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Better Business Process Optimization
By: C. Richard Panico
Posted: October 24, 2006, from the October 2006 issue of GCI Magazine.
page 3 of 4
Six Sigma employs process diagrams as a tool to define and illustrate discreet process steps and specific metrics for process efficiency. This can be used to promote an understanding of the key business processes across the supporting functional areas, as a tool for training purposes and as the basis for identifying process improvements later in the project. A high-level process map may include additional information such as cycle time, resource utilization, defect rates, waste, work in process queues and customer satisfaction.
The next step in a process optimization project aims to identify those critical factors that enable or hinder process execution success. Six Sigma defines this as the analyze phase. A SWOT analysis is one tool that assists the project team in analyzing the current process. While strengths and weaknesses focus on internal factors, opportunities and threats identify external factors that affect the process.
Pareto analysis, another Six Sigma tool, helps identify the most common categories or reasons for process failure. Pareto charts are simply frequency plots where the most frequent results are placed in order from the left side of the chart to the right. The chart also plots the cumulative frequency from the left of the chart. A large sample of data in each Pareto chart will ensure meaningful results.
After the project team identifies process inefficiencies and causes of failure, their focus turns to the identification, development and implementation planning. If the process is to be re-engineered, the project team may choose to create a desired-state process map. Mapping the desired-state process is a very useful tool that allows the team to visualize the optimized process and ensure all process weaknesses and threats are amply mitigated, while sustaining process strengths and exploiting process opportunities.
Following the development and testing of systemic, procedural or responsibility enhancements, the BPO project team’s efforts should focus on ensuring the solutions are implemented and measured for effectiveness. The team must identify measures to be tracked after the desired state process is deployed. This includes the identification of who is responsible for collecting and analyzing the process data and reporting process efficiencies and effectiveness to the entire organization. Six Sigma projects typically employ statistical process control charts that track the stability and variation of a particular process over time, showing control limits that the results will fall between if the process is “in-control.” Use of any statistical process control chart requires regular updating and review to ensure its relevance and to ensure that process performance does not decline again.