Integrating Lean 6 Sigma into an Organization

Aug.03, 2009 in Lean 6 Sigma

THE CONTINUOUS IMPROVEMENT CULTURE:

Integrating Lean 6 Sigma into an Organization

The change required for achieving breakthrough profit performance!

Businesses exist fundamentally to earn profits. Shareholders, stakeholders, directors and management engage in a business activity to meet these goals – results, revenue, growth and return of invested capital.

Now, can an initiative such as 6 Sigma and Lean Sigma Thinking or commonly know today as Lean 6 Sigma be incorporated into an organization to achieve the goals stated above for businesses.

Can these initiatives that have shown great successes in the world of manufacturing, such as Motorola and Toyota, since the early 1980’s and in the world of finance, service and transactions, such as GE Capital and Xerox, since the mid 1990’s, be made into a success in the world of Information and Communication Technology?
What is Lean 6 Sigma?

Lean Sigma and 6 Sigma, the combination become Lean 6 Sigma, you could call it the next generation of 6 Sigma and whether some like it or not it was only a matter of time and pure logic before it occurred. The new name derives from two very essential components in business process and improvement. “Lean” the business’s internal needs on process management- reduction of waste and “6 Sigma” the calculation of least defects - the customer’s needs.

Both are the voices of two distinct business success characteristics: VOC -The Voice of the Customer - Quality(6 Sigma).
VOB - The Voice of the Business - Speed(Lean sigma).

However, to make it work there is a third voice which is hardly recognised: VOE - The Voice of the Employee - Culture (Fusion). And as many of us have found out you can have the best process improvement system on the planet but if the employees who use it, don’t buy into it - then what’s the point?

The fusion of Lean Sigma and 6 Sigma is required because:

• Lean Sigma can not bring a processes under statistical control.
• 6 Sigma alone cannot dramatically improve process speed or reduce invested capital.

Lean 6 Sigma, is hence a Lean 6 sigma methodology driven by the need to change, to continuously improve to processes, to meet the goals of the management and shareholders though a single most important element – Voice of the Employee or simply, Culture.

A continuous improvement culture

The foundation of any continuous improvement methodology or initiative is the focus on results. When an organization embarks in such initiative, following the paths of successful business leaders such as Jack Welsh and Warren Buffet, integrating Lean 6 sigma into the essence of the organization’s culture, economics and synergies need to be seriously considered. Many organizations, at their own peril, disconnect the management system
and customer strategy, from the continuous improvement activity in business processes.

The key to a successful continuous improvement culture is the infrastructure that effectively translates Lean 6 sigma strategic agendas into continuous improvement initiatives aimed at maximizing value and results whilst directly linked to profits and loss through effective management and tracking of results.

The Lean 6 Sigma, as an initiative on process improvement, should not be adopted to replace an existing 6 Sigma or Lean sigma methodology but the best aspects of both 6 Sigma and Lean sigma should be integrated to create sustainable culture.

There are five key factors that have the biggest leverage in ensuring that a continuous improvement culture is made sustainable for long term success on Business processess.

1. Leadership Engagement
Lou Giuliano, CEO of ITT Industries, summarized the importance of engaging leaders this way: “I’ve watched enough change programs and change efforts to know that the key is leadership.

To ensure that initial continuous improvement successes are translated to long-term sustainable gains, management need to instinctively understand that Lean 6 Sigma is vital to achieving corporate goals and strategy, participate in decisions that affect the daily use of Lean 6 Sigma by integrating into the management thinking and practices – leadership engagement.
This instills the culture of consistent and strategic. The framework of Define, Measure, Analyse, Improve and Control (DMAIC) together with information such as data, customers, quality, speed and processes become a norm within organization.

2. Quick Starts and Hits
“Can we effective and consistently harvest the low hanging fruits – rid ourselves from the daily and routine issues that effect cost, quality and speed?”
It is essential to aim and achieve important results quickly. Targeting what achieves the maximum benefits with the least efforts is vital to eliminate skepticism on continuous improvements initiative. Achieving fast results through Lean 6 Sigma are keys to sustaining and maintaining a cultural change momentum into corporate culture.

To do so, organizations should effectively look at a core training a corporate Lean 6 Sigma deployment team, using Kaizen to establish specific deployment target, objective and deployment metrics, identifying resources and timeline.

3. Organizing for Success
Though Lean 6 Sigma utilizes the DMAIC framework and tools - establishing a continuous improvement culture requires the changing and aligning of people’s mindset to business and customer strategy.

Addressing cultural and technical barriers becomes important if Lean 6 Sigma is to become a natural way of continous improvement.

Acceleration in the change process can be achieved through management team and proper team dynamics and engaged leaders from top down.

Anne Mulcahy, CEO and chairman of Xerox Corporation noted: “Lean 6 Sigma is not tools…it’s the infrastructure and discipline in place to make improvement an imperative in corporate culture. It will be painful, we will select and train our best people, those we can least afford to reassign, our future leaders, to enable a cultural change.”

4. Value Creation
The integral component of Lean 6 Sigma is the rigorous use of a value-based project selection methodology that ensures resources are committed to efforts linking to strategic objectives and creating value.

Having resources committed to Lean 6 sigma activities that are not meeting customer’s need, reducing defects, increasing speed and quality - link to strategic goals, revenue, profit and ROIC are reasons why value creation is the essence to establishing a successful Lean 6 Sigma culture into management system.

5. Continuous Improvement & Performance
“Is all about finding best practices, adapting them, and continually improving them. When you do that right, new product and service ideas, new processes, and opportunities for growth start to pop out everywhere and actually become the norm.
” This is exactly what happened at GE under Jack Welch’s leadership.
Companies successfully adopting Lean 6 Sigma would continuously look at ways to keep it living and evolve. New ways, 6 Sigma tools and Lean 6 sigma techniques are developed and integrated into the Business processess.

Results are always based on profit performance that would continuously outpace peers and market indices, driven by all these five key factor – most importantly the first factor – leadership engagement! Lean 6 Sigma Leaders aligned to achieving strategic goals will ensure the continuous improvement initiative in continuous to survive.