“When they told me they could increase our profit, whilst doing the same amount of work, I was sceptical. Next they told me we could work less, yet still make the same amount of profit – yup I was still sceptical. But when they showed us how we could expand our business by using efficiency tools, yet not incur a lot of additional overheads and continue to grow our profits, I was instantly hooked.”
Initially developed to improve industrial efficiency and quality, Lean Six Sigma is now widely adopted by financial institutions, law firms, manufacturers, accountants, retailers, and hospitals. Lean Six Sigma is a combination of two models: Lean, is aimed at reducing waste, and Six Sigma, which helps companies reduce errors. Together they can help companies reap the benefits of faster processes with better margins and higher quality.
Benefits of Lean Six Sigma
The benefits of Lean Six Sigma are broad and deep and for the sake of brevity they fall into seven key categories:
- Financial benefits
- Strategic benefits
- People development benefits
- Client benefits
- Competitive position
- Stakeholder benefits
- Standardisation benefits
Lean Six Sigma is a methodology that delivers ongoing process improvement within your business by combining both common sense procedures and data-based tools to remove waste, reduce flaws and delight clients.
Lean Six Sigma will:
- Increase speed of production/service
- Reduces waste (inefficiencies in your processes clients would not see as value)
- Simplify processes
- Increases accuracy
- Directs focus on the client’s objectives
Productivity is the key to business sustainability
Lean Six Sigma productivity is improved and sustained productivity. All resources are used to create value for your clients. All other uses are considered ‘waste’. Working from your client’s viewpoint, “value” is any action or process for which your client will want to pay you.
Lean Six Sigma can be applied to attack waste in each step of your organisation’s processes. Errors or variations in your processes that may be identified as waste include:
- Repeating or correcting employee work product
- Preparing materials far in advance of when needed
- Failing to allocate work to appropriate employees
- Inefficiently or ineffectively communicating with clients
- Waiting to receive necessary information from the client
Clients want value. How do you know what value is? How do you find out?
The challenge is not just recognising what value to create, or what the benefits are, but to simplify client-facing processes to efficiently deliver the value your clients want. You must understand what combination of benefits derive the most value to your client. This, a key feature of the process, is to capture the voice of the client.
When we develop a client’s value proposition, we keep in mind the following:
- There are two stages clients assess value; before and after they make their purchase
- Value is perceived at various levels and value must be delivered at various levels
- Understanding what clients’ value is the first step in delivering client value
Delivering value to a client will involve us strategically thinking about:
- Cost and benefits
- Predictability of delivery
- Achieving client’s desired outcomes
- Delivery of high-quality service and excellence