Lean Six Sigma
From Supply Chain Management Encyclopedia
Russian: Бережливое производство и шесть сигм
Management Concepts Six Sigma and Lean Production were formed in the mid 80's of the last century. The concept of Lean manufacturing was created to optimize costs in the automotive industry and is focused on the elimination of waste and continuous improvement of production and service operations.  The Six Sigma concept came from development of special program focused on eliminating defects from finished product by reducing process variability. This concept first was applied in the production of semiconductors. Pioneers in the application of these concepts were manufacturing companies, but later they presented significant results when applied in production and non-production areas. So, these concepts are now widely used. Integrated concept Lean Six Sigma was developed later, in 2002 in Michael George works. It is oriented on process improvement and development using Lean’s waste elimination process and critical to quality characteristics from Six Sigma.
Six Sigma approach
The term Six Sigma (coined by Bill Smith, an engineer from Motorola, where "sigma" is the standard deviation of a process, a way of describing the variation in data set) is derived from the statistical methodology, used as a base of statistical quality control. The term is a registered trademark of the Motorola company. This concept arises as the result of common enthusiasm, when total quality management instruments became widely spread among managers. It helps to develop managerial decisions based on facts and data. Six Sigma focuses on achieving following objectives:
- Increasing customer satisfaction;
- Reducing the duration of the operating cycle;
- Reducing the number of defects.
The concept of Six Sigma recognizes that even in different products and services, there is some possibility of defects :
Table 1. Defects per million opportunities and process variation levels
|Process variation level, sigma||Defects per million opportunities|
Although the tools of the "Six Sigma" are the tools of quality management, this system covers the entire business, from product improvement to changes in leadership style.
Lean production approach
Lean manufacturing (lean production, lean enterprise) is the concept of management based on the continued effort to eliminate all types of waste and continuous improvement of the internal value stream of transactions and activities. In case when the elimination of waste and continuous improvement represented throughout the global demand-driven supply chain, is possible to identify Lean network. The term was first introduced by John Krafcik (a scientist from the Massachusetts Institute of Technology) in his work Triumph of the Lean Production System (1988). But it became famous since the book issued in 1990 by James P. Womack (and others) The Machine That Changed The World. The story of Lean Production. Lean manufacturing is a full implementation of the principles based on Toyota Production System (TPS). This system initially was based on operational management system «Just-in-time» (JIT). The lean production usually starts from the creating more value to the customer with fewer resources. Value is an item or specific feature, for which a customer is ready to pay. Lean production allows concentrating the resources for producing only value-added products.
Integrated concept Lean Six Sigma
Integrated concept Lean Six Sigma answers to the question "how to organize activities?" are taken from the Six Sigma concept, but answers for the question "what to do" – from the Lean manufacturing concept. Lean Six Sigma uses an integrated set of measurable indicators (metrics) and integrated set of methods and tools for implementing process improvement.   For the Lean Six Sigma implementation is necessary to use both the Kaizen DMAIC process for short-term projects (5 - 30 days) and then, for 30 and more day project a Black Belt DMAIC process. Implementing Lean Six Sigma allows in a short time (about a year) to achieve the following results:
- reduce the cost of products and services by 30-60%;
- reduce the time of service delivery up to 50%;
- 2 times reduce the number of defective items;
- increase without the cost of work performed up to 20%;
- reduce the cost of projects by 30-40%;
- reduce time, needed for the project up to 70%.
- ↑ Bell, Steve Lean enterprise systems: using IT for continuous improvement. – John Wiley & Sons Inc., New Jersey. ISBN-10: 0-471-67784-1
- ↑ Pete Pande, Larry Holp. What is Six Sigma? 2001. ISBN-10: 0071381856
- ↑ James P. Womack, Daniel T. Jones The Machine That Changed the World : The Story of Lean Production, ISBN-10: 0060974176
- ↑ George M.L. Lean Six Sigma: Combining Six Sigma Quality with Lean Speed. - ASQ Quality Press, 2002
- ↑ George M.L. Lean Six Sigma for Service. How to Use Lean Speed & Six Sigma Quality to Improve Services and Transactions. - N.Y., McGrow-Hill Co., 2003
- ↑ Levinson W.A., Rerick R.A. Lean Enterprise: A Synergistic Approach to Minimizing Waste. - ASQ Quality Press, 2002