringing people together to achieve objectives rather than using single people. The ideas that a team can generate will be a lot more effective and will take less time. Six sigma teams also have a step-by-step process called Determine Measure Analyze Implement Control or DMAIC. Since issues can typically get sorted out and solved quickly, it leads to an organizational setup that is efficient in sorting out issues. It leads to constant improvements within the process.

The goal is to have fewer defects, sharper turn around times and higher quality. A sigma rating is given to a process where the percentage of defective products per million is taken into account. Sigma 4.5 is where there are 3.4 defective products per million. Sigma 6 is the ultimate, the highest rating, something that realistically cannot be reached.

Lean

Lean is also an ideology that started off with manufacturing. When Ford first started to mass produce cars, it was hailed as the best and fastest way to build them. Toyota then came up with a way to reduce that time by getting rid of waste in every process and not just concentrating on price like Ford. The result was a much improved way of producing. Lean, as it is known now, also focuses on waste reduction. Any procedure or process that does not contribute to the final outcome is a waste. If it is removed, things will flow better and the outcomes will be positively affected.

While the two philosophies of work started off in hardcore industrial production, it can now be seen as a way for even service-oriented corporations like banking and finance to make their business to function with improved efficiency, leading to better service, which in turn leads to better outputs when applied together.

2017-07-04T11:35:43+00:00 9.2.2016|Tags: , , |

One Comment

  1. Mihail Sadeanu 2016/02/20 at 19:50 - Reply

    Let me cite from the posted text inside “Six Sigma” paragraph:

    1).-“Sigma 4.5 is where there are 3.4 defective products per million”.

    Correctly, the 4.5 Sigma corresponds to a DPMO equal to 1350. Just the 6 Sigma (with a 1.5 Sigma shift toward the side with CSL-critical specification limit, i.e. using a sample size of 4 for detecting a minimum shift in the 1.5 sigma mean value) corresponds to a DPMO equal to 3.4, respectively to a % yield of 99.99966% (exceeding the specification limit).

    2).-“Sigma 6 is the ultimate, the highest rating, something that realistically cannot be reached”‘

    Fortunately, there is already defined the realistic case for 7 Sigma with a % yield of 99.9999981%. The 7 Sigma (with a 1.5 Sigma shift) corresponds to a DPMO equal to 0.019. These realistic values for 7 Sigma quality are used in banking and air transportation.

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