Organizations spends too much money looking for ways to improve their financial performance and fortune when all that is actually needed is to tap from the fundamental principles behind Lean Six Sigma which are dead simple.
What is Lean Six Sigma Triad?
When it comes to improving financial performance of an organization, lean six sigma is golden. What makes lean six sigma golden is the fact that it is built on three solid pillars namely:
- Customer experience: organizations that start their journey from the customer perspectives have higher chances of improving financial performance. Tools like Kano model is used to collect voice of customers (VOC) from the very beginning of a process. The effect of this approach is that solutions to customers wants will be proffered. The importance of accounting has in fact gone beyond just number crunching and business advisory to also carter for the customers by fulfilling their customer care duty as accountants.
- Data analysis and harmonization: it has become well documented that data driven leadership is by far better than leadership that is based on intuition. Data analytics tools have now become so cheap that cost implication is no longer an excuse for a company not to leverage on the power of big data. Managing a business or attempting to manage a business of any kind in this day and age without data is like flying a plane without equipping yourself with weather information.
- Process optimization: a wise man once said that he will create a conglomerate from a small business with its current workforce as long as the processes are top notch. This is to say that process is everything. That the world is now enjoying most things today is because of the fact that processes have tremendously improved from what it used to be. We keep refining processes from generation to generation – this is exacting what lean six sigma has been doing since its introduction and will continue to do.
Eight (8) process waste
Many man-hours has in the past been put into research with the aim of uncovering easy way of identifying wastes. Well, eight-process waste made it all easy. The eight waste process is best remembered by the acronym DOWNTIME where
- D = Defects,
- O = Overproduction,
- W = Waiting,
- N = Non utilized knowledge,
- T= Transportation,
- I = Inventory,
- M = Motion,
- E = Excess processing
I will not be explaining these as they seem self explanatory, all that there is to say here is that any company’s performance will greatly improve if the above mentioned components of eight waste process is taken care of.
What are value add activities?
Value add activities are those activities that help a company move closer to its objective. There are three (3) criterion that must be met for an activity to be value add;
- Customer must be willing to pay for it
- The object must change form as a result of the activity, and
- It must be done right the first time
The task of improving financial performance of a company will become trivial if business managers would simply embrace the points discussed in this article which are;
- Using the lean six sigma triad,
- Eliminating wastes by firstly identifying them using DOWNTIME, and
- By focusing more on value add activities
I hope you have enjoyed this piece, please let me know what you think by leaving a comment below.
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