The following contribution to the already extensive body of knowledge associated with Lean Six Sigma endeavors to look at those areas where both Lean, the philosophy, and Six Sigma, the methodology, overlap to create a uniquely synergistic opportunity for warehouses and logistics firms to achieve cultural, procedural, or organizational change.
What Is Lean Six Sigma?
You don’t have to be a graduate of the Harvard Business School or even a long-time subscriber to Harvard Business Review magazine to understand that change, especially organizational change, is hard.
Then there’s procedural change and cultural change, neither of which even touch upon whether the need to improve ‘how things are done around here’ was anticipated or reactive and, in the case of the latter, likely the result of some new market entrant suddenly outperforming your current warehousing or logistics firm.
As the GM or operations manager, then, what do you do? Everything feels like a top priority from SOPs (standard operating procedures) to defect reduction to process improvement. Then there’s the resistance from the workforce to contend with and you haven’t even determined whether this change needs to be strategic or incremental in nature.
But before you scream, quit, or simply walk out the door, first look to those industrial organizations that led successful change management initiatives in the past in order to identify those best practices you might be able to ‘borrow’; having done that, what is the one common theme that you see time and time again?
Lean Six Sigma.
In one variation or another, this hybrid of Lean and Six Sigma plays a critical role in change management stories as disparate as those out of DHL, Ryder, IBM, and more.
But why this third way? How come Lean, on its own, proves insufficient? What about Six Sigma and its inability to enact lasting change?
But again, one plus one does not always equal two as is the case with Lean Six Sigma where the outcome is often three, four, or much, much more!
Why is change so hard?
Before diving into the change management synergies one can achieve vis-à-vis Lean Six Sigma, let’s first discuss change drivers so that your warehouse or logistics firm can better anticipate change and, ultimately, embrace it as a means to an ends that is all things better, safer, and (yes!) richer.
As seen in the table below, and (yes, we know) pontificated by none other than HBR, most major change initiatives fall into one of three categories, or:
- intended to boost the quality
- meant to result in a better, stronger, or more-inclusive workforce culture
- assembled to reverse a corporate death spiral
What’s more, some 70% of such change initiatives fail with only 12% of those left standing achieving what they set out to accomplish.
There are numerous barriers to change, of course, but none looms larger than that of not knowing why change needs to be enacted in the first place. In other words, and in turning to the below graphic, most firms are reacting to outside competition and pressure. This means they are unable to think clearly enough to create a long-term program or project dedicated to transforming their firm continuously and on their own terms.
Before looking at Lean, Six Sigma, and how the two are greater than the sum of their parts, consider a few more barriers to organizational change and the essential strategies needed to overcome them, or:
- Barriers
- loss of direction, clarity, and procedural stability when receiving, stowing, picking, packing, and/or shipping products
- confusion and chaos in SOPs as a result of poor version control
- anxiety and uncertainty among workers that feel incompetent
- lack of empowerment among associates or drivers
- loss of purpose and a desire to cling to past results
- Strategies
- communicating, realigning, and renegotiating formal patterns and policies or procedures
- training not just for today, but for tomorrow; anticipating new skills
- OJT and enlisting warehouse associates when looking to reduce steps or waste in a process
- create ‘quick hit’ or ‘just do it’ projects that rely on associates closest to the step under review
- formulate new goals or mission and vision statements by eliciting inputs from employees
Now, what you are likely to notice is that the best defense is a good offense and many of the top strategies saw change as a means to work more closely with associates, request their input, and follow through on their promises. Additionally, those best practices also relied upon proven methodologies and philosophies born of Lean and Six Sigma, respectively, which is where we turn our attention to next.
Lean and Six Sigma and Change Management?
It might be going too far to say that Lean Six Sigma is simply Lean plus Six Sigma as this misses the point entirely of combining a philosophy (Lean) with a set of hard, data-driven methodologies (Six Sigma).
Rather, Lean brings to the table a thinking-based set of constructs that empower employees to always be reducing waste while Six Sigma scientifically measures, monitors, and controls any procedural gains by verifying the removal of variation and validating the new standard.
Six Sigma’s focus on standardizing processes so that the right product in the right quantity flows to the right customer 99.99966% of the time generates a virtuous circle wherein Lean practices drive out still more waste while achieving maximum warehouse velocity.
Before going any further, though, let’s familiarize ourselves with some more Lean Six Sigma terminology:
- efficiency, or: the number of resources, or inputs, needed to execute a process
- effectiveness, or: the ratio between the actual versus the planned input
- productivity, or: the relationship between efficiency and effectiveness
- profitability, or: that which is leftover once all the bills are paid and expenses accounted for
- SOP, or: consists of all elements as well as a diagram of a specific operation with each step involved in that process; should include the approximate amount of time required for that process broken down by step; can be manual and/or robotic
- continuous process improvement (CPI)
- optimization, or: adjusting the system or process inputs to produce the best possible average outcome with minimum variability
It’s important to note, of course, that each of the above KPIs can be achieved via the implementation of Lean philosophies or Six Sigma tools, techniques, and procedures. Only when the two are combined, however, can an entire warehousing network realize change as a powerful, long-term means towards achieving sustainable growth quarter after quarter and year over year.
But how?
Lean and Six Sigma are the perfect complements for one another given that the former provides warehouse operatives with a strategic-level framework in which to solve more problems systematically by deploying tried-and-true statistical tools (courtesy of the latter) that can easily capture waste reduction ‘wins’ for the organization as a whole.
What Lean and Six Sigma are not, however, is a panacea for deeply entrenched structural, procedural, and cultural issues within a warehouse or supply chain. Practitioners should not be surprised to learn that there is no one-size-fits-all solution when faced with internal processes gone astray and that the ‘best method’ is often unique to not only that firm, but that particular step in the value stream.
So, while the macro factors of change often remain the same regardless of the industry or sector in question, the unique variables within a firm demand that managers and Lean Six Sigma practitioners take a bespoke approach in their application of data-driven corrective measures.
In summary, and no matter the type of change in question, it is important for warehouse and supply chain personnel alike to remember that what gets measured, gets managed and for Lean Six Sigma programs that means clearly defining KPIs focused on reducing variations in processing time, mitigating cost overruns, and ensuring customer-centric quality services.
BUSINESS SCHOOL BONUS!
Not to put too fine a point on business school or Harvard grads, but when it comes to managing change and implementing a culture of continuously improving processes to standardize processes there are a few (six to be exact!) routines that warehouse managers and logistics leaders should anticipate and control for to ease the transition for all concerned, or:
- Create a culture of “yes” and build teams with as few cynics as possible
- Always maintain focus on the ends and not the means
- Avoid introducing new variables into your process equation until the ones you have are within your upper and lower control limits
- Make sure meetings are productive and that constructive conflict occurs during (not after) a particularly ‘cordial’ discussion
- Watch out for, and avoid, analysis paralysis, especially with Six Sigma tools
- Monitor and control for employees that continue to do things ‘the old way’ assuming that this particular change initiative, too, shall pass
Final thoughts and a change management case study!
Lean Six Sigma, as the name implies, goes beyond Lean and Six Sigma as standalone concepts and affords those organizations willing to embark on a long-term, sustainable continuous process improvement journey with a strategy that aims to permanently root out variation and result in standardized processes.
Change is, of course, hard (and not always successful), especially when reactive in nature, but this is precisely where Lean Six Sigma proves most effective as both a philosophical construct that gets all employees thinking about waste reduction while simultaneously looking to measure, modify, and monitor all adjustments that make their work lives easier…
and their home lives richer!
just one warehouse or supply chain in that it bring the best of both concepts to bear on the organization that is ready and
CHANGE MANAGEMENT ON A GLOBAL LEVEL, OR: REDUCING E-WASTE THROUGH DYNAMIC E-RECYCLING
One only has to go so far as to realize that modern-day living is nearly beholden to technology, with what essentially counts as a computer in almost everyone’s pocket; not to mention home-based electronics like televisions, desktop computers, and stereos. What’s more, this does not even begin to factor in the number of electronics we rely on at work or in public spaces.
That said, what happens to those cell phones and fax machines that are made obsolete year after year? Where do they end up?
Well, and despite the best efforts of many international bodies attempting to prevent the most likely (and obvious) outcome, most electronics end up ‘recycled’ overseas in places like the Agbogbloshie slum in Accra, Ghana, wherein some 200,000 not only make their living stripping precious metals from old consumer goods but also suffer the consequences of the pollution they live with daily.
But what does any of this have to do with Lean Six Sigma and, moreover, why should you care as a warehouse manager or logistics professional?
Easy: others are already taking ownership of the problem and turning it into an opportunity to not only make a profit but to engineer out the problem from the start.
Enter Dynamic Recycling, who not only holds itself to a higher standard by partnering with only those industries that are helping to improve the environment, but also keeps innovation at the fore of what they do by continuously improving its people, processes, and value stream relationships.
Consider, too, their use of visualizations and mappings in order to better define a global problem (Six Sigma) alongside their philosophical focus (Lean) designed to improve the occupational health and safety of all those persons negatively impacted by e-waste.
Dynamic’s focus on reverse logistics in the e-waste industry is not only a testament to the power of Lean Six Sigma thinking, but also how such synergistic constructs can lend themselves to positive change the world over…
one warehouse at a time.