Caroline Ucherek,  CJU Medical Marketing, discusses lean 6 sigma and how it can help your business.

If you haven’t heard of Lean Six Sigma, it’s likely because it is a methodology first adopted primarily by manufacturing companies and has only been making inroads into the healthcare and medical industry in recent times.

The goal of Lean Six Sigma is to drive customer satisfaction and improve bottom-line results through the reduction of variation and waste.

How does it do this?

Through the introduction of standardised work methods and flow causing a competitive advantage. In essence, Lean Six Sigma is a philosophy directed by close examination and understanding of customer needs. It is fact-based and data-driven and uses diligent attention that focuses on the improvement and reinvention of business processes for defect prevention rather than defect detection.

Wherever variation and waste exist, Lean Six Sigma can be applied and has saved companies billions of dollars worldwide.

Six Sigma was originated with Motorola in 1986. Following on from Motorola’s success, many large, multi-national manufacturing companies went on to successfully adopt and benefit from Lean Six Sigma including, Toyota, Ford, Intel, Nike and Kimberley Clarke.

Although Lean Six Sigma started in manufacturing, the improvement philosophy principles were found to apply just as well to transaction and service environments. In fact, the service industry has higher waste ratios than manufacturing which led to it being introduced into Bank of America, Merck, Starbucks, Virginia Mason Hospital and Wal-Mart.

How does it work?

When we start something new such as being in a skill based training program, taking up a new sport or opening a business - on a scale of 0 to 6, most humans are operating at between 1.5 – 2.0 Sigma. This means approximately 30-50% of our time is spent making errors.

But we improve on this by learning from our errors. Type “A” personalities will seek to reach a 3+ Sigma (equating to 5% or less error level). They achieve this by asking questions, note taking, practice and refinement of their skills. For people, Sigma levels above 4 can be pushed to be achieved through checklists, mistake proofing and other methods.

Six Sigma represents 3.4 errors per million transactions and has been achieved through:

• Process redesign and simplicity
• Statistical process control and measurement
• Removing variation in inputs such as material, machinery and environment
• Enabling people to do their best by providing them with the training and methods to do their job

Six Sigma utilises a proven, closed-loop framework for tackling problems consisting of five phases known as DMAIC:

Define, Measure, Analyze, Improve, and Control.

One of the cornerstones of the success of this approach is identifying the most significant root causes of a problem before implementing solutions.

Lean looks at achieving the fastest rate of improvement in Cost, Quality and Customer Satisfaction by focusing on reducing waste by streamlining operations and reducing defects.

In Australia the most successful use of Lean Six Sigma places emphasis on waste reduction as well as localised problem solving processing. Companies embracing Lean Six Sigma have gained improved outcomes, better staff morale and improved customer satisfaction – all resulting in a better bottom line. You might recognise some of them:

• Commbank, NAB, Suncorp, ANZ (banking / finance)
• New Zealand Post, IBM Australia, Western Power, Flight Centre (service)
• Qantas (transport)
• Snowden Max (consulting)
• ADF (defence)
• Nestle, Coca Cola Amatil (manufacturing)

And...

• Macquarie University (education)
• Medical Systems, Resmed (health)

Can Lean Six Sigma work for small – medium sized businesses?

Although Lean Six Sigma has been widely adopted by large organisations as a strategy for creating efficiencies and waste minimisation, it’s less known for it’s ability to be utilised in small – medium businesses.

Small - medium businesses employ lean and six sigma methods in more subtle ways that include:

• The speed up of “cycle times” and the removal of non-value adding activities
• Better data analysis to meet customer requirements without rework (eliminating waste)
• Creating efficiencies

So, what has Lean Six Sigma got to do with marketing?

Marketing is about improved business outcomes and growth. Many times, we see client’s whose businesses have issues and problems needing to be addressed and corrected to allow them to achieve the results they want. The adoption of a Lean Six Sigma strategy is a real option for many medical businesses and has proven results. It’s not for the faint hearted, it needs buy in from all levels of the business, but the rewards will speak for themselves.

Sound complicated?

It is, but we can help.

If you would like to learn more about Lean Six Sigma, contact Caroline Ucherek, CJU, Managing Director today, for further discussion.