Kaizen and Six Sigma Together in the Quest for Lean

Kaizen is seductive and efficient. It can deliver results quickly and on a significant scale, utilize the collective insight and experience of those who know most about the process and inspire employees with a relentless curiosity about and discomfort with waste, defects and constraints to throughput. But it is also overrated.

Kaizen Alone

In the context of a truly “Lean” environment, Kaizen is a pervasive philosophy that affects the way all employees look at their work environment. Kaizen, loosely translated from Japanese, means “continual improvement.” And what better way to promote learning, build capabilities and improve processes than to create a culture that drives everyone to constantly seek, study and exploit opportunities for improvement. Kaizen is particularly effective in business environments seeking to improve their value streams with an inexhaustible focus on more effectively delivering value to customers and society – environments that remain dedicated to this philosophy even at the expense of short-term financial goals, as noted in The Toyota Way by Dr. Jeffrey Liker. It is this philosophy that cultivates continual learning and characterizes the Lean environment, not the use of specific tools like kan ban (using visual or other signals to trigger activity) or hiejunka (leveling the workload). Some tools or approaches are practically universal in Lean, such as 5S (sort, straighten, shine, standardize, sustain) or value stream maps, but the consistent thread tying all Lean systems together is the drive for everyone in the processes to continually learn. The learning environment in Lean embraces two basic notions: 1) Genchi Genbutsu, study and thoroughly learn the process or problem yourself and 2) make decisions by consensus supported by a deep understanding of all the potential options and then act on those decisions quickly.

Kaizen in North America

Unfortunately, most North American organizations do not apply Kaizen in this context. Kaizen tends to be limited to blitzes: short, focused bursts of continuous improvement activity utilizing a team of people removed from the distractions of normal operations. These teams typically consist of the right players: process technicians, technical experts, customers and suppliers using effective tools like 5S, value stream maps, takt-time analysis and standard work combinations to balance product flow. And they deliver solid results. The problem is that results happen in sporadic bursts due to the intermittent nature of the Kaizen events. Because decisions are made quickly to accommodate the timeframe of the Kaizen event, root causes are often not thoroughly analyzed in order to optimize the results. Kaizen events without the philosophical structure of Lean focus on fixing the obvious issues at the expense of learning about the latent opportunities. For many organizations that may be enough, but Kaizen in this regard is no different than Quality Circles of the 1980s or Work-out from the early 1990s.

Kaizen Events

Kaizen events can lead an organization to believe that an effective continuous improvement culture can be achieved through Kaizen events alone. Recently an organization employed well-planned and executed Kaizen events in various functions of the organization. Sales processes were improved to reduce price reductions. Customer service centers were streamlined to resolve issues faster. And waste was removed from servicing processes to reduce reviews, hand-offs and cycle time. The only problem was that “quick fix” solutions – improvements that failed to address root causes – were employed in each case. Prices were lowered and margins reduced to help sales achieve fewer price reductions. Issues in customer service were resolved quicker but the number and severity of issues remained constant since no effort was employed to eliminate issues at the source. Servicing processes were faster, but because escaped defects increased, customer satisfaction and market share declined. In each of these cases Kaizen was employed – and even sold to the organization – as an alternative to disciplined measurement and analysis of the processes. Remember, nothing in Kaizen promises optimization – only change – and in situations like this where systems thinking is neglected it is no more than group brainstorming with a housekeeping component.

Kaizen with Six Sigma

Six Sigma, or DMAIC, can assist in filling the gap that Kaizen (as it tends to be applied in many organizations outside of Toyota) fails to address. Six Sigma is not a substitute for Lean and does not necessarily cultivate a learning culture. It is effective in supplying the analytical discipline and rigor necessary to thoroughly understand the nature of processes and problems. Six Sigma is a structured, data driven approach to solving problems. Six Sigma is not a set of statistical tools, and it is not a bureaucratic, stage-gate approach to managing projects, although these features often are hallmarks of successful Six Sigma deployments. Six Sigma is a way of thinking and the results of the approach can yield a spectrum of improvement choices based on the balance of value and risk. The improvements can range from frequent and immediate, low-risk actions addressing obvious opportunities; to Kaizen event-like team efforts addressing root causes based on data; to protracted projects that require review and administration through the DMAIC project cycle. The figure below shows the spectrum of the project/risk relationship.

The Six Sigma way of thinking, through DMAIC, provides rigor and minimizes poor decisions by:

◈ Asking what a company wants to learn versus jumping to conclusions

◈ Discovering processes and requirements

◈ Gathering the right facts and data

◈ Characterizing root cause through y = f (x)

◈ Innovating solution alternatives and selecting the best

◈ Controlling results and verifying value

◈ Standardizing and leveraging best practices

The collective insight of the project team, combined with analytical tools and a variety of risk-management tools like MSA (measurement system analysis) and FMEA (failure mode and effects analysis), help reduce the risk of sub-optimal decisions in the DMAIC process. Without the judicious application of some subset of these tools, Kaizen events are simply a technique similar to the less successful Total Quality Management approaches that initially forced the evolution of Six Sigma.