Lean and Six-sigma Approach

By

EXECUTIVE SUMMARY

This thesis is a theoretical evaluation of two popular corporate initiatives, Six-sigma and Lean. While corporations try to implement these two methods simultaneously, they face some fundamental barriers. The problem statement in this thesis recognizes these fundamental barriers and addresses some of the major issues that exist in their simultaneous implementation. A very thorough literature review was conducted on all the available written literature on Lean and Six-sigma. The similarities and synergies between Lean and Six-sigma were evaluated and rigorous comparison and contrast were conducted. Lean and Six-sigma's relationship to other initiative tools was provided to develop a context. Based on this study, a recommendation was made for integration of the two methods so that it becomes a much more powerful integrated tool. The statistical power for six-sigma was coupled with the "Big Picture" overall system optimization capability.

TABLE OF CONTENTS

EXECUTIVE SUMMARYII

CHAPTER 1: INTRODUCTION1

Research Question1

Aim of the research1

Objectives of the research1

CHAPTER 2: LITERATURE REVIEW2

Introduction2

A Study into Lean Production Systems3

The origins of Lean3

Lean Principles5

The Applications of Lean7

Benefits of Lean Methodology9

Lean and the Organizational Context11

A Study into Six-sigma Quality Management System15

The Origins of Six-sigma15

The Six-sigma Approach16

The Applications of Six-Sigma17

Improvements in Businesses18

Remedy Variability / Defects18

With creative variation, best idea could be ruined18

Cost Reduction19

Making More and Spending Less19

Improvement of the Cycle Time19

Increasing Customer Satisfaction19

Benefits of Six-Sigma20

Six Sigma Methodologies22

Define Phase22

Measure Phase23

Analyze Phase25

Improve Phase26

Control Phase26

Lean vs Six-sigma28

The Benefits30

The limitations31

Can they work together?34

CHAPTER 3: ANALYSIS AND DISCUSSION37

CHAPTER 5: CONCLUSION44

Future of Lean and Six-sigma45

CHAPTER 6: RECOMMENDATIONS47

REFERENCES49

BIBLIOGRAPHY52

CHAPTER 1: INTRODUCTION

Research Question

Recent high profile failures such as Toyota's Brake fiasco have highlighted the need for more robust quality management systems and improved production tools in large organizations. From the perspective of an operations manager in a large manufacturing firm, present a case to the board of directors for adoption of Lean Production Systems and 6 Sigma Quality Management System.

Aim of the research

The report aims to form a case that will be presented to the board of directors to decide, if Lean Production Systems and Six-sigma systems are to be implemented.

Objectives of the research

To carry out a study on Lean production systems and Six-sigma quality systems

To compare and contrast the two methodologies (Lean, Six-sigma)

To present the benefits of adopting both methodologies simultaneously

To recommend the implementation of both, Lean and Six-sigma, to the board of directors, supported by the findings

CHAPTER 2: LITERATURE REVIEW

Introduction

Lean manufacturing is the American name for the Toyota Production System (TPS). It is one of the most advanced manufacturing concepts available in the market today. Many progressive companies like General Electric, Honeywell and Motorola have implemented Lean Manufacturing in various areas of their businesses and enjoyed the benefits. (Woodall 2007 341-378)

Japanese Sensei, who is Ex-Toyota employees, has been responsible for spreading Lean concepts around the world. Various U.S companies were exposed to Lean manufacturing after the book Machine that changed the world, (Woodall 2009 376-386) was published and since then have increased their understanding and utilization of the subject.

During the period that Lean Manufacturing was becoming popular, another quality movement, Six-sigma, ...