1. Six Sigma and Lean Thinking

2. Lean Thinking What is Lean Thinking anyway?
As the name implies, it is really a mindset -- a way of viewing the world.
Lean is about focus, removing waste, and increasing customer value.
Lean is about smooth process flows, doing only those activities that add customer value and eliminating all other activities that don’t.
Adding value is another way of saying generating revenue.
If it doesn’t generate revenue then it must add cost, not value.
Sounds easy doesn’t it, I mean after all, this is what we do every day… or is it? Let’s see.

3. Lean Thinking
Lean Thinking is about smooth process flows, doing only the things that add customer value and eliminating other activities that don’t (Waste). There are five basic steps in assessing lean operations:
Identify the activities that create value
Determine the sequence of activities (also called the value stream)
Eliminate activities that do not add value
Allow the customer to “pull” products/services
Improve the process (start over)

4. Lean Thinking
Lean Thinking is ideal for mature (energy), slow growth (automotive), low transaction industries (small business) or an organization where mathematical tools are not common.
Lean begins to use systems thinking and considers all of the process interactions
But lean is still a reductionist approach focused on eliminating waste (cutting costs).
What is needed is to balance the resources released through Lean or Six Sigma improvement programs with an increase in throughput and need for resources. Otherwise you enter a cost cutting, job losing cycle and your process improvement program will grind to a halt.

5. Six Sigma Vs Lean Thinking
Program
Six Sigma
Lean Thinking
View of Waste
Variation is waste
Non-value add is waste
Application
1.Define
2.Measure
3.Analyze
4.Improve
5.Control
1.Identify Value
2.Define Value Stream
3.Determine Flow
4.Define Pull
5.Improve Process
Tools
Math-Statistics
Visualization
Focus
Problem focused
Process flow focused

6. Six Sigma Vs Lean Thinking
Six Sigma is problem focused with a view that process variation is waste.
Lean Thinking, on the other hand, is focused on process flow and views any activity that does not add value as waste.
Six sigma uses statistics to understand variation.
Lean uses visuals: process mapping, flowcharting, and value stream mapping, to understand the process flow.

7. Lean Thinking
If you are in a mature, slow growth, low transaction, or non-math business then Lean Thinking will work real well for your organization.
Six Sigma and Lean use two different approaches to get the same end result – process improvement.
The Theory of Constraints (throughput improvement) takes the concepts of Lean Thinking to another level of systems thinking

8. Lean Thinking There are five basic steps in assessing lean operations:
Identify the activities that create value
Determine the sequence of activities (also called the value stream)
Eliminate activities that do not add value
Allow the customer to “pull” products/services
Improve the process (start over)

9. Lean Thinking -Example
For example, let’s take a look at the most fundamental cycle within a lean operation, the order-to-delivery cycle.
The top level activities, in sequence, are taking an order, building the order, and delivering the order.
The activities that do not add value are such things as: order entry, backlog, inventory, and shipping delays
In a lean operation we could have the customer enter their own orders; products made on demand, so we would have no backlog or inventory, and then product could be shipped overnight for minimal shipping delay

10. Lean Thinking -Example
Companies with very short order-to-delivery cycles (and not using inventory as a buffer) are lean operations. Lean operations have a strong cash cycle.
In general, the shorter the cycle the leaner the operation.

11. Lean Thinking
Lean uses systems thinking and considers all of the process
interactions, while utilizing the 5S system of organization.
Unlike Six Sigma, it does not require a lot of mathematical
analysis and works well for mature, slow growth or low
transactionbusinesses.

12. Six Sigma
Six sigma is all about variance reduction. By variance, we are referring to the amount of control you have over your processes. Another way to look at it is how good you are at or forecasting the future outcomes of a given process. Six Sigma uses a scientific approach called DMAIC to analyze a specific problem. DMAIC stands for Define, Measure, Analyze, Improve and Control, which is also known as the learning loop or PDCA.
Scientific and numbers-based organizations can benefit the most from Six Sigma. If you are in a high technology, high transaction, or expensive error environment then Six Sigma could work very well for your organization.