Selecting the right approach for your business strategy can be confusing so it’s important to understand the potential for business growth.
Businesses grow through two main processes: acquiring more clients, and increasing the profit margin by eliminating unnecessary expenses and waste. Six Sigma and Lean are two approaches that aim to achieve these goals, but use different methodologies.
Selecting the right approach for your business strategy can be confusing and hard, so it’s important to fully understand each approach and its potential to contribute to business prosperity and growth.
What is Lean Manufacturing?
Lean manufacturing or lean production, usually referred to simply as “lean” is an enterprise methodology developed by Toyota Motor Corp in the 1990s. It is an organized process of eliminating waste from various activities in the organization, providing maximum value to customers with the lowest possible amount of investment.
Advantages of Lean:
Lean’s main strength is its fast implementation, and almost immediately visible results. Short term benefits include a rise in productivity, error reduction, and shorter customer lead times. In the long run, when properly planned and executed, Lean can improve financial performance, customer satisfaction, and staff morale.
What is Six Sigma?
Six Sigma, introduced in the 1980s by Motorola, is a production practice that aims to increase efficiency by identifying and removing variability in processes. With its goal being uniformity in process output to meet client requirements, Six Sigma puts customers first, using statistics and data to consistently optimize results.
Advantages of Six Sigma:
Six Sigma is a quality improvement methodology that provides a multifaceted framework for companies to improve operational efficiency. It includes employee training in key performance areas, alignment of company services with customer needs, and careful measurement of progress aimed at identifying KPIs, and improving the performance of business processes by reducing process quality variation.
Why is there now a debate on which system to use?
Both Lean and Six Sigma have the same goal of identifying and eliminating inefficiency in businesses processes. The main difference between the two is in the approach toward this goal, and each system’s definition of the root cause of waste.
The main reasons for the debate is, as always, the rate of success different organizations have had with each approach. Some swear by Sigma Six, while others rave about Lean, due to either positive or negative past experience. Of course, there are advantages and disadvantages to each. While Lean is traditionally manufacturing-oriented, and is quicker to implement, Six Sigma is armed with the power of data for decision making, and is consumer-centric at its core.
Choosing the right system for your business
The approach and methodology you choose can have a profound effect on all aspects of your business. Companies often struggle with this dilemma, as each of the two systems offers their organization its own benefits, and have different effects on organizational processes.
Before you try and select the right approach for your businesses, there are a few things worth remembering.
First and foremost, you must consider the unique needs and goals of your business. No two business are alike, so no implementation of Lean or Six Sigma can be identical to another, even if the organizations that employ them operate in the same market. Despite that, there’s a lot to be said in favor of some elegant competitor research to discover how other players in your field work toward their goals.
Many experts today find that the best results are reached when the two approaches are combined to create a goal-oriented synergy of the two. This consensus birthed the combined approach of Lean Six Sigma, allowing for more strategic flexibility. When you want to reduce waste and improve the efficiency of a process, you use the lean tools. When your goal is to reduce variance and improve performance, you should be using Six Sigma tools.
Balancing the two can be tricky, and some experts claim that without the Lean process “cleanup”, Six Sigma efforts cannot bear fruit. Others base their strategy on “recipes” that major organizations have had success with. In selecting the right approach for your business, focus not only on current company goals, but future ones as well, and remember to consider the differences between your business and those whose recipes and approaches you use.
It’s important to remember that even though these methodologies are decades old, much like your business, they continue to evolve. The needs and properties of your business change in unexpected ways. For example, your software company may start offering hardware products as well, demanding operational processes for good production, internal communications, and inventory management. Such a fundamental shift in company goals, demands you re-examine your current approach, and adjust.
Depending on market and business variables, Lean and Sigma can compete for the greatest dollar savings, but it’s never a one-size-fits-all deal. While both seek to eliminate waste, please customers and maximize profits, in most cases it’s the optimization of the synergy between the two that can help your business reach its maximum potential.
Eyal Katz is the marketing director for Connecteam. Connecteam is a manufacturing mobile app that helps manufacturers run their business with modules for processes, payroll, training, employee feedback, and communications from anywhere, at anytime.