Companies like Safeco, who have been ranked among the largest insurance service providers, took nearly a week for making changes in auto policies they issued. However, thanks to Six Sigma, they now have an online, service-and-sales portal where local agents can make real-time changes and cut down on all the business processes.
Process Cycle Efficiency
As stated by Michael L. George, author Lean Six Sigma, the lean techniques concentrate on process cycle efficiency, or PCE, to determine the speed of the process execution
PCE = Value-Added Time / Total Elapsed Time
Lean process generates a process cycle efficiency (PCE) of about 25% or more. Not many businesses are lean enough. It is said that nearly 20% of activities give about 80% of their waste in this process. Lean generally concentrates on increasing process velocity, as it facilitates getting rid of non-value-added activities from the process. These methods, just like stream mapping, also give a methodical way of identifying and eliminating waste.
There are technologies that have prospered after implementing the Lean Improvement method.
1. Wireless Connectivity
Many casualty insurance and property companies have evened out wireless connectivity for claiming adjusters who are caught up in a catastrophic event like an earthquake or tsunami. A wireless connection can help adjusters who remotely enter the information into the claims software system, reducing the time necessary in the business process.
2. The World Wide Web
Web portals have facilitated organizations business processes, from order entry to customer service to logistics that have to be performed by their employees irrespective of the time and place.
3. Digital Documentation
Scanning and digitization allow circulation of digital versions of documents instead of wasting time on moving paper across the company. Digitization makes it possible for processes to effortlessly move paper at geographically long distances. This makes it easier for employees of various geographically dispersed offices to take part in the same workflow.
4. Automated Workflow Systems
There are times when business processes undergo excessive physical movement of paper from one desk to the other. Automated workflow systems avoid keeping work items stagnant, they raise alerts whenever work items have been put on hold for a prolonged time or reroute them if someone is busy. These systems are efficient in detecting the tailbacks in a system.
5. Document Management Systems
Document management systems enable organizations to perform business processes all over the world. Document management systems enable verification of documents for editing, rechecking before completion.
6. Business Process Management Systems
Business process management systems (BPMS) allow integration and streamlining of various software systems that are a part of any business process. With the help of an outline for the business process, these systems facilitate efficiency in business processes in various functions backend software systems, and departments.
7. Online CRM System Systems
Customer relationship management (CRM) systems are a part of websites of various organizations. Customers can login and create a trouble ticket online for a support or service request rather than consulting the customer support representatives.
The basic goal of Lean process improvement is to improve PCE and increase process velocity. Many new information technologies have the potential of enhancing efficacy and velocity. This is usually done by reducing waste, averting transportation and manual data entry.
Businesses that are unable to provide due consideration to this aspect, often fail to harness the full potential of Lean implementations and consequently start complaining that "Lean Six Sigma does not work". They fail to realize that the problem is not with Lean concepts; their failures are due to the inherent inability of the implementation team to overcome the common problems and challenges.
Identifying Implementation Problems and Challenges
For ensuring the success of Lean projects, the implementation team should first try to identify the common problems and challenges that it might come across during the implementation phase. For this, the implementation team should make use of time-tested Six Sigma tools and techniques such as "Process Charts" that highlight each and every event, functionality, and sub-processes of the given process selected for improvement.
However, since it is not be feasible to look into each and every aspect of the given business process, the implementation team should focus on only those aspects that are critical to the main process. In effect, the team should concentrate on identifying potential problems in only those sub-processes that might be contributing more than 50 to 60 percent towards the delivery of the final outcome. This is necessary because if problems occur in critical sub-processes during the implementation phase, the business may lose its productive efficiency, something that will make a mockery of "Lean" aims and objectives that call for improved productive efficiencies.
For better results, the implementation team should seek input from people such as floor managers, supervisors, process managers, and others who might be having workable knowledge about the given business process. If required, middle and top management can also be requested to provide their valuable input and suggestions.
Overcoming Challenges
The job is said to be "half done" as soon as the problems are identified, but the implementation team should not lose its focus at this stage because it still has to finish the remaining half, i.e. overcoming the identified problems and challenges. This is often the toughest part, because not even the most experienced professionals such as Black Belts can guarantee the success of initiatives undertaken for overcoming implementation problems and challenges.
The best that the implementation team can do then is to utilize Six Sigma simulation tools, which can make very accurate predictions. Simulations help a lot because they make it possible for the implementation team to use the "hit and trail" method without worrying about real losses, monetary or physical. Using the "hit and trail" method, the implementation team can then easily select an initiative that best suits the need of overcoming implementation problems and challenges.
Aside from putting their trust in Six Sigma tools and techniques for overcoming problems and challenges, the implementation team should try to encourage creativity and innovation because sometimes only these skills can save a project from certain failure. Constant motivation, guidance, and recognition are good ways of promoting creativity and innovation among the Lean Six Sigma implementation team members.
Tony Jacowski has sinced written about articles on various topics from University, Six Sigma and Information Technology. Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online and certification classes for lean six sigm. Tony Jacowski's top article generates over 90500 views. to your Favourites.