Lean Six Sigma brings you closer to your Vision
By Dr Jaap van Ede, owner and editor-in-chief business-improvement.eu.
The first version of this article was published (in Dutch) in the specialist journal PT Industrial Management, spring '09
Lean Six Sigma strives for efficient production (Lean), in combination with good and constant quality (Six Sigma). Although the number of applications is growing rapidly, Lean Six Sigma is not a panacea, but ‘just’ a tactical tool. According to Colin Smart, vice-president continuous improvement at Alcan Packaging, you should therefore develop a vision of the future first. That vision should be sufficiently realistic that people can play it like a movie. In addition, there should be a road map, which specifies your route to the future. Third, old ways of thinking and accompanying performance indicators should be replaced in time. The last aspect is stressed by Paul Verheul, CEO of Driessen Aerospace.
In this article, attention is also given to a new trend: Lean Six Sigma can be used as a marketing tool! Suppliers use their experience with this improvement approach to distinguish themselves in the market, by selling Lean Six Sigma consultancy and their products together.
Tactics without strategy is the noise before defeat, said Sun Tzu approximately 2500 years ago. John Neill cites this Chinese general, to emphasize that applying Lean Six Sigma without a vision leads to nothing.
Lean Six Sigma = Lean + Six Sigma
Lean Six Sigma combines the perspectives of logistics management and quality improvement. Lean is used to stimulate flow and to reduce waste of time and materials, and Six Sigma is used to pursue good and constant quality. The ultimate goal: an organization which is both slender and perfect. The application of Lean Six Sigma is in particular powerful when:
- Multiple and sequential steps are required to produce a product or service: the Lean area of application.
- Quality is an important and distinguishing property: the Six Sigma area of application.
Very different organizations meet this profile, varying from companies like Shell to the University hospital of Groningen (UMCG) in the Netherlands!
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John Neill has been CEO of the third party logistics provider Unipart for 22 years, see also the textbox Marketing Lean and Six Sigma knowledge. His company is the main sponsor of a large congress on Lean Six Sigma, organized by IQPC1.
'Many companies start off enthusiastically with Lean Six Sigma', Neill continues. 'However, in 90% of the cases, the implementation runs aground after a few successful projects. This has been confirmed by research at the Universities of Cardiff and Cambridge'
Spectacular start-up projects that herald disasters are called Kamikaze Kaizens. But what causes this? Neill: 'Part of the answer is an inappropriate culture and attitude, but also inadequate skills. Setting up a Lean business is comparable with the formation of a large symphony orchestra. To make that a success, the players must have had a proper and lengthy training. In addition, the conductor must have mastered the composition in advance, in his head.'
^ John Neill, CEO Unipart: ‘Setting up a Lean business
is comparable with the formation of a big orchestra'
Colin Smart, vice-president continuous improvement at Alcan Packaging, agrees with Neill.
'Lean Six Sigma is not a strategy, but just a tool', says Smart. 'Before you can start, you must have a Clear Vision of your current situation, your destination, and of the route to get there. Second, you should get that Vision into the hearts and minds of all the people in your organization.'
Alcan Packaging is a multinational, specialized in packaging products, ranging from foodstuffs to medicines and lipsticks. Smart continues: 'The business strategies of all companies, mentioned in their Vision Statements, are approximately the same. Common are a pursuit of growth, operational excellence and optimal use of human skills. However, if you ask what is exactly meant by that, there often will be no clear answer. Therefore, a Vision Statement is insufficient.'
Not that Alcan Packaging doesn’t have such a vision statement! On their site, you can read, among others: 'To be a world leader… we strive to deliver the highest quality packaging products...'
However, the real view on Alcan’s future, meaning the way in which the above will be implemented, goes way beyond that. This Future Vision, which is widely spread throughout the organization, comprises a single page of text. It describes what you would see if you walked through a factory in the future. Smart explains: 'A good Vision is logical and feasible. It should be very difficult to disagree with. It describes the consequences of all the changes in a single and complete image.'
^ Workshop continuous improvement in the factory of Alcan Packaging in Mexico
After the Future Vision has been defined, step two follows: an assessment to determine the current situation and what to change. 'We started by putting dozens of keywords, that match with our Vision, into a matrix. This included concepts like self-steering teams, visual management, making processes flow and the implementation of mistake proofing. Next, we clustered those concepts and linked them to five result areas, namely employee mobilization, customer relations, supply chain, production system and innovation. Finally, we determined per topic a score for the current and the desired situation.'
This final step is the most difficult: how to bridge the differences between the current situation and the Future Vision. A route map should thereto be designed. ‘A Vision Statement is not enough, but the same can be said about a Future Vision. Take for example the Toyota Production System, which is often seen as the holy grail. If that Vision is your only compass, it is like cooking a meal on the basis of a photo. It is very difficult to reverse engineer how Toyota arrived at their current production system, because the only thing you see is the end result of a process that took decades.’
Therefore you need a recipe for change, developed for your own company. ‘We sorted out the improvement tools we want to use. Most of them are Lean Six Sigma tools. The order is determined by the degree of difficulty to implement them’, Smart explains. ‘The first stage of our roadmap includes tools that create stability and flow, such as 5S, the Theory of Constraints and Value Stream Management. The next step is the implementation of methods that improve our Process Capability, such as Total Preventative Maintenance and Mistake Proofing. The highest level is Advanced Flow, here the application of tools like self-steering teams and level scheduling is foreseen.’
All the production locations of Alcan Packaging follow the same path, described by the roadmap. ‘The local management is however allowed to determine how long each step takes. Progress is monitored using scorecards.’
It is important that the employees know why each step is necessary. 'If you aren’t familiar with some part of the journey, why would you go along? Knowing the final destination – we are going to the Promised Land as described in the Vision – is not sufficient. For each step, such as 5S, it should be explained why that helps to reach the final destination.’
Finally, Smart emphasizes that new ways of working also require new metrics. 'Change will not last if you continue to support old working methods. Let me give an example: if you use the efficiency of an isolated production line as a performance indicator, it will be impossible to ask your employees to halt this line when needed.'
^ Paul Verheul, CEO Driessen Aerospace: ‘Now we even
have customers complaining that we deliver too early
The importance of implementing new performance indicators becomes even more clear by listening to Paul Verheul, CEO of the Driessen Aerospace Group. His company manufactures items like galleys, kitchens for aeroplanes. The Driessen Group became famous for their trolleys, which are used to serve food and drinks. ‘Our production process resembles a company that makes custom made furniture', says Verheul.
One of the Lean Six Sigma projects that was conducted recently, under the supervision of RNG Global Consultants, took place in a galley factory in the Czech Republic. ‘In the past, the sales team in that factory calculated for each quotation the required hours of work. However, when the data were analyzed, it turned out that there was only a small difference in the calculated hours for constructing simple and complex galleys. Therefore, the Lean Six Sigma-team suggested to scrap this calculation. That was however not accepted without striking a blow. It resulted in very heated discussions, people were nearly screaming!’
Another paradigm shift took place in a trolley factory in Thailand. ‘That factory was already profitable. Therefore, emphasis here was on the improvement of delivery reliability.’
One important change was to start measuring the lead time outside-in, or in other words, from the viewpoint of the customer. 'In the past it occurred that a customer requested delivery in 6 weeks. Then, on the phone, it was told that 12 weeks was feasible. Finally, the products were delivered after 14 weeks. From our viewpoint that appeared reasonable. However, the customer experiences this as eight weeks later then desired.’
Verheul still thinks the results of Lean Six Sigma are unbelievable. ‘Now we even have clients complaining that we deliver too early! And in the Czech factory, productivity rose from 18 to 40%. In addition, we have achieved a competitive advantage: we now win 80% of the tenders.’
One of the customers is Boeing. 'Boeing is already using Lean Six Sigma for some time. They provide consultancy about it to their suppliers, free of charge, and that includes us. It is very important for Boeing that our galleys are delivered on time, to prevent delays in completing their aircrafts.'
A factory of Driessen Aerospace in Los Angeles already made use of Boeings consultancy. ‘They started with Lean, followed by the data-driven approach of Six Sigma. That they choose to do it in that sequence is a pity in some ways, because now it is impossible to measure the improvements precisely. Now they are unable to prove that their results are at least as good as in the Czech Republic.’
Marketing Lean and Six Sigma knowledge
Large companies such as Philips often have a lot of practical knowledge about improvement methods such as Lean and/or Six Sigma. This knowledge is itself a product that can be marketed.
^ Lean Six Sigma training of employees within Unipart
Unipart was created over twenty years ago, by a management buy-out of a division of the nationalised British Leyland (BL). The other parts of BL went to several car manufacturers. Unipart remained a supplier to the car industry, which explains their practical experience with Lean Six Sigma. However, their core business is now third party logistics.
Today, Unipart offers their customers distribution centres, that are run according to Lean Six Sigma principles. This can be an example for other logistics service providers: There seems to be a market for client-specific final assembly of products, in combination with Lean Six Sigma process optimisation!
AkzoNobel is another company that distinguishes itself with its experience with process improvement. Doug Kirk is senior process consultant at Akzo Nobel Car Refinishes in Sassenheim. Before that, he worked for over thirty years in car repair companies. During that period, he rose from the shop floor to management level. Ultimately, he specialized in the development of Lean production lines.
Nowadays, he is using this experience to help car repair companies. 'Customers are more likely to choose Akzo Nobels paint, if we also provide Lean advice', explains Kirk. 'After all, that will save them money. During lean courses within car repair companies we speak their language, because it wouldn’t be very appealing to them if we turned up with 5S. I prefer to speak about "listening to what your workplace is saying."'
Akzo Nobel's consultancy model seems attractive to many other companies, that have a lot of process improvement experience.
Perhaps it is a good idea to look around in your own organisation: Is there perhaps somebody who has Lean and/or Six Sigma experience, that could be of use to your customers?
Do you need help with the implementation of Lean Six Sigma?
1) The first version of this article was based on IQPC’s 4th Annual Lean, Six Sigma & Process Improvement Summit, which took place from 27 to 30 October '08 in Amsterdam (see IQPC.com)
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