Basics

The dynamics of the business environment are changing, driven by increased globalisation and variable stakeholders’ orientations. Furthermore, the economic downturn in the last decade has caused organisations to strive for continuous improvements in productivity and efficiency while pursuing enhanced customer satisfaction through better quality products and services (Sreedharn et al, 2019). This has led many organisations to embrace reliable continuous improvement strategies such as Lean and Lean Six Sigma (LSS), regardless of their type and size of organisation (Antony et al, 2017). 

LSS is a business improvement methodology that aims to maximise shareholder value by improving quality, speed, customer satisfaction, profitability and cost efficiency (Laureani and Antony, 2018). This methodology has evolved through a combination of Lean as a waste reduction tool and Six Sigma as a data-driven tool to reduce variation and defects (Shokri et al, 2016). 

This report offers concise information about LSS, presented in a form that is accessible for stakeholders from diverse backgrounds, with the purpose of raising awareness and knowledge about Lean and LSS and their principles, benefits, challenges and critical success factors. The report will conclude by introducing summarising principles, benefits, challenges and key success factors of Lean and LSS to stakeholders from different sectors including service, manufacturing, Small to Medium Sized Enterprise (SMEs), Higher Education (HE) and Start-ups with micro businesses. 

The concept of lean is rooted in Japanese manufacturing, although it has now been adopted by various organisations of different sizes. The significant economic crises, high unemployment rate and destruction of markets due to Word War II led Japanese organisations to adopt the philosophy of lean (Toyota Production System at the time) in order to eliminate waste and increase productivity (Drohomeretski et al, 2014). Lean was defined by Womack and Jones (1996) as a continuous improvement philosophy to reduce waste through identifying the non-value adding (NVA) activities. 

Six Sigma is defined as “a well-established approach that seeks to identify and eliminate defects, mistakes or failures in business processes or systems by focusing on those process performance characteristics that are of critical importance to customers” (Albliwi et al, 2015). Six Sigma is a systematic rigid and reliable methodology with top-down approach that focuses on the opportunity of defects and sources of variation to remove them or minimise them with the purpose of achieving customer satisfaction and exceeding their requirements. It attempts to attain similar values as lean management such as productivity and cost efficiency. 

Many studies recommended the adoption of LSS as a hybrid programme to overcome shortfalls of Lean and Six Sigma individually for performance improvement and cost efficiency in organisations with a proper infrastructure built on leadership and change culture (Costa, 2021). Nevertheless, despite its successful application in many organisations of different sizes, LSS is not always a suitable tool for start-ups due to its resource intensity. This, however, does not prevent start-ups from deploying lean management in their businesses.