Business Process Improvement
Abstract
This paper entails a review on different business process improvement methodologies that include kaizen, total quality management, six sigma and lean six sigma. The review defines the respective methodologies, their purpose and how they are used. Moreover, the analysis further examines the accomplishment of the business process improvement methodologies. The analysis further examines the similarities and differences of the respective methodologies. The discussion identifies Kaizen as a Japanese business philosophy that is aimed at enhancing continuous improvement in an organizations operation. On the other hand, total quality management entails a management approach that is aimed at enhancing an organisation’s capacity to deliver high quality products and services to the final customers. Six sigma is identified as a process improvement methodology that is focused on eliminating deviations from predetermined specifications in order to enhance customer satisfaction. Conversely, lean six sigma business improvement process is aimed at minimizing cost hence benefiting the target customers. In summary, the review shows that the overall objective of the methodologies is similar which is to satisfy customers.
Business Process Improvement
Processes and process innovation constitute a crucial element in the management of contemporary organisations. According to Suarez-Barraza and Smith (2014), the subject of process and process innovation has attracted interest from different scholars and practitioners. For example, business managers have become aware of the importance of entrenching comprehensive approaches in managing their business processes. The growth in interest on the need for process innovation and improvement has been stimulated by failure of renowned firms as a result of ineffective processes. According to Suarez-Barraza and Smith (2014), provision of low quality products and services is one of the leading causes of business failure. Thus, the need for quality and efficiency in business operations is invaluable.
The need for process improvement in promoting organisational performance has led to formulation of different business process improvement methodologies. According to Bendell (2005), business process improvement is an essential element in businesses’ development, change management and quality improvement (Bendell 2005). The purpose of the new management methodologies is to improve quality and efficiency. This paper entails a discussion on the different business process improvement methodologies that include; Kaizen, Six-Sigma, Lean Six Sigma and Total Quality Management.
Analysis
Kaizen
Kaizen refers to a Japanese business philosophy that focuses on undertaking continuous improvement on an organisation’s internal operational practices at a minimal cost. According to Sanchez and Blanco (2014), continuous improvement is an essential phenomenon in promoting long term excellence. The Kaizen methodology seeks to ensure that an organisation adopts the most effective way to accomplish job role by streamlining work processes and through gradual elimination of non-value adding activities or muda (Suarez –Barraza & Smith, 2014). In addition to elimination of muda, the Kaizen methodology focuses on enhancing the efficiency with which internal organisational stakeholders such as employees execute the assigned roles and responsibilities.
The Kaizen methodology is very valuable in enhancing change in organisations, in that it generates small and gradual improvement in operational processes.
The Kaizen proposes that business improvement constitutes a continuous cycle that, which means that it an organisation must be committed at undertaking improvement on business processes progressively as opposed to a one-time event. Additionally, Kaizen should be an interdependent activity, which means that the process should be a collaborative activity between different internal stakeholders. Considering the fact that the core objective of the Kaizen methodology is to improve organisational processes, the methodology is concerned with identifying new areas of improvement and eliminating wastes inherent in the management processes. Subsequently, Kaizen stimulates an organisation’s operational efficiency (Suarez –Barraza & Smith, 2014).
Six sigma
According to Kumar (2006), six sigma entails an organisational-wide strategic approach that is aimed at minimising variation in the production process or project execution. By reducing variations, six sigma contributes to significant increase in the level of customer satisfaction and reduction in the cost of production. As one of the business process improvement methodologies, six sigma is customer-oriented in that it ensures that a firm focuses on delivering a high level of customer satisfaction (George, 2002). With reference to the cost aspect, six sigma methodologies is distinct in that it ensures that customers are directly impacted by cost reduction (Kumar, 2006).
The efficacy of the six sigma methodology in reducing variations and improving business processes is achieved through application of two main best practices/approaches that include DMADV and DMAC. The DMADV technique [Define, Measure, Analyze, Design, Verify] is focused on improving product design quality by ensuring that the project goals are optimally designed, customers’ needs and specifications are optimally measured, alternative process options are effectively analysis in order to meet the customers’ needs, and that a detailed design of the product and verification of the design’s capacity to meet customer’s needs are undertaken (Kumar, 2006; Singh, 2015). Thus, application of the DMADV technique contributes to development of new processes that enhance product quality.
Unlike the DMADV, the DMAIC technique [Define, Measure, Analyze, Improve, and Control] focuses on improving processes within an organisation. This goal is achieved by evaluating whether the stipulated specifications have been achieved and determining the necessary incremental improvements in order to maximise the target customers’ level of satisfaction (Singh, 2015). Therefore, DMAIC technique is very valuable in ensuring that the root cause of performance variations is identified. Application of the DMAIC technique ensures that an organisation is not solely focused on the individual functions undertaken by the respective departments. On the contrary, it focuses on promoting a holistic change in an organisation’s culture and management. The ultimate effect is that an organisation is able to produce more with minimal inputs (Singh, 2015). Application of the two techniques under the six sigma business process improvement methodology contributes to remarkable improvement in the level of customer satisfaction. In summary, six sigma enhances an organisations’ competitive advantage by improving its capacity to achieve lasting business leadership.
Total Quality Management [TQM]
According to Bendell (2005), total quality management refers to a management approach that is aimed at enhancing an organisation’s long term success by sustaining a high level of customer satisfaction. Subsequently, the TQM business process improvement methodology ensures that the respective internal and external organisational stakeholders are committed at improving products and services offered to customers and the processes involved in the delivery of such products/services (Bendell, 2005). Moreover, TQM is aimed at transforming an organisation’s culture in order to offer clients high quality products and services.
The TQM methodology is actualised by entrenching a management system that is customer-oriented, which means that all the total quality management activities undertaken within an organisation are aimed at ensuring that employees are continually improving their operations in order to satisfy the customers (Singh, 2015). Therefore, customer centricity is an essential component of a firm’s total quality management system.
The success of TQM in enhancing business process improvement such as transforming organisational culture is influenced by different aspects. One of the major aspects relate to the nature of type of management strategy adopted and the internal communication system integrated. According to Bendell (2005), implementation of the TQM requires an organisation to entrench effective internal management practices. Some of the management concepts that organisations should focus in promoting total quality management include teamwork, training, and leadership. The relevance of these concepts indicates that the success of TQM in promoting business process improvement is influenced by the extent to which an organisation’s management team is employee-oriented. Singh (2015) emphasises that for a firm to succeed in entrenching total quality management, it must ensure that employees are optimally involved in its business processes.
Lean six sigma
According to George (2002), lean six sigma entails ‘a methodology that maximises shareholder value by achieving the fastest rate of improvement in customer satisfaction, cost, quality, process speed, and invested capital’ (p. 7). The concept of lean six sigma and six sigma are closely correlated in enhancing the effectiveness with which an organisation achieves business process improvement. This correlation is underlined by the fact that to improve quality, cost and responsiveness, an organisation must eliminate delays as a result of time traps by employing both six sigma and lean six sigma tools (George, 2002). One of the ways through which lean six sigma methodology improves business processes is by reducing lead time for example, in sourcing inventory and raw material. Through this approach, slow processes, which are expensive to an organisations operation, are eliminated.
Lean six sigma methodology proposes that organisations should focus on improving their operations by eliminating processes that do not add value to an organisation. Thus, lean six sigma is similar to the Kaizen approach, which stipulates that muda or non-valuable processes should be eliminated. Additionally, lean six sigma stipulates that business organisations should seek at achieving operational efficiency by eliminating hidden factory costs, which arise from long production processes. For example, long production processes increases the cost of labour and other manufacturing overheads. Long production processes further increase the cost of poor quality because of process variability. Conversely, lean production processes stimulate revenue growth minimising such costs. According to George (2002), ‘lean six sigma directly attacks the cost involved in the production process more effectively than any other business process improvement methodology because it comprehends both quality and speed’ (p. 8).
Lean six sigma is not only concerned with reducing the cost involved in the manufacturing process. On the contrary, lean six sigma methodology can also be employed in improving the efficiency with which different processes such as product development, design changes, order fulfilment and customer service are delivered. Therefore, lean six sigma is an essential business process improvement methodology that contributes to creation of value to the target stakeholders.
Conclusion
Business process improvement is critical in fostering an organisation’s long term competitiveness. However, it is imperative for businesses to ensure that the relevant business process improvement methodologies are applied. Amongst the most effective methodologies include six sigma, lean six sigma, kaizen, and total quality improvement. Despite the differences inherence in the respective methodologies, their overall objective is similar. According to the analysis, the four process improvement methodologies are aimed at improving an organisation’s capacity to deliver and sustain a high level of satisfaction. Therefore, customer centricity comprises the core foundation of business process improvement. A review of the four process improvement methodologies further indicates that quality and cost constitute an essential element in undertaking business process improvement. Application of the four business process improvement methodologies further focus on elimination of waste and identifying new areas of improvement.
To leverage on the benefits associated with business process improvement methodologies, it is essential for firms’ management teams to develop adequate knowledge on the core components of a particular business process improvement methodology. Additionally, businesses should progressively review the contribution of the business process improvement methodologies to their competitive advantage. The review will be a source of critical insight on how to adjust the respective process improvement methodology in order to achieve the intended outcome.
References
Bendell, T. (2005). ‘Structuring business process improvement methodologies’, Total Quality
Management, 16(9), 969-978.
George, M. (2002). Lean six sigma; combining six sigma quality with lean speed. London:
McGraw-Hill.
Kumar, D. (2006). Six sigma best practices; a guide to business process excellence. New
York: J. Ross Publishing.
Sanchez, L., & Blanco, B. (2014). ‘Three decades of continuous improvement’, Total Quality
Improvement, 25 (9), 986-1001.
Singh, K. (2015). Wrap the scrap with DMAIC; strategic development of six sigma in Indian
foundry SMEs. New Delhi: Anchor Academic Publishing.
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