Generally, business goals are to make money for shareholders by delivering perceived value to customers through the provision of products and/or services. If businesses are able to achieve these two goals, then, they can also provide meaningful work for their employees and can positively contribute to the overall well being of society through improved quality of community life.
However, today’s business reality is that change is inevitable and occurring at an extremely fast pace. Besides price and quality, the time has become a new competitive domain. Markets are now global, providing global opportunities to businesses – limitless possibilities. However, globalization also brings global competition spanning all the three domains discussed above. Customers are becoming more and more knowledgeable and their expectation and perception of quality has increased and continues to rise.
In such a competitive business environment, three major challenges faced by the industrial sector are:
- Skilled labor shortages
- Manual Handling, safety, and regulatory compliance
- Staying relevant in the ever changing world
Considering the issues above, one immediately is inclined to think of Automation and Digital transformation as possible solutions to these problems. However, did you know that up to 50% of robotic process automation (RPA) and 70% of digital transformation projects fail? Ever wondered why?
The answer lies in Bill Gates two rules of automation that I have extended to include digital transformation as follows:
Automation and digital transformation applied to efficient and organized processes will magnify and intensify the efficiencies and control
Automation and digital transformation applied to inefficient and disorganized processes will magnify and intensify the inefficiencies and lead to faster chaos.
The right way for the deployment of automation and digital transformation stems from the above stated two rules:
Improve the efficiency and control of your business processes as much as humanly possible before embarking on the Automation and Digital Transformation journey.
This requires dramatic changes in the way of conducting business. However, in management theory, change is hard, especially in large organizations. Numerous studies have shown that employees instinctively tend to oppose change initiatives because they disrupt established power structures and ways of getting things done.
If the leaders of an organization do not have the right mindset to help their organization survive, even well-established companies can be pushed to the brink by smart competitors and changes in their industries. Blackberry is a perfect example. To keep up with the changing business world and bring about meaningful and most appropriate positive change, at the right time, for automation and digital transformation, is made possible with the appropriate deployment of the Lean Six Sigma program that has stood the test of times. Organizations can adopt Lean Six Sigma in a bid to improve the quality of their processes and products, and thus achieve a competitive advantage while preparing for automation and digital transformation.
How does Lean Six Sigma work?
Metrics lie at the heart of Lean Six Sigma. The basic approach is to measure performance on an existing process, compare it with a statistically valid ideal and figure out how to bridge the gap and eliminate any waste and variation. Project teams might speak in terms of reducing medical errors or process cycle time, improving customer satisfaction, cutting down on returns and improving the speed and accuracy of order fulfillment. No project is considered complete until the benefit has been shown and a team of financial auditors signs off.
There are five steps to project execution:
- Define: A Lean Six Sigma project team—led by a champion and black belt—identifies a project based on business objectives as well as customer needs and feedback. The team identifies CTQs (critical to quality characteristics) that the customer considers having the most impact on quality. It also separates the “vital few” from the “trivial many” (the projects that will have the most impact versus those that could be improved but are not critical).
- Measure: The team identifies the key internal processes that influence CTQs and measures the baseline by documenting the defects currently generated relative to these processes.
- Analyze: Through brainstorming sessions and rigorous statistical analyses the team discovers why defects are generated by identifying the key variables that are most likely to create process variation. The team also validates a system for measuring deviations of the key variables and quantifies the variability contributed by the process parameters and those that are inherent in the measurement system.
- Improve: Using various statistical tools the team identifies the ranges of values for the key variables that will produce an optimum business result. The team modifies the value of the key process variables to the new setting and confirms that the predicted settings do improve the processes by comparing the new outcome with the baseline established in the Measure phase.
- Control: Tools are put in place to ensure that the key variables remain within the maximum acceptable ranges over time and the improvements made during a Six Sigma project are sustained.
Design for Lean Six Sigma
What happens when the process either doesn’t exist or is so broken that no amount of fixing it will bring it to an acceptable level? This situation calls for the need to design new processes from the ground up using Lean Six Sigma techniques to ensure reliable and satisfactory performance. Design For Lean Six Sigma (DFLSS) is an outgrowth of traditional Lean Six Sigma methodology. It is a disciplined and statistically based process to take customer requirements and translate them into process specifications and final design requirements. DFLSS tools help to predict and improve quality and performance before a process or product is launched.
For Successful Automation and Digital Transformation process optimization and controls are pre-requisites and Lean Six Sigma helps organizations achieve that.
As the process performance improves the cost of poor quality reduces and the organization starts to gain control of its processes. The sigma rating of the organization as given in the above image defines its readiness for the automation and digital transformation.
Benefits of Lean Six Sigma Deployment
- Improved Customer Satisfaction – Repeat Business for the Organization
- Improved Quality of Products and Services
- Reduced Waste, Variability, and Errors
- Improved Productivity
- Reduced Operating Costs
- Improved communication amongst team members and within the organization
- Improved Employee satisfaction and retention
- Rapid project schedules — three-six months is common
- Maximizes returns on investment (ROI) and pay for its initial deployment costs in less than a year.
- Prepares organizations for Successful Automation and Digital Transformation
Dr. Ijaz Rauf, Master Black Belt.