Comparing Lean and Six Sigma and the Impact of Theory of Constraints

More Accurately: Comparing the Impact when Lean and Six Sigma are Implemented stand-alone, or Implemented in combination with Theory of Constraints

(aka The Theory of Constraints/Lean “either/or” decision you do not need to make.)

A California Corporation conducted a 2-year experiment across 21 plants – 11 plants applied Six Sigma, 4 plants applied Lean, 6 plants applied TOC THEN applied Lean AND Six Sigma within the TOC improvement framework.

Among the key measurements they used was “contribution to financial savings” … not an ideal measurement from a Theory of Constraints perspective where the focus is typically on making more money rather than saving money.

(To be clear: a  reduced Operating Expense is a common side-effect of a TOC implementation that we’re always happy to see, of course. But it’s rarely a first choice objective in an implementation in a  for-profit implementation. On the other hand, reducing the OE can be the focus of an implementation in a Government Department, for example. There are Case Studies illustrating the impact in those circumstances.)

The “cost savings”measurement is more in line with Lean and Six Sigma.

But even with measurements more commonly associated with Lean and Six Sigma, what were the results?

  • 89% of total cost savings came from the 6 plants using the TOC approach.

  • 7% of total cost savings came from the 11 plants using Six Sigma alone.

  • 4% of total cost savings came from the 4 plants using Lean alone.

The case Study was published as a PDF file. You can download this report from the link below:

Published Report of the Experiment

TOC does NOT push Lean or Six Sigma aside.

Rather, it focuses their contribution for maximum competitive and profit advantage.

This article makes the point, emphatically.

Managers who see only “either/or” are blind to the benefits they could be banking.