Het bericht Improve your organisation with Business Process Management verscheen eerst op Lean Six Sigma Group.
]]>Business Process Management
BPM, for short, includes everything that has to do with processes within an organisation. An example would be mapping out and improving processes.
But why would you use Business Process Management?
Processes make sure an organisation keeps its customers satisfied and possibly makes profit. It is important to keep these processes structured and maybe even improve them. BPM is concerned with these tasks.
The four steps of Business Process Management
BPM can be divided in four steps:
- Process identification
Mapping processes makes it easier for employees to get an oversight of all tasks and streams within an organisation. This “map” shows all processes and their relations to each other. - Process description
By using a Makigami of een Value Stream Map (VSM) you will start describing these processes that have been mapped out. A SIPOC contributes by determining who is involved in these processes. Which tool you choose, depends on your final goal. - Process analysis
In this phase, you fulfill tasks that lead to the final phase: process optimisation. You will, for example, collect data of systems from which you will conclude something in the next phase. If there is no data that can be trusted, then wait no longer and start measuring. - Process optimisation
There are many ways in which a process can be optimised. Lean provides your organisation with many tools. A well-known tool is looking at processes from the perspectives of seven different types of waste. Determine whether the process adds value for the customer. If not, these can be eliminated. However, sometimes there are processes that do not add value, yet are legally required.
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]]>Het bericht Process analysis using Lean verscheen eerst op Lean Six Sigma Group.
]]>Organisations are continuously striving towards a better position than their organisational rivals. They are working on continuous improvement and optimising their business processes. These are focused on improving the quality of a product or service, to create more efficiency regarding the business processes. Process analysis is a part of this process optimisation. But how does Lean help here?
The definition
It is important to focus on what a process actually is. At the beginning of a training, we usually task our participants the same question. It then becomes clear how hard it actually is to define what a process is. There is no clear definition, however we say:
A collection of activities of process steps that are converted into in- and outputs.
Different levels
It is important to distinguish different levels of a process:
- Chain level– Process of organisations within the same context;
- Business process– The architecture of a business to fulfill the needs of a customer;
- Work process– These visualise the way business processes work;
- Process step– Give an insight in the tasks that are carried out;
- Action/activity – The way a specific tasks or process step is fulfilled;
Map the current situation
To analyse a process, it is important to visualise these. There are many techniques to do so. A well-known technique is the Value Stream Map. This is often carried out by the use of a ‘Brown Paper-session’. In here, details of work processes are mapped out by describing activities and process steps.
The actual process analysis
The analysis of this current, mapped out situation is done to collect data about the goal that is set for an organisation. This goal must be mapped out as well and takes on a futuristic role: what would we want the process to look like? Or more importantly: how should the process work?
After specifying the goal(s), it becomes possible to work towards these. By now, it should become clear which parts of the organisation could use some more attention. A process analysis focuses on identifying possible bottlenecks or waste. Where do these points occur? Are there certain points in the organisation where fails occur or work is not done very efficiently?
Using this process analysis, the quality of products and services can be improved. Possible improvements are mapped out; these can lead to decreases of costs. And in the end this leads to more efficient processes. It gives you the opportunity to view your organisation from ‘the outside’ and be critical. The collaboration between employees is improved as well; they will get a collaborative image of all processes and take their responsibilities to achieve continuous improvement.
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]]>Het bericht Customer value according to Lean verscheen eerst op Lean Six Sigma Group.
]]>As an organisation, you should improve continuously and keep developing in order to live up to the ever-changing environment regarding customer value. When handling according to agreements your company made about fulfilling the wishes of the customer, your organisation will do right. But what is this customer value? And how does Lean contribute to this?
What is customer value?
This term knows many definitions and there are many methods to determine this value as well. In relation to the Lean philosophy, the meaning behind customer value actually goes deeper than just this value. It means a product or service is delivered that satisfies the customer. He or she might choose to order from your company again.
But it is not the same thing as customer demand. Customer demand focuses on fulfilling the need of customers. However, often the customer him- or herself does not even know the need is there. The process of becoming conscious of these needs is important to companies. Here, you can gain customer value.
Why is creating customer value so important?
Creating customer value contributes to the growth of organisations. The ability to distinguish yourself as an organisation becomes more and more important with this market of competition. Simultaneously, customers are demanding more of products and services.
The increasing complexity and customers becoming more critical leads to a transition to a demand-economy. The focus is not on the current stock and how to reach the target group, but on what the target group wants and how to meet those requirements.
Organisations without commercial intent, think of schools or hospitals, have noticed the switch to the focus on customers. However, because the administrative work increases, some tasks of the core of the organisation have become really pressured. Even when looking at the government, it sometimes lacks focus on the ‘customer’, also known as citizens.
Every single one of these Dit vraagt om een significant andere benadering, waarbij problems have one thing in common: a switch towards customer needs should be made. Lean can contribute significantly to this.
How can customer value be improved?
Organisations know many ways to respond to customer needs. And these entail flexible processes that focus on the customer. The Lean philosophy supports with a structured approach that improve these processes.
While using tools and techniques that define the customer value, it becomes possible to examine which business processes supply added value. Those that do not should be minimised or even eliminated. Because in the long run, this will lead to more ‘spare’ time that can be applied to increase the customer value.
But keep in mind you should not only focus on the external customer. Every process has to do with a customer and these corresponding business processes create an output to colleagues or employees of other departments. When you, as an employee, see your own colleagues as (internal) customers as well, your collaboration will improve and intensify. Not only for you, but for your entire organisation and the external customers. This way, the common goal can be achieved: creating customer value.
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]]>Het bericht How Supply Chain Management will support your company verscheen eerst op Lean Six Sigma Group.
]]>Lean & Supply Chain Management
Customers, either B2B or B2C, make decisions based on delivery time. One would like this to be as short as possible. They want the stock to be small, because this takes up space and can be very costly. These are the reasons companies become motivated to lessen the lead time. A corresponding discipline is called Supply Chain Management, which we will elaborate on in this blog.
The connection between Lean and Supply Chain Management?
Lead times are linked to stock and the end product. Lack of products can lead to certain delays, which is an unwanted incident to the customer. And he or she will not pay for such services. Supply Chain Management, however, gives a company a system that continuously provides them with stock, purchased at a suitable price and at the right moment.
How can Lean principles be used to support companies this way?
1. Value
Supply Chain Management starts with the customer. What is their demand? Or in other words, which requirements must these products meet? When do they need to be delivered and what is the quantity? As a company, you should know the Voice-of-the-Customer. That should support the entire planning.
However, the main idea of Supply Chain Management regards the fact that every entity within the chain can be considered a customer themselves. This is why it is even more important to make clear agreements with other suppliers. Especially when thinking about these lead times that should be decreased, it is relevant to have a clear image of the competence of your suppliers. It might be possible they can take over part of the production at less costs than you would be able to. This would be time-efficient for you as well.
2. Valuestream
ICT-systems are a bit part of Supply Chain Management. This is sometimes called Enterprise Resource Planning (ERP). There are actually many possibilities regarding ICT. The main advantage is stock and suppliers are always orderened. The disadvantage, however, it might increase the amount of administrative work.
These ERP-systems are meant to produce more time than it costs. This becomes possible due to overlay between departments. For example, the sales department enters orders that have come in, production makes a planning based on these orders, finances sends out the corresponding invoices and customer support gets insight in the history of orders from specific customers. To conclude, it does still happen sometimes that companies keep up too much administrative work, which has become unnecessary.
3. Flow
Flow can be considered the most important Lean principle when talking about lead time. This actually creates a continuous stream of production. A waiting time might arise when some parts are not present when using Supply Chain Management. You could state that the something went wrong regarding the communication between departments. And this is not that bad! Make sure the entire company learns from these mistakes and keep improving continuously.
Another noticeable mistake in many companies is the fact that employees need to look for things they might need. An example might be chaotic closets. And frequently, these closets do not even strike employees as messy. This happens because there must have been some sort of system before, yet there is not now. Make sure you immediately make a change. This leads to loss of valuable time and possible frustrations, so it does not need to be said this must be solved.
4. Pull
Pull starts at production when a customer has placed an order, not just at any time. This has positive impact on the stock, which thus decreases. Supply Chain Management is an essential here, because it is used as a form of communication between the different departments.
This, however, does mean a company should have a short lead time, because customers will switch companies whenever they would feel like it takes too long to receive their orders. “If you can’t beat them, join them”, might be the best strategy. And let this be the reason why Amazon is as successful as they are. When this company was conducted, it put much more pressure on companies delivering products to customers in the Netherlands.
5. Perfection
Already in possession of a process that works efficiently? Make sure you standardise this process and create clearance for your employees. These processes should always be transparent. If this is the case, there is always room for continuous improvement.
Supply Chain Management and Lean principles come together. They both avoid waiting time, failures, stock, bottlenecks and other frustrations. However, you should stay critical. Keep track of the value stream!
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]]>Het bericht Theory of Constraints verscheen eerst op Lean Six Sigma Group.
]]>A frequently returning term regarding processes is called a bottleneck. This means some kind of work overload is present. When these processes are improved, more effective result can be achieved. And thereby, more profit is obtained. This is called the Theory of Constraints (ToC).
What is the Theory of Constraints?
This methodology focuses on discovering the most limitative aspect of a process. This bottleneck is then eliminated systematically. Every (complex) system consists of more than one connected activities. Sometimes it becomes hard to focus on what is really important because of this. However, the Theory of Constraints aims at focusing on the goal your organisation wants to achieve and provides you with a set of tools to do so. There are three aspects of ToC:
- The five steps of focus
Identifying and eliminating limitations. - The process of thinking
Tools for analysing and solving problems. - Throughput Accounting
Measuring performances and supporting decisions from the management team.
When analysing the processes within an organisation, there can be different types of limitations. ToC focuses on the one with the highest priority: the current limitation. Therefore, ToC tends to be the perfect methodology for the creation of fast improvements.
The five steps of focus
- Identify the limitation
Identify the current limitation – or bottleneck – in the process. - Exploit the limitation
Make improvements as to tuning out the limitation while using the correct resources. - Make sure everything is inferior
Take another look at all activities in the process, in order to make sure they support the needs of the limitation. - Evaluate performances
If the limitation still exists during this step, think about eliminating other activities as well. Repeat this step until the limitation is actually removed. And keep in mind this sometimes means investments should be made. - Repeat the process
These five steps of focus are walked through in a cycle In other words, when one limitation is removed, the next can be handled immediately by starting at step one again.
The process of thinking
This tool has been developed to retrieve the unwanted effect of a limitation and replace it with a new one. Three questions that should be asked to do so are:
- What should be changed?
- To what should it be changed?
- Which precise actions lead to this change?
Below, you can find some tools that can be applied to fulfill the idea of the process of thinking.
- Current reality tree
Describe the current situation. - Evaporating cloud tree
Evaluate potential improvements. - Future reality tree
Describe the future situation. - Strategy and tactics tree
Compose a plan of action regarding improvements.
Throughput Accounting
Throughput Accounting is an accounting methodology which tries to eliminate harmful disturbances. It actually arose from traditional accounting methods that threaten the profit of an organisation to decrease. ToC makes an organisation mandatory to sell the entire stock in the foreseeable future. This might lead to an increase of profit on paper, but in reality, stock takes up this profit while it is still unsold. And this same money could be used to make other investments. However, ToC finds decreasing costs less important than focusing on the flow of products.
As said, ToC focuses on throughput accounting with the most important pillars: throughput, investments and operational costs.
- Throughput
The time in which products are sold to customers. - Investments
Money that is tight to the organisation instead of usable: stock, machines, building(s), et cetera. - Operational costs
Money that is invested in the throughput of an organisation.
What are the advantages of the Theory of Constraints?
By applying ToC, the following advantages arise:
- Increase of profit;
- Quick improvements;
- Improved capacity – by eliminating constraints, an organisation becomes able to produce more and more;
- Decrease of lead time – the process flow will improve;
- Less stock – the amount of work within a process decreases.
Some examples of ‘Constraints?’
Constraints can be defined as everything that limits an organisation in its progress. In other words, it keeps an organisation from its goal(s).
- Physical
This includes actual equipment, but other tangible things such as lack of employees or space or shortage of material as well. - Policy-wise
The recommended way or working, procedures of the organisation or written agreements. - Paradigm
This category contains things such as habits. Think of “Machines should be turned on and working 24/7 in order to keep costs per product as low as possible”. - Demand of the market
When an organisation produces more than the market demand, it is categorized under demand of the market.
To conclude, the Theory of Constraints is able to assist you with solving problems regarding limitative factors within your organisation structurally. By applying this method cyclically, your organisational processes will improve continuously.
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]]>Het bericht RPA might improve your organisation verscheen eerst op Lean Six Sigma Group.
]]>Working more efficiently using robots
Everyone has heard of Artificial Intelligence nowadays. But why is this still not applied within every organisation? After automating many processes, there has arisen a new opportunity. This is called RPA, or: Robotic Process Automation. This enables an organisation to create many more opportunities for the future.
The Lean methodology
The Lean methodology is often used to optimise processes, because these will be fun more efficiently. From here on, it is easier to implement RPA. When looking in the Lean toolkit, RPA can be seen as the most recent and technological addition to it. Currently, Lean makes use of tools and techniques in business processes that optimise time, resources, possessions and productivity. And eventually, this increases quality as well as customer value.
The growth of Lean
Robots are able to support Lean to increase this quality, eliminate possible defects, reduce lead time and increase customer satisfaction. Looking at the growth potential of Lean, the graph below shows the phase of growth (the red line). It is expected the growth in all three phases could increase with 20% by implementing the use of robots.
And how about working more efficiently? Often, when companies are thinking about using robots, focus is laid only on these robots and processes are forgotten. Less, is more they think. The surface of the organisation is improved. However, this would only include the tip of the iceberg that is the organisation. In other words, this automation is hard to develop, prone to failure and takes up much time.
Cross-functional teams must work together to create a transparent process. The best solution to a problem must be chosen, tested and the effect it has must be measured. This way, it becomes clear in what way exactly robots make these processes more efficiently and what the impact is they have on the customer and organisation. You should strive towards a better solution for the organisation instead of the other way around.
Lean tools, techniques and principles might be able to offer great support. The tools that are used will focus on the process design first. This should be finished before the automation phase has started. Waste should therefore be eliminated and current tasks should be optimised.
Advantages of RPA
After implementing these robots, you will be able to work more efficiently, because:
- Automation increases the percentage of FTR (First Time Right) by eliminating possible human errors.
- You can work using Just-In-Time. This means the process of possessing information on the right moment should be automated.
- RPA takes the robot out of the human being. Employees can focus on activities that increase value and increase customer satisfaction. Studies have shown people actually prefer their jobs when they feel autonomous, capable and in possession of a goal.
- Robots are able to work 24/7. This is an unique power.
- Robots are faster than human beings.
- The data that is generated by the use of robots provide managers with more insight in the bottleneck of the process and gives them ideas on how to improve the organisation.
- Using RPA hands you the opportunity to choose the capacity of the robots, whenever.
In other words, RPA gives an organisation many advantages to work more efficiently and moreover use these capacities optimally because employees are assigned tasks they are good at.
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]]>Het bericht Popular method of process optimisation explained verscheen eerst op Lean Six Sigma Group.
]]>Process optimization using Lean
One of the most popular methods for improving processes is process optimisation using Lean. The biggest reason why is it happens from the centre of the organisation, namely the actual working place. Because as a matter of fact, those who do know what goes wrong: your employees.
It sounds simple and it might even be. The difficulty would be the mindset or organisational side of the company. Because how would you involve your employees in such a way they see improvements and start solving problems? The key here is trust. Trust the organisational side, their vision and most importantly each other.
Below, you will find a few pillars of process optimisation using Lean.
Lean is long-term
To reduce costs is not Lean’s main concern. It is a philosophy focused on the long-term. It might be seen as a way of work. A mindset, defining how an organisation should handle or take decisions. To make employees feel part of the company.
Clear vision
Every organisation has its own goals and visions. But these do need to be clear to every single employee. Why does the company exist? And how do they satisfy their customers? It is almost an organisation’s personal mission. These goals are set on strategic, tactical and operational level. When such a vision is indeed clear to every employee, chances are they will be more motivated to achieve these goals.
Standardised processes
The philosophy Lean strives towards standardised business processes in order to deliver products of excellent quality (First Time Right) on customer’s demand (Just in Time). An improvement of quality and decreasing the amount of lead time can be done by eliminating waste. When this is done, all processes will be focused on the customer instead of other distractions.
Employees take on the central role within an organisation
Without employees, an organisation would be nowhere. When companies invest in the development of their employees, they always notice their own growth and problem solutions are dependent on them. Because who knows the organisation better than them? They know best what could still be improved. This is why organisations should most definitely involve their employees when improving continuously.
All organisations that focus on these four points are on their way to win their employees’ trust and keep onto it. Nowadays, this might even be essential in order to survive as a company.
Our Lean Six Sigma consultants and trainers are here for you. They can help you apply Lean Six Sigma. Please let us know what we could do for you.
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]]>Het bericht What is the KANO-model and why should it be used? verscheen eerst op Lean Six Sigma Group.
]]>As known, Lean Management is all about the customer. Your success rate is actually determined by the satisfaction of the customer. This is why you should listen to the so-called Voice-of-the-Customer. If you know which requirements the customer wants you as a company to meet, you can use the KANO-model to do so.
This model was first introduced by Noriako Kano in the ‘80s. The main takeaway of the model is the requirements that the customer would like to see in your product or service. Expectations, priorities and explicit needs are mapped by using the KANO model. This model plots two indicators in a graph. The x-axis is scaled from not filled in to filled in, whereas the y-axis goes from satisfied to unsatisfied (top to bottom). Three needs can be visualised in this graph, using these scalings, namely: basefactors, factors regarding performance and WOW-factors.
Basic Factors
These can simply be described as the basic needs of the customer. If these are not present, the customer is unable to be satisfied. They might be easy to overlook, but you should definitely invest time in them and take these very seriously. To give an example, think about a hotel room. Adding a bed seems obvious, but think about it from another perspective. In the case of forgetting the bad, could a customer still be satisfied?
Performance factors
Unlike the hotel room example, where adding more beds would not increase your customer’s satisfaction, less is not better when talking about performance factors. An example regarding the same example we just used would be the size of the hotel room. The bigger, the better, right?
WOW-factors
This is a special type of factors, considering the satisfaction of a customer will not be influenced when this type of factors is missing. Owing to the fact that these factors are meant to surprise the customer, because he or she did not expect it. Think about leaving a little piece of chocolate on the pillows of the hotel room, for example. In other words, WOW-factors leads to a positive result: increase of the customer satisfaction.
Applying the KANO-model
WOW-factors can turn into performance- or even basefactors over time. A great example would be Wi-Fi in your hotel room. A few years ago, this was a WOW-factor. However, a hotel without Wi-Fi is almost unthinkable nowadays. This means the WOW-factor has turned into a basefactor.
As a company or organisation, you should always focus on the basefactors and make sure these are taken care of. Your performance factors should be a going-on process and WOW-factors should be an extra. This will lead to customers being satisfied over-all, experiencing great service due to performance factors and being surprised once in a while because of your WOW-factors.
KANO-model and Lean projects
But what does the KANO-model have to do with Lean projects, I can hear you think. Lean projects focus entirely on the customer. Focus on obtaining useful input by surveys, interviews or other sources, which in turn can be used to create a KANO-model. The next step is to look for what your customers actually find important and what would be considered a WOW-factor. This can be done by filling in their wishes in your KANO-model and define each one of them as base-, performance- or WOW-factor. But keep in mind there is a difference between wishes and demands. In the example of the hotel, would adding a buffet be a wish or demand?
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]]>Het bericht The explanation of Lean and Mean verscheen eerst op Lean Six Sigma Group.
]]>Lean basically means: put together in the exact way you which enables you to perform your task. An example of this would be a cheetah. He is built to run, with muscles intended for sprints on short distances. Running long distances is not what a cheetah is intended to do.
This definition is applicable within an organisation as well. Unfortunately, Lean does not have the best reputation. When an organisation decides to implement this on account of wrong intentions, people are fired because of “financial cuts”. And this can basically be described as Mean. In the past, this phenomenon has occurred many times. Little do people know, these so-called financial cuts are only temporary and these losses will only increase in the long term.
Are we able to let employees go when using Lean?
As you can read in our blog Lean and Toyota, the philosophy has been applied by the car company since the ‘40s. They believe that using Lean creates more capacity for the organisation and offers an opportunity to develop itself. So, working more efficiently generates more capacity to be able to develop new products. This made Toyota one of the most innovative car manufacturers of the world.
In other words, Lean does not actually mean firing people whenever seems appropriate, but it stands for efficiency and grander customer satisfaction, which enables the realisation of more profit in the long run. But not only customers, employees are centralised as well. It is important to keep them satisfied as well. This can easily be achieved, because working more efficiently will lead to more fun.
To implement it successfully, it is important to add value for the customer, employees and suppliers. This is why “Mean” should actually be considered Meaningful.
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]]>Het bericht What actually is Six Sigma? verscheen eerst op Lean Six Sigma Group.
]]>What is Six Sigma?
“Six Sigma is a quality program that, when all is said and done, improves your customer’s experience, lowers your costs, and builds better leaders”. — Jack Welch
Yes, what actually is Six Sigma? Before handing you the exact answer to this question, it must be said this article will focus on two sides of this methodology. Because looking at the statistical and project-based aspects will lead to an answer to the question, that has been given much thought:
What is Six Sigma?
The project-based side of Six Sigma
‘Six Sigma’ is a well-known concept, which as a matter of fact goes by many different names. ‘Operational Excellence’, ‘Zero Defects’, ‘Customer Perfection’ or ‘Customer Excellence’ are examples of such. However, each of these names define the same concept: a benchmark for quality which strives after perfection. Six Sigma eliminates defects and variations in every process – fabrication to facturation and production to service – by using a data-driven approach.
This methodology has one main focus: the implementation of a strategy based upon measurements, focusing on process improvement and the limitation of variation by applying these process improvements. By applying two Six Sigma sub-methodologies, this can be achieved. The process of Define, Measure, Analyse, Improve and Control – also known as DMAIC – is a methodology focusing on possible improvements within already existing processes, by searching for incremental improvement possibilities while keeping an eye on specification requirements. The other sub-methodology is called DMADV, which stands for Define, Measure, Analyse, Design and Verify. This improvement system is used to develop new processes or products with the quality of Six Sigma. Though, it can be used if an existing process needs more than ‘simple improvement’ as well.
Both of these systems are executed by Green Belts, Black Belts and under the supervision of Champion Belts.
Why implement the use of Six Sigma?
One example of why the implementation of Six Sigma leads to good things, is the company General Electric. They first used this methodology after Motorola and Allied Signal in 1995. And their profit over the first five years is estimated to be $10 billion. They have become one of the most successful companies who appeared to have implemented Six Sigma. This led to other companies discovering what Six Sigma could actually mean for their business.
The statistical side of Six Sigma
We can talk about ‘implementing Six Sigma’ all we want, but what does it mean? As stated before, it is a benchmark for quality which strives after perfection. However, the quality as known by the customer does not cover all statistical implications. Six Sigma is a methodology, originated from maths and statistics.
Six Sigma quality focuses on decreasing the variation in the output of processes. This will make sure the customers’ experience concerning processes will statistically result in less than 3,4 defect parts per million (ppm) chances in the long term. A process with just one specification limit then results in six standard deviations between the process’ average and the customers’ specification limit. Where do you think the name Six Sigma comes from?!
A process with two specification limits contains a little more than six standard deviations between the average and the limit, resulting in a defect-percentage which corresponds with the equivalent of the six deviations. USL stands for Upper Specification Limit and resembles the upper customers’ wish. Logically, LSL means Lower Specification Limit, which stands for the lower customers’ wish.
A process could be able to produce a nearly perfect outcome. The total performance of a process, from the customers’ perspective, can be 3,4 DPMO – this resembles a long-term performance with a value of 4,5 sigma. The difference between the ‘best state’, measured by taking the short-term process capacity, and the total customers’ experience (long-term) is also called Shift (Zshift of sshift). The shift of a classic process is 1,5. So when speaking of Six Sigma, this is inherent to the theorem which states that the short-term capacity of a process is 6 sigma and the long-term 4,5, using a standard deviation of 1.5. This is actually 3,4 DPMO from the customers’ perspective.
When referencing to the number of mistakes using DPMO, this often indicates long-term capacity of the process. Here, the experience of the customer is looked at. Key is the role of the Six Sigma professional: quantifying the performances of the process and choosing the right strategy to achieve the goal. If the value of Sigma increases from zero to six, the variation of the process decreases. When the value of the process reaches a certain level, the variation of the process will be around zero: ‘zero defects’.
Would you like to know more about this subject?
Is this indeed the case? Then do not hesitate and sign up for one of our Lean Six Sigma trainings!
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