The application of lean six sigma principles to the production process as we know it today started with the development of the Toyota Production System (TPS) in the 1940s.
What has now been established is that while the benefits of lean six sigma can be attributed to the effective use of lean six sigma methodology, principles and tools, sustainability can only be achieved by creating a culture where change is embraced at every level and in every area of the organisation.
During the last 30 years, the manufacturing industry worldwide has increasingly been driven to be more effective and reduce operating costs. However, it has been found that lean six sigma improvements within the manufacturing area do not typically present as big an opportunity as initially thought compared to those that are found in the rest of the value stream.
Waste and variation are everywhere: existing in every process and every interaction between humans, systems and functions. They create performance issues, soak up resources and affect customer satisfaction. They also threaten health and safety and potentially even job security.
Increasingly, the emphasis in mature lean six sigma manufacturing operations has been around achieving zero defects (especially in the aerospace, defence and medical sectors) and creating products that can be manufactured on processes that are engineered to run an optimal capability level and produce little, if no, variation.
This means that there is increased focus on the quality within, and control of the supply chain with a switch in emphasis for designers to focus on planning for lean six sigma and create defect-free products.
The knock-on effect of this change is that the equipment suppliers also have to develop processes that can operate at six sigma quality levels and the supply chain needs to deliver components and materials that fall within six sigma quality levels. However, despite all the good intentions and increased attention paid in these areas, there remains a lot of room for improvement.
Any electronics manufacturer that still employs inspection and testing on receipt of purchased products, as a means of protecting the customer from receiving poor quality goods needs to review its whole supplier development strategy from a lean six sigma perspective.
The emphasis in this area has to be to drive improvement back into the supply base and engineer-in the quality of supplied product. If these tactics are employed effectively, the consequence should be a significant reduction in the requirement to inspect and test.
This means that supply chain management is increasingly being looked at and has become a key area that has a significant impact on the value stream. Lean six sigma development of the supply chain can lead to significant benefits in many areas as well as a significant improvement in delivery performance.
There will also be an inventory reduction, which consequently reduces the inventory holding space required. This can lead to a reduction of the working capital required with subsequent cash cycle improvement and lower operating margins.
It is not enough, however, for manufacturing companies just to try to replicate Toyota’s lean principles. They need to consider the psychological impact that new working methods will have on the employees.
The lack of insight into this requirement is one of the main reasons that some have failed to sustain lean six sigma. To prevent this it is critical for the executives and leaders who are moving operating philosophy towards lean six sigma to understand more about the human reaction to change. It is by identifying these reactions that they will be able to impact directly the effective management of the change introduction and will ultimately define whether implementation is successful or not.
Adoption of lean six sigma principles goes a long way towards identifying and removing waste and variation; but to be sustainable, we need to ensure that we create an environment where continuous improvement is a part of the organisational culture. Only then will lean six sigma be successful within all areas of electronics manufacturing.
On a final note; after over 70 years of lean at Toyota, the company still believes that it still has a long way to go to remove waste entirely from its value streams. So whilst continuous change is being implemented, there is always room for further improvement.
David Maddison is a director at Plexus