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LEAN SIX SIGMA

A Dual Concept
For Long-Term Success
S
ix Sigma does not guarantee organizational success despite many
USE INTEGRATED examples of excellent results. Motorola, the inventor of Six Sigma,
PROFIT wrote the first success stories with millions of dollars in cost savings. But
Motorola eventually had to lay off thousands of people. In Germany, its fac-
MANAGEMENT tory in Taunusstein was closed.
Another pioneer of the Six Sigma concept, Bombardier, the Canadian aircraft
AND VISUAL manufacturer, also had problems because of decreasing markets. Bombadier
PROCESS closed seven factories in Germany, Portugal and the United Kingdom, laying off
about 6,000 employees in 2004 and so far in 2005.
MANAGEMENT. Still, Six Sigma’s value has been proven through the success of many organ-
izations in the United States and other countries. What worked in the past,
however, will not necessarily work tomorrow. Because major market changes
combined with a lack of innovation will lead to loss of market share and prof-
it for an organization, its long-term success cannot depend on Six Sigma alone.
In fact, no one management concept will work for all organizations in all cases.
In the typical Six Sigma approach, about 1% of staff become Black Belts (BBs),
while others become Green Belts or something similar. But what about the other
By Fritz W. 90 to 95%? Perhaps they get a
half- or full-day training session
Weigang, but are normally not really in-
Figure 1. Integrate Profit
Management
Institut für volved in improvement processes.
But people resources are the Clienting
most important organizational (customer + environment/competition)
Qualitätsmanagment
success factors—especially in
medium-sized companies. If you
ive

Ad

give employees the right infor-


t

ap
ova

tiv

mation and a degree of work


Inn

Profit
freedom, you cannot prevent
them from doing a good job.
This involvement of the other Processing Reliability Partnering
90 to 95% of staff can be accom- (processes) (employees)
plished through an integrated
profit management concept
that includes Visual Process Management1 and combines the advantage of the
lean Six Sigma approach with this involvement of people.
Integrated profit management (see Figure 1) combines:
• Clienting: customer orientation with concentration on the most impor-
tant bottleneck in the organization.
• Partnering: People orientation.
• Processing: Improving product and processes.

Clienting

The success of a company requires concentration on doing the right things


right. It is therefore necessary to view the customer as the secret president of

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your company. Figure 2 provides an example of a cli- Figure 2. Clienting


enting statement. To accomplish what the statement
promises requires learning how to get and retain cus- I am your client and therefore your boss!
tomer loyalty, as shown in Figure 3. My customer loyalty determines your profit.
Focusing your efforts on too many markets or cus- You should therefore concentrate
tomer segments will waste company resources and on my requirements.
bring only average results. You must concentrate your
activities on the most effective points—just David as Don’t do all things at the same time,
met the forehead of Goliath with his stone—by pro- but concentrate on the most
viding your target group with exactly what it wants. important bottleneck!
If you then consider how you can influence this © Institut für Qualistätmanagement (IQM), 2004.
external target through internal activities you will
find your internal bottleneck. Then you have to con-
centrate on the removal of the most important inter- an organization’s culture along with its long-term suc-
nal and external obstacles related to this target cess. Readers are likely familiar with many U.S. exam-
group. These internal factors are the right choices for ples of this short-term profit thinking. There are
lean Six Sigma projects (see Figure 4). other examples worldwide, including Mannesmann-
Most companies unfortunately engage in egocen- Rexroth in Germany.
tric profit thinking today, which means they are look- But if you concentrate on satisfying your target
ing only at short-term profit and not considering the group using integrated profit management, as I’ll dis-
consequences of activities for their employees and cuss later in this article, you will not only make more
the environment. money (short-term profit) but also will have more
Unfortunately, the usual Six Sigma strategy also long-term success, and your organization’s employees
focuses on short-term profits. This focus can destroy will find much more job satisfaction.

Figure 3. Customer Loyalty Realization Example


Safety
Television Functionality (for example, overview instrument panel)
Folders Quality of product (aesthetically/functionally)
Communication/ Reliability
Internet
Operating instruction
marketing Products Handling characteristics
Exhibitions Dynamics (power)
Events Roominess
Sponsoring Senses (for example, smells and feelings)
Innovations (for example, navigation)
Environmental compatibility

Influences of situations Purchase criteria


Experience/word of mouth Customer
Variety seeking environment Image Marketing, experience
Influence of family Word of mouth
Company regulations
Distance to the dealer

Purchase price
Resale value
for a new automobile Price Additional expenses
Sales talks Marketing/sales
Fuel consumption (miles per gallon)
Events promotion in the trade Reliability (costs for repair and maintenance)
Regional exhibitions Disposability
Special sales supporting activities

Date agreement
Reception (show room) Behavior of the service advisor
Friendliness of salesman/others Sales Service Receipt of the vehicle that will be repaired
Felling technology/sales conclusion process process Collection date
Selling assistance (financing/borrowing car) Result of the repair
Vehicle delivery Pick up of vehicle
Follow-up assistance Calculation understandability
Personal behavior
of the employees Follow-up assistance
© IQM, 2003.

20 I A U G U S T 2 0 0 5 I W W W . A S Q . O R G
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Partnering change attitude and culture before returning to


improve the material situation.
Figure 5 differentiates the material aspects of organ- Take a well-known example in Germany. Philip
izations on the right side and the nonmaterial on the Holtzmann, a construction company, was bankrupt in
left. The material covers factors such as process, per- 1999, and our federal chancellor, Gerhard Schröder,
formance, profits and loss calculations. Surprisingly, I gave it 100 million deutschmarks (at that time, about
believe this side’s contribu-
tions account for only about Figure 4. Ideal Problem Solving Chain
10 to 20% of long-term suc-
cess. The left side of the fig-
ure, the nonmaterial side
(attitude and culture) is much
1 2 3
more important, counting for
about 80 to 90%. Which is the most What can you offer Which is now your biggest
burning issue to solve this problem bottleneck for realizing
If you are in a crisis, as shown of your target group? (alone or with others)? this solution?
in the lower right of the figure,
you will have a hard time going
directly up to the higher level
on the right. Instead, you have © IQM, 2003.
to first go to the left side and

Figure 5. Material and Nonmaterial Parts of an Organization


The design of a company in its totality (according to laws)

Thinking = spirit Feeling = soul Acting = body


Pictorial thinking Potential/energy Moving Profit and loss Company
Learning
calculation/balance substance
(right brain) (left brain)
Positive thinking Strategic chances Return surplus Substance gain

Chances External
customer/
External future noncustomer
influences:
Viability

assessment:
(more qualitative view) Use of the past
Market analysis: achievement
• Future requirements. (in relation to
• Benchmarking. competition).
Environmental influences: Risks • Product.
• Technology trends • Service.
(IT, substitutions). • Handling.
• Laws, regulations. • Image.
Negative thinking Strategic crisis Return deficit Substance loss

Status of the nonmaterial plane Status of the material plane


Nonmaterial balance: Process Material More than
attitude/behaviour performance: balance: balance:
Environment Goals of Field • Productivity/ • Balance. • Good will.
of the management: employees: yield. • Profit and • Industry/
company: Are they What are the • Cycle time/ loss calcu- firm image.
What is the spiritualized/ employees process lation. • Know-how
customer/ accepted? thinking? cycle • Code of the em-
shareholder/ efficiency. numbers, ployees/
stakeholder • Equipment for example motivation.
thinking? utilization. after
• Quality, for balanced
example, scorecard.
Cpk.
• Cost of
© IQM, 2003. poor quality.

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$60 million U.S. dollars) to save jobs. After a year and The success stairs have four blocks and include five
a half, the company was bankrupt again, and public basic steps, three typical lean modules and a dual sys-
opinion prevented Schröder from bailing it out again. tem for a total of 10 steps to get to the top block.
Philip Holtzmann did not change its attitude and The five basic steps in the first block are Visual
culture but continued to do business the same as Process Management and consist of :
before. If you don’t change the attitudes and culture of 1. The five S’s developed by Toyota for production
top management and think only of short-term share- employees,2 with additional suggestions for man-
holder benefit (which frequently puts money into the agement to get rid of and prevent wrong projects
pockets of top management), you will not gain long- and activities. The latter is called “the five S’s for
term success. The same holds true for Six Sigma. management.”
Unfortunately, bankers and shareholder ratings fre-
2. Standardization, which involves much more
quently consider only the right side of the figure—the
than ISO 9000 or its sector specific derivations. It
material side—which is not as important for long-
consists of pictorial presentations of processes
term success.
with special checklists, lists for corrective actions
While layoffs often increase shareholder ratings, the
if the process is going out of control, activities in
organization will lose momentum on the left side, and
which people measure and visualize the out-
that often leads to long-term disadvantage. Through
come of processes according to the results and
short-term personnel strategies, which are only cost
productivity charts and special activities—about
oriented, you destroy your long-term organizational
six times a year—that use posters, hints for man-
social capital.
agement and supporting documents for produc-
Processing tion employees.
3. Fun during work—the best motivation—which is
Clienting and partnering are the necessary mental important for long-term success.
preparation for the integrated profit management
concept, but without the third phase—processing or 4. Process thinking, a realization of next operation
realization with clear steps—it will not work. This as customer, which can be shown by using a sup-
reveals the advantage of Six Sigma. Professional qual- ply, input, process, output, customer diagram,
ity activities should lead to avoiding tomorrow’s mis- commonly known as a SIPOC diagram.
take, not simply to measuring today’s mistakes. 5. The goals for each process with measurement
Figure 6 shows the combination of cost, time and criteria.
quality as evidenced by lean
Six Sigma. Lean is concen-
trated more on the reduc- Figure 6. Combination of Cost, Time and Quality with Lean Six Sigma
tion of cycle time and waste,
while Six Sigma focuses
more on variation. The Cost
three parts in the figure are (utilization degree/yield)
connected with a kind of
invisible rubber band. If you
stretch at one point—time,
for example—you will also
change the other parts. Customer
loyalty/profit
To show this combination
together with other concepts
and tools, I have developed Quality Time
what I call success stairs. Reduction of variation Increase of cycle time (CT) efficiency
Figure 7 is an example for a
CT
manufacturing organization ~3σ ~6σ (ideal)
that combines Six Sigma, Other time
lean and Visual Process Value added
Variation in the process extends/deteriorates (waste)
CT
Management, which will be the cycle time.
described later in this article.

22 I A U G U S T 2 0 0 5 I W W W . A S Q . O R G
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The second block consists of three Figure 7. Success Stairs


steps—typical lean modules:
6. Total productive maintenance.
7. Reduction of setup times.
8. A pull system, which is customer EFQM mod
el
oriented order handling and or Baldrig
e criteria Block
4:
up
includes elements such as kanban check

and one-piece flow. 10. Vis


ual Pro
The third block, the dual system, (em cess M k 3:
Bloc ept
9. Six ployees on anagement nc
has two steps: Sigma sit
projec e.
c o
dual vement
ts. pro
o f im
9. For problems such as order
8. P
handling that cannot be solved u
7. S ll system
e .
in one department and typical 6. To tup time :
tal p r
rodu eductio ck 2 s
Blo n step
projects according to lean/Six 5.
G
ctive n.
main a l l e a
i c
Sigma. 4. oals w tena
nce. ty p
P
3. roces ith vis
Fun s t u al
2. h
10. Strong involvement of produc- S at w inki izati
1. tanda ork/c ng/ne ons. 1: s
Fiv r h xt o
tion workers using Visual Pro- d
e S izin a
g p nging pera ck tep
's.
roc t Blo ic s
cess Management. ess corpo ion as as
es/ rate c eb
cor c us fiv
The fourth block is self-assess- rec ultur tomer
tive e. .
act
ment according to the European EFQM = European Foundation ion
s.
for Quality Management.
Foundation for Quality Management
© IQM, 2003. Patented in Germany.
model or the Malcolm Baldrige
National Quality Award criteria.
This should be done yearly.
The success stairs don’t have to be followed sequen- if they are available.
tially but can instead serve as a checklist. After a sta-
tus analysis, determine and concentrate on the bot- • Attitude and culture analysis. Learn what man-
tleneck you have at the moment. You can then enter agement and the other employees think through
the infinite success stairs, shown in Figure 8 (p. 24). interviews.
If you follow this stairway, you will enter a higher level The four blocks in Figure 9 are grouped by their
at every step along the way. It is important to see the potential to cause problems. Next comes the impor-
infinite steps as a kind of never ending journey. tant management task of selecting the vital few proj-
ects, which are then dealt with using lean Six Sigma
The Dual Concept procedures and by using Visual Process Management
to influence activities of production employees
Using the dual concept of integrated profit man- through measuring, visualizing and improving.
agement, it is necessary to first do the clienting Figure 10 (p. 25) shows how this concept with inter-
phase, a careful status analysis to concentrate on the departmental lean and Six Sigma projects for
real bottleneck affecting the most important cus- improvement and innovation is different from visual
tomer group (see Figure 9, p. 24). This status analysis process management.
includes: The training of a typical BB takes four weeks.
• Market analysis. Determine customer require- Within this time the participants learn lot of statistics.
ments, competition activities, market develop- Based on my experience, many participants don’t like
ments, environmental issues, trends and other statistics and thus don’t use what they learned in their
issues. projects.
A special course held four days a week over two
• Process performance. Assess the status of weeks can meet the requirements of employees of
process performance by determining such mid-sized companies. There are no “belts” involved.
things as process capability, the output and the Instead, the goal is to develop quality improvement
cost of poor quality. experts who can handle the usual problems.
• The vision and goals. Use balanced scorecards My course teaches Dorian Shainin’s industrial

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problem solving meth- Figure 8. Infinite Success Stairs


rk
od,3 particularly variable un a
t wo
3. F
research for design of tion
pera r
ext o ome
experiments, and uses 4. N as cust
oals
either Minitab or Statisti- ss g
roce
5. P ation
ve ardiz
ca software. Taught the ducti tand
o ta l pro tenance 2. S
T
6. main
right way, it is possible
up time
t
for employees to solve 7. S
e

more than 90 to 95% of 's

em
ive S

yst
1. F
ls
Pu
8.
a mid-sized company’s

am
Sig
Six

e n ss
9.

gem ce
usual problems after tak-

na Pro
t
M a su a l
i
.V
10

ldr and
ing such a course.

Ba QM
ige
EF
11

t
To solve other prob-

ar
St
lems for which the use
Cu
of more sophisticated sto
me
r
statistics is necessary, In loya
EFQM = European Foundation Im nova lty
pro tio
vem n
organizations may first for Quality Management.
en
t
need to use a coach and
© IQM, 2005.
then let their employ-
ees gradually become
more interested in statistics as they actually work on petition can quickly catch up. The difference between
projects. excellent organizations and others is how they handle
processes involved in day-to-day work.
Visual Process Management Typical processes include much waste, which, unfor-
tunately, is not usually noticed. Management usually
Typical business decisions for strategic and high pays attention to big projects, not to smaller mistakes.
level operational activities don’t normally result in a But these smaller mistakes are like a virus, which can
long-lasting competitive advantage because your com- spread and cause many more small problems.

Figure 9. Formula for Profit


Customers/market requirement Goals of your company Climate analysis: What do Actual process
Competitive activities according to a employees, management, performance for
Environmental trends balanced scorecard and stockholders think? all key processes

Potential of changes:
Weighting + concentration of future activities

Interdepartmental projects–– Intradepartmental activities––


lean/Six Sigma Visual Process Management

• Pictorial representation of the processes.


• Goals with measurement criteria and
• Carefully chosen projects (by Champions)––
tolerances for single processes.
4% of the activities cover two-thirds of
• Employees are measuring and visualizing
the profit chances.
the results (traffic light system using red,
• Full-time Black Belts.
yellow and green).
• Systematic project proceeding with
• If it is red, improvements will be started
statistical methods (suitable software).
by the employees, possibly with
• Management involvement.
assistance from the process champion.
• Support of the whole company.
• If there is no success, intradepartmental
projects (Six Sigma) will start.

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Figure 10.Visual Process Management (Basic Level)


A good micro-process is a necessary fundamental for Six Sigma projects.

Tilt

Removal of waste

a
a

eg
eg under the surface Strategic

M
M Strategic (basic noise) projects
projects

Six Sigm Removal with Visual Six Sigma projects/


Macro

Macro
a pro
realizati jects/ Process Management: realization of
on o innovation
innovati f • Application of five S's.
on • Pictorial presentation
Basic of process flows.

Micro
noise Visual Process Management
waste basic level

Before After

Figure 10 shows the important macro and mega Supplemental level: Many programs are started,
projects suffer from hidden waste. But management but enthusiasm frequently decreases over time, and
is astonished when the benefits of Six Sigma projects programs die slowly but surely. Use of productivity
decrease with time—the consequence of hidden charts and special benchmarking, along with incen-
waste. tive activities, can prevent this.
Reducing this waste through Visual Process The productivity charts are self-evaluations, usually
Management provides real long-term benefit. Visual
Process Management uses pictures and graphics, which
leads to easier, more enjoyable learning. The roadmap Figure 11.Build-up and Supplemental Levels
consists of three levels (see Figures 11 and 12):
1. Basic. Increase in employee productivity
2. Build-up. with Visual Process Management

3. Supplemental. Supplemental:
Basic level. The basic level consists of three stairs in • Six times per year special
which employees detect waste after training. Then activities with incentives.
they start with improvement activities according to • Special benchmarking through
the five S’s and pictorial standardization. employees/management audit.
• Productivity charts.
Build-up level: The build-up level also consists of
three stairs. At this level, the company goals are
Build up:
deployed to process goals with measurement criteria
• Employees measure, visualize and
and tolerances. After special training, employees start improve, if necessary.
to measure and visualize the output of the process. If • Training (according to modern
there is need, they then begin with improvement brain theory).
activities according to a special structure. • Goals with measuring criteria.
The employee starts doing his or her own improve-
ment work. If the work is not successful, the process
Basic:
owner will help; if it’s still not successful, a Six Sigma
• Pictorial standardization.
project will be started. • Five S’s.
I developed a special suggestion system, which when • Employees determine the waste
added to the build-up activities, gives production in their processes.
employees an opportunity to work on their own ideas.

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Figure 12. Visual Process Management Steps To Increase Employee Productivity


Productivity increase of employees

9. Regular Six Sigma activities


(each two months, one activity
with poster and materials for
management and employees).
1. Waste:
8a. Benchmarking measurement
through employees. through
employees.

2. Five S’s—order,
8b. Management audits. housekeeping
(also for management).

3. Pictorial process flow:


• Checklists.
• Mistake prevention check.
7. Productivity charts. • Procedure for corrective action.

4. Targets for processes/


6b. Dual employee subprocesses.
suggestion system.

5. Training of employees
6a. Realization with measure,
(brain compatible).
visualize/improve.

of production employees, at regular intervals. The members of top management, whose deeds should
charts are completed using weighted targets from be so loud that you can’t hear their words.
management, evaluation of actual or estimated past
data and development of neutral scores. Processes or ACKNOWLEDGMENTS
subprocesses are improved through friendly compe-
The author thanks J.M. Juran and Michael L. George for their writings and
tition with incentives. seminar presentations.
The production employees benchmark their status
against leading organizations worldwide. Managers REFERENCES AND NOTES
conduct audits twice a year—but not in their areas.
For example, the sales director might audit produc- 1. The Visual Process Management model is patented in the Munich,
Germany, patent office.
tion and vice versa.
2. The five S’s are Japanese terms, with their English translations also
Every two months, production employees are beginning with S (sort, set in order, sanitize, standardize and sustain).
assigned a special, clearly defined task, such as reduc- They are used to create a workplace suited for visual control and lean
production.
tion of cycle time. The task is explained using docu-
3. Dorian Shainin, www.asq.org/about-asq/who-we-are/bio_shainin.html.
ments and a humorous poster. Production manage-
ment also gets clear instructions.
The structured combination of integrated profit
management with Visual Process Management (see WHAT DO YOU THINK OF THIS ARTICLE? Please share
Figure 12) is a formula for increasing the productivi- your comments and thoughts with the editor by e-mailing
ty of production employees and for long-term suc-
cess. But such success depends on the behavior of godfrey@asq.org.

26 I A U G U S T 2 0 0 5 I W W W . A S Q . O R G