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Lean Six Sigma: A Fusion of Pan-Pacific Process Improvement

Malcolm T. Upton

Master Black Belt, George Group mupton@georgegroup.com

Charles Cox

Master Black Belt, Lean Master, George Group ccox@georgegroup.com

Abstract Statistical Process Control, Total Quality Management, The Toyota Production System, Just-in-Time, Lean Enterprise, and Six Sigma have roots and histories on both sides of the Pacific. Lately, the most recent of these, Lean Enterprise and Six Sigma, have begun to be fused into a more powerful and effective hybrid, addressing many of the weaknesses and retaining most of the strengths of previous traditions. Using TQM as a baseline, the strengths and threats of Lean Enterprise and Six Sigma are highlighted and a more powerful Lean Six Sigma fusion is discussed. Specific areas examined are organizational infrastructure, career path/incentives, analysis tools and methods favored, depth and type of organizational deployment, methods included in addition to process improvement, project identification strategy, project portfolio management, methodology for tool use, project review methods, speed-cost-quality focus, and methodology bias. Some additional discussion on the role of complexity management in augmenting the value of Lean Six Sigma will also be included.

TQM, Lean, & Six Sigma: A Comparison The end of the 20th and beginning of the 21st century has seen increasing and continuing pressure from customers and competitors for greater value from their purchases whether based on higher quality, faster delivery, or lower cost (or some combination) in both manufactured products1 and services2. In many industries, this has encouraged companies to adopt Six Sigma as their process improvement approach. Perhaps the most well known of these are Motorola, GE,3 and Honeywell4.

1 M. George, Lean Six Sigma: Combining Six Sigma Quality With Lean Speed, McGraw-Hill, New York, 2002. 2 M. George, Lean Six Sigma for Service: How to use Lean Speed & Six Sigma Quality to Improve Services and Transactions, McGraw-Hill, New York, 2002. 3 R. Basu, IIE Solutions, 33, (7), 28 (2001). 4 Annual Report, 1999, Honeywell International, Morristown, NJ, 2000.

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Figure 1. Historical developement of TQM, Six Sigma, Lean Enterprise, and Lean Six Sigma.

In other industries, this has driven companies to adopt Lean as a method of improving speed to customer and overall cost. This is especially true in the automotive5 and 5 J. P. Womack and D. T. Jones, Lean Thinking: Banish Waste and Create Wealth In Your Corporation, Simon & Schuster, New York, 1996.

Craft ProductionEli Whitney -

Product Standards

Shewhart – Statistical Methods

Juran – Process Analysis

Industrial Production

Statistical Process Control

Quality Control

Taguchi – Customer

Focus

Quality Engineering

Deming – Systems Thinking

TQM - Total Quality Management

Smith (Motorola) – Statistical

Rigor Six

Sigma v1 Welch/

Bossidy – Organizational Infrastructure Six

Sigma v2

Taylor – Time/Motion

Studies Scientific

Management

Ford – Work

Analysis

Assembly Line Manufacturing

Sloan – Modern

Management

OrganizedLabor –

Worker’s Rights

Mass Production

Toyoda,Ohno, Shingo

Toyota Production

System

Womack& Jones

Lean Enterprise

George, Lockheed Martin, others

Lean Six Sigma v1

Harry –DMAIC

Simplified Manufacturing

Simplified Service/Process

Cox – Italian Tractor Co.

George & Wilson – Optimized Complexity

Lean Six Sigma v2

Tunner – Berlin Airlift

Simplified Product

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aerospace6 industries. What is becoming increasingly obvious, however, is that a combined approach shows far more potential than either alone7,8. Many of us, however, have heard this all before, during the TQM era in these and other companies and industries. In most cases, however, TQM failed to live up to its potential. Is there any way that Lean, Six Sigma, or the Lean Six Sigma amalgam can avoid the deathtraps that compromised so many promising TQM implementations? Total Quality Management (TQM) has roots that can be traced into ancient times but is usually identified with the establishment of product standards and statistical methods. With the additions of Juran, Deming, and a host of Japanese thinkers, the Statistical Process Control of the early 20th century became the TQM of the later 20th century9. Lean has roots stretching back to the beginning of mass production. Generally, many of the ideas of Henry Ford and the TQM contributors, as interpreted and applied by Taiichi Ohno of Toyota and as documented by Womack & Jones are seen as the basis of Lean thinking10. Six Sigma began when Smith applied more statistical rigor to TQM11 and became the organizational powerhouse when Welch and Bossidy developed the organizational infrastructure elements that characterize its modern implementation12. Lean Six Sigma is an integration of Lean Enterprise and Six Sigma that has been created independently and with greater and lesser degrees of success on numerous occasions13. This historical development is summarized in figure 1 (preceding). One interesting thing about both Lean and Six Sigma, however, is their common TQM roots. The question of why Lean Six Sigma would work where TQM failed is important, especially since many of the TQM failures were in organizations and industries that are currently attempting implementations of either or both of these or an integrated Lean Six Sigma effort. Table 1 compares TQM, Six Sigma, and Lean14. The dark green cells indicate strengths for one of the implementation traditions. Light green cells indicate that more than one of the traditions have strengths in that area.

6 E. Murman, T. Allen, K. Bozdogan, J. Cutcher-Gershenfeld, H. McManus, D. Nightingale, E. Rebentisch, T. Shields, F. Stahl, M. Walton, J. Warmkessel, S. Weiss, and S. Widnall, Lean Enterprise Value: Insights From MIT’s Lean Aerospace Initiative, Palgrave, New York, 2002. 7 See notes 1 and 2. 8 B. Wheat, C. Mills, and M. Carnell, Leaning Into Six Sigma: The Path to Integration of Lean Enterprise and Six Sigma, Publishing Partners, Boulder City, NV, 2001. 9 J. Folaron, Six Sigma Forum Magazine, 2, (4), 38 (2003). 10 LM21 Lean/Six Sigma Black Belt Training, Lockheed Martin Corporation, Bethesda, MD, Module 23, 2001. 11 See note 3. 12 See note 9. 13 See notes 1, 2, 8, and 10 14 Much of the TQM/Six Sigma comparison is based on G. H. Watson, ASQ Six Sigma Conference 2002: Delivering Organizational Value, (2002).

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Table 1. Comparison of TQM, Six Sigma, and Lean

Total Quality Management Six Sigma Lean Infrastructure: Quality Council, Process Improvement Teams

Infrastructure: Champions, Sponsors, Green/Black/Master Black Belts

Infrastructure: Senior Leaders, Sensei

Haphazard incentive or career development

Some incentive, frequent career development

Haphazard incentive or career development

Basic Data Analysis Advanced Statistical Analysis (preferred)

Basic Data Analysis

Part of everybody’s job Everybody’s job (Yellow/Green Belts) – dedicated resources (Black Belts)

Part of everybody’s job

Process-centered Process-centered, some Product-centering

Process-centered, some system of processes thinking

“Popular” project identification

Strategy-driven project identification

“Popular” and strategic project identification

Portfolio of tools Structured tool use (DMAIC)

Portfolio of tools, some structure

Haphazard project review Gated review at the end of each DMAIC phase

Updates during Kaizens, communication at end

Focus on quality improvement

Focus on reduction of cost and variation

Focus on reduction of cycle time and WIP

Bias to quality for quality’s sake (Quality Circles)

Bias for analysis (Projects) Bias for action (Kaizen Events)

Lessons From Six Sigma The strengths of the Six Sigma tradition in comparison to other approaches has been detailed before15, but in this case, we want to look specifically at what Six Sigma could bring to a Lean Six Sigma fusion. To that end, we will divide the characteristics of Six Sigma into three groups, strengths unique to Six Sigma, strengths that can be drawn from Six Sigma and other traditions, and threats to the Six Sigma tradition that need to be considered and mitigated in a Lean Six Sigma fusion.

Unique Strengths of Six Sigma Six Sigma has a number of unique strengths, explaining in part both the endurance of its appeal and the demonstrated power of the approach. Among these are the infrastructural elements and career development paths that were developed and added to Six Sigma under Jack Welch at GE and Larry Bossidy at Allied Signal (now Honeywell). A strength 15 M. Goldstein, Six Sigma Forum Magazine, 1, (1), 36 (2001).

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of Six Sigma related to this is the presence of dedicated resources, namely Black Belts, in addition to the general expectation that everyone will be involved. Finally, the structure to improvement projects provided by DMAIC and the use of gated reviews at the end of each DMAIC phase are two additional strengths unique to Six Sigma. Let us examine each of these in more detail.

Detailed Infrastructure One of the primary and perhaps the most valuable addition that Bossidy and Welch added to the Six Sigma program Motorola began was the infrastructural roles they defined for their implementations16. Despite attempts by some organizations, notably the American Society for Quality, to provide specific definitions to at least the Black Belt role, what specifically is meant by each of these roles varies significantly from company to company and training organization to training organization. Generally, the roles of Champion, Sponsor, Master Black Belt, Black Belt, and Green Belt are part of the picture with the roles and responsibilities of at least the first four being generally similar. Green Belt roles vary significantly and in some organizations, other roles including Yellow Belts and others, are added. This paper will attempt to provide a general definition for the most common of these infrastructural roles. Champions. Champions often have different names, and occasionally are left out of an implementation. When used, however, whatever their name, they are usually a member of senior management who are charged with leading and energizing the Six Sigma effort and most often theirs is a full-time position. They are often the ones that choose who will be Black Belts and Master Black Belts. They are also often charged with identifying projects, prioritizing those projects in relation to the organization’s strategy, and assigning projects to Black Belts and/or Green Belts as those resources become available. Often Champions use Master Black Belts as their technical advisors. They are responsible for managing the organization’s project portfolio to maximum effect. Occasionally this role is filled by the same person filling the Master Black Belt role. Sponsors. Sponsors are sometimes called Process Owners indicating their role in a process improvement project. Essentially this is the person that has the organizational authority to make changes in a process. Sponsor is a part-time role in two ways. First, the sponsor is not involved full time when they are sponsoring a project. They play a critical role in defining the project and evaluating progress and direction, but it is only one of the tasks that they are working on at the time. Also, a Sponsor only fills this role when they have a project being worked on by a team. In some organizations a Project Sponsor is involved in the sponsorship of several projects in a given functional area, all of whom may have a project owner. The Project Sponsor is an intermediary in larger organizations between the Black Belts and the Champion. Master Black Belts. Master Black Belts are the senior technical advisors for a Six Sigma effort. A full-time position, the expectations for them vary from organization to

16 See note 3.

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organization, but generally include a significant number of these: provide technical assistance and support for Champions, coach and mentor Champions, coach and mentor other members of senior management, coach and mentor Black Belts, train Black Belts, train management/senior management, develop/ update curriculum and support materials for the implementation, facilitate large projects that have sub-projects or spawn multiple follow-on projects, facilitate projects that are not standard process improvement. Master Black Belts are usually drawn from the ranks of experienced Black Belts. Organizational approaches to Master Black Belt development vary from simple identification of experienced Black Belts and designation as a Master Black Belt to 300+ hours of skill demonstration plus some additional training, before an experienced Black Belt becomes a Master Black Belt. Black Belts. Black Belts are the central technical advisors of a Six Sigma effort. In successful Six Sigma implementations, they are always dedicated full-time to the implementation effort17 and most of this time is spent working projects. The primary responsibility of the Black Belt is to provide technical expertise and leadership for process improvement projects. Since they are dedicated to the implementation, it becomes cost effective to invest the additional resources in developing the Black Belts ability to apply a broad range of process improvement tools and techniques. Generally, Black Belts receive 80-200 hours of classroom training, often in addition to previous Green Belt training and, possibly, experience. The most common model is four full weeks of training with each week separated by 3-4 weeks in which the Black Belt to be works on a first project applying what they have learned. In most cases, some form of demonstration of expertise in the form of a minimum number of projects and/or minimum return from projects is required before the Black Belt is certified in the company’s certification process. Green Belts. Green Belts are common in all Six Sigma implementations, but what a Green Belt is varies tremendously from organization to organization. At one end of the spectrum are those organizations that identify Green Belts as every person who has had training and experience as a team member on one project. At the other end of the spectrum are Green Belts with extensive training who work part to full-time leading projects and/or have deep expertise in one or more of the Six Sigma tools. In this author’s experience, generally Green Belts are given one or two weeks of training and usually are expected to lead one or two projects a year, i.e. a part-time commitment. These projects are usually some simplified sub-set of the range of projects that Black Belts in the same organization have worked on. Indeed, Green Belts often lead a replication of a previous project they worked on where a Black Belt led the initial project and they learned the specific approach for that solution..

17 F. W. Breyfogle III, ISSSP 2nd Annual Six Sigma Leadership Conference: Navigating New Frontiers, (2001).

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Career Development for Infrastructural Roles. Another contribution made by Bossidy and especially Welch was the explicit tie between participation in the infrastructural roles and career development for managers. In those organizations that make experience as a Green Belt or Black Belt a requirement for promotion beyond a certain level of management, support for the continuous improvement program is significantly greater than in organizations that do not have this requirement. Also, when being a Black Belt is a temporary role (usually an assignment between 18 and 36 months) for high-potential and/or managerial candidates, the quality of the Black Belts and the commitment to doing a good job are also significantly better.

Addition of Dedicated Resources One could argue that dedicated resources existed before TQM, namely the quality professionals in the quality departments and industrial engineers in their various process design or IE departments. There are two significant differences that Six Sigma brought to the idea of dedicated resources. First, Black Belts are usually brought from across the organization for a temporary assignment as a Black Belt instead of the TQM approach of drawing on quality department personnel who may stay in that function for years or an entire career. Second, many organizations, especially larger ones, do not concentrate their Black Belts in a “Quality Department” or similar organization but have them deployed into the organization to work projects in their area. This means that Six Sigma implementations can capture the advantage of having well-trained individuals that can advise and lead the continuous improvement effort while reducing the potential for people to see continuous improvement as the responsibility of some other part of the organization.

DMAIC Structure A very significant addition to TQM that transformed it into Six Sigma was the replacement of the Deming “Plan – Do – Check – Act” Cycle with the Measure-Analyze-Improve-Control structure. The rapid addition of Define to the beginning of this model only increased its usefulness. A major strength of this model is the division of the preparation and planning into multiple steps before implementation during Improve. DMAIC also has proven its value as a model around which to structure training programs with most training programs requiring the assignment of an actual project to be worked on by the Black Belt during training.

DMAIC Gate Reviews Almost all Six Sigma implementations include some sort of gate review at the end of all or most of the DMAIC phases. In practice the Define gate review often becomes a fairly informal review between the Black Belt and the Sponsor of the project. Often the Measure and Analyze gate reviews tend to cover some of the same ground and/or are combined, although they are more often a more formal affair. Often a review after the implementation plan has been developed occurs during Improve and, if a pilot is run, another review occurs after that. These two reviews are usually in addition to the review

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at the end of Improve. A review after Control is highly correlated with sustained gains from projects. The specifics of these reviews tend to be tailored to the details of the organization and its implementation. Some organizations also do a Sustain Review six months after the project is closed out to confirm the gains and many any adjustments brought up during the six month operating period.

Strengths Not Unique to Six Sigma In addition to these five strengths unique to Six Sigma, this tradition has three areas that are strengths that are also areas of strength in one or both of the other traditions.

Advanced Statistical Analysis The first thing that transformed Motorola’s TQM effort into a Six Sigma effort was the addition by Bill Smith of statistical rigor in the form of the advanced statistical analysis that has become a hallmark of Six Sigma. This advanced statistical analysis tends to be unique to Six Sigma implementations, however, it often comes at the expense of reliance on more basic data analysis tools. TQM and Lean both rely on basic data analysis tools and, traditionally, do not take advantage of the sophisticated statistical tools favored by Six Sigma.

Process And Product Focus Very early in the development of Six Sigma, it became obvious that it would be impossible to have 6-sigma quality from products with 4-sigma design quality. This product focus lead to the development of Design for Six Sigma (DFSS) methods. DFSS deployed appropriate tools from the process improvement toolbox and added additional tools for creativity (e.g. TRIZ), translation of the voice of the customer (e.g. Quality Function Deployment), and statistical analysis (e.g. Weibull methods). These additions made it possible to improve the fundamental designs of the products, enabling higher quality outputs from the process. Lean has a similar emphasis on product design to enable the process goals of a Lean Enterprise, although these are more often called Design for Manufacturability (DFM), Design for Assemblability (DFA), or a combination of the two (DFM/A)18. Some providers are beginning to offer the same tools under the title of Design for Lean Manufacturing (DFLM)19, Design for Lean Six Sigma (DFLSS)20 and others212223. 18 D.M Anderson, Design for Manufacturability and Concurrent Engineering: How to Design for Low Cost, Design in High Quality, Design for Lean Manufacture, and Design Quickly for Fast Production, CIM Press, Cambria, CA, 2004. 19 K. J. Duggan, IIE Solutions, p. 30, 1998, December. 20 George Group, Design for Lean Six Sigma, http://www.georgegroup.com/lean_six_design.php, retrieved March 24, 2004. 21 D. S. Cochran, W. Eversheim, G. Kubin, M. L. Sesterhenn, The International Journal of Production Research, 38, (6), 1377 (2000). 22 J. Flinchbaugh, Center for Quality Management Journal, 7, (2), 23 (1998).

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Focus On Reduction of Cost and Variation Customers want everything better, cheaper, and faster. Both TQM and Six Sigma provide things better and Six Sigma is stronger than TQM at providing it cheaper. Unfortunately neither produces excellent results at the faster part of the equation. A hallmark of Six Sigma is its built-in zeal to reduce cost and structural bias to reduction of variation. Many TQM efforts seemed to present process improvement as a moral or almost religious imperative, causing some to see the TQM effort as a “quality for quality’s sake” initiative. When business reality made companies reexamine their activities, initiatives that did not have a bottom-line impact fell by the wayside. When TQM efforts took on this “quality for quality’s sake” character, they were among those activities abandoned. Six Sigma has been, and still is, firmly focused on cost. Some say it is too focused on cost and tends to discount too heavily projects with intangible or strategic benefits in the absence of significant cost benefits, at least in the short term. Some implementations even discount revenue generation projects, growing the top line, because the benefits are more difficult to tie directly to the project efforts. The other bias of Six Sigma toward reduction of variation is a two-edged sword as well, leading to great leverage in improving quality, especially in regard to quality measured with continuous as opposed to discrete measures. It also, however, tends not to greatly enable reduction of cycle time. The Lean tradition focuses more on cycle time reduction and reduction of work in process, delivering on both the “faster” and “cheaper” of the customer demands.

Threats in Six Sigma Tradition Despite the strengths of Six Sigma and the fact that it was an advance over any tradition that was generally known at the time it was developed, there are two areas of concern that this author believes should be addressed when developing a next generation Lean Six Sigma implementation.

Bias to Only Strategic-Driven Projects. It is the authors’ perception that most Six Sigma efforts identify their projects only on the basis of strategy. Like many things in Six Sigma, theoretically there is nothing wrong with this. In fact, theoretically, this is exactly what one would want to do. Two difficulties arise during the practical application of this ideal. First, the time it takes for senior management to learn enough about Six Sigma to include it in their strategic planning, actually go through one cycle, identify projects to address strategic needs, and then charter and deploy projects is often seen by the organizational members as a huge dead zone where leadership is talking, but not doing anything. Although this can be finessed by skilful management, many of the skills are those that are best developed in a mature Six Sigma implementation, not those generally in the hands of management early

23 Society of Manufacturing Engineers, Foundation Blocks for Lean Manufacturing: Design for Lean Manufacturability, http://www.sme.org/cgi-bin/get-train.pl?&&D20214&000007&D20214&TR&SME&, retrieved March 24, 2004.

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in an implementation. Second, the first waves of projects, strategically focused in areas that will have significant impact to the organization, tend to be very large in scope and pose a daunting problem for the Black Belt trying to lead the project. Again, large scope projects can be handled by the Six Sigma toolbox and methodology, however, those skills, again, tend to be developed later in the implementation, and are in short supply when most of the projects are these large-scale monsters. Practically, most implementations start with a period of 6-18 months where some or most of the projects are volunteered by management with only anecdotal or gut-feel ties to strategy.

Bias to Analysis/Projects. Because of the power of the statistical tools, the structural bias of Six Sigma to the use of advanced statistical tools over basic analysis is strong. Six Sigma implementations usually assume a 6+ month implementation time-line for first projects and 2-6 months for later projects. Most implementations have a structured set of gate reviews, usually at the end of each DMAIC phase, and these reviews tend to have a rather extensive list of analysis products that are required or at least expected. In many organizations, some or all of these reviews are very formal and tend to drive behavior toward spending days or even a week or more just in preparation for the gate review. Both of these forces can, and often do, combine to push a team and project into “analysis paralysis” where they constantly seek for just a little more data or one more analysis run, significantly delaying implementation. This can lead to lost opportunities or at least increases in costs, both direct as the project consumes more resources than necessary to get the desired improvement, and indirect in the lost opportunity for savings or additional revenue due to a later than necessary implementation (as well as delaying moving onto the next set of projects).

Lessons from Lean Just like Six Sigma, the Lean tradition has unique and shared strengths as well as threats to its potential impact. Since this analysis is primarily focused on what Six Sigma can learn from the Lean tradition, we will only examine the strengths, unique and shared, and leave the threats to another discussion.

Unique Strengths of Lean There are three strengths that are unique to the Lean tradition, an acceptance of popular project selection in addition to strategic project selection (along with a very effective strategic project selection method), a focus on reduction of cycle time and work in process (WIP), and a bias for considered action.

Both Popular and Strategic Project Selection Lean tends to have a broader based approach to project selection. On the one hand, it allows for the “who’s got a project” approach that tends to build and maintain

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organizational motivation as “my pain” is addressed. On the other hand, it also uses strategic identification, either from traditional strategy approaches using Lean to close strategic gaps as well as using its own Value Stream Mapping tool24. Value Stream Mapping is one of the most effective tools the authors have seen to help identify, strategically, process improvements that will help move an organization forward. All of these in combinations that can be tailored by: a) the organization and b) where in the implementation life-cycle the organization is to provide a very robust and flexible approach to project selection. This allows for a more optimal combination of enthusiasm-generating “fix my pain” projects and strategic gap-closure projects. It also allows for quickly-identified projects to begin showing commitment and results while the strategically critical projects are being identified and started.

Focus on Cycle Time and WIP Reduction The reduction of cycle time is such a central part of Lean tradition that it is the focus of some Lean authors25, 26, 27. Reduction of work in process (WIP) and the associated savings in capital, space, logistics and process simplification is a fundamental part of Lean thinking and the analogy of WIP as water covering the rocks of process deficiencies has become almost ubiquitous28. This focus on cycle time and WIP reduction makes Lean very powerful at addressing customer expectations for faster and cheaper, although better is more often a by-product or enabler than a focus. Like Six Sigma, Lean provides some, but not all of the picture (the “faster” and “cheaper”, but not as good with respect to the “better”).

Bias for Action One of the most powerful things Lean has is the concept of the Kaizen event. In fact some of the basic works in the field of Lean focus on this idea29, 30, 31, 32. “Kaizen” is Japanese for “continuous improvement,” but as generally used in U.S. Lean discussions, 24 M. Rother and J. Shook, Learning to See: Value Stream Mapping to Add Value And Eliminate Muda, The Lean Enterprise Institute, Brookline, MA, 1999. 25 C. Meyer, Fast Cycle Time: How to Align Purpose, Strategy, and Structure for Speed, Free Press, New York, 1993. 26 P. G. Smith and D. G. Reinertsen, Developing Products In Half The Time, Van Nostrand Reinhold, New York, 1991. 27 P. R. Thomas, Competitiveness Through Total Cycle Time, McGraw Hill, New York, 1990. 28 M. Imai, Kaizen: The Key to Japan’s Competitive Success, Random House, New York, 1986. 29 See note 28. 30 M. Imai, Gemba Kaizen: A Commonsense, Low-Cost Approach to Management. McGraw-Hill, New York, 1997. 31 A. C. Laraia, P. E. Moody, and R. W. Hall, The Kaizen Blitz: Accelerating Breakthrough In Productivity And Performance, John C. Wiley & Sons, New York, 1999. 32 M. D. Regan and M. Slattery, The Kaizen Revolution: How to Use Kaizen Events to Double Your Profits, Holden Press, Raleigh, NC, 2000.

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Kaizen, or Kaizen Blitz events, are focused process improvement events, usually 3-5 days in length, in which the bulk of an improvement project is accomplished. Legend and some anecdotes of very experienced Kaizen practitioners refer to the Sensei coming into the plant, touring for a few minutes to an hour, and then starting the Kaizen in the critical place right then, with, essentially, no pre-work. Practically, the pre-work of identifying the area, scoping the project, identifying team members, coordinating support, and preparing logistically for the event consume some time for 1-3 weeks ahead of an event. Lean dogma states that all actions identified during a Kaizen event are complete by the end of the week. Again, practically, many events have some follow-up actions, although completion of the majority of the actions (or even all the actions) is not uncommon. Practically, follow-up action for a Kaizen event should not take more than 30 days following the event. These are not “shoot from the hip” activities as they use the basic analysis tools of a lean tool-box, but the consideration is straightforward and aimed at getting most of the information that will probably produce a “good” solution, instead of getting all of the information that will make certain the best possible solution. All of this points to a bias for action and experimentation that tends to be lacking in traditional TQM or Six Sigma implementations. To paraphrase one of Colin Powell’s laws33, Lean encourages teams to do enough analysis so that they will probably make a good decision instead of succumbing to the analysis paralysis that so many TQM and especially Six Sigma teams fall prey to.

Strengths Not Unique to Lean There are two areas where Lean shares strengths with one or more of the other traditions. These are: the use of the same basic analysis tools that TQM uses, and the addition of some system of processes thinking that late TQM began to add.

Basic Data Analysis One of the enablers of Kaizen is the structural bias of Lean toward basic data analysis to the essential exclusion of advanced statistical tools. Lean shares this focus with TQM, but the Kaizen event of Lean as compared to the process improvement team of TQM, takes this focus to a place where real leverage is gained.

Addition of Some System of Processes Thinking Peter Senge has argued that systems thinking is one of the five disciplines that are essential to future organizational success34, a view that was also espoused by Dr. Deming in his later teachings about TQM35,36. Lean does not specifically talk about systems

33 C. L. Powell and J. E. Persico, My American Journey, Ballantine, New York, 1995. 34 P. M. Senge, The Fifth Discipline: The Art & Practice of the Learning Organization, Currency Doubleday, New York, 1990. 35 W. E. Deming, Quality, Productivity, and Competitive Position, Seminar presented by Quality Enhancement Seminars, Phoenix, AZ, 1991.

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thinking, however, the recent Lean developments of Value Stream Mapping37,38 and process value analysis (often also called value stream mapping39,40) shows the beginnings of system thinking in that the entire process is examined and trade-offs are made that cannot be seen by considering a single function.

A Lean Six Sigma Synthesis The preceding analysis of Lean and Six Sigma can be used to inform decisions about what a more beneficial and robust Lean Six Sigma methodology might look like. In many cases, the actual Lean Six Sigma amalgams follow many of these suggestions. However, the authors know of none that take advantage of all of the gems of wisdom from both methodologies. One potential synthesis based on the authors’ experience, research, and examination is offered in Table 2.

Table 2. Synthesis Lean Six Sigma compared to heritage initiatives

TQM Six Sigma Lean Lean Six Sigma Infrastructure: Quality Council, Process Improvement Teams

Infrastructure: Champions, Sponsors, Green/Black/Master Black Belts

Infrastructure: Senior Leaders, Sensei

Infrastructure: Champions, Sponsors Green/Black/Master Black Belts

Haphazard incentive or career development

Some incentive, frequent career development

Haphazard incentive or career development

Some incentive, frequent career development

Basic Data Analysis

Advanced Statistical Analysis (preferred)

Basic Data Analysis

Basic or Advanced Statistical Analysis as applicable

Part of everybody’s job

Everybody’s job (Yellow/Green Belts) – dedicated resources (Black Belts)

Part of everybody’s job

Everybody’s job (Yellow/Green Belts) – dedicated resources (Black Belts)

Process-centered Process-centered, some Product-centering

Process-centered, some system of processes thinking

Process-centered with both system of processes and product improvement

“Popular” project Strategy-driven “Popular” and “Popular” and

36 W. E. Deming, The New Economics: For Industry, Government, Education, MIT Center for Advanced Engineering Study, Cambridge, MA, 1993. 37 See note 24. 38 M. Rother and J. Shook, Training to See: A Value Stream Mapping Workshop Participant Guide, The Lean Enterprise Institute, Brookline, MA, 2000. 39 See notes 1, and 2, also taught by Lockheed Martin purchasing functions to suppliers. 40 Document and Analyze the Process, Lean Six Sigma for Service Black Belt Training, George Group, Dallas, TX, 2003, Module W1C09 1-05.

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identification project identification strategic project identification

strategic project identification

Portfolio of tools Structured tool use (DMAIC)

Portfolio of tools, some structure

Structured tool use (CEIEC)*

Haphazard project review

Gated review at the end of each DMAIC phase

Updates during Kaizens, communication at end

Gated review at the end of each CEIEC phase, monitoring reviews during extended Execute

Focus on quality improvement

Focus on reduction of cost and variation

Focus on reduction of cycle time and WIP

Focus on value improvement, cost, cycle time, variation, and WIP reduction

Bias to quality for quality’s sake (Quality Circles)

Bias for analysis (Projects)

Bias for action (Kaizen Events)

Bias for rapid analysis & action (Event enabled projects)

* CEIEC – Charter – Explore – Imagineer – Execute – Close

Lean Six Sigma Infrastructure The Six Sigma infrastructure of Champions, Project Sponsors, Master Black Belts, Black Belts, and Green Belts has been proven very effective in sustaining Six Sigma implementations. Specifically a Lean Six Sigma infrastructure would have executive Champions that would provide senior leadership support of the effort. This should be in addition to the visible involvement of the head of the business and many, if not all, of the head’s direct reports. Green Belts can take any of the forms seen in a Six Sigma implementation, from super team members to deep or wide subsets of the Black Belt skill set. What form the Green Belts take in a particular organization should be decided by the culture and aims of that organization’s implementation. As in successful Six Sigma efforts, Lean Six Sigma Black Belts should be full-time dedicated to leading process improvement. They should have broad knowledge of an integrated Lean Six Sigma tool set and methodology and should not be knowledgeable in just Lean or Six Sigma. Black Belts should also have primary responsibility for the development and support of Green Belts. A target of approximately 1% of the organization as Black Belts is probably best. Master Black Belts should also be full time and have primary responsibility for the training and development of Black Belts. Whether they or the Black Belts train the Green Belts depends on the organization’s vision for their Green Belts. Master Black Belts will also probably be the ones that coordinate related projects and handle large or atypical projects. Whether Master Black Belts or Champions take on the role of Value Stream Managers41 is another question that will be resolved in the particular context of an [Note: need to add something here about Value Stream Managers – this comes out of the blue, the reader won’t understand without referencing the citation what this is all about] organization’s implementation. A Master Black Belt to Black Belt ratio of between 1:5

41 See notes 24 and 38.

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and 1:20 is a good target, again depending on the particular vision of the roles of Black Belts and Master Black Belts.

Incentives and Career Path In conjunction with the Six Sigma infrastructure that Lean Six Sigma should adopt, the approach to career path integration should also be adopted. The approach that GE and others have taken that: a) at some point promotion in the management ranks requires at least Green Belt certification and b) the Black Belt position is an 18-36 month development tour for future leaders, is a valuable addition to a Lean Six Sigma implementation42.

Analysis Lean Six Sigma should learn from the analysis weaknesses and strengths of both its parent disciplines and take an integrated approach to analysis. When significant gains in the challenging area can be achieved with basic data analysis tools, such gains should be harvested without the added investment or complication of unnecessary advanced statistical analysis. In other words, when the sophistication of a designed experiment (DOE) or failure mode and effects analysis (FMEA) is needed, they should be used. When less sophisticated tools are sufficient to make a significant improvement, then the advanced DOE or FMEA should not be used. In all projects, Colon Powell’s Law (paraphrased)43, “When you have enough information so you will probably make the right choice, choose,” should apply.

Who Does Process Improvement? Again, the proven strengths of the Six Sigma approach to this area should be applied to a Lean Six Sigma implementation. Senior management gets involved as Champions, middle managers get involved by sponsoring projects, first line managers and employees get involved by being members of process improvement project teams, but the heavy lifting of knowing the tools and facilitating the project is the responsibility of, primarily, the Black Belt specialists with support from Master Black Belts and, if the organizations vision allows, Green Belts.

Focus of Efforts As with analysis, this area should take the strengths of both Lean and Six Sigma to form a fusion greater than either predecessor. Specifically Lean Six Sigma should: i) take the process focus legacy from TQM and add: ii) the product focus that was pioneered in the Design for Six Sigma effort and iii) the System of Processes approach that Lean’s Value Stream Mapping added. If a strategic-level evaluation model such as the Malcolm 42 G. H. Watson, Six Sigma Forum Magazine, 1, (1), 13 (2001). 43 See note 33.

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Baldrige National Quality Award (MBNQA)44 or the European Foundation for Quality Management (EFQM) Excellence Model45 is used, this should make for a very powerful and effective driver of the organization’s strategy efforts.

Project Identification In conjunction with the focus of efforts, project identification should take the Lean approach of having both strategic and popular identifications. There is definitely a place, especially during the first 6-18 months, for popularly identified projects. These can be more quickly identified and work begun on them, giving early wins and building the enthusiasm for the implementation effort. When combined with a Lean Six Sigma approach to project management that uses Kaizen events to enable quick completion, this effect is multiplied. While these initial projects are being accomplished, the organization should use a strategic-level integration model such as the MBNQA criteria46 along with systemic, strategic tools such as Value Stream Mapping47 to identify projects more strategically. These should come to dominate the project portfolio, but should never completely eliminate “pop-ups” and “popular” projects.

Tool Structure DMAIC is certainly more useful at a tactical level than any approach that either TQM or Lean offer, and it is better than any other model that was extent at the time it was developed. Be that as it may, this author believes that a better model, the Charter-Explore-Imagineer-Execute-Close (CEIEC) model is an improvement over the DMAIC model48, 49, 50. There are three major reasons for this. First, the CEIEC model has proven to be more intuitive and helpful to new process improvement facilitators. Second, the CEIEC model is an integrated model preserving the bias for action of Lean without compromising the analytical rigor of Six Sigma. Finally, CEIEC is a Lean Six Sigma model and does not have to deal with the potential baggage that a model strongly identified with either Six Sigma or Lean would have.

Review Process Whether a Lean Six Sigma implementation uses DMAIC, CEIEC or some other model, the Six Sigma practice of a review at the end of each phase to review progress,

44 2004 Baldrige National Quality Program: Criteria for Performance Excellence, National Institute of Standards and Technology, Washington, DC, 2003. 45 EFQM Excellence Model, European Foundation for Quality Management, Findhoven, NL, 2003. 46 See note 44. 47 See notes 24 and 38. 48 M. T. Upton, ACTION Field Manual: Accelerate Change, Thought, Innovation, Organization, Now!, Author, Fort Worth, TX, 2003. 49 M. T. Upton, Competitive Advantage, 11, (4), 1 (2003). 50 M. T. Upton, 11th International Conference on Advances in Management, 2004.

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methodology discipline, and continued business case, is useful. This provides a discipline to the implementation that most TQM and Lean implementations lacked, keeps each project tied to the business need that spawned it, and allows the technical experts, specifically the Master Black Belts or senior Black Belts, to ensure that the tools are being appropriately used and used when appropriate. It also provides a vehicle to publicize and legitimatize the effort as non-sponsoring managers in affected areas see the rigor, data-based decision making, and employee enthusiasm that is often present in these reviews.

Focus of Improvement Once more, in this area Lean Six Sigma should learn from the triumphs and trials of its legacy approaches. Most TQM efforts failed to address product design, despite calls from the quality gurus that quality was often designed into the product51, 52. Six Sigma has addressed this some, but separates process improvement (DMAIC) from product and process design (DFSS, DMEDI, DMADV among others). Lean also looks at product design, but calls for different tools. At the very least a Lean Six Sigma effort should include both DMEDI as well as DMAIC tools and techniques, but this author believes that using CEIEC with an expanded tool set for process improvement, product design/improvement, and process design/reengineering, is a more valuable approach, removing unnecessary barriers between practitioners that can sometimes lead to managerial confusion and false competition about which methodology will get priority. [Malcolm: There’s another aspect that’s not covered here (and maybe it’s best left out but I’ll cite it anyway for our evaluation): The ROI of the LSS deployment. That’s the key reason that we always start with DMAIC – you have lots of short (4 – 6 mos.) projects that quickly show that LSS works AND which return some very nice chunks of money to the bottom line. Only after DMAIC has proven the LSS approach do we move on to DFLSS and with good reason: the usual DFLSS project takes much longer before the returns are realized (12 – 24 mos. although it is possible to break it up into smaller phases with deliverables coming out of each of the phases, there’s still a much longer time before money is returned. Also, LSS is different than TQM because there was rarely any expectation that the expenses of TQM would be directly offset by fewer defects, higher productivity, etc. There was rarely a dual set of metrics for the improvements: Dollars for the senior executives; Defects for the middle and below managers. TQM focused on defects reduction, not on converting results to dollar impact on the bottom line. Just some ideas, because the cash flow of a performance improvement program is important also. And, it’s a good idea to look at the risk the organization is subjecting itself to when embarking on a LSS program. Because virtually all of the activities are internal to the organization, there’s very low risk. And, as we now know from so many LSS deployments, the returns are substantial with many programs being accretive in the first 1-1/2 years. What’s not to like about this then? Well, a key issue is the necessity of leadership for the investment in LSS to be effective. This is a second area that perhaps could be expanded upon. TQM sometimes had the 51 J. M. Juran, Juran on Planning for Quality, Free Press, New York, 1988. 52 J. M. Juran, Juran on Quality by Design, Free Press, New York, 1992.

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senior leadership team behind it, but often did not. That impacted it’s ability to address the issues important to the leadership – they weren’t part of it and, for the most part, did not understand it or it’s ability for them to use it as a vehicle to obtain their strategic goals. That’s a key improvement when evolving from TQM to LSS. Your thoughts on these two ? Should they be included or not? If so, where/how? I’m not pushing for inclusion – maybe put in your next paper – I’m just raising the issue for us to discuss.] Bias. Finally, the bias of a Lean Six Sigma effort should also learn from its legacy. The bias of TQM for quality improvement for quality improvement’s sake should be avoided by keeping projects tied to business goals. The bias of Six Sigma for deep analysis that can lead to analysis paralysis should be avoided by adopting some of Lean’s bias for action and using event-driven project management and the mindset called Colin Powell’s law. If the team in the event keeps in mind that they only need enough data that they will probably make a good decision, this will greatly speed project execution and keep teams from falling into analysis paralysis. Finally, the tendency of some Lean implementations to take the Kaizen event thinking too far and actually advocate a “Ready, Fire, Aim” approach53 is reduced by using a methodology, DMAIC or CEIEC, that includes data and analysis based decisions, and by using a robust gate review process.

What About Complexity? In recent experience, when reviewing the effectiveness of Lean Six Sigma deployments there have been instances where the expected gains were not as great or were not accomplished as fast as generally seen. Investigation of the causes turned up a new area of study: complexity. It turns out that different organizations deal with the complexity of their offerings (whether products or services – or the related processes needed to deliver the offerings) in different ways. There is no question that complexity can dilute the impact of Lean and Six Sigma efforts and, in addition, it slows the rate of improvement. It is important to note that complexity, in and of itself, is not “bad.” Some organizations have purposely introduced and leveraged complexity in their offerings to competitive advantage. Other organizations, however, are only vaguely aware of the negative impact that complexity can have on their operations and profits. When dealing with the reduction of complexity there are three approaches: i) Standardization; ii) Rationalization and iii) Lean Improvement. It is difficult to implement the first two, if the underlying processes are unstable and out-of-control. Therefore, it may be necessary to start with lean improvements prior to addressing complexity reduction. It is essential that complexity be measured and efforts be made to reduce it when it does not give an adequate return on investment. Standardization efforts target the number of components in a product or elements in a service with the goal of decreasing them. Rationalization reviews the return on investment for each offering and compares that ROI to the cost of capital. Those offerings that don’t pay their own way need to be re-priced or removed. Lean

53 Author’s personal experience. A consultant used a slide with these three words on it as a central theme for how Kaizen teams were supposed to approach the event. Specifics are intentionally omitted.

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Improvement can be any of the traditional approaches: reducing non-value-add activities, reducing cost and cycle time, etc. Reduction in the complexity of an organization’s offerings assists lean improvements by focusing resources on proportionately fewer offerings. This gives a steeper learning curve for process cycle time improvement, waste reduction and defect prevention.

Conclusions An integrated Lean Six Sigma approach, learning and drawing from the best of its historical roots, is the next evoluntionary state in the area of process performance improvement. It builds and improves on Lean and Six Sigma just as these traditions built and improved on TQM which built and improved on SPC and so on back into history. The demands of the modern marketplace for greater and greater levels of value, that all organizations offerings become ever better, cheaper, and faster, show no signs of abating. In order to meet those demands and still survive, and even thrive; organizations have to marshal the best methods in continuous improvement. The continuous improvement methodology itself must continuously improve as well. There comes a point in that continuous evolution when the best of continuous improvement is different enough from its predecessors that a new term is rightly applied. Such was the case in the 1980’s when it was called Total Quality Management. Such was the case in the 1990’s when it was called Lean or Six Sigma. At the dawn of the new century, it is time again for a new name for the best and brightest continuous improvement has to offer. It is time for Lean Six Sigma.

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