I’ve noticed the topic of “sustainability” is piquing the interest of an awful lot of businesspeople of late. I believe it’s an issue worthy of serious consideration but I have a few questions before I proceed:

• How are we defining the term? Do we agree on what it means?
• Is there anyone on the inside (developing sustainability policies, setting sustainability objectives, implementing sustainability practices and procedures, etc.)?
• Are most of us aligned with the status quo (i.e., standing on the shore, waiting for some other fool or brave soul to test the water)?

There are plenty of references to sustainability floating around the web. In Quality, we continually refer to a practice known as the “5S’s”, the key “S” being “sustainability”. Sustainability is often linked with the construction business, LEED certification being the hottest topic in the industry. Our friends at ISO – the International Organization for Standardization – have issued a number of standards that directly or indirectly address the issue, such as:

• ISO 15932, “Sustainability in Building Construction – General Principles“;
• The ISO 15686 series on “Building and Construction Assets – Service Life Planning“; and
• ISO 14001, “Environmental Management Systems“.

I’m curious to know what all of you think, so I’ve started a poll on LinkedIn — look for “What’s the status of your organization’s ‘sustainability program’?”. For those of you who have a LinkedIn account, I hope to hear from you soon. (For those who don’t, it costs nothing to sign up.) I’ll post the results for you in the near future.

Thank you for your time, as always.

Steve

Looking for lean six sigma news stories?  The Wall Street Journal (WSJ) newspaper has a site focused on their Lean Six Sigma mentions in the news.  Any WSJ story that mentions lean six sigma is available for easy reading.  If you are looking for references to lean six sigma in the news media then this is a great place to start.  Check it out.

http://topics.wsj.com/subject/l/Lean-Six-Sigma/3124

This webinar presents the results of a project that explored the application of process improvement methodologies, such as Lean Six Sigma, to services offered in the public sector. Comprehensive field research identified success factors along with some common organizational barriers. Specific recommendations were developed to overcome the challenges identified and initiate a Lean Six Sigma based process improvement program that sustains for the long term.

First, what is Lean Thinking anyway? As the name implies, it is really a mindset – a way of viewing the world. Lean is about focus, removing waste, and increasing customer value. Lean is about smooth process flows, doing only those activities that add customer value and eliminating all other activities that don’t.

Adding value is another way of saying generating revenue. If it doesn’t generate revenue then it must add cost, not value. Sounds easy doesn’t it, I mean after all, this is what we do every day; or is it? Let’s see.

Process Flow

There are five basic steps in assessing lean operations:

1. Identify the activities that create value
2. Determine the sequence of activities (also called the value stream)
3. Eliminate activities that do not add value
4. Allow the customer to “pull” products/services
5. Improve the process (start over)

For example, let’s take a look at the most fundamental cycle within a lean operation, the order-to-delivery cycle. The top level activities, in sequence, are taking an order, building the order, and delivering the order. The activities that do not add value are such things as: order entry, backlog, inventory, and shipping delays.

In a lean operation we could have the customer enter their own orders; products made on demand, so we would have no backlog or inventory, and then product could be shipped overnight for minimal shipping delay (or downloaded in the case of software).

Companies with very short order-to-delivery cycles (and not using inventory as a buffer) are lean operations. Lean operations have a strong cash cycle. In general, the shorter the cycle the leaner the operation. Do you know any companies like this?

Internet business are like this.  They carry very little inventory, customers enter their own orders via the web, make product on demand, and ship within 24 hours.  Therefore, the order-to-delivery cycle is very short (within 24 hours).

5S System

Another important tool used in lean thinking is the 5S system of organization. The idea is that a messy workplace, desk, or manufacturing cell makes it hard to find things, easier to get distracted, and can introduce accidents or mistakes. The 5S’s stand for:

1. Sort – Sort needed and unneeded items
2. Set in Order – Arrange things in their proper place
3. Shine – Clean up the workplace
4. Standardize – Standardize the first three S’s
5. Sustain – Make 5S a part of the job

Note the visual nature of lean. Lean Thinking is very visual, picturesque, even Zen like. It is definitely a state of mind. Clean, clear, and focused at the task at hand and nothing else. It does not require a lot of mathematical analysis, unlike Six Sigma.

Six sigma vs Lean Thinking

Six Sigma is problem focused with a view that process variation is waste. Lean Thinking, on the other hand, is focused on process flow and views any activity that does not add value as waste. Six sigma uses statistics to understand variation. Lean uses visuals: process mapping, flowcharting, and value stream mapping, to understand the process flow.

Taiichi Ohno is credited with creating the Toyota Production System (TPS), which is one of the better known implementations of Lean Thinking anywhere in the world. The concepts of lean were born out of the severe resource constraints in postwar Japan, which leads us to next week’s process improvement program – Theory of Constraints.

Lean Thinking is ideal for mature (energy), slow growth (automotive), low transaction industries (small business) or an organization where mathematical tools are not common. Lean begins to use systems thinking and considers all of the process interactions.

But lean is still a reductionist approach focused on eliminating waste (cutting costs). What is needed is to balance the resources released through Lean or Six Sigma improvement programs with an increase in throughput and need for resources. Otherwise you enter a cost cutting, job losing cycle and your process improvement program will grind to a halt.

If you are in a mature, slow growth, low transaction, or non-math business then Lean Thinking will work real well for your organization. So what’s left? Six Sigma and Lean use two different approaches to get the same end result – process improvement. The Theory of Constraints (throughput improvement) takes the concepts of Lean Thinking to another level of systems thinking.