Difference Between Lean, Six Sigma and BPM Explained
Today, quality management practices are at the forefront of meeting next-gen business demands in this highly competitive market. Lately there has been a great deal of talk with regards to Lean, Six Sigma and BPM in enterprises globally. But, few speak about implementing Lean, and few speak for Six Sigma and BPM and others want to use the combination of both Lean and Six Sigma. So, how do you know which process improvement methodology is right for your organization? Below, we will explain in detail about each of these methodologies and how it adds value to the organization and its business processes.
Definition of Lean:
Lean is a production practice found by the Japanese auto giant Toyota in the 1980s which covered all facets of the manufacturing business, from quality assurance to human resources. The main objective was to eliminate waste and reduce production time and costs.
Toyota defined seven wastes in the form of: transport; inventory; waiting; motion; over-processing; over-production; and defects. The tools that they used for implementing Lean were Kanban, Poka-Yoke (mistake proofing) and Value Stream Mapping.
For Lean to work there should be a cultural change in the organization where the best practices are ingrained among the workforce and it has to merge through the business silos and receive unanimous backing from the senior management and employees.
Future of Lean in an Organization:
Lean’s mainstay is in its quick implementation. Some of the immediate benefits it can showcase is in productivity, reducing errors and customer lead times. Long-term benefits of Lean include – improvements in financial performance; highly motivated staff; and better customer satisfaction.
Lean as a standalone entity has its shortcomings. Hence, enterprises use Lean and Six Sigma together to achieve maximum benefits. Six Sigma clearly focuses on identifying mistakes in data inputs and looks at Root Cause Analysis to determine the source of errors to reduce wastage.
The future of Lean is dependent on how it can translate its methodology from the manufacturing sector to the more unconventional settings. Lean as a philosophy, a methodology or as a cultural transformation has a bright future ahead.
Definition of Six Sigma:
Six Sigma is one of the widely-recognized process improvement methodologies that allow enterprises to use data to eliminate defects in any process. Six Sigma as a methodology was first outlined by Motorola in 1985 and later popularized by General Electric and Ford Motor Company in the 90s. Six Sigma’s two project methodologies in DMAIC (Define, Measure, Analyze, Improve and Control) and DMADV (Define, Measure, Analyze, Design and Verify) are based on Deming’s Plan-Do-Check-Act cycle.
Implementing Six Sigma is not an easy task. It needs a dedicated team which is divided into hierarchies based on Six Sigma certifications such as Yellow Belt, Green Belt and Black Belt. This team uses several advanced statistical tools such as Pareto charts and Root Cause Analysis to deliver maximum value for an organization.
Because Six Sigma is a multifaceted methodology, it caters differently for each process. For instance, if you are a statistical engineer, it might simply be a production quality metric and if you are a customer service employee, it typifies corporate culture on the whole.
Future of Six Sigma in an organization:
Though Six Sigma has been very popular in the manufacturing sector, but they seem to be moving beyond quality control and towards innovation. Other industries such as financial, IT and others demand a unique customer focus, and there seems to be a struggle with data inputs and Six Sigma appears to be a perfect partner to get that right.
There is some criticism directed towards Six Sigma as it does not offer anything beyond quality improvement and requires a long implementation time. However, with certification courses, an average salary for Six Sigma Black Belt professional can go up to ~USD 90,000. Enterprises across the globe still value quality management professionals. As long as enterprises see positive ROI from Six Sigma projects, it will continue to thrive in the future as well.
Business Process Management (BPM)
Definition of BPM:
Business process management (BPM) is an approach that looks at an entire business process in a holistic manner to create workflow that is more effective, efficient and capable of adapting to meet new market demands to accomplish organizational goals.
BPM was created way back in 90s by Michael Hammer and James Champy who published a book on business process re-engineering and later which was disputed by Smith and Fingar’s book: Business Process Management, The Third Wave. Though the origins of BPM is somewhat unclear, but in the early 2000 dot com boom created a thriving vendor market which required platforms with BPM.
As an enterprise why should you use BPM?:
Many enterprises are usually divided into departments with different functionalities. A customer’s perception of an organization is through the business process through which they interact. For instance, when a customer applies for a loan, they just see them as a loan provider and not as a group of departments as sales, finance, marketing, IT, legal etc. Customers demand transparency and a seamless experience and BPM looks to provide them that experience by mitigating business silos and helping enterprises to manage complex business processes to meet customer demands.
Future of BPM in an organization:
BPM is growing at a steady pace and BPM vendors like Appian is worth close to ~USD 350 million. All tells us that BPM space has a great future. The old school BPM which was a factory-style sequential workflows have been outdated, but the dynamic BPM model which incorporates business process intelligence and predictive analytics, is well and truly established. Down the line emerging technologies and BPM form a seamless integration in the form of mobile, social, cloud and predictive BPM are going to be the next big thing.
Enterprises across the globe are in need of process improvement methodologies to cater to the demands of changing business landscapes. Lean, Six Sigma and BPM have their own benefits and enterprises can implement these process improvement methodologies that suit them the best which can improve customer loyalty; create greater ROI; increase bottom line and provide high quality services.
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