Downsising of the production cost is every organization’s goal. In the fight to reduce the cost of production, two approaches can be employed, that is the lean and the six sigma approaches. The lean approach, aimed at cutting the cost of production by eliminating sections in a production line that are of no value to the finished product. On the other side of the coin, six sigma practitioners believe that enormous variations in the production process are uneconomical. Both approaches have a common objective of reducing waste during production.
Despite the fact that there are similarities between lean and Six Sigma, there are also truly outstanding differences. For example, the lean approach aims at improving the flow of the process, while Six Sigma is directed towards enhancing the flow of the process. This notwithstanding, it is best to adopt the two processes for maximum benefit to the organization and, hence, lean six sigma. The benefits are realized since the lean approach will be advocating on reduction of the steps in production, while the six sigma approach will be fighting for a smooth flow of the process, hence, improved production at a reduced cost.
In every business organization, planning plays an extremely pivotal role. Planning can be outlined as the process of setting up goals, determining the way of achieving the goals, implementing the plan by following the decided method, and finally, evaluating the whole plan to see whether the set objectives have been met. The various levels of business planning are strategic planning, business planning, and operational planning.
At the strategic planning level, there is a clear understanding of what the organization is. This involves setting up the overall objectives to be achieved. The strategic plan is qualified to the second level, which is the business plan. The business plan entails deciding on the activities that the organization will carry out, so as to compete with a rival organization. The activities planned, are then passed on to the last level of business planning, which is the operational plan. In the operational planning, more flesh is added to the strategic plan so that the main objectives are broken down into finer detail prior to implantation and, hence, achieving the laid down objectives.
The difference between the levels of business planning is in terms of time, the magnitude of objectives, and the focus. A strategic plan takes a long duration of about three years, while the operational plan may take less than a year. In terms of the focus, strategic plan looks at the whole business, business plan – at the business unit, while the operational plan focuses on the resources and activities at a given area of the business.
Core competency is a measure of the business competitive advantage. In other words, core competency spells the strengths that an organisation can maximise, to outdo the competitors. When an organisation has a strong core competency, it enjoys better production and, in this connection, offers its customer improved products and services. Lean Six Sigma has found application in health care where it helps reduce duplication of services, hence a reduced cost of production. The money saved by increasing the health services efficiency, can then injected to other projects that enhance the service delivery to the people and thus a healthier nation.
An organisation has to measure its core competency in order to determine their strength prior to making crucial decisions. For example, if an organisation wants to venture into a new market segment, it must be aware of their strength then compare it with that of the competitor and, hence, determine their success rate in the business. If the scale is tipped to the competitor’s side, the business is likely to fail, thus, the organisation will opt to quit or, else, they make a loss.