Business improvement tools – Lean and Six Sigma methodologies

Abstract
Lean and Six Sigma methodologies are stand-alone tools and have been implemented in isolation by many businesses in the past. But there have been recent shift in the paradigm, as more and more businesses are implementing the integrated approach. The aim of this study is to understand the concept of lean and Six Sigma as a combined approach an also to investigate the advantages and the probable challenges in implementing lean Six Sigma in both manufacturing and service industry.
Introduction

Businesses are always looking out for the ways to improve their bottom line. Business improvement methodology has been constantly developing from the last century (Snee, 2004). While businesses have always ventured for improvement, but improvement as we think about it today, began with the seminal work of Taylor (1911) on scientific management. Among various process improvement methodologies, Six Sigma and lean are considered as the best methodologies widely used by various industries and are currently referred to as state of the art. But, there is a drawback in applying only one of the two methodologies alone, as the continuous improvement may have the deficiency of being slow. In the next section we would discuss the concepts of Six Sigma and lean.
Concepts of Lean and Six Sigma
The six sigma methodology is founded by Motorola and is a well disciplined and structured approach to enhance process performance and to obtain high levels of quality and low levels of variability. A six sigma process is expected to be statistically 99.99966% free of defects i.e, it aims for reduced defect rate of 3.4 per million opportunity (Brady and Allen, 2006). The Six Sigma approach starts with the identification of the need for an improvement initiative.
The lean methodology founded by Toyota help organizations to achieve on time delivery of the right quality and quantity to satisfy customers (Salah et al. 2010). Lean helps in eliminating waste, variation and work imbalance. Waste not only includes unnecessarily long cycle times, or waiting times between value-added activities but also include rework or scrap, which are often the result of excess variability, so there is an apparent connection between Six Sigma and lean.
Lean Six Sigma
The phrase lean Six Sigma (LSS) is used to describe the integration of lean and Six Sigma philosophies (Sheridan, 2000). Figure 1 shows how lean and Six Sigma can be integrated for process efficiency and effectiveness. According to Bendell (2006), the concept of LSS as an approach to process improvement is yet to fully mature as an area of academic research. Smith (2003) has argued that the majority of the efforts to implement LSS comprehensively in organizations have not been realized to its full potential. Specifically, in case of fusing lean and Six Sigma, the two approaches are often been implemented in isolation (Smith, 2003). This has produced subcultures of lean and Six Sigma in an organization, which can cause a conflict of interest and drainage of resources (Bendell, 2006).