Lean Six Sigma in Hrm

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Lean Six Sigma in the Service Industry
Alessandro Laureani
University of Strathclyde
United Kingdom
1. Introduction
The business improvement methodology known as Lean Six Sigma is rooted in the manufacturing industry, where it developed over the past few decades, reaching widespread adoption worldwide. However, according to the World Economic Outlook
Database, published in April 2011, by the International Monetary Fund (IMF, 2011), the distribution of PPP (Purchase Power Parity) GDP, in 2010, among various industry sectors in the main worldwide economies, reflected a decline in the industrial sector, with the service sector now representing three-quarters of the US economy and more than half of the
European economies.

PPP GDP 2010

Agriculture

Industry

Service

European Union

5.7%

30.7%

63.6%

United States

1.2%

22.2%

76.7%

China

9.6%

46.8%

43.6%

India

16.1%

28.6%

55.3%

Table 1. PPP GDP Sector Comparison 2010.
In light of the increasing importance of the service sector, the objective of this chapter is to discuss whether the business improvement methodology known as Lean Six Sigma is applicable to the service industry as well, and illustrate some case study applications.

2. What is Lean Six Sigma?
Lean Six Sigma is a business improvement methodology that aims to maximize shareholders’ value by improving quality, speed, customer satisfaction, and costs. It achieves this by merging tools and principles from both Lean and Six Sigma. It has been widely adopted widely in manufacturing and service industries, and its success in some famous organizations (e.g. GE and Motorola) has created a copycat phenomenon, with many organizations across the world willing to replicate the success.

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Advanced Topics in Applied Operations Management

Lean and Six Sigma have followed independent paths since the 1980s, when the terms were first hard-coded and defined. The

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