See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/283047231

“Integrating Lean and Six Sigma – A Holistic Approach”,

Article · May 2007

CITATIONS READS
47 872

1 author:

Ron Snee
Snee Associates, LLC
395 PUBLICATIONS   5,684 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Statistical Engineering View project

Working to Bring Analytics to Construction Industry Safety Data View project

All content following this page was uploaded by Ron Snee on 27 January 2016.

The user has requested enhancement of the downloaded file.

 join us online www.asq.org

SIX
ASQ
VOLUME 6, NUMBER 3 • M AY 2 0 0 7

• Integrate Lean
SI MA And Six Sigma

• 6 Steps to Measure
Inspection

MAG
A AZINE
FROM THE BASICS TO THE BOARDROOM
• Sigma Within the Batch

HUNTER on
TIME
SERIES
TOOLS

ASQ Six Sigma Forum TM

www.sixsigmaforum.com
LE A N I N T E G R AT I O N

Integrating Lean and Six

Sigma—a Holistic Approach
Fortune 500 company had been using Six Sigma to drive improvement
COMPREHENSIVE
IMPROVEMENT A in product quality and had achieved significant bottom-line results
over several years. Recently, the company incorporated lean principles
to attack waste and cycle time, and saw further improvements. But the
REQUIRES BOTH company has now encountered some cycle time and waste problems for which
lean approaches are not working.
LEAN—TO ACHIEVE Another company embarked on a lean Six Sigma program that was initially
successful. Later it found some problems were falling through the cracks—
SIMPLICITY—AND they didn’t seem amenable either to Six Sigma or lean approaches.
SIX SIGMA—TO Although both companies had overcome the once common belief that lean
and Six Sigma should remain mutually exclusive alternatives for pursuing
MANAGE COMPLEXITY. improvement, they failed to get the most out of a lean and Six Sigma union.
Why? Because they continued to take a far too narrow view of improvement.
Both companies used Six Sigma exclusively to improve quality, and lean exclu-
sively to improve process flow by reducing waste and cycle time. For these
companies, integration of lean and Six Sigma meant running parallel
improvement programs with the two approaches overlapping only occasion-
ally in isolated projects.
By Ronald D. While both companies achieved some impressive gains, they fell far short of
what is possible with a holistic improvement system and of what will be
Snee, Tunnell required to compete in the future.
Consulting, Comprehensive Improvement—the Ultimate Objective
and Roger W.
Although the overworked warning seems familiar, it bears repeating: The
Hoerl, GE leveling effects of globalization and IT have enabled organizations and indi-
viduals around the world to compete successfully.
Global Research All organizations need to improve continuously or face extinction.
Improvement must come on all fronts: quality, cost, delivery, customer satis-
faction and more. It is within this unmercifully unforgiving context that
attempts to integrate lean and Six Sigma are taking place.
If the methods are to succeed, they must first define the problem in terms
of the ultimate objective. That objective is not to integrate lean and Six Sigma
but rather to improve performance as comprehensively and sustainably as
possible.
Based on our more than 60 years of collective experience with improvement
methods and programs with leading companies, we believe organizations that
successfully pursue lean Six Sigma will do so by:
• Taking a holistic view of the business and of business improvement.
• Adopting a holistic improvement method.
• Establishing an integrated project management system.
Guided by those three simple but powerful principles, ambitious organiza-
tions can begin to reach the full potential of lean Six Sigma.

15 I M AY 2 0 0 7 I W W W . A S Q . O R G

Holistic View
Reducing waste and cycle time are necessary but
not sufficient. Reducing variation alone will not make
you a winner. A holistic approach to improvement—
a broader view of how to improve business perform-
ance and a deeper understanding of the various
approaches to improvement—is needed.
A holistic approach to improvement:
• Works in all areas of the business.
• Works in all cultures, providing a common lan-
guage and toolset.
• Addresses all key measures of performance.
• Addresses all aspects of process management,
such as process design, improvement and con-
trol.
• Addresses all types of improvement, including
manufacturing, nonmanufacturing, transaction-
al, service and administrative.
• Includes a management process for improve-
ment such as plans, goals, budgets and reviews.
Ultimately, a holistic approach helps develop a cul-
ture of improvement, including the use of improve-
ment approaches as a tool for leadership develop-
ment, throughout the organization.
Create a Holistic Improvement Methodology
As Figure 1 suggests, many companies have focused
on lean or Six Sigma, but rarely both, as their improve-
ment approach. Today some organizations are work-
ing to integrate the two under a common name such
as lean Six Sigma. To achieve maximum performance
improvement, however, lean, Six Sigma and other
approaches should be brought together as part of a
holistic improvement method.
An effective improvement method must be able to
improve quality, cost and delivery anywhere in the
organization, anywhere in the world. Lean principles
and tools can be used to deal with issues of waste, cycle
time, process flow and nonvalue added work. Six
Sigma tools can be used to shift the process average,
reduce the variation around the process average, find
the operating sweet spot, help create robust products
and processes, and reduce waste and cycle time.
Other improvement tools such as redesign, the
General Electric (GE) workout approach to basic
team problem solving with minimal tool use, and
Baldrige assessments can also be useful. However, in
a holistic improvement method, the overarching
strategy is not to run parallel improvement programs
but to create a system in which lean and Six Sigma
S I X
Integrating Lean and Six Sigma—a Holistic Approach
Figure 1. Evolution of Lean Six Sigma
Lean Six Sigma
Improve
Past process
Reduce
variation
flow
Lean Six Sigma
Improve Reduce
Present process variation
flow
Holistic
Future improvement
methodology
mutually reinforce each other.
Examples include when Six Sigma is applied to
reduce variation in process flow or lean is used to
improve the quality of products that might age rapid-
ly by improving flow through the system and reduc-
ing cycle time to the end customer.
The execution of projects in this holistic improve-
ment method can be guided by the familiar define,
measure, analyze, improve and control (DMAIC)
approach. Although DMAIC originated in Six Sigma,
it can be sharply distinguished from the Six Sigma
tools with which it is associated and generalized to a
higher level as an overall framework for process
improvement. Then the tools that are appropriate to
a particular problem—whether they are Six Sigma or
lean tools—can be applied at the appropriate point
in the highly structured and sequenced approach of
DMAIC.
As an important aside, there are no such things as
Six Sigma tools or lean tools because neither method
invented tools. Realizing there are only improvement
tools, we use the phrase “Six Sigma tools” or “lean
tools” simply as a convenience to indicate those tools
typically associated with each of these initiatives.
Integrated Project Management System
To create a holistic improvement method you must
create an integrated system for managing projects
rather than separate systems for lean or Six Sigma proj-
ects. As Joseph Juran admonished, “improvement hap-
pens project-by-project and in no other way.”1
The project management system should therefore
employ a project-by-project selection and management
approach. And, as with any effective project manage-
ment system, there should be processes to guide and
S I G M A F O R U M M A G A Z I N E I M AY 2 0 0 7 I 16
Integrating Lean and Six Sigma—a Holistic Approach
Figure 2. Novel Approach to Project Selection
Business Performance
goals gaps
Value stream
mapping
Six Sigma
projects
Kaizen Quick-hit
projects projects
ProcessSavings
improvements
from cost
process improvements
sustain improvement: project tracking and review, com-
munications, recognition and reward, and training.
For drawing on both lean and Six Sigma as effec-
tively as possible—that is, to achieve and sustain
desired improvements—nothing is more critical than
project selection. Before the project starts, the proj-
ect selection process identifies the right improve-
ment approach and thus identifies the right person-
nel and tools to be used.
This principle not only takes project selection to a
new level but also puts the selection of both the proj-
ect and the improvement approach ahead of person-
nel selection. Many organizations mistakenly begin
with personnel selection.
This enhanced project selection process should
identify the right projects, those that will:
• Produce the highest value in relation to business
goals.
• Improve performance of processes that are pro-
ducing the pain.
• Improve the flow of materials and information
while reducing waste and cycle time.
Figure 2 schematically shows what we believe is a
novel and powerful approach to selecting the right
projects that includes elements both of Six Sigma and
lean, all with the ultimate goal of achieving maximum
sustainable process improvements. Although there are
many types of improvement projects, process improve-
ments typically result from three major types of proj-
ects, requiring varying amounts of time for completion:
• Quick-hit projects can be accomplished almost
immediately and, should they fail, cost little in
lost time and resources.
• Kaizen projects are typically completed in 30 days
17 I M AY 2 0 0 7 I W W W . A S Q . O R G
or less.
• Six Sigma projects are typically completed in
four to six months but are often completed more
quickly.
As Figure 2 suggests, all these different types of proj-
ects are generated directly or indirectly from business
goals or performance gaps. A top-down approach
employs business goals to generate projects, while the
bottom-up approach addresses performance gaps that
arise from within the operations of the organization.
Business goals and performance gaps can directly
generate Six Sigma projects, which is the customary
approach for project selection in purely Six Sigma
improvement systems.
But in the holistic approach described here, goals
and gaps can also provide inputs for value stream
mapping (VSM), a technique often employed in lean
that can also be used to generate Six Sigma projects.
For example, Six Sigma is usually used to address
complex problems for which the solution is unknown.
If a VSM effort uncovers a complex problem with no
known solution, then a Six Sigma project might result.
A Six Sigma project might uncover quick hits or gen-
erate kaizen projects in the course of its execution. If
VSM uncovers nonvalue added activity for which lean
tools might be appropriate, then a kaizen event might
be convened to brainstorm solutions. The kaizen event
then might initiate a kaizen project. Employing lean
tools, it might uncover a quick fix or find there is no
known solution, which would then generate a Six
Sigma project.
Note that the lean Six Sigma projects category is con-
spicuously absent from the framework. That’s because
in a holistic improvement method, in which the over-
arching goal is improvement—no matter how it is
achieved—all projects are, in effect, lean Six Sigma
projects. They draw on a common toolbox that con-
tains tools that have in the past been kept apart.
Depending on the nature of the problem, of
course, tools traditionally regarded as lean or tools
associated with Six Sigma might dominate. Consider,
for example, the types of commonly encountered
improvement needs, including to:
• Streamline process flow to reduce complexity,
decrease downtime, shorten cycle time and
reduce waste.
• Improve product quality.
• Achieve consistency in product delivery.
• Reduce process and product costs.
• Reduce process variation to reduce waste (such
as the waste of defective products).
• Improve process control to maintain stable and

predictable processes.
• Find the sweet spot in the process operating win-
dow.
• Achieve process and product robustness.
In all these cases and others, the nature of the
improvement to be pursued and the root causes stand-
ing in the way help define the appropriate approach
and tools to be used.
In cases when shifting the process average or reduc-
ing process variation is appropriate for the problem
at hand, Six Sigma will dominate. In cases when
improving process flow or reducing process com-
plexity is appropriate, lean tools might dominate.
Contrary to popular belief, however, both lean and
Six Sigma approaches can be used to deal effectively
with reduction of waste, cycle time and nonvalue-
added work (Figure 3). This is another mark of the
desirability of truly integrating lean and Six Sigma to
make available the best possible tools, regardless of
the origin of their method.
A Deeper Look at Improvement
In the real world, an opportunity for process
improvement and the problems associated with it are
rarely one-dimensional. Such opportunities often con-
sist of multiple process steps as well as process flows
between the steps.
As Figure 4 illustrates, information and material
flow between the process steps (between the boxes)
are often the root cause of poor process perform-
ance. But value adding transformation takes place at
the process step within the box, which might also har-
bor root causes of poor performance.
Lean principles are typically most effective when
used to deal with the flow of information and materi-
als, while Six Sigma approaches are typically most
Figure 3. Convergence of Six Sigma and Lean
Six Sigma objectives Lean objectives
• Shift process
Reduce:
• Improve
• Waste
average process flow
• Nonvalue
• Reduce process
added work
• Reduce process
variation complexity
• Cycle time
Lean Six Sigma improves quality, cost and delivery.
S I X
Integrating Lean and Six Sigma—a Holistic Approach
effective when used to address poorly performing
value adding transformations.
However, it is critical to remember that the goal is to
get at the root causes of poor process performance,
not simply to focus where symptoms appear. For
example, a poorly performing transformation can
cause process flow problems, and poor flow can result
in problems in the transformations (perhaps due to
excessive aging of materials). It is therefore far more
effective to draw on lean and Six Sigma simultaneous-
ly to achieve the maximum improvement possible and
to address all the root causes of poor process per-
formance.
Value Added Transformation
In the current state of improvement methods,
issues of material and information flow and the abili-
ty of lean principles to address them are relatively
well understood. The power of those principles to
simplify and streamline processes, as well as the rela-
tive simplicity of the principles themselves, is impres-
sive. Indeed it is that relative simplicity that is part of
their appeal.
Less well understood, however, is the value added
transformation that occurs inside the boxes, in which
the challenge is often to manage and optimize the
complexity of the process step rather than simplify it.
More complex processes will have more action
within the boxes, while simpler processes might have
more action between the boxes. For example, con-
sider assembly processes in which a product is creat-
ed by bolting parts together. Little transformation
occurs inside the box—where the bolting takes
place—but there might be significant issues of mate-
rial and information flow.
Contrast that with a process in which the product is
created by process inputs coming together under the
right process conditions and being physically or chem-
ically changed to produce the product. For example,
when two pieces of metal are welded together, critical
factors include current level, weld material, and thick-
ness and type of metal. In those processes, the trans-
formation that occurs inside the box, where the weld-
ing takes place, is where problems are likely to occur.
The case is even clearer in the extremely complex
value adding transformations typically found in the
chemical, pharmaceutical, biotechnology and high-
tech industries. Often, in those situations, develop-
ing functional models of the form Y = f(X) is fre-
quently needed to understand what is going on with-
in the boxes.
This is not to argue that one approach is superior
to another but that both are needed to optimally
S I G M A F O R U M M A G A Z I N E I M AY 2 0 0 7 I 18
Integrating Lean and Six Sigma—a Holistic Approach
Figure 4. Process Flow and Value
Adding Tranformation
Step one
Six
Step two
Sigma
Lean
Value adding
Step three
Material and transformations
information occur within
Customer process steps.
flow between
process steps.
address performance gaps. Both approaches affect
the outcomes that have traditionally been seen as
dependent on one or the other’s approach.
Cycle time reduction has usually been regarded as
best attacked by lean principles. But cycle time can be
a function of both variation within the value adding
transformation and process design inefficiencies, such
as availability of materials, information and other
resources.
For example, in a mixing process associated with
batch chemical production, an improvement project
resulted in the development of a Y = f(X) model that
showed batch cycle time was related to type and
quantity of raw material as well as the amount of mix-
ing time.
Using this model, the organization was then able to
find the operating sweet spot by reducing the batch
cycle time and increasing batch size, thereby increas-
ing capacity 20% for an annual savings of $280,000.
Thus, the cycle time was influenced by the value
adding transformation—a chemical reaction in this
case—rather than information and material flow.
Regardless of the type of process, the model Y =
f(X) is always applicable. In some cases the model is
obvious because of the linear/additive form of the
model, as when total process cycle time is the sum of
subprocess cycle times.
In other more complex situations, more complicat-
ed models are needed to understand the process,
such as when product performance (Y) is a function
of interactions between raw materials (X) and
process operating variables (X).
Models can be both quantitative (when the form of
the functional relationship is known) and qualitative
(when the direction of effects are known but not the
quantitative magnitude of effects or the functional
form of the model). We use qualitative models all the
time in our daily lives. Body weight gain or loss, for
example, is a function of caloric intake and exercise.
Many lean principles are based on qualitative models
developed from years of experience.
19 I M AY 2 0 0 7 I W W W . A S Q . O R G
In determining the improvement approach to be
used, look at the steps in the process and determine
whether the root cause of the problem— not the symp-
tom—lies in the value adding transformation within
one or more process steps or in the flow of informa-
tion and materials between one or more process steps.
The improvement of value adding transformation
typically benefits from the use of Y = f(X) models.
Information and material improvements typically
benefit from process streamlining, and reductions in
bottlenecks, waste and cycle time.
As noted throughout this article, many projects call
for both approaches to improvement to achieve max-
imum benefit. For example, a pharmaceutical com-
pany needed to improve the capacity of a manufac-
turing process to meet market demand for a highly
successful product (see Figure 5). The strategy for
improvement included increasing the process yield
to get more product out of existing raw materials and
getting the product to the customer faster.
Systems and process analysis identified the batch
release process—specifically the batch record
release—to be a problem. Prior to the release of a
drug batch to the market, batch records required by
corporate standards and government regulators must
be complete and indicate compliance with standard
operating procedures. Until the batch records are
complete, the batch is held up, often resulting in late
or missed shipments, high inventory costs, and cus-
tomer dissatisfaction.
A DMAIC analysis focused on manufacturing’s
review of the batch records. Using lean principles,
the project team reduced review cycle time by 35 to
Figure 5. Using Lean and Six Sigma Together
Need to increase process capacity
to meet market demand
Batch record release Yield
• Speed manufacturing improvement
review
• Use lean DMAIC Use DMAIC
• Inventory reduced
$5.2 million
• Batch release cycle time Yield increased 25%
reduced 35 to 55%
• Cost savings $200,000
per year
Process output meets market demand.
DMAIC = define, measure, analyze, improve, and control
 Integrating Lean and Six Sigma—a Holistic Approach

55%, depending on the product, saving $5.2 million Table 1. Drivers of Performance Measures
in inventory and $200,000 per year in operating costs.
Meanwhile, a DMAIC analysis employing the Y = Measure of performance Key drivers
f(X) model to understand the value adding transfor-
Quality Target value, variation
mation showed the raw material batch to have a
major effect on yield. When the batch-to-batch dif- Target, variation, flow,
Cost
costs—fixed and variable
ferences were reduced, the yield increased by 25%.
Delivery Flow, variation
Understanding Process Variation Customer satisfaction Quality, cost and delivery

Process variation provides another window into the

desirability of combining lean and Six Sigma. As
shown in Table 1, process variation affects not only
quality but also cost delivery and customer satisfaction.
Process variation that results in defective product,
scrap and rework also impedes process flow. The root
causes of the variation might be differences between
operators and process teams, differences in raw materi-
al lots, poor process understanding and control, and
numerous others. But the consequences are the same:
reduced process flow due to increased inventory,
increased material movement, overproduction, and
wasted motion.
Process flow improvement studies should therefore
not be confined to lean principles but should also
include analysis of process variation. Although this is
a fundamental of quality improvement, it appears to
have been somewhat overlooked recently.
Furthermore, variation isn’t confined to manufac-
turing processes. It also affects business, financial and
other nonmanufacturing processes. The solution to
performance problems in such processes often
requires Six Sigma’s approach to reducing variation.
For example, GE pays a large portion of its bills from
one accounts payable office. The sums of money
involved are significant and many vendors give GE dis-
counts for paying on time, such as 2% for paying with-
in 30 days. Data showed that the time-to-pay distribu-
tion was very wide, ranging from four to 90 days. The
problem was not nonvalue added steps or waste in the
process, but rather excessive variation.
A careful study of the process, using a Y = f(X)
approach, allowed GE to minimize variation around
the optimal target of 27 days, which saved millions of
dollars in lost interest while still reaping the benefits
of discounts for paying within 30 days.
Customers, too, often feel the impact of process
variation. Typical delivery times for two suppliers are
shown in Table 2. Although supplier one sometimes
delivers products in as few as two days, customers pre-
fer the more predictable delivery times of supplier
two. In some cases, in fact, delivery too early is worse
than too late if the customer is not ready to receive it.
Delivery is typically thought to be an issue of
process flow, and the application of lean principles to
reduce nonvalue added and wasteful steps might
help improve supplier one’s performance. But
process variation must also be taken into account to
achieve maximum improvement.
From Understanding Variation
To Understanding Processes
Understanding process variation leads to process
understanding—and you cannot improve or control
a process you don’t understand. In fact, sustainable
improvement depends on process understanding.
Developing models of the form Y = f(X) are a highly
effective way to achieve such process understanding.
You understand a process when:
• Critical variables (Xs) that drive the process are
known.
• Critical uncontrolled variables (noise) that affect
the process outputs (Ys) are known.
• The process has been designed to be insensitive
to these uncontrolled variations (robustness).
• Measurement systems are in place, and the
amount of measurement variation is known.
• Process capability is known.
• Effective process control procedures and control
plans are in place.
• The performance of the process over time can
be reliably predicted.
Lean Six Sigma provides the concepts, methods
Table 2. Customers Feel Process Variation
Supplier Delivery time (days) Mean Range
1 17, 2, 5, 12, 4 8 15
2 7, 9, 9, 8, 7 9 2
Note: Table adapted from Jack Welch,
Jack Straight From the Gut, Warner Books, 2001

S I X S I G M A F O R U M M A G A Z I N E I M AY 2 0 0 7 I 20
 Integrating Lean and Six Sigma—a Holistic Approach

and tools for developing process understanding. Six • Strives for process understanding using Y = f(X)
Sigma brings rigorous approaches for developing thinking to sustain improvement.
cause and effect understanding, and lean brings Ultimately, all that is required is a modest shift of
proven principles based on a wealth of knowledge perspective. Instead of narrowly pursuing Six Sigma,
and experience across the globe. lean or simplistic versions of lean Six Sigma and
achieving only temporary improvement, we can suc-
A Modest Proposal cessfully meet the challenges of 21st century compe-
tition by encompassing multiple improvement meth-
Despite the nearly universal imperative for organi- ods in a holistic system. In such a system, the ultimate
zations to focus keenly on growth and productivity to criterion of success is neither reduced waste nor
remain competitive in the 21st century, many organi- reduced process variation, but achieving maximum
zations lack a holistic method for improvement that sustainable improvement.
could deliver the maximum possible benefits.
© Ronald D. Snee and Roger W. Hoerl, 2007
Meanwhile, disagreements among proponents of
various methods unnecessarily impede progress REFERENCE
toward holistic improvement. Partisans for Six Sigma
maintain the key to better performance is the reduc- 1. J.M. Juran, Leadership for Quality: An Executive Handbook, Free Press,
1989, p. 35.
tion of process variation. Adherents of lean question
the wisdom of reducing the variation in a process that Bibliography
is inherently wasteful.
These differences might be explained in part by George, M.L., Lean Six Sigma—Combining Six Sigma Quality with Lean Speed,
McGraw-Hill, 2002.
the origins of each approach. Lean arose in environ-
George, M.L., Lean Six Sigma for Service—How to Use Lean Speed and Six
ments such as automobile manufacturing, where Sigma Quality to Improve Services and Transactions, McGraw-Hill, 2003.
assembly was paramount and addressing problems of Hoerl, R.W., and R.D. Snee, Statistical Thinking—Improving Business
process material flows greatly improved performance Performance, Duxbury Press, 2002.
operationally and financially. Also, decreasing various Snee, R.D., and R.W. Hoerl, Leading Six Sigma—A Step-by-Step Guide Based
kinds of waste often meant a drive to simplify and on Experience With GE and Other Six Sigma Companies, Financial Times
Prentice Hall, 2003.
streamline processes.
Snee, R.D., and R.W. Hoerl, Six Sigma Beyond the Factory Floor—Deployment
Six Sigma arose in environments such as high tech Strategies for Financial Services, Health Care and the Rest of the Real Economy,
and chemicals, where value adding transformation Financial Times Prentice Hall, 2005.
dominated. Reducing variation often meant an effort
to optimize, stabilize and control the interaction of
complex variables.
Instead of seeing these two approaches as opposed,
it is far more productive to see them as complemen-
tary. Achieving comprehensive improvement requires
both the ability of lean to achieve simplicity and the
ability of Six Sigma to manage complexity. Harnessing
their mutually reinforcing power most effectively
requires a holistic improvement system that:
• Focuses on improvement of the entire business.
• Uses a careful project selection process that
identifies the right projects and right improve-
ment strategies for each project.
• Uses a generalized DMAIC framework to guide
projects.
• Encompasses robust improvement methods that
can handle the wide variety of problems an organ-
ization experiences as well as the wide variety of
problems encountered in individual projects.
• Employs analysis of process variation as part of
any improvement project.

21 I M AY 2 0 0 7 I W W W . A S Q . O R G

View publication stats