Growing Your Business With Lean Six Sigma
Not so long ago, manufacturing was the only industry using Lean Six Sigma. But today the popular business improvement methodology has so many benefits within the workplace that companies from a wide range of industries have begun to cash in on it as well.
Lean Six Sigma is a collaboration of two business optimisation methodologies, ‘Lean’ and ‘Six Sigma’, which can help your business in different ways – from increasing revenue to decreasing costs and improving efficiency.
From car manufacturers to the US government, the methodology is used by many organisations around the globe. Research estimates that over half of Fortune 500 and up to 82 per cent of Fortune 100 companies have implemented the methodologies to save around US$427 billion.
What Exactly Is Lean Six Sigma?
Lean and Six Sigma both have their roots in the 80s when there was intense pressure to increase quality and speed in the manufacturing industry. Originally developed by Toyota, the Lean system improves quality and reduces production time and cost. It’s about process efficiency and instilling a workplace culture focusing on quality, standardisation and continuous improvement.
Six Sigma, pioneered by Motorola, is a set of tools that use statistical analysis to identify and eliminate defects. It shot to prominence in the 90s when Jack Welch adopted it as General Electric’s core business strategy. Literally, the term means that a process functions 99.9997 per cent defect-free.
But even organisations which don’t operate conveyer belts have recognised that there are always processes which can be improved in the workplace.
Take for instance the legal industry.
Clifford Chance is one of the best known examples of a law firm implementing Lean Six Sigma. According to a Harvard Law School article, the UK firm found the methodology could reduce staff time by as much as half. In 2013, it saved time equivalent to about US$1.5 million by improving legal processes.
In a white paper published in 2014, the firm reported the methodology had an impact on even minor processes, such as creating bound compilations of documents at the conclusion of a case. It found cost savings of 60 per cent, while the time needed to produce each volume fell by up to 80 per cent. This is considered no small feat given that over 1,500 bound volumes are produced each year in Clifford Chance’s London office alone.
How to Cut Waste
Lean Six Sigma focuses on streamlining services from end to end to eliminate waste. There are eight types of waste that can be eliminated from business processes to reduce costs and time: defects, overproduction, waiting, non-utilised talent, transportation, inventory, motion, and extra-processing.
Examples of some of these wastes, when applied to a legal context, can include work that needs to be redone because of errors or omissions, having to search for a missing file, over-researching and using multiple lawyers on a matter.
“DMAIC” is the problem-solving framework used to eliminate waste. It stands for: Define, Measure, Analyse, Improve and Control. Together, the process is a powerful tool to clarify business goals, streamline resources and enhance performance.
Firms that adopt the Lean Six Sigma methodology can expect to see benefits including:
- Lower costs and greater profit
- Greater client satisfaction
- Improved client/firm collaboration
- An increase in productivity using fewer resources
- Faster response and turnaround times
- Valuable resources increasingly being freed up
- A stronger focus on quality and value
Is your organisation ready to implement Lean Six Sigma?