Lean vs Six Sigma: What's the Difference?

Lately there's been a great deal of talk around Lean execution. But, some people speak of Lean, some speak of Six Sigma and some use a combination of the two. But, what's the difference? How do you know what's right for your organization?

Lean Six Sigma is a methodology that combines process speed with quality. To become a truly more efficient and effective organization in terms of operations and business processes, you must have both Lean and Six Sigma methodologies; having one without the other ultimately results in process destruction.

Lean, itself, focuses on speed. It emphasizes reducing the amount of time between activities, events, and cycles.  The shorter the cycle time, the more cycles you can complete in a given amount of time. Lean also identifies areas where process waste and bottlenecks can be eliminated. There are 8 types of waste that can be removed from business processes to reduce costs and time:

• Waiting- whether it is for the next activity, process step, or information, process wait time can be 90% or more of the processing cycle.
• Overproduction- over producing products or services ahead of the need can result in product expiration or excess inventory
• Rework- correcting defects, mistakes and errors
• Motion- excessive movement/transfer of people, supplies, materials, and documents
• Over Processing- of information, data, and testing
• Inventory- maintaining excessive amount of supplies that could potentially expire
• Intellect- failing to use the talents and knowledge of the organization
• Unnecessary Transporting- equipment, people, etc.

While lean promotes rapid business processes the problem that arises from it is a lack of quality. It doesn't matter how many forms are completed or calls are taken if the data and information captured is not up to par. Simply completing activities rapidly, without check marks fosters an environment prone to errors and often requires rework. This is where Six Sigma becomes essential to business process management. 

The Six Sigma methodology is a quality tool that emphasizes reducing the number of errors in a process. It focuses on identifying variation in the types of data inputs, and looks at Root Cause Analysis to determine the source of errors. After all, what good is it to complete a process quickly if the information is incorrectly entered?

To ensure process and organizational success a combination of both lean and six sigma are needed. Together lean and six sigma work through process mapping to model and automate the most efficient, quality workflows possible, allowing your company to maximize productivity, while eliminating waste and reducing costs. Having a Lean Six Sigma approach to your business processes is essential for any company to achieve operational excellence.

You'll also hear from certain people that software is not necessary for Lean Six Sigma execution. Sure, it's not necessary if you only want to receive a fraction of the possible results; but, why only go through process of making your manual tasks lean? If you automate your tasks with a Lean Six Sigma approach you are likely to receive an infinitely higher return on your efforts.

Is your company implementing both lean and six sigma thinking into operations? Have you considered a process automation solution to help with your Lean Six Sigma Initiatives?

 

Relevant Links:

Controlling Process "Rework" with Lean Six Sigma Practices
Visibility Into Your Processes Helps You Control Your Costs
Getting Started with Process Modeling
Lean Healthcare?

Mary Katherine Strupe
Marketing Coordinator
Ultimus

Reduce Process Rework with Role Definition in Organizational Charts

Human Centric Business Process Management is one of the many LinkedIn groups I am a member of and find myself posting ideas and replying to discussions. Recently, a very interesting question was brought up regarding the use of Organizational Charts in companies and whether they will one day be replaced with process maps.

While process maps are key for business process management (BPM), Organizational charts and structures play a vital role in business processes in terms of maintaining your company's ability to adapt to internal changes with little process rework. Establishing a link between process participation and job function roles, rather than specifically named users, allows business processes to sustain functionality when employees eventually role off / role on.

Interestingly enough, I find some companies still have not invested in organizational charts with defined and nested reporting relationships. Many companies with whom I talk still have large Active Directories where all of their users sit in a single flat list. This can be costly as every time a there is a change in role, a process champion must update the Organizational Chart and business processes with a new employee name from the Active Directory list.

Ideal Organizational Chart models are ones that support:

• Multiple departments
• Departments as well as Group entities
• Primary job functions as well as secondary job functions
• Nestings (sub-charts and sub-groups)

With these types of features and functions, the rigidity and hierarchy mindset of Organization Charts is obviated.

More importantly, however, I believe Organizational Charts have their place as a vital part of being a backbone to effective application security, application involvement, and business process participation. I see Organizational Charts being more widely adopted if the Organization Chart application itself has a supported, openly documented API to allow for fluid and seamless integration. 

How is your company currently mapping processes? Do you find yourself completing lots of rework when there is an internal change?

 

Relevant Links:

Building Your Ultimus V8 Process Library Quickly: Reusable Process Libraries

Mitigate Risk by Modeling Your Business Processes

Controlling Process "Rework" with Lean Six Sigma Practices

 

Chris Adams
VP Product and Technology
Ultimus

Expanding Business Process Communications Outside Your Office

In today's work environment, approximately 40% of your work force is working outside of the office at any point in time.  Modern day work environments include colleagues on business trips or those  who work in offsite locations. Moreover, in today's work environment, situational out-of-office situations, such as being sick or on vacation, do not obviate the necessity to communicate with your co-workers.  Despite not being located in your company headquarters, your colleagues are vital parts to your day-to-day operations.  Effective business process execution in your company requires intra-office and inter-office communication.

Mobile technologies have served as the "glue" to bring together company colleagues no matter where they are.  In addition to new employees being issues laptops and desks, standard roll-on practices often include the issuing of mobile phones, PDAs, or beepers / pagers.  Mobile technologies allow colleagues to communicate through voice, emails, texts, and alerts no matter where they are.

Integrating mobile technologies into the execution of your business processes is important for numerous reasons:

• It is inefficient for your process participants to manually recreate emails and redial colleagues through phone calls and/or pages.
• History of process communications is a valuable part of the process audit trail. Having a BPM Suite record when process alerts were sent and to whom they were sent becomes part of the process audit trail.
• Interfacing with processes is not always performed through "fat" client interfaces. Mobile devices allow process participants quick and simple web based interfaces allow critical processes to be expedited forward.

Despite the current buzz in the BPM space with social technology integration (such as FaceBook, Twitter, etc), some business industries are still very much reliant on older, established communications.  For example, hospital staff workers often carry pagers to receive alerts to clean patient care rooms.  Having such capabilities allows for quicker bed turnover, increased productivity, and less waste (view webcast on this subject). Ultimus Adaptive BPM Suite business processes provide business participants numerous choices for interaction with their process tasks:

• Alerts through Social Technology sites
• Emails
• Web based forms
• Text Messages
• Alerts to pagers and beepers
• Voice based messages

Flexible and numerous process communication options are essential to ensure process participants can always remain part of your day-to-day operations.  If your process participants are isolated or abandoned from your critical business processes, then you run the risk of those critical processes becoming bottle-necked and stalled.  Are you leveraging numerous communication options in your processes today?  Are your process participants reliant on emails to get process updates?

 

Relevant Links:

Business Processes: Recognizing You Need Business Process Improvements

Visibility Into Your Processes Helps You Control Your Costs

Rethink The Ways You Update Your Process Participants

Ultimus Enhances BPM Suite with Twitter Updates for Your Business Process

 

Chris Adams
VP of Product Development and Technology
Ultimus

BPM: A Tracking System for Sales

BPM is more than just a process automation tool. It is also a key componet to enhancing Customer Relationship Management (CRM) system. When most people think about CRMs they think solely about their exisiting customer base and how they can better serve them; however, this mentality is a tunnel vision approach to managing accounts and contacts that could be critical to your sales team. 

An effective CRM system should do more than just manage your relationship with current customers.  It should extend beyond active customers up to the beginning of the pipeline where prospects and leads are acquired. Whether your sales cycle is 6 days or 6 months the same ideaology applies. Prospects and leads need information and follow up communication if they are ever going to become more than just a prospect. Often times follow up emails or calls are missed as a result of:

Poor documentation Lack of visibility into the pipeline and customer history Inadequate transfer of information between sales members Simply, forgetting An effectively used CRM creates the greatest opportunity to drive customer satisfaction, loyalty, and new customer onboarding, which in turn increases and helps maintain a steady stream of revenue.  A CRM is a key part of a complete and fully functional Business Process Management (BPMS) Suite. Using a BPM Suite as a facet for your CRM initiatives enhances your ability to track and report on critical sales activities. It is a robust tool that can help you effectively monitor and pursue prospects and leads throughout your pipeline to ensure the necessary follow ups and touch points are met; and more importantly, that these activities are being logged.

Using the rules, alerts, and notifications that are found in the Ultimus Adaptive BPM Suite the sales team can set reminders on who they need to follow up with, when, and specifically what about. Moreover, BPM based CRM systems give supervisors and managers the ability to monitor sales activity as it is logged (or not logged) allowing them to generate better reports, forecasts, organizational strategies, and appropriate actions plans.

Automating the processes in which you call on and follow up with leads and customers can be a simple solution to ensure that the right measures are being taken to maintain and grow your company. What kind of CRM system is your company using now? Does it include managing and tracking prospects? Does it provide management with visibility into pipeline activities?

 

Related Links:

What is SAP and How Does BPM Integrate With it?

Business Processes Should Not Be Driven By IT Initiatives

Business Processes: Recognizing You Need Business Process Improvements

Avoid Investing in Workflow in Non-Workflow Applications

Mitigate Risk by Modeling Your Business Processes

 

Mary Katherine Strupe
Marketing Coordinator
Ultimus

Methodology For Fast ROI with BPM: "Rome Was Not Built In A Day"

A "best practice" when conceptualizing and discovering business processes is to get all process stakeholders together (either physically or electronically) to discuss, debate, and ultimately agree on what constitutes the "As Is" state of your current day-to-day operations.  These discussions result in a rough draft of a business process flow as well as a list of "to do" items required to develop this business process using a BPM Suite tool.  As with many  company projects, involving more people usually means more issues, exceptions and special cases will be brought up for discussion.  As part of your process automation talks, many process construction items will be identified that can range from the "must haves" to the "like to haves."  An example of such a list is below.

Classic project management practices take over the role, where your process owner will identify all identified tasks, work to prioritize the tasks, and then work with your process architects to estimate the effort for each of these tasks.  You may be very surprised to see how long your list gets, after everyone spends enough time thinking about your day-to-day operations and becomes comfortable with noting your current day inefficiencies.  After looking at this daunting task list, you may be in a position where you are telling yourself "This project will take FOREVER!"  In cases like these, an ideal methodology for process automation is to remind yourself "Rome was not built in a day".

There are two potential project paths you can take when strategizing on how to complete the items in your project list.  One path is to work to complete all items in one comprehensive project; trying to satisfy everyone's needs, solve all the scenarios and extend to process improvement initiative to include multiple sub-processes.  This is the path of high risk, high cost, potential slow deployment and typically results in high management dissatisfaction and worker disruption.  The better path to success is to "Think Big, but Start Small"; break the big project into several smaller sub-processes and identify the "high leverage" aspect of the process pain.

A business can typically get 60%-80% of the benefit behind automating only 20% of the process.  By talking a smaller, but critical aspect of a large process, the work team can generate a quick win by implementing the process in as little as 8-10 weeks.  Management can see an immediate improvement and users can quickly see the results of the initiative.  This positive energy fuels the ability to expand the project to include additional aspects of the process.

By breaking down the process automation project into three phases, ROI on your process automation initiative is experienced soon and your process participants are involved in your new automated, online processes quickly.  As business process continually evolve and change, based on changing business practices, it may be the case that the original Phase B items get marked with lower priorities, as new higher priority items arise.  Keeping an agile approach to business process improvements ensures you are continually investing in and evolving your business processes.   Are you involved in a large business process automation effort currently?  Are you structuring your process automation project into phases to ensure you have a measurable and attainable return on investment?

 

Relevant Links:

BPM As A Foundation For Business Transformation

Business Processes: Recognizing You Need Business Process Improvements

Business Processes Should Not Be Driven By IT Initiatives

Think "Small" When Starting with BPM: Recipe for Immediate ROI

 

Chris Adams
VP Product Marketing and Management
Ultimus