Why lean six sigma is poised for a comeback in 2023

PEX Network explores why lean six sigma could be the answer to 2023’s biggest business challenge including inflation, supply chain disruption and worker shortages, and uncovers why lean six sigma continues to be a top continuous improvement methodology.

Why do businesses continue to use lean six sigma

Born on the factory floors of Toyota and Motorola, companies have relied on lean six sigma (LSS) to increase efficiency, quality and customer experience for decades. Given the complex economic and workforce-related challenges organizations are now facing, the potential of lean six sigma to help solve these problems cannot be ignored.

Despite lean six sigma’s long track record of delivering transformational results, in recent years, the strategy has been overlooked. Sometimes conflated with more austere strategies such as “just in time manufacturing”, in recent years lean six sigma has fallen out of fashion, or at least seemed to. 

In reality, lean six sigma remains a powerful tool for continuous improvement especially when combined with other enabling solutions such as agile, advanced analytics and artificial intelligence. The following is an examination of some of the ways organizations can reimagine lean six sigma to confront new and emerging challenges. 

Drive growth and sustainability with green lean six sigma

Mounting environmental and societal crises have increased public scrutiny on the impact companies have on the planet and its inhabitants. In response, governments have begun passing new, bold legislation to hold companies accountable for their environmental, social and governance (ESG) practices, or lack thereof. 

In order to prepare to fulfill the requirements outlined by new regulations such as the EU’s Corporate Sustainability Reporting Directive and meet the demands of an increasingly ESG-aware public, organizations are looking toward lean six sigma as one possible solution.

By eliminating waste, conserving resources and improving operational efficiency, lean six sigma can, on its own, organically deliver ESG-related benefits. For example, in addition to the typical increases in efficiency and quality, 3M’s 2001 corporate-wide lean six sigma initiative also generated “direct reductions in energy use, air emissions, waste reduction, greenhouse gas emissions, and other environmental impacts”. 

Another example is Rockwell Automation. After leveraging lean six sigma to re-engineer one of its facility’s cooling systems, the company was able to reduce energy costs by US$300,000 per year. 

In recent years, a new concept has emerged: green lean six sigma (GLSS). Like its predecessor, GLSS leverages traditional continuous improvement methodologies, such as statistical analysis and kaizen, to reduce process variations and waste. The difference is that, instead of focusing on eliminating non-value add activities, GLSS seeks to minimize unnecessary usage of water, energy and natural resources. 

A comparatively new methodology, the green lean six sigma methodology has yet to be fully defined, much less proven. Preliminary studies, however, indicate that it has the potential to be a highly effective tool for driving ESG objectives. 

Strengthen supply chains with lean six sigma

Supply chain disruptions increased by 32 percent year-over-year (YoY) in 2022, according to risk analysis firm Resilinc. Though supply chain disruptions appear to be on the decline, it is unlikely that supply chains will normalize to pre-2020 levels in 2023. 

“Global tensions have made a significant impact on the supply chain,” Les Cyfko, Director M&W, Operations, Engineering and Continuous Improvement at PepsiCo, recently explained in an interview with IX Network. 

He went on to say, “Lean Six Sigma, by virtue of simple tools like process mapping, identifying pain points and non-value added activities can help you know what potential solutions are ideal at any given time or in any given situation”.

Though organizations may be moving away from extreme, “‘just-in-time” supply chain strategies, lean six sigma’s DMAIC (define, measure, analyze, implement, and control) problem-solving framework will continue to be an effective enabler of supply chain agility, visibility and automation. 

Embattled healthcare systems will embrace LSS to solve complex challenges

The Covid-19 pandemic exacerbated many of the healthcare industry’s most pervasive, long-term challenges including staffing shortages, budget cuts and the rising cost of medical treatment. In some countries, these issues have become so severe they are fueling a series of full-blown public health crises.  

When properly implemented, lean six sigma has the potential to optimize workflows and improve the quality of patient care. Yale New Haven’s six sigma efforts, for example, resulted in a 75 percent reduction in bloodstream infections and an estimated $1.2 million in annual savings. Another, more recent lean six sigma project in India generated annual cost savings of INR3.4 million ($41,700) and increased patient satisfaction to 91 percent. 

Lean six sigma can also be used to increase workplace safety and decrease the administrative burden placed on clinical workers. With the help of lean six sigma, Children’s Health Ireland was able to reduce the number of staff members exposed to Covid-19 patients from 13 to one. 

Given that burn-out and fear of getting sick are two of the main factors driving healthcare professionals to other careers, any successful lean six sigma project going forward will prioritize the employee experience or likely fall flat. 

Winning the race to industry 4.0 will require lean six sigma

Manufacturers looking to increase operational resilience and profit margins are embracing a new suite of technologies collectively known as industry 4.0. These solutions include IoT, robotics, 3D printing and artificial intelligence (AI).

Though industry 4.0 technologies have the potential to deliver substantial results in terms of quality, efficiency and sustainability, only a minority of companies successfully implement them. In fact, according to McKinsey, 75 percent of companies fail to progress their industry 4.0 projects beyond the pilot stage. 

As these technologies require steady streams of accurate, structured data and tightly controlled, standardized processes to function, lean six sigma can play an important role in setting the stage for successful industry 4.0 deployment. In addition, the goals of lean six sigma and industry 4.0 are intertwined. Industry 4.0 can even be thought of as an extension of lean six sigma. 

It should be noted that, similar to green lean six sigma, researchers have only just begun to formally study how lean six sigma can augment industry 4.0. The industry still has a long way to go when it comes to developing evidence-driven frameworks and best practices for integrating these two business philosophies. 

With that in mind, if your organization is currently leveraging lean six sigma to enable industry 4.0, please contact us and let us know. We would love to learn more about your journey. 

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