Identifying and Prioritizing BPM Projects

Based on Quick Wins and Clear Financial

Benefits

Six Sigma IQ Webinar24 March 2009

Rick HefnerDirector, Process

ManagementNorthrop Grumman

Corporation

Background

• Business process management (BPM) focused on aligning organizations with the wants and needs of clients

• Continuous process improvement is required due to:– Changing wants and needs of the client base– Changes in the competition and their offerings– Changes in the business environment– Changes in the supporting technologies

• How does an organization determine which improvement projects will yield maximum return?

Classic Approaches

Business Goals

Value Stream Mapping

“Where’s the pain?”

SC

OP

E

TIMEFRAME

Projects Driven by Business Goals

• A vision of what the organization needs to be…– Customers, needs and wants, products and services– Benchmarking with competitors

• What are the business goals? How is success measured?– Profitability, market share, speed, quality, etc.– Gaps between “as-is” and “should-be”

• Which processes are critical to meeting these goals…– Process maps, swim-lanes– Value stream mapping

• What problems exist in these processes?– External/internal customer perspectives– Unwanted variation

Division Dashboards

SectorDashboard

• Used to Manage the Core Business Processes

• Defined by Business Executives

• Owned by Business Executives

Enabling Processes

Financial Management

Information Management

GovernanceCompliance

Relationship Management

Technology/Product Development

Employee Management

Portfolio Management

Business Development

Program Execution

Core Processes

Results of Lean Six Sigma Projects seen in improved business performance

• Productivity • Profitable Growth

Key Business Questions

SubProcesses

Gaps&

Goals

ROI Gate

….

Subcontractor Management

Mis

sion

Syst

em

s B

usi

ness

Ob

ject

ives

Goals – Processes - Measures

•Customer Satisfaction •Operational Effectiveness

Watch

De-Emphasize

Focus Improvement Focus Improvement EffortsEfforts

Protect/Optimize

Low High

Pro

cess

Mat

urit

y/P

erfo

rman

ce

1

2

34

6

78

9

1012

13

14

15

High

Low

11

Criticality to Operations/Function

Performance Gap Analysis

Lean Six Sigma

• Conformance• Process Definition/Design• Lean Tools• Best Practices

5

Focus on 2, 5 & 9 for

process improvemen

t

Based on goals,

optimize 3 & 11 and sustain

1, 4, 5 & 14

Cause & Effect Diagram

•Internal conflicts•Lack of skills / resources•Ad hoc training

•Processes are improvised•No process discipline

•Tools & technology are not standardized•Equipment is acquired on an ad hoc basis

•Demand shifts•Market turbulence

•Measurement is faulty and/or incomplete•Measurement inconsistency

•Lack of skills•Ad hoc training

Effect

Measurements

Methods

Manpower (People)

Machines

Materials

Mother Nature (Environment)

Service Industries (4P’s): Policies, Procedures, People, Plant/Technologies

Summary

• Your approach for selecting process improvement projects should be based on several factors– Top-down analysis based on your business goals – Identification of critical business processes– Viewpoints of internal and external customers– Direct and indirect ROI– Maturing over time