Time for Lean Six Sigma 2.0?
Quality improvement must adopt a new paradigm to respond to today’s challenges
by Ron Snee and Roger Hoerl
One of the primary roles of statisticians and quality professionals is to help their organizations solve problems and improve their performance. Lean Six Sigma has proven over decades to be an effective approach to improvement. The question is whether a better approach to achieve even higher levels of improvement is needed. Does lean Six Sigma warrant a version 2.0?
Huge impact of lean Six Sigma
The history of Six Sigma goes back to Motorola in 1987.1 Facing stiff foreign competition in the pager market, Motorola desperately needed to improve quality and lower costs to stay in business. Through Six Sigma, it could do both. Other electronics manufacturing companies, such as Honeywell and AlliedSignal, saw Motorola’s success and soon launched their own initiatives.
In 1995, General Electric (GE) CEO Jack Welch announced that Six Sigma would be the biggest initiative in GE’s history, and would be his personal No. 1 priority for the next five years.2 GE reported billions of dollars of savings over the next several years, resulting in a much larger pool of organizations adopting Six Sigma, not to mention significant growth in GE stock price.
Honeywell, GE and others realized that a different approach was needed when designing new products and services. When designing a new process, there is nothing to improve because the process doesn’t exist yet. Based on earlier design work by Honeywell, GE developed the define, measure, analyze, design and verify (DMADV) approach to design for Six Sigma (DFSS).3
Several major health networks launched Six Sigma initiatives, including Commonwealth Health Corp., which reported $1.6 million in savings in its radiology department alone in the first year.4 Among other innovations to Six Sigma, GE developed an approach to applying Six Sigma outside of manufacturing, including to financial processes at GE Capital. Bank of America became the first major bank to launch a Six Sigma initiative in 2001.5
As early as 2003, practitioners were noticing Six Sigma’s limitations. Toyota had developed generally accepted principles of manufacturing excellence over several decades of intense improvement efforts on the assembly line. These principles, often referred to as lean manufacturing, were often overlooked in Six Sigma projects because they were simply not well known. Michael L. George suggested integrating lean principles with Six Sigma to create the broader improvement initiative lean Six Sigma.6 GE and others quickly transitioned their Six Sigma initiatives to lean Six Sigma. Results continued to roll in.
Dramatic change since 1987
While lean Six Sigma has been a tremendous
success, the world has changed considerably since 1987. Table 1 lists a few of
Obviously, there have been massive shifts in the global economy since 1987. While Motorola was already facing stiff global competition, globalization has accelerated even more dramatically since then. India has become globally recognized for its IT prowess, China has become a dominant player in manufacturing, and large numbers of call centers supporting global customers have sprung up in developing countries such as the Philippines.
The world also has recognized the need to collectively address large, complex and unstructured problems. The issue of global climate change cannot be addressed by any one organization or even one country. It is simply too big of an issue.
Security has always been a concern to societies and to businesses. Prior to the Sept. 11, 2001 terrorist attacks, many in the United States and some western European counties believed that terrorism was something that occurred elsewhere, not in their counties.
Beyond terrorism, individuals and businesses have
serious security concerns over computer hacking. Protecting against identity
theft has become a
billion-dollar industry in the United States alone.
It is clear that we live in a different world—some would say a much more dangerous world—than in 1987. How should you think about continuous improvement in such a world? Is lean Six Sigma the best approach to take for all problems, including large, complex and unstructured problems, such as climate change?
A different paradigm—holistic improvement—is needed to take continuous improvement to a new level in today’s world.7,8 The best method to deploy it would be a new version of Six Sigma called lean Six Sigma 2.0.
The evolution of lean Six Sigma
What does lean Six Sigma 2.0 mean exactly? Over the lifetime of Six Sigma there has been considerable evolution. These enhancements (see Table 2) have been primarily incremental and have not rethought the fundamental paradigm of Six Sigma.
The development of Six Sigma at Motorola is referred to as Six Sigma 1.0. This method focused on manufacturing and improving existing processes. GE made several enhancements to Six Sigma, such as adding the define stage, developing the DMADV approach to design projects and broadening the effort beyond manufacturing to commercial quality,9 including finance, healthcare and administrative processes, producing version 1.1.
The first major effort at integration of lean and Six Sigma occurred when lean manufacturing principles were integrated with Six Sigma, creating lean Six Sigma,10 which we call version 1.2. A major advantage of lean Six Sigma is that it minimized competition between lean and Six Sigma practitioners, and put both sets of proponents on the same team. It also broadened the scope of problems that could be tackled effectively.
More recently, researchers and practitioners have investigated the relationship between lean Six Sigma and innovation. Brian Hindo evaluated issues in Six Sigma deployment at 3M and suggested that Six Sigma and innovation were antagonistic.11 Hindo contended that deploying Six Sigma, while making important incremental improvements, would damage a creative and innovative culture, such as that at 3M, because it was too rigorous and disciplined.
Roger Hoerl and Martha Gardner demonstrated that lean Six Sigma could actually enhance the innovation of an organization, producing version 1.3.12 They pointed out that the scientific method, upon which lean Six Sigma is based, has sparked creativity and accelerated innovation for centuries.
For long-term success, organizations must be able to be operationally efficient, continuously improve existing operations and innovate to develop new products and services, wrote Julian Birkinshaw and Cristina Gibson.13 They refer to organizations that can optimize operations ("exploitation") and innovate ("exploration") as ambidextrous. Six Sigma does help organizations achieve ambidexterity by helping them continuously improve existing operations and enhance, rather than stifle, creativity and innovation.14-16
Lean Six Sigma 1.3 limitations
There is much to commend about lean Six Sigma 1.3. It covers a diverse array of application areas, from internet commerce and other high-tech industries to healthcare, finance and, of course, manufacturing. It has incorporated key lean principles from the Toyota Production System.
Research has documented a clearer, synergistic relationship between lean Six Sigma and disruptive innovation, and demonstrates how to use DFSS projects to take innovative concepts to market. Despite these advantages, there are still important limitations (see Table 3).
Lean Six Sigma 1.3 is not the most appropriate approach for all projects. For example, Hoerl was asked years ago to help a GE computer scientist with his Six Sigma project. When Hoerl asked him about the project, he stated that it involved the installation of an Oracle database. Hoerl asked if he knew how to install an Oracle database, and he replied, "Yes." Hoerl asked if he had done this before successfully, and he again replied, "Yes." Hoerl, now with a puzzled look on his face, asked what the problem was that required solution. The computer scientist replied that there was no problem to be solved, but that his boss had told him to use Six Sigma on this installation, so this is what he was going to do.
This is a classic case of a solution-known problem.17 That is, you have a problem, but the solution is already known. This does not necessarily mean that the solution is easy to implement—installing databases is not trivial. However, there is no need to analyze data to search for a solution. Rather, you just need to ensure that the people doing the work have the right skills, experience and procedures to properly implement the known solution. The question of whether the solution is known or unknown is a key consideration in choosing a method.
The important point is that Six Sigma was not needed, and perhaps not even helpful, for this installation. Some type of formal project management system and possibly database protocols were needed to ensure success.
The integration of lean into Six Sigma helps avoid
fitting Six Sigma because lean may be an appropriate method for a given problem when Six Sigma is not. For example, lean has proven principles that provide excellent guidance on solution-known problems.18 However, just as Six Sigma is not appropriate for all problems, neither is lean.
Any time you select the problem-solving method before you have clearly documented the problem, you are prone to force fitting. Shouldn’t you learn about the problem first, and only then determine the best approach to finding a solution? Who would continue to see a physician who recommends treatment prior to learning about the patient’s condition?
Similarly, lean Six Sigma 1.3 does not incorporate routine problem solving. That is, suppose a manufacturing line begins leaking oil at 3:30 a.m. This is not the time to put together a Six Sigma team to gather data and study the problem for a few months; someone needs to stop the leak ASAP. By routine problem solving we mean the day-to-day problem solving that occurs in all organizations, typically in real time.
Some problems are not easily solved on a routine basis. For example, suppose this is the fifth time this year one of the machines in the plant has begun leaking oil. Why is this problem recurring? Is the fundamental root cause the oil itself, the equipment, the way we are operating the equipment, the way we are maintaining the equipment, or something else?
To solve this higher-level problem, a team and some formal method, perhaps Six Sigma, will likely be needed. The point is that routine problem solving is an important aspect of continuous improvement; however, you typically do not need lean Six Sigma—nor is there time—to conduct a lengthy project. Immediate solutions are needed.
Fundamentally, lean Six Sigma 1.3 is a project-based method for driving improvement, but it is not a complete quality management system (QMS). That is, it does not replace ISO 9000 quality systems or provide the same breadth as national quality awards, such as the Baldrige award. For example, individual Six Sigma projects may lead to calibrating measurement equipment in a lab in the measure phase, but they would not provide an overall lab calibration system.
In our view, minor adjustments to lean Six Sigma 1.3 will not address these limitations. Rather, a new paradigm will be needed. Thomas Kuhn noted that the need for a new paradigm is recognized when the list of problems not solved by existing paradigms becomes too large to ignore.19 For the reasons noted earlier, we feel lean Six Sigma 1.3 is now at this place.
Time to make the leap?
Some time has passed since Six Sigma was introduced and lean Six Sigma was developed. In the meantime, the world and its needs have changed. As a result, quality improvement must adopt a new paradigm—one of holistic improvement called lean Six Sigma 2.0.
This approach must incorporate various improvement methods for different types of problems, integrate with an overall QMS, and address the other limitations of lean Six Sigma 1.3 noted in Table 3.
Next month’s Statistics Spotlight will elaborate on what such a system might look like, including consideration of large, complex and unstructured problems, the emergence of big data analytics, and the increased importance of risk management in today’s world.
© 2017 Ronald D. Snee and Roger W. Hoerl
- Mikel J. Harry and Richard Schroeder, Six Sigma: The Breakthrough Management Strategy Revolutionizing the World’s Top Corporations, Currency Doubleday, 2000.
- Ronald D. Snee and Roger W. Hoerl, Leading Six Sigma: A Step-by-Step Guide Based on Experience with GE and Other Six Sigma Companies, Financial Times/Prentice Hall, 2003.
- Ronald D. Snee and Roger W. Hoerl, Six Sigma Beyond the Factory Floor; Deployment Strategies for Financial Services, Healthcare, and the Rest of the Real Economy, Financial Times/Prentice Hall, 2005.
- Michael L. George, Lean Six Sigma: Combining Six Sigma Quality With Lean Production Speed, McGraw-Hill, 2002.
- Ronald D. Snee, "Utilizing a Holistic Approach to Improvement," presentation, ASQ World Conference on Quality and Improvement proceedings, Milwaukee, May 1-3, 2006.
- Roger W. Hoerl and Ronald D. Snee, "One Size Does Not Fit All," Quality Progress, May 2013, pp. 48-50.
- Gerald J. Hahn, Necip Doganaksoy and Roger W. Hoerl, "The Evolution of Six Sigma," Quality Engineering, 2000, Vol. 12, No. 3, pp. 317-326.
- George, Lean Six Sigma: Combining Six Sigma Quality With Lean Production Speed, see reference 6.
- Brian Hindo, "3M’s Innovation Crisis: How Six Sigma Almost Smothered an Idea Culture," Business Week, June 11, 2007.
- Roger W. Hoerl and Martha M. Gardner, "Lean Six Sigma, Creativity and Innovation," International Journal of Lean Six Sigma, 2010, Vol. 1, No. 1, pp. 30-38.
- Julian Birkinshaw and Cristina Gibson, "Building Ambidexterity into an Organization," MIT Sloan Management Review, 2004, Vol. 45, No. 4, pp. 47-55.
- Zhen He, Yujia Deng, Min Zhang, Xingxing Zu and Jiju Antony, "An Empirical Investigation of the Relationship between Six Sigma Practices and Organizational Innovation," Total Quality Management and Business Excellence, October 2015, pp. 1-22.
- L.J. Gutierrez Gutierrez, O.F. Bustinza and V. Barrales Molina, "Six Sigma, Absorptive Capacity and Organization Learning Orientation," International Journal of Production Research, 2012, Vol. 50, No. 3, pp. 661-675.
- Leopoldo Gutierrez Gutierrez, Vanesa Barrales-Molina and Javier Tamayo-Torres, "The Knowledge Transfer Process in Six Sigma Subsidiary Firms," Total Quality Management and Business Excellence, 2016, Vol. 27, No. 6, pp. 613-627.
- Hoerl and Snee, "One Size Does Not Fit All," see reference 8.
- Thomas S. Kuhn, The Structure of Scientific Revolutions, University of Chicago Press, 1962.
Ronald D. Snee is president of Snee Associates LLC in Newark, DE. He has a doctorate in applied and mathematical statistics from Rutgers University in New Brunswick, NJ. Snee has received ASQ’s Shewhart, Grant and Distinguished Service Medals. He is an ASQ fellow and an academician in the International Academy for Quality.
Roger W. Hoerl is a Brate-Peschel assistant professor of statistics at Union College in Schenectady, NY. He has a doctorate in applied statistics from the University of Delaware in Newark. Hoerl is an ASQ fellow, a recipient of ASQ’s Shewhart Medal and Brumbaugh Award, and an academician in the International Academy for Quality.