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Lean Six Sigma - Essay Example

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Lean Six Sigma Name Class Professor University Date Lean Six Sigma Lean Six Sigma is a combined managerial concept of Six Sigma and Lean which was designed to improve quality of the products and/or services and minimize if not eliminate waste (Fu-Kwun) that would lead to an enhanced bottom line…
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Lean Six Sigma Lean Six Sigma Lean Six Sigma is a combined managerial concept of Six Sigma and Lean which was designed to improve quality of the products and/or services and minimize if not eliminate waste (Fu-Kwun) that would lead to an enhanced bottom line. The precursor of Lean Six Sigma was the Six Sigma which was first developed by Motorola in the 1980s. “Six Sigma is primarily a methodology for improving the capability of business processes by using statistical methods to identify and decrease or eliminate process variation. Its goal is reduction of defects and improvements in profits, employee morale and product quality” (Fu-Kwun 2010:301). While it was originally developed to improve manufacturing processes, it has also been used by many organizations to improve other areas of their business” (Guarraia 2009). Lean Manufacturing on the other hand had its roots back to production system of Toyota Production System which was “traditionally associated with moving equipment” (Klaasse, 2006). As a management strategy it aims to optimize the company’s productivity by reducing waste during the development of products/services. The need to align service delivery in accordance to customer expectations and the market imperative to reduce cost to remain competitive in the market however compels the operations of businesses to think of management implements that would serve this purpose. Lean Six Sigma specifically caters to this need of reducing costs and maintaining competitiveness by removing processes that do not add value to the company and enhances the quality of the company’s output by applying the Lean Six Sigma in its processes. The result of the implementation of Lean Six Sigma across the organization is a better organization that can produce/render better product/service at a lesser cost. As a business practice, Lean Six Sigma can be likened to the company’s existing quality control where it seeks to eliminate poor quality of its product and/or services and standardized procedures of its operation. The difference is that Lean Six Sigma is more comprehensive because it involves all processes and requires cultural change on the whole organization because the core of philosophy of Lean Six Sigma is the identification of customer value that any activities that is not consistent to customer value, or anything that the customer is not willing to pay for will be removed. Thus, with the implementation of Lean Six Sigma, the organization is driven to improve values that the customer is willing to pay for. Then a value stream is created to serve customer value. To be concrete about Lean Six Sigma’s similarity and difference to an existing improvement method/s used by companies, we can use TQM (Total Quality Management) as an example. Just like Lean Six Sigma which is a hybrid of Lean Manufacturing and Six Sigma, TQM is a result of other quality implements such as ISO 9000 and quality tools such as FEMA, Blitz KAIZEN, TPM, Poka Yoke, Quality Circles, empowerment until Total Quality Management is achieved. Just like Lean Six Sigma, TQM also intends to satisfy its customer and avoids waste. It also develops, deploy and maintain systems and processes that would enhance quality and business process excellence (isixsigma, 2012). This suggests however that TQM is more of a style of work compared to Lean Six Sigma which is more cultural. The process of Lean Six Sigma typically involves defining and prioritizing processes, measuring performance, analysis of root cause, implement improvements and control the process which is not present in TQM. As a simple analogy of the two management strategy, we can take Lean Six Sigma as TQM on steroids. The successful implementation of Six Sigma’s Tools has substantial impact on an organization’s bottom line. The training of its implementers such as the Lean Six Sigma Black belts will be beneficial to an organization and it was estimated that the typical contribution of an experienced Lean Six Sigma Blackbelt to an organization is $1 annually (Klaasse, 2006). Implementing Lean Six Sigma however incurs cost. As the old business adage goes, in order to make money, one must invest money (isixsigma, 2012). The same goes with Lean Six Sigma where the training of a Six Sigma Black Belt could run up to $100,000 depending on the project at hand (Aveta Business Institute, 2012). There will also be opportunity cost due to the errand processes or “procedures which could have been saved had the procedures or the processes been corrected at the expense of a fraction of the cost” (Aveta Business Institute, 2012). The contribution of the savings and enhanced productivity of Lean Six Sigma to a company’s bottom line however far outweighs the cost. References Aveta Business Institute (2012). How much does Lean Six Sigma Cost? Retrieved at http://www.sixsigmaonline.org/six-sigma-training-certification-information/articles/how-much-does-six-sigma-cost.html Fu-Kwun, Wang; Kao-Shan Chen (2010) Applying Lean Six Sigma and TRIZ methodology in banking services. Total Quality Management & Business Excellence, 21(3):301-315. Guarraia, Peter; Carey, Gib; Corbett, Alistair; Neuhaus, Klaus. Six Sigma – at your service. Business Strategy Review, 20(2):56-61. Isixsigma (2012). Lean Six Sigma. Retrieved at http://www.isixsigma.com/. Klaasse, Sandy, Lytle, Jeff (2006). Lean Six Sigma working in the latex industry. Rubber & Plastics News, 03006123, 35(25) Read More
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