Lean Six Sigma Trends by Vincenzo Buonomo
There have been many approaches over the past decades to driving continuous improvement. Methods such as total quality management, quality circles, problem solving, process re-engineering, just in time, and others are familiar terms to many. While some organizations have had great success with some of these, others have struggled or had numerous “false starts.” Two other popular approaches are lean and six sigma. Lean, in general, focuses on eliminating waste and decreasing cycle time, while Six Sigma is geared toward reducing variability and improving quality. Today, more and more organizations are fully integrating these two continuous improvement methodologies. Lean Six Sigma (LSS) focuses on eliminating waste in systems and on implementing statistical methods to drive breakthrough improvements to an organization’s processes.
There are several reasons why LSS has been successful whereas other quality efforts have failed. A key reason is the focus on the financial impact of the project. By keeping track of the impact that the cumulative projects have on the bottom line of the organization, management is more convinced about the value of the program and more readily supports it. The results from clients have been outstanding, with many organizations reporting significant financial benefits, enhanced customer satisfaction, and reduced costs. The average project benefit was over $95,000 based on completed LSS projects last year from Green Belts and Black Belts trained though Rochester Institute of Technology’s (RIT) John D. Hromi Center for Quality and Applied Statistics (CQAS).
A second reason for success is the tools that are part of the typical LSS toolkit, which have been demonstrated to lead teams to positive results. Third, using the DMAIC (Define, Measure, Analyze, Improve, and Control) structured problem solving method can significantly reduce waste and variability, lead to preventative solutions, and ultimately improve customer satisfaction. And, finally, the effort to seek breakthrough improvements keeps an organization ahead in this highly competitive environment
Organizations Using Lean Six Sigma
While the DMAIC problem solving process and many of the concepts and tools originated to improve industrial practices, today they are being applied to processes in all sectors including healthcare, service, education, finance, government and others.
Figure 1 shows the breakdown of Lean Six Sigma projects from Green Belts and Black Belts trained through RIT CQAS during the last three years (2011-2013). Although manufacturing still remains a big portion, there has been tremendous growth and acceptance of these techniques in other industries. For example, the service industry includes engineering firms, financial institutions, payroll companies, software development, telecommunication, transportation, and utility organizations. The healthcare sector includes dental, hospital, nursing homes, and outpatient and lab services. In the education field, projects have been conducted in elementary, secondary, and higher educational institutions.
Figure 2 shows the breakdown of Lean Six Sigma projects completed in manufacturing companies. Many of these projects still tend to be focused on issues in production, assembly, packaging, quality, shipping, and inventory. There is also a growing recognition in manufacturing companies that major improvement opportunities exist “off the production floor,” commonly referred to as transactional processes. Those processes reside in the support functions or administrative areas. Project examples include business development, customer surveys, product development, forecasting, hiring, information technology, order entry, payroll, quoting, software, and warranty process.
In addition, many small and medium size organizations have benefited from using Lean Six Sigma methodologies. According to Steven Pomeroy, President of Schatz Bearing Corporation, “Our goal at Schatz has been to get the right people and give them the right tools. These are powerful tools. After sending numerous people to yellow belt and green belt training, we have completed several successful projects and have many more in progress. We have targeted processes that we use regularly. The results have been impressive (in excess of $100,000 per year savings) and there are endless future opportunities. Every company recognizes the need for continuous improvement. This is the way to do it.”
There are various levels of training and certifications available for Lean Six Sigma, and there is significant variation in the programs among training providers. RIT offers a comprehensive set of courses from an introductory 1-day White Belt seminar to an intensive 24-day Black Belt certification. A three-day Yellow Belt and 12-day Green Belt program provide participants with an appreciation of the value of a structured problem solving approach as well as the tools to help a team identify and implement sustainable solutions.
Ideally, everyone in the organization at some point will become a team member of a continuous improvement effort. Consequently, many organizations decide that it is advantageous for all employees to have a general awareness of the DMAIC process as well as some of the basic tools. The other advantage of the White Belt training is that it helps to develop a common language for continuous improvement within the organization. As a result, the suggestion is that 100% of the workforce be trained at this level over time. Randy Adams, Plant Manager of Selux Corporation, says “by providing an introduction of basic core LSS principles to all manufacturing employees, we’ve taken small steps towards aligning our current business model with future strategic goals. It has allowed us to begin to critically examine our core manufacturing processes and identify areas where LSS practices would benefit our overall ability to manufacture in today’s fast paced world, and help us to meet the demands of our customers in an effective manner.” Many organizations have developed internal training material to provide this type of training to existing and new employees.
The next level of training is the Yellow Belt. This gives the participants an excellent background in the basic problem solving tools so that they can support Green Belts and Black Belts as effective team members. The Yellow Belts get experience going through the DMAIC process by working on making improvements to a process within their organization. At the conclusion of the training they come up with recommendations on improvements that might be implemented, but are not expected to actually carry out those strategies. The suggestion is that up to 20% of the organization be trained at this level.
The Green Belt receives more training during which they will work on a project. Typically, once they complete the program, Green Belts spend only a portion of their time on projects and they may lead some smaller projects and assist Black Belts with some larger projects. The suggestion is that up to 10% of the organization be trained at this level.
Black Belts get even more intensive training in addition to working on a project. In some larger companies the Black Belt may spend up to 100% of his or her time on projects, while in small to medium size companies this is not feasible. Consequently, the suggestion is that they spend up to 50% of their time on the projects. The recommendation is that there is one FTE Black Belt per 100 employees.
Organizational Structure for a Successful LSS Journey
Regardless of the organization, it is important that any training be supported by an organizational and communication structure that will sustain Lean Six Sigma. As with most initiatives, strong leadership is a requirement. A second key element is the focus on metrics. Metrics are critical to help determine the improvement opportunities as well as to identify the root causes of the problems. Metrics also are critical to evaluate the overall success of the Lean Six Sigma program.
Figure 3 shows how many companies have designed their organizational structure to successfully implement Lean Six Sigma. The recommendation is that all continuous improvement efforts (e.g. quality, safety, cost, delivery etc.) within an organization be included within this structure. There are several key roles:
See profile story on Central Hudson Gas & Electric Lean Six Sigma program called Bridge to Excellence which has generated tremendous employee buy-in, leveraged employee pride in the company and resulted in impressive financial benefits in their continuous improvement journey.
LSS really needs to be aligned with the strategic goals and business objectives of the organization. These goals help provide the basis for the selection of the right projects, using factors such as the project's value, resources required, and timing. Once the projects have been identified, the right people with the appropriate training need to be selected, and they need to follow the DMAIC structure problem solving approach to make the improvement. All of the various improvement projects need to be managed, including frequent reviews and sharing of information. And, finally, organizations need to continually seek additional improvements and make certain that whatever improvements have been made are sustained. The finish line is perfection, so enjoy the journey!
Vincenzo Buonomo is a senior program manager at Rochester Institute of Technology's Center for Quality and Applied Statistics. He can be reached at 585-475-7207 or firstname.lastname@example.org
PROFILE: Central Hudson Gas & Electric By Andrew Lindsay, LSS Champion
Recent LSS Green Belt Class
Since Central Hudson launched its continuous improvement initiative nearly four years ago, the tools and training from the Lean Six Sigma system have become deeply embedded in the daily work of all employees throughout the entire organization. At Central Hudson, we have been able to create a culture of continuous improvement so that all employees are driving continuous improvement through a collaborative and innovative work environment. Our goal was simple, leverage continuous improvement to transform our business so that Central Hudson can improve customer service, moderate bill pressures for customers and realize benefits that impact the bottom line! The Lean Six System was a perfect fit for our organization because it is data driven and fact based – just like we are – and once the results are obtained, they are permanently sustainable. Additionally, Lean Six Sigma involves every single employee, because everyone can contribute something to continuous improvement. Promoting continuous improvement at Central Hudson allows employees to constantly think about how to eliminate waste and non-value added activities with their daily work.
All employees have participated in Lean Six Sigma training at Central Hudson and more than 500 projects have been implemented company-wide. Additionally, more than 500 employees have participated, which further proves that Central Hudson continues to embrace the tools provided by Lean Six Sigma by assimilating it into the daily responsibilities of all employees. Continuous improvement is no longer seen as something that is done in addition to essential duties and responsibilities – rather, it is a fundamental part of what we do at Central Hudson each and every day.
Furthermore, our executives are deeply committed, visible and inspirational when it comes to continuous improvement. In fact, most serve as project sponsors and help create a strategic alignment so that continuous improvement projects align with business needs. The Champion serves as the leader and main catalyst of change to drive continuous improvement results across the Company and there are 15 Group Champions across the organization that improves the flow of ideas through implementation. Group Champions are key employees in each business group that have a passion for continuous improvement and have helped to accelerate the pace of continuous improvement at Central Hudson.
In summary, Central Hudson has made tremendous progress with its continuous improvement efforts in four short years. Over 2,100 ideas have been submitted since inception and the company has realized over $15 million in annualized benefits. Most importantly, continuous improvement and the Lean Six Sigma system have allowed Central Hudson to create a common language to reduce waste and deliver results, which has taken our performance to an even higher level.