The premise of Six Sigma is eliminating wastes by continuous process improvement, echoes one of my interviewees. One thing crucial about eliminating wastes is time. All companies no matter its nature cannot afford to be wasteful for a long time, or even for one production/service cycle.
With the latest advances in technology, popular notion has it that automation is the answer to speeding up your processes. Many tend to believe this. All those paper work and signature sequences for every approval of a document is time consuming. Those who do not know better will find value in those detailed steps. After all, it is for the security of company’s processes.
However, not all sucessful companies turn to automation as the answer to process improvement. An isixsigma.com article says so. Companies only need to know the 95/5 rule—typical processes consist of 95% non-value adding time and only 5% value adding time.
Six Sigma defines value added as to be a value added action the action must meet all three of the following criteria:
To be competitive, you must reduce costs that do not contribute to value adding, not passed on to customers. Thus, you must eliminate waste. As a review, waste in a process is any activity that does not move the process closer to final output, or even add value to final output. Overproduction, inventory, waiting, transportation, motion, process (useless steps in a process) and defects are the examples of wastes.
The practice of process improvement involves the following:
1. Select a process that, if improved, will have a positive impact on the organization. The object is not to eliminate people – it is to improve the process so people can be freed up to increase throughput or take on additional business for customer satisfaction.
2. The process must have a clearly defined beginning and end.
3. No process improvement can take place without involvement of a process owner.
4. A team has to be organized by the process owner to map the process, reengineer it and implement the new process plan.
5. The process must be mapped (or diagrammed) as it actually is, not as people think it works or how it was originally designed to work.
6. After the map is complete the team studies each of the steps with the goal of shortening the process.
7. Shorten the process: eliminate all non-value adding operations where possible; consolidate related operations; simplify or automate by looking at remaining operations and evaluate them as processes within the larger process. BUT automate only when you are sure all waste has been eliminated or minimized.
8. The biggest failures in process improvement are lack of implementation of the redesigned process and reexamination of the process on a regular basis.
Source: Process Improvement—Is Automation Always the Best Answer?
