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There are popular terms used increasingly in the modern business world, but what exactly do they signify? Words like Lean, Continuous Improvement, Kaizen, Lean Six Sigma, and others.
What does it mean to be a “Lean” company?
A lean organization focuses all of its resources on producing greater value for the customer and also on the workflow while minimizing waste such as the company’s time, effort, and money. Simply put – maximizing customer value and minimizing waste. It is not just a way to reduce a cost but it is the way of thinking and doing. Every company has to analyze and revisit each step in their business process to cut all the “fat” = everything that doesn’t bring/create value.
The lean philosophy is derived from the Japanese manufacturing industry (Toyota Production System). The term “lean” was first used by John Krafcik, who was a Toyota quality engineer at the time, in his article, "Triumph of the Lean Production System”.
Its origin might be the reason for a common misconception that lean can be adapted only by manufacturing companies. In the present the truth is quite the opposite; lean is actually implemented by many different businesses and processes.
Lean is a long-term approach to trying to achieve ”perfection” by constantly looking for any incremental adjustments in the company’s processes and continuously improving customer value (efficiency, quality, production…).
That leads us to other familiar words Continuous Improvement also known as Kaizen that translates from Japanese as “improvement” (kai – “change” – zen “good”). It is an ongoing effort to improve existing products, services, or processes by implementing rather smaller than major changes. These alterations are initiated by ideas of all the workers, and not just by the management.
One of the continuous improvement methodologies that many companies rely on and commonly use is Lean Six Sigma, which combines Lean manufacturing and Six Sigma approaches.
As previously mentioned Lean manufacturing is the set of tools that helps to identify and eliminate waste. The most common tools include SMED, Value stream mapping, Five S, Kanban (pull systems), Poka-yoke (error-proofing), Total Productive Maintenance, Rank Order Clustering, Control Charts, etc.
Six Sigma is a quality improvement methodology that was introduced by engineer Bill Smith while working at Motorola in 1986, and by Jack Welch who used it at his business strategy at GE in 1995. Six Sigma follows two project cycles, each composed of five phases (DMAIC = focuses on existing business process; DMADV = directs attention at creating the new product); Deming’s Plan-Do-Check-Act Cycle inspires it.
The five stages of the DMAIC process are:
- Define the Opportunity
- Measure the baseline performance
- Analyze the root causes
- Improve the process
- Control the improved process to prevent regression
DMADV features the following phases:
- Define realistic and measurable goals that are consistent with customer demands and the company’s strategy.
- Measure the factors that are crucial to the quality and identify CTQs (characteristics that are Critical to Quality), measure product capabilities, production process capability, and risks.
- Analyze to develop and design alternatives. During this stage, it is determined what is the best design option available for achieving your goals.
- Design an improved alternative, best suited per analysis in the previous step. A high-level design and prototype are developed.
- Verify the design, set up pilot runs, implement the production process and hand it over to the process owner(s).
Lean management and Six Sigma share similar techniques and tools, but they are two different programs. The lean concept is focused on eliminating waste and ensuring efficiency. Six Sigma’s main goal is eliminating defects, reducing variability, and achieving better consistency.
What is your company’s experience with practicing “continuous improvement”?
“Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.” – Antoine de Saint Exupery
The largest room in the world is the room for improvement.” – Author Unknown
“It is not the strongest that survive, not the most intelligent, but the one most responsive to change.” – Charles Darwin