Lean Six Sigma of Lin Shest Sigma Methods of lean production Lean Manufacturing

Concept of LEAN Management

Lean in methodology of Perform is the end-to-end system directed to increase in customer satisfaction and efficiency of commands.

The main benefits for the company – growth of efficiency and competitiveness

• Increase in efficiency for 20% (on average), including at the expense of performance
• Quality improvement of the rendered services and growth of customer satisfaction
• Gain of team work, increase in initiative and involvement of personnel
• Development and professional growth of personnel
• Additional increase in business performance for 5-6% annually

Meetings at a board promote the focused discussion of load of employees and continual improvement

Boards of visualization execute a role of the "deshbord" reflecting efficiency of a command, including qualitative and quantitative KPIs

Key blocks of a board of visualization:

• Individual and command performance
• Problems and Ideas
• News
• Command section

Meeting at a board – the focused discussion creating a common information space for interactive discussion of results of work and opportunities for increase in efficiency

• Are carried out by a command on a regular basis
• All participants of a command actively participate in a meeting, rotation of moderators is observed
• Duration – from 15 to 30 minutes
• Motivates and loads a command

Kaizen session – the tool for the structured solution of difficult cross-functional tasks and generation of the ideas – the structured brainstorming directed to development of solutions on the existing problems and also identification of the new hidden problems. It is characterized by the strict sequence of actions and a broad spectrum of the used tools, control of the course of a session is exercised by the leader.

Concept of LEAN Production

The concept of LEAN Production ("lean production") was created in Toyota in the 1950th. With triumph rushed into the sixtieth Toyotas on car market of the USA: Japanese cars appeared better, and cheaper American. Then became interested in the concept of LEAN also in other industries: power and trade, services and health care, army, and later and in IT^[1].

The essence of LEAN – to do everything possible really to understand customer requirements and to gradually remove all superfluous that does not bear for it value. So to make so:

Lean IT (lean IT)

Lean IT (lean IT) is a business concept which in relation to work of IT department inherited strict Lean-approach (the management concept a production cycle of the enterprise based on permanent aspiration to elimination of all types of losses). Its purpose consists in executing бóльшие volumes of work with smaller costs, however provided that the benefits received from Lean IT application will be not less, than earlier. However, if benefits from implementation of thrifty practice of development are obvious, then why IT departments are so overloaded with it what do not even respond to the requests of business divisions concerning implementation of digital processes?^[2]

Problem in expectations. The matter is that after Lean IT implementation the management of IT departments wants to see immediate return, it literally goes in cycles in it, allocating methodology with miracle opportunities. As a result the command responsible for Lean IT implementation begins to hurry, and it begins to affect quality: processes are carelessly automated or are transferred to third-party suppliers of managed services without due control of quality. Many IT departments do not pay sufficient attention to training of IT personnel therefore the automated processes often fail or at the company, or at the outsourcer. Thus, instead of cooperating with business departments, to IT personnel to have periodically to finish the "automated" processes that does not leave them time for work on such really important projects as digital transformation.

How to approach Lean IT from the correct party?

The first that needs to be meant: The IT command should not hurry with Lean IT implementation, otherwise it will lead to technology failures. At first it is necessary to create the proper nomenclature of technology services with the inventory of the scheme of implementation for each of them. Here what in it should be available:

• the detailed scheme of introduction of service to operation that is necessary for its support at the initial stage and at the end of lifecycle;
• the list of the involved technicians and its managerial roles;
• requirements to service providers;
• planning of lifecycle, quality control;
• interrelation with other departments.

Also it must be kept in mind that votlichy from Lean technique on production which is aimed at reduction of all cost types Lean IT in software area should adapt to the speed of development of technology and variability of business needs. This key difference of Lean IT from Lean on production — the last has much more static character therefore the main changes in it can be planned in advance. Expecting Lean IT implementation, it should be taken into account influence of external factors and in particular disruptive digital technologies — all this requires to giving to business processes of a digital form and this work should be carried out by IT department forces.

Thus, the sure adaptability to the changing business processes is necessary for successful implementation of Lean IT — even the insignificant turn in business strategy demands from IT specialists of operational making changes or adding of new technology. To be able to react to these changes, IT department needs to resort to dynamic buffer control (Dynamic Buffer Management, DBM) is the one more operating time from industrial Lean, but in IT it will help to adjust management of services which IT departments should manage or create. IT services always have resources and the best practices for optimization of workflows, it is only important to take a realistic position in terms of the current rates of digital innovations.

Concept of 6 Sigma

The concept of 6 Sigma was developed by Motorola company in the 1980th for the purpose of decrease in deviations in production processes of electronic components. At the heart of project title – the Greek letter "sigma" which designates a statistical concept of root mean square deviation.

In the conditions of an unstable and changeable economic situation more and more attention is drawn by the methods of management, including production directed to overcoming the crisis phenomena and increase in efficiency of the enterprises at the expense of an internal resource. Among the advanced approaches directed to improvement of indicators of activity of any enterprise the concept of "Lean production" is selected (or a Lean-system). Implementation of the principles of a Lean-system allows to bring any company to qualitatively higher level: it helps to find ways for business process optimization at the expense of an exception of losses and inefficient transactions at all stages of production process, to reveal sources for further growth.

Lean Six Sigma is the integrated concept integrating the most popular management concepts in the 90th years of last century quality: the concept "Lean production" (Lean manufacturing) focused on elimination of losses and unproductive costs and the concept "Six sigma" (Six Sigma) aimed at decrease in variability of processes and stabilization of product characteristics^[3].

The Lin Shest Sigma model is a combination of two approaches popular abroad. The central theme of the concept of Lin - consumer value. The Japanese corporation Toyota where in the middle of the last century methods of lean production (lean manufacturing) were created became her ancestor. Within the model Lin any activity is classified on the transactions and processes adding value or neutral. The first group develops, the second is considered as loss and is eliminated. Popular solutions of Lin are, for example, 5S (five simple steps to creation of a qualitative working environment for work performance improvement), a kanban (the system constructed by the principle "just in time" i.e. with the minimum warehouse stocks), kaizen (aiming at continuous improvement on each of value creation stages), TPM (general care of the equipment).

The concept of Lean Six Sigma has a wide scope and can be used by any enterprises, irrespective of the size and a field of activity.

The period of formation of concepts "Six sigma" and "Lean production" falls on the middle of the 80th years of last century. At that time in the field of production the highest quality requirements of products and economy of resources were set. The concept "Lean production" was created as cost optimization methodology in automotive industry. The concept "Six sigma" is obliged by the birth to the program of fight against defects of finished goods by decrease in variability of processes by production of semiconductors. It is quite natural that manufacturing enterprises were pioneers in application of these concepts. Stages of development of concepts "Six sigma" and "Lean production" repeat stages of development of standards on the quality management system (QMS). The standards containing requirements to quality assurance for war industry, later — for automotive industry and mechanical engineering were primogenitors of the most used standards on SMK ISO of series 9000.

"Shest Sigma" is the methodology of process optimization relying on mathematical models. It was created in Motorola company, but it became widely known after adaptation for General Electric. The name comes from a statistical concept of the root mean square deviation designated by the Greek letter σ - sigma. The maturity of production process is estimated by means of calculation of an exit of faultless products. The indicator is less, the production is stabler. It is considered that the highest level of Shest Sigm gives no more than 3.4 cases of defects on one million^[4].

Some time Lin's concept and a technique of Shest Sigm, developing in parallel, competed with each other, finding the supporters and opponents. Many companies use complex option "Lin Shest Sigma". The integrated solution allows to gain economic effect both due to decrease in losses, and thanks to creation of stable and controlled processes.

The beginning of the 90th years of last century can be characterized as time of active use of standards for management systems and concepts "Six sigma" and "Lean production" in spheres, nonconventional for them. All the accruing competition pushed producers of services and intellectual products, the state and public organizations to search of new ways of maintenance and increase in demand. From the point of view of consultants, perspectives of adaptation of standards and management concepts quality to requirements of the enterprises for these spheres were extremely wide. For example, now in the field of services 80% of gross national product of the USA are produced. Having undergone repeated approbation at the enterprises of both production, and non-productive spheres, concepts "Six sigma" and "Lean production" found universality. As a result the name "Lean manufacturing" — "Lean production" — was transformed to "Lean" — Thrifty management. To the middle of the 90th of the concept "Six sigma" and Thrifty management became some of the most demanded directions of consulting business in quality management.

The ratio of "number of successful implementations" to "the total number of implementations" at them is higher in comparison with other methods and concepts of quality management. Except the subjective success factors caused by efforts of training centers and consulting firms there is also a number of objective factors. In relation to the concept "Six sigma" among success factors the most essential — high organization is selected. The high organization is one of the most distinctive features of the American business which is expressed in the following:

• all activity is carried out within projects, each of which has the set purposes, terms, the budget, distribution of responsibility and powers, requirements to risk identification, conducting records, etc.;
• requirements to knowledge and abilities of the personnel involved in projects are accurately defined and classified by categories ("black belt", "a green belt", etc.);
• the course of each project is regularly traced using an installed system of the measured indicators — "metrics".

There are several success factors of the concept "Six sigma". The procedure of its implementation is formulated in the Reference book by the American engineer on quality as "determination, the choice and execution of projects". The greatest attention at the same time is paid to the choice of projects which should be reasonable both in terms of the greatest economic feasibility, and in terms of a possibility of accomplishment in practice. It is interesting to note that the specialist having "black belt" despite the hired nature of the work, has all advantages of the external consultant, namely:

• it is independent and can take out impartial estimates and judgments;
• it is not perceived by colleagues as "one of us", to his opinion listen as to opinion of the expert in issues of improvement of quality;
• the reputation and further career of the specialist of category "black belt" completely is defined by success implemented by it within the concept "Six sigma" of projects, than its high level of motivation speaks.

The specialists having "black belt" can be employed on conditions of both partial, and full employment. For assessment of results of their activity "the lower and upper borders of admission" are established — for a year of work the specialist of such category employed on full time working week should bring to the enterprise economy from $500 thousand to $1 million. An exit out of limits of the lower bound of admission means mismatch of qualification, exceeding of the upper bound is improbable. The concept Thrifty management for the first time created at the Japanese enterprises has other success factors. The high organization is not a success driver, but the received result any more. The reached high organization of processes (as the main, and auxiliary) allows the enterprise to save the considerable volume of resources. Besides that the concept Thrifty management means essentially new approaches to the culture of management and the organization of the enterprise, she also offers tool kit, allowing to reduce the price and accelerate processes. The main tools are already well-known to quality specialists: precisely in time (just in time), 5S, kaizen (concept of continuous improvement), flow control of value creation (value stream management), poke-yok (method of error protection), etc. In this list experts specialists select "value creation flow control" as one of the most productive tools in achievement of goals of the concept Thrifty management.

The concept "Six sigma" having the American roots mutual interest in a single process makes related with the Japanese concept Thrifty management. It essentially distinguishes them from many the "venerable predecessors" focused on a general scope and makes related with concepts of new generation, such as "business process reengineering". Concepts "Six sigma" and Thrifty management ideally supplement each other.

The concept Thrifty management does not set requirements to a form of implementation of the concept and the infrastructure required for this purpose. Therefore success of Thrifty management in many respects depends on initiative and managerials ability of managers, however when changing managers everything can fail. Thrifty management lacks the concept the formalized obligations from the top management, the formalized training, the planned selection of resources, tracking of success with acceptance of corrective actions, etc.

The concept Thrifty management is not rather focused on requests of consumers. Their satisfaction is directly not connected with its main objective — elimination of losses and unproductive costs. In the concept "Six sigma" focus on consumers — a crucial element. It is confirmed by the fact that all main metrics of this concept are constructed on tracking of interrelation of process parameters and product characteristics with the specifications set by consumers. The key principle of the concept "Six sigma" begins DMAIC with determination of consumer requirements: Define — define — measure Measure — analyze Analyze — improve Improve — manage Control.

In the concept Thrifty management defects and discrepancies are recognized as one of the main sources of losses at the enterprise. At the same time in it methods of statistical office for elimination of losses are not considered by processes. The concept Thrifty management is not focused on search of sources of variability of processes and ways of decrease in variability that is one of basic elements of the concept "Six sigma".

Defects — the main target of the concept "Six sigma" — are only one of many types of losses at the enterprises. In the classical theory of the concept Thrifty management seven types of losses are selected: overproduction, waiting, transportation which is not adding value activity, a stock availability, movement of people, production of defects. Many authors select additional types of losses. For example, the "false economy" consisting in use of cheap and low-quality raw materials and materials, "variety" as result of application of not unified elements in processes.

In the concept "Six sigma" parallels between quality and consumer satisfaction, on the one hand, both duration and speed of accomplishment of processes, with another are not drawn. At the same time duration of process is directly connected with consumer satisfaction when rendering services, and for production processes — with the frozen means in the form of the stocks which are in standby mode. In the concept Thrifty management the analysis of time as one of the main resources of process is the key direction.

The tool kit of the concept "Six sigma" limits possible is abrupt solvable tasks. Improvement of process within methodology "Six sigma" is carried out, generally by decrease in variability of processes by statistical techniques and redesign of processes using the DFSS method (Design for Six Sigma is design for the concept "Six sigma"). In methodology "Six sigma" are missed such opportunities for process improvement as reduction of unproductive activity, decrease in waiting time, stock reduction and transportation costs, optimization of jobs, etc. All listed opportunities are fully implemented by the concept Thrifty management.

Completion of the "spaces" described above within the integrated concept of Lean Six Sigma is given in the table

From this table it is visible that answers to the question "how to organize activity?" are taken in concepts of Lean Six Sigma from the concept "Six sigma", and on the question "what to do?" — generally from the concept Thrifty management. At the same time the concept of Lean Six Sigma uses a joint set of the measured indicators (metrics) and a joint set of methods and instruments of implementation of improvement. The example of set of the methods and tools used in the concept of Lean Six Sigma is given below.

Practice of use of the concept of Lean Six Sigma at the western enterprises allows to achieve by own forces in short terms (about a year) results:

• decrease in product cost and services by 30-60%;
• reduction of time of provision of services up to 50%;
• reduction of quantity of defective products approximately twice;
• increase without additional costs of amount of completed work to 20%;
• reduction in cost of project works for 30 — 40%;
• reduction of runtime of projects up to 70%.

Graphic comparison of results of activity of the enterprise using the integrated concept "Six sigma" + Thrifty management with results of the concepts "Six sigma" and Thrifty management applied separately is given in the drawing.

There are two main signs testimonial of existence of removable losses in processes. The first sign — any changes happening at the enterprise, for example, increase or reduction of production volumes, expansion of the range, organizational changes, innovations, etc. The second sign — insufficient documentation of processes and misunderstanding of an entity of processes by the employees involved in process.

Before answering the question "whether it will work?", it is worth reviewing an example when did not "earn" one of seven simple tools of quality — a method of stratification of data. After the seminar in one of consulting firms the specialist of the enterprise decided to analyze the saved-up data on defects.

Defects at the enterprise came to light by methods:

• by method of acoustic emission,
• ultrasonic examination,
• by vortex-current method,
• magnetic powder, etc.

At the enterprise there was no classification of types of defects which could be connected with origins of defects. The data array was stratified by methods of identification of defects and then data analysis for the entire period is carried out. Such analysis did not yield results, the nature of data did not allow to carry out other analysis. As a result statistical techniques were forgotten, and fight against defects developed into increase in penalties.

To begin projects on improvement it is not necessary to know in perfection all tool kit and metrics of Lean Six Sigma. The principle 20/80 is fair also concerning demand of knowledge of specialists of category "black belt". When implementing 80% of projects less than 20% of the tools studied by these specialists are used. The complexity of application of the concept of Lean Six Sigma is in simplicity of its separate elements. The most part of problems is connected with the wrong collecting and data preparation, as in the described example. There are several basic principles accompanying success both in application of simple statistical techniques, and when implementing the concept of Lean Six Sigma:

• interest of the management;
• selection of resources;
• experience of successful projects.

When implementing the concept of Lean Six Sigma carry the paid time of personnel, costs for its training and for acquisition of the means necessary for preparation and project implementation to resources. The management should gain the volume of knowledge necessary for control and management of this activity. Calculation of necessary hours of training and costs of working time for project implementation can be found in any textbook according to the concept "Six sigma". The leader of the project should have practical experience of participation in successful projects on improvement. At all importance of training, experience of participation in one successful project is worth of studying of tens of examples from practice.

Success of the concept "Six sigma" in the American market generated desire to dress in a form of this concept and other approaches, continuing the movement on a way of continuous improvement, or, in other words, to be ahead of competitors.

The concept of Lean Six Sigma allows to improve activity gradually, from the project to the project.

Lean production through PLM approach

Main article: Lean production through PLM approach

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Main article: Zero waste philosophy (Bioeconomy)

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