BPMSOverviewBusinessProcessManagementBPMSOverviewBusinessProcessWhatdoesBPMSmeanforYou?

TheStrategicComponentofSixSigmaAwayforalldepartmentstobeactivelyinvolvedandalignedintheiractionstosatisfycustomersAwaytoalignproblemsolvingresourcestosolvecriticalcustomerissues“ProcessesarethebasicvocabularyofSixSigma”GeneralElectric2WhatdoesBPMSmeanforYou?TGettingMoreResultsfromSixSigmaForseveralyears,companieshaveusedBusinessProcessManagementtoimproveandmanagekeybusinessprocesses.Theyhavelaunchedspecificcustomer-focusedprojectsasanaturalextensionofprocessimprovement.GEbrokethemold,andlaunchedspecificprojectsinparallelwithprocessimprovementThisistheapproachthatweareencouragingSamsungCorningtotake.3GettingMoreResultsfromSixHistoryofSuccessful

SixSigmaDeployment4HistoryofSuccessful

SixSigMr.Welch’sStory“Thefirstyear,weusedSixSigmatoattackcosts,improveproductivity,andfixbrokenprocesses.In1997weachieved$320millioninproductivitygainsandprofitBy1998,wehadgenerated$750millioninSixSigmasavingsandgot$1.5billionin1999.Ouroperatingmarginswentfrom14.8percentin1996to18percentin2000.”5Mr.Welch’sStory“ThefirstyMr.Welchcontinues….“ThenextphasewastouseSixSigmatoolstofixanddesignnewproducts”GEPowerSystemscustomerswereexperiencingPowerDownsituationswithregularity.GEredesignedandreducedunplanneddowntimefrom33%to0onthelast210unitsproducedsince.GEMedicallaunchedanewCTscannerwithreducedMRIproceduresfrom3minutesto17seconds.”6Mr.Welchcontinues….“ThenexFunctionallyFocusedSixSigmaProjectSelectionMostorganizationsaremeasuredby“functions”SixSigmasuccessislargelywithinfunctionsExecutivesmayoperateasateambutarefocused,individually,onthefunctions.Strategy&ActionSalesFinanceMarketingHumanResourcesPurchasingManufacturingProductDevelopmentFunctionsCustomers?$$SixSigmaProjectSavings$$7FunctionallyFocusedSixSigmaMr.Welchcontinues…stillnotenough“Ourcustomersweretellingusthattheyfeltnodifferenceinquality.”Companyishappy…..ButCustomerstilldoesn’treceivereliabledeliveries!8Mr.Welchcontinues…stillnoMr.Welchcontinues-nowCustomerNoticesThecustomerneedsreliabledeliveryasmuchasshortcycletimesNowthecustomerishappy!9Mr.Welchcontinues-nowCustCustomerProcessYourProcess

CABCustomerViewHowdidtheperformanceofmysupplieraffectmytotalprocessperformance?YourViewTwoViewsofPerformanceHowdidweconformtothecustomer’srequirement?AttheCustomerFortheCustomer(ACFC)CustomerProcessYourProcessCAtTheCustomerFortheCustomer11AtTheCustomerFortheCustomACFCMetricsGEAircraftEnginesnolongerfocusesjustonhowlongittakestorepairanengineforanairlinecustomer.Themeasurethatcountsis“wingtowing”--howlongittakesfromthetimetheenginecomesoffanairplane’swinguntilitisreplaced--sincethatishowlongtheairplaneisoutofserviceActualGErepairtime=?halfthewing-to-wingtimeGEhasstartedaprojecttohelpairlinecustomersattacktheother?ofthetotalwing-to-wingtime12ACFCMetricsGEAircraftEngineACFCMetricsGECapitalfoundaprobleminitsbusinessunitthatprovidesfinancingtoofficeequipmentdealersFirstGECapitalreduceditsinternalcycletimeforfinancingapprovalfrom2daystoafewhoursButthebiggerissuewasthatequipmentdealershada47daycycletimeforARGEhashelpedthesedealerstoredesigntheirbilling&collectionprocesses,andhasdriventhetimedownto25days.GECapitalisconsideredaProcessEnterprise13ACFCMetricsGECapitalfoundaWhatisaProcessEnterprise?ThereisasmuchallegiancetoprocessesastofunctionsEmployeesinternalizeprocessgoalsEmployeesunderstandhowtheprocessisperformingEveryoneknowscustomerrequirementsandstrivestomeetthemEmployeeshelpmanageeachotherinsteadofescalatingconflictsProcessesaremeasuredObjectively–andfrequently

GECapital14WhatisaProcessEnterprise?TCustomer-FocusedProjectSelection

FunctionalIntegrationandLine-of-SighttotheCustomerCustomersseeusthroughourbusinessprocessesProductsandservicesforcustomersarebyprocesseswhichcrossdepartmentallinesThiswillbethefocusofourworkinBPMS..ToaligndepartmentalprocessestofocusoncustomersStrategy&ActionSalesFinanceMarketingHumanResourcesPurchasingManufacturingProductDevelopmentCrossFunctionalProcessCustomers$$SixSigmaProjectSavings$$15Customer-FocusedProjectSelecBPMSFramework16BPMSFramework16SixSigmaandBusinessProcessFocus6smakeseachprocessefficientandeffective,... ...BusinessProcessManagementSystems(BPMS)connectsthoseprocessesintoachainfocusedonflow andcreatingvalueforthecustomerCreatingAConsistentValueChainforCustomers!EngineeringSuppliersOperationTestSupportCustomer6s6s6s6s6s6s6s6s6s6s6s6sAdministration6sTraditionalSixSigmaRoll-OutEngineeringOperationTestAdministrationMaterialsSupport6s6s6s6s6s6s6s6sSuppliersCustomerSixSigma/CoreProcessfocus17SixSigmaandBusinessProcessMethodologiesforManagingPerformanceProcessManagement(BPMS)BusinessCaseImprovement(DMAIC)Customer/Shareholder/StakeholderRequirementsPerformanceBusinessStrategyCoreandEnablingProcessGoalsBusinessResultsCTQsProcessPerformanceMeasuresBusinessProcessesResourcesforDrivingPerformanceCorp.LeadershipTeam(CLT)ChampionsSixSigmaTeams.ProcessOwnersProcessTeamsGeneralElectric’sIntegratedProcessApproachtoBPMS18MethodologiesforCustomer/PerfBPMSatCorporateLevelPackagingConsolidationSub-assemblySequencingImportServicesJITpickup/deliveryInventoryMgtKittingSequencingSub-assemblySupplier ConformanceCarrierMgt.Materialfollow-upWIPtransportFacilityDesignYardManagementQualityAssuranceDCOperationsInventoryMgt.Returns-PackingYardManagementImport/ExportCarrierMgt.TransportConsolidationCustomsClearanceInventoryMgmt.RailLoadingVehicleDeliveryVehicleReleasingSecondary ServicesReverselogisticsInventoryFactoringFinancingInventoryOwnershipFreightPaymentEquipmentLeasingProjectFinancingEquipmentFin.PrivateFleetFin.WIPinventorymgt.EquipmentFinancingProjectFinancingFreightPaymentCreditservicingEDIVendorManaged InventoryNetworkDesignsMRPsystemsPartVisibilitySatellite CommunicationsIntegratedSupplyChainToolsProductionplanningToolsWMSDRPsystemsEDI3rdPartyMgt.RoutingDesignProductVisibilitySatellite CommunicationsPODverificationSuppliersInboundLogisticsManufacturingDistributionCentersFinishedProductDistributionCustomerPhysicalServicesFinancialServicesInformationServicesSALESPRODUCTIONValueCreatingProcessesEnablingProcessesTheBigPicture19BPMSatCorporateLevelPackagiElementsofaBusinessProcessstartboundary:

coreprocess:endboundary:

sub-process

sub-process

sub-process

sub-process

sub-process

sub-processsuppliers:inputs:customers:outputs:20ElementsofaBusinessProcessDetailedMappingistheNextStepinBPMSTop-LevelProcessSub-subprocessesSub-processesStop21DetailedMappingistheNextSBPMSLinkagetoStrategicObjectivesTraditionalSixSigmaProcess-CenteredSixSigma

Mission,Values,Vision…DevelopmentofBusinessPlans-Goals-ObjectivesDeployment-Functions-DepartmentsExecutionDMAICDMADVReviewandAudit

Mission,Values,Vision…VOCAnalysis-StrategicObjectivesProcessGoalsOrganizationalProcessCapabilitiesObjectiveAlignment-CoreProcessesBPOwnersEnablingProcessesExecution-ProcessCapabilitiesControlDMAICDMADVReview22BPMSLinkagetoStrategicObjeWeareSeekingtheDriversofProcessImprovement

Y=(x1,x2,x3,x4,…xn)

ProcessProcessEfficiencyInside-OutProcessEffectivenessOutside-Inand23WeareSeekingtheDriversofEffectiveness:SamsungandBrandValueSamsungisthenumberonewinner*inincreasedBrandValue(2002Vs.2001).Samsung’sbrandvalueincreased30%in2002,whileSony’sdecreasedby7%Samsung’sbrandvalueis#34intheworld.Sonyisstill#21,but“SonygadgetshavecomeunderattackbySamsung”“Samsunghasusedbolddesignstotransformitselfintoapremiumsellerofconsumerproducts.”“HeavyinvestmentsindesignR&Dhavebroughtfatterprofitmargins.”*BusinessWeekMagazine,August5,200224Effectiveness:SamsungandBrLeveragingBrandValue

BPMSgivesSamsungCorningaroadmapforfocusingbusinessprocessesoncustomerserviceobjectivesThiswillcatalyzegrowthwithSamsungandwithOEMsCUSTOMERSERVICEBRANDVALUE+MARKETDOMINANCE=SSCcanleveragebrandvaluewithexcellentcustomerservice…tohelpSamsungovertakecompetitors25LeveragingBrandValueBPMSgiInside-Out&Outside-InReduceCOGS(Materials&Conversion)IncreaseProductivityofBusinessProcessDecreaseCycleTimeofBusinessProcessesIncreaseMarketShareEstablishPriceLeadershipFocusonCompanyValueFocusonCustomerValueEffectivenessEffectivenessEfficiencyEfficiencyEfficiencyBPMSMaturityHigherLowerCostLeadershipWhatprocessmeasuresdrivecostleadershipandwhatimprovementisrequired?Inside-OutMarketLeadershipWhatistheVoiceoftheCustomer;howarecompetitorsperforming;whatimprovementisrequired?Outside-In26Inside-Out&Outside-InReduceBPMS&SixSigmaLinkageBPMSiscomplimentarytoSixSigma,andwillbesuccessfulbecauseoftheSixSigmaskillsandPIskillsofSamsungCorning.BPMSwillchallengefunctionaldepartmentstodefineprocessmetricsthatarelinkedtocustomermetricsByusingtheseprocessmetrics,futuresixsigmaprojectscanbealignedtofocusonsolvingcustomerissues.27BPMS&SixSigmaLinkageBPMSiWhataretheCulturalBenefitsofBPMS?Anorganizationthatemphasizesprocess,asopposedtohierarchies,andishighlyfocusedonprocessoutcomesthatimprovecustomersatisfaction.Anorganizationthat,inadditiontotraditionalaccountingmeasures,placesemphasisonmeasuresofprocessoutputquality,processcycle-time,processvariabilityandprocesscostAnorganizationthatisabletosustainthemomentumofproductivityimprovementbyusingthemeasuresofprocessperformancetoconstantlyfindnewandchallengingsixsigmaprojects28WhataretheCulturalBenefitsThisisalsoAboutChange“ForanystudentofHistory-ChangeistheLawoflife.Anyattempttocontainitguaranteesanexplosiondowntheroad.Themorerigidtheadherencetothestatusquo,themoreviolenttheultimateoutcomewillbe.“HenryKissinger29ThisisalsoAboutChange“ForPathForward

Goal-Directed/OutcomeThinkingHighperformingteamsfocusonpositiveoutcomesandopportunitiesratherthanonlimitationsandconstraintsPresentState(CustomerIssues)DesiredState(ResolvedIssues)ActionSteps30PathForward

Goal-Directed/OutBPMSOverviewBusinessProcessManagementBPMSOverviewBusinessProcessWhatdoesBPMSmeanforYou?

TheStrategicComponentofSixSigmaAwayforalldepartmentstobeactivelyinvolvedandalignedintheiractionstosatisfycustomersAwaytoalignproblemsolvingresourcestosolvecriticalcustomerissues“ProcessesarethebasicvocabularyofSixSigma”GeneralElectric32WhatdoesBPMSmeanforYou?TGettingMoreResultsfromSixSigmaForseveralyears,companieshaveusedBusinessProcessManagementtoimproveandmanagekeybusinessprocesses.Theyhavelaunchedspecificcustomer-focusedprojectsasanaturalextensionofprocessimprovement.GEbrokethemold,andlaunchedspecificprojectsinparallelwithprocessimprovementThisistheapproachthatweareencouragingSamsungCorningtotake.33GettingMoreResultsfromSixHistoryofSuccessful

SixSigmaDeployment34HistoryofSuccessful

SixSigMr.Welch’sStory“Thefirstyear,weusedSixSigmatoattackcosts,improveproductivity,andfixbrokenprocesses.In1997weachieved$320millioninproductivitygainsandprofitBy1998,wehadgenerated$750millioninSixSigmasavingsandgot$1.5billionin1999.Ouroperatingmarginswentfrom14.8percentin1996to18percentin2000.”35Mr.Welch’sStory“ThefirstyMr.Welchcontinues….“ThenextphasewastouseSixSigmatoolstofixanddesignnewproducts”GEPowerSystemscustomerswereexperiencingPowerDownsituationswithregularity.GEredesignedandreducedunplanneddowntimefrom33%to0onthelast210unitsproducedsince.GEMedicallaunchedanewCTscannerwithreducedMRIproceduresfrom3minutesto17seconds.”36Mr.Welchcontinues….“ThenexFunctionallyFocusedSixSigmaProjectSelectionMostorganizationsaremeasuredby“functions”SixSigmasuccessislargelywithinfunctionsExecutivesmayoperateasateambutarefocused,individually,onthefunctions.Strategy&ActionSalesFinanceMarketingHumanResourcesPurchasingManufacturingProductDevelopmentFunctionsCustomers?$$SixSigmaProjectSavings$$37FunctionallyFocusedSixSigmaMr.Welchcontinues…stillnotenough“Ourcustomersweretellingusthattheyfeltnodifferenceinquality.”Companyishappy…..ButCustomerstilldoesn’treceivereliabledeliveries!38Mr.Welchcontinues…stillnoMr.Welchcontinues-nowCustomerNoticesThecustomerneedsreliabledeliveryasmuchasshortcycletimesNowthecustomerishappy!39Mr.Welchcontinues-nowCustCustomerProcessYourProcess

CABCustomerViewHowdidtheperformanceofmysupplieraffectmytotalprocessperformance?YourViewTwoViewsofPerformanceHowdidweconformtothecustomer’srequirement?AttheCustomerFortheCustomer(ACFC)CustomerProcessYourProcessCAtTheCustomerFortheCustomer41AtTheCustomerFortheCustomACFCMetricsGEAircraftEnginesnolongerfocusesjustonhowlongittakestorepairanengineforanairlinecustomer.Themeasurethatcountsis“wingtowing”--howlongittakesfromthetimetheenginecomesoffanairplane’swinguntilitisreplaced--sincethatishowlongtheairplaneisoutofserviceActualGErepairtime=?halfthewing-to-wingtimeGEhasstartedaprojecttohelpairlinecustomersattacktheother?ofthetotalwing-to-wingtime42ACFCMetricsGEAircraftEngineACFCMetricsGECapitalfoundaprobleminitsbusinessunitthatprovidesfinancingtoofficeequipmentdealersFirstGECapitalreduceditsinternalcycletimeforfinancingapprovalfrom2daystoafewhoursButthebiggerissuewasthatequipmentdealershada47daycycletimeforARGEhashelpedthesedealerstoredesigntheirbilling&collectionprocesses,andhasdriventhetimedownto25days.GECapitalisconsideredaProcessEnterprise43ACFCMetricsGECapitalfoundaWhatisaProcessEnterprise?ThereisasmuchallegiancetoprocessesastofunctionsEmployeesinternalizeprocessgoalsEmployeesunderstandhowtheprocessisperformingEveryoneknowscustomerrequirementsandstrivestomeetthemEmployeeshelpmanageeachotherinsteadofescalatingconflictsProcessesaremeasuredObjectively–andfrequently

GECapital44WhatisaProcessEnterprise?TCustomer-FocusedProjectSelection

FunctionalIntegrationandLine-of-SighttotheCustomerCustomersseeusthroughourbusinessprocessesProductsandservicesforcustomersarebyprocesseswhichcrossdepartmentallinesThiswillbethefocusofourworkinBPMS..ToaligndepartmentalprocessestofocusoncustomersStrategy&ActionSalesFinanceMarketingHumanResourcesPurchasingManufacturingProductDevelopmentCrossFunctionalProcessCustomers$$SixSigmaProjectSavings$$45Customer-FocusedProjectSelecBPMSFramework46BPMSFramework16SixSigmaandBusinessProcessFocus6smakeseachprocessefficientandeffective,... ...BusinessProcessManagementSystems(BPMS)connectsthoseprocessesintoachainfocusedonflow andcreatingvalueforthecustomerCreatingAConsistentValueChainforCustomers!EngineeringSuppliersOperationTestSupportCustomer6s6s6s6s6s6s6s6s6s6s6s6sAdministration6sTraditionalSixSigmaRoll-OutEngineeringOperationTestAdministrationMaterialsSupport6s6s6s6s6s6s6s6sSuppliersCustomerSixSigma/CoreProcessfocus47SixSigmaandBusinessProcessMethodologiesforManagingPerformanceProcessManagement(BPMS)BusinessCaseImprovement(DMAIC)Customer/Shareholder/StakeholderRequirementsPerformanceBusinessStrategyCoreandEnablingProcessGoalsBusinessResultsCTQsProcessPerformanceMeasuresBusinessProcessesResourcesforDrivingPerformanceCorp.LeadershipTeam(CLT)ChampionsSixSigmaTeams.ProcessOwnersProcessTeamsGeneralElectric’sIntegratedProcessApproachtoBPMS48MethodologiesforCustomer/PerfBPMSatCorporateLevelPackagingConsolidationSub-assemblySequencingImportServicesJITpickup/deliveryInventoryMgtKittingSequencingSub-assemblySupplier ConformanceCarrierMgt.Materialfollow-upWIPtransportFacilityDesignYardManagementQualityAssuranceDCOperationsInventoryMgt.Returns-PackingYardManagementImport/ExportCarrierMgt.TransportConsolidationCustomsClearanceInventoryMgmt.RailLoadingVehicleDeliveryVehicleReleasingSecondary ServicesReverselogisticsInventoryFactoringFinancingInventoryOwnershipFreightPaymentEquipmentLeasingProjectFinancingEquipmentFin.PrivateFleetFin.WIPinventorymgt.EquipmentFinancingProjectFinancingFreightPaymentCreditservicingEDIVendorManaged InventoryNetworkDesignsMRPsystemsPartVisibilitySatellite CommunicationsIntegratedSupplyChainToolsProductionplanningToolsWMSDRPsystemsEDI3rdPartyMgt.RoutingDesignProductVisibilitySatellite CommunicationsPODverificationSuppliersInboundLogisticsManufacturingDistributionCentersFinishedProductDistributionCustomerPhysicalServicesFinancialServicesInformationServicesSALESPRODUCTIONValueCreatingProcessesEnablingProcessesTheBigPicture49BPMSatCorporateLevelPackagiElementsofaBusinessProcessstartboundary:

coreprocess:endboundary:

sub-process

sub-process

sub-process

sub-process

sub-process

sub-processsuppliers:inputs:customers:outputs:50ElementsofaBusinessProcessDetailedMappingistheNextStepinBPMSTop-LevelProcessSub-subprocessesSub-processesStop51DetailedMappingistheNextSBPMSLinkagetoStrategicObjectivesTraditionalSixSigmaProcess-CenteredSixSigma

Mission,Values,Vision…DevelopmentofBusinessPlans-Goals-ObjectivesDeployment-Functions-DepartmentsExecutionDMAICDMADVReviewandAudit

Mission,Values,Vision…VOCAnalysis-StrategicObjectivesProcessGoalsOrganizationalProcessCapabilitiesObjectiveAlignment-CoreProcessesBPOwnersEnablingProcessesExecution-ProcessCapabilitiesControlDMAICDMADVReview52BPMSLinkagetoStrategicObjeWeareSeekingtheDriversofProcessImprovement

Y=(x1,x2,x3,x4,…xn)

ProcessProcessEfficiencyInside-OutProcessEffectivenessOutside-Inand53WeareSeekingtheDriversofEffectiveness:SamsungandBrandValueSamsungisthenumberonewinner*inincreasedBrandValue(2002Vs.2001).Samsung’sbrandvalueincreased30%in2002,whileSony’sdecreasedby7%Samsung’sbrandvalueis#34intheworld.Sonyisstill#21,but“SonygadgetshavecomeunderattackbySamsung”“Samsunghasusedbolddesignstotransformitselfintoapremiumsellerofconsumerproducts.”“HeavyinvestmentsindesignR&Dhavebroughtfatterprofitmargins.”*BusinessWeekMagazine,August5,200254Effectiveness:SamsungandBrLeveragingBrandValue

BPMSgivesSamsungCorningaroadmapforfocusingbusinessprocessesoncustomerserviceobjectivesThiswillcatalyzegrowthwithSamsungandwithOEMsCUSTOMERSERVICEBRANDVALUE+MARKETDOMINANCE=S