Lean Six Sigma is a powerful methodology that can be used to improve business processes. It is a structured approach to problem-solving that can be applied to any process - manufacturing, sales, marketing, IT, BPO, accounting, purchasing, you name it. All processes have variation. Variation is the cause of all evil - it leads to defects and customer dissatisfaction. Lean Six Sigma methodology can be used to reduce variation from any source and thus improve costs, quality, and hence customer satisfaction.
The standard methodology that is used to improve existing processes is called DMAIC. The acronym DMAIC stands for Define - Measure - Analyze - Improve - Control. If you think about it - this methodology is common sense. Before we start working on a problem, we need to have a good definition of what is the problem, why we are working on it, where is the pain area, what is in the scope of the project etc. All of these are accomplished in the Define phase. Secondly, in the Measure phase, we are interested in ensuring that the data used for further analysis is free of measurement errors. Lean Six Sigma is about making decisions based on facts & data. If the data is inaccurate, we would end up making the wrong decisions. Hence, the measured phase ensures good data. Before making any improvements, it is also important to establish a baseline so that we can clearly communicate the benefits obtained from our project to other key stakeholders. The next phase, Analyze, is all about making the hypothesis and using data to either prove or disprove our hypothesis. We make the hypothesis about what is causing the problem and then establish the real root causes. The fourth phase, Improve, focus on getting the best possible solution to solve the root cause of the problem. The solution is optimized and any potential failure modes are resolved before the solution is deployed in the real world. The last phase, Control, is all about ensuring that the solution is sustainable in the long run. Any financial benefits obtained from the project are also quantified. Finally, the improved process is transitioned over to the process owner. As we can see from this paragraph, any problem can be addressed using this structured approach.
Here are some things that should come to your mind when people talk about Lean Six Sigma:
Business Process Improvement Methodology
3.4 defects per million opportunities
Customer focused
Uses facts & data
Quantify financial benefits
Structured improvement approach