From high-tech enterprises in Silicon Valley to automotive manufacturers overseas, organizations of all types must learn to optimize their processes at every level of production. That means eliminating defects, minimizing variance, maximizing throughput, and cutting out all wasted steps along the way.
The optimization method chosen will largely depend on the industry, the organization and the application needs, but if the goal is to improve the efficiency of business processes, two of the most common process improvement strategies include Six Sigma methodology and Lean methodology.
This article will define Lean and Six Sigma, describe the key components of each methodology and explain the primary differences between the two methods.
Six Sigma vs. Lean
The focus of Six Sigma and Lean are to improve production to optimum levels of quality. The metrics may vary by company, but typically, this can include increasing production, reducing delivery time or time to market, eliminating defects and errors, limiting variance, and helping businesses meet or exceed their bottom line.
Despite their common goals, the approaches Six Sigma and Lean practitioners take to reach these goals can vary significantly — though there may be some overlap between the two.
- Six Sigma uses statistical analysis and other quantitative methods to minimize variance and flawed products to a level of 3.4 defects per million opportunities. This corresponds to six standard deviations from the mean — symbolized by the Greek letter sigma, or σ — and is where the method gets its name.
- Lean uses primarily qualitative methods to identify areas of waste along a product or process lifecycle and continuously looks for ways to improve operations.
Although the successful implementation of either methodology can result in superior business processes and products, a key distinction between Six Sigma and Lean is that Six Sigma focuses on variance — i.e., the number of products that don’t adhere to a predetermined standard — while Lean focuses on eliminating waste and adding value.
Six Sigma Practices
First popularized by Motorola in the 1980s, Six Sigma applies several management tools to enhance business processes. Some of the tools and techniques include:
- Statistical Data Analysis
- Design of Experiments (DoE)
- Failure Mode and Effects Analysis (FMEA)
- Control Charts
- Hypothesis Testing
Six Sigma is an iterative process that’s characterized by two distinctive features: a data-driven quality strategy and an expertise hierarchy similar to martial arts.
If an organization wishes to resolve its process inefficiencies and maximize productivity, it needs a strategic approach to start. Named after the five stages of the process, DMAIC offers a data-driven way for companies to evaluate the improvements they need to make to existing processes. The stages of DMAIC include:
- Define: In this phase, team members focus on defining the parameters of their project, with scope, customer needs, budget and team development being sculpted from stated goals.
- Measure: Once the project has been outlined, deciding the metrics that will determine success can begin. It starts with baseline data collection to assess the original process status, and teams will then create a detailed process map of all that’s involved in every stage of production.
- Analyze: After all production phases have been mapped out, team members can begin to assess where the greatest inefficiencies lie. Data analysis can show which changes can have the greatest impact and which process improvement branches hold the lowest-hanging fruit.
- Improve: Upon analyzing the available data, teams test their findings to implement any changes they’ve determined will help. Upgrades are ongoing, and stakeholder participation is an important way to see if the solutions developed are resulting in positive outcomes.
- Control: If the implemented changes have worked, the next step is to create metrics and resources that ensure ongoing success. If not, then the process repeats until the desired quality thresholds are reached.
Another quality strategy, DMADV (Define, Measure, Analyze, Design, Verify), is used when an organization desires to create optimal new processes or new products or services. There are many tools and techniques within the Six Sigma framework to help make a project flow as efficiently as possible. Understanding the purpose and applicability of these tools is vital for successful Six Sigma implementation.
Six Sigma Belt Levels
Another difference between Six Sigma and Lean is the organizational structure that Six Sigma employs. It’s derived from the belt levels used to signify a person’s knowledge of Six Sigma and mastery of its tools and techniques.
- White Belts: Possess an introductory knowledge of Six Sigma methods and terms. Individuals with a White Belt designation can range from front-line workers to executives looking to understand the basics of Six Sigma.
- Yellow Belts: Have a slightly greater proficiency in Six Sigma principles and common tools than White Belts but only practice Six Sigma on a part-time basis. Generally, Yellow Belts work under a Green Belt or Black Belt project leader and participate in data collection efforts.
- Green Belts: Serve at the heart of the project and are generally considered experts in both Six Sigma tactics and the process they’re working to improve.
- Black Belts: Have a mastery of statistical analysis techniques and advanced Six Sigma tools and techniques. Black Belts practice Six Sigma full-time and usually serve as managers or mentors to Green Belts.
- Master Black Belts: At the top of the Six Sigma chain are Master Black Belts, who often serve as mentors to Black Belts. Their responsibilities go beyond leading individual teams; they often manage enterprise-wide Six Sigma projects and serve as consultants for multiple teams.
This multitiered hierarchy ensures that all team members know their proper roles and often works best when built into an organization’s entire infrastructure.
While Six Sigma focuses on repeatability and quality, Lean practices search for waste and value along the entire product journey. One key difference of Lean is that its tools are less statistically grounded and are targeted more toward process evaluation. Some of the most common Lean tools include:
- Value Stream Mapping
- Just-in-Time Manufacturing (JIT)
- Root Cause Analysis
While slightly more qualitative than quantitative, the processes that Lean employ helps identify opportunities for cost savings, productivity gains, and increased process efficiency.
Types of Waste
From excess inventory to prolonged downtime, there are eight types of waste that Lean seeks to minimize. These types of waste can be represented by the acronym, DOWNTIME:
- Non-Utilized Talent
- Extra Processing
Understanding how to recognize and eliminate these types of wastes is essential to optimize any type of business process.
Principles of Lean
Like Six Sigma, Lean includes a five-part assessment strategy that serves as a roadmap to improve a process. The five Lean principles include:
- Defining Value: The worth of the product or service is determined by considering demand, timeline, and price point, along with other business factors.
- Value Stream Mapping: Sometimes known as process re-engineering, this step helps visualize a process to identify bottlenecks and impediments. Mapping the value stream shows just how much goes into production and can provide vast insights into your entire business operation.
- Flow: Creating flow streamlines the rest of the process after any waste is identified during value streaming. This is done by eliminating bottlenecks, interruptions, or delays and by improving cross-departmental communication.
- Pull: Prioritizes a shift toward just-in-time manufacturing, which asserts that work should only be completed when there is customer demand.
- Perfection: This principle incorporates Lean thinking into every part of the company culture by continuously striving for perfection. Lean is an ongoing effort that never ceases to trim the process fat.
Lean Six Sigma
Because Six Sigma focuses primarily on variance and defect reduction and Lean drives the elimination of waste, fully optimizing your process efficiency sometimes means combining the two methodologies This practice is known as Lean Six Sigma and applies many of the principles contained in each.
Understanding the difference between Lean and Six Sigma can help you determine which approach is right for your business needs. The methodologies may aim at different targets, but their ultimate goal is the same: to make your organization the best version of itself.
Interested in learning more about how to apply Lean, Six Sigma or a combination of both into your workplace? Visit our Principles of Lean or Lean Six Sigma Green Belt certificate program pages for more details about student expectations, program benefits, program length, tuition and more.