INCREASING PROFITABILITY AND SURVIVABILITY WITH
BUSINESS PROCESS IMPROVEMENT
By: Suwandi (www.SSCXinternational.com)
Starting from the credit crunch in the US to regional
economy shrinkage which then leads to global recession, the
situation has forced most or even all organizations to cut
costs by any means as soon as possible. Many organizations
are facing problem in their cash flow, cash shortage, higher
commodities and oil prices. During these difficult times,
there is less and less money available for equipment
upgrades, revenue is harder to maintain, and there is
increasing pressure from customers for lower prices. It is a
very difficult time for most organizations indeed.
However, there is always an opportunity in every situation even in the worst. In this
current situation for example, it is a good timing for the organization to improve by
increasing the competitiveness to adapt with the changes. The organizations which are able
to withstand the worst economic condition will eventually come out as the winner in the
competition.
One of the strategies to gain such competitiveness is Six Sigma. People tend to relate Six
Sigma with a complicated statistic terminology. In addition, people also tend to refer Six
Sigma only as a set of tools deployed to a problem solving project. Six Sigma is way beyond
the perception. Six Sigma is a systematic and focused approach to drive improvement with
the appropriate objectives, projects, and people. Six Sigma is about business improvement
by producing significant improvement in process with significant bottom line impact.
In detail, Six Sigma will help you to:
1. Understand your current position and define your objectives or goals.
By comprehensively understanding the voice of business, voice of customer, voice of
process, and voice of employee; Six Sigma provide a systematic framework to
understand your current position and to help you define your objectives or goals.
Your objectives could be freeing up cash, which could have been hidden in your
inventory or in an inefficient process, increasing product profitability, or anything
relevant to your industry.
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2. Prioritize improvement efforts based on your objectives
Once you understand your current position, your profit-loss statement; Six Sigma
provides you with a powerful methodology to quickly define and prioritize the
potential improvement efforts. These improvement efforts are directly linked with
your objectives or goals. You certainly do not want to waste your team valuable time
and effort into something less or not important to your business. This is the key
success factor of Six Sigma and any business process improvement initiatives.
Formal and proper project selection is as important as choosing your product
portfolio.
3. Produce significant improvement with bottom line impact.
Six Sigma equip your team with a powerful problem solving methodology that will
assist your team to complete the project, hence producing significant improvement
with bottom line impact. Six Sigma focuses on bottom line impact. Everything shall
be calculated in dollar (or in Rupiah).
This strategy is applicable to the organizations regardless their sizes. Many books provide
Six Sigma business case from large corporation, such as GE, Motorola, Bank of America.
From the story, the reader could easily tell the benefits of implementing Six Sigma. In
addition, many smaller companies have also gained benefits from Six Sigma, especially in
these difficult times. Your organization will gain the same benefit by consistently and
actively deploy a business process improvement initiative.
Suwandi is a master black belt from Six Sigma Center of Excellence (SSCX). He helps organizations
increase profitability by aligning strategy and operation improvement, streamlining their process,
and providing coaching to internal business process improvement teams. He can be reached at
suwandi@sscx.asia, or just visit www.sscxinternational.com.
This paper was also publised in SME Magazine July 2009 Edition.
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