Which one do you want to be first: Effective or Efficient?
You want to be BOTH, right? Me too…but it is very important to decide which one first.
To explain this let’s clarify what I mean by being EFFECTIVE. It is doing the right things. Being EFFICIENT means: do the things right.
So first you should decide what to do (and what not to do) before you try to do it right, with less effort, quicker, etc.
This is also true for the implementation of Lean Six Sigma.
When you apply Lean Six Sigma (LSS) in your company you will create great business efficiency but the final result still can be crap, why?
Because your program is not effective.
So my advice is: apply Lean Six Sigma in the area’s where you have a big gap between your key objectives and your current performance.
I have seen examples where a company was introducing Lean Six Sigma to different areas without a clear purpose, other than cost savings. Although there were some nice projects saving a few 100 KEUR’s, still it was not clear where LSS should help the company in achieving their objectives. The result: managers perceived LSS was just another “pain in the a…”.
Another practical example:
A company has started using LSS in order to increase capacity of their machines and production lines. In the meanwhile their biggest challenge shifted from capacity shortage to costs because the orders were dropping. The original projects were still being executed to increase capacity but there was less attention to them from the management as they were now concerned about reducing costs.
But how should you run a Lean Six Sigma program to be effective?
- Decide on your mission, vision and objectives
- Chose the most important metrics (sales, profit, costs, volume, etc.) to monitor your current performance (baseline)
- Set up and run LSS projects that will help you to get closer to your objectives. Selection should be based on Pareto-law (80% of results will be driven by 20% of your projects)
- Keep monitoring as you complete the LSS projects to see if you are moving closer to your objectives.
- If not: Change the projects even if they are not finished in case you see that they are not in line with your plan to close the gap…and that requires guts and leadership.
Next time we will look at how to become efficient using Lean Six Sigma.