Service Providers Make Gains Combining Lean & Six Sigma

by Tom McBride, Partners for Creative Solutions, Inc.

  The terms lean and six sigma are widely recognized, due in part to the tremendous success of companies like Toyota and General Electric.  While both philosophies have foundations in manufacturing, service providers large and small are getting into the act as pressures mount to control costs and improve value in the eyes of customers.

Both lean and six sigma reduce variation to achieve breakthrough results in operating costs and quality.  Lean not only addresses individual processes but also the “flow” of work between processes, and as a result is generally superior to six sigma at reducing lead times.   Six sigma projects often focus on individual processes and utilize powerful statistics to improve process efficiency and dramatically reduce defects (by definition six sigma quality is defined as less than 3.4 defects per million).  They share many tools and techniques, but their unique strengths combine to produce the greatest gains when they are applied together.

Here are a few examples of successful applications.

Bank of America started lean six sigma as a corporate initiative in 2001 and has trained over 10,000 associates in the techniques.  A few examples from thousands of process redesign projects are:  $1.3 M saved in relocating new hires; $5 M increased revenue form improved lockbox deposit availability; $10.7 M revenue from improving customer referrals from tellers; $30 M revenue/$1.5 M savings from measuring return on sponsored events. 

A regional Insurance agency used lean to reduce customer transaction times by 27%, saving $50,000 annually.  They also cut total cycle time for mail transactions from 30 days to 24 hours.

Valley Baptist Medical Center had a lengthy, inefficient process for discharging in-patients, a common concern for hospitals.  Using six sigma and lean tools the project team reduced the average time to execute a discharge order from 185 minutes to a more consistent 48 minutes.

In 1999 the new mayor of Fort Wayne , Indiana had a vision of a city that was safer, had more good jobs, and provided excellent service to its citizens.  Within three years Fort Wayne trained more than 60 employees in six sigma and lean techniques, and launched 60 projects that achieved direct savings of $3 million, reduced response times for services, and made it easier to do business in the city. (1)

A Westin Hotel location in Colorado improved from “poor performer” to one of the top 10 hotels in the chain by applying the six sigma process. (2)

In summary, service providers of all types and sizes are combining lean and six sigma to ensure long term viability.  Go to and click coming events to learn more about this topic.

References: 1) George, Lean Six Sigma for Service, 2003  2) Eckes, The Six Sigma Revolution, 2001