Getting Back To Lean Six Sigma And How You Can Leverage It To Better Profits
December 9, 2009
The reason we care about LSS is the fact that it’s probably the single most powerful set of approaches currently known to man that empowers people to be fully effective. I know that’s a lofty claim, and certainly LSS alone is not a silver bullet. That said, it represents a tool box that will take you a long way toward your objectives.
To understand what LSS is all about, we must first have a basic understanding of the two components Lean and Six Sigma.
Lean as a term has been credited to James Womack and Dan Jones, who authored several books about the Toyota Production System, including The Machine That Changed the World and Lean Thinking. I was dragged kicking and screaming into learning about the principles of LSS 25 years ago when I worked in operations management at an automotive component supplier. We learned about just-in-time, statistical process control, quality circles and teams long before these fashionable terms of Lean and Six Sigma were even conceived.
My research traces the underpinnings of LSS/OE back into the middle of the 19th century. After World War II, General Douglas McArthur charted the Japan Union of Scientists and Engineers (JUSE) and they, along with a bunch of Westerners, including Drs. Deming and Juran, helped Japan rebuild based on a different competitive paradigm that today we know as LSS.
Think about it. Japan is an island nation. No coal. No iron ore. No petroleum. No forestry or large-scale agriculture. The only thing Japan had was people; everything else had to be imported. And they had to make things to compete with the global behemoth the United States. The United States was in a great position after WWII. Having basically the only infrastructure left, we could make anything at any level of quality and charge a price of cost plus desired profit margin. And the world was happy to pay it. As we all know, this paradigm has shifted with a vengeance, starting in the late 1970s with the loss of most consumer electronics to Japan and more famously the emergence of Toyota. As a data point, note this: Toyota passed up General Motors in total global auto production in the month of May 2007, a feat no one dreamed of just 20 years ago. Recent events and the melt-down of GM in 2009 have now propelled Toyota to the top – probably permanently. What would it mean if your organization became the ‘Toyota’ of your industry?
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Driving service business profits with Lean Six Sigma – Things anyone can leverage to make more money
December 8, 2009
One of the three things we must do to win in service-providing businesses is learning how to be globally competitive in speed, cost and quality while offering fantastic customer service and continual innovations in what your business offers. We must get and keep the edge on our competitors as part of the every day operations – not just an annual activity.
This is the first of a series of articles about a hot topic among Fortune 1000 businesses globally that I have tailored to fit the needs of any size organization interested in improving their bottom line results – Lean Six Sigma (LSS).
Most business professional already know that fancy methodologies and tools (like those in LSS) alone are not enough to create sustainable competitive advantage in any organization be it for profit, nonprofit, private, public or governmental. Long-term sustainable success only comes through people. Let me emphasize this: long-term success is most effective… primarily through your people understanding and executing it based on your vision and objectives. I advocate an approach to leveraging operational excellence best practices in a way that takes this reality into account. One of my favorite quotes of late that you are likely to already have heard and/or agree with is something like this:
“People would rather live with a problem they cannot solve than accept a solution they don’t understand.” Woosley & Swanson
How can anyone expect great results leveraging best practices without making sure our people really understand? Below are my keys to success that I have learned the hard way in 25 years of learning and applying these ideas with thousands of people in hundreds of organizations around the world.
Borrowing from one of my favorite authors winning in business, Michael Gerber, who authored E-Myth, I believe that there are basically only three things we have to get right in any kind of business endeavor to be successful.
First, marketing and sales must be effective. Without a top line there can be no bottom line. Without understanding the innovations required to differentiate now and in the future, an organization loses relevance and is commoditized out of business sooner rather than later if the competition is global.
The second key is globally competitive operations. Last time I checked, being fast and delivering a great level of quality at a fair market price is required to even be in the game in the for-profit sector. This is where Lean Six Sigma (LSS) and operational excellence comes into play; techniques to empower people to truly know the voice of the customer and deliver on it every day. In addition ,this must be in a perpetual state of continuous improvement, again driven by customer expectations. Going beyond basic expectations sets the real leaders apart from everyone else.
Finally, the third key is human performance. I firmly believe that 80 percent or more of long-term sustainable success in organizations ultimately comes back to its people. Our ability as leaders to educate, empower and lead our people is the ultimate competitive advantage.
Consider this: What is the one thing our competitors don’t have that we do? They can have the best equipment, materials, computers and fancy marketing, and even set up shop next door to our customers. So what is left? You and your people. Our employees are the only thing our competitors don’t have or can’t easily get – employees who are motivated, educated and empowered to act on the vision and promise required by your customers.
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