Reasons for Lean Six Sigma

Lean Six Sigma allows for the improvement in speed and performance of a process coupled with the reduction of waste and defects. If you ever find your current processes with high rework, client turnover, product recalls/crashes, and a plethora of errors it might be time to change your process design. As you will read below, I have noted a few benefits and reasons for Lean Six Sigma.

  • Lean Six Sigma projects cut costs and expenses by eliminating waste (a result of inefficient or non-value added process steps).
  • Whilst, the reduction of expenses helps companies yield higher revenues and profits. Improvements in quality and delivery also have the potential to increase sales and profit.
  • When waste is eliminated, processes flow seamlessly and delivery times improve.
  • As a process flows more quickly, the amount of inventory needed to keep the process moving is reduced and cash is freed up for investment elsewhere.
  • By improving quality in each process, customer satisfaction is increased.
  • Lean Six Sigma allows employees to work in valued added processes which in turn increases overall internal satisfaction and morale.
  • The cost savings of implementing Lean Six Sigma, compared to the time and resources spent working on a project without Lean Six Sigma is typically 10 to 20 times the investment.

 

Notable Bookkeeping is a certified Lean Six Sigma company. Contact us today to learn more about our process improvement/Lean Sig Sigma services! We work with all industries and all company sizes.

 

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How to plan a Process Improvement Project

When planning a process improvement project the most important question you have to ask is, “What problem are we trying to solve?” This question relates directly to the first step in DMAIC ( a Lean Six Sigma problem solving tool), which is to define the problem. After you answer this question you are ready to outline the criteria for an effective process improvement plan. Projects are usually one time occurrences created to fulfill specific goals for the organization.

Essentially, Lean Six Sigma projects must have the following 3 critical characteristics to be effective: performance, cost and time.  The performance criteria allows us to understand what the project seeks to accomplish. Project expectations and goals should be written clearly, be realistic, made available to all project team members, and team members should also be held accountable for achieving them.

The second criteria, cost, provides insights into the resources needed to complete a project. Usually, money belts which are financial auditors provide an objective independent evaluation of the potential financial benefits of a project as well as the actual results achieved by the Lean Six Sigma project.

Finally, the third criteria, time, assures that team members are aware of the time-frame for the starting and ending of the project. Gantt Charts are excellent tools for monitoring all the activities associated with a project coupled with checkpoints which are smaller points throughout a project that are used to judge how far the project is toward completion.

It is imperative that all team members in a process improvement project understand the top 3 inter-related objectives of the project which are meeting the budget, finishing on schedule and meeting the performance specifications.

 

When to Automate a Process

Many Managers and leaders ask this question, “When do I know its time to automate a Process?” The simplest answer is that automation of a process is critical when the well-being of your employees is being impaired, too much time is spent on manual input and putting out fires; and less time is dedicated to strategic planning and achieving strategic goals.

Leaders must constantly measure process performance as this includes, process cycle time, lead times, and process costs coupled with benchmark comparisons to truly understand how they fare with their competitors. For example, say you wanted to automate your Accounts Payable function. You would first create a process map to identify inefficiencies in the process, test and implement new controls, track and analyze Key Measures of Performance (cost per invoice, process cost, process cycle time, days to resolve a problem, et cetera) and compare data to your competitors. If you realize that the cost per invoice and process cycle time is significantly higher than your competitors it is wise to consider automation software.

However, before integrating software to automate the process you must compare the total costs and see if new and tested controls or alternative low cost methods can reduce costs and cycle time without the integration.

A process in dire need of automation can be detected by increase in poor quality, delivery and productivity. A process can not run smoothly if any of these process efficiency characteristics (quality, delivery and productivity) is not meeting business and customer requirements.

E.O.W (End of the Week) Notable Tip: Quality Improvements

Happy Friday! I hope you had a fabulous week!

Today, I was thinking about quality. As you have learned, Quality is what the customer says it is, not what you think it is. When does quality begin and how do you ensure your efforts bear fruit in a quality improvement engagement?

“Quality begins with education as it enhances your ability to see the big picture and supports deeper understanding of the activities that must take place in order for any quality improvement engagement to be successful.”

 

I hope you enjoyed this short tip and as always, “Success is continuous Improvement.”

 

Notable Friday Chat: Care about your employees!

Happy Friday!

I hope you’ve had a productive and enriching week. Today I want to leave you with a short message that will have a significant impact on your talent management goals and overall company wide health. I hope you have a great weekend and remember, “Success is continuous improvement!”

 

“Taking the time to talk to and ask atleast one employee each day how they are doing and somehow guide them in solving a professional or personal problem will in turn, help you build a stronger relationship with your employees but also support your talent management goals.

 

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