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The Six Sigma Method and the Lean Manufacturing/thinking Method of Business Operation

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Although many businesses throughout various production sectors have a unique model for their operations, two methods have stuck out across industries due to their superior cost saving and organizational capabilities. These two systems are the six sigma method and the lean manufacturing/thinking method. Both share similarities and differences between one another. Depending on what type of production industry and problem a company is facing may determine which method would fit better for their specific production needs.

When simplified, the six sigma method can be seen as a project-oriented procedure that’s goal is to accelerate a business’ operational process. The way this is executed is by implementing a structured methodology which searches for the reasons defect units are made. Then with this information the business attempts to understand where in the production process the defect is coming from and eliminate it. Thus cutting down on the process variation and coming as close to the mean (zero defects) as possible. In fact, the word sigma itself is a statistical term which is directly related to mean variation and distribution. The root of the six sigma methodology is that defects are measurable, quantifiable, and can be phased out with the proper management and system knowledge. Through the proper implementation, product variation will decrease and the company will benefit from the overall savings on waste products; leading to greater customer satisfaction with a standardized product or service.

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At the core of the six sigma method is a term called the “breakthrough strategy,” which, similar to Deming’s stage PDCA cycle, is a five step process aimed at improving company projects. That five step process begins with the “defining” stage where an individual company will assess and try to understand the issue at hand, and what may happen when it is solved. This assessment is based off of past projects and which certain product attributes are essential for customer’s satisfaction. The next two steps in the six sigma process go hand in hand with one another: measuring and analyzing. Here the process parameters are calculated and can be compared to what the company inclined to provide to its customers — whether it be a product or service. The analytical stage is where that quantified data is evaluated and used to combat the variation in unit production. The last two steps in the “breakthrough” concept are improvement and control. At this phase in the system the team developing the project will collaborate for potential ideas to solve the operational problems. If nothing changes positively in the production outcome the team will continue collaborating and brainstorming until they are satisfied with the result. Lastly, once the optimal result is achieved for that specific project it is controlled and closely monitored by upper management to confirm that the system in place is both sustainable and cost effective. This “breakthrough strategy” concept is just one part of the whole six sigma methodology and can only solve half of the problem at hand. In order to fully utilize six sigma one must also understand is structure within a company.

Primarily, it is essential that the six sigma ideology is understood and accepted by all employees regardless of their level of project involvement. When implementing six sigma to a project it is customary for a rigorously trained, full-time project leader to spearhead the operation. For the project leader it is absolutely necessary that they are proficient using analytical and statistical tools in order to solve the variation occurring in the project. The project leader monitors and consults a small team of employees who work on the project part-time usually for a fiscal quarter. As these project leader and team members further advance through the company they will continue to utilize the six sigma method.

Closely related to, but not the same as six sigma, is the lean manufacturing/thinking system of quality control and production efficiency. When broken down to its simplest form lean manufacturing can be thought of as a means for eliminating as much waste in the production process as possible. Whether that waste be material, time, labor, or any other factor that plays a role in operations, its essential that the excess is cut back as much as possible. As this excess is eliminated production costs will gradual reduce over time and thus be able to provide a better, cheaper product. The main prerogative of a lean manufacturing/thinking system is cutting down on costs by observing what the costliest and most wasteful part of production; then rethinking and reworking it in order to make it more efficient. If a company carefully monitors and analyzes each stage of the production process it can better see what is costing them an excessive amount of capital.

Furthermore, the company can see not only what, but also why that specific stage in the process is so costly. The “why” the business is looking for can stem from many different structural and communicative errors ranging from bottlenecks to simply a misinformed employee. Like previously stated, the lean manufacturing/thinking method revolves around waste elimination in all sectors of the production process. Movements such as transferring material around the manufacturing plant unnecessarily and underutilizing personal or machinery are just a few ways companies unnecessarily spend money on a daily basis. Author, Bert Markgraf, summed up the bottom line of the lean method very concisely when he stated “Lean manufacturing principles call for the synchronization of manufacturing tasks to ensure that one finishes as the next is ready to receive the material.” Managing a manufacturing plant with this methodology is a sure way to maintain a steady stream of completed units and to eliminate waste. Not only in physical excess material is money wasted, but also when a company must constantly pay rent in order to store all of their goods. WHO MADE JIT, plays a huge role in mid/post production activities and capital retention because of the “just-in-time” concept. Basically the concept is that as one part of the process is completed its immediately sent down the line “just in time” for the next one coming to your stage in the process. As step A goes to B and B to C the rest of the stages down the lobe move just the same and in the same amount time; making a steady flow of identical completed units.

When comparing these two systems of production methods there are some very clear cut similarities between them. The first, and what I think, is the foundation of similarities between the two systems begins with the employees. Meaning that is it absolutely essential that there is company wide recognition and involvement regarding what system is put in place. If there are a few or even one misinformed employee in either the six sigma or the lean manufacturing/thinking method the whole operation can unravel, resulting in lost profits. Also the underlying themes of both systems are closely related to one another; they both aim for maximum efficiency throughout the business production process, but achieve it in different ways. As well as this, both systems derived from Japanese project management; the six sigma at Motorola and the lean manufacturing at Toyota.

Although it may seem that both systems aim toward the same ultimate goal of increase profits and greater customer satisfaction, in reality the six sigma looks to save money, but the lean method looks to cut down on lead time. Primarily, the heart of each system is structured differently and desires a different conclusion. The six sigma system relies on an analytical approach consisting of: defining, measuring, analyzing, improving, and controlling in order to solve variation issues. Whereas the lean manufacturing/thinking method’s process stages are: identify the value the customer sees in the product, identify the value stream, phase out functional obstacles, let the customers pull which products they like the most, and then perfection. Through these two unique methods different outcome are reached. For instance, the six sigma’s main focus is to remove all product variation, while the lean’s target is to remove all waste and produce an even flow of completed products. Depending on what industry one’s business is in can influence what system may be the most effective when implemented. For example, a company called BD Medical which manufactures medical devices needs to use the six sigma method because is is pivotal that every device is made the exact same with zero defects. This is crucial for a business like this because in this case a defect could potentially result in a death. But, on the other hand a company like Nike uses lean manufacturing to their advantage because they have different plants producing different things 24/7. Here Nike needs to focus on getting their products out the doors as fast as possible with as little to no excess fabric or material wasted. Considering that they are both manufacturing systems which may seem very similar to someone outside the business realm, they are in fact very different from each other and both with different objectives.

Although both the six sigma system and the lean manufacturing/thinking method have had exponential positive impacts on business ranging across industries, they are not interchangeable.

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