As companies transition to a remote workforce and make other operational changes in reaction to the coronavirus, Lean Six Sigma offers a fresh approach to how they do business. The process improvement methodology can help provide order and structure for business leaders and employees during a time of crisis.
The goal of Lean Six Sigma is to create value to the customer by eliminating defects and cutting waste. It also helps companies to look at challenges differently and offers ways to find solutions that are backed up by data.
Coronavirus (COVID-19) has emerged as an economic threat as well as a healthcare crisis. For companies looking to support employees and make operations as efficient as possible as they ride out this crisis and its aftermath, Lean Six Sigma may provide some answers.
Eliminate Errors
Many companies have been involved with risk management, which assesses potential outcomes and allows companies to avoid a crisis. But crisis management is something different. It involves what a company does to react when a crisis such as the coronavirus hits.
In a paper on Lean Six Sigma and crisis management, two Bulgarian researchers found that most companies “are not adequately prepared for a crisis.” They also noted that many companies must overcome “the blindness that overconfidence can create.”
To underscore that argument, they cited Steven Fink’s book, “Crisis Management: Planning for the Inevitable,” which stated that 89% of 500 CEOs surveyed felt a crisis was inevitable for their company, but 50% admitted their organization had not planned to meet that crisis. Yet, 97% of them felt confident they would handle the crisis.
Something like the coronavirus could change all of that. Schools are having to change from one system of delivering education to another. Restaurants that once made most of their profit on dine-in customers have had to change into a food delivery operation. Some grocery stores have had to embrace food pickup as well.
Lean and Six Sigma can help reduce the number of errors and the waste that impact a hastily put together new operation. For Six Sigma, the goal is to achieve just three errors per million opportunities. Most companies, however, operate at Three Sigma, which equates to a 93.3% quality or 66,807 defects per million opportunities.
A Focus on Adding Value
One of the advantages of Lean Six Sigma is that it eliminates the white noise and breaks down an operation to its key components. In Lean methodology, a primary goal is to eliminate everything from an operation that does not add value for the customer.
During a time of crisis like the COVID-19 outbreak, the needs of customers abruptly shift. This presents an unprecedented number of challenges to businesses. Company owners need to make changes to quickly address those needs. And now more than ever, businesses need to get the job done right the first time.
Lean and Six Sigma provide tools and techniques that allow companies to quickly assess where they are, and the changes needed to get them where they want to be.
The Eight Forms of Waste
One place to start with Lean is to look at its eight wastes. If these exist in businesses as they pivot to meet customer needs during a crisis, that is where efforts to make operations more efficient should focus.
- Motion: Just because people are busy, it doesn’t mean they are productive. Any steps taken that do not add value to the customer should be eliminated.
- Waiting: This is the time wasted while one person in a process waits for information, equipment, parts or people.
- Unused talent: This involves not maximizing the talents, creativity and knowledge of everyone at a company.
- Inventory: Having materials on hand that you do not need wastes space and money.
- Transportation: This involves the unnecessary movement of materials and information.
- Extra processing: This is anything in a process that does not add value for the customer.
- Defects: Mistakes in a product or a service that lessen the quality for customers.
- Overproduction: Making more of something – or making it faster – than what is needed.
Focusing on these eight areas can uncover a company’s wastes and help make current or new processes more impactful for customers.
How to Fail Fast
Once companies know the areas where wastes can be found, it’s time to use the right tools to find them. Lean and Six Sigma offer many useful tools and techniques to uncover waste. One of them is failure mode and effects analysis (FMEA). It essentially allows an organization to uncover points of weakness before even putting a plan into motion.
Designed by the military in the 1940s, this system has been perfected over the years. Organizations use FMEA to eliminate or reduce the chance of failure. Potential failures found through analysis of an operation are then addressed one by one, starting with the ones of highest priority.
The place to start is by asking the question, “What is the purpose of this operation” or “what do customers expect it to do?”, according to ASQ. A multi-disciplinary team walks through each step of the process, bringing different perspectives, talents and knowledge to assessing where failures are most likely to occur.
What is Value Added vs Non-Value Added?
To further ensure that an operation is adding value to customers, value stream mapping allows a team to plot out every process within an overall operation. This information is placed on a diagram so everyone can clearly see every step taken. It is then easier to identify what steps add value and what steps do not.
When an issue arises, the Five Whys can also help businesses quickly get to the root cause of a problem by asking a series of questions about why something is happening. It usually takes five questions to get past the surface issue and find the root cause.
Because speed is of the utmost importance in a crisis, using a Kaizen Event may also be helpful. This calls for a small interdisciplinary team to come together and focus exclusively on one area, identifying problems and quickly coming up with solutions.
For companies looking to move fast and make changes during a crisis, these Lean Six Sigma tools and techniques may help provide a stabilizing force and increase customer satisfaction.
