Lean and Six Sigma theories and applications are both nowadays widely spread around the world. Finding their root origins in Toyota and Motorola, and then largely adopted by many companies, their individual success is unquestionable. However, a new trend appeared so as to combine the two approaches into a single one, called Lean - Six Sigma (LSS), or sometimes known as Lean Sigma.
This paper will investigate the potential advantages and disadvantages of such a combination. The means to present a fair investigation will be supported by both a literature review on the subject and practical examples of Lean - Six Sigma companies. The extent of the research takes the business world as a whole, from manufacturing to service and public sector.
The work follows the inquiry of two research questions, based on personal knowledge. They will then be assessed and confronted to the literature and real case studies. Through this, findings are finally presented as to answer the initial question.
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According to what Pepper and Spedding (2010) report from the literature review of the Lean - Six Sigma implementation, little has yet be done in practice to combine these two theories. Sources of explanation are a lack of commitment from management. Moreover, such an implementation is thought to potentially create subcultures and lead to conflict of interest. On his side, Bendell (2006) acknowledges that literature about Lean - Six Sigma is limited and even disappointing.
The popularity of Lean - Six Sigma is also limited in the service industry. This is mostly due to the nature of processes in service, as most of them are unseen, intangible and potentially unmeasurable (Charkrabarty and Chuan, 2007).
As stated, the first hypothesis assesses the potential advantages or disadvantages from Lean - Six Sigma introduction in a company. This paper considers this approach as not a brand new one, meaning that it doesn't propose a drastic new theory, but rather combine Lean thinking and Six Sigma.
Therefore, one could suppose that both theories' characteristics are present in LSS. The very first logical question for executives and managers is how to implement this combination, and by extension, does it present drawbacks?
Starting from literature review about Six Sigma and Lean thinking taken separately, a fair estimation would be that Six Sigma would be used as the core framework while Lean approach would be implemented as a tactical tool, or weapon, aimed to eliminate waste and non-adding value activities in the process. This hypothesis is supported by the integrated DMAIC process in Six Sigma approach, as well as its implementation strategy definition (Eckes, 2003).
Nevertheless, the literature review appears not to consider this approach as a valid one, as nor theoretical nor practical proof or reports exist. On the contrary, two other theories distinct themselves: a co-ordination between both approaches at the same time, and lean thinking complemented by Six Sigma. A final notable point is the poor availability of unambiguous and structured implementation plans, which could have provided a "how-to" guide for LSS achievement.
The co-ordination between both approaches
Most of the work under this approach is based on the fact that one theory actually fills the gap of the other's flaws. In other words, rather than seeing a simple addition of tools, techniques and strategies, LSS provides synergy between Lean thinking and Six Sigma, enhancing both of them.
Arnheiter and Maleyeff (2005) list similarities between Lean and Six Sigma as both involving cultural changes, new approaches to production and servicing customers, as well as a high degree of training and education (from shop floor workers to management).
But on the other hand, Lean carries a burden of being seen as an approach that leads to layoffs, as employees see "waste elimination" going with sacking workers that perform non value-adding activities.
Meanwhile, Six Sigma is sometimes considered as a consultancy package, "old vine in a new bottle" in other words, that actually regroups various incumbent tools and techniques (T&Ts) under a new etiquette. Another aspect of the resistance is the "fear of statistics" which is in the heart of the Six Sigma approach that prevents executives and/or employees to fully embrace the theory.
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As a consequence, one could argue that both approaches complement each other to remove resistance to change, so as to Six Sigma brings an overall staff awareness of the approach - as well as a structured framework (DMAIC) - while Lean philosophy is a well-established practice, which founder (Toyota) still outclasses most of its competitors in the car manufacturing industry. In other words, one philosophy supports the other against reluctance to change.
Moreover, Lean is backed up by Six Sigma ability to use data and facts in the decision-making process, as well as methodologies that promote a more scientific approach to quality (Arnheiter and Maleyeff, 2005).
An example is the Ford transmission issue (Gunter, 1987 cited in Arnheiter and Maleyeff, 2005). Transmissions were both manufactured in the US and in Japan but the customer quality rating privileged the Japanese products. Investigations showed that the American transmission presented a higher level of technical variation. Only using Lean approach (i.e. "go-no go" inspections) clearly fails to prevent such malfunction in the quality process. That is why including Six Sigma measurement, which narrows down the risk of variation, will both increase quality and customer satisfaction.
Six Sigma can also rely on Lean thinking as, for example, a company using a batch-and-queue model can still perform extremely well according to Six Sigma principles, but such production organization is likely to increase lead time and be limited in responsiveness and flexibility (Womack, 2003).
In more practical terms on how this integration works, Figure 1 (Carleysmith et al. 2009), explains quite well the "repartition of tasks" between Lean and Six Sigma.
A more critical analysis could argue that even if this representation proposes a straightforward understanding, when applied in practice, one could fear that complexity of the organization and/or its processes, as well as the link between outputs and inputs, will cause this model to be extremely difficult to implement. In addition, possible conflicts between both approaches are not mentioned. Finally, this model doesn't suggest any real integration concerning resources allocation, training and education of staff, roles and responsibilities specific for a LSS approach.
Interestingly, another framework for LSS proposes to combine both five main steps from each theory (Byrne et al. 2007) into a single one. This has the advantage of providing a more integrated approach but it lacks a tactical proposition.
Lean thinking as a starting point
Six Sigma complements Lean philosophy by providing tools and know-how to tackle waste elimination issues (Pepper and Spedding, 2010). Furthermore, as Six Sigma focuses on the variation reduction in the process, combined with Lean application, the spotlight could then be redirected to the customer through highlighting key adding-value areas.
An adaptation from Pyzdek (Pyzdek, 2000) by Pepper and Spedding (2010) proposes that implementing Lean principles is supported by Six Sigma tools. In other words, it is suggested here that Lean philosophy is backed up by Six Sigma practical aspects. Table 1 below summarizes the most "palpable" synergies that can be seen on the work-floor.
Going further on using Six Sigma's scientific approach to problem solving, some argue (Arnheiter and Maleyeff, 2005) that Lean thinking requires targeted data and a methodical approach to waste elimination, while, at the same time, Six Sigma should widen its approach to quality improvement by taking the whole system into consideration (i.e. waste or muda pointed out by the Lean approach).
Based on literature review, Lean approach should be used first, so as to focus on value-adding activities, reducing waste and complexity in the system. Then, Six Sigma tools and techniques will help to improve core processes with a methodical and data-based evidence approach. Paraphrasing Pepper and Spedding words: Six Sigma will be used as a powerful improvements-opportunities-leverage, while Lean provides strategic orientation as to where improvements should be implemented. This is illustrated by a personal adaptation of Pepper and Spedding (2010) proposed model (Figure 3).
Another example that justifies this approach is described by Sheridan (2000) on the BAE Systems Control plant in Fort Wayne (Ind., USA),
Lean - Six Sigma outcomes
Based on a 165 organization survey, where 17% adopted a Lean - Six Sigma management system, Debusk and Debusk (2010) provide a strong observation that advocates positive advantages of a LSS implementation.
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The average savings per year after a Lean - Six Sigma implementation is $529,000 while 75% of interviewees were considering the combination of the two approaches as "very beneficial" or "beneficial", not only as a quality outcome, but also for financial gains (costs savings, increased margin).
The survey also shows a "positive correlation between the positive effects and the length of use, as well as between benefits realized and the extensiveness of the deployment" throughout the business. Therefore, it can be said that LSS is a long-term - sustainable performance improvement approach. This idea can also be found in Sharma's (2003) work on a battery manufacturing company, insisting on the resulting synergy of LSS.
Three major benefits of Lean - Six Sigma are described as following (Arnheiter and Maleyeff, 2005)
Incorporation of an overriding philosophy that seeks to maximize the value-added content of all operations, backed up through training and education with defined leaders.
Constant evaluation of systems to ensure a global optimization (and not only local) combined with variation reduction within the process.
Management decision-making that bases decision on relative impact on the customer stressed by data-driven methodologies.
Criticism exists about the outcome and positive effects of Lean - Six Sigma implementation among the literature as well. A company adopting both integrated practices will see itself engaged in too many time- and resources consuming projects, that don't necessarily provide sufficient results (Spector and West, 2006). The complexity of Six Sigma concepts is pointed out to be responsible for the incompatibility of the two approaches (Mika, 2006).
A Lean - Six Sigma could easily fall under the domination of immediate costs saving, rather than focusing on customer experience. Indeed, even if it is mentioned in both theories, in practice, the necessity of rapid cash results is predominant (Bendell, 2006) due to a lack of a policy deployment.
Lean - Six Sigma in the pharmaceutical R&D
Experts (academics and practitioners) disagree on the validity in applying Lean Sigma in the R&D department. Some argue that such an approach "would kill creativity" and is "inconsistent with all but incremental innovation and change" (Carleysmith et al. 2009).
On the other hand, authors like Calabrese or DePalma (cited in Carleysmith et al. 2009) defend Lean - Six Sigma of "having a positive impact" (on the drug development process) or that it "doesn't inhibit creativity but rather frees creativity for more productive work".
A successful example of LSS application in the R&D is the UK pharmaceutical company GSK (GlaxoSmithKline) where three major achievements significantly proved the beneficial use of the combination of both theories (Carleysmith et al. 2009)
Process harmonization through reduced waste and inefficiency
Increased productivity by greater focus on value-adding activities
Improved experimental variability and efficiency
Lean - Six Sigma in the public sector
Very little work has been done in assessing the potential of LSS in the service / public sector. Kumar and Bauder (2010) take the example of the Dakota County Community Development Agency that implemented an improvement project using most of Lean and Six Sigma tools and techniques. As a result, the lead time of a tenant's file re-examination has been reduced by 80%, allowing a cycle time falling from 90 days to just more than 30.
Another report in the NHS (Proudlove, Moxham & Boaden, 2008) describes an LSS implementation but argues that most of processes should rather be redesigned before introducing such techniques.
There is therefore no theoretical evidence that Lean and Six Sigma cannot be used in the Public sector. But public organizations should be aware of their unique characteristics, such as rules and regulations, the organizational structure, the election cycle and more importantly, their focus.
It has appeared quite evidently that Lean - Six Sigma is a powerful weapon for companies, based on the theoretical point of view, as well as taking practical successful examples. Even if, taken separately, both of them suffer from some flaws in their application, one has proved that when combined, one strategy would subdue the other's weaknesses. Thus, companies would be able to act at the same time on their process flow, cleared out from ineffective and non-relevant activities while those remaining would see their variation (and in fine their quality output) improved. Not to mention that LSS incorporate a top-down approach concerning training and direction while using bottom-up experience and support.
This paper therefore is strongly in favour of an LSS application following Pepper and Spedding (2010) proposed model: Lean narrows down the focus on vital value-adding activities that Six Sigma then improves using statistical control. In this case, KPIs (Key Performance Objectives) are limited but relevant, and easier to identify, record and control.
However, the ideal theoretical situation is subject to some reserves. The very first one is the high complexity of integrating both philosophies at once on existing processes and culture. Therefore, bringing in too much change and novelty incurs the risk of greatly perturbing the production process, adding to that a decline in staff motivation. Hence, long-term management commitment is imperative. Executives and managers have to stand back and try to adapt best practices that suit their organizations. The danger could be that "a la carte" Lean - Six Sigma only targeting convenient problems, meaning that root causes of change would be ignored, leading to an unsatisfactory experience.
The second critic of Lean - Six Sigma is that it could result in a management headache to coordinate too many projects at the same time, worsen by a different focus rubbing off both distinguished theories. Most of what has been investigated suggests that one theory is applied first and then the second one is introduced.
Finally, one would be more or less legitimated to say that Lean - Six Sigma doesn't provide any complementary tools or techniques, neither another approach to performance improvement projects, as only combining two theories, without a clear framework of application.
It is quite evident that Lean - Six Sigma would theoretically work, enabling companies to tackle root causes of quality issues and customer dissatisfaction, as well as high costs and inefficiency. Nevertheless, this strategy is mostly based on the combination of two other approaches. As organizations are already struggling to succeed in implementing Lean or Six Sigma as the theory explains it, Lean - Six Sigma seems all the more a biggest challenge. This paper therefore advocates for a need of clarification on a "how-to" guide for LSS implementation, integrating both approaches and not just adding them together.