Friday, September 14, 2007

Lean and Six Sigma's Effect on Complex Organizations

Last Wednesday night, I attend the APICS Chicago Chapter Monthly Professional Development Meeting to listen to Praveen Gupta, President of Accelper Consulting and author of many books including Six Sigma Business Scorecard and Virtually Stat Free Six Sigma, on his topic, Lean and Six Sigma’s effects on complex organizations.

Praveen’s insights on the applying improvement strategies in our increasingly complex organizations were thought provoking. From his point of view, our limited success in getting results from our improvement activities rests mainly on our approach (which has also gotten more complex) and not understanding the purpose behind our activities.

In his presentation, Praveen expanded on the book, The Goal, in modifying the goal of business from making money to the goal of business is to sustain profitable growth. In order to sustain profitable growth we need three things.

1. Any process improvement approach like Lean, six sigma, Lean/Sigma, etc.
2. A business scorecard to measure what we value.
3. Growth not dependant on Mergers and Acquisitions, but driven on innovation.

Praveen challenged us to avoid some of the traps of our current improvement approaches like:

1. Corporations not measuring sigma levels.
2. Leaders avoiding accountability of improvements activities to the bottom line.
3. Too much statistics entering into Six Sigma at the cost of product/process knowledge.

Praveen Gupta’s message for success:

“Standardize intent, customize methodology, utilize the right mix of tools and reduce the number of measurements.”

For more thoughts from Praveen Gupta, check out his long list of books, and look in Quality Digest Magazine for numerous articles he has published.


Raymond said...

How does a small family run business go lean? Do you have books you'd recommend?

Mike Wroblewski said...

Hi Raymond,

In my opinion, I recommend the following books to read to start- The Toyota Way by Jeffrey Liker, The Toyota Way Field Book by Jeffrey Liker and David Meier, and Creating a Lean Culture by David Mann.

For all companies, large and small, the first step is to prepare your mind. Read the books, blogs and aticles. Attend a seminar, conference or class. Network with other local companies attempting the lean appraoch.

After you have your mind pointed in the right direction (full understanding not required), look at your processes with lean thinking and try to fully understand/document your current state.

Decide on a potential idea on what your future process looks like. Then act toward creating the future process.

You will gain the most benefit and understanding by "Learn By Doing". Keep the change scope at a doable level. Involve ALL your employees and have fun!

In general terms, I hope this helps. Mike