Benefits of Six Sigma and Lean

Obviously, you can see that benefit of both of these, Six Sigma and Lean is to make the customer happy.

  • Six Sigma generates sustained success. Anything which you have improved in the process is going to give you a repeated benefit. For example, if you reduce the defect rate today, over a number of years this improvement will keep on giving you the benefit.
  • In Six Sigma the projects are selected based on customer focus and profit. Whatever improvement you make the ultimate benefit of that will be the improved profits. That is the reason management is interested in Six Sigma.
  • A full-time Black belt, working on projects leads to around a million-dollar saving a year, by completing 3 to 4 projects in a year.
  • In Six Sigma you have a recognition and reward system to provide motivation.

Let’s look at some hard numbers related to benefits achieved by some early adopters.

Motorola:

  • 5-Fold growth in Sales
  • Profits climbing by 20% pa
  • Cumulative savings of $14 billion over 11 years

General Electric:

  • $2 billion savings in just 3 years
  • The no.1 company in the USA

Bechtel Corporation:

  • $200 million savings with investment of $30 million

While talking of benefits, let’s understand that any Six Sigma project which you do, there is an investment. This investment includes the salary of the team, benefits, training cost, investment to improve process, stoppage of work to do adjustments,

Benefits of Lean

Following are the benefits of implementing Lean.

  • Waste reduction is the key benefit of the Lean. Lean classifies activities into at value-added activities and non-value-added activities. Lean attempts to remove the non-value added activities from the process.
  • In addition, Lean looks at reducing inventory This leads to reduced cash tied to the inventory, reduce space required to store, reduce preservation etc. Reduced inventory also helps in quality improvement, as any problem gets highlighted quickly.
  • Lean reduces cycle time and allows in flexible manufacturing.
  • Lean creates a safe workplace environment. 5S practice helps in clean workplace, which improves the safety.
  • Lean improves the employee morale, because employees are involved in improving their work processes. They see the value what they can provide to the organization by improving processes.