Qualtec's Business Performance Improvement Blog

So, what does Business Process Management (BPM) mean to you if your organization has already gone headstrong into lean,  six sigma or other improvement efforts?    What does it mean to you if the efforts have really produced some good results?  Think you don’t need it and should move on?   You may want to think again ….

I constantly talk with people and hear some variation of ….

“We got a lot of great results from our program (Lean, Six Sigma, Quality, CI, etc) for the first couple years, everyone was excited and motivated, but now the program seems to be running out of steam.  Results and participation are falling, interest in waning, and we can’t figure out why”.

There are, of course, many potential causes for this, but one of them seems to be pretty consistent.  There is no real project pipeline and project prioritization approach. What happens?  People don’t really know what to work on so they don’t do anything or, maybe worse, they start working on squeaky wheel projects that have little or no impact on the business, and may even have a negative impact.  If this happens, I can assure you that it is a recipe for disaster for any business improvement program.

Download our whitepaper that discusses using BPM and scorecards to align improvement efforts

If you build that BPM framework, you will have a clear view of what really matters to the business and metrics to gauge your success in improving those things.  A pipeline of business cases and projects can be built based on measurable performance gaps and those projects will, by definition, have clear line of sight to things that really matter.  A clear prioritization scheme then keeps things practical and real.

If you have a clear list of projects that are absolutely aligned with the things that matter most to the business and you have a way to prioritize improvement efforts, do you think an improvement program is likely to fizzle?   I think not.

So, give BPM a second look, even if you’re well into an improvement program.  It doesn’t have to be a complicated, drawn out task.  If you’re just getting started, you can and should build it in stages, while you’re picking up some of those low hanging fruit projects.   If you have a mature effort, you can still build it in manageable stages by prioritizing the different areas of the business.  In the medium to long run, it might be the difference between your improvement program being a flavor of the month initiative and a long-term, strategic value-add component of the way you do business.

Contact me if you’d like to discuss BPM and your organization in more detail.

I talk to people everyday in all kinds of industries who, for whatever reason, have decided that they need to do Lean.   As often as not, they quickly jump to something that  I think is just not THE critical success factor for Lean success – TOOLS.

Now, before I get “purists” thinking I’m completely nuts, I’m not saying that tools aren’t important. Tool knowledge is obviously necessary, but it is not sufficient. Let me explain my thinking.

First, what is success, or maybe better, what is not success?  Success IS NOT training 100 people across 5 operations in Lean. Success IS NOT about skills certifications. Success IS NOT completing 20 projects last quarter, all with slick final report outs.

our Lean Overview and Primer ….

In this new business world we live in (and, realistically, in the old as well) success can only be defined by RESULTS, results that can be measured. Am I improving service to the customer? Am I pulling cost out and improving margins? Am I doing a better job of retaining revenue streams? Am I doing a better job generating top-line growth? Anything else is just academic, and I can’t think of a single business today that is interested in academic exercises.

To get RESULTS and to get them consistently and over the long term, there is much, much more involved. I think it can be boiled down to a simple and probably over-simplistic analogy though: Acquire your target, aim the weapon, then fire. And do it consistently.  All to often the acquire and aim components are put on the back burner in favor of fire events like tools training and kaizen events.

There has to be a business system in place to make sure that all three of the elements happen. Why? What happens if the acquire and aim components are ignored? You’ll get squeaky wheel projects being worked on that, while they are interesting and do improve stuff, really don’t make any measurable impact to the business. Training for the sake of training and projects for the sake of projects …. a recipe for a Lean train wreck.

Acquiring targets is about aligning the lean effort with the REAL NEEDS OF THE BUSINESS. Aiming is about defining and scoping projects so that they are manageable and that results are predictable. Combine these with good training and Lean project execution and success in terms of meaningful results is within reach. Ignore them and, well, you’ll have a lot of people trained and executing projects ….. but you’re unlikely to see any real improvement in your business …..

Thoughts?  I’d like to hear from you …..

It may not be completely intuitive, but  a recent article on SupplyChainBrain.com posed this very question.  The article talks about how manufacturers have, for some time, being willing to rely on extremely cumbersome and sometimes risky global logistics processes in order to achieve a single objective:  to save on manufacturing labor and increase their ability to compete.

However, there is a realization among more and more manufacturers that there are some very real downsides to these complex global supply chains and that an alternative approach is viable  – an approach known for many years as lean production.

our Lean Primer kit now…

When I saw this article, I remembered an interview I saw on CNBC earlier this week.  The CEO of Boeing discussed how too broad of an offshore, horizontal supply chain that incorporated too much engineering was to blame for the massive delays in their new 787 deliveries.  He talked about how he would be on-shoring more of his supply chain.  He didn’t use the word lean, but he was talking about exactly what this article discusses.

Give it a read and let me know what you think.

For many companies, CI has has moved from a top-down strategic initiative to tactical activities focused on specific business problems

I’ve written several articles that talked about how views on business process and performance improvement have changed over the last 3 years.   In the personal development world, there is a mantra that basically says that meaningful change comes only when the pain of not changing becomes greater than the pain associated with change. 

The economic downturn definitely created the pain that caused a lot of companies to change the way they look at their business, and at process and continuous improvement.  I see very few companies saying they want to launch a top-down, enterprise wide Six Sigma (or Lean or BPM) initiative, especially ones that focuses on investing big $’s on training and infrastructure up front.   Those days, for the most part, seem to be over and gone.  Certainly a big change from years past, but is it a bad thing?  

Some purists might argue that it is a bad thing, that top-down, large scale change management and process improvement initiatives should be a fundamental part of any enterprise.  Theoretically, yes, but how many large-scale Six Sigma (or Lean or BPM) initiatives basically collapsed under their own weight in years past, after a great deal of money, time, and intellectual capital was spent?   A great many, I can assure you.  Why?   Well, I might argue that it’s because they took on a front-and-center life of their own, as initiatives, growing unbounded for the sake of the initiative when their place should have been in supporting the core value-generating processes of the business. 

a short guide to project selection and definition.

I would argue that the change is not a bad thing, and was necessary to survive in this new normal.  Let’s think about where are we now?   Companies are lean and mean, operating in very much of a do-more-with-less mindset.  For many, big Six Sigma (or Lean or BPM) organizations have been disbanded.  Productivity is at record levels.  60 hour + work weeks are the norm for many.  But, you can only ask so much of your people for so long.   Sooner or later the business processes have to be looked at, right?  

But, now, what I see is that many organizations are taking a very pragmatic and tactical approach to CI.  The competitive environment, the regulatory environment, or maybe even a very important customer is telling them EXACTLY where process problems are, and they are listening.  They then focus like a laser beam by identifying and rigorously defining good projects (see a recent article I wrote on the elements of good project definition) that solve real, specific business problems.  They then develop the process improvement skills in-house or work with a specialist partner to execute what are, by definition, high-impact improvement projects. No guesswork, no unnecessary overhead, no unnecessary infrastructure.   

In essence, what I see is a fundamental shift from CI initiatives that are pushed into the enterprise to an environment where CI and process improvement are pulled in, as specifically needed by the business.  Of course, the pendulum has swung very far from the strategic to the tactical and the optimum is probably somewhere in the middle.  But, was this change a bad thing?   I think not.  I think it will serve to refocus CI on what really matters …. making the business more competitive and profitable in an ever-changing marketplace.

Feel free to contact me directly.  I’d like to hear your thoughts ….

With today's lean workforces, outsourcing important process improvement activities to a specialist partner may be the path to results ...

One trend I saw throughout 2010 (and 2009 for that matter) was a intense focus on doing more with less.  Business is picking up substantially for many companies, BUT the willingness to hire certainly has not.   Personally, I think this trend will continue unabated through 2011.  Companies are very lean and have realized very high levels of productivity (and profitability), and are simply unwilling to go back to the old ways of thinking (i.e. “bloated” workforces).  Outsource certain activities to specialist providers, and figure out how to do more with the same resource levels internally.  As I see it, that is the new norm.  And, one of the fundamental ways you do this is by improving processes.   

But, if the workforce is very lean, running at very high levels of utilization and productivity, how then do you find the bandwidth to do meaningful process improvement activities?  A difficult conundrum, without a doubt?  The old approach (if you consider 2-3 years old!) of setting up a formal top-down initiative (i.e. BPM, Six Sigma, Lean), training a large number of people in one or more problem solving methodologies, and then sending off your new process improvement army to fix stuff is simply not feasible for many organizations.  Even if they want to do this, their people are so busy that there is no bandwidth available, and any kind of a training centric approach like this would likely fail. And, hiring to build a dedicated process improvement organization is just not likely.  So, what is to be done? 

our Lean Primer Kit for an overview of Lean and how it can be leveraged to improve results

I would argue that the way to do it is to outsource process improvement activities to a partner that specializes in Process Improvement. This is a standard outsourcing value proposition where, instead of building up an internal CI organization, you establish a strong relationship with a specialist partner, and leverage their products/services on an on-demand, as-needed basis.  Fixed overhead now becomes variable cost.  Done well, it’s actually better in that ANY $’s expended on process improvement with your partner should yield a significant ROI.

Does working with this specialist partner mean that internal resources are completely isolated from process improvement activities?  No, of course it doesn’t.  But their involvement shifts to a subject matter expert role, rather than a process engineer.  Key stakeholders are involved every step of the way, from characterizing the current state of the process, to identifying problem root causes, to solution identification and prioritization, to management and control plans.  BUT, they are involved in a way that doesn’t drag them into the weeds and allows them to stay focused on their day job.   Process improvements get done in an efficient and cost effective way, and day to day business activities don’t suffer.   Not bad …     

Here at Qualtec, we are already seeing this type of shift happen with many of our clients and have adapted our business model and offerings to accommodate.  AND, we are seeing it work, very well.  So, if you have a real business driver for process improvements, but don’t and will not have internal resources to execute, think seriously about and outsourced approach to process improvement activities.  You may be pleasantly surprised with the results.

Feel free to contact me if you’d like to discuss.

Charlie Jacobs, Director of Process Improvement for APL Logistics, recently wrote a short article for inboundlogistics.com titled Lean: The Next Best Thing to ‘Clip-and-Save’.  In this article, Charlie laid out 3 mini case studies of simple lean projects that yielded extraordinary results. 

His point, backed up by his own results, was that it is difficult to justify NOT using Lean or other basic process improvement approaches in warehousing and distribution operations. The 3 successful cases had elements that should make them attractive to any manager:

• Each was implemented by the same type of personnel and talent your company probably has working in its supply chain operations. No special skills required.
• None required so much of any one resource’s time that it interfered with their ongoing job responsibilities. Their day  job did not suffer.
• And no one misses the waste and inefficiency they ultimately eliminated. It was a win-win across the board.

APL is a long standing Qualtec client, and we feel privileged to have been part of the success Charlie has had with APL’s ACI program. It is a model that a lot of warehousing and distribution centers might be wise to follow.

Contact me if you’d like to discuss Lean for warehousing and distribution operations.

As I have said in a number of previous articles, Continuous improvement (CI) seems to be coming back in vogue after a couple of years where CI programs were severely cut back or outright eliminated.  Service and service delivery organizations that paid scant attention to structured business and process improvement are now taking notice.  Why? 

our BPM Overview Presentation

Well, the simple answer is that things are just different now.  I talk to business leaders every day, and I can’t tell you the last time I heard “we want to start a continuous improvement (or Lean or Six Sigma program, etc) to instill a culture of quality and continuous process improvement in the company”. Overwhelmingly, my conversations say it’s all about solving specific business problems, immediately and relatively inexpensively.   And, services and service delivery organizations are who I’m talking to.

Problems seem to cluster around being able to deliver an increasing service level while maintaining or growing margins, WITHOUT adding headcount.   It’s do more with less (or at least with what we have).  My limited insight doesn’t bode well for the near-term employment outlook, but it’s what I see nonetheless.

So, the reasons for doing it are different than they were just 2 years ago.  The way business leaders want to do CI is also different.  There is very little appetite for big dollar corporate initiatives. The focus is almost entirely on quick wins … results now.   Now, the Six Sigma purists out there might say that a focus on near term results is a recipe for disaster.  I don’t think so.  We have to live in the real world, and if some basic infrastructure components are put in place, you can focus on short term wins and still get sustainable results. We (SSQ) have defined and seen first hand just how successful an incremental, pay-as-you-go approach can be in a wide range of service oriented organizations. 

Basically, what we see for back-office and service delivery organizations is that fundamental Business Process Management (BPM) and Lean can make for an incredibly cost-effective way to make near-immediate, high impact improvements. 

In a services environment, BPM and Lean allows you to consistently execute well-defined, low risk, and high impact projects  that are clearly aligned with the real goals of the business …. for many, a better path  to  Continuous Improvement

BPM crystallizes value streams (processes) and establishes measurement systems that clearly identify the highest value gaps in performance, from both customer and business perspectives. These gaps represent business cases, and ultimately, projects.  Define a good prioritization approach, and you have a project pipeline.

Lean is an inexpensive and highly effective way, then, to execute those projects and close those performance gaps.  Now, there is not doubt that not all projects identified will be lean projects.  You will for sure find capital projects, six sigma projects, and even some process redesign projects.  BUT, my experience is that a significant number of the highest value projects in service and service delivery organizations are indeed Lean projects. They focus on doing more with less, reducing cycle time, or reducing cost.  That’s lean.

BPM and Lean.  Done well, you can get near-term results AND set the stage for long-term sustainable results.  And, the beauty of it is that it can be very lightweight and cost-effective.  Contact me if you want to discuss how this lightweight approach to CI might work for your organization.

“We can’t decide whether to do Lean or Six Sigma …”.  I’m still surprised how many times I hear this, much in the same context of whether to get a Camaro or a Mustang.   There is still this misconception that Lean and Six Sigma are competing methodologies, and that you have to opt for one camp or the other based on some arbitrary preferences. 

The CI consulting industry is partly responsible for this, no doubt.  Lean shops push Lean  — Six Sigma shops have all kinds of reasons why Six Sigma is the be-all end-all.   Then the waters were muddied further with the introduction of this thing called Lean Six Sigma, which weaves the lean tools through DMAIC methodology. 

So, if you’re a business leader with real problems and real opportunities, how do you make a smart decision, one that has a good chance to deliver a solid ROI and bottom line results?   

The simple answer is Let your business tell you what makes sense.   We did a recent post that touched on the concept of letting the business pull your CI approach vs. pushing a one size fits all approach, a good example of Lean thinking itself.  We have a very structured assessment model we use when we help our customers design CI programs, but the waters can start to clear with some simple questions …

1. What kinds of business problems do I need to solve?  Do I have clear quality and defect issues that are hurting the business?  Are they complicated problems, where you really don’t know what’s happening?    Or, am I really trying to increase efficiency, make things run faster, and at a lower cost?   Quality and defect issues may tilt the scales toward Six Sigma.  Efficiency, cycle time, flow almost always point to lean.
2. When it comes to process maturity and availability of data, where is my organization, really?  Six Sigma is heavily dependent on measurement and analysis of detailed data to get to root cause. What happens if you really don’t have a lot of data, and have a lot of processes that are messy and unstable?  Projects that take a VERY long time to complete, if they ever complete, is a likely scenario.  In this case, then maybe you should look to lean to clean up and stabilize processes, establish some measurement systems, and get some quick results before moving into Six Sigma.
3. Am I under major budget and time constraints?  Six Sigma can yield some incredible breakthrough results when done correctly, but it takes some upfront investment, in money, resources, and time.   Lean is typically simpler, projects tend to be more incremental, upfront costs are less, and results (albeit in smaller bites) come quicker.
4. Do I have leadership buyin and active participation?  Getting Six Sigma off the ground really requires some support and infrastructure.  If you have that buyin, there are typically some major gains to be had.   If you don’t, and need to do things more from a grass roots perspective, then lean might be a better answer.
5. Am I under pressure to show real operational improvements, NOW?  If so, then I’d take a hard look at lean as a starting point.

our Lean Quickstart .ppt.  There is a short section that provides a high level overview of the differences between Lean and Six Sigma.

Now, before all you purists get mad at me, I know this is overly simplistic.  Did you see all the “may” and “maybes”?   But, you have to admit it is very practical and does provide some realistic guidance, a starting point at least. 

Of course, no single one of these questions should be looked at in a vacuum, but I think if you look at all of them in total, you can get some clarity on what might be the best place to start, whether it be Lean, Six Sigma, or a blended Lean Six Sigma approach.  And, remember, different organizations within the company will likely be in different places.  That’s OK.   Remember, be flexible, and let the business pull the CI approach/tools that make sense. Good results will follow ….

As always, I welcome your feedback and thoughts.   Email me if you’d like to discuss in more detail.

Last week I published a short article titled What about Lean in a Services Environment?.  It made the case for Lean’s applicability in a non-manufacturing environment.  My goal with that article was to dispel notions that Lean is a manufacturing paradigm.  Building on that, I thought I would talk about a specific services process, and what better place to look than IT ….

Our Lean QuickStart Presentation here.

Remember, Lean is first and foremost about the elimination of waste, and I would argue that there is plenty of waste in IT, hence there is applicability for Lean in IT.   To take things further, since IT is supporting the broader business needs, waste in IT can be magnified into bigger waste (and bigger problems) as it filters through the business.  Let’s look at the elements of waste and make the connection to IT ….

Waste of Defects.  Systems not meeting requirements, software bugs, missed deadlines, blown budgets, etc.  This clearly adds cost to IT, but I would argue that the impact to the business can be even larger in terms of $’s.  Incorrect handling of a single customer transaction can cost the business big in terms of cost, lost revenue, and potentially attrition.

Waste of Overproduction.  Here, overproduction means simply doing things that don’t need to be done, like working on low-impact squeaky wheel projects that really don’t provide value to the business.  This is the classic IT Alignment with the Business problem that has been talked about for years and years.  The cost to the broader business is that strategic projects offer real value don’t get worked.

Waste of Waiting.  Test teams waiting for the next load that’s running behind, development teams waiting for test results, waiting for new hardware, waiting for software upgrades and patches, etc.    But, again, the business impact can be bigger.  Think about slow application response times, inefficient problem escalation process, missed deadlines delaying product launches, etc.

Waste of Overprocessing (non-value add processing).  A good example here is IT keeping track of excessive amounts of technology metrics, and then reporting those metrics to business managers.  Again, the old business / IT alignment demon rears its head.

Waste of Transportation. On site visits to correct hardware/software issues, physical security, compliance, or software audits, vendor visits for equipment that might not really be needed, etc.  

Waste of Excess Motion. Firefighting creates excess motion, and I think it’s safe to say that firefighting is a way of life for many IT organizations and a productivity killer.

Waste of Excess Inventory.  Server sprawl, under-utilized hardware, software installed that no one uses, development and test teams benched, waiting for their next assignment

Waste of Underutilized Talent.  Failure to encourage and capture new ideas for innovation, retention issues, high-value employees used for mundane tasks that really require a much lower skill level, or possibly even automation (i.e. regression testing).   And I’ll add one more here … build vs. buy.  What is the impact when IT leverages its resources to build something inhouse, when a better and cheaper solution could have been bought?  This negatively impacts IT and the business heavily.

I think it’s pretty clear that there are many opportunities to use Lean to remove waste in IT organizations, lower IT costs and resource requirements.  I also believe that, due to most businesses’ increasing dependence on IT, the bigger value to improvements will likely be realized by the business, through smoother operations, better resource utilization, and happier customers and employees.   

Think about it and Contact me if you’d like to discuss how lean can be applied to IT organizations in more detail.

Everyone knows that Lean came from the manufacturing world, and many aren’t quite sure how, or even IF, it applies to more service oriented environments. Well, rest assured, it does.  I see countless examples of Lean success stories in a broad range of services/transactional domains. Financial close, claims processing, call centers, software development, enterprise software implementations, patient waiting times, logistics and supply chain, order fulfillment  …. The list goes on and on.

Our Lean QuickStart Presentation here.

Granted, adoption of Lean in services environments has been a little slow, but adoption is happening now at a rapid pace.  Why?  It could just be the natural progression of things, but I think it’s also a function of the business environment since the recession.  Internal efficiency and productivity, doing more with less, and cutting costs are now just the way business is done, the new norm …. And that, my friends, is what Lean is all about. 

Lean first and foremost is about the elimination of waste, and it defines 7 ( or 8 ) elements of waste. Any activity that doesn’t add value, from the customer’s perspective (internal or external), is by definition non-value-add and should be minimized (or eliminated).   Now, think about this … some very reputable research suggests that, in a typical services process, 80% of the activities are non-value add. 

Yet, all those NVA activities add time and cost, and opportunities for errors to the process. In the case of most back-office processes (e.g. Finance, Customer Service, HR, IT, supply chain, etc), any saving in cycle time / cost filter straight to the bottom line.  

80% NVA activities, savings straight to the bottom line … That tells me that there is ample room and opportunity for Lean in Service-oriented processes.      Think about it and contact me if you’d like to discuss in more detail.