The 3rd Annual IQPC European Lean, Six Sigma and Process Improvement Summit.

Hotel Okura, Amsterdam

The annual congress in Amsterdam has had many names over the years. In 2005, it was Six Sigma, last year it was Lean Six Sigma, and now in 2007, Process Improvement has been added to the title.

However, according to the two main keynote speakers of the second day of the conference, Lean and Six Sigma should not necessarily be put together. Jeffrey Liker, author of “The Toyota Way”, and John Neill, CEO of Unipart, both argued that the two methodologies are not natural bedfellows.

In his presentation about implementing Toyota’s principles into an organisation, Mr Liker stated that Six Sigma is flawed because it makes the assumption that organisational improvement is reliant on a set of tools that conform to Y=f(x), whereas in actuality the answer is to create a different way of thinking. The Asian philosophy is that there is no such thing as a perfect process, he said, which goes against Western thinking in general and Six Sigma in particular.

Mr Liker believes that Lean is not a set of tools but instead a philosophy, an opinion also expressed by John Neill in his ebullient presentation. This makes leadership and management even more important, as they must be prepared to take the long-term view. Mr Neill believes that Lean is a lifetime journey that must be practised every day, consistently, and the ownership structure has to be committed to creating a different mindset within the organisation. You cannot think your way into acting, you can only act your way into a new way of thinking differently.

In addition to his thoughts on the Lean journey, Mr Neill spoke about the extraordinary history of Unipart, who started using Lean techniques in the late ‘80s. At that time, the company had a bad reputation in terms of quality; one of its factories was voted the worst in Britain. After Mr Neill led a management buy-out in 1987, they began to focus on improving quality, continuous learning, and developing its people. They benchmarked with Toyota and Honda, started focusing on their customers and established a university with renowned Lean author Dan Jones as the principal. By 1991, the factory that had previously been voted the worst in Britain, was recognised by an independent adjudicator as now being one of the best.

Visionary

Talking about Unipart, Toyoda-san, Director & Member of the Board, Toyota Motor Corporation said: “...this facility is now one of the best examples of TPS that I have seen anywhere in the world outside of Japan.”. Recently it was named one of the six most visionary companies in the UK, and the most visionary in the area of organisational transformation.

There was very much a Lean theme to the speakers of the second day, but on day one of the conference another methodology was brought to the fore: Innovation.

The question of whether Six Sigma and Innovation can co-exist has been a hot topic recently on the onesixsigma.com forums, and the highlight of the first day was the presentation by Robyn Pratt of Starwood Hotels. It dealt with how Starwood are integrating their Six Sigma programme with “Blue Ocean Strategy” (BOS), an innovation strategy devised by Professors W. Chan Kim and Renée Mauborgne.

Starwood’s improvement programme is to execute sustainable solutions which are aligned to the key business priorities on time, every time. It is about adding value in everything they do, which they categorise as either Value improvement or Value Innovation. Recently, Starwood began instigating operational innovation, which looks at how things can be done differently within a structured process.

Benchmarking is intrinsic to BOS, and Starwood do so with other industries and BOS companies. When focusing on creating an experience, your competitors may be completely different to who you think they are.

Creativity plus Implementation

“Innovation” comes from the Latin word “innovare” which means “make new”. It is the act of introducing something new or starting something for the first time, but it has to be a viable new business concept. Innovation is not creativity, it is creativity PLUS implementation.

BOS is about out-of-the-box strategic thinking and creating uncontested market space ripe for growth, thus making competitors irrelevant. To understand this, you need to look across industries, across trends, across time to create powerful leaps in value for both customers and the company. It is also about “Value Up, Cost Down”.

Starwood split their programme into three phases. The first incorporates BOS, the second is evaluating the business plan, and the third incorporates Six Sigma. By doing this, you can obtain world class operational innovation.

The rest of the conference dealt with these and various other themes, from whether to inject Belts into the organisation or hand the ability to improve to the workforce, to focusing on delivering a long-term vision instead of just picking off the low hanging fruit.

Customer focus, such a fundamental aspect of Lean and Six Sigma and always a pertinent topic, was brought to the fore in presentations by Dell and Deutsche Bank. Bill Black, Quality officer of EADS, spoke about the importance of face-to-face interaction with the customer in order to ascertain their distinct requirements for things to be on-time and on-quality.

"Not comfortable with statistics"

Management and communication of data is important both for the customer, and employees. According to Andy Liddle, formerly of Dupont and now Catalyst Consulting, the way data is presented is imperative. In a typical organisation 80% of people are not comfortable with statistics, and thus statistical support needs to be user friendly, easily analysed and very visual.

Using Six Sigma and Lean techniques in the IT sector is a fairly new concept, and Fujitsu were there both to sponsor the conference and talk about how they are driving their improvement programme. The IT sector is probably the most wasteful: it has been said that if Microsoft and Cisco made cars, they wouldn’t get out of the garage. It is estimated that 65% of work is simply in keeping infrastructure going, resulting in a lot of waste to get rid of, and a fertile ground for Lean improvements.