Many companies use business process methodologies to help them analyze, improve, and optimize their business processes. Such methodologies aim to reduce inefficiencies, errors, costs, and risks found within a company’s business processes, whilst looking at ways to increase customer satisfaction, quality, productivity, and profitability.
In this article, we are going to look at several business process methodologies and which types of companies would implement them.
1. Six Sigma
The Six Sigma process improvement methodology was created in 1986 by Bill Smith, an American engineer who worked for Motorola. With this methodology, business leaders are able to better understand the efficiency and effectiveness of their current processes by analyzing the statistical data provided by Six Sigma. The goal is to have less than 3.4 defects per one million cycles. This helps businesses minimize poor product quality and inconsistencies thus leading to greater customer satisfaction.
Six Sigma has two main sub-processes: DMAIC and DMADV. The DMAIC helps business managers and leaders assess and improve existing processes whilst the DMADV helps them to create and implement new strategies.
2. Lean
More widely known as lean manufacturing, lean focuses on improving profitability and lowering waste levels. With its focus on customer perceptions, managers across various business sectors create a value map of such perceptions whilst highlighting those areas in the business processes which are wasteful and/or redundant. As a result, business leaders are able to adjust their processes accordingly, eliminate bottlenecks and overcome any interruptions. Lean helps businesses hone in on what customers want and fine-tune their goods and services accordingly.
3. Kaizen
Kaizen is another process methodology some companies implement. Its focus is on incremental yet continuous changes over a series of time. Kaizen is also known as continuous process improvement, and it closely follows a Japanese philosophy. This philosophy adheres to the viewpoint that small continuous changes aimed at improving our lives bring a deeper level of satisfaction.
Kaizen is comprised of two major types:
- Kaizen events hone in on a specific process or issue requiring change within a limited time.
- Kaizen culture has a long-term focus as the entire business staff works together towards everyday improvements within their daily work.
As a business methodology, Kaizen is characterized by its PDCA cycle, which stands for:
- Identify the problem
- Test the brainstormed solutions to the problem
- Measure the solutions for effectiveness
- Implement the solutions which are working successfully
4. Business Process Reengineering (BPR)
Business Process Reengineering (BPR), a process improvement methodology aimed at completely redesigning or transforming current business processes, was developed in the 1990s by American management consultants Michael Hammer and James Champy. BPR focuses on looking at the current business processes in a completely new way. As such, this business methodology can often be used by companies needing drastic changes to better cope with outside challenges or opportunities, including new regulations, target audience/market, technologies, etc… Innovation is the goal that will result in the business having a more competitive edge and increased business value.
5. Agile
Customer satisfaction is a high priority with the Agile method to improve processes. With this methodology, businesses adopt a more fluid and flexible approach to quickly meet their client’s expectations and requirements. Communication and collaboration with the parties involved give this method its cutting edge.
One of the main tools Agile implements is Scrum which is made up of the customer representative, the development team and the Scrum master (usually a manager or business leader). The team is assigned a sprint, a time frame of one to four weeks, in which to work on their prioritized tasks. Throughout this time, the team may have regular scrums or short meetings to provide progress reports, and updates, and to discuss any changes. Once the sprint has been completed, the team will hold a meeting to showcase their project, receive feedback and highlight any areas for future improvement.