A discussion on actual process improvement methodologies: applications, limitations, future.
The effective management of its supply chain is a
crucial point into driving success into a corporate organization. Whether it is
planning correctly your supply and demand to secure the right inventory, being able
to produce at a lower cost, delivering your service in time for greater
customer satisfaction, or improving the quality of your product, an effective
and superior supply chain can make the difference.
Thus, many
improvement methodologies are actually used in the market and while one could
argue that they all have the same broader goal which is to create additional value
for your organization by saving time, money, increasing productivity, etc., choosing
the right tool is a key in achieving process improvement.
In his paper, ‘How To Compare Six Sigma, Lean and
the Theory of Constraints’ [1], Dave Nave does a comparative study of the Lean Thinking,
Six Sigma and another process improvement methodology , the theory of
constraints which is based on the principle that upgrading weakest link in the
process will result in an overall process enhancement. He explains how you
can evaluate the organizational values and select the one adapted to your
needs.
However, selecting and using the right improvement
methodology is more than aligning facts and figures, it is adapting the tool to
the needs of your organization and being innovative and smart in the way you
use it.
DELL is a pioneer in this area. In 2004, the company
managed to have 72 hours of inventory by adopting a just-in-time philosophy that
is close to the Lean thinking. However, they go beyond the static and standard
implementation of a lean methodology by pushing their suppliers to adapt and by
having their complete organization aligned to function with speed and
flexibility [2].
Another example is the Seattle Children’s Hospital.
The hospital implemented a program called “continuous
performance improvement” C.P.I based on the Toyota Production System, TPS or
Lean Thinking. Among other notable improvements, the hospital cut their costs
by 3.7% saving $23 million [3].
While those are examples of application of the TPS
methodology, another management theory is the Total Quality Management also
called TQM. It is a variant of the lean
manufacturing and it emphasized the fact that better quality of service,
products and even work environment will lead to a greater rate of return [4].
An inspiring success story is how RIMS, a graduate
business school in India, used TQM to improve their KPIs: assurance of
learning, research productivity and graduate placement. The school management determined
key performance indicators, identified the stakeholders and used TQM tools to significantly
improve their measures [5].
The broader range of applications of management
theories show that every industry is concerned about cost effectiveness,
productivity, quality of service and customer satisfaction. Process improvement
methodologies such as TQM, Six Sigma, or Lean Thinking can move beyond
manufacturing and be applied to health care, IT services and even higher
education. While there have been some edifying and innovative ways to use it by
the past, I wonder how the exponential development of new technologies will
lead to original applications of these relatively old tools that have managed
to be relevant no matter what. Another question would be whether there is a
domain where you cannot apply those methods or where their limitations make
them ineffective.
Nonetheless, though some problems are universal and
corporations have always wanted to improve customer satisfaction and revenue at
a lower cost, I think we may expect new theories on how to better manage our
supply chain to emerge and maybe one day, Lean thinking and Six Sigma would
join mass production as obsolete and ineffective management theories.
REFERENCES
1 - http://www.lean.org/Admin/KM%5Cdocuments/76dc2bfb-33cd-4ef2-bcc8-792c5b4ef6a6-ASQStoryonQualitySigmaAndLean.pdf ; accessed on September
16, 2013
2 - http://www.fastcompany.com/51967/living-dell-time; accessed on September 16, 2013
3 - http://www.nytimes.com/2010/07/11/business/11seattle.html?pagewanted=all&_r=0; accessed on September 16, 2013
4 - http://www.idosi.org/wasj/wasj12(9)/34.pdf; accessed on September 16, 2013
5 - http://rube.asq.org/2011/02/continuous-improvement/business-school-tqm.pdf; accessed on September 16, 2013
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