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Lean Six Sigma – waste and optimization

Waste and Six Sigma

Lean Six Sigma combines the knowledge of Six Sigma principles with reduction of so called waste. In many companies, people will explain you that there is a lot of ‘overhead’ in the process. People observe simply things being done that are duplication of work, that are superfluous or that are unnecessary. This is called waste.

By mapping out an existing IT or industrial process, it often becomes apparent that there are too many instances of this type of overhead.

Examples of waste

To mention a few examples, waste can be unnecessary transportation of goods or documents. If a document must be ‘checked’ or stamped by a manager before it can be released, the question can be asked if the process of creating and releasing a document should be revised. In many cases, the added value of the ‘Manager’ is negligible to the actual content of the document or process.

Storage of goods. If the process is not running smoothly, there is a constant need to keep things as reserve stock. Just-in-case instead of Just-in-Time one could say about this type of waste.

Keeping other people waiting is a huge waste of time for many. By aligning processes and information, this can be avoided.

Six Sigma approach

An important phase in the optimization according to Six Sigma principles occurs when investigating how processes can be optimized during the measurement and analysis phases. The so-called Process Mapping gives an initial overview of the ‘workflows’ and a first insight into the level of efficiency that has been applied. Where a lot of ‘parallel’ activities or ‘back-loops’ are visible that later all come together again in a single ‘node’, there is reason for concern. As it is unlikely that all tasks happening at the same time will end at the same time: result is in most cases a waiting time until all activities are finailzed.

Process mapping furthermore provides the foundation for:

  • Analysis of the performance w.r.t. requirements from Customer and Organization
  • Identification of bottlenecks
  • Simulation of improvements
  • Procedure standardization
  • Communication of roles and responsibilities
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Lean Six Sigma helpt werkmethoden doorlichten

Op de Maasvlakte-centrale ging vorig jaar een aantal zogeheten Lean Six Sigma-projecten van start. LSS staat voor een bepaalde methodiek die werkprocessen helpt te beheersen en te verbeteren. Meerdan veertig medewerkers zijn al, of worden nog, opgeleid in deze innovatieve denk-en werkwijze. ‘t Houdt eigenlijk in, dat processen aan de hand van een vaste methode heel gestructureerd worden doorgelicht. Rode draad: Define-Measure-Analyze-lmprove-Control.

Oftewel: Definieer-Meet-Analyseer-Verbeter-Controleer. Metdeze houvast kunnen medewerkers de efficientste manier vinden om tot een gewenst eindresultaat te komen.

Lean-Six-Sigma past volgens manager Operations Albert den Hartog dan ook uitstekend in E.ON’s streven naar verantwoord ondernemen. Albert: ‘Bij Corporate Responsibility wordt vaak gesproken over de baians tussen People, Planet, Profit – Mensen, Planeet, Winst. Omdat LSS zieh richt op de best mogelijke uitvoering van werkzaamheden, kun je je voorstellen dat een project dat bijvoorbeeld draa it om de afvalwaterzuivering, de milieuove rsch rijdingen tot nul terugbrengt.

Zoiets is niet alleen goed voor ons als werknemers, maar voor alle mensen. LSS-projecten zijn per definitie mult idisciplinair; oplossingen komen grotendeels van de werkvloer. Door te werken volgens LeanSix- Sigma krijgen we bovendien een methode in handen om oplossingen op een duidelijke manier te beargumenteren. Zodat we ook meer grip krijgen op de werkprocessen zelf. Daarom is CR-denken zo belangrijk in een organisatie.’

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Europe has a great economy. Why do we need to worry about productivity?

Europe’s economy has experienced seemingly high productivity over the past decades, due largely to the massive capital investments in various sectors. However, the real issue is Europe’s productivity growth rate (how quickly we’re improving our productivity).

Over the recent years, Europe’s productivity has been lower then China’s and India’s productivity growth rate. Europe doesn’t fare any better when compared to countries around the world. As an economy, we start to lag behind, but on the macroeconomic level, Europe’s prospects remain very rosy, but from a microeconomic perspective our performance is of serious concern.

Compared to other developed economies, Europe has weakening labour productivity growth and sliding real income growth. Concerns about weak productivity growth will only intensify as structural changes in the global economy shift the engines of economic growth to China, India, and Brazil.

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Why is Europe performing so poorly in productivity growth?

Various factors have contributed to our poor productivity growth:

  • slow or no adoption of new processes and technologies to enhance efficiency
  • underinvestment in machinery, equipment, and technology
  • lack of innovation to enable the creation of new products and technologies
  • lagging workplace re-organization and worker training

The EU, in close partnership with industry and other levels of governments, is working on a strategic three-pronged approach to address the productivity growth challenges faced by Europe:

  • education and awareness of productivity
  • productivity enhancement tools
  • policies to promote and enhance productivity and innovation
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So, what is the EU doing to address the productivity gaps?

The EU, in close partnership with industry and other levels of governments, is working on a strategic three-pronged approach to address the productivity growth challenges faced by the EU:

  • education and awareness of productivity
  • productivity enhancement tools
  • policies to promote and enhance productivity and innovation
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Does Europe have an enough young and growing population? Will that be enough to address the productivity gaps?

Europe’s population is aging. More and more workers, especially the Baby Boomers, are or will be approaching retirement age in the very near future. When this group of workers begins to leave the labour force, it will place great demands on the existing workforce and on the economy as a whole.

Europeans relocating from other parts of the continent or immigration will not address the full shortage of workers in the European economy. In order to successfully meet the challenges of the demographic shift and the high demands of today’s employers, we need to tackle the labour issue from both the supply and demand sides of the equation.

It is important to understand that all companies compete in a global market place and, more often then not, are competing with companies with a greater cost advantage. To ensure European companies are able to sustain themselves, they must look at how they can improve operational efficiencies to maintain their competitive advantage.

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Why does productivity matter?

Productivity growth plays an active role in offsetting inflationary pressure and as well as long tern economic growth. This is achieved through greater resource allocation and human resource efficiency, effectiveness and engagement; increased innovation and technology diffusion and capital investment.

Productivity is an essential component to the success and health of every company in Europe and the overall standard of living.

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How is productivity defined?

Productivity measures the efficiency with which resources such as labour or capital are employed in the production process. There are two widely used productivity measures; labour productivity and multifactor productivity.

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Lean Six Sigma , labour and productivity

What is the difference between labour and multifactor productivity?

Labour productivity is measured as real output per hour worked. Multifactor productivity, a broader measure of efficiency, is measured as real output per unit of combined inputs (capital, labour, etc). In essence, this is the efficiency of all or your factors of production.

Progress in productivity constitutes a significant source of increased standard of living. In the long run, increases in real hourly earnings are tied to productivity gains. The European economy has been able to produce more goods and services over time, not by requiring a proportional increase of resources such as labour, but by making production more efficient. The overall performance of any company, operating in any industry, is comprised of at least seven key criteria:

  • effectiveness
  • efficiency
  • innovation
  • productivity
  • profitability
  • quality
  • quality of work life
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