One of the best decisions I’ve ever made in my 35-plus year Operations career was to get Lean and Six Sigma certified. In this two-part article, I want to make a case why every small business owner needs to at least investigate both the Lean and Six Sigma methodologies and disciplines for use in their business, if not get certified themselves (if not, a least a trusted key employee). Part One will consist of my reasoning why Lean and Six Sigma should be used, while Part Two will delve into more of the nuts and bolts of these disciplines, the information they generate, and how to utilize it. And finally, Part Three will go into some detail for how to get these programs started in your company.
One of the constant themes I hear all the time regarding small business owners is that they do not know how to run a business – how to start it up, secure financing, do the accounting, and so on – primarily everything other than how to produce the product or service they want to sell. I know that sounds like I am painting all small business owners with a broad brush, but I think many would agree with me that I’m not that far off the mark. At the very least, many small businesses know they need much more assistance – if not intervention! – than they thought they’d need when they started their venture.
As many of you know, Lean Principles come from the Toyota best business practices of over thirty years ago. I was lucky to have been one of the first people to learn them and bring them over to the United States from Japan, where I was taught by the best – my sensei – Taiichi Ono, the father of Lean Manufacturing. Although I became imbued with Six Sigma later in my career (mid-1990’s), I found that Lean and Six Sigma principles compliment each other – to the point that many companies have totally integrated both disciplines into one, which they call (naturally enough) Lean Six Sigma. (Note: for this series, I have chosen to keep both disciplines separate, as there are nuances between them that could confuse the novice – more on this later.)
So why do I believe so heavily in both these disciplines? I want to put forward three reasons why I believe they are so necessary to incorporate into your business – big or small, troubled, static or growing. The first reason is that EVERY business needs to incorporate some type of quality assurance management. In the old days, quality was “manufactured into” a product or service; i.e., if the product or service didn’t meet some etched-in-stone parameters, it was rejected or retooled (remember the person in the smock at the end of the production line?). This was costly to the business in terms of not only rejected materials and delivery commitments, but in machine and employee time, as well. I don’t know any business that does it that way anymore. At the very least, most businesses have some sort of process and product control built into their overall infrastructure to root out problems.
And that’s just the point I want to make with my first reason – there needs to be a universal process built into a company at every level and at every point in the business to identify, investigate, analyze and fix problems. What I call a “root cause and corrective action” program needs to be built into the core fabric, if not the entire culture, of a company. And this is not just for the departments producing the products and/or services, but for EVERY department and process, and every employee – from the CEO or President down to the janitor. And truly committed Lean and Six Sigma companies will extend these programs all through the supply chain, including suppliers, customers and other stakeholders in the bargain.
The second reason is that Lean and Six Sigma rely on empirical data collection to make decisions and improve the thing you’re working on, whether it is a manufacturing process, an accounting program, an engineering model, or how to create a succession plan within the company. In other words, Lean and Six Sigma can be incorporated into EVERY process and department within your company to make it better. A manager or an employee need not rely on “gut feel,” hearsay or concocted belief to make sound business decisions.
And thirdly, Lean and Six Sigma allow the business owner to incorporate the changes and improvements into his or her processes immediately, and reap the benefits therein immediately, as well. Cost savings, profitability enhancements, margin increases, efficiency improvements, bottom-line results – they all can take effect as soon as they are implemented (unlike many other so-called “quality improvement” programs).
As with all other subjects, I am just scratching the surface of this topic. There are many books, web sites and companies out there which talk about Lean and Six Sigma in more detail – feel free to perform a Google search. I look forward to bringing you Part Two, where I’ll delve into how Lean and Six Sigma work from the perspective of a certified Master Black Belt practitioner.
John L. Ware
globalmfgops@mac.com
John has accumulated over 35 years of experience and expertise within all types of business operations management – including manufacturing, supply chain, distribution, engineering and quality/compliance operations. Companies he has worked for include U.S. Surgical Corporation, Sun Microsystems, nVidia Corporation and Domino Lasers, Inc.
APPLYING LEAN & SIX SIGMA TO SMALL BUSINESS – PART TWO (OF THREE)
Tuesday, January 8th, 2013In Part One of my series on Lean and Six Sigma, I discussed primarily why small businesses should consider utilizing them in practice, if not making them a core segment of their culture. In Part Two, I want to talk about how Lean and Six Sigma work from the perspective of a certified Master Black Belt practitioner. Prior to me earning any of my Six Sigma belts and my Lean Practitioner certification, I (like many) considered these disciplines to be nothing more than just another, albeit significant, quality assurance tool. How wrong I was.
Lean and Six Sigma are, by design, well-suited to be the core segment of any company’s culture because of the following reasons. One, anyone can learn how to use and incorporate them, irrespective of experience, rank within the company, or what department they work in. I’ve seen young people become Master Black Belts six months into their business career. I’ve seen meek accountants (with apologies to finance people) become Master Black Belts. Heck, even salespeople can get certified! Can you imagine a salesperson who can sell AS WELL AS find problems and do paperwork? SIGN THEM UP! (Just kidding, sales and marketing!) And, in my particular case, I was a Senior Director in Operations with well over 20 years’ experience with Sun Microsystems back in the late 1990’s when I got Lean certified and Master Black Belt certified. It’s not just for QA or engineer-types anymore!
Secondly, the Lean and Six Sigma disciplines are made to perpetuate. Once you think you have “solved” a problem or an issue, think again. No problem or issue is ever TOTALLY solved or resolved, essentially. But you have improved a situation that you will re-address at some time interval in the future, in order to improve it. And a few months later, yet again. This is called the “DMAIC” cycle – Define, Measure, Analyze, Improve, Control.
And here is where I want to discuss some of the techniques Lean Practitioner candidates and Green Belts should be using. The first and, ironically the most important Lean tool, is Process Value Mapping. It is brilliant in its simplicity, and I wonder why only 15% of all businesses in the U.S. have implemented it. How it works is, you pick any process within your company – one production line, or new product introduction, or the purchase order process…really, ANYTHING you do to get a job done – and you pick it apart by taking each minute step and that step’s owner and mapping it with Post-It Notes on a flow chart on a wall. In a nutshell, you break a process down to build it back up again, improving it in the process – all the while keeping the initial process going until you are ready to incorporate the changes.
Many of you have probably done this, or have been a part of a team which has utilized this method. For instance, a top-notch integrator of a new IT or enterprise software system has used this method to improve your information technology network. Running the new system in parallel with the “old” analog system is an excellent example of this. In another example, building a new production line in your company was (hopefully) accomplished by laying out the process on paper BEFOREHAND! So, really all I’m talking about here is formalizing this process to EVERY department within your company for new process introduction or improving existing processes. Because of it’s importance, I will discuss more about Process Value Mapping in a later post.
The core metric of Six Sigma is DPMO – Defects Per Million Opportunities. When you lower your defects, the change – Sigma – can be plotted utilizing Statistical Deviation mathematics, and everything that entails. Essentially, every company I’ve seen prior to incorporating Lean, Six Sigma or a combination has been somewhere around Three Sigma. What does that mean? Well, in the world of statistical deviation, probability and statistics, Three Sigma is “average.” Think of a large bell curve – using the concept of the Pareto or “80:20” Rule, most of the companies will be somewhere on the loop part of the curve. Conversely, you will have a smaller percentage “above average,” that is, with a higher sigma rating and you’ll have a few with a lower sigma rating.
Obviously, everyone understands why they should lower the errors and mistakes within their company, because these lead to lost revenue or cost overruns, correct? But many companies don’t have a system to make this happen. At best, they tend to fix something “over here,” and lose the thread of something “over there.” Not unlike the Whack-a-Mole game. With Lean and Six Sigma, a company can now have a discipline to keep all the “moles” underground.
Other very simple techniques and methods include Histograms, Scatter Plots, Fishbone Diagrams, Fault Trees, FMEA and many, many others put you on the track of reducing the number of errors in your company. I won’t go into great detail on what these techniques and methods are and how they work as they are fairly documented in many places. Just know that a good Green Belt can implement the lower third tier of these methods simply and effectively with less than 90 days’ worth of training. A Black Belt can essentially do the next third up, as well as becoming a de facto change agent within your company. And a Master Black Belt worth his or her salt can accomplish more than a well-meaning QA Director at any company.
Bottom line: data and numbers don’t lie. Incorporating a combination of Lean and Six Sigma tools will get you fast results. In Part Three, I will review how you can get a Lean and Six Sigma sustainable culture started within your company.
John L. Ware
Lean Practitioner/Master Black Belt
globalmfgops@mac.com
John has accumulated over 35 years of experience and expertise within all types of business operations management – including manufacturing, supply chain, distribution, engineering and quality/compliance operations. Companies he has worked for include U.S. Surgical Corporation, Sun Microsystems, nVidia Corporation and Domino Lasers, Inc.
Tags: indianapolis small business, John L. Ware, Process Value Mapping, Quality assurance, Six Sigma
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