By J. Fernando Cevallos-Candau
When a small manufacturer of mining equipment wanted to reduce the lead time in the production of a part, they turned to Progressive Processes, LLC for help. At Progressive Processes, what we found surprised them but not us. By introducing relatively simple changes to the manufacturing process, we were able to reduce lead time from two weeks to one week, reduce actual processing time from 10 hours to three hours and reduce the total production cost by 25 percent. Similarly, we used Lean and Six Sigma methodologies to help a non-profit organization improve the recertification compliance of its clients from 66 percent to 99 percent, which improved its ability to bill and be reimbursed for its services.
Many people associate Lean and Six Sigma methodologies with large-scale manufacturing companies such as Motorola, GE and Dow Chemical. However, these techniques are useful for a broad range of organizations, large and small. Hospitals have used them to reduce mortality during procedures or to reduce wait time at the emergency room; banks have reduced processing errors and telemarketing companies use them to more efficiently route calls and schedule shifts.
Six Sigma is a rigorous management discipline that systematically eliminates defects and improves the economics of business processes to improve customer satisfaction and increase customer loyalty. The term Six Sigma comes from statistics terminology, which makes it intimidating. Simply stated, it represents the goal of satisfying your customers with almost perfect products and services all the time. When a process delivers at a sigma level of six, it means that there are only 3.4 defects in 1 million opportunities. In the past, an organization that delivered quality 95 percent of the time was considered good, but in today’s global economy, such performance is not only not acceptable but it could possible wipe out 20 to 40 percent of the profits due to recalls, rework and other costs of poor quality. If you played 100 rounds of golf every year and you played at the Six Sigma level, you would miss one putt every 163 years—imagine bringing that sort of quality and reliability to your customers.
Lean manufacturing is often associated with the Toyota production system. Lean methodologies postulate that whenever work is being done, waste is being generated, thus a Lean enterprise is constantly looking for ways to reduce waste. Most car manufacturers and their suppliers have adopted Lean manufacturing in order to compete or even survive. Dell uses Lean techniques for manufacturing and supply chain. The concept that a computer is not manufactured until a customer orders one is a core competitive advantage for Dell and is a central idea of Lean manufacturing which views inventory as a form of waste.
Today both methodologies are used together as Lean Six Sigma to produce a very powerful combination of waste reduction and defect elimination techniques. Some practitioners incorporate Lean methods to the traditional Six Sigma stages. For instance, they use Value Stream Mapping at the start of a project. Other organizations prefer to use Lean as their main philosophy or road map for waste reduction and call upon the Six Sigma tool set to solve specific quality issues.
Large corporations usually implement Six Sigma by using a structured in-house organization with several levels of expertise while utilizing martial arts terminology. Champion, Master Black Belt, Black Belt and Green Belt are the most common. Master Black Belts are practitioners with a great deal of experience and act as primary trainers and consultants to Black Belts and Green Belts who are working on Six Sigma projects. They also advise the management champions on project portfolios and implementation matters.
This elaborate structure may serve large organizations well, but it is not necessarily suitable for the small business organizations that are prevalent in West Virginia. This, however, should not be a barrier to benefitting from the very powerful improvement tools used by Lean Six Sigma since the value of the methodology is independent of the size of an organization or project. Smaller organizations may better benefit by using a consultant instead of a Six Sigma department with a full-time Master Black Belt.
The training of Green Belts and Black Belts can be done on a more gradual basis by taking advantage of work force training programs that offer Six Sigma. For instance, Kanawha Valley Community and Technical College offers Six Sigma training at a fraction of the cost of national training programs. The West Virginia Manufacturing Extension Partnership in Morgantown and the Robert C. Byrd Institute in Huntington offer limited training and consulting as well. Most training programs require a certification project with direct impact to the employer. In most cases, the economic benefit of this first project more than justifies the time and money spent in the training. For instance, in a recent training at a West Virginia medical devices manufacturing company, a student who was working on his Green Belt certification was able to identify more than $600,000 per year of hard savings and an additional amount of more than $500,000 in extra production capacity for an oversold product line.
Implementation of Lean Six Sigma changes the culture of an organization and brings it to a much higher level of quality and customer service. Smaller organizations tend to be more flexible and more adept to change. Furthermore, initiatives that bring such change are more visible to the whole organization, bringing a level of energy and enthusiasm that is not easy to create in large companies. When it comes to Lean Six Sigma, small, can indeed, be beautiful.
