Page 36 - Lean six sigma demystified

Chapter 1 What iS Lean Six Sigm a ? 15

The Lean Six Sigma Toolkit

Lean Six Sigma is the best toolkit for helping you think outside the business. The tools
are designed to help employees see the business more clearly than ever before.
Lean Six Sigma is a result-oriented, project-focused approach to quality,
productivity, and profitability. These reductions translate into cost savings,
profit growth, and competitive advantage. And the process is simple.

1. Focus on key problem areas by counting and categorizing your delays,
defects, misses, mistakes, errors, and deviation.
2. Improve by eliminating delays, defects, and deviation.
3. Sustain the improvement by monitoring key measures and responding if
they become unstable.
4. Honor your progress.

If we applied Lean Six Sigma to
• Tax returns, there would only be 340 defects in the 100 million returns
filed each year.
• Baggage handling, airlines would only lose temporarily 10,000 bags a year
instead of 30 million (1% of the 3 billion bags processed). Airlines perma-
nently lose 200,000 bags a year. The bags go missing temporarily for
31 hours on average. It costs carriers $2.5 billion a year to correct the
mishandled luggage. The biggest root cause is the mishandling during
transfer from one flight to the next. (Is this why so many airlines have
added a baggage fee, to pay for their mistakes?)
• Teen pregnancy, there would only be 34 pregnancies a year instead of
1 million.
• Driving, there would only be 3.4 accidents per million miles driven.
• Hospital intake, there would only be 3.4 deaths per million hospital admissions
instead of 1 per 100 as reported by the National Academy Press (1999).

Why Lean Six Sigma?

Why now? Fortune 500 companies like GE are using these tools to save big
bucks. In 1998, GE invested $450 million to achieve $2 billion in savings. Make
no mistake about it, when Jack Welch, the CEO of GE, got behind Six Sigma,
it took a big leap forward. Unfortunately, the Fortune 500 version of Lean Six