QUESTION: You address questions about lean leadership. What about Six Sigma? Is there a place for Six Sigma in a lean transformation?
ANSWER: Great question. The short answer is ABSOLUTELY! There is definitely a place for Six Sigma as part of a lean transformation. The only downside I’ve seen over the years to a “Six Sigma initiative” is that sometimes overzealous advocates squander scarce resources chasing near perfection when it simply isn’t necessary and doesn’t make good business sense. Here’s how I think about a “lean transformation” and the role of lean and Six Sigma tools.
Think of lean tools and Six Sigma tools as two drawers in the same toolbox. Lean tools are focused on the elimination of waste and are relatively easy tools that can be learned and used by anyone in the business. Examples are: 5S, kanban, Pareto Analysis (80/20 rule), quick changeover, fishbone diagram (cause & effect), 5 Whys, visual management.
Six Sigma tools, on the other hand, are a more sophisticated toolset that are necessary to solve the more sophisticated problems often exposed by the use of lean tools. Six Sigma tools require more extensive training including formal engineering skills and use of sometimes complex software.
Six Sigma is focused on understanding process variation and finding ways to measure, reduce and control variation within engineered limits. It also helps to define what is normal variation vs. variation that requires corrective action.
A common and highly effective methodology for conducting Six Sigma projects is called DMAIC (du-may-ik) which means Define, Measure, Analyze, Improve, Control. Examples of Six Sigma tools are: VOC (voice of the customer), (DOE) design of experiments, regression analysis, process capability studies, (VSM) value stream mapping, (HOQ) House of Quality, FMEA (failure mode & effects analysis), ANOVA (analysis of variation), hypothesis testing.
Most Powerful Use of Six Sigma
The most powerful use of Six Sigma for my money is in understanding the CTQs (Critical to Quality) requirements of the customer and then internally engineering the CTPs (Critical to Process) characteristics to ensure that the process will deliver those CTQs at a Six Sigma level of performance, i.e. no more than 3.4 defective parts per million (DPM).
In the wire and cable industry where I worked for 35 years, there were lots of “industry standards” that customers used to design their products. Those were commonly the CTQs for things such as ensuring the electrical or digital signals were within the proper limits to meet specific applications for those particular cables. For example, it might be voltage capacity on power cables, cross-talk limits on twisted pairs or impedance measurements on a coaxial cable.
Other characteristics varied because of specific customer application needs. For example, a contractor using multi-conductor cable in conduit doesn’t care much about color. If one of the conductors is supposed to be green, the exact shade of green may not make any difference since the color is for identification purposes only. It’s not a CTQ.
On the other hand, when Cher was planning a concert back in her heyday, she insisted on having a synthetic rubber microphone cord that was hot pink in color so it would match the feathers in her costume and her hot pink dress. In this case, color match was a CTQ. Dimensions were also a CTQ for this microphone cable because the cable had to fit very precisely into a microphone connector. If the cable diameter was over-sized, it simply would not fit. Show stopper.
Oftentimes CTQs require the manufacturing processes to have very narrow control limits on things such as water temperature, air or steam pressure, tip and die control, compound temperature, soak time, etc. Once CTQs are understood (preferably with the help of sales people, design engineers, your customer’s engineers, possibly material supplier engineers) then the process engineers on the shop floor can do their work, i.e. to make certain that the existing process is robust enough to control the CTPs within the necessary control limits and consistently meet the Six Sigma requirement for the CTQs.
Too frequently manufacturing doesn’t know that the process capability does not exist to meet the customer’s quality requirements until the order is in process on the shop floor. Now we’re in trouble with the customer. Our costs go through the roof in a scramble and our delivery promises have no credibility.
Those companies who involve all parties early in these discussions to define CTQs will consistently beat their competition to market and will always have the best chance to maximize operating margin in the relatively short time that it takes for a product to go from being new to being a commodity. Why? Because the manufacturing and process engineering experts get the opportunity to know their processes intimately from a capability standpoint so that the company does not promise control limit parameters that cannot be met.
>>Larry Fast received strong reaction to this article. Read his response at On Leadership, Culture Change and Improvement Tools.
This can also be a rich source of input where processes require re-engineering to enable even tighter process controls that open doors for more new business opportunities.
Fast forward a few years from now where the company has become proactive in defining its process capabilities and with improving them as a part of engineering standard work. They have armed their design engineers, sales and customer service people with up to date parameters that can be used for routine incoming orders as well as for customer requests for custom designs.
Understanding process capability is no longer a mystery but rather a key reason why your company is winning the business!