Category Archives: Lean Six Sigma

Systems Thinking and Ships in Shanghai

shanghai-shipQuality experts and practitioners alike know that a solution should be designed for a particular context of use. The complete environment of the problem should be considered, and political, economic, social and technical ramifications should be examined before investing in a costly project.

This wasn’t the case for the $260 million construction of a cruise terminal in Shanghai along the Huangpu River which was recently opened. The building is ultra-modern, environmentally friendly and a model for sustainable development. But to get to the terminal, ships have to sail underneath the Yangpu Bridge, which has such low clearance that a third of the world’s ships can’t fit (and the trip is risky for many of the others, who have to wait until low tide to navigate it).

An architect or designer should have recognized that for the terminal to achieve “fitness for use” as defined by Juran, the traffic pattern to bring ships to the building would play an important role. The situation is a little more striking when you consider the question of siting airports – how useful would it be to build an airport in the center of a metropolis where airplanes couldn’t find a clear path to the runway? Building the terminal without consideration for traffic patterns was wasteful: the city will miss opportunities to serve many customers, blocking out the possibility to drive passenger revenue to the city, extra time will be needed for captains to successfully steer their ships in, and extra fuel will be expended in the process. (Not to mention that the only solution now would be to raise the bridge, which would cost several tens of millions more.)

These types of problems are not limited to examples in transportation. I remember several years ago I went to a meeting where a group of highly skilled, senior engineers were discussing how to deploy a sensitive piece of research equipment they’d been working on for years. It had been a long, hard road, and they were finally ready to see the fruits of their labor in use. A concrete monument had been poured to keep the instrument level, and they were discussing in excruciating detail how to get the instrument onto the pad.

“Hold on,” somebody asked. “How many pounds can that monument hold?”

Another engineer quickly replied. “We used some really high-grade concrete. It can hold up to ten thousand pounds.”

“Yeah, but our instrument is almost twice that weight!”

Ten scientists and engineers looked around the room, pensively. Some wrinkled their brows and others started furiously scribbling notes on paper, but no one said a word. After a few uncomfortable minutes, the leader of the meeting said “Well, we’ve come to the end of the hour. Let’s talk about that next time.”

I don’t think the instrument ever got deployed. Remember: think about the whole system! Quality depends on fitness for use in a particular context.

Lim, L. (2008). Some Ships Can’t Reach Shanghai’s New Terminal. NPR News, November 3.

Lean Thinking: The Many Flavors of Waste

The seven types of waste are a foundational concept in lean manufacturing, all forms of muda as described by Taichi Ohno of Toyota. Reducing waste systematically can help you achieve flow in your processes. Waste can result from:

  • Overproduction – making too much of something that goes unused, spoils, or collects dust.
  • Inventory – keeping too much of something that goes unused, and costs time or money to store.
  • Extra Processing – wasting time or effort on steps that are unnecessary.
  • Motion – exerting energy to do something that doesn’t create value.
  • Defects – products or processes that don’t conform to their specifications.
  • Waiting – time spent being unproductive could be used in other ways to create value.
  • Transportation – moving things over long distances costs time, effort and money.

In addition to muda, mura (unevenness in production) and muri (overburdening of people and equipment) are also recognized as characteristics of a process that impede flow. Overburdening either people or machines can lead to burnout, which can result in a high repair or replacement cost!

Pydzek, T. (2003). The Six Sigma Handbook: The Complete Guide for Greenbelts, Blackbelts, and Managers at All Levels, Revised and Expanded Edition.

Polls, Margins of Error, and Six Sigma Data-Driven Decision Making

One of the most critical skills that a technology manager can have – or any manager, really – is the ability to interpret data and assess whether or not it reflects reality. Why is this important? Because good managers base their decisions at least in part on data, so the quality of the decision is often related to the quality of the data on which the decision is based. (One of the tenets of Six Sigma, for example, is “data-driven decision making”.)

So what if you were basing a decision on the quality of the election polls currently being conducted? Six Sigma experts and practitioners, take note: today’s election polls offer up a really effective lesson on threats to validity which, if human subjects are ever a part of your quality improvement efforts, you need to be aware of these sorts of issues:

[Poll results and margins of error work] pretty well if you’re interested in hypothetical colored balls in hypothetical giant urns, or survival rates of plants in a controlled experiment, or defects in a batch of factory products. It may even work well if you’re interested in blind cola taste tests. But what if the thing you are studying doesn’t quite fit the balls & urns template?

  • What if 40% of the balls have personally chosen to live in an urn that you legally can’t stick your hand into?
  • What if 50% of the balls who live in the legal urn explicitly refuse to let you select them?
  • What if the balls inside the urn are constantly interacting and talking and arguing with each other, and can decide to change their color on a whim?
  • What if you have to rely on the balls to report their own color, and some unknown number are probably lying to you?
  • What if you’ve been hired to count balls by a company who has endorsed blue as their favorite color?
  • What if you have outsourced the urn-ball counting to part-time temp balls, most of whom happen to be blue?
  • What if the balls inside the urn are listening to you counting out there, and it affects whether they want to be counted, and/or which color they want to be?

If one or more of the above statements are true, then the formula for margin of error simplifies to:

Margin of Error = Who the hell knows?

Because, in this case, so-called scientific “sampling error” is completely meaningless, because it is utterly overwhelmed by unmeasurable non-sampling error. Under these circumstances “margin of error” is a fantasy, a numeric fiction masquerading as a pseudo-scientific fact.

Read the whole article at It’s a winner. (And thanks, Mary Pat, for posting this on Facebook.)

DMAIC Demystified

The DMAIC (Define-Measure-Analyze-Improve-Control) methodology is one of the cornerstones of a Six Sigma project. It provides a useful heuristic that can remind you how to structure your project when you apply Six Sigma. This is important for two reasons. First, by reminding you to DEFINE your project’s goals, its deliverables to external customers, its deliverables to internal customers, and most important – your definition of a defect – you establish the solid foundation for actually delivering process improvements that meet tangible goals. Second, DMAIC provides a common language for Six Sigma practitioners so that new teams can spend time solving problems instead of searching for their own standard operating procedures.

If you’re familiar with Deming’s PDCA (Plan-Do-Check-Act) cycle, DMAIC is essentially equivalent, but with a very important addition at the end:

  • Planning = Defining
  • Doing = Measuring
  • Checking = Analyzing
  • Acting = Improving
  • (Sustaining/Continually Learning) = Controlling

There’s nothing magical about DMAIC – it’s just a helpful reminder to guide you as you structure a Six Sigma project. And remember that a Six Sigma project is hopefully not the end of the improvement – ideally, a process team will leave behind a new foundation for identifying more efficiencies in the future.

Being Frugal vs. Being Lean

The October 20, 2008 issue of Business Week features an article on page 55 called “The New Age of Frugality”. The article, about “confronting the debt culture” in the U.S., describes a handful of real-life stories from people who recently overextended themselves, and were forced to learn some hard lessons about finding the natural limits of their spending capabilities.

As individuals and families find it necessary to become more frugal, it is reasonable to think that companies might also `find themselves in this situation. But what does it really mean to be frugal? According to the Random House Unabridged Dictionary, “frugal” means:
1. economical in use or expenditure; prudently saving or sparing; not wasteful: a frugal manager.
2. entailing little expense; requiring few resources; meager; scanty: a frugal meal.

So to be frugal, you must be economical; you must be cautious with your expenditures, save for a rainy day, try to get the most out of limited resources, and don’t waste. This last part reminded me of the lean philosophy – but does lean also embrace judicious investing?

What is lean? The five principles of lean, from Womack & Jones (1996), are understanding value, understanding your value streams (that is, how the value is generated), embracing the concept of flow, employing “pull” within processes, and committing to continuous improvement. By understanding value generation, we can refine a process so that every action is productive. By employing pull, we ensure that we use resources only when they are needed, and thus don’t waste. By committing to continuously improve, we agree to consciously approach each element of the process, and reflect on value and flow often to find new opportunities to improve. In other words, once we’re done improving a process, we don’t stop thinking about it and learning from it. And in learning from it, we can make it even better.

How can you confront your own attitude towards debt and spending using lean principles?

  • Understand what purchases or investments will REALLY help you add value
  • Understand how that value is generated (by you or your financial institution)
  • “Pull” from your checking accounts, savings accounts and investments just-in-time, and only when it directly contributes to adding more value
  • Commit to reflecting on your expenditures regularly, and evaluate how much value you have been able to create from what you’ve spent

These principles can also be applied in your work environment. Value is sometimes reflected in metrics like Return on Investment (ROI), but not always. For example, are you creating value in the form of goodwill? This counts. Lean principles can help you be more frugal, but being frugal will not make you lean – spending less does not necessarily mean that you are generating value more effectively.

Womack, J. & Jones, D.T. (1996). Lean thinking. New York: Simon & Schuster.

When Lean and Six Sigma Don’t Work

Someone on LinkedIn recently asked “Are there examples of processes where the concept of Lean, the philosophy of Six Sigma, or other quality tools don’t work?

Fortunately, there have been plenty of researchers who have asked this question already. A persistent in theme in the management and quality management academic literature over the past several years has been to study the conditions under which quality practices “work”. To me, “working” means that the return on investment (ROI) has been worthwhile – doing the project yielded more benefits than not doing the project.

For all the bottom-line success stories from TQM implementations in the 1980’s and early 1990’s, and Six Sigma from the 1990’s until now, there are lots of “failed projects” that didn’t deliver on their promises.

My favorite overview is a meta-analysis from Benner & Tushman (2003) in the Academy of Management Review. Summarizing several other research studies, they found that “in stable, technologically certain settings [quality management] practices may be productive, [but] in uncertain or technically complex contexts these practices may be quite counterproductive.” The more rapidly the competitive environment is changing, the less likely quality management or process improvement will “work”.

  • Slowly changing competitive environment = Better success with quality initiatives
  • Rapidly changing competitive environment = Less success with quality initiatives

Granted, this isn’t a complete conclusion, because the skill and style of the process improvement team can impact its potential for success. But it does suggest that a company should consider the competitive environment as it sets its own expectations for what a process management initiative can deliver.

Benner, M.J. & Tushman, M.L. (2003). Exploitation, exploration, and process management: the productivity dilemma revisited. Academy of Management Review, 28(2), 238-256.

What is Green Six Sigma?

Green Six Sigma, also called “Green Sigma” by IBM, refers to a Six Sigma or Lean Six Sigma (LSS) project in which the tangible benefits are also environmentally conscious – such as reducing landfill waste, reducing energy requirements, reducing variation in energy usage, and systematically conserving energy or other natural resources (e.g. water). In addition to the environmental benefits, there are also often cost reductions – trash service can be expensive, especially if the refuse needs to be hauled or special pick-ups must be arranged.

Although the term may be new, the practice is not! One of the pillars of the Toyota Production System, which developed in the early days after World War II, was its aggressive attitude towards waste – Toyota was the first company to achieve zero landfill waste in all of its operations. The tools and techniques of Green Six Sigma are identical to those used in any other LSS project.

In its 18 August 2008 press release “A Measured Approach to Going Green“, IBM describes the “Green Sigma” consulting offering. It’s nice that the company is calling attention to the fact that established methodologies can be used to promote sustainability, but don’t be confused – it’s not a novel approach.

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