Lean Six Sigma: saving more than just money.

Author:Minkin, Steven J.

Lean Six Sigma (LSS), a term that has gained traction in the lexicon of federal employees is the combination of two methodologies designed to improve organizational effectiveness and reduce costs.

Lean is a tool used to streamline manufacturing and production. The focus of Lean is to reduce waste in various forms (1) and help organizations identify and implement countermeasures to prevent its reoccurrence. Six Sigma on the other hand, specifically focuses on one type of waste, eliminating defects. Defects are the result of production processes that fail to create an output to required standards. It is a combination of both Lean and Six Sigma working hand in hand that allows organizations to reduce cost. While we may think of reducing costs strictly in terms of dollar savings, LSS helps find savings in several other ways to include time saved on activities, eliminating wasted resources, and reducing the number of people needed to produce a final product. Looking at some real world results from LSS projects will help demonstrate the cost saving power of LSS.

What a Waste

The types of waste that LSS helps identify and mitigate are easy to remember if you commit to memory the acronym

DOWNTIME. The letters of this acronym represent the types of waste that impact both manufacturing and administrative process. The acronym DOWNTIME means:

Defects--making something that does not work or meet standards

Overproduction--fixing seven engines when you only need three

Waiting--employees sitting around not doing anything of value

Nonstandard work--employees all doing the same job in a different manner

Transportation--moving a product or raw materials all over the plant floor

Intellect--not embracing your team's ideas that can improve operations

Motion--employees moving around to get tools, equipment, or parts at their workstations

Excess Inventory--buying 12 cases of toner at year end, knowing five will expire before you use them

Each of these types of waste can be found in almost any process. I have found, however, that three tend to be particularly common in events I have facilitated: defects, waiting, and nonstandard work. I have also seen a reoccurring need to identify the correct number of employees needed to meet customer demands in several LSS engagements.

Defects can be caused by several reasons to include undefined processes, employees doing a task differently, poor instructions, and failing to maintain equipment. (2) Looking at the administrative processes in financial management, defects may include improperly paid travel vouchers, errors in gaining personnel on base, audits in the wrong format, performance appraisals containing unapproved terminology, or rejected purchase requests.

Each of these defects requires time being spent working on poor products. Furthermore, there is a cost associated with a task taking an extra two hours to fix the defect. Employees that spend time correcting defects are not spending their time on new products or other projects. This cycle of work, defect, and repair causes high production costs as raw materials are consumed on defective products. How much money would a snowmobile company waste if two out of 10 engines built were defective? Mechanics would spend time repairing the engines costing both time and...

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