Two’s Company, Three’s a Crowd?

Surely it can never be possible that LEAN, 6σ and TOC can live together in harmony, in the same house, for the rest of their married lives? Is it right? What about the arguments and the conflict? Will the kids suffer?

Lets first of all recall where these different management philosophies were born and then explore what makes them unique and maybe just what bonds them together.

Norman Bodek first published in English, the work of Taichii Ohno and Shigeo Shingo at the Toyota Motor Company during the period 1949 to 1975. Several publications later, including ‘The Toyota Production System – An Integrated Approach to Just-In-Time’ (Yasuhiro Monden - first published in English in 1983), and the world of manufacturing and business experts from every continent were striving to understand and apply the principals developed by the Japanese engineers. And how many cycles did we go through on this learning curve? Total Quality, Zero Defects, The Cost of Quality, Quality Circles, World Class Manufacturing, SMEDS, TPM to name but a few. Corporations and businesses slavishly tried to apply the principals with varying degrees of failure, not realising that there is no recipe for instant success and that each business is as individual as the people that work in it.

With the publication of James Womack’s book ‘The Machine that Changed the World’ – 1990, the phrase LEAN Manufacturing was coined. At the same time in Motorola in the USA, engineers were working on principals of SPC (Statistical Process Control) to reduce defects in their manufacturing processes and they developed what emerged as a way of doing business called Six Sigma. To complete the trio Dr Eli Goldratt published his novel ‘The Goal’ in 1984 with a subsequent explanation of TOC (Theory of Constraints) in his book in 1990.

So I can hear you say ‘just what is the difference between them?’

Lean is about the reduction of waste. There are seven by the way:

• Defects
• Stock
• Movement
• Process
• Waiting
• Transportation
• Overproduction

But it is a lot more than that. It centres on the principal understanding of ‘just what value is the customer paying for?’ Anything that does not add value to the product should be reduced to a minimum. It also looks at the whole supply chain including suppliers and customer. Very much the JIT principles laid out in the Toyota Production System.

Six Sigma is about the reduction in variability of the process. By using statistical tools and techniques, the target is to reduce defects to 3.4 in every million produced. But again it is a lot more than that. It is customer centric and is process and data driven such that the whole process or product becomes standardised and repeatable.

Theory of Constraints recognises that within any corporation, company, department or cell there is a bottleneck, or constraint, that is preventing that body from performing at a higher level. So the key is to recognise where the constraint is and to exploit it, subordinate all other operations to it, elevate it until it is no longer the thing that is holding the business back. Then go and find the next thing that is now the new constraint and start all over again.

Now LEAN and Six Sigma have lived in the same house quite comfortably for a while. They compliment each other and live very much in harmony. Both are focused on customer satisfaction. While LEAN will take out unwanted stock, reduce waiting time, increase throughput or reduce lead times, Six Sigma can in parallel be making the operation more reliable and repeatable and reducing defects and waste. The problem comes with the fact that every business is different and every business is a complicated and sometimes it’s very difficult to see the woods for the trees. Management and staff can be skilled in applying the right principals but is it having the right effect on the business? This is where TOC join them in the same house and compliment their talents and strengths. By determining the bottleneck in the system then Lean and Six Sigma will exploit it until it is no longer the problem.

As with all techniques, the way they are applied in any particular business will depend on the business itself as each is unique. Just as we all know that we have to deal with different people in different ways to get the best out of them, it’s the same with businesses. These different techniques have to be applied at the right time in the right place to avoid the pain of having to go back and do that again.

So is three a crowd? Certainly not, they can all live happily ever after. Until the next new technique hits our screens, that is! Then we may have to visit the divorce court.