Benefits of Lean Six Sigma
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What are the benefits of Lean Six Sigma for a non-manufacturing business?
What are the benefits of Lean Six Sigma for ME and MY business?
The 'Lean Six Sigma' principles apply to ANY business, whether Manufacturing or not. I was part of a six man team in an airline catering company that produced over $10,000,000 of savings in just 6 months. I personally have colleagues who work in the Financial sector applying exactly the same tools and techniques as they did in Manufacturing and getting even better results because the processes are much simpler. What you need to remember is that 'Lean' deals with mainly two things - People and Processes (Machines would be included in the processes)
So any businesses that has people and processes can be improved using 'Lean Six Sigma' methodology. I haven't yet come across an industry that CAN'T be improved with 'Lean Six Sigma' ! There are also 'Lean Six Sigma' initiatives being set up in many other industries around the world at the moment, for example in the UK the National Health service, The Royal Mail, Local Government agencies to name but a few are going down the 'Lean six sigma' road.
What are the benefits of Lean Six Sigma for me if my business is making money already?
Why leave money on the table?
If you are already making money without applying 'Lean Six Sigma'
then you are more than likely leaving cash on the counter. Additionally, how long will
it
be before your competitors catch up or even overtake you. Imagine if they
started to make the same product to a better quality standard at a third
of
the cost to them - especially if you're competing against companies in
the
emerging markets of China and India. How long would it be before your
market share took a nasty dip? You either move forward and improve or you will begin to decline. The laws of the universe do not allow for standing
still
(Not for very long anyway!)
What are the benefits of Lean Six Sigma for me and how will this actually improve my bottom line?
There is something called 'The Essential Business Equation' in which there are three parts - Costs, selling price and profit. Obviously your profit is determined by your selling price minus your costs. The only one of these two you can have
any effect on is the costs, because the selling price to a greater or lesser degree is determined by the market (You can't suddenly put a retail price
of $100,000 on a two door family saloon car because you want to make more profit ! The market just won't buy.) So the only one you can really take
control of is your costs.
Reduced costs = Increased profits. 'Lean Six
Sigma'
methodology concentrates on reducing 'Waste' in the operation to reduce
costs so that the work that is done is more closely aligned to what the
customer is actually willing to pay for.
We tried some of these improvement fads before and they didn't work, What are the benefits of Lean Six Sigma for me?
ALL improvement methodologies will fail if the management commitment isn't there. 'Lean Six sigma' requires that ALL workers from the CEO to the guys on the front line change the way they operate. If the person at the top isn't willing to walk the walk and lead by example, then your road to 'Lean Six Sigma' will be a very slow one and you may well be out of business before you get there! If however, the person at the top is on board and actively waving the flag and leading by example, your business will flourish and prosper and you'll leave your competitors eating your dust !
My people are already working flat out and doing overtime, but we still can't keep up with orders. What are the benefits of Lean Six Sigma for me?
Some of the real basic 'Lean
Six Sigma' diagnostic tools will very quickly identify what your
production rate needs to be along with the ideal number of workers. The application of working to 'Takt Time' and a simple rebalance of the working processes
could be all you need to get more work out with less employees and no overtime.
Every situation is different obviously, but a good Value stream map will
very quickly let you see where your bottlenecks and main areas of waste
are
(AND they probably aren't where you think they are!)
My people are already working flat out and doing overtime, but we still don't make any profit at the end of the month, what are the benefits of Lean Six Sigma for me?
Your people are working
flat out and working overtime... Are they working flat out on the 'Right'
things? If you spent all morning digging a hole and then all afternoon filling it back in, you'd have been flat out working hard all day but
what would you have to show for it ? There are three categories of work:
Value adding work - Changing the form or function of a product so that it
more closely resembles what the customer wants i.e. If you are making
cakes, then mixing the ingredients would be an example of Value adding work. Or
if you are in the finance sector, reviewing and making a decision on a loan application would be Value adding. The second type of work is 'Incidental work' or 'Non Value adding but essential' work with current processes and wherewithal. In the cake example, inspecting the cakes when they come out
of the oven does not in itself add any value to the product BUT it is
something that must be done to ensure quality is right. And the third type of work
- 'Waste' This is one of the benefits of Lean Six Sigma' concentrates on eliminating.
Waste is the use of any material or resource beyond what the
customer requires and is willing to pay for.
One of the benefits of Lean Six Sigma is to identify and
eliminate waste to
improve the performance of the business.
There are seven wastes and they are as follows;
7 Wastes
OVERPRODUCTION
e.g. making it for the sake of it
INVENTORY
e.g. high raw material stocks
WAITING
e.g. long set ups and times
MOTION
e.g. walking lifting putting down
TRANSPORTATION
e.g. unnecessary movement / extra handling
REWORK
e.g. customer satisfaction / right first time
OVERPROCESSING
e.g. fresh air cutting / speeds and feeds
o The 8th Waste - Under utilisation of
people. People are your greatest asset,
learn to get the best out of them.
-
How can I learn how to
implement Lean Six Sigma without
paying out $$$$thousands on consultants?
In this Lean Six Sigma Training and certification is a step
by step guide to implementation - Read it, apply it - Don't worry about
getting it right, just get it going. The worst thing you can do is -
Nothing. If you keep doing what you've always done you'll keep getting what
you've always got. The things you are currently doing that got you into the
situation you are currently in are NOT the things that will get you out of
it.
o Learn, understand,
apply
and if you get stuck, we are only an email away.
· What is Lean and how can I use it to make my business more efficient?
o Lean Six Sigma should be recognised as a
totally different way of looking at
working. It?s about attacking waste; the massive areas in the value stream
(overall process), from raw material to finished goods, where no added value is
taking place.
‘Lean thinking’ first appeared in the
1920s Henry Ford used it to
improve his manufacturing flow lines while producing his famous Ford model T.
He used it to rid his company’s
production lines of all waste, be it
an activity or other form of waste, so he could meet his vast order schedule.
Lean carried on in its infant form up to the seventies, where the global oil
crisis demanded that petrol-guzzling engines, (that Ford had become used to
making), be replaced by economical smaller engines. This is when lean was
adopted
by Japan and the Toyota car company. Here it was refined to the present
standard we are
accustomed to - The Toyota Production System.
So what is ‘lean’? As already stated it’s
the removal of waste from
our business.
But just removing waste only is not
enough, so that’s where the
other lean principles come into practice.
They cover all aspects of production in
any environment and can be
used by anyone who wants to improve his or her working environment and
production processes.
LEAN THINKING AIMS
QUALITY
Built in quality
Zero defects / PPM
Route cause analysis
Everybody involved
COST
Increased capacity
Capital spend reduction
Optimised inventory level Productivity increase.
DELIVERY
Drumbeat manufacture
Reliable and consistent
Responsive to fluctuation Lowest possible lead-time
MANUFACTURING
TRADITIONAL FOCUS:
WORK HARDER FASTER FOR LONGER
LEAN
APPROACH:
IMPROVE THE PROCESS TO ELIMINATE WASTE
AND TO WORK SMARTER / SAFER -
THIS IS THE AIM OF Lean Six Sigma