Kaizen, Lean Six Sigma, and Idea Management Systems

In a January 2007 paper “Driving Operational Innovation Using Lean Six Sigma,” the IBM Institute for Business Value argued that Lean Six Sigma can do more than help achieve operational excellence through improving processes: Lean Six Sigma can

. . . help leaders discover innovation opportunities far beyond operations, enhance financial performance, and create organizations that have an inherent inclination towards innovation.

IBM’s conclusion should not be particularly surprising to anyone with a familiarity with the history of Lean.

Lean Production is a philosophy and set of processes and tools derived from Toyota’s approach to quality and production (itself in turn derived from Quality Management principles advocated in Japan by Deming) that deliver “fast, flexible processes that give customers what they want, when they want it, at the highest quality and the lowest cost” (Liker, 2004: 8). Lean involves a focus on reducing waste and improving cycle time of delivery of value to the customer through mechanisms such as “Just in Time” production and customer “pull”, and a philosophy of continuous improvement.

Lean has been described (Womack and Jones, 2003) as a five-step process:

  1. defining customer value
  2. defining the value stream
  3. making it “flow”
  4. “pulling” from the customer back and
  5. striving for excellence.

The heart of Lean is the driving philosophy of continuous improvement.

For example, when Liker (2004) set out to study the Toyota Production System (TPS) over several decades, he gradually learnt that “all the supporting tools of lean . . . were not the key to TPS . . . Rather, the power behind TPS is a company’s management commitment to continuously invest in its people and promote a culture of continuous improvement.” American institutions trying to adopt Lean typically do “not understand the power behind true TPS: the continuous improvement culture needed to sustain the principles of the Toyota Way” and therefore “dabble” at the “process” level (eliminate waste) rather than adopt at the philosophy, people and problem solving (continuous learning and improvement) levels.

For Toyota, the key to a culture and practice of ongoing continuous improvement is Kaizen (a Japanese term that translates as “continuous improvement”). Kaizen encourages all employees to suggest improvements. While many of these improvements are small and lead to incremental operational improvements, process improvements and quality improvements, other suggestions individually or cumulatively can begin to impact the business model, suggest new products or services, and generally begin to transform the organisations.

It is hardly surprising therefore that the Japanese approach to continuous improvement also has yielded high quality products and services at lower cost with reasonably high levels of product and business model innovation.

Now, back to Lean Six Sigma.

Lean Six Sigma is a fusion of Lean Production philosophy and methods with Six Sigma process improvement methods.

Six Sigma is focused on improving processes to reduce defects and improve quality of outputs (particularly in manufacturing). Six Sigma, like Business Process Reengineering, is largely a planned implementation – one decides what processes one wants to manage and improve using six sigma methods, and then improves them. Conversely, the Lean approach is driven by a culture of continuous improvement, with incremental improvement ideas coming from the workplace upwards.

Six Sigma is focused primarily on reduction of defects, Lean also focuses on the value chain between production and delivery to the customer, reducing or eliminating ‘waste,’ and improving product delivery cycle time.

Lean Six Sigma combines the two approaches, using Six Sigma methods for improving production processes and Lean approaches and philosophy for customer-centered analysis and improvement of the value chain, eliminating waste and improving cycle time.

Now, back to the IBM paper. IBM noted that companies used Lean Six Sigma in a “visionary” manner to “surface significant innovation opportunities” and “establish organizations that now have an inherent inclination towards innovation” that are “focused on customer needs, detailed data analysis, and facts.” The organizations had:

  • An innovation vision based on factual customer and market insights
  • Leadership committed to perpetual innovation
  • Alignment across the extended enterprise
  • Organizational capabilities that made innovation habitual.

Well, yes . . . but it should not be surprising to IBM or anybody else that companies that adopt Lean thinking display these characteristics: these outcomes are fundamental to successful implementation of a Lean approach. Lean’s focus on the value chain focuses an organization on identifying and delivering customer value based on factual customer and market insights. Lean is premised on a leadership committed to perpetual innovation and developing organizational capabilities that make innovation habitual. Lean is by its nature a holistic program that must extend across and align the extended enteprise if it is to work at all.

And Idea Management Systems? Lean’s focus on Kaizen – continuous workplace improvement – places Idea Management Systems at stage centre of an organization’s efforts for reducing waste and improving cycle response times. Effective Idea Management Systems need to be at the core of organizational infrastructure for organizations focused on innovations, through Lean methods or otherwise.

One Response to Kaizen, Lean Six Sigma, and Idea Management Systems
  1. within your imagination
    May 25, 2007 | 11:45 AM

    Well, another success story of kaizen. Well done, it's a good well-managed blog. For me, kaizen is simple but amazing philosophy. Even other Japanese companies, somehow, fail in copying Toyota's kaizen. Look Sony, or Nissan.

Kaizen, Lean Six Sigma, and Idea Management Systems

In a January 2007 paper “Driving Operational Innovation Using Lean Six Sigma,” the IBM Institute for Business Value argued that Lean Six Sigma can do more than help achieve operational excellence through improving processes: Lean Six Sigma can

. . . help leaders discover innovation opportunities far beyond operations, enhance financial performance, and create organizations that have an inherent inclination towards innovation.

IBM’s conclusion should not be particularly surprising to anyone with a familiarity with the history of Lean.

Lean Production is a philosophy and set of processes and tools derived from Toyota’s approach to quality and production (itself in turn derived from Quality Management principles advocated in Japan by Deming) that deliver “fast, flexible processes that give customers what they want, when they want it, at the highest quality and the lowest cost” (Liker, 2004: 8). Lean involves a focus on reducing waste and improving cycle time of delivery of value to the customer through mechanisms such as “Just in Time” production and customer “pull”, and a philosophy of continuous improvement.

Lean has been described (Womack and Jones, 2003) as a five-step process:

  1. defining customer value
  2. defining the value stream
  3. making it “flow”
  4. “pulling” from the customer back and
  5. striving for excellence.

The heart of Lean is the driving philosophy of continuous improvement.

For example, when Liker (2004) set out to study the Toyota Production System (TPS) over several decades, he gradually learnt that “all the supporting tools of lean . . . were not the key to TPS . . . Rather, the power behind TPS is a company’s management commitment to continuously invest in its people and promote a culture of continuous improvement.” American institutions trying to adopt Lean typically do “not understand the power behind true TPS: the continuous improvement culture needed to sustain the principles of the Toyota Way” and therefore “dabble” at the “process” level (eliminate waste) rather than adopt at the philosophy, people and problem solving (continuous learning and improvement) levels.

For Toyota, the key to a culture and practice of ongoing continuous improvement is Kaizen (a Japanese term that translates as “continuous improvement”). Kaizen encourages all employees to suggest improvements. While many of these improvements are small and lead to incremental operational improvements, process improvements and quality improvements, other suggestions individually or cumulatively can begin to impact the business model, suggest new products or services, and generally begin to transform the organisations.

It is hardly surprising therefore that the Japanese approach to continuous improvement also has yielded high quality products and services at lower cost with reasonably high levels of product and business model innovation.

Now, back to Lean Six Sigma.

Lean Six Sigma is a fusion of Lean Production philosophy and methods with Six Sigma process improvement methods.

Six Sigma is focused on improving processes to reduce defects and improve quality of outputs (particularly in manufacturing). Six Sigma, like Business Process Reengineering, is largely a planned implementation – one decides what processes one wants to manage and improve using six sigma methods, and then improves them. Conversely, the Lean approach is driven by a culture of continuous improvement, with incremental improvement ideas coming from the workplace upwards.

Six Sigma is focused primarily on reduction of defects, Lean also focuses on the value chain between production and delivery to the customer, reducing or eliminating ‘waste,’ and improving product delivery cycle time.

Lean Six Sigma combines the two approaches, using Six Sigma methods for improving production processes and Lean approaches and philosophy for customer-centered analysis and improvement of the value chain, eliminating waste and improving cycle time.

Now, back to the IBM paper. IBM noted that companies used Lean Six Sigma in a “visionary” manner to “surface significant innovation opportunities” and “establish organizations that now have an inherent inclination towards innovation” that are “focused on customer needs, detailed data analysis, and facts.” The organizations had:

  • An innovation vision based on factual customer and market insights
  • Leadership committed to perpetual innovation
  • Alignment across the extended enterprise
  • Organizational capabilities that made innovation habitual.

Well, yes . . . but it should not be surprising to IBM or anybody else that companies that adopt Lean thinking display these characteristics: these outcomes are fundamental to successful implementation of a Lean approach. Lean’s focus on the value chain focuses an organization on identifying and delivering customer value based on factual customer and market insights. Lean is premised on a leadership committed to perpetual innovation and developing organizational capabilities that make innovation habitual. Lean is by its nature a holistic program that must extend across and align the extended enteprise if it is to work at all.

And Idea Management Systems? Lean’s focus on Kaizen – continuous workplace improvement – places Idea Management Systems at stage centre of an organization’s efforts for reducing waste and improving cycle response times. Effective Idea Management Systems need to be at the core of organizational infrastructure for organizations focused on innovations, through Lean methods or otherwise.

One Response to Kaizen, Lean Six Sigma, and Idea Management Systems
  1. within your imagination
    May 25, 2007 | 11:45 AM

    Well, another success story of kaizen. Well done, it's a good well-managed blog. For me, kaizen is simple but amazing philosophy. Even other Japanese companies, somehow, fail in copying Toyota's kaizen. Look Sony, or Nissan.