Six Sigma

Six Sigma is a set of tools and standards for businesses to follow to enable process improvement. Manufacturing and distribution businesses use the Six Sigma methodology for reducing operational waste, enabling cost reduction and quality improvements. It is a problem-solving technique that uses the following data-driven stages to create process solutions. The key stages include:

1. Define: Work to identify all necessary information and actions to rectify a problem or reach a goal. This stage works to quantify and qualify information, including project timelines, project scope and value stream maps and other measurement tools.
2. Measure: Part two will first measure the current process or activity capabilities, then look to see improvements from original measurements with these data sets.
3. Analyse: All the stage two data is then analysed to the exact meaning and identify the root cause of the process inefficiencies. The analysis phase requires company-specific Six-Stigma approved data maps to be completed along with the formal root analysis before moving to stage 4.
4. Improve: Generally using a Design of Experiment plan, companies will isolate the factors which have contributed to the problems and outline the variables.
5. Control: Using a control plan that outlines improved daily workflows, teams will deploy the new standardised process. The control chart will then track the outcome data from the previous process to the new process allowing for quantifiable comparison.

The primary advantages and disadvantages of Six Sigma include:  

Advantages

Disadvantages

Quantifiable recorded results to compare differences in productivity. Root cause identification and elimination enable companies to make minor tweaks and changes without upending their workflows. Via minor adjustments to operational improvement, businesses can improve the quality of their product and services. Creates visibility across the entire production cycle reducing the likelihood of damage control incidents. The focus on efficiency and waste elimination results in reduced operating costs.

Without proper guiding philosophy and statistical training, successful utilisation is significantly reduced. Due to the highly statistical nature of the methodology, company’s need an expert to deploy the method. The approach requires technical fluency. If understanding is not shared across management and teams, support and buy-in can waiver, reducing the output of the methodology.

Cause and Effect Analysis

Cause and Effect Analysis is a mind mapping tool to identify all likely causes of a problem and related factors. The methodology often uses a fishbone diagram to discover the root problem, possible bottlenecks in the process and other interrelated causes. The primary principles include:

1. Identify the problem: Identify the main problem, who is involved, and where it occurs.
2. Discover all major related factors: Review systems, processes, culture, equipment, and materials that contribute to the main problem.
3. Identify possible causes: Brainstorm and list all the causes related to major factors impacting the main problem.
4. Analysis: Review the diagram and identify the following steps to assess the major factors and causes. This can involve surveys, interviews and focus groups on testing the possible causes contributing to the root cause.

The primary advantages and disadvantages of Cause and Effect Analysis include:  

Advantages	Disadvantages
The visibility of the diagram enables team members to digest the problem and interrelated factors to make change possible. Brainstorming sessions involving team members create a sense of involvement and contribution to future change. Assists to prioritise major factors before interrelated causes, promoting out of the box thinking.	Interrelated factors are hypothetical and qualitative, minimising the use of hard facts. The root problem can get lost within the many causes of the problem. Complex issues require sub-diagrams. When completed incorrectly, it can result in confusing and misleading information.

SIPOC Analysis

SIPOC Analysis (Supplier, Inputs, Process, Output, Customer) provides a high-level process summary. Often used to scope large projects in the initial planning and design phase when detailed mapping is not yet needed. Used in a table form, businesses can map the inputs and outputs of multiple or singular processes and the associated goals. The five areas of the diagram will include

1. Supplier: Identify the inputs of a process.
2. Input: Resources, materials, technology and equipment needed to complete the process.
3. Process: Detailed description of the steps of inputs and outputs involved in the process.
4. Outputs: End result of operations (product and services).
5. Customer: Recipient of the outputs.

The primary advantages and disadvantages include:  

Advantages	Disadvantages
At a glance, the diagram can provide an overall view of a project. Due to its simplicity, it is an effective tool to keep management on track and in agreeance. Enables teams to quickly identify the inputs, outputs and stakeholders involved in a process.	SIPOC can not solve problems alone and is the preliminary mapping step. If the key stakeholders are not involved, vital information can be missed reducing the validity of the diagram.

Value stream mapping (VSM)

Value stream mapping is the detailed visualisation of all steps from the flow of goods from the supplier, production to the end output and delivery to the customer. All essential steps in the workflow are mapped out from start to finish. Value stream focuses on the flow of materials, analysing everything that the customer is willing to pay for and sees value in. Using a set of symbols in the mapping process, items are marked as adding value or not from the customer’s standpoint. The key principles of VSM are:

1. Identify what is involved in satisfying the customers need.
2. Establish the systems, processes and technologies that are involved in meeting the customers need.
3. Clearly identify where values streams meet.
4. Using all the items above, visually outline processes to identify process improvements to satisfy the customer’s needs.

The primary advantages and disadvantages of VSM include:  

Advantages	Disadvantages
Creates a culture that emphasises the customer’s perception and value of goods and services. Via the identification of value activity, companies work to eliminate waste and unproductive activities. The reduction of waste and process improvement results in improved operating costs.	Employees can typically feel fear and uncertainty when reviewing all activities and defining activities as ‘value’ and ‘non-value. When companies do not include all key activity members in the mapping flow, critical steps and factors may not be accounted. Multiple products can not be shown on the same map, limiting the visibility of interconnectivity across product lines.

Total Quality Management (TQM)

Total Quality Management focuses on instilling a culture that focuses on customer satisfaction. All organisation members must participate in and are accountable for improvements and quality management across processes, products and services. The eight principles of TQM are:

1. Customer-focused: Quality of service is determined by the customer’s feedback.
2. Employee involvement: Every single member of an organisation is accountable for the quality of products and services.
3. Process centred: Every activity must is clear and identifiable processes.
4. Integrated systems: Quality management is achieved with an integrated system.
5. Strategic and systematic approach: All goals need to be linked to the company’s strategic vision.
6. Decision making based on facts: Decisions are based on customer retention, customer feedback from surveys and reviews, sales data and operational figures.
7. Communication: Any change requires effective communication, and each staff member must be aware of the reasons for change, level of involvement and time objectives.
8. Continuous improvement: All employees must continually strive to improve the quality of products and services to achieve a competitive advantage.

The primary advantages and disadvantages of TQM include:  

Advantages

Disadvantages

TQM, when implemented correctly, leads to the efficient production of goods resulting in reduced costs. Focuses on installing value, improved communication, and efficiency for all employees, linked to higher employee engagement and retention. Company’s using TQM reduce the variability of products resulting in higher customer retention rates. The focus on data-controlled processes reduces the likelihood of risks when considering scaling a business.

Requires company-wide commitment, which can be difficult when there are entrenched culture trends already in place. TQM requires a commitment to ongoing training and coaching. In addition, full circle evaluations are needed to ensure TQM is effectively implemented. Lack of statistical understanding and tools can fail due to lack of experience and company commitment to ‘Decision making based on facts.’

Kanban Process Mapping

Kanban is a workflow management technique that focuses on defining, managing and improving services via visualising work and continuous improvement. The principles of Kanban can be broken down into two categories, change management and service delivery principles:

Change Management:

1. Identify what you do now: Kanban identifies the value of current processes. The focus is to identify areas of improvement without removing the entire service delivery framework.
2. Agree to small incremental changes: Large sweeping changes are discouraged due to the cultural resistance, fear, uncertainty and risks these changes create.
3. Leadership at all levels: Encompanses consideration and involvement of every staff members insights and behaviours to reach optimal performance.

Service Delivery Principles:

1. Customer-centric approach: Meeting and exceeding the customer’s expectations should be the centre of all organisations.
2. Manage the work: Involves the empowerment of employees to self-organise their work.
3. Continuously review network services: Continuously evaluations are required to assess the effectiveness and efficiency of processes.

The primary advantages and disadvantages of Kanban Process Mapping include: 

Advantages

Disadvantages

The process focuses on the optimisation of products through small incremental changes. Manufacturing companies can use the excess product to improve current and future lines, reducing waste. In Kanban, products are manufactured only when needed, reducing overproduction and controlling costs. The visibility created through mapping easily allows the sharing of project status and work progress. Kanban has been linked to better machine utilisation due to the controlled incremental changes.

Kanban can be difficult to manage in industries that have fluctuating products and volumes. Kanban requires an element of stability to eliminate variability making it unsuitable for some businesses. Should a Kanban system fail, it can result in an entire production line shutting down.

 

How to identify which method is best for your business

Although each of the methodologies shares common characteristics and goals, each technique will suit a businesses requirements differently.

To identify which methodology is best suited for your business, refer to the fundamental principles and how each method creates change. These differences include;

1. Establishing frameworks to create lean process improvement;
2. Focus on strengthening company culture to ensure process improvement; and
3. Assist workflow management via mapping out goals and intended outcomes.

When process improvement becomes part of every day, it never ends. Nimble businesses establish cultures that measure results, can strategically modify plans and are supported by innovative tools. To overcome the weaknesses of any methodology, your business will need the support of integrated systems, data and training to maximise growth.

At Klugo we’ve helped hundreds of businesses achieve Operational Excellence via lean process methodologies and world-leading technologies. Schedule a call with our team today and start the journey towards Operational Excellence.

 

About Klugo

NetSuite + NextService

Klugo’s vision is to unlock the full operating potential of our customers to maximise the value of their business. We do this by helping our customers achieve operating excellence using NetSuite + NextService, the world-leading cloud ERP and FSM business platform for small-to-medium-sized businesses.