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Is Lean Six-Sigma better than ISO9001?
When ISO9001 was changed to ISO9001:2000 the focus changed from one of documentation to process definition, management and improvement. The latest reissue to ISO9001:2008 has done nothing to change this emphasis. Lean Six Sigma is a well recognised approach to improving business performance by using data driven methods and tools to improve or redesign business processes. So, are the two approaches competing, and if so, which is best?
What is ISO9001?
In a sentence, ISO9001 is a Quality Management System Standard. The standard can be used when an organisation needs either to demonstrate its ability to consistently provide products or services that meet customer requirements, or to enhance customer satisfaction. The word quality has many different meanings, from inherent goodness, to technical specification, but ISO9001 defines quality as the degree to which a set of inherent characteristics fulfils requirements. In simple terms, quality can be defined as how well the product or service meets customer requirements, or in other words:
QUALITY = CUSTOMER SATISFACTION
A management system is best considered as everything needed to achieve business objectives: processes, resources, structure and information, that's pretty well every aspect of the organisation. The ISO9001 standard contains a list of requirements, and can be considered as a "high jump", with the height of the bar being the qualifying level. Auditors will assess the organisation to make sure that the level is being achieved before granting a registration to the standard.
So to sum up, a Quality Management System Standard defines a level that needs to be achieved by the organisations processes, resources, structure and information to consistently achieve, and subsequently improve, customer satisfaction.
In the 1950's Dr W. Edwards Deming made popular a four stage cycle, Plan, Do, Check, Act, that defines the actions necessary to ensure good quality, and ongoing continuous improvement.
This cycle has been used as a key principle of quality management over the years, and is used within ISO9001. In organisation terms, Planning relates to setting direction and goals, providing resources and defining processes, Doing relates to operating the processes, Checking relates to evaluating performance and Acting relates to improvement.
Why Implement A Management System?
There is no doubt that implementation of a formal management system, and the registration that many companies seek to recognise that their systems have achieved a certain standard, can be a considerable investment in time and money, so why do so many organisations do it?
There are two main reasons why organisations implement formal systems: The first is that many customers demand that their suppliers are registered to a standard such as ISO9001, registration indicates that the supplier has achieved the minimum level required by the standard; the second reason is that implementing a formal system means that the organisation needs to examine every aspect of what it does, to try and improve things and this usually leads to better performance. Most companies that implement management systems report that it does lead to better performance in the long run.
What Is Lean Six Sigma?
All organisations operate processes that transform inputs into outputs. These processes are used to provided services or goods. Any process can be considered to have two dimensions of performance, how effective the process is in meeting its objectives (for example quality of output supplied, whether it is supplied when agreed), and efficiency (the resources consumed by the process, for example people, equipment, utilities).
Improving organisation performance involves either becoming more efficient, more effective, or both. Lean principles are to identify and eliminate waste in business processes to make them more efficient and Six Sigma principles are to develop processes that are more effective for both the business and the customer by identifying and controlling the factors that impact on process variability.
The combination of Lean and Six Sigma approaches has become known as Lean Six Sigma (LSS). Lean Six Sigma is a systematic approach to improving important business processes so that they operate efficiently and effectively to achieve customer satisfaction and the organisation's business goals.
Lean Six Sigma tackles improvements on a project-by-project basis, using the organisations own people working together using defined methodologies and tools to achieve success. The Lean Six Sigma approach has enabled companies both large and small to improve performance and profits dramatically by streamlining operations, improving sales, and eliminating defects in everything the organisation does.
Improvement projects are identified by understanding the goals for the organisation and the processes that will deliver those goals, then reviewing current performance against desired performance to determine the gaps. These gaps are the improvement opportunities. After prioritisation and selection, the projects are tackled in a structured way using the DMAIC (Define, Measure, Analyse, Improve, Control) methodology.
Why Use Lean Six Sigma?
The results achieved by organisations such as GE from Lean Six Sigma are quite phenomenal, with a claimed savings of $10Bn over a 10 year period. In 2000 Mikel Harry studied over 3,000 Six Sigma projects, working out that the average value per project was $175,000. Similar figures can be quoted for many Lean projects. SigmaPro studies have shown that the ROI for a LSS deployment is typically better than a 4:1 ROI in the first year.
Quality Digest did a survey of organisations that had implemented Lean Six Sigma, and asked respondents to comment on whether job satisfaction had been improved, only 22% did not think it had improved. In the same survey, 59% of respondents replied that customer satisfaction had improved as a result of the programme, only 14% stated that it had not. SigmaPro also carried out research in 2006 looking at whether or not programmes of improvement were judged to have been successful or not. 73% of respondents stated that there programmes had achieved some benefit for the organisation, whilst only 1.3% stated there had been no benefit.
So there are plenty of compelling reasons why organisations should use Lean Six Sigma to improve their performance.
So, which is best, Lean Six Sigma or ISO9001? The answer of course is that they are not the same thing and so cannot be directly compared. ISO9001 is a recognised International Standard that contains requirements for planning, carrying out, checking and improving the organisation. Lean Six Sigma is a structured, data driven approach to improving the organisation by identifying and tackling gaps between required and actual performance.
So, which is best, Lean Six Sigma or ISO9001? The answer of course is that they are not the same thing and so cannot be directly compared. ISO9001 is a recognised International Standard that contains requirements for planning, carrying out, checking and improving the organisation. Lean Six Sigma is a structured, data driven approach to improving the organisation by identifying and tackling gaps between required and actual performance.
ISO9001 contains requirements, but is not prescriptive about how these requirements should be addressed. Whilst there is a widely held belief that obtaining registration to ISO9001 is beneficial, there is no clear ROI. Lean Six Sigma contains methodology, milestones and tools that give a very clear approach to improvement. There are also defined roles within Lean Six Sigma, and even approaches to training these roles. Lean Six Sigma has many examples where a clear ROI can be seen.
There are many organisations that have used ISO9001 and also Lean Six Sigma, but no research on whether the combination of the two provides better ROI.
A model that explains how the two approaches may fit together within the Deming PDCA cycle is shown here.
In this model the Lean Six Sigma approach is shown providing the improvement required under ISO9001 (parts of checking and acting). ISO9001 provides the "What" and Lean Six Sigma provides the "How".
More work is required to show whether the combination of the two approaches actually does lead to better results than using each in isolation, but in relation to Dr W. Edwards Demings PDCA cycle, it can clearly be seen that they do fit together. In theory at least the two approaches are complementary, not competing.
If you want to find out more about Lean Six Sigma or ISO9001, please contact us on +44 1676 532470 for further details, or take a look at our web site www.sigmapro.co.uk
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Chris Rees - Director of Operation
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