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Six Sigma Brings Big Benefits to GE-Genpact
Lean Manufacturing and Six Sigma can bring big benefits to organizations—but only if companies successfully complete a two-stage adoption strategy.
That's the message being delivered by two experts from Genpact, General Electric's worldwide process outsourcer and systems integrator. Genpact is the world's second largest Six Sigma organization, with more than 250 Black Belt experts.
Afzal M. Modak, general manager of GE-Genpact Programs, and S. Bala, senior vice president for re-engineering at Genpact, say GE case studies show successful Lean and Six Sigma projects can significantly reduce nagging problems, such as errors on customer data records, which for many organizations can save more than 316 hours of wasted time per month. The strategies also can improve same day delivery rates by 20 percent, boost on-time orders shipments to 98.7 percent, while driving vendor data accuracy from 84 to 95 percent, on average.
Lean and Six Sigma attack different areas. Lean attempts to eliminate the 80 percent waste associated with people, processes, and products inherent in most business operations. Six Sigma uses statistical analysis to identify and fix defect-causing variations in business processes.
Modak and Bala suggest a two-step approach for Lean and Six Sigma success. First, conduct a pre-implementation phase that focuses on process due diligence. This step maps business processes as they currently exist and identifies necessary adjustments prior to an ERP implementation. These baseline metrics will help quantify later improvements in Lean and Six Sigma implementations.
Also important in the early phase is the development of plans that address risk-analysis and risk-mitigation, according to Modak and Bala. Finally, organizations should define the change-management process that will help all affected staff members understand and accept the impending changes.
Step two consists of the actual implementation activities surrounding process integration and change management. At this point organizations should manage the project using "tollgate" reviews, a mechanism that allows project leaders to verify that necessary milestones are being met. Also important are continuing conversations with end users to ensure their ongoing needs are being met and that the organization understands the impact of the efforts on upstream and downstream processes.
Although Lean and Six Sigma projects require discipline and concerted effort, the rewards can boost efficiency, Modak and Bala say, pointing to studies that show some companies see a 60 percent increase in performance with 40 percent fewer employees.
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