Lean Manufacturing

The central idea of lean manufacturing is actually quite simple: Work relentlessly to eliminate waste from the manufacturing process. In this context, “waste” is defined as any activity that doesn’t add value from the customer’s perspective. Almost every company has a tremendous opportunity to improve by using lean manufacturing techniques. Lean principles were developed by the Japanese manufacturing industry—by Toyota and the Toyota Production System (TPS) specifically. Lean manufacturing is based on the following goals and assumptions:

• Continuous improvement
• Respect for people
• Long-term approach to process improvement
• The right process will produce the right results
• Add value to the organization by developing your people and partners
• Continuously solving root problems

Toyota Production System

Toyota originally began sharing the TPS with its parts suppliers in the 1990s. Because of interest in the program from other organizations, Toyota began offering instruction in the methodology to others. Toyota has even “donated” its system to charities, providing its engineering staff and techniques to nonprofits in an effort to increase their efficiency and their ability to serve people. For example, Toyota assisted the Food Bank for New York City to significantly decrease waiting times at soup kitchens, packing times at a food distribution center, and waiting times in a food pantry.^[1]

Six Sigma

In the United States, another approach to quality management was formulated at Motorola in 1986 and was named Six Sigma. Six Sigma is a company-wide process that focuses on measuring the number of defects that occur and systematically eliminating them in order to get as close to zero defects as possible. In fact, Six Sigma quality aims to have every process produce no more than 3.4 defects per million. Six Sigma focuses on designing products that not only have fewer defects but that also satisfy customer needs.

A key process of Six Sigma is called DMAIC. This stands for Define, Measure, Analyze, Improve, and Control. Employees at all levels define what needs to be done to ensure quality, then measure and analyze production results using statistics to see if standards are met. They are also charged with finding ways to improve and control quality. The following features also set Six Sigma apart from other quality-improvement initiatives:

• Focus on measurable financial returns
• Emphasis on good management
• Commitment to making data-driven decisions

General Electric (GE) was one of the first companies to implement Six Sigma throughout the organization. Fully implementing Six Sigma within GE took 5 years but resulted in a savings of $12 billion.^[2] After GE’s success, other companies such as Samsung, Ford, Boeing, Amazon, and GlaxoSmithKline also adopted Six Sigma.^[3] Service firms and government entities have applied Six Sigma to their quality initiatives as well.

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