7. Why am I hearing so much about Lean Six Sigma these days?

There are two angles that I will answer this question from and I think both are correct but depend upon which side of the fence you are starting from. Six Sigma companies have been forced to adopt lean principles due to shortcomings inherent in Six Sigma and vice versa lean companies have been forced to do some of the same. In other words deficiencies in the way the programs were being implemented lead to adoption of some of the tools of the other.

Six Sigma is the program that attempts to reduce variation in any process and achieve the difficult level of about only 2.4 defects per million opportunities. Needless to say this is a very, very high level of process capability. Initially the program was aimed at improving quality and process capability. However, the program grew and became synonymous with the notion of specially trained elite Black Belt experts conducting improvement projects that are suppose to save the company $250K per project. In most companies the program has entirely lost its focus on improving quality and process control and become yet another way to try and get cost savings projects implemented. Done correctly, I assume there is nothing wrong with this of course. The unintended side effect of this aspect of Six Sigma is that it has not improved either quality or improved on time delivery, or reduced inventory in most cases. This was the actual situation in GE from discussions I had with there chief of corporation strategy and improvement several years ago. So being smart cookies Six Sigma practitioners have added the tools of lean to their corporate Six Sigma tool kit in hopes of addressing these problems as well.

Lean programs have adopted Six Sigma for similar but different reasons. Again some companies have done the stereotypical “lean” implementation that relies upon Value Stream Maps and improving “flow”. The net result is usually that lead-time is reduced, inventory is reduced, and on-time delivery improves as well. This approach usually does not lead to quality improvements or deep reductions in cost however. This result of course leads companies to look at ways to improve in these two dimensions and Six Sigma jumps out as the natural set of tools to pick up and use for this purpose. Or if the executives of the company in question are ex-GE managers they will try to inject what methods they are most comfortable with by driving improvement via Six Sigma projects. As I stated above as stereotypically implemented today both programs have some short comings that lead them to attract the opposite program.

Sometimes I am asked if Toyota has a Six Sigma program and the answer is no. Since the 1960’s Toyota has worked tremendously on improving quality of the product and the capability of the process. Today Toyota is the closest that I know of in terms of operating factories near Six Sigma level quality. It is a rare manufacturing line in the company that operates worse than 50 ppm to the customer or around 5.4 sigma (assuming the usual 1.5 sigma drift). And with Toyota annually making around $10 billion per year why bother with a Six Sigma program. Honestly turning loose expert black belts in Toyota would be contrary to their culture of having people improve their own process. None the less the common statistical tools of Six Sigma are of course well understood by people in Toyota and used for improvement. Neither Six-Sigma nor Toyota invented these they all come from various quality improvement movements. There just is no separate organization or set of resources that are asked to use the tools in Toyota as it is just part of the job.