A quick overview
Every morning a Gazelle wakes up in Africa. It knows it must run faster than the lion or it will be eaten. Every morning a lion wakes up. It knows it must outrun the gazelle or it will starve. It doesn't matter whether you are a lion or a gazelle, when the sun comes up, you had better be running. Globalization, more competition, increasing customer demands, whatever the challenges faced the need to improve has never been greater.
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).
Effectiveness
An effective process will satisfy the customer of the process. Customers will judge the quality or adherence to requirements of the product or service, and whether it was delivered in the agreed time.
Efficiency
All processes consume resources. The resources consumed will vary depending on the process involved. Resources consumed include people, equipment, utilities and space.
Most resources cost money. An efficient process will consume the minimum amount of resources required to transform inputs to outputs and therefore be cost efficient. An efficient process can also be said to have no waste.
Improving organisation performance involves either becoming more efficient, becoming more effective, or both. The Lean approach has developed from the Toyota production system, and its principles are to identify and eliminate waste in business processes to make them more efficient. Six Sigma has been made famous by Motorola and GE, and the 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. Although the two have different objectives, in reality there is a significant overlap as when a process is made more effective, often the efficiency improves, and when waste in a process is reduced, invariably the process becomes more effective.
The third possibility to improve organisation performance is to develop new products or processes. These three components (become more efficient, becoming more effective, developing new products and processes) can be considered as the three dimensions of improving the organisation.
The combination of Lean and Six Sigma approaches to tackle these improvement areas has become known as Lean Six Sigma. Lean Six Sigma has become a systematic approach to identifying and improving important business processes so that they operate efficiently and effectively to achieve customer satisfaction and the organisation's business goals, and developing new products and processes that operate right first time
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.