A report from POMS 2013 in Denver
Are Lean and Six Sigma relevant for the 21st Century Manufacturing? An answer to this—and thousand other questions—is being suggested at the annual POMS Conference in Denver, Colorado, this week.
The POMS Conference is the world’s largest academic conference for operations management. This year’s conference is the 24th arranged by the Production and Operations Management Society (POMS). More than 1000 researchers from close to 50 countries have travelled to the Mile-High City to attend this year’s conference. We gather to discuss all kinds of odd interests within the operations management sphere: special tracks range from “healthcare operations management”, “humanitarian operations and crisis management”, and “spa and wellness service management” (!), all the way to the more classic OM themes of “inventory management” and “production planning and scheduling”, to mention only a very few. I certainly learn a lot at POMS 2013 that is valuable for my own research on company-specific production systems (XPSs). In this post, I report from the panel discussion “Relevance of Lean and Six Sigma for Manufacturing Excellence in the 21st Century Manufacturing”.
Santosh Mahapatra, Associate Professor at Clarkson University, had put together this outstanding panel of researchers on Lean and Six Sigma: Professor Yavuz Bozer and Professor Wallace Hopp (both University of Michigan Ann Arbor), Professor Morgan Swink (Texas Christian University) and Professor Peter Ward (Ohio State University). The invitation read: “The usefulness of Lean and Six Sigma has often been questioned on grounds such as narrow conceptualization, failure to suggest new product ideas, and overreliance on a set of generic tools/standards. This discussion would explore the relevance of the two of the most popular manufacturing innovations in 21st century.”
Lean or Six Sigma or Lean Six Sigma or what?
“Lean” can be understood in a many different ways. According to the panel, Lean is fundamentally about reducing waste—seeking to do only the processes that add value to the customer. It is about creating flow in a process where a customer has been defined. Importantly, it is not just a collection of tools and techniques, but a management philosophy. “Six Sigma”, on the other hand, is more project-driven and mainly concerned with driving variability out of production. Six Sigma is primarily a quality improvement program; originally, it was Motorola’s Total Quality Management (TQM) program. Six Sigma relies more on rigid statistical analyses and the relentless definition and follow-up of measures (cf. the DMAIC method). Lean is more complex than Six Sigma. Not because it is more technical and far-fetched (it is not), but because it reaches much broader and involves the whole organization.
So, is it useful to talk about Lean Six Sigma? In practice the term Lean Six Sigma (LSS) has been widely used since about 2003. There is a general consensus that Lean and Six Sigma are complements not competitors. Bozer exemplified with a story from an automobile company that used to have parallel programs, where the Six Sigma team reported to Head of Quality and the Lean team reported to Head of Production, only to realize that it did not work. Ward suggests that, at the core, both should be seen as “a problem solving view of the organization”.
If you need both Lean and Six Sigma, the two programmes must be integrated into one system. This argument fits well with my own research and observations in companies: The integration can successfully be done with a company-specific production system—an XPS. In my opinion, your company probably always needs Lean, but not necessarily Six Sigma.
Lean Six Sigma in future manufacturing
To hypothesize about the future importance of Lean Six Sigma, we first need to make clear if it has been successful in the past. It has! Numerous high-quality empirical papers—including several of the panel participants—establish that both Lean and Six Sigma have measurable positive benefits on performance. Bozer puts it this way: “Lean is a powerful system. So why not use it?” He claims that “if you have a process, and you have a customer for that process, then Lean applies“. Thus, only when something is produced for the sake of art, Lean has limited or no application.
Second, we need to evaluate whether the manufacturing paradigm will be the same as the one we have today or change radically. Bozer shows how the Lean Six Sigma we have today, is the result of hundred years of development: Lean comes from the Toyota Production System (TPS), which is based a lot on Ford’s mass production system, which again builds on Frederick Taylor, and so on and so on. Now we have been in the same manufacturing paradigm for a century. So, what will happen when we move to the next manufacturing paradigm—when we seriously start to apply the internet of things, 3D printing, holonic manufacturing, automation, and nano-technologies in manufacturing?
The panel agrees that: “Lean Six Sigma might take new forms, but it will not be abandoned.” A participant in the audience points out that “Lean was defined in the 20th century; probably it has to be somewhat redefined for the 21st century”. He suggest that the “value created” should be redefined from the financial measures we use today to sustainability at large. That’s a good suggestion!
Lean Six Sigma—worthy of future research?
Despite the enormous amount of research that has gone into studying improvement programs like Lean and Six Sigma, there is no sign of a declining interest. We know that implementation of Lean Six Sigma is troublesome for many companies, so there is still a need for a better understanding of when and where it applies. Lean Six Sigma is clearly worthy of more research, and the panel suggests a few routes it could take:
- Hopp takes another go at the TPS-abbreviation: “What does TPS stand for? It’s not necessarily the Toyota Production System; it is the Thinking Production System.” How Lean Six Sigma ultimately turn an organization into a learning organization is a promising field
- Bozer maintains that Toyota’s “Respect for people” is not well understood in practice.
- Ward suggests that Lean Six Sigma has its limitations in environments characterised by high levels of uncertainty and needs for flexibility. “Lean assumes that you know what the customer is willing to pay for, but that is not always the case”. Flexibility aspects of Lean should be further developed.
- Swink finds that we still do not fully understand the real underlying driving forces for change; leadership and motivation in Lean Six Sigma implementation.
The panel is clearly optimistic for the future of Lean Six Sigma—in terms of both practice and research. Are you too?