Lean in Business
Why lean six sigma?
In 2019 Toyota made 98% of Volkswagen’s annual revenue by using 53% of their total workforce, also SAIC that employs 59% of Toyota staff made less than half (43%) of Toyota’s revenue, without talking about the net income that is a tiny fraction compared to what Toyota generates every year.
The second table presents the auto products exports by the major players. We can see that Japan dominates all the other countries.
Where is the secret? Their technology? Corporate culture? Their adoption and improvement of the existing management and business philosophies? Maybe the influence of the American Deming that helped Toyota develop their famed Toyota production system from which lean was born? Or maybe all.
Why lean six sigma?
That is a great question, we are here to answer that same question. What is the goal of opening or working in a business? (They give some answers) You know that our goal to open a business or work in one is to make money through fulfilling a market need or customer demand.
Why do we need LSS to do that, we are doing fine, and LSS is costly?
First LSS is a methodology, a business and an initiative that enables world-class quality and continuous improvement to achieve the highest level of customer satisfaction.
Can we use other methods to improve, yes, we can and I am sure that every business does that (we want to earn money, remember?). let us look at the famous example of Japanese automakers (Toyota) and how they overcome the American automakers in 40 years not just in the numbers of cars made but also in every important metric to the business:
Graph 3: Car production comparison US-Japan
Graph 4: Vehicle per worker Japan vs US
let me ask you a question, for all the improvement initiatives that we are conducting, are they:
a part of a whole business strategy, or are done based of enough data, taking in consideration the whole business process (Value Stream), is that what the customer want, are they done in collaboration between department (not in silo) or did they yield the wanted result (no new unwanted bottlenecks)?
If the answer is no, then we need to think about our business approach and how to diagnose the situation, also where to look for answers and how to find them. This is when LSS comes in. It offers the most efficient and consistent framework to help us overcome the challenges.
If the answer is yes, then we can ask ourselves: is the company as a whole working towards the same targets or not? Are the roles and responsibilities well defined? How are we going to strengthen our weak links, LSS offers a framework that allows us to work together for same goals.
It is not totally wrong to say that LSS is costly. If you look at Figure 1, 40 years might look like that, but in the life of a company it is not that long, especially if we look at Figure 2 and their amazing achievements in the major business indicators.