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BPMSOverviewBusinessProcessManagementWhatdoesBPMSmeanforYou?
TheStrategicComponentofSixSigmaAwayforalldepartmentstobeactivelyinvolvedandalignedintheiractionstosatisfycustomersAwaytoalignproblemsolvingresourcestosolvecriticalcustomerissues“ProcessesarethebasicvocabularyofSixSigma”GeneralElectric2GettingMoreResultsfromSixSigmaForseveralyears,companieshaveusedBusinessProcessManagementtoimproveandmanagekeybusinessprocesses.Theyhavelaunchedspecificcustomer-focusedprojectsasanaturalextensionofprocessimprovement.GEbrokethemold,andlaunchedspecificprojectsinparallelwithprocessimprovementThisistheapproachthatweareencouragingSamsungCorningtotake.3HistoryofSuccessful
SixSigmaDeployment4Mr.Welch’sStory“Thefirstyear,weusedSixSigmatoattackcosts,improveproductivity,andfixbrokenprocesses.In1997weachieved$320millioninproductivitygainsandprofitBy1998,wehadgenerated$750millioninSixSigmasavingsandgot$1.5billionin1999.Ouroperatingmarginswentfrom14.8percentin1996to18percentin2000.”5Mr.Welchcontinues….“ThenextphasewastouseSixSigmatoolstofixanddesignnewproducts”GEPowerSystemscustomerswereexperiencingPowerDownsituationswithregularity.GEredesignedandreducedunplanneddowntimefrom33%to0onthelast210unitsproducedsince.GEMedicallaunchedanewCTscannerwithreducedMRIproceduresfrom3minutesto17seconds.”6FunctionallyFocusedSixSigmaProjectSelectionMostorganizationsaremeasuredby“functions”SixSigmasuccessislargelywithinfunctionsExecutivesmayoperateasateambutarefocused,individually,onthefunctions.Strategy&ActionSalesFinanceMarketingHumanResourcesPurchasingManufacturingProductDevelopmentFunctionsCustomers?$$SixSigmaProjectSavings$$7Mr.Welchcontinues…stillnotenough“Ourcustomersweretellingusthattheyfeltnodifferenceinquality.”Companyishappy…..ButCustomerstilldoesn’treceivereliabledeliveries!8Mr.Welchcontinues-nowCustomerNoticesThecustomerneedsreliabledeliveryasmuchasshortcycletimesNowthecustomerishappy!9CustomerProcessYourProcess
CABCustomerViewHowdidtheperformanceofmysupplieraffectmytotalprocessperformance?YourViewTwoViewsofPerformanceHowdidweconformtothecustomer’srequirement?AttheCustomerFortheCustomer(ACFC)AtTheCustomerFortheCustomer11ACFCMetricsGEAircraftEnginesnolongerfocusesjustonhowlongittakestorepairanengineforanairlinecustomer.Themeasurethatcountsis“wingtowing””--howlongittakesfromthetimetheenginecomesoffanairplane’’swinguntilitisreplaced--sincethatishowlongtheairplaneisoutofserviceActualGErepairtime=??halfthewing-to-wingtimeGEhasstartedaprojecttohelpairlinecustomersattacktheother??ofthetotalwing-to-wingtime12ACFCMetricsGECapitalfoundaprobleminitsbusinessunitthatprovidesfinancingtoofficeequipmentdealersFirstGECapitalreduceditsinternalcycletimeforfinancingapprovalfrom2daystoafewhoursButthebiggerissuewasthatequipmentdealershada47daycycletimeforARGEhashelpedthesedealerstoredesigntheirbilling&collectionprocesses,andhasdriventhetimedownto25days.GECapitalisconsideredaProcessEnterprise13WhatisaProcessEnterprise?ThereisasmuchallegiancetoprocessesastofunctionsEmployeesinternalizeprocessgoalsEmployeesunderstandhowtheprocessisperformingEveryoneknowscustomerrequirementsandstrivestomeetthemEmployeeshelpmanageeachotherinsteadofescalatingconflictsProcessesaremeasuredObjectively–andfrequentlyGECapital14Customer-FocusedProjectSelectionFunctionalIntegrationandLine-of-SighttotheCustomerCustomersseeusthroughourbusinessprocessesProductsandservicesforcustomersarebyprocesseswhichcrossdepartmentallinesThiswillbethefocusofourworkinBPMS..ToaligndepartmentalprocessestofocusoncustomersStrategy&ActionSalesFinanceMarketingHumanResourcesPurchasingManufacturingProductDevelopmentCrossFunctionalProcessCustomers$$SixSigmaProjectSavings$$15BPMSFramework16SixSigmaandBusinessProcessFocus6smakeseachprocessefficientandeffective,......BusinessProcessManagementSystems(BPMS)connectsthoseprocessesintoachainfocusedonflowandcreatingvalueforthecustomerCreatingAConsistentValueChainforCustomers!EngineeringSuppliersOperationTestSupportCustomer6s6s6s6s6s6s6s6s6s6s6s6sAdministration6sTraditionalSixSigmaRoll-OutEngineeringOperationTestAdministrationMaterialsSupport6s6s6s6s6s6s6s6sSuppliersCustomerSixSigma/CoreProcessfocus17MethodologiesforManagingPerformanceProcessManagement(BPMS)BusinessCaseImprovement(DMAIC)Customer/Shareholder/StakeholderRequirementsPerformanceBusinessStrategyCoreandEnablingProcessGoalsBusinessResultsCTQsProcessPerformanceMeasuresBusinessProcessesResourcesforDrivingPerformanceCorp.LeadershipTeam(CLT)ChampionsSixSigmaTeams.ProcessOwnersProcessTeamsGeneralElectric’sIntegratedProcessApproachtoBPMS18BPMSatCorporateLevelPackagingConsolidationSub-assemblySequencingImportServicesJITpickup/deliveryInventoryMgtKittingSequencingSub-assemblySupplierConformanceCarrierMgt.Materialfollow-upWIPtransportFacilityDesignYardManagementQualityAssuranceDCOperationsInventoryMgt.Returns-PackingYardManagementImport/ExportCarrierMgt.TransportConsolidationCustomsClearanceInventoryMgmt.RailLoadingVehicleDeliveryVehicleReleasingSecondaryServicesReverselogisticsInventoryFactoringFinancingInventoryOwnershipFreightPaymentEquipmentLeasingProjectFinancingEquipmentFin.PrivateFleetFin.WIPinventorymgt.EquipmentFinancingProjectFinancingFreightPaymentCreditservicingEDIVendorManagedInventoryNetworkDesignsMRPsystemsPartVisibilitySatelliteCommunicationsIntegratedSupplyChainToolsProductionplanningToolsWMSDRPsystemsEDI3rdPartyMgt.RoutingDesignProductVisibilitySatelliteCommunicationsPODverificationSuppliersInboundLogisticsManufacturingDistributionCentersFinishedProductDistributionCustomerPhysicalServicesFinancialServicesInformationServicesSALESPRODUCTIONValueCreatingProcessesEnablingProcessesTheBigPicture19ElementsofaBusinessProcessstartboundary:coreprocess:endboundary:sub-processsub-processsub-processsub-processsub-processsub-processsuppliers:inputs:customers:outputs:20DetailedMappingistheNextStepinBPMSTop-LevelProcessSub-subprocessesSub-processesStop21BPMSLinkagetoStrategicObjectivesTraditionalSixSigmaProcess-CenteredSixSigmaMission,Values,Vision…DevelopmentofBusinessPlans-Goals-ObjectivesDeployment-Functions-DepartmentsExecutionDMAICDMADVReviewandAuditMission,Values,Vision…VOCAnalysis-StrategicObjectivesProcessGoalsOrganizationalProcessCapabilitiesObjectiveAlignment-CoreProcessesBPOwnersEnablingProcessesExecution-ProcessCapabilitiesControlDMAICDMADVReview22WeareSeekingtheDriversofProcessImprovementY=(x1,x2,x3,x4,…xn)ProcessProcessEfficiencyInside-OutProcessEffectivenessOutside-Inand23Effectiveness:SamsungandBrandValueSamsungisthenumberonewinner*inincreasedBrandValue(2002Vs.2001).Samsung’sbrandvalueincreased30%in2002,whileSony’sdecreasedby7%Samsung’sbrandvalueis#34intheworld.Sonyisstill#21,but“SonygadgetshavecomeunderattackbySamsung”“Samsunghasusedbolddesignstotransformitselfintoapremiumsellerofconsumerproducts.”“HeavyinvestmentsindesignR&Dhavebroughtfatterprofitmargins.””*BusinessWeekMagazine,August5,200224LeveragingBrandValueBPMSgivesSamsungCorningaroadmapforfocusingbusinessprocessesoncustomerserviceobjectivesThiswillcatalyzegrowthwithSamsungandwithOEMsCUSTOMERSERVICEBRANDVALUE+MARKETDOMINANCE=SSCcanleveragebrandvaluewithexcellentcustomerservice…tohelpSamsungovertakecompetitors25Inside-Out&Outside-InReduceCOGS(Materials&Conversion)IncreaseProductivityofBusinessProcessDecreaseCycleTimeofBusinessProcessesIncreaseMarketShareEstablishPriceLeadershipFocusonCompanyValueFocusonCustomerValueEffectivenessEffectivenessEfficiencyEfficiencyEfficiencyBPMSMaturityHigherLowerCostLeadershipWhatprocessmeasuresdrivecostleadershipandwhatimprovementisrequired?Inside-OutMarketLeadershipWhatistheVoiceoftheCustomer;howarecompetitorsperforming;whatimprovementisrequired?Outside-In26BPMS&SixSigmaLinkageBPMSiscomplimentarytoSixSigma,andwillbesuccessfulbecauseoftheSixSigmaskillsandPIskillsofSamsungCorning.BPMSwillchallengefunctionaldepartmentstodefineprocessmetricsthatarelinkedtocustomermetricsByusingtheseprocessmetrics,futuresixsigmaprojectscanbealignedtofocusonsolvingcustomerissues.27
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