Taiichi Ohno, popularly known as the pioneer of the Toyota Production System was born in Dalian, China in 1912. He graduated from the Nagoya Technical High School in Japan and joined Toyoda Spinning in 1932. He joined the Toyota Motor Company as a shop-floor supervisor in the year 1943 and rose to the position of an executive.

In the early 1950s, Ohno, then working as an assembly manager in Toyota, developed significant improvements that eventually took the shape of the Toyota Production System (TPS). Toyota was on the verge of becoming bankrupt and was not in a position to afford large investments in major inventories or equipment. In the 1950s, a major collaboration with Shigeo Shingo started and further refinement in the direction of framing an integrated manufacturing strategy took shape.

The Rise of Toyota Production System

The oil crisis of 1973 hit Japan just as it affected America and Europe. By 1974, Japan’s economy collapsed and crashed to a state of zero. At the Toyota Motor Company, profits witnessed a downfall; however, greater earnings were reported and sustained in 1975, 1976, and 1977 as compared to other Japanese companies.

The huge gap between Toyota and other Japanese companies resulted in the other firms in Japan adopting the Toyota Production System, and began spreading its roots rapidly in the country.

Ohno’s success resulted in his career acceleration from an Assembly Shop Manager to the Executive Vice President in 1975. He retired from Toyota in the early 1980s and joined the Toyota subsidiary and supplier, Toyota Gosei, as the President.

Ohno strongly believed that “Having no problems is the biggest problem of all.” He stated that problems are not the cause of worry; rather it is a Kaizen opportunity to improvise and grow. He also stressed that each problem has to be seen without any set of preconceived notions.

Taiichi Ohno: Contribution to Six Sigma & Lean Manufacturing

Ohno was strongly of the opinion that waste & inefficiency are the two major reasons why Toyota’s production was suffering. He personally took charge of the elimination of wastes and reducing the inefficiency in the production area.

His efforts finally took the shape of the Toyota Production System. Ohno’s principles influenced people in the areas outside of manufacturing, including the service arena.

Ohno also played an instrumental role in identifying ways by which organizations identify waste with his model known as the Seven Wastes which forms the core of many academic studies to date.

A Muda’ is a Japanese term that stands for any entity that doesn’t have any further value and should be eliminated from the organization without any further delay. It is critical to examine the values that each activity contributes to the organization and identifying those that do not contribute any value. After reaching this point it is easier to see what it is that the customer pays for. Organizations can then start working on the elimination of waste. These seven wastes are as follows:

1. Any time wasted in delays or waiting in the queue with no value addition
2. The production is more than the demand
3. Resources (physical or material) being wasted in a non-strategical activity
4. Unorganized or unplanned transportation
5. Unplanned movements or motion
6. Non-utilized inventory
7. The defects, for the inspection of the inventory, cost time and money

A few parts of the Toyota Production System are frequently used in the United States such as kanban (the tagging/signal in JIT stock control system), jidoka (the injection of quality), and muda (the elimination of waste).

Conclusions

Taiichi stated that progress cannot be possible if one stays happy with the present conditions. He took the elimination of the inefficiency in Toyota as his personal goal and kept working until he devised the well-known Toyota Production system.

He was very proactive in removing defects and unusable stock from any organization. He devised seven categories of wastes through which organizations can easily proceed with systemic waste removal from their businesses. His contributions have made Toyota a world-renowned organization with respect to quality excellence.

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Lean and Six Sigma have quickly become two of the most important methods to gauge business process quality in many industries, helping organizations attain higher effectiveness and improved operational efficiency. Both of these are vital aspects within the hospitality industry, giving a hotel a competitive advantage thanks to great customer service, the desired guest experience and high quality of service.

By combining these two methodologies, Lean Six Sigma allows hotels to anticipate and meet guests’ specific expectations, needs and wants and deliver them. Invariably, this will bode well for even the most demanding hotel guests.

How Lean and Six Sigma Methodologies Come Together To Give Hotels a Competitive Advantage

Lean and Six Sigma are the two preeminent process improvement methodologies that have received wide acceptance and adoption by many service and manufacturing organizations across the globe that need to identify weaknesses (defects) in their operations and work towards streamlining their processes. The resulting improvements in quality lead to higher profitability and sustainability of their competitive advantage.

In particular, businesses in the service industry such as hotels can put in place business process improvement plans like Six Sigma and Lean in order to offer their customers a higher value, distinctive and authentic experience while developing their competitive advantage thanks to the following benefits:

1. Increased profits

Adoption of Lean Six Sigma helps to increase the profitability of an organization through streamlining of its operational processes. The end game is to have the hotel’s services delivered to guests faster and in a more efficient manner without compromising quality. Put simply, the Lean Six Sigma model will increase revenues by allowing the hotel to achieve more with fewer resources.

2. Lowered costs

Another major benefit of Lean Six Sigma is that it lowers the hotel’s costs of doing business by:

• Elimination of waste from processes: These are any activities within the hotel which are not necessary for the provision of quality service to guests, but still incur costs for the establishment.
• Solving of process problems: These defects are activities that, while essential for the hotel’s operations, take up much more resources than are necessary and cost money.

In a nutshell, a hotel can reduce costs and use of valuable resources by identifying and fixing defective processes through Lean Six Sigma.

3. Improved effectiveness and efficiency

The efficiency of hotel operations and the effectiveness of processes can be improved by Lean Six Sigma in the following ways:

• Maximizing the hotel’s efforts to offer a satisfactory service to guests
• Allowing an establishment to allocate revenues and resources realized from the implementation of new and improved processes towards business development and growth.

Through more efficient and effective business processes, Lean Six Sigma ensures that hotels are able to offer their guests more services, resulting in a more satisfied clientele.

4. Development of effective teams

Another benefit of Lean Six Sigma implementation in the hospitality industry is its capacity to give employees a sense of accountability and ownership. In this way, their effectiveness increases and they are more focused on delivering the desired results for any part of the process improvement project which they may be involved in. This methodology improves the effectiveness of hotel employees by:

• Getting employees involved: When hotel employees feel that they are an integral part of the process improvement project, they become more active, engaged and accountable.
• Fostering trust: When transparency cuts across all levels of the hotel’s organizational structure, the Lean Six Sigma method promotes a mutual understanding and appreciation among staff of each person’s importance to its overall success.

5. Enhanced customer experiences

The benefits to guests at a hotel will usually be in the form of improved service, better delivery and high quality. Efficiencies in internal processes will have a trickle-down effect on the customer experience, and often results in maintaining a high number of repeat visitors.

It also helps from a marketing standpoint, with implementation of Lean Six Sigma methodologies letting hotels publicize the fact that improved processes and problem-solving methods allow them to offer an enhanced range of services and amenities to guests.

Conclusion

In order to achieve and maintain competitiveness in the cut-throat hospitality industry, hotels have to identify and meet the expectations of their guests, as well as deliver high-quality service. The effectiveness and efficiency resulting from Lean Six Sigma in the hotel business will lead to better service quality, higher morale among employees and increased customer satisfaction.

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The Spread of Lean Six Sigma from Its Original Inception to Today

Lean is a popular concept in many organizations today, but its presence in industry is actually relatively recent, dating only a few decades back. It originates in Japan, and has close ties to the Kaizen philosophy, and today, it’s growing at a fast pace and enjoying a lot of recognition in many parts of the world.

Roots of lean methodologies

The fact that lean is popular on a global scale today owes mostly to the impression Japan made on the rest of the world with their exceptional manufacturing quality, after rebuilding the empire following the end of World War II. The country managed to implement successful reforms in its industry, and those innovative approaches to manufacturing, and overall organizational philosophy, were primarily responsible for the spread of lean to the rest of the world.

If you want to learn more about the history of Lean, check out our infographic on Lean history >>>

Six Sigma takes America by storm

About the time when lean was making an impact in the US, another methodology was gaining momentum, called Six Sigma. It was developed by Motorola to improve quality, using the concepts of Total Quality Management (TQM), packaged in an easier to learn approach.

The methodology was easier to embrace for American companies for two reasons:

1. There was limited knowledge and some cultural push back of the lean approach
2. The focus on data and the training regimen was new and exciting

As the growth in Six Sigma took off, especially after General Electric (GE) reported savings in the billions of dollars, there was still continued interest in the lean methodology. The tools and methodology seemed to fill a gap that Six Sigma could not address, the people side of improvement.

The boom of lean adoption occurred around this time as well, with the methodologies spreading across many sectors, from private to public ones, and it can now be seen in pretty much any industry and type of organization.

Lean Six Sigma is born

Lean Six Sigma in particular didn’t exist as a separate entity until the beginning of the 2000’s, when it broke out from its parent group of philosophies. Lean methodologies still exist on their own as well, but the relationship between all these members of the family are becoming more and more apparent in recent years, and it will be interesting to see where we end up in a decade or so. Will they become synonymous with each other, or start to pull apart back into their purest forms.

Is it completely blended together? Not really. How they blend together is still being tested and experimented with. Most companies still slightly favor one approach over the other (usually the one they started with). But rarely do companies today just subscribe to only lean or only Six Sigma.

Specific differences

The main difference between lean and Six Sigma and the factors combined in Lean Six Sigma are in the focus of each methodology. Lean is mostly concerned with the reduction/elimination of waste in order to increase value, while Six Sigma attempts to quantify the problem and turn it into a statistical equation to be solved.

Lean is focused on small improvements that can be implemented by all employees, whereas Six Sigma invests time into training key employees on the methodology so they can learn to improve processes as they move up the company.

Regardless of what approaches are used, it’s important that the process is guided by someone experienced enough to know which aspects of Lean Six Sigma work best for that particular organization. Think of the change agent as a contractor for building a house, and he/she must have good knowledge of both Lean and Six Sigma, in order to be able to apply the correct approach for the situation.

What can we expect in the future?

As the concepts are taking hold in more areas, we’re likely going to see them transformed in interesting and creative ways, leading to the discovery of even more tools for efficient resolution of problems and elimination of waste.

Some sectors are contributing a lot to the development of Lean Six Sigma, and the US government has been a major entity in the growth of the methodology. And the more eyes we have focused on the problem, the better results we’re going to see in the near future.

It’ll be particularly interesting to follow the tech industry in this regard, as the combination of lean methodologies with modern technology, AI, machine learning and similar tools, can potentially lead to a revolution in the area. Computers are much better than us at parsing large volumes of data and looking for interesting patterns in them, so it’s not unlikely that the next major development in the area of Six Sigma could come from that area exactly.

When the analysis can be uncovered through machine learning, will there still be a need for a Black Belt? We foresee some continued improvements in automation, but ultimately there will still be process improvement consultants needed to interpret the results, and work with the process experts and workers to interpret the results, and implement improvements in a way that can be embraced.

Conclusion

The next few years are probably going to be the most active period in the lifetime of Lean Six Sigma so far, and we expect to see plenty of interesting developments in the field from the various organizations that have adopted these methodologies.

Where do you think Lean Six Sigma is headed in the future? Add your comments below…

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