WHY: Lean primarily focuses on how we create value for the customer, rather than on the production or other processes. Waste is anything we do that the customer does not value. Six Sigma primarily focuses on the processes that create the customer value. Six Sigma has rigorous, usually statistical, methods to identify poor processes, and to create robust, repeatable, and perfect processes.
HOW: Lean companies systematically work on increasing customer value and eliminating waste. There is waste everywhere in the company. Administrative, financial, & managerial processes are 100% waste. Sales and marketing contain huge amounts of waste. The factory process also has huge waste but also has a huge amount of value-add. Six Sigma seeks to eliminate variability in the processes. Six Sigma identifies poor processes and there are standard methods for identifying, analyzing, changing, measuring, and validating the improvements.
TOOLS: Six Sigma has a clear set of tools that can be used very successfully by trained engineers to make much improved processes. Lean does not really have “tools”. Lean methods change according to the circumstances and the customers needs. But over the last 20 years a certain number of methods deriving from Toyota Motors have become popular and are largely standard within US and Western manufacturing. Lean tools do not make for a lean organization; there must be a passion for continuous improvement that increases customer value week in and week out.
WHO: Owing to the complexity of the methods and statistics, Six Sigma projects are generally run by production engineers and other “professional” people. Six Sigma projects usually run over several months and create significant, measurable change.
Lean improvement is primarily done by the people working in the company’s processes, and the benefit comes from a large number of small improvements. The people are trained on-the-job by engineers or lean specialists. This leads to genuine continuous improvement driven by the workforce, rather than a series of projects driven by the managers and engineers.The “pursuit of perfection” becomes ingrained in the company’s culture.
THINKING: Six Sigma can be applied in any kind of industrial organization. Six Sigma is not dependent on the company’s Lean ambitions. Six Sigma does not change any fundamental thinking within a company; it can be used frequently or occasionally.
Lean is not a series a tasks and methods; it is a radically different way of managing the company. Lean thinking is largely the opposite of 20th century management practice. A company can not achieve success by “applying some lean tools”. Companies are only successful will Lean if their leaders passionately embrace strategic business change.
COMING SOON: very personal piece on “Where Lean Accounting Came From–and Why“