Reduction of waste through Lean Six Sigma leads to lower costs and higher productivity.
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Lean Six Sigma achieves two important outcomes: enhanced productivity and lower costs. To make processes faster and more efficient, reduction of waste becomes necessary. Lean methodology concentrates on the reduction of waste with the aim of lowering costs of production while improving the end value for customers.
Below are explained the seven areas of waste under Lean:
- Transport: Waste in moving products from one place another when it is not required to perform the processing
- Inventory: Waste of inventory when it is overstocked and is perishable
- Motion: Unnecessary movement of human resources and equipment when it can be eliminated to perform a process
- Waiting: Waste of time, human resources and equipment while employees wait for the next instruction or face obstacles to fulfill duties
- Overproduction: Production ahead of demand
- Over Processing: When unnecessary processing is leading to more than necessary use of resources
- Defects: Recurrent errors and their correction lead to waste of resources
The seven areas of waste include both human resources and processes. It helps to identify waste and encourages the employees to perform tasks using the quickest and the most effective method of operation. Such an approach towards tasks results in higher efficiency just by the removal of waste. The removal of waste automatically leads to the lowering of costs that were earlier being used to carry out unnecessary actions.
Difference between Lean and Six Sigma
Lean concerns itself with the reduction of waste with the end result of lowering costs of production while improving the end value of a product/service for the customer.
Six Sigma aims to reduce the variability of processes and improve the efficiency of processes, which leads to the lowering of the cost of production.
Lean and Six Sigma in tandem eliminates variability by identifying and removing the causes of waste. It uses the DMAIC methodology to achieve process improvement and elimination of waste. The aim of Lean Six Sigma is to lower costs by removing defects in processes and enhancing the quality of the end product/service.
The 5S Principles
5S is a Japanese term used for the five practices in Lean Six Sigma that lead to the creation of a well-managed workspace. The five S’ are:
Seiri – It means to separate the tools required from the unrequired materials.
Seiton – It means to arrange and organize the tools.
Seiso – It means to carry out the cleaning of the work area.
Seiketsu – It means to conduct the above three frequently, sometimes every day, to maintain the managed workspace.
Shitsuke – It means to create the habit of following the above four for the maintaining order and efficiency of the workplace.
Using the various Lean Six Sigma methodologies, including the 5S, waste elimination methodology of Lean, DMAIC, and more, organizations can substantially lower their costs of production while enhancing quality and increasing production.
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