Analyzing the Value of Lean and Lean Six Sigma in Organization

Facilitating organizational design is a major function of the Lean Six Sigma technique.

Organizational design, according to the University of Southampton, is “the process of matching an organization’s structure with its objectives, with the ultimate goal of improving efficiency and effectiveness.”

It includes three discrete and successive processes for the sake of this post: design, execution, and improvement.

The process starts with the design, or redesign, of a full business, its component units, and the connections between them. Other names for it include business process management, business process re-engineering, and business transformation.

At the most basic level, it involves redesigning the organizational architecture, beginning with the identification of the relevant stakeholders and business processes, and moving on to the design of an organizational structure based on business processes that include KPIs, design objectives, and other settings. Lower-level design, on the other hand, focuses on process mapping and the organizational structure of the intended process itself, which includes elements like resource allocation and risk management.

It’s important to remember that the breadth of this organizational design should be seen as a single project that covers the full business and all of its parts. Every element that has been designed here should then be put into practice during the “execute” phase and improved as needed afterward.

Introducing Lean Six Sigma

Execution is just one aspect of this subsequent phase. Additionally important are the data collection and monitoring processes employing dashboards for graphical and statistical analysis based on the KPIs specified in the “design” phase. As a result, if a specific cause or non-conformity—i.e., an element that doesn’t operate as intended—is found, it can be approved for “containment and correction.”

Imagine that a water pipe has broken. The leak will be stopped by containment, but a new pipe will need to be installed to let water back into the system. The root reason for the non-conformity won’t be discovered through “containment and correction,” though. The “improve” step, when corrective and preventive action is taken, is where this is done, as well as eliminating it to stop it from happening again.

Lean Six Sigma makes it possible to improve current products, services, and procedures while minimizing errors, which reduces special causes and non-conformities.

It provides a strong combination of two methodologies: the focus on defect and variation reduction of Six Sigma and the waste-reduction mindset of Lean. Its main objective is to reduce waste by reducing business process variability and establishing a continuous flow between each stage, allowing organizations to solve issues more quickly, reduce process inefficiencies, and increase productivity.

Lean Six Sigma is a technique, but it’s also a way of thinking about business, a way of measuring success, and a set of tools. It serves as a toolbox for improvement.

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Building on a foundation

It offers many tools that should be employed in the first “design” phase, much like when planning a building: the project’s scope and the company’s design are like the floor plan of the entire structure. Every room in that building, which symbolizes a component of the organization, has an initial design that Lean Six Sigma details and improves.

The “design” phase must, however, provide the foundation for the program. Programs for Lean Six Sigma usually fail, with the main cause being a lack of a solid basis. This indicates that no Lean Sigma Six efforts need to start before the company’s fundamental design and architecture.

Imagine that a company’s project portfolio includes 50 projects that are active at once. KPIs, the customer’s voice, and numerous business processes must be recognized and mapped for each project. Running aligned and simplified Lean Sigma Six projects in an integrated portfolio requires the overall consistency that results from creating a solid framework.

Improving until entitlement

In the “execute” phase, several tools are used. Lean Six Sigma tools include gathering data, monitoring, and dashboarding, for example. In short, applying Lean Six Sigma thinking at the corporate level is a different approach to defining how an organization is designed.

Additionally, during the “improve” phase, each component of the business is improved using the Lean Six Sigma approach until it reaches the process entitlement. Starting with the “before,” it entails boosting Six Sigma capabilities by reducing errors, cutting costs, and boosting performance until the desired “after.”

Lean Six Sigma is an important part of organizational design since it serves as a methodology, philosophy, metric, and toolbox. Businesses can create and then realize the performance they most want from their company and all of its composite elements when the proper framework, or foundation, is in place.

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