To its benefit, operating a business using Lean Six Sigma directly (and positively) impacts capacity and lead-time, with indirect benefits occurring to ease of management and quality. How this affects your business financially is easy to calculate.

Shorter lead times allow you to do so much more, whether it’s faster payments (with a potential increase in market share) or a reduction in inventory (which allows you to take on more inventory, in terms of repair businesses). Often, businesses don’t turn to Lean Six Sigma until they’re in a crisis of some sort. Product quality sees a sharp decline or orders can no longer be filled, and suddenly the company realizes they must take drastic measures in order to save the business. If this process is practiced correctly by those appropriately trained to lead the initiative, productivity can be boosted almost immediately and lead-time can be greatly reduced. The added benefit is that it can be a low cost program to initiate.

As indicated, Lean Six Sigma can easily give your business shorter lead times. Simply defined, it is the amount of time it takes your company, from start to finish, to complete a process. How you define a process is dependent on your company and it’s products and can include things done post job completion, such as billing, or things done before the process begins, like taking bids for a project. Taking the number of steps in a process, and dividing this number by how many completions are done in an hour calculates lead-time. To shorten this number, the number of steps in a process should be reduced while maintaining a constant number of completions per hour.

Depending on your business, there are number of different ways in which you’ll search to find opportunities for lead-time reductions. This often involves inventory reductions, whether it is in reducing backlog, buffer stock, safety sock, or finished goods. Inventory is often used to protect your process against “worst case scenarios” which MAY happen, but also may NEVER happen. If you can find the underlying cause for necessitating these extra inventory numbers, and then promptly eliminate it, you will experience shorter lead times.

As you can see, Lean Six Sigma works to reduce the time between operations in a process, which then shortens your lead-time. This improves your process as a whole, and the bottom-line of your company.