Posts Tagged ‘lean’

(Almost) perfect, at less cost and applicable in the outsourcing and shared services industry

May 22, 2010

Good quality does not cost – it pays. But many companies do not recognize it as they do not know how much things cost due to missing cost calculation in many areas. And that is the reason why it usually takes a long time for them to think their processes over and to implement simple measures assuring reduction in cost of delivering customer satisfaction. The latest one does not have to be as high as the cost of materials!

Good, better, (almost) perfect… – there is always a better way to make things. That is an old approach known as continuous improvement or kaizen and being an integral part of TQM (total quality management). It got very famous in Japan thank to quality gurus of Western origin and then the idea fascinated the rest of the world. Originally applied for industrial processes and by engineers, could be then successfully implemented for administrative tasks. And after the boom of outsourcing and shared services industry has begun, it has also been an attractive approach worth following to improve outsourced or insourced operations.

Six sigma, lean management – they are no more the domain of production, engineering or of in-house made operations. Even more insourcers and outsourcers recognize their importance to cut cost and increase customer satisfaction as quality pays. And the concept of “customer” itself does not just cover external but also internal clients you provide your work to.

While six sigma is a statistical method of quality control, lean management implies a qualitative approach. The main principles of lean / six sigma are as follows:

• they provide a system for improving the performance of a process, product or organisation,
• they help to understand performance from the customers’ perspective (how to put yourself into customers’ shoes),
• they provide a way of thinking in terms of end-to-end,
• they put a stress on making value flow and removing waste,
• they are in fact a pragmatic and rational approach to data and statistical variation.
• they help to treat causes not symptoms (in place of the fire-fighter approach).
• they focus on people, learning and continuous training being crucial to sustained competitiveness of the organisation.

Lean / Six Sigma
Source:Mike Way, Six Sigma and Lean in a shared services environment, presentation Prague 2009

Many organisations could reduce cost and/or increase revenue by reducing waste in existing processes thank to implementing lean / six sigma: Better, faster, safer with lean / six sigma implies quality improvement, reduction of response/reaction times and reduction of operational risks.

That all sounds nice, doesn’t it? Why not try it?

Magdalena Szarafin