Six Sigma Laws – The Law of Complexity and Cost

The Law of Complexity and Cost is the last of the five laws of lean six sigma. In order to properly explain this law, however, it’s useful to know what exactly lean six sigma is.

Lean Six Sigma, which combines six sigma with lean manufacturing in order to increase overall speed and customer satisfaction. It does so by focusing more on improving process flow and speed than on improving quality by combining the laws of six sigma with that of lean manufacturing. The concept of lean Six Sigma utilizes five different “laws” in order to make the process successful. The Law of Flexibility is the second law of lean six sigma. It states that the speed of a process is dependant upon the workers’ ability to switch back and forth among tasks. This is important because the overall goal of six sigma is to increase a company’s profits by identifying and then eliminating factors that contribute to waste and customer dissatisfaction.

Lean six sigma has five “laws” that are used to come up with the most efficient way to reduce waste while remaining up to speed. The five laws are:
1. The Law of the Market
2. The Law of Flexibility
3. The Law of Focus
4. The Law of Velocity
5. The Law of Complexity and Cost

The concept of lean six sigma is a combination of six sigma and lean manufacturing. In a nutshell, Six sigma is a method used to provide business with the necessary tools to increase their overall performance and customer satisfaction. This is done by statistically analyzing various forms of data and information, then using it to anticipate the needs of their customers. The overall goal of Six Sigma is to increase a company’s profits by identifying and then eliminating factors that contribute to waste and customer dissatisfaction.

The overall goal of lean manufacturing is to eliminate waste. The first step to eliminating waste, according to lean manufacturing, is to identify what causes the waste. As a general rule, waste is categorized in the following ways:
• Overproduction – this refers to producing more than is required, resulting in wasted products and labor
• Excess Transportation – transportation that costs the customer money but doesn’t add any value to the end product
• Excess Inventory – more inventory than is required to complete the project
• Excess Processing – refers to using more of the labor force than necessary
• Waiting – idle time, either via machines or laborers
• Correction – wasted time fixing a problem because it wasn’t done correctly the first time
• Motion – wasting time to run errands like pick up parts, etc.

The Law of Complexity and Cost
This final law of lean six sigma states that a product or service that is very complex adds more non-value, higher costs, and more Work-In-Progress (WIP) than processes that are slow or of poor quality. In other words, the complexity of something is more expensive to the organization than something that is lower quality or produced in a lower speed.

One common example of a high level of complexity and cost is the automotive industry. The complex nature of automotive products in general make it a high-cost industry. Organizations can work to reduce the law of complexity and cost by going back to the basic laws of six sigma and working to cut costs in other areas.

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Categories: Facilities Management, Lean Manufacturing, Operations, Project Management, Supply Chain Management, Total Quality Management,

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Tags: law complexity cost manufacturing lean six sigma