Misinterpretations of Lean vs. Six Sigma

I had a conversation recently with a very smart and talented consultant.  He is a Lean Six Sigma consultant.  He knows the tools of lean and Six Sigma backwards and forwards.  The consultant also talked ab out the importance of having leadership buy-in from the top all the way to the bottom to be the most successful at both lean and Six Sigma. Overall, he was a very astute about both lean and Six Sigma.

During his presentation, there were two misinterpretations that stuck out to me.  I found them to be quite a difference in thinking.

1. Six Sigma is focused on the customer while lean is focused on elimination of waste.  I find this to be a significant difference in thinking.  Lean’s #1 tenant is to focus on the Customer first and foremost.  By focusing on the customer, an organization can learn what the customer finds of value.  What is not of value can be considered non-value added (waste) or non-value added but necessary (government regulations).  These should be eliminated or at least reduced.

Most people focus on the elimination of waste and miss why eliminating the waste is important.  It is because it is of no value to the customer which is the main focus.  Once the waste is eliminated it frees up resources allowing an organization to grow the business without having to invest in more resources.

Thanks to Mark Graban. This picture was borrowed from the Lean Blog.

2. Six Sigma focuses on making the product right while lean just focuses on making the product.  The consultant mentioned the 7 types of wastes.  One of the 7 types of wastes is directly solely at making the product right.  That is the waste of defects. Not to mention the concept of building in quality (jidoka).

As mentioned above, when a company focuses on the customer first it will recognize quality is very important.  This is why building in quality is one of the two pillars of the Toyota Production System.

After the presentation, the consultant and I had a very good discussion on these points.  I admitted to being raised in the Lean House.  I wasn’t arguing that Six Sigma was wrong or companies can’t benefit from it.  Just that I have a different perspective of lean on the points mentioned above.

Sign of a Problem

This weekend I went by one of our many local McDonald’s restaurants.  It has been newly renovated.  It looks really nice, but there was on thing that caught my eye.  The new drive-thru setup.  The ordering and pay/pickup windows are the same.  The change was in the parking spaces.  After the remodel McDonald’s added two parking spaces with reserved signs for people in the drive-thru.  I wish I was able to get a picture of the spots but my camera phone was not working.

The spaces are there because orders aren’t ready so they ask the customer to pull up and park.  They will bring the food out when it is ready.

So are the spaces a good idea? Or bad idea?

I think the spaces are a good idea if they are tracking how many people have to pull up and wait.  If they use it as a way to highlight a problem.  Cars in the parking spaces = problem.

This is equivalent to something we do in our manufacturing plants.  When there is a problem we divert the work to a penalty area to understand the problem and fix it.  This way it does not interfere with the flow of the work that does not have a problem.  But, we are gathering data and looking at and understanding process problems to resolve.

The other thought is to not have the parking spaces and to have the car sit and block the line until the problem is fixed.  This is a reasonable solution also, but I would use it in one of two circumstances.  1) The time to fix the problem is very short and wouldn’t hold up the line for very long or 2) if the restaurant does not use the parking spaces as a way to highlight the problems and work on fixing the process so zero cars have to pull over.

Even Toyota, when they stop the line only stop a portion of the line and not the entire line.  If it is a big problem, Toyota will still move the car offline to a visible area to work on resolving the process problem that created the situation.

We must understand our process well enough to understand which option for highlighting our problems might be best.

What are other ways to highlight problems?

Restaurant Focused On Customer Value

I came across a great story showing how a restaurant’s thinking is about the customer first leading to repeat customers and more profit.

Here is a link to the story.  I would recommend taking 2 minutes to watch the video of the story.  It is well worth it.

Passing along increased food prices just upsets customers.  I know I have quit going to a few restaurants because the same meal was now $2 more.  Multiple that by a family of four and over time that gets very expensive.

The hidden way a restaurant passes on increased cost is by keeping the price the same but giving the customer smaller portions.  Either way this is an example of Price = Profit Wanted + Cost.

This restaurant (Avenue’s Bistro) is trying not to pass on the increased food prices to its customers.  Instead they are trying to hold their prices steady with a unique strategy.  No.  The restaurant doesn’t buy lower quality food.  Instead, they look for high quality food that is less expensive and can still hit the menu price points their customers come to expect.

The manager talks about giving value to the customers.  Understanding the customers want quality dining experience for a good price.  The customer wants a good meal with generous portions at a reasonable price.  Changing the menu based on what food they can get within their cost range also gives the customer different options of food to try on a regular basis.  They seem to be focusing on the model of Profit = Price – Cost.

The restaurant may not be lean but there seems to be some lean like thinking going on and focusing on the customers is a great practice.

Have you seen any restaurants that seem to be using lean like thinking?

Bath Fitter Has Vertical Integration

The other night while watching TV I saw the commercial below for Bath Fitter.  Bath Fitter is a company that retro-fits new acrylic bathtubs, showers, and surrounds to give an updated look to your bathroom.  Can you pick out the things that caught my attention from a lean perspective?

I can’t speak to the quality of their product because I have never used them, but there two things that caught my attention.  The vertical integration of the supply chain and the lifetime guarantee.  The commercial is only 30 seconds that I checked out their website and it mentions the the vertical integration and lifetime guarantee also.

Bath Fitter has control of the product from raw material to installation.  This control allows them to better guarantee the quality by knowing exactly how it is made, not outsourcing it to someone that could take shortcuts to manufacture the product without Bath Fitter knowing.  Also, they control the measuring, installation, and customer facing representative.  By doing this, Bath Fitter would be able to get accurate and fast feedback about how the product is being used, quality issues, or the ease of installation.

This is very similar to Henry Ford controlling everything from the raw materials (mines for metals and saw mils for wood) to manufacturing to the first dealerships.  The tighter control over the supply chain allowed costs to be reduced AND quality improved.  Not just one or the other.

The lifetime guarantee Bath Fitter promises indicates the confidence in their quality of product and installation.  I know some companies (and Bath Fitters could be one, I don’t know) play games with the lifetime guarantee making it impossible to actually get a claim on the guarantee.  A reason they can make the guarantee and feel good about it is because they controlling the supply chain from start to finish.

What do you think?  Does Bath Fitter have some lean like qualities?