Introduction

Lean Six Sigma is a management method to improve business and operational excellence. It was originated from manufacturing space. Now it has been widely used in manufacturing, supply chain, finance, health care, pharmacy, and many industries.

It is made up of two concepts:

• Lean: reduce cycle time and remove waste
  • the eight kinds of waste (muda): Defects, Over-Production, Waiting, Non-Utilized Talent, Transportation, Inventory, Motion, and Extra-Processing.
• Six sigma: minimize deviation to reduce inefficiency

Lean and six sigma were different methods, but they were developed at similar timeframe and they complement to each other.

Major benefits:

• increase in profits: General Electric reportedly experienced a profit-cost savings exceeding $2 billion
• Standardized and Simplified Processes: Lean Six Sigma eliminates wastes in processes and unnecessary steps to stream-line production. The processes are simplified so that they are easier to follow and less likely to lead to error. The simplified processes will also reduce time, leading to a decrease in overhead costs.
• Lean Six Sigma drastically reduces errors such as defects and miscalculations and identifying root causes of error when it appears.
• Create values to customers and improve customer satisfaction

History of Lean

• Craftsman Workshop The master craftsman was an expert who took in apprentices and trained them over a long period of time until they gained enough competence. The goods produced in this system were of high quality but took a very long time to manufacture. The manufacturing process was full of waste and rework since there was no standard way of production
• Mass Production used standardized parts and assembly lines for manufacture of goods. This led to remarkable reduction of the cost of production and eventually lower the price of the final product due economies of scale.
• Lean Manufacturing was an improvement on the mass production system. Essentially, the aim was to produce the highest quality goods with the least amount of waste in the value chain. The lean system aims at producing only what the customer wants, in the amount needed and at the time required. By improving effectiveness of the process, the time and resources required to produce goods reduced significantly while the quality got better.

Scientific Management and Mass Production

Frederick Taylor introduced a series of concepts to improve industrial efficiency on the factory floor, like standardization of work, time and motion studies. He wrote a book called The Principles of Scientific Management in 1911, which is considered as the most influential management book of the twentieth century. One of his principles is to replace working by rule of thumb with "the scientific method to study work and determine the most efficient way to perform specific tasks". Taylor's scientific management thinking provided many significant contributions to the systematic training procedures and workplace efficiencies. He also laid out the foundation of Lean.

Example of Time Studies

Henry Ford introduced Model T in 1908. It was a modular car that was designed with interchangeable parts, so that it could be built with very standard procedure through efficient, mass production. To support that, Henry installed the first moving assembly line for the mass production of automobiles. This was a new manufacturing process: the assembly process was broken down into 84 discrete steps and each station was responsible for one step; after a step was complete, the car would be transmitted to the next station. All the resources, including people, machines, materials, and tools were placed alone an assembly lines that were up to a few miles long in total.