Six Sigma, Lean or TOC: What’s the Difference?

Have you ever wondered what the difference is between Six Sigma, Lean or the Theory of Constraints (TOC)? Will all of these work in any situation? Or, are there specific situations that are better suited for a particular approach? This post compares and contrasts these programs and explores the advantages and disadvantages of each one, along with the best way to use each method to realize improvement.

Six Sigma, Lean and TOC
A quick search over at Google Trends between Six Sigma, Lean and TOC yields the following:

Six sigma, Lean manufacturing, TOC

The popularity of Six Sigma over both Lean and TOC is significant. However, Six Sigma, Lean and TOC are not based on approaches that are contradictory at the foundation level. For example, both TOC and Lean seek to reduce the time from receipt of order to conversion to cash. Both are based on a pull system that starts with the customer, and endeavor to provide a coherent approach to dealing with the entire supply chain. That is, TOC as an enterprise wide philosophy has extended the basic benefits of drum-buffer-rope, critical chain, the distribution solution – and more – across the entire supply chain. Likewise, Lean has extended the basic benefits of the JIT approach, 5S, – and more – across the entire supply chain. The table below summarizes these programs:

Six Sigma is problem focused with a view that process variation is waste. Lean Thinking is process flow focused and views any activity that does not add value as waste. Theory of Constraints is systems focused looking for any system element that reduces the throughput of the whole system. It is less concerned with an individual process.

Six sigma uses statistics to understand variation. Lean uses visuals like process mapping, flowcharting, and value stream mapping to understand the process flow. TOC is holistic: It addresses emotions, intuition, and the thinking process of the whole person. It helps to remove blame by shifting negative energy against someone to positive energy towards solving the problem, together, focusing on individual needs.

The Theory of Constraints takes the concepts of Lean Thinking to another level of systems thinking. You will see a lot of similarity between TOC and Lean. Both are focused on reducing waste and increasing process flow. However, TOC goes beyond Lean with its focus on throughput. Reducing waste is nice but the emphasis should be on making more money by selling more product not just by cutting costs and this is where the two diverge.

TOC is used to focus on the right problem and the right solution at the right time. Then Lean is used to reduce non-value add within the subordinated processes while Six Sigma is used to solve the efficiency problem of the constraint. Now all three can be used together. TOC is more strategic whereas Lean and Six Sigma are more tactical.

TOC should be the overall philosophy that management uses to determine and guide their strategy. Lean principles and lean tools should then be applied in the places in the system where TOC detects they will have the greatest impact on achieving the goal. For example, when TOC pinpoints the place where set-up reduction is needed (i.e. at the constraint or at feeding resources that sometimes become a bottleneck), Lean has the right tools to accomplish this.

Conclusion

• Every system has at least one bottleneck which limits the system’s ability to get more [of its goal]. So every system needs the TOC viewpoint to manage the constraints.
• Every system has unnecessary steps which don’t add any value to the final products. So every system needs to use Lean tools to eliminate them.
• And finally, every system has variations which prevent it from working steadily. So every system needs Six Sigma techniques to find and get rid of them.
  

Do you agree with this assessment? Post a comment and let me know.

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Comments

By Ron on June 15th, 2007 at 2:40 pm

Rob, I agree with most of things you mention. The biggest flaw with TOC, in my opinion, is their focus on always making the bottleneck (Herbie) the pacemaker. I wrote a series on this over on my blog comparing the TOC bottleneck to the Lean pacemaker. I personally believe lean has it right and Mr. Goldratt could improve on his ideas upon reading more of Mr. Ohno’s ideas.

By Ron on June 15th, 2007 at 9:40 am

Rob, I agree with most of things you mention. The biggest flaw with TOC, in my opinion, is their focus on always making the bottleneck (Herbie) the pacemaker. I wrote a series on this over on my blog comparing the TOC bottleneck to the Lean pacemaker. I personally believe lean has it right and Mr. Goldratt could improve on his ideas upon reading more of Mr. Ohno's ideas.

By Jack222 on June 15th, 2007 at 6:44 pm

Don’t you know that lean is a bunch of crap! It only exists to give consultants $$$$. Idiots like you and your readers need a kick in the ass!!

By admin on June 15th, 2007 at 6:48 pm

@Ron: Thanks for the comment Ron. I believe the tends are perpetuated to a degree by consultants, who in turn are responding to customer demands.

@Jack222: You clearly need to understand what lean’s about!

By Jack222 on June 15th, 2007 at 1:44 pm

Don't you know that lean is a bunch of crap! It only exists to give consultants $$$$. Idiots like you and your readers need a kick in the ass!!

By admin on June 15th, 2007 at 1:48 pm

@Ron: Thanks for the comment Ron. I believe the tends are perpetuated to a degree by consultants, who in turn are responding to customer demands.

@Jack222: You clearly need to understand what lean's about!

By lean manufacturing software on January 31st, 2008 at 4:07 am

lean manufacturing software…

We have very much promoted this type of business practice ourselves and am glad I came across your blog again. I have added you to our digg bookmarking account. Thanks!…

By Samuel Okoro on March 29th, 2008 at 7:38 am

I agree with your view that the various improvement approaches are complementary. Lean and six sigma provide the actual tools for making improvements while TOC helps focus those efforts on areas with immediate bottom line impact.

It is like trying to strengthen a chain with a weak link. Any efforts applied to links other than the weak link are wasted and do not contribute to the overall strength of the chain. TOC identifies the weakest link, and out of myriad problems faced in the production setting can point out those which if solved will stengthen the link (thus immediately contributing to the overall success of the business).

By Samuel Okoro on March 29th, 2008 at 2:38 am

I agree with your view that the various improvement approaches are complementary. Lean and six sigma provide the actual tools for making improvements while TOC helps focus those efforts on areas with immediate bottom line impact.

It is like trying to strengthen a chain with a weak link. Any efforts applied to links other than the weak link are wasted and do not contribute to the overall strength of the chain. TOC identifies the weakest link, and out of myriad problems faced in the production setting can point out those which if solved will stengthen the link (thus immediately contributing to the overall success of the business).

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