Page 39 - Lean six sigma demystified

18 Lean Six Sigma DemystifieD

Every Business Process Has Three Big Leaks

It doesn’t matter if you’re in manufacturing or services, health care or groceries,
injection molding or consulting; every business is leaking cash. Most three sigma
businesses try to blame these problems on their employees, but the problem
isn’t the people.

Big Leak 1—Delays. The delays between the steps in your process cost you
time and money that dampen your productivity and profitability.
Big Leak 2—Defects. The defects, mistakes, and errors that have to be fixed
or scrapped. Fixing mistakes that shouldn’t have been made in the first place
consumes time and money that could be better spent serving customers and
boosting the bottom line.

HINt Watch your process, not your people!

Big Leak 3—Deviation. The small to large differences from piece to piece, day
to day, month to month of your products and services.

HINt Forget specification limits; focus on target values. Tiny deviations from
your customer’s target value cost time and money.

Even a small reduction in delay, defects, and deviation in your mission-critical
processes can give you a sustainable competitive advantage. Customers aren’t
stupid. They can tell a finely tuned supplier from a clumsy one. Once you have
a head start, your competitors will always be playing catch up.

Every Business Has Two Improvement Focuses

Every business consists of (1) the core business activity and (2) the supporting
operational processes.

1. The core business. In a hospital, its the diagnosis and treatment of patients
that involves doctors, nurses, lab work, and so on. A printer focuses on
getting an image on some kind of media. A manufacturer focuses on get-
ting products manufactured to specifications. An hotelier focuses on a
customer’s stay. With all the data I’ve looked at, even caring for patients in
a hospital, no business is better than 0.6% error (6,000 mistakes per mil-
lion). The 1999 study, To Err Is Human, found about a 1% mortality rate