We are in a fortunate position to have the opportunity to chat with business leaders across the spectrum about the challenges and opportunities they face. Most conversations involve employee engagement, operational excellence, and customer satisfaction. Leaders are hungry for ways to transform their organization's culture and results. Unfortunately, because so much has been written about the various business management methodologies, it is easy to become confused about what will work best.
This post looks into one question we get a lot, "Should we adopt the continuous improvement model or Lean Six Sigma?"
The answer will become clear if we dig deeper into what each means.
What is the Continuous Improvement Model?
The continuous improvement model (CI) is the implementation of the idea that organizations reach their strategic goals and business objectives by making a series of small incremental improvements. Six principles guide the approach:
1: Improvements Consist of Small Changes Rather than Revolutionary Transformations or New Inventions
This idea, while simple, is critical because significant changes often feel threatening and destabilizing to organizations. By approaching improvement in incremental steps, the continuous improvement approach reduces tension and increases the speed of progress. When following this method, the organization does not need to wait for a strategic shift or a new product introduction to begin to move toward its goals.
Any idea that reduces waste, speeds the time to market, reduces defects, or allows employees to gain new skills, is worth exploring.
2: Employee Suggested Opportunities for Improvement are Valuable
The continuous improvement model relies heavily on employees at every level, not only top management, to identify and implement opportunities for improvement. Bottom-up improvement works well because employees are closest to the processes and thus better equipped to solve problems.
This principle goes hand in hand with the first because it is unreasonable to expect front-line employees to invent new ways of operating the organization or introduce new products or markets. However, if you ask team members what small change could help them save 5 minutes a day and then empower them to make that improvement, the result becomes significant when shared across the organization.
3: Incremental Improvements are Not Expensive to Implement
While certainly, some improvements require an investment, our customers find that employees usually focus on incremental changes that can be achieved without much cost. Many ideas involve eliminating process steps rather than adding more. For example, eliminating redundant data entry through automation costs little but saves time.
4: Employees Are Responsible for Improvement Activities
The continuous improvement model relies on employees to identify, analyze, plan, and implement positive change. Unlike the traditional top-down business approach, CI empowers employees to take ownership of the processes they operate and rewards extra effort to remove friction. The result is more engaged employees who build leadership and problem-solving skills and stay with the organization longer.
5: Improvement Requires Feedback
We like to think about continuous improvement as a constant conversation about what works well and what isn't. Every time a change is implemented, it is essential to discuss and document the results so the following improvement can be even more effective. In a culture of continuous improvement, ideas spread from one functional area to the next, with each project viewed as an opportunity to gain tribal knowledge. Modern organizations manage this conversation using continuous improvement software as a repository of information and lessons learned.
6: Improvement is Measurable
In order to know if change equals improvement, it is crucial to have some metric by which to analyze the new state vs. the current state. Some metrics are more objective than others, but each improvement should have a definition of success. Common metrics are reduced costs, increased cycle times, improved customer satisfaction ratings, fewer defects, and fewer safety incidents.
What is Lean Six Sigma?
Lean Six Sigma is a structured business model that combines two methodologies based on Toyota's manufacturing principles after the Second World War.
Lean Manufacturing: The Lean method seeks to improve every organization's process by optimizing the activities that generate the most value for customers while removing as much wasted activity and resources as possible.
There are three specific types of waste in Lean:
- Muda: The seven process wastes: transportation, inventory, motion, waiting, overproduction, over-processing, and defects
- Mura: The waste of unevenness
- Muri: The waste of overburden
Removing all waste is impossible, but minimizing it is the key to a production stream that delivers the highest value to the customer for the least cost.
Lean organizations rely on the PDSA (Plan, Do, Study, Adjust) improvement cycle to implement lasting change that positively impacts the value stream.
Six Sigma: Six Sigma is a collection of techniques and tools for implementing process improvement. Six Sigma organizations seek to improve quality by finding and removing the root causes of defects and minimizing variation in manufacturing and business processes. This is activated by using a defined project methodology with specific objectives such as reducing defects or improving customer satisfaction.
The term Six Sigma comes from statistical modeling in the manufacturing sector. The quality of a manufacturing process can be defined by a sigma rating indicating the percentage of defect-free products it produces.
Six Sigma organizations commonly use the DMAIC (Define, Measure, Analyze, Improve, Control) improvement structure.
Lean Six Sigma melds the two methods, giving teams and leaders a broad set of problem-solving techniques to deploy depending on the situation. It works because reducing waste can lead to reduced variation and vice versa.
Continuous Improvement vs. Lean Six Sigma
So, back to the central question, should you implement continuous improvement or Lean Six Sigma? By now, the answer should be obvious. Lean Six Sigma is one way of implementing continuous improvement. You can't do Lean without constant improvement.
Continuous improvement should be a given. It is necessary to stay competitive and reach strategic objectives. The question is really how and what to improve. Lean Six Sigma offers answers to both. By focusing the organization on reading waste and eliminating variation, Lean Six Sigma helps make it easier for employees to spot and implement opportunities for improvement. And introducing PDSA and DMAIC gives them the tools they need to introduce incremental positive change.
Lean Six Sigma focuses on process improvement through incremental change. In addition to the improvement cycles, it offers several additional techniques and tools for a smoothly operating value stream, including:
- Kanban boards: A way to visualize and limit work in progress to ensure uninterrupted flow of value.
- A3 Reports: A structured method for communicating and documenting an improvement cycle's plans, activities, and results.
- The 5-Whys: A powerful method for uncovering the root cause of defects and process problems.
- 5S: A workplace organization method that helps to reduce waste.
- Value Stream Mapping: A way to visualize the flow of value to the customer and identify waste.
Every organization is different, and your best continuous improvement approach will depend on your industry, your organization's maturity, culture, and business goals. We have successful clients that pull ideas from the best of Lean and Six Sigma to implement a hybrid model. The important thing is that continuous improvement is central to how they operate and is always top of mind.
Whichever approach you take, KaiNexus has the tools to support your team, making it easy for everyone to engage in taking small steps toward operational excellence.