How Lean (6sigma) Projects Can Power SME Improvement and Innovation
The “Lean” business ideology promotes efficiency and the elimination of waste, in terms of time, energy and resources, while also focusing on creating a high level of awareness within the organization of what the customer needs from their product or service. Lean projects can increase your insight into improvement and innovation, and it is easier for an SME to implement than you think. Find out why.
What is Lean Six Sigma?
Six Sigma focuses on reducing process variation and enhancing process control, whereas lean drives out “waste” (specifically non-value-added processes and procedures) and promotes work standardization and flow. The term "lean Six Sigma" is more commonly used today, recognising that process improvement requires aspects of both approaches to achieve positive results, as the two methods complement each other.
It’s designed to:
· eliminate problems
· remove waste and inefficiency
· Improve working conditions to provide a better response to customer’s needs
The Case for Process and Quality Management for SMEs
According to the U.S. Bureau of Labor Statistics , approximately 20% of new small businesses fail during the first two years of being open, 45% during the first five years. Governance and quality management will help you avoid many of the pitfalls of a new business, and ensure that you are part of the 25% that make it to 15 years and beyond.
Every company must satisfy the needs of their customers, stakeholders, and employees to survive, and smaller businesses have a narrower buffer to shelter customers from error and waste, which is why implementing quality programs from the start is so crucial.
Lean Six Sigma is one of the few quality methodologies that can be applied from the very beginning, resulting in cost savings and efficiencies from the beginning. These benefits are not limited to one type or size of company, but rather can be utilized across various business structures and across industries that strive to increase their competitive advantages, operations, and profits, in both regional and global markets.
How Does Lean (6Sigma) Work?
Contrary to the often confusing and intimidating information that most Lean Six Sigma resources provide, the methodology has clear principles that are very understandable, and can be implemented for any process within any industry.
Simply put, Lean Six Sigma helps you identify the root cause of a problem and implement a fix based on key facts, and analysis rather than assumptions, to drive customer satisfaction:
· Identify your customers and what they value
· Map the value stream
· Create flow to the customer
· Establish pull based on customer demand
· See continuous improvement
This is achieved in five phases, using the easy to remember acronym:
1. Define: Define the problem and what is required to satisfy your customer.
3. Analyze: Investigate and identify what causes the problem.
4. Improve: Implement a fix that will solve the problem.
5. Control: Sustain the improved results.
Benefits of Lean (6Sigma)
It’s all about removing low-value process steps, identifying which activities are necessary, and which are simply wasting valuable resources.
This results in:
· Simple processes
· Fewer errors and mistakes
· Predictable performance
· Active control
· Personal effectiveness
· Employee skill development
No matter what the size or how much of a budget an organization has, Lean Six Sigma offers tools that will uncover areas in need of improvement, helping to increase customer satisfaction and bolster bottom lines. Being lean does not translate into being mean. With the right people centric approach to growth and efficiency, your lean perspective can and will lead to a happier and more productive workforce, continuing to multiply the benefits of your initiatives.
At THG Advisory, we work with companies to structure their processes for the best possible performance, ensuring your team can perform at optimal efficiency. Now more than ever, lean and robust structures will protect the future of your SME.