Is there a process that lets you identify waste to improve customer service and your bottom line, a process that provides many ways to improve your business? Yes, in fact, there is. It’s called lean six sigma. However, this process is not intuitive, so before you can use it effectively, you have to understand its principles and the DMAIC problem-solving technique. Once you know how to use it correctly, you can use it to keep your data reliable.
The Business Directory provides a broad definition for lean six sigma: “A management approach for problem solving and process improvement based on a combination of the different tools of Six Sigma and Lean Manufacturing.” Breaking this down, it means that Six Sigma is a data-driven problem-solving method to enhance business operations. In fact, lean six sigma is claimed to be so effective that it can achieve a rate of improvement of 70% or more. Although this might seem like an exaggeration, Six Sigma can make this claim because it is a comprehensive and extensively tested system for identifying problems, thinking clearly about them, and coming up with solutions whose efficacy can be measured.
The methodology consists of fundamental principles, the scale, the DMAIC method, and tools.
The Six Sigma Fundamental Principles
Lean Six Sigma uses 5 core principles. These can be thought of as the philosophy of the methodology, although it is laid out more like axioms in geometry.
The 1st principle is the law of the market. The company must always put the customer first because without customers there would be no business to run.
The 2nd principle is the law of flexibility. The more flexible a business process, the easier it is to adapt to change. If possible, avoid creating rigid policies, programs, processes, etc, as these can be problematic if a change is necessary.
The 3rd principle is the law of focus. Instead of trying to solve problems on a companywide basis, focus only on solving specific problems. Avoid the temptation for a complete makeover. Instead, focus on the problem to solve rather than getting distracted by side issues. It’s a waste of time to try to fix areas of a company that don’t need to be changed. In colloquial terms: “if it isn’t broken, don’t fix it.”
The 4th principle is the law of velocity. The more details or steps any process has, the slower it works. The amount of effort put into a process should be in proportion to the measurable results it produces.
The 5th principle is the law of complexity. Strip a process to its simplest parts; remove unnecessary pieces that only make it complex. The more complex a process, the more difficult it is to use. In essence, this is the business adoption of the idea of the English Franciscan Friar, William of Occam. This medieval philosopher is famous for a principle known as Occam’s Razor which states “Don’t multiply entities beyond necessity.”
This is a scale to measure efficacy. It compares how something performs in relationship to what it’s required to do. The higher the score, the more efficiently something works.
The DMAIC Method
DMAIC stands for Define, Measure, Analyze, Improve, Control.
These five steps are used to any business process or procedure to improve its effectiveness.
- · Defining a procedure creates the context and sets an objective for improvement.
- · Measuring a procedure determines baseline performance expectations for improvement.
- · Analyzing a procedure is about understanding causality; tools and data are used to get a better understanding of something.
- · Improving a procedure is about making suitable modifications to it.
- · Controlling a procedure is about establishing ways to make sure that all the improvements are sustainable.
Six sigma uses a variety of tools to achieve its goals of solving problems, removing waste, and improving a business’s operations. Considerable training is required to learn how to apply the right tools. When properly used, these tools should create accurate and acceptable outcomes. Moreover, the outcomes should be reusable.
Although this is a quick outline of lean six sigma, it should give you some idea about how powerful this methodology is in improving the efficiency of any organization. It can be used in any number of ways, like identifying activities that hurt the bottom line; for instance, identifying superfluous meetings that waste time that could be spent on essential business activities.