Implementing Lean Six Sigma throughout the Supply Chain 3.pdf

Chapter 2 Lean Six Sigma Overview Lean and Six Sigma (6σ) are powerful philosophies backed by several tools for improving quality, productiv- ity, profitability, and market competitiveness for any cor- poration. Lean philosophies focus on eliminating waste and improving flow using various proven methods ini- tially pioneered by the Toyota Manufacturing Company under the banner of the Toyota Production System (TPS). Six Sigma is focused on reducing process variation using problem-solving and statistical tools. It was first perfected by the Motorola Company and most notably deployed by Jack Welch during his tenure as CEO of General Electric (GE). Both methods, when used independently, can pro- duce positive results for the user, but when applied in a holistic manner, they complement each other well and provide more dramatic gains. Again, Lean emphasizes the elimination of waste and creation of flow within an enterprise. Lean’s primary focus is on the customer, to address value-added (VA) and non-value-added (NVA) tasks. Value-added tasks are the only operations for which the customer is ready or willing to pay. Typically, these are processes that transform the 5 6  ◾  Implementing Lean Six Sigma Throughout the Supply Chain product or service based on customer requirements. The idea of creating flow in Lean is to deliver products and services just in time (JIT), in the right amounts, and at the right quality levels at the right place. This necessitates that products and services be produced and delivered only when a pull is exerted by the customer through a signal in the form of a purchase. A well-designed Lean system allows for an immediate and effective response to fluctuat- ing cus