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Why Six Sigma + Lean

- Arushi Kasaat

Six Sigma is a quality program

gained widespread popularity. The approach,

that, when all is said and done, im-

which aims to help companies create leaner man-

proves your customers experi-

ufacturing operations and boost product quality

to no more than 3.4 defects per million opportu-

ence, lowers your costs, and builds

nities, has delivered significant improvements

better leaders. Jack Welch

and cost savings.

Six Sigma; at many organizations simply means

a measure of quality that strives for near perfection. It is a disciplined, data-driven approach and
methodology for eliminating defects in any process from manufacturing to transactional and

Lean Six Sigma is a managerial approach that

combines Six Sigma methods and tools and the
lean manufacturing/lean enterprise philosophy,
striving to eliminate waste of physical resources,
time, effort and talent, while assuring quality in
and

organizational

are tales of dissatisfaction. Many organizations

have trained and deployed legions of Lean Six
Sigma experts, known as black belts, only to see
little value result from their efforts.

Drilling deeper, we discovered that mobilizing

from product to service.

production

But for every Lean Six Sigma success story there

processes.

(Source: Investopedia)

large and costly squads of black belts in some

cases actually slows down performance improvement efforts. Managers are unsure how best to
deploy the Lean Six Sigma experts and too often
black belts treat all problems, big and small, with
the same approach, resulting in less-effective solutions. Moreover, they fail to prioritize the improvements that will make the biggest differ-

Lean Six Sigma for the Manufacturing

ence.

Industry

It's wasteful and unnecessary to run every pro-

As a methodology for improving both factory

cess through Lean Six Sigma; knowing where to

output and quality, Lean Six Sigma (LSS) has

focus efore unleashing the black belts can make

all the difference.

It's wasteful and unnecessary to run every pro-

mines which process improvements, will yield

cess through Lean Six Sigma; knowing where to

the greatest results when the Lean Six Sigma

focus before unleashing the black belts can

teams are deployed.

make all the difference.

Once the X-ray has identified the most pressing

There are companies that are yielding the big-

issues, companies unleash the black belts and

gest gains from Lean Six Sigma are deploying an

begin the traditional five-step Lean Six Sigma

upfront diagnostic X-ray to help them identify

DMAIC processDefine, Measure, Analyze,

the most critical opportunities. Performed by a

Improve, and Controlon the targeted areas.

small advance team of black belts, the diagnos-

Example

tic X-ray consists of three steps:

For an aircraft manufacturer: Reducing inven-

1. Enterprise Value Stream Mapping, in which

tory to improve cash flow

the X-ray team scans the enterprise and maps

A major aircraft-parts manufacturer faced a fi-

its primary processes to identify the biggest op-

nancial crisis and urgently needed to free up

portunities to reduce cost by reducing wasted

more cash to invest in the business. The compa-

time and materials.

ny was losing out on new contracts because of

2. Benchmarking, in which the performance of

high costs, mostly due to low inventory turno-

processes is measured against internal and ex-

ver. As a result, it was losing money. While the

ternal benchmarks to measure shortcomings

aircraft-parts manufacturer knew that improv-

and establish performance-improvement tar-

ing inventory turnover was critical, it didn't be-

gets.

lieve that could be achieved without running

3. Prioritizing, in which the X-ray team deter-

low on essential parts. The company's inventory

turnover rate was 2.7times compared with its US

for each possible improvement and prioritized

competitor's 4times turnover rate. A diagnostic X-

based on cost savings that each could produce.

ray quickly exposed a key fact: The low inventory

The company wanted to use Lean Six Sigma to

turnover was just one symptom of much ineffi-

lower supply quantities, speed deliveries, and re-

ciency in the management of its parts supplies.

duce factory-floor delays. Finally, the diagnostic

The diagnostic team started with a thorough val-

team tied each initiative to metrics that allowed

ue stream mapping of the supply flow. The map-

the company to track progress against year alone.

ping allowed the company to clearly see the root

With the supply chain working more efficiently,

causes that were driving up expenses. Among the

the company was able to save another $20 mil-

problems: too many suppliers and a large support

lion by reducing its headcount. Once back o

staff. Next, the team used benchmarking to com-

n sound financial footing, the aircraft-parts manu-

pare costs, both internally and against industry

facturer was able to plow almost $200 million

standards. It showed that the employee head-

back into the business to help regain its competi-

count and overtime were about double the US

tive edge.

industry average. Initiatives then were drawn up

Tools for 5s & Lean

-NIDHI TOKE
Lean tool
1) 5S

What is it

How does it help

Organize the work area:

Eliminates waste that results

Sort (eliminate that which is not from a poorly organized work

needed)

area (e.g. wasting time looking

Set In Order (organize remain- for a tool).

ing items)
Shine (clean and inspect work
area)
Standardize (write standards for
above)
Sustain (regularly apply the
standards)

2) Just-In-Time (JIT)

Pull parts through production Highly effective in reducing inbased on customer demand ventory levels. Improves cash
instead

of

pushing

parts flow and reduces space require-

through production based on ments.

projected demand. Relies on
many lean tools, such as Continuous Flow, Heijunka, Kanban, Standardized Work and
Takt Time.
3) Kaizen (Continuous Improve- A strategy where employees Combines the collective talents
ment)

work together proactively to of a company to create an enachieve

regular,

incremental gine for continually eliminating

improvements in the manufac- waste from manufacturing proturing process.

cesses.

4) Andon

Visual feedback system for the Acts as a real-time communicaplant floor that indicates pro- tion tool for the plant floor that
duction status, alerts when assis- brings immediate attention to
tance is needed, and empowers problems as they occur so
operators to stop the production they can be instantly addressed.
process.

5) Bottleneck analysis

Identify which part of the manu- Improves

throughput

by

facturing process limits the over- strengthening the weakest link

all throughput and improve the in the manufacturing process.
performance of that part of the
process.
6) Continuous flow

Manufacturing where work-in- Eliminates many forms of waste

process smoothly flows through (e.g. inventory, waiting time, and
production with minimal (or no) transport).
buffers between steps of the
manufacturing process.

7) Gemba (the real place)

A philosophy that reminds us to Promotes a deep and thorough

get out of our offices and spend understanding

of

real-world

time on the plant floor the manufacturing issues by firstplace where real action occurs.

hand observation and by talking

with plant floor employees.

8. Heijunka (Level Scheduling)

A form of production schedul- Reduces lead times (since each

ing that purposely manufactures product or variant is manufacin much smaller batches by se- tured more frequently) and inquencing (mixing) product vari- ventory (since batches are smallants within the same process.

er).

9) Hoshin Kanri (Policy De- Align the goals of the company Ensures that progress towards
ployment)

(Strategy), with the plans of mid- strategic goals is consistent and

dle management (Tactics) and thorough

eliminating

the

the work performed on the waste that comes from poor

plant floor (Action).

communication

and

incon-

sistent direction.

10. Jidoka (automation)

Design equipment to partially After Jidoka, workers can freautomate

the

manufacturing quently monitor multiple sta-

process (partial automation is tions (reducing labor costs) and

typically much less expensive many quality issues can be dethan full automation) and to au- tected immediately (improving
tomatically stop when defects quality).
are detected.

11. KPI (key performance indi- Metrics designed to track and The best manufacturing KPIs:
cator)

encourage progress towards crit-

Are aligned with top-level

ical goals of the organization. strategic goals (thus helping to

Strongly promoted KPIs can be achieve those goals)
extremely powerful drivers of Are effective at exposing
behavior so it is important to and quantifying waste (OEE is a
carefully select KPIs that will good example)
drive desired behavior.
Are readily influenced by plant
floor employees (so they can
drive results)

Trends in lean manufacturing :

sources.

1.Budget Reductions our economy has under-

3. Green Supply Chain Management Driven in

gone a lot of suffering lately and this suffering

seemingly equal part by social responsibility and

has led to some significant budget cuts that

environmental regulations, the trend towards

have forced lean decisions that said- recovery

green is impacting nearly every industry in-

is within our reach

cluding manufacturing.

- as per the results of the eight annual Prime Ad-

Rooted in the very idea of using fewer re-

vantage Group Outlook (GO) Survey

87% of

sources, and producing less waste, the trend

manufacturing companies see revenues as the

towards green is an underlying force driving

same or better through the balance of the year.

lean manufacturing as companies must assess

This same survey indicates that the manufactur-

and improve everything from transportation

ing employment outlook is far more conserva-

planning to package design.

tive, as 11% of manufacturing companies plan to

4. Footprint Reduction Essentially a sub-trend of

increase layoffs. In other words, while the econ-

green, the idea of footprint reduction is in the

omy may be improving, the budget reduction

notion of using fewer resources. Footprint re-

trend appears to be still firmly in place leading

duction is concerned specifically with the physi-

us in a lean world that is new.

cal space being used.

2. Process Improvements The trend towards

5. Need for Visibility : A big barrier many com-

lean manufacturing is not all surrounded by

panies are striving to overcome, en route to

grim economic realities. Many manufacturing

lean, is visible into manufacturing operations.

companies, whether forced into lean or not,

The demands of lean are driving companies to

have taken the opportunity to create greater

look deeper at the capabilities of their current

efficiencies within their day-to-day operations.

(or prospective) Enterprise Resource Planning

And this has helped startup in a new trend of

(ERP) software when it comes to achieving

process improvements, as companies develop

greater project and process visibility .

strategies designed to meet new objectives

through more efficient use of existing re-

What if Start up?

-Arushi Kaasat
How can one use Six Sigma for a Startup!

that makes them more effective and productive.

Starting a business is a scary but thrilling process.

Many things determine whether a start-up will succeed or fail. The Six Sigma is a school of thought in
business management that focuses on doing more
with less.
When an organization that follows Six Sigma undertakes a project, it uses a system known as
DMAIC as a framework. DMAIC allows a team to

Measure:

develop the project from its inception.

Define:
Planning is a golden ladder which bootstraps one
to a big progress. Before one decides to take their
startup to the next level, collect as much data as
possible and categorize it. This helps in focusing on
what the major problems are. Quantify the data
and determine what they mean. What are the inputs and the outputs? Who are the suppliers and
the distributors?
Get to know the employees and management
teams and find out how they work best. Do they
do well in groups or produce more by themselves?
Try to accommodate the employees in the way

Now that one has got their plans together and everyone is on board, its time to measure the requirements of the business.
Investment in some cloud based platforms/apps to
quantize the business needs and manage the ex-

penses should be done.

Find a great system to begin tracking the variables.
There are great software programs available such
that not only give entrepreneurs and business
owners great information about the different aspects of their business, but also provides an easy
way to track their time, costs, and income.
Analyze:
Once everything is started, this way of working has
to be maintained or everything will be put to
waste. Schedule regular training classes to teach
new employees how to work in the business. One
should use as much as one can from their re-

should use as much as one can from their re- rection designed to test a new fundamental hysources before incorporating more. Have the pothesis about the product, strategy, and engine
manpower to keep things productive and not of growth.
messy. Special attention should be paid to numbers and other important information so that it Control:
can be prevented from declining before its too Employee training program could help in making
late.

the growth more persistent. Keep the inflow of

thoughts between the employees. Keep a quali-

Improve:

ty control check on goods and services by regu-

Gathering and analyzing the data gives a way to lar feedbacks from the customers and also keep
improve the business processes which leads to a comparing with the ongoing and future trends in
better outcome; this means more money in the the market.
pocket.

One should not expect results tomorrow, or

Follow the feedbacks from customers and other even next month but regular commitment to
channels and improve the business model. One quality improvement will pay off over time.
should not panic to take a structured course cor-

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-Ashish S Dad
Bain and company success story with
Lean + Six Sigma

achieve their savings targets.

Bains approach starts with a full potential di-

We are pragmatic in our use of Lean Six Sigma.

agnostic and embeds Six Sigma methodology

We use only the tools that make the most

with added efficiency and speed from lean. In

sense for each situation. Bain has developed

each case, we first gain an understanding a

an up-front diagnostic X-ray that enables com-

company's value stream, and then move rapid-

panies to identify and focus on only the pro-

ly to mapping out processes and costs. Next,

cess changes that will quickly make the biggest

we define a view of "full potential" through

differences, ensuring faster results with small-

such measures as bottleneck analysis and in-

er initial investment.

ternal and external benchmarking. Finally, we

target areas for improvement, unleashing the

Originally developed to improve manufactur-

trained teams.

ing efficiency and quality, Lean Six Sigma is

now being widely adopted by financial institutions, retailers, hospitals and other corners of
the services industry. Lean Six Sigma is a blend
of two concepts: lean manufacturing, which is
aimed at reducing waste, and Six Sigma, which
helps companies reduce errors. Together they
can help companies reap the benefits of faster
processes with lower cost and higher quality.
From our research and experience with clients,

Our experience across industries and geogra-

we've learned that despite its growing popu-

phies allows us to perform diagnostics quickly

larity and impressive results at some compa-

that help companies achieve sustainable im-

nies, Lean Six Sigma often fails to deliver ex-

provements. Using the cash and capabilities

pected results. Bains management survey of

assessment to focus on areas with the most

183 companies found that 80 percent are not

potential for generating results, our clients

achieving their expected value from Lean Six

avoid the extra cost and time of training and

Sigma efforts, and 74 percent have failed to

deploying more teams than absolutely re-

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How it changed Xerox Company

Xerox Company
Xerox Lean Six Sigma is a powerful businessimprovement tool that can enhance the effectiveness of Xerox and of the services we provide to our customers. It leads to solutions that
no one person could ever develop alone. And
the return on investment can be huge.
"Our success in Lean Six Sigma has become an-

Belt based in Seattle. She successfully tackled a

project to help enhance the skills of first-line
managers in Xerox's Managed Services organization so they can better help their customer's
business - and talks more about the value that
Lean Six Sigma has brought to her and her
teams.

What was the business challenge for

other defining competitive advantage for Xer-

them?

ox," says Anne Mulcahy, chairman and chief

According to their chairman main issue was in-

executive officer.

efficiency. They wanted that Xerox and other

The Xerox Lean Six Sigma tools, processes and

companies working with them to give best ser-

principles are built on earlier Leadership

vices efficiently. Trying to make something

through Quality and new quality efforts at Xer-

betterthere's just something about it that

ox. Since 2003, Xerox people have been using

drives them to it.

Xerox Lean Six Sigma tools and methods in

Why

both internal projects and projects for custom-

Lean Six Sigma is having a huge positive effect.

ers. These projects focus on reducing waste

It is still on the curve where people are learning

and increasing effectiveness in vital business

to embrace it. But being able to look objective-

processes to bring measurable improvements

ly at how all operate is a proven way to deliver

in results for customers and the company.

better results. Lean Six Sigma is a compelling

Lean

Six

Sigma?

tool.

For someone who isn't familiar with

Lean Six Sigma, what should they
know?
It takes time to make time. People think Lean
Six Sigma is a gruelling process, and in some
One successful leader of Lean Six Sigma at Xer-

ways it is. It takes a lot of fact gathering and

ox is Cyndi Quan-Trotter, a Lean Six Sigma Black

analysis. You have to perform due diligence

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and respect the integrity of process. But that's

Why did they enjoy implementing it?

why it works. Lean Six Sigma leads to solutions

The whole Lean Six Sigma process has been a

that no one person would ever think of. The re-

great learning opportunity for them & learning

turn on investment can be huge.

about other businesses, being able to work with

Proposing same strategy to companies

people across divisions and in developing mar-

they work.

kets. They have incredible teams which helped

Once they gave the feedback to their customer

people learn new skills and tools and then

on utilizing their full capacity as keeping it for

watching them develop. And even manager

high demand suggests there in efficiency. This

satisfying says to know that I had a hand in even

honesty made the relations further strong and

the smallest part of their growth.

helped them.

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Lean at Call Centre

-Anurag Mathur
Lean Six Sigma Call Centre

ma.

Call centres are a worldwide phenomenon.

Benefits

Countries such as The Netherlands, Ireland, UK,

Philippines, South Africa and India all have large

Centre: lean strategy helps in eliminating waste

call centre industries. In the USA there are over

and other non-value added activities from the

55,000 call centres employing approximately 2.9

processes.

million agents (Mahesh and Kasturi, 2006). In

the UK the sector employs over 595,000 agents

mas root cause analysis and hypothesis testing

in 6,324 call centres (Mintel, 2009).

techniques can assist in determining how much

The two major types of call centres are out-

Streamlining the operations of the call

Decreasing the number of lost calls: six sig

time to spend on different type of calls, thus

bound centres and inbound centres. The most

providing a guide to the operators.

common are inbound call centre operations. For

many customers call centres are the first point

resource and technology), leading to a reduc-

of contact with an organization and their experi-

tion in the costs of running the call centres.

ences can play a major role in their decision to

stay or leave that organization. Almost every-

the root causes of why customers call in the first

one in their daily life has had the experience of

place, can help in uncovering troubles further

contacting one of those Centres for a variety of

up in the process stream thus providing benefits

reasons. In the UK alone, more than 10 million

that go further than the call centre itself and

customers use telephone banking (Forsyth,

improving customer service and support.

2004).

Better utilization of resources (both human

Unveiling the hidden factory: establishing

Reducing employees turnover: call centres

Outbound centres are used more in areas

are usually characterized by high employee

such as marketing, sales and credit collection. In

turnover, due to the highly stressful work envi-

those cases, it is the call centre operator that

ronment (Mintel, 2009). A more streamlined

makes contact with the user/customer.

operation would assist in reducing operators

Although there are some differences be-

stress, particularly in an in-bound call centre.

tween outbound and inbound call centres, they

each have similar potential benefits and challenges for the implementation of lean six sig-

SWOT Analysis

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Strengths: root cause analysis can determine

queue; and improving employee productivity

major reasons for customers calls, helping in

(i.e. number of calls dealt with per the hour);

uncovering problems further up the value

and

stream of the company;

Threats: In the UK, the independent regulator

Weaknesses: lean six sigma deployment r

for the communications industries has

quires a significant investment in training. That

introduced standards with regards to

may be difficult from a time perspective in a

abandoned calls remaining below 3 per cent in

fast moving environment such as the one in call

a 24 hour period; lack of metrics; lack of sup

centres;

port from process owner; and pre-conceived

Opportunities: decreasing the number of lost

ideas.

calls; reducing waiting time for calls in the

SIPOC
Suppliers
Providers

Inputs
Process
Outputs
of Resources Top level description of the Deliverables from

the required required

resources

by

process

Customers
the Anyone who

process

receives

the

de-

liverables

process

from the process

Customer
(Retail
Business)

Request
of info

Requirements

Require-

Dates/Time

ments
Profession-

on

al

service

ID

and

Courteous
Less than Customer

Location
Reservation

Customer

10 mins
Service that Customer

Immediate
compensa-

Service

tion, resolu- Time

makes cus- senior

to

tion for es- handle call

calation for
Description

further

in-

of Events

vestigation

Man-

tomer use agement

company
again
To main- Call

centre

tain waiting Manager

quires to <
2 mins

15

CrossWord
-Sudhi Srivatava

NOTE: For solution please refer the last

page.

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Fun Corner
-Uday Bisht

17

Solution of Crossword

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Measurement is the first step that leads to control and

eventually to improvement. If you cant measure something, you cant understand it. If you cant understand
it, you cant control it. If you cant control it, you
cant improve it.
- H. James Harrington

Quality cannot be copied; there is no step-by-step

cookbook that applies equally to all company situations and cultures.
- Ernst & Young
Intellectuals solve problems; geniuses prevent them.
Albert Einstein
Quality depends on good data. It also depends on executive leadership in using that data.
- Juran Institute, Inc.
We cant solve problems by using the same kind of
thinking we used when we created them.
Albert Einstein

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