There are many different types of waste in manufacturing – waste that can cost the economy many billions of dollars per year. For example, a 2022 McKinsey report on food loss (food wasted during harvest and processing) estimated a global cost of $600 billion per year for growers and manufacturers. Unplanned downtime due to breakdowns of production equipment is another type of waste, and a 2023 analysis of the cost of downtime by Siemens (p. 2) estimates that this wasted time costs Fortune Global 500 companies 11% of their annual turnover.
Management experts have tried to solve the problem of waste in manufacturing for generations. Today, many organizations have adopted Lean Six Sigma, a popular managerial methodology that helps improve processes, reduce waste, and ensure the quality of products.
In this article, you'll gain clear definitions of Lean and Six Sigma, a deeper understanding of the principles of Lean Six Sigma, and details on the Lean Six Sigma certifications available to practitioners.
What Is Lean Six Sigma?
First, let’s define Lean Six Sigma. As mentioned above, Lean Six Sigma is a management methodology that aims to streamline operations, boost efficiency, and drive continuous improvement. While it has its roots in manufacturing, Lean Six Sigma has also been adopted by other industry sectors including finance and technology.
Lean Six Sigma originates from two separate methodologies, Lean and Six Sigma. Both these methodologies have their own rich histories.
Lean: Low-Waste, Efficient Production
Lean principles have their roots in the automotive manufacturing sector. According to an article by the Lean Enterprise Institute, Lean principles emerged from the Toyota Production System (TPS), which was developed in Japan after WWII.
Taiichi Ohno, a production expert and Executive Vice President at Toyota, is considered the father of TPS. According to his entry in the Encyclopedia Britannica, Ohno developed a production system he called “just-in-time” manufacturing. The Toyota Europe website describes the just-in-time approach as “making only what is needed, when it is needed, and in the quantity needed, at every stage of production.”
When the TPS began to be studied and implemented in the United States, it evolved into Lean manufacturing. “Lean” was coined by then-MIT researcher John Krafcik, and defined in the 1996 book Lean Thinking by the researchers James Womack and Daniel Jones. In the introduction to their book, Womack and Jones describe Lean as a methodology which “provides a way to specify value, line up value-creating actions in the best sequence, conduct these activities without interruption whenever someone requests them, and perform them more and more effectively.” (p. 6) Lean principles have since moved beyond industrial production to construction, technology, and other industries.
Six Sigma: Rigorous Quality Control
According to an article by Six Sigma education provider Six Sigma Online, Six Sigma is a data-driven method developed by engineers at Motorola in the 1980s to reduce defects in manufacturing processes. The term “Six Sigma” refers to a process that produces “no more than 3.4 defects per million opportunities, which equates to six standard deviations (sigma) between the process mean and the nearest specification limit.”
Six Sigma spread to other businesses, achieving mainstream popularity when Jack Welch, then-CEO of General Electric, embraced it as a key part of GE's business strategy in the 1990s. In 2011, it was formally standardized by the International Standards Organization.
Bringing Lean and Six Sigma Together
In the early 2000s, organizations realized that combining Lean’s focus on waste reduction with Six Sigma’s focus on process improvement through data-driven techniques could create a powerful, complementary approach to process optimization. Lean Six Sigma was born as a hybrid methodology focused on both eliminating waste (Lean) and reducing defects and variation (Six Sigma). Or, as Momal put it in his webinar on Monte Carlo Simulation, “when we're talking Six Sigma, we mainly talk about quality, and when we're talking lean, we mainly talk about speed.”
What Are the Main Principles of Lean Six Sigma?
The methodology of Lean Six Sigma revolves around key principles drawn from both foundations. These principles guide how businesses can identify problems, find solutions, and sustain improvements. In an extract from the book Lean Six Sigma for Leaders published on the Chartered Quality Institute’s website, authors Martin Brenig-Jones and Jo Dowdall list these principles:
Focus on the Customer
Lean Six Sigma begins with ensuring that the organization understands the customer’s needs and expectations, then aligns processes to meet those requirements. This means eliminating activities that do not directly contribute to customer satisfaction.
Identify and Understand the Process
Before improving any process, it's essential to understand how it works. Lean Six Sigma uses tools like process mapping to visualize workflows and identify bottlenecks or unnecessary steps. The aim is to achieve a smooth, consistent process that maximizes efficiency.
“Manage by Fact” to Reduce Variation and Defects
Six Sigma emphasizes reducing variation within processes, ensuring that outcomes are consistent and predictable. This principle is based on data analysis and statistical tools that help identify the root causes of defects or inefficiencies. By reducing variation, companies can deliver products or services that meet quality standards with minimal defects.
Eliminate Waste
Lean principles focus on identifying and eliminating different types of waste within a process. Waste can be anything that doesn’t add value to the final product, such as excess inventory, waiting time, unnecessary movement, or overproduction. The goal is to streamline processes, minimize resource usage, and increase value-added activities.
There are seven types of waste Lean aims to eliminate. These were originally identified during the development of the TPS. Toyota describes them in a 2013 article about the TPS as:
- Overproduction
- Waiting
- Transportation
- Over-processing
- Excess inventory
- Motion
- Defects
Empower Teams and Foster Collaboration
Lean Six Sigma emphasizes teamwork and empowering employees to contribute to process improvements. Employees are trained in Lean Six Sigma tools, creating a culture of continuous improvement.
Continuous Improvement (Kaizen)
Both Lean and Six Sigma emphasize kaizen, a Japanese term meaning “continuous improvement.” The Kaizen Institute explains that this principle also originated from the TPS. Kaizen involves regularly assessing processes to make incremental improvements.
Data-Driven Decision Making
One of the core elements of Six Sigma is its reliance on data to make decisions. Lean Six Sigma practitioners use data to understand the current state of processes, measure performance, and determine whether improvements have been successful.
Lean Six Sigma Certifications
Practitioners can pursue certifications in Lean Six Sigma to demonstrate their ability to apply the principles to projects and processes. These certifications are described as “belts,” and follow a color system similar to that found in many East Asian martial arts. An article from the consultancy Process Management International lists the belt certifications from newest practitioner to most experienced starting with the white belt to the final master Six Sigma black belt:
- White belt
- Yellow belt
- Green belt
- Black belt
- Master black belt
Next Steps: Using Monte Carlo Simulation to Inform Lean Six Sigma Implementation
Now that you’ve explored the fundamentals of Lean Six Sigma, you’re ready to discover how powerful risk analysis tools like @RISK can further enhance project outcomes.
Check out the next article, Using @RISK to Support Lean Six Sigma for Project Success, where we’ll showcase real-world examples from François Momal’s webinar series, demonstrating how organizations apply Monte Carlo simulation in @RISK to successfully implement Lean Six Sigma.
Ready to get started now? Request a demo of @RISK.