Lean and Six Sigma fundamentals and concepts
Lean and Six Sigma share a goal - processes that reliably deliver what the customer values - but attack different failure modes. Lean removes non-value-adding activity; Six Sigma reduces variation and defects using data. The exam tests your grip on the vocabulary (value, waste, CTQ, DPMO, sigma level), the origins, and your ability to tell which lens a scenario needs.
Lean: speed through waste removal
- Value is defined by the customer, in the customer's terms, at the moment of use.
- The seven classic wastes (TIMWOOD) are Transport, Inventory, Motion, Waiting, Overproduction, Overprocessing and Defects; many texts add an eighth, unused skills.
- Value, the value stream, flow, pull and perfection are the five Lean principles popularised by Womack and Jones; value stream mapping is the main diagnostic tool.
- The Toyota Production System supplies jidoka (stop and fix), andon, kanban and takt time as operating mechanics.
Six Sigma: consistency through variation reduction
- Six Sigma emerged at Motorola in the 1980s (Bill Smith, backed by Bob Galvin) and was scaled at General Electric.
- A six sigma process produces 3.4 defects per million opportunities, a figure that already includes the customary 1.5-sigma long-term shift.
- Core logic: Y = f(x) - the output Y is a function of process inputs x, so controlling the critical x's controls the result.
- CTQ (critical-to-quality) characteristics translate customer needs into measurable process outputs.
Worked example
A billing process handles 2,000 invoices and 10 contain errors. With one opportunity per invoice, DPMO = 10 ÷ 2,000 × 1,000,000 = 5,000, a yield of 99.5%, roughly a 4.1-sigma process. Reasoning: the opportunity count must be stated before you compute. If each invoice had three independently checkable fields, opportunities would be 6,000 and DPMO would fall to about 1,667 - same defects, different sigma claim.
Traps that cost marks
- Treating "defect" and "defective unit" as synonyms; one unit can carry several defects.
- Quoting 3.4 DPMO without the 1.5-sigma shift caveat, or assuming Six Sigma means inspection.
- Assuming Lean equals headcount reduction; its aim is flow.
- Labelling any improvement "Six Sigma" when no measured baseline exists.