Can Lean Six Sigma Help Private Sector’s Declining Productivity?
In March 2012, Mark Carney, the Governor of Bank of Canada, described Canada’s investment into productivity as "abysmal" (cbc news), and further predicting that the cost to each and every Canadian will be $30,000 if the trend in falling productivity is not reversed. Labour productivity issue is not unique in Canada, this also applies to US. As reported by Reuters in June 2012, the productivity growth in the US fell 0.9% in the first quarter of 2012.
Lean Six Sigma is a process improvement framework that assists organizations to deliver products and services faster, cheaper, and better through the elimination of wasteful activities and reduction of variation within the process. Can Lean Six Sigma be one of the solutions to reverse this trend in falling productivity?
This post describes three ways in which companies in North America can use Lean Six Sigma to improve productivity.
1. Expedite the time to market
The race for new and innovative technologies has always been a preoccupation for many countries around the world at some time but with the rapid rise in demand and innovation in smart phone and tablet technology, the race for dominance in this space has gotten even that much more competitive. Companies, like Apple, who have been able to bring innovative technologies to the market faster than their competitors have benefited significantly. Other companies, such as RIM, who have been slower to innovate and bring these technologies to market have lost.
Lean Six Sigma (LSS) or Design for Lean Six Sigma (DFSS) can be used to eliminate wasteful activities in the R&D process and commercialization of new products resulting in a faster time to market. Furthermore, DFSS can be used to optimize supply chains to minimize the time from development to delivery of products. Once new technologies are fully commercialized, the technologies can be leveraged to increase productivity in the markets that the technologies support.
2. Lower the Cost of Innovation and Production
Time to commercialization and delivery of products and services is not the only component that improves productivity. LSS and DFSS can be used to develop and deliver new and existing products/services at a lower cost through the elimination of process inefficiencies. As a result of the lower cost per product/ service, the return on investment from these products or services increases; thus attracting more investment into these products. With increased investment should come new innovation resulting in productivity gains.
3. Increased resource performance and utilization
Lean Six Sigma increases labor productivity directly in many ways. First, the elimination of wasteful activities within the processes means that throughput per employee or production will increase. The second is that through LSS process flow is optimized such that the time work stays idle, the transportation time of materials and, work from one activity to the next are all minimized. The third is that resources are utilized only when they are needed, and unproductive time is minimized resulting in higher productivity.
In this blog, I have highlighted three of the many ways that Lean Six Sigma or Design for Lean Six Sigma can increase productivity.
Since government's can design economic policies and programs to help private sector producivity I leave you with this one question. Should governments look at more incentives to promote the use of methodologies like LSS to assist in increasing private sector productivity and competitiveness on a global scale?
Interested in learning how we saved our client 1 Million Dollars and eliminated all non value added tasks
The following URLs provide great additional information on Lean 6 Sigma
Toppazzini and Lee Consulting Lean 6 Sigma Consulting at -Lean Six Sigma Consulting
Linkedin Six Sigma Group at http://www.linkedin.com/groups?home=&gid=37987&trk=anet_ug_hm
ISixSigma web site at www.isixsigma.com
ASQ web site at www.asq.org