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Six Sigma and Lean can help businesses of any size, take this example:

The owner of a seafood restaurant often advertises an all-you-can-eat special on crab legs. Half the time, however, he runs out of crab legs before the end of the evening. That same owner regularly throws out pounds of spoiled food. Both incidents represent defects that can be eliminated or significantly reduced using Six Sigma to define and measure the problem. The solution is buried in the receipts and sales data over time. We know how many people are coming to eat, we know how much inventory is consumed, but the owner does not numerically associate the inventory input to the output over time.

Define: During the past six months, the cost of spoiled food was $38,375.67, an average of more than $6,000 per month. The objective of this Six Sigma project is to reduce this “defect” by 50 percent, achieving a cost savings of $3,500 per month.

Measure: Using receipts, stock levels and purchasing records, we ensure that these records accurately represent the continuous level of waste. We perform a “measure system analysis,” which compares what was ordered by the owner to what was purchased by the customer, and repeat this comparison for the past two months. You may find that some records were recorded in error, but now we have a measurement system that is repeatable. We have our problem definition, the defect being the cost of food not consumed by the customer that spoiled per week; and we have our business metric: wasted money on inventory.

Analyze: We define a metric by analyzing the data, from which it can be determined that 75 percent of the wasted dollars is coming from two sources: beef and high-end fish products. We further determine that of that 75 percent, the fish products accounted for 80 percent of the problem. We verify that the source of information is repeatable for the past eight weeks, and the receipts confirm that is, in fact, the case.

During the analysis phase, additional defects may be uncovered, such as order delivery times being longer than they should or a short supply of crab legs, thus accounting for the shortage of crab legs during the all-you-can-eat specials.

Improve: We have determined that for three foods–beef, high-end fish and crab legs–the amount ordered doesn’t match the consumption rate. Therefore, an 80 percent reduction in the ordering of the slow-consumption foods–the beef and the fish–will yield a savings of $3,800 per month. Increasing the amount of crab legs ordered lowers opportunity costs by having a supply of crab legs that meets demand during all-you-can-eat specials.

Control: To prevent recurrence of defects, we track our shortages and overages and place “threshold spending amounts”–maximum amounts spent based on inventory–on each major food category. A graph of the previous day’s orders and shortages or overages is created daily, with results reviewed weekly. Based on end consumption rates, an action plan is put into place, including such components as a more accurate buying guide and menu adjustments. The “test” of the action plan are the customers voting with their wallets.

Okay, but isn’t Six Sigma and Lean learning expensive? Do you need to pay $$$ to consultants? Not so, check out these free courses over at MIT:

Applied Statistics
This course is an introduction to applied statistics and data analysis. Topics include collecting and exploring data, basic inference, simple and multiple linear regression, analysis of variance, nonparametric methods, and statistical computing. It is not a course in mathematical statistics, but provides a balance between statistical theory and application. Prerequisites are calculus, probability, and linear algebra.

Managerial Psychology
This course introduces you to behavioral science theories, methods, and tools and provides opportunities to use and apply them to problems you will encounter in your work and career. The course material will begin with an overview of work and organizations in modern industrial society, and then examine individual behavior, move to behavior in groups or teams, and finally discuss organizations as a whole. It is expected that at the end of the course you will: (a) know something about managerial psychology, (b) know how to learn more, (c) understand the behavioral research process, and (d) develop skills in presenting your ideas in oral and written reports.

Integrating the Lean Enterprise
This class addresses some of the important issues involved with the planning, development, and implementation of lean enterprises. People, technology, process, and management dimensions of an effective lean manufacturing company are considered in a unified framework. Particular emphasis is placed on the integration of these dimensions across the entire enterprise, including product development, production, and the extended supply chain. Analysis tools as well as future trends and directions are explored. A team project is a key component of this subject.

Lean/Six Sigma Processes
Students of this course will develop a broad understanding of Lean/Six Sigma principles and practices, build capability to implement Lean/Six Sigma initiatives in manufacturing operations, and learn to operate with awareness of Lean/Six Sigma at the enterprise level. All course materials are organized around a common “single-point lesson” (SPL) format, with some of the SPLs provided by the instructor and guests and with some developed and delivered by student teams.