Finding Your Perfection with Lean Six Sigma

In the industrial supplies space, small errors can mean big costs. Learn about the benefits of implementing a Lean Six Sigma process at your organization.

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At some point, everyone dreams of reaching perfection. Making the winning shot in a big game, exceeding an aggressive sales target set for the year, or having zero defects in a complicated production process.

Fortunately for us, we are some of the lucky ones. Because in our line of work, that dream becomes a reality as we have the chance to blur the lines between the possible and impossible with a little something called Lean Six Sigma.

Lean Six Sigma at Fastenal

Lean Six Sigma is a methodology that we strongly believe in at Fastenal. So much so that we stress its importance to our employees each day, while also leading our industrial customers to their most absolute state.

Believe it or not, though, not everyone fully understands the value that this approach can bring an organization. Some groups even invest in shortcuts or quick fixes in hopes that they too can achieve the impossible, cheaply. Today, we hope to change their minds, as we discuss the benefits of truly being a Lean Six Sigma organization.

Lean, Six Sigma or Both?

Lean and Six Sigma, while closely related, are actually two, different concepts:

Lean is “the systematic identification and elimination of waste,” and seeks to:

  • Lower production costs
  • Lower labor required to produce
  • Shorten product development
  • Improve product quality
  • Improve profitability
  • Increase flexibility

While Six Sigma is “a highly disciplined approach focusing on consistently producing near perfect outputs,” where 99.99966% of all services, products, etc. are expected to be error-free.

To break it down further, “six” means 6 standard deviations (or sigma) between the average and acceptable limits. So, you can also have 3 sigma, 4 sigma, 5 sigma, and so on. All of which produce exponentially lower error rates when linearly compared to one another.

Six Sigma Graph

Put them together and what do you get? A Lean Six Sigma approach that includes problem solving and process improvement, at a faster and more efficient pace.

Don’t We Already Operate Perfectly Enough?

A lot of organizations think that things are good enough just the way they are. Or, that operating at a 3 or 4 sigma level is enough. For fun, let’s look at some real-world examples of what it means to be a 4 sigma (99.9%) organization:

  • At least 200,000 wrong drug prescriptions every year
  • 10 incorrect medical procedures performed each day
  • 22,000 checks deducted from wrong bank accounts each hour
  • 12 babies given to the wrong parents, daily

As you can see, operating below a 6 sigma level just isn’t enough to ensure quality control, and we hope it makes you ready to make some organizational changes. But, before you get started, we want you to understand how important it is to do things the “right way.”

Traditional vs. Lean Organizations

As with any new process or culture change, implementation takes time and effort. Some of the most common mistakes we see during the implementation of a Lean Six Sigma approach include 1. Not getting leadership buy-in, and 2. Not investing enough time in training and communication.

And, these change-management components are a big deal, because a lot of business processes are impacted by such a tremendous shift in how you do daily business, including:

  • Inventory management
  • Ideal economic order quantity & batch size
  • People utilization
  • Work scheduling
  • Work groups
  • Accounting
  • Quality control

Let’s go through a few of these in a little more detail.

People Utilization

Traditionally, leadership believes all people must be “busy” at all times. But once you move to a more efficient and error-free state, work is performed based on customer demand. So, employees aren’t burdened with inefficient busy-work throughout the day, and actually have more time to be productive.

Work Groups

A leaner approach means out with the traditional functional departments, and instead opens up the opportunity for more collaboration across cross-functional teams.

Quality

Since processes, products and services are designed to eliminate errors, time no longer needs to be devoted to post-production inspections for mistakes.

Now that it’s clear how important it is to have company-wide buy-in, and the proper training and communication, let’s explore the industry-leading tools that can help you reach your Lean Six Sigma goals.

Popular Tools and Success Stories

There are quite a few tools out there when it comes to Lean Six Sigma implementation, but we’ll discuss some of the ones we really trust at Fastenal.

First, we use the 6S technique as a guide for all projects:

  • Sort - remove all unnecessary materials
  • Straighten - make it obvious where things go
  • Shine - clean everything
  • Standardize - establish policies/procedures
  • Sustain - train and make part of routine
  • Safety - the most important one

Then comes process mapping. Here, we work with you to map product flows through the current state of your procurement system, and then identify areas where operational costs can be reduced or eliminated.

The result? We uncover hidden sources of supply chain waste, and provide total cost savings solutions that make your business faster, leaner and more competitive.

Another staple in our tool set is point of use, which brings vending technology into the spotlight. The goal is to keep the production worker doing work instead of looking for products. So, we bring the product closer to the end user, which minimizes walking and waiting time.

Success Stories

While each situation is unique, and requires a custom solution when it comes to a Lean Six Sigma methodology, we do want to share some of the ways we have experienced success with our customers:

DISCIPLINE SQUARE VISUAL WORKSPACE

Everything is labeled for easy identification so the work instructions are clear, resulting in continuous process improvement and an error-proof solution.

Discipline Square Visual Workplace*Image courtesy of Brady

SHADOW BOARDS

Think of your typical utensil drawer organizers in your kitchen: everything has a place and there’s a place for everything. Now, employees spend less time traveling and looking for tools, and have more time to do actual work.

Shadow Boards*Images courtesy of Accuform

 

FOAM INSERT IN VENDING LOCKER

At a glance, employees can easily see and find necessary tools, while also seeing what is missing and who had last access.

Foam Insert in Vending Locker*Images courtesy of Fastenal Solutions (Vending) and Accuform

 

What Now?

At Fastenal, total cost of ownership is a driving force behind all that we do, and you can see that with our passion for Lean Six Sigma — we make employees and processes more efficient, saving you more money on the overall product cost.

Total Cost of Ownership Graph

We’re happy that Corporate United shares a similar mindset, which means our partnership and program is founded on the same value proposition. That’s why members on the program experience mid-agreement reviews, core list management and a total cost of ownership initiative with Lean Six Sigma support.

Are you ready to find out what you’re missing? Contact Corporate United to get started.



Matt Horvath and Gene Humes, Fastenal
With more than 40+ years of supply chain industry experience, Matt and Gene support Fastenal customers through the Lean Six Sigma implementation process, and are both certified Lean Six Sigma Black Belts and Blue Belts.