Excerpt from Rath & Strong’s Six Sigma Leadership Handbook (Wiley, 2003)

 Chapter 6: Lean and Six Sigma

Introduction

Lean is a proven method to eliminate waste and streamline operations. This chapter will provide a perspective on the roots of the Lean principles and how Lean relates to Six Sigma, ending with a discussion about how leaders can combine the powers of Lean and Six Sigma.

A historical perspective on Lean

Like Six Sigma, which evolved over time and integrates the lessons learned throughout the last hundred years, Lean is not a new concept. Henry Ford is widely recognized as one of the first to use Lean principles in his operations in his quest to produce an affordable car. Ford’s use of the assembly-line concept helped him reduce the time from procuring raw materials to delivery to the customer to eighty-one hours.¹ The concept of the assembly line incorporates the idea of “producing the smallest quantity at the latest possible time while eliminating inventory.”

However, the limitations of Ford’s approach became apparent when consumers began to demand more variety in styles and colors. The model Ford had created was not yet able to accommodate this crucial customer requirement. Subsequently, other manufacturers were able to gain market share, and over time, the lessons learned at this early stage were lost. Using inventories to buffer against the unpredictability of customer demand, the focus shifted from effectiveness to efficiency, optimizing individual steps of the process instead of considering the overall process.

           Japanese manufacturers, especially Toyota, are credited with rediscovering the principles Ford applied. After the Second World War, the Japanese were struggling to rebuild their industrial base. Because of their natural constraints, the Japanese manufacturers looked for a way to maximize their limited resources. Toyota in particular was striving to combine the efficiency of Ford’s approach with the demands of the market, with Taiichi Ohno² as one of the thought leaders who helped formulate a comprehensive approach. Over thirty years, this work ultimately evolved into the Toyota Production System, which outside Japan become known as Just-in-Time. The Japanese can be credited with combining the power of the tools and techniques with a focus on teams, embedded into a culture of continuous improvement. The success of Japanese companies during the 1970s and 1980s led to a renaissance of Lean principles in the United States and Europe under the heading of JIT. However, many of the early JIT implementations failed – for the most part, because they focused on the more obvious characteristics of JIT such as Kanban systems or quality circles without considering the underlying principles. Over time, the original ideas of JIT were packaged with other concepts and promoted as World Class Manufacturing, Stockless Production, Continuous Flow Manufacturing, and many other labels.

          In 1990, James Womack, Daniel Roos, and Daniel Jones wrote a book documenting the result of a five-year, fourteen-country study of the auto industry conducted by MIT.³ The book introduced the term “Lean Manufacturing,” and its strong message captured the attention of senior executives across a broad range of industries. The essential principles of Lean Manufacturing do not substantially differ from the techniques developed by Toyota, and can be applied to any process (although, in reality, Lean is most powerful in manufacturing). The power of these ideas is dependent on their thoughtful application to the unique challenges of the individual firm to which they are applied.