Chapter 1

Defining Lean Six Sigma

IN THIS CHAPTER

Finding out the fundamentals of both "Lean" and "Six Sigma"

Getting to grips with key concepts

Bringing new thinking into the Lean Six Sigma mix

Throughout this book, we cover the tools and techniques available to help you achieve real, sustainable improvement in your organization. In this chapter, we aim to move you down a path of different thinking that gets your improvement taste buds tingling. We look at the main principles behind Lean and Six Sigma and what today's "Lean Six Sigma" is made up of. We'll also introduce some of the main concepts and terminology to help you on your way.

Introducing Lean Thinking

Lean thinking focuses on enhancing value for the customer by improving and smoothing the process flow (covered in Chapter 11) and eliminating waste (discussed in Chapter 10). Lean thinking has evolved since Henry Ford's first production line, and much of the development has been led by Toyota through the Toyota Production System (TPS). Toyota built on Ford's production ideas, moving from high volume, low variety, to high variety, low volume.

Although Lean thinking is usually seen as being a manufacturing concept and application, many of the tools and techniques were originally developed in service organizations. These include, for example, spaghetti diagrams, and the visual system used by supermarkets to replenish shelves. Indeed, it was a supermarket that helped shape the thinking behind the Toyota Production System. During a tour to General Motors and Ford, Kiichiro Toyoda and Taiichi Ohno visited Piggly Wiggly, an American supermarket, and noticed Just in Time and kanban being applied. This innovation enabled Piggly Wiggly customers to "buy what they need at any time" and avoided the store holding excess stock.

Kanban is a Japanese word meaning "card you can see." At the Piggly Wiggly, it was a card that provided the signal to order more stock. You'll see kanbans turning up again in Chapter 16 when we look at how Agile principles and approaches can be used to accelerate Lean Six Sigma projects.

Lean is called "Lean" not because things are stripped to the bone. Lean isn't a recipe for your organization to slash its costs, although it will likely lead to reduced costs and better value for the customer. We trace the concept of the word "Lean" back to 1987, when John Krafcik (who later led Google's self driving car project) was working as a researcher for MIT as part of the International Motor Vehicle Program. Krafcik needed a label for the TPS phenomenon that described what the system did. On a white board, he wrote the performance attributes of the Toyota system compared with traditional mass production. TPS:

• Needed less human effort to design products and services.
• Required less investment for a given amount of production capacity.
• Created products with fewer delivered defects.
• Used fewer suppliers.
• Went from concept to launch, order to delivery and problem to repair in less time and with less human effort.
• Needed less inventory at every process step.
• Caused fewer employee injuries.

Krafcik commented:

It needs less of everything to create a given amount of value, so let's call it Lean.

And just like that, Lean was born.

Bringing on the basics of Lean

Figure 1-1 shows the Toyota Production System, highlighting various tools and Japanese Lean thinking terms that we use throughout this book. In this chapter we provide some brief descriptions to introduce the Lean basics and the TPS.

© Martin Brenig-Jones and Jo Dowdall

FIGURE 1-1: The TPS house.

Toyota's Taiichi Ohno describes the TPS approach very effectively:

All we are doing is looking at a timeline from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that timeline by removing the non-value adding wastes.

The TPS approach really is about understanding how the work gets done, finding ways of doing it better, smoother and faster, and closing the time gap between the start and end points of our processes. And it applies to any process. Whether you're working in the public or private sector, in service, transactional or manufacturing processes really doesn't matter.

Think about your own processes for a moment. Do you feel that some unnecessary steps or activities seem to waste time and effort?

We must point out, however, that simply adopting the tools and techniques of the TPS isn't enough to sustain improvement and embed the principles and thinking into your organization. Toyota chairperson Fujio Cho provides a clue as to what's also needed:

The key to the Toyota way is not any of the individual elements but all the elements together as a system. It must be practiced every day in a very consistent manner - not in spurts. We place the highest value on taking action and implementation. By improvement based on action, one can rise to the higher level of practice and knowledge.

Perhaps this is why Toyota didn't mind sharing the secrets of their success. It might be easy to replicate certain practices and adopt certain concepts, but it is not easy to replicate a true culture of Continuous Improvement.

Building people first

"First we build people," stated Toyota chairperson Fujio Cho. "Then we build cars." Figure 1-1 shows that people are at the heart of TPS. The system focuses on developing exceptional people and teams that follow the company's philosophy to gain exceptional results. Consider the following:

• Toyota creates a strong and stable culture wherein values and beliefs are widely shared and lived out over many years.
• Toyota works constantly to reinforce that culture.
• Toyota involves cross-functional teams to solve problems.
• Toyota keeps teaching individuals how to work together.

Being Lean means involving people in the process, equipping them to be able, and feel able, to challenge and improve their processes and the way they work. Never waste the creative potential of people!

Looking at the lingo

You can see from Figure 1-1 that Lean thinking involves a certain amount of jargon - some of it Japanese. This section defines the various terms to help you get Lean thinking as soon as possible:

• Standardization seeks to reduce variation in the way the work is carried out, so that everyone operates the process in the "one best way." This highlights the importance of following a standard operating process or procedure. In the spirit of Continuous Improvement, of course the "one best way" of carrying out the process will keep changing, as people in the process identify better ways of doing the work. You need to ensure the new "one best way" is understood and fully deployed.
• Heijunka encompasses the idea of smoothing processing and production by considering leveling and sequencing:
  • Leveling involves smoothing the volume of production in the production period, in order to reduce the ups and downs and peaks and troughs that can make planning difficult. Among other things, leveling seeks to prevent "end-of-period" peaks, where production is initially slow at the beginning of the month, but then quickens in the last days of a sale or accounting period, for example.
  • Sequencing may well involve mixing the types of work processed. So, for example, when setting up new loans in a bank, the type of loan being processed is mixed to better match customer demand, and help ensure applications are actioned in date order. So often, people are driven by internal efficiency targets, whereby they process the "simple tasks" first to get them out of the way and "hit their numbers," leaving the more difficult cases to be processed later on. This means tasks are not processed in date order, and people are reluctant to get down and tackle a pile of difficult cases at the end of the production period, making things even worse for the customer and the business.
• Jidoka concerns prevention; it links closely with techniques such as the Failure Mode Effects Analysis (FMEA), which are covered in Chapter 13. Jidoka has two main elements, and both seek to prevent work continuing when something goes wrong:

  • Autonomation allows machines or processes to operate autonomously, by shutting down if something goes wrong. This concept is also known as automation with human intelligence. The "no" in autonomation is often underlined to highlight the fact that no defects are allowed to pass to a follow-on process. An early example hails from 1902, when Sakichi Toyoda, the founder of the Toyota group, invented an automated loom that stopped whenever a thread broke. A simple example today is a printer stopping processing copy when the ink runs out.

    Without this concept, automation has the potential to allow a large number of defects to be created very quickly, especially if processing is in batches (see "Single piece flow"...