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Difference between Lean Manufacturing and Six Sigma |
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If you have any questions about our Quality Matrix, or wish to make any comments, please feel free to send a message to us at quality@artige.com. |
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| Overview |
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This analysis is just one of many comparisons that are offered as part of the Artige Quality Matrix, which can be seen here in its original form. The definitions that are used in these comparisons are the ones that we at the Artige Company use internally and with our clients, derived from the research that we perform as a matter of due course. These definitions are derived from natural laws of physics and statistics, in order to screen our work from the effects of the business press. The original article where these terms are discussed appears here. In other words, we like to think that this work will withstand the scourges of time and not be categorized as "management du jour". |
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| Lean Manufacturing |
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Definition |
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The main concern of lean manufacturing design is to eliminate waste. The main desire is to reduce the production cycle, which eliminating waste should accomplish. Lean also has a focus on retaining tasks that add value, and eliminating non-value adding tasks. Other concepts having to do with time and waste are important to lean manufacturing. Lean manufacturing is normally driven by customer demand. This brings up the point about what the driver of a business process should be. The two concepts are push and pull. Most concepts of lean involve a pull scenario. This is in comparison to the "traditional", "out-of-date", or "old-fashioned" push scenario. In the good old days companies manufactured to stock, filling warehouses with product that marketing was responsible for emptying out. The push method involves carrying costs and results in various types of waste, especially as the product lifetime came to an end. |
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| Pull-driven |
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In a pure pull scenario, the customer demands the product, and the manufacturer creates or delivers the desired product at the moment the demand signal is received. Based on today's technology, the marketing department closely monitors the customer' needs, or the customers themselves can directly make their own demands, so the firm is able to react very quickly to market conditions. Note the word "react". It is a term that lean and TQM aficionados would like to eliminate from business vocabulary, as it foreshadows the waste to come. To accommodate pulling, minimal amounts of work-in-progress and inventory will be desired in the process design, otherwise there must be additional steps that are adding delay, which will result in waste being generated. |
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| Takt time |
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When considering Lean manufacturing, one also has to take into account the concept of flow, which is driven by a production beat, that being called "takt time". Flow reinforces the notion that lean manufacturing requires constancy and cannot tolerate interruptions, otherwise additional amounts of waste will be generated. The term "takt time" describes the average amount of time it takes to manufacture a product or deliver a service, expressed in terms of a cycle. In other words, one might be able to manufacture one unit of a certain part in 120 seconds. However, if one needed to manufacture 2000 units of the part, will it still take 120 seconds per part? Takt time takes into account the flow of production, and requires that a process to run at a consistent rate, to the constant beat of a production clock. The concept of takt time recognizes that many business processes need to run at a consistent rate in order to maintain the highest quality and still deliver product at a particular volume. With takt time, one can visibly see when a problem might be brewing. If the production rate becomes erratic and inconsistent, or changes from a given norm, then some aspect of the process has failed. However, a period of erratic production may occur when the takt time period was purposefully altered. |
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| Lean Management / Lean Thinking |
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One will see the terms of lean manufacturing, lean management and lean thinking used interchangeably. From what we have found, there is no difference between these terms. They are all driven by the same methodology of cutting waste. The vast majority of lean manufacturing implementations have been applied to manufacturing, but there is no reason why it could not also be applied to service processes. Lean manufacturing would be considered incremental in the rate of change being applied. |
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This last concept of purposefully altering takt time helps explain an inconsistency that one might think exists at first glance between pull-driven manufacturing and takt time. If a lean manufacturing process was based upon a consistent, never-varying takt time, how can it deal with changes in demand? The answer lies in the fact that a takt time system does not react to every demand whim on a first order basis. Rather, a second order function is used, that watches the rate of change in demand. This rate change will manifest itself in a change to the takt time period of the production line. The takt time change may result in some waste (time, resources, cost, depending on the situation). In the end the total cost of operating the production line with a takt time is supposed to compensate for the waste that may occur with individual takt time period changes. |
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| Six Sigma |
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Definition |
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Six Sigma has come to mean two things. First, it is a focal point or slogan used as a means to coach a company into improving its performance. For example, one firm's Six Sigma program is "a highly disciplined process that helps us focus on developing and delivering near-perfect products and services". Second, Six Sigma is a designation for a regulated program that a firm might elect to use to establish a quality management system in an effort to improve the quality of products produced or services delivered, and then desires to maintain that improved level of performance. The latter definition is the one referenced most often in the popular business press. |
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| General Systems Theory |
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For both definitions, Six Sigma draws upon the general system theory and relies heavily upon statistics, especially statistical process control (SPC), and requires quantitative parameters that can be measured on an on-going basis if it is deployed as a quality management system. This methodology utilizes traditional process control at its best, making Lord Kelvin proud. Process control is the practice of operating a system, measuring externally available parameters, and modifying the process based upon the measurements. The calculations are not random, but based upon statistics, especially standard deviations. |
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Actually, Six Sigma gets its name from the table of probabilities for the normal (Gaussian) distribution that is used in many statistical calculations. The standard deviation variable is typically symbolized by the small Greek letter sigma. A standard deviation in this context is the amount of the population of samples that are expected to be perfect. The higher the standard deviation, the fewer rejects are expected. The amount becomes exponentially smaller as the number of standard deviations increases, which indicates that it will be more difficult to maintain a process within higher levels of standard deviation. |
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| Sigma = 2 Std Dev |
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Back in the good old days when SPC was common practice, a process was considered to be in control when it ran with +/- three standard deviations, or three sigma. Note that number sums up to six total standard deviations. Today, one is not satisfied unless the process runs within six-sigma deviation, leaving little room for error or defects. To give some numbers to these sigma values, one could consider the number of defects one could expect in the different scenarios. For three sigma, one could expect 2.6 defects per thousand units. For six sigma, the rate would be one half defect per billion units. However, there is an additional factor that needs to be taken into account, that of the drift in the process being measured. SPC takes that into consideration, so the typical defect rate realized with six sigma processes increases to 3.4 defects per million units. Note that these values are typical, and a properly run SPC regime will measure the true defect rates. |
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| DMAIC |
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As you can see from the previous paragraph, it is possible to deploy a Six Sigma program with steadiness and purpose. However, SPC is only one portion of a Six Sigma program. Essentially, Six-Sigma extends the process control concepts to process design and improvement. It requires that one take a system view of the business or manufacturing processes and treat them in a systemic manner. An acronym associated with Six Sigma is DMAIC, which stands for the continuous improvement process of Define, Measure, Analyze, Improve and Control. This is a circular process, where the results of the first pass are used to run the second iteration. |
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The hardest part of Six Sigma is defining the system that describes the business process. It is completely up to the business or process owner to select the best places for splitting an enterprise into monitorable systems. The first two parameters of Define and Measure are the numerically manageable parameters. Metrics and goals need to be defined, seeking out those that can be measured and consistently reported upon, that reflect upon some sort of process output. As the process is operated, process measurements are collected and recorded on a periodic basis. |
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The final three parameters of Analyze, Improve and Control act upon the metrics that were recorded, and are of a more qualitative nature. Here one compares the results against the self-determined boundary conditions and goals. The process is investigated when the boundary conditions are exceeded, and problem solving is engaged in an attempt to determine what went wrong and what could be done to improve the process. The metrics also allow for one to be proactive, and start problem solving based on trends that are observed before the boundary conditions are crossed. Main point is that the DMAIC process is never halted, otherwise complacency will set in. |
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The Six-Sigma methodology requires human intervention, as this process occurs around and about the business processes. The data collection aspect can be automated, but does not have to be. The analysis and improvement aspects cannot be automated at this time. The requirement for human intervention, along with its inefficiencies, brings along indirect issues, such as group dynamics and process ownership. To address these inescapable issues, many Six-Sigma methodologies incorporate personnel practices, summarized through the use of mentoring and granting of titles to the practitioners, based upon colored belts. |
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Note that there is difference of opinion on the effectiveness of hierarchical organizations, and quality organizations typically run flat. On top of that the notion that the practitioners of Six-Sigma are limited by the level of expertise that they possess and are only able to draw upon is curious for a quality organization to pursue. Nonetheless, discipline is strongly promoted, as the tighter the control limits (higher the number in front of sigma), the more tedious the effort to maintain control will be. For the most part, Six-Sigma is an incremental methodology. |
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| The Difference |
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Differences and / or Similarities |
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At first glance, one would think that Six Sigma and Lean principles have a few things in common, in addition to the fact that they both deal with the topic of quality. They are both methodologies that can be used to implement changes that could potentially improve quality in a firm's offerings. The two methodologies take different approaches, resulting in different outcomes. |
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Lean Manufacturing offers a direct approach to improving quality in an existing system, through process design changes that are aimed at reducing waste. It also imposes the constraint that the business processes should be driven by customer demand, and provides the hint that a process runs with better quality when it can be run at a consistent rate, according to takt time. In summary, the lean principles offers the benefit of higher quality if one is willing to perform some process redesign and then operate them with the customer and clock in mind. |
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Six Sigma also offers a direct approach to improving an existing system, through the disciplined application of continuous improvement, using a statistical approach applied using general systems theory. Six Sigma does provide a framework in which to apply the continuous improvement, the DMAIC approach. While not presenting exact details for every specific situation, it does offer a consistent methodology. This makes this approach well suited for large organizations that need a firm structure and documented tactics in order to institute process improvements. One could consider this method a direct attempt at improving the lot of an organization. |
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So on one hand with Lean Manufacturing we have a methodology that provides specific guidance on the subject areas to focus on when improving processes that should result in improvement in quality. These are direct steps that one can take, but may not be simple or trivial to implement. One must realize that any time process redesign is suggested, effort must be exerted, and probably capital funds will need to be spent. On the other hand, Six Sigma brings us a different set of improvement ideas that are related more towards setting up a continuous improvement process that has an SPC component and a process assessment component, to integrate the results of the SPC testing. This means that Six Sigma includes a manual component, which will require discipline to maintain. |
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Both methodologies should result in changes to the underlying operating processes. So the main difference between these methodologies is that Six Sigma is open ended with the processes that can be monitored for continuous improvement, while the lean principles declare that elimination of waste is the one way to accomplish improvement in quality. |
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