six sigma& BPM

One of the most powerful ways to improve business performance is combining business process management

(BPM) strategies with Six Sigma strategies. BPM strategies emphasise process improvements and automation to drive

performance, while Six Sigma uses statistical analysis to drive quality improvements.

BPM

Basics0 Set of tools and strategies for process

improvement0 Motorola, 1980’s: improve the quality of

products and services0 Systematic, rigorous routine0 Approaches business processes from a highly

analytical point of view0 Incorporates five levels of activity

Six Sigma0 Allows an organization to reduce the variability in its products and

services Reduce waste Increase efficiency Increase customer satisfaction Solve business problems through rigorous application of data collection

and analysis tools0 Five step progression (DMAIC)

Key to success of six sigma: methodology Uses information and statistical analysis to address the achievement of

operational goals. Some differences in the five steps depending on whether they are used to

improve an existing process or design a new process

0 Goal (always): standard metric of 99.9997% defect free performance

0 Graph of the normal distribution0 underlies statistical assumptions of 6 modelσ0 (sigma) marks distance on horizontal axis σ

between mean, µ, and curve's inflection point0 The greater this distance, the greater is the spread

of values encountered.

Basics (cont.)

Philosophy • Enterprise-wide embrace of defect reduction by making decisions based on hard data

and customer focus

Focus on the customer• Meet or exceed customer requirements/expectations

Metrics• Statistical focus to make process outcomes 99.9997% defect free• (3.4 defects per million opportunities)

Methodology• Structured approach to solving problems that uses specific tools and

process mapping to achieve the metric goal

Process based• Defects or errors introduced into products or services are based upon deficiencies in

the processes

Five step progression (DMAIC)

0 Define Project goals and boundaries Identify issues to be addressed to achieve the higher sigma level

0 Measure Gather information about the current situation Obtain baseline data on current process performance Identify problem areas

0 Analyse Identify the root cause(s) of quality problems Confirm those causes using the appropriate data analysis tools

0 Improve Implement solutions that address the problems (analyse) phase

0 Control Evaluate and monitor the results of the improve phase

Basically identify an area where there is a process problem, measure it, work out why there is a problem and then fix it.

0 Methodology to prioritise the projects and close the gapsReduces process variation

improves process capability

Addition to 6- σ methodology: emphasis on removing non-value added work

Combining BPM and Six Sigma

Strengths Weaknesses

BPM

Ability to automate processes and workflow Through modelling and examination of inputs, outputs and performance

Ability to analyse data associated with very difficult or multifaceted problems

Six Sigma

Rigorous approach to data collection and analysis.

Can identify opportunities for process improvement

Maximizing ability to institute necessary changes

Ability to monitor process improvements and ensure they are applied across the board

Their strengths complement each other Create a synergy

Entire operation with a focus on quality and performance

BPM complements Six Sigma by providing tools to automate process improvements and connect those improvements across the entire organisation

Six Sigma complements BPM by providing the statistical analysis needed to deal with complex problems

A powerful combination

Both BPM and 6- σ

Represent significant commitments on the part of a business

or organisation

Take time to implement thoroughly

Tremendous organisational change is often required

Most companies start with a single department or pilot project and expand their use over a multi-year period.

It is well worth the time and effort to generate the substantial business improvements that are typical with BPM and Six Sigma.