MM Consulting Services is a firm that specializes in IT Consulting Services and Organizational Processes Improvement.
Today, most industries are challenged with increased costs and pressures as each strive to increase, or at least maintain, their competitive advantage in a very challenging marketplace. Strategies and solid actions to continuously improve the business are imperative in order to continue adding value and stay in business.
Today, there could be multiple approaches to "business or process improvement" that companies can choose from, but there are not so many that have proven benefits across multiple industries in this area. In this article, we would like to share information of Business Process Management with Lean Six Sigma as a methodology to business improvement that has shown proven benefits in diverse industries.
Business Process Management (BPM) is a holistic, structured management approach focused on aligning all aspects of an organization with the wants and needs of clients. It considers processes to be strategic assets of an organization that must be understood, managed and improved to deliver value added products and services to clients. It promotes business effectiveness and efficiency while striving for innovation and flexibility while integrating human driven processes and technology. BPM as a management through processes method which helps to improve the company's performance in a more and more complex and ever-changing environment. Management through processes is a management method based on two logical levels: process governance and process management:
• Process governance is all of the company's governance activities which, by way of allocating on the processes, work towards reaching its objectives, which are both operational and progress related.
• Process management is all the management activities of a given process which work towards reaching the objectives allocated for this process.
BPM can be coupled to other methodologies, such as Lean Six Sigma to continually streamline and optimize the process to ensure that it is tuned to its market need achieving breakthrough business results. The Lean Six Sigma methodology comprises the Lean's waste (or non-value added) elimination and cost reduction concepts and the Six Sigma focus on quality and reliability to make it an appropriate business improvement sustainable alternative. An enhanced DMAIC toolkit is used that combines the Lean Six Sigma and BPM tools through which organizations, processes and/or problems are defined, measured analyzed, improved and controlled.
Define – Create the vision, strategize organizational functions and processes. Baseline the organization or process improvement. Determine the scope, goals, deliverables and milestones.
Measure – Baseline the organization or process, determine and measure the current organization or process and its performance. Simulate the changes. Use statistical, mapping and data collection tools, as appropriate.
Analyze - Compare the various scenarios to determine an optimal improvement. Risk management tools are often used at this phase.
Improve - Select and implement the optimal improvements, define the plan and implement. Implementation can be done based on priorities, phases/projects and resources.
Control – Monitor the improvement in real time and feed the performance information back into the organization or process through user defined dashboards metrics or criteria in preparation for the next improvement iteration.
The unique integration of these tools can be used to help almost any industry type and company process using these improvement methodologies and experts.
Through experts in these methodologies, these tools can be modified to fit the traditional manufacturing environment as well as transactional environments typical of the service industry. For example, the application of the "seven wastes" of lean manufacturing can be adapted in service industries (Lean Service). These wastes can be applied as follows:
1. Delay on the part of customers waiting for service, for delivery, in queues, for response, not arriving as promised.
2. Duplication – unnecessary processing, having to re-enter data, repeat information, and answer queries from several sources within the same organization.
3. Unnecessary Movement - queuing several times, lack of one-stop, back and forward the movements of paper, people, etc.
4. Unclear communication and the wastes of seeking clarification, confusion over product or service use and lack of clarity of roles or procedures.
5. Incorrect inventory – being out-of-stock, unable to get exactly what was required and process interruptions due to lack of information or materials.
6. An opportunity lost to retain or win customers, a failure to establish effective communication, ignoring customers, unfriendliness, and rudeness.
7. Errors in the service transaction, product defects in the product-service bundle, lost or damaged goods.
As a word of advice, it is crucial that people with the appropriate level of knowledge and expertise are used in the business process improvement management efforts to assure a holistic, versus a too narrow, approach is taken and that the right application and selection of the tools are applied through the DMAIC cycle. The incorrect selection, overutilization or unbalanced approach to process improvement can lead to undesirable risks and results. For example, only focusing in waste and cost reduction without the appropriate level of quality and reliability could deliver benefits short term but could impact unfavorably the organization in the long run. Management must play a key role assuring the appropriate resources and risks are identified to assure that efficient but sustainable gains are achieved.
There are many benefits from implementing a formal business improvement management initiative in your organization. BPM enables organizations to be more efficient, more effective and more capable of change and respond faster than competitors to achieve higher customer satisfaction, product quality, service and regulatory compliance and time-to-market speed – creating competitive advantage and improving the bottom line. In addition, there are some additional important benefits it can bring to the organization: achievement of the objectives and goals of the company and its processes as it works process governance and management; increases value added activities while eliminating the non-value added ones; enables a faster response to change and innovation of products and services considering human process, procedures and technology factors; enables compliance with regulatory requirements and with internal and management control mechanisms; provides upper management with the right data and information for decision making; and facilitates communication and collaboration.
Written by:
Saribel Estrada
MM Consulting Services
Business Manager
About the author: Saribel Estrada has a M.E. and B.S in Chemical Engineering, is a Certified Six Sigma Black Belt, Certified Quality Engineer and a Project Management Professional. She has over 16 years of professional experience in the areas of Business Improvement, Strategy Development, Project Management, Regulatory Quality & Compliance, Operations, and Technical Services for the Manufacturing of Medical Devices, Pharmaceuticals and Financial Industries.