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How To Compare Six Sigma,

How To Compare Six Sigma,

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Published by furiaazul
6 SIGMA METHOD
6 SIGMA METHOD

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Published by: furiaazul on Sep 11, 2008
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ITHIN THE AMERICAN
businesscommunity a multitude of processimprovement champions arevying for leadership attention.Each champion advocates theadoption of his or her improve-ment methodology in your organization. Almost allplead that if you adopt their specific tools or followa specific way of thinking, all your business prob-lems will be solved.After listening to multiple champions advocatetheir special methodology, how do you choosewhat will be best for your situation? What method-ology fits the culture of your organization?Many process improvement methodologiesappear to conflict with each other or at least down-play the contribution of othermethodologies. This montage of tools and philosophies creates theillusion of conflicting strategies.In this article, I will discuss thebasics of the three improvementmethodologies and present a modelto help you understand their con-cepts and effects and similaritiesand differences. Table 1 describesthe essence of each methodology.
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How To Compare Six Sigma,Lean and the Theory of Constraints
 A framework for choosing whats best for your organization
 by
Dave Nave
PROCESS IMPROVEMENT
Six Sigma
Six Sigma claims that focusing on reduction of variation will solve process and business problems.By using a set of statistical tools to understand thefluctuation of a process, management can begin topredict the expected outcome of that process. If theoutcome is not satisfactory, associated tools can beused to further understand the elements influenc-ing that process.Through a rigid and structured investigationmethodology, the process elements are more com-pletely understood. The assumption is the outcomeof the entire process will be improved by reducingthe variation of multiple elements.Six Sigma includes five steps: define, measure,
W
Improvement Programs
TABLE 1
Program Six Sigma Lean thinking Theory of constraintsTheory
Reduce variationRemove wasteManage constraints
Application
1. Define.1. Identify value.1. Identify constraint.
guidelines
2. Measure.2. Identify value stream.2. Exploit constraint.3. Analyze.3. Flow.3. Subordinate processes.4. Improve.4. Pull.4. Elevate constraint.5. Control.5. Perfection.5. Repeat cycle.
Focus
Problem focusedFlow focusedSystems constraints
 
analyze, improve and control(commonly known as DMAIC):
Define.
Practitioners begin bydefining the process. They ask who the customers are andwhat their problems are. Theyidentify the key characteristicsimportant to the customeralong with the processes thatsupport those key characteris-tics. They then identify exist-ing output conditions alongwith the process elements.
Measure.
Next the focus is onmeasuring the process. Keycharacteristics are categorized,measurement systems are veri-fied and data are collected.
Analyze.
Once data are col-lected, it is analyzed. Theintent is to convert the rawdata into information that pro-vides insights into the process.These insights include identi-fying the fundamental and most important causesof the defects or problems.
Improve.
The fourth step is to improve the process.Solutions to the problem are developed, andchanges are made to the process. Results of processchanges are seen in the measurements. In this step,the company can judge whether the changes arebeneficial, or if another set of changes is necessary.
Control.
If the process is performing at a desiredand predictable level, it is put under control. Thislast step is the sustaining portion of the Six Sigmamethodology. The process is monitored to assure nounexpected changes occur.Focusing on the primary area of variation reductionproduces other secondary effects, too. Quality isimproved. Process investigation produces the re-eval-uation of the value added status of many elements.Some elements are modified, while others are discon-tinued. Elements are refined and improved. Mistakesand opportunities for mistakes are reduced.Some elements discovered during the Six Sigmainvestigation constrain the flow of products or ser-vices through the system. Flow is defined as the timefrom the input of raw material to the output of a sal-able item. Improvement of a process that was restrict-ing flow results in reduced variation, better qualityand improvement in the volume of the process out-put. Thus the organization has less money tied up inin-process inventory. The time from paying for inputmaterial to seeing a profit is reduced, and the organi-zation can respond to cus-tomer needs more quickly.Six Sigma is founded ontwo main assumptions.First, people in an organi-zation understand andappreciate the fact thatnumbers can representfeatures and characteris-tics of a process. Theyappreciate that a deeperunderstanding of data anddata analysis can be usedto produce improvements,and graphical representa-tions of data can providenew and different per-spectives of the process.Analytical types, such asengineers and scientists,generally respect thisapproach.Another assumption isthat through the reductionof variation of all the processes, the overall perfor-mance of the organization will be improved. But whileit is hard to argue against improvement, the economicreality of business is we want the most improvementfor the least investment. Improving all of an organiza-tion’s individual processes could actually have a detri-mental effect on the company’s ability to satisfy thecustomer’s needs and provide product and services atthe right time at the lowest cost. The realized savingsto the system might be less than the cost of all theimprovements.So, an organization that improves things justbecause it can may be improving the wrong things forthe business.
Lean thinking
Lean thinking is sometimes called lean manufactur-ing, the Toyota production system or other names.Lean focuses on the removal of waste, which isdefined as anything not necessary to produce theproduct or service.One common measure is touch time—the amountof time the product is actually being worked on, ortouched, by the worker. Frequently, lean’s focus ismanifested in an emphasis on flow.There are five essential steps in lean:1.Identify which features create value.2.Identify the sequence of activities called the valuestream.3.Make the activities flow.
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Six Sigma
HOW TO COMPARE SIX SIGMA, LEAN AND THE THEORY OF CONSTRAINTS
The assumption is the outcomeof the entire process will beimproved by reducing thevariation of multiple elements.
 
4.Let the customer pull product or service throughthe process.5.Perfect the process.
Identify value.
The determination of which featurescreate value in the product is made from the internaland external customer standpoints. Value is expressedin terms of how the specific product meets the cus-tomer’s needs, at a specific price, at a specific time.Specific products or services are evaluated on whichfeatures add value. The value determination can befrom the perspective of the ultimate customer or asubsequent process.
Identify the value stream.
Once value is identified,activities that contribute value are identified. Theentire sequence of activities is called the value stream.Then a determination is made as to whether activitiesthat do not contribute value to the product or serviceare necessary. Necessary operations are defined asbeing a prerequisite to other value added activities orbeing an essential part of the business. An example of a nonvalue added but necessary process is payroll.After all, people need to be paid. Finally the impactnecessary, nonvalue added activities have on theprocess is reduced to a minimum. All other nonvalueadded activities are transitioned out of the process.
Improve flow.
Once value added activities and nec-essary nonvalue activities are identified, improvementefforts are directed toward mak-ing the activities flow. Flow isthe uninterrupted movement of product or service through thesystem to the customer.Major inhibitors of flow arework in queue, batch processingand transportation. Thesebuffers slow the time from prod-uct or service initiation to deliv-ery. Buffers also tie up moneythat can be used elsewhere inthe organization and cover upthe effects of system restraintsand other wasted activities.
Allow customer pull.
Afterwaste is removed and flowestablished, efforts turn to let-ting the customer pull productor service through the process.The company must make theprocess responsive to providingthe product or service onlywhen the customer needs it—not before, not after.
Work toward perfection.
Thiseffort is the repeated and con-stant attempt to remove nonvalue activity, improveflow and satisfy customer delivery needs.While lean focuses on removing waste and improv-ing flow, it too has some secondary effects. Quality isimproved. The product spends less time in process,reducing the chances of damage or obsolescence.Simplification of processes results in reduction of vari-ation. As the company looks at all the activities in thevalue stream, the system constraint is removed, andperformance is improved.The lean methodology also makes some assump-tions:People value the visual effect of flow.Waste is the main restriction to profitability.Many small improvements in rapid succession aremore beneficial than analytical study.Process interaction effects will be resolved throughvalue stream refinement.People in operations appreciate this approach.Lean involves many people in the value stream.Transitioning to flow thinking causes vast changes inhow people perceive their roles in the organizationand their relationships to the product.
Theory of constraints (TOC)
TOC focuses on system improvement. A system isdefined as a series of interdependent processes. Ananalogy for a system is thechain: a group of interdepen-dent links working togethertoward the overall goal. Theconstraint is a weak link.The performance of theentire chain is limited by thestrength of the weakest link. Inmanufacturing processes, TOCconcentrates on the processthat slows the speed of prod-uct through the system.TOC consists of five steps:1.Identify the constraint.2.Exploit the constraint.3.Subordinate other processesto the constraint.4.Elevate the constraint.5.Repeat the cycle.
Identify
. The constraint isidentified through variousmethods. The amount of work in queue ahead of a processoperation is a classic indicator.Another example is whereproducts are processed inbatches.
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Lean
Lean focuses on theremoval of waste, whichis defined as anythingnot necessary to producethe product or service.

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