We are living in times of a deep economic crisis characterized by scarcity of raw materials, energy and credit and an increase in volatility and globalization. All of which leads to considerably increased competition in terms of quality, and price of products and services. This challenge is due, on the one hand, to the increase of knowledge, demands and the power of customers and, on the other hand, to the number and aggression of competitors.
Every organization must seek to satisfy customers’ requirements in terms of quality and price of products and services. At the same time, it must innovate and improve the cost structure of production and service supply; in other words improve business processes.
The Six Sigma and Lean Thinking methods are effective for supporting and making process improvement projects. However, they leave a number of important issues unresolved:
- Is there a coherent model that covers both the aspects of Lean and Six Sigma methodologies and those of digitization?
- In what way can Information and Communication Technologies (ICT) support such improvement projects rather than hinder them?
Lean and Six Sigma methods work on the analysis and subsequent optimization of physical and organizational flows. They leave aside the study of the automation flow and of the interactions between information systems and telecommunication networks with physical and organizational activities. The risk, consequently is for any desired improvement to remain trapped within the constraints imposed by such systems.
An empirical rule states that 50% of the processes are independent from automation, whilst the remaining 50% of the processes are closely based on automation and very dependent on information systems and networks. These percentages are changing and automation is acquiring an increasing relevance.
It is important to integrate automation methods and management rules with improvement and optimization projects of Lean Six Sigma. This is the only way to optimize typical processes for improving competitive advantage and is especially true in those service companies that traditionally have not assigned significant priority to the improvement of processes, but which now depend increasingly on digitization.
Lean and Six Sigma initiatives are designed to enable sustained improvements in your company or organization’s efficiency and competitiveness. As with other improvement strategies they are dependent on two things, effective management and your ability to automate or digitize elements of your business process.
Sustainable business improvement requires a holistic, methodological approach, designed to improve and optimize processes from all points of view. Such an approach should:
- Be complete and operational;
- Be structured (Six Sigma);
- Be guided by customers’ demands (Lean and Six Sigma);
- Not be stuck in a specific sector;
- Make use of digitization wherever this makes sense;
- Enhance the benefits brought about by processes and projects of management automation and the rational use of information systems and telecommunications.
Process digitization should go together with the improvement of the organizational and physical flows. Collectively they enable you to eliminate any source of waste from the logical flow caused by physical, organization and digitization activities and their interfaces. It is only once you have streamlined or redesigned the new process that it is possible to introduce or re-introduce automation in an effective, efficient and economical way. At that stage you can speed up and automate activities adding value that will be recognized by the customer. You can also avoid waste in the information and communication system and in the automation flows. This waste causes the production or supply processes to slow down or stop altogether.
There are different methodologies generally accepted on Lean Thinking and Six Sigma. There are several systematic approaches to information and communication systems (Information and Communication Technology ICT) and to automation. These may be from the project management point of view. The approaches can be also from an operation point of view (e.g. ITIL, Information Technology Infrastructure Library, or a set of guidelines inspired in the practice of the management of ICT services). There are no integrated approaches blending Lean and Six Sigma with digitization.
In my book I introduce a method for improvement, optimization and automation of processes. I call this “Lean & Digitize” and it provides a coherent and integrated method which:
- Can manage and optimize simultaneously organizational, physical and automation flows;
- Uses the information system and telecommunication networks as a lever for process improvement and for project management; and
- Can help solve non-alignment problems between the organization and the ICT initiatives.
In order to achieve this objective, this book aims to:
- Define and introduce the “Lean & Digitize” method;
- Analyse the development of automation and of information and telecommunications systems;
- Review the development of technologies related to quality and process improvement management, particularly Six Sigma and Lean Thinking;
- Analyse several real cases of organizational approaches and of the management of process improvement initiatives;
- Compare organizational realities and the Best (and Worst) Practices with the proposed method. In this way, it allows its validation at the operational and organization level. The basis are not only real cases, but, above all, of the author’s personal experience in a number of best-in-class organizations.
The Lean & Digitize method helps to solve the following problems:
- Incomplete alignment of ICT and process improvement initiatives;
- Initiatives redundancy;
- Excessive time lost in the analysis and implementation phases;
- The difficulties in the measuring and verifying control improvements.
By engaging information and communication systems in your initiatives together with process improvement and optimization, you can secure excellent results. The method is quantitative: based on facts. This allows a quick and accurate measurement processes whether in an analysis or control phase, which helps facilitate and accelerating all project activities.
From an organizational point of view, the Lean & Digitize method;
- Includes information and communication systems in improvement initiatives, making it possible to improve and optimize physical, organizational and automation flows concurrently;
- Provides on-going improvements to projects delivering new or updated information and communication systems by integrating them with those projects associated with process improvement and optimization;
- Automates only those processes that have already been improved and optimized.
Lean and Digitize provides a convincing picture of each of these elements (process improvement, digitization and the management of both) to help eliminate waste, improve process and service, and better align your information and communications technology with your strategic objectives.
Lean and Digitize analyses and reviews the development of automation and telecommunications systems in the context of quality management and process improvement. This book uses case examples to illustrate organizational and management approaches to implementation. These, along with his practical guidance, will help make sense of the complexity, benefits and interrelations between these different elements. The text shows on the one hand, how to integrate information and communication systems into any organization’s process improvement projects and, on the other, how to align information and communication projects with the quality strategy.
Bernardo He worked for GE Capital, as Group CTO, GE Oil & Gas, as CIO, and AIG, with assignments in Italy, UK, USA and Latin America. Currently he is Professor of IT Procurement at the Master in Procurement of the University of TorVergata, Rome, Italy and provides consultancy in Europe and Asia on IT Strategy, Organization and Procurement. Bernardo has been particularly active in the application of project management to Financial Institutions. He is the author of 20 books on Management, published in Italy and in UK. He is a frequent speaker in International Conferences and writes on international reviews.