55 Process Improvement Case Studies & Project Results [2024]
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Cem is the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per Similarweb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
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Business leaders know that process improvement reduces costs and increases customer satisfaction. Therefore, businesses follow process improvement methodologies or deploy tools such as process modeling, process mining and RPA to discover, modify and automate their processes. However, it can be difficult for process experts and business analysts to understand the different process improvement approaches and the results they should expect.
Read our process improvement approaches guide for a categorization of process improvement approaches so you can rely on a framework to structure your process improvement initiatives. In this article, we share typical process improvement project results and case studies. Our aim is to provide benchmarks so business analysts and leaders can set targets for their own initiatives.
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What are the typical project results?
Process improvement solutions help businesses define weaknesses and take action to solve these problems. In the case studies we collected, the most common project results that we came across are as follows:
1- Improved efficiency: Most businesses increase the efficiency of their processes by adapting process improvement methodologies. After defining their problems, companies eliminate unnecessary steps in processes, reduce their costs, and shorten process times. As a result, they achieve faster processes and higher quality output with fewer resources.
For example, in a process mining case study, a manufacturer leveraged IBM Process Mining to analyze the procure-to-pay processes. It is claimed that the manufacturer detected and managed deviations, mismatches and early payments, which lessened maverick buying and saved $60,000 in reworking cost. The firm improved purchase order and invoice processes by automating 75% of line creation and delivery activities. As a result, the company decreased the invoice registration and approval time.
2- Enhanced customer satisfaction: The increasing quality of output and faster processes can also reflect on customer satisfaction. Process improvement solutions help businesses reduce waiting time and focus on customer value. For example, it is claimed that by adopting the Kaizen methodology, Tata Steel has shortened its response time and delivered more on-time orders to its customers.
3- Harmonization of different teams/processes: For large companies, handling different processes simultaneously can be a big challenge. Teams should be informed about what others do, and processes need to work in sync to avoid problems. With process improvement solutions, businesses can have a full understanding of all their companies and align different processes successfully.
Here is an extended list of case studies which are collected from different resources. You can filter the list by the process improvement solution, service provider, industry, or process and investigate the achieved results.
Further Reading
If you want to learn more on process improvement, these articles can also interest you:
- Process Improvement: In-depth Guide for Businesses
- Lean Process Improvement Guide for Your Business
Check out comprehensive and constantly updated list of process mining case studies to process mining real-life examples and compare them to process improvement case studies.
If you want to manage and improve your processes, check out our data-driven and up-to-date list of vendors for:
- Workflow management software
- Business process management software
- Low-code/No-code development platform
- Onboarding software
- Process mining
- Business process automation software
If you still have questions about process improvement, we would like to help:
![case study business process improvement](https://research.aimultiple.com/wp-content/uploads/2022/06/Cem_Portrait-80x80.jpg.webp)
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised enterprises on their technology decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
AIMultiple.com Traffic Analytics, Ranking & Audience , Similarweb. Why Microsoft, IBM, and Google Are Ramping up Efforts on AI Ethics , Business Insider. Microsoft invests $1 billion in OpenAI to pursue artificial intelligence that’s smarter than we are , Washington Post. Data management barriers to AI success , Deloitte. Empowering AI Leadership: AI C-Suite Toolkit , World Economic Forum. Science, Research and Innovation Performance of the EU , European Commission. Public-sector digitization: The trillion-dollar challenge , McKinsey & Company. Hypatos gets $11.8M for a deep learning approach to document processing , TechCrunch. We got an exclusive look at the pitch deck AI startup Hypatos used to raise $11 million , Business Insider.
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What is process workflow & top 4 benefits & case studies in '24, process innovation in '24 & 3 best practices to achieve it, how to implement process improvement in 6 steps in 2024.
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Hi Cem, Thank you ver much for your interesting article. I am interested in getting a deeper look into some of the case studies: How exactly did they approach the problem? ….Would it be possible to get a closer look at the case studies? Thanks in advance. Adrian
Hi Adrian, please feel free to get in touch with us via [email protected] . Happy to discuss these in more detail once we know which types of case studies you are interested in
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55 Process Improvement Case Studies & Project Results [2023]
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Hi there! As a data analyst and AI professional, I wanted to share a comprehensive look at 55 process improvement case studies and their results. Optimizing business processes is essential for reducing costs, boosting quality, and improving customer satisfaction.
In this guide, we‘ll explore real-world examples of process improvement across industries. My goal is to provide you with detailed case studies so you can use them as benchmarks for your own projects. Let‘s dive in!
What Typical Results Should You Expect?
Before looking at individual cases, it‘s helpful to understand the most common benefits of process improvement:
- Increased Efficiency: Streamlining processes lets companies do more with less. For example, a manufacturer used process mining to cut invoice approval time and automated 75% of activities.
- Higher Quality: With smoother flows, there‘s less room for errors. A chemicals firm reduced defects by 70% after process optimization.
- Enhanced Customer Satisfaction: Faster throughput and fewer mistakes boost customer loyalty. An insurer‘s process work shortened response times and increased on-time case resolutions by 42%.
- Cost Savings: Eliminating waste and paperwork reduces expenses. A telecom achieved $2.3 million in annual savings through an RPA initiative.
Overview of 55 Process Improvement Case Studies
![case study business process improvement Infographic showing process improvement results by industry](https://i0.wp.com/i.ibb.co/1LLfgC9/process-improvement-results.png?w=1290&ssl=1)
Manufacturing – Improving Production Processes
Manufacturers can leverage solutions like Lean Six Sigma to optimize production and supply chain processes.
For example, Lockheed Martin aimed to reduce its environmental footprint and costs. By focusing on eliminating non-value-added work, it decreased facility size by 33% and chemical storage to just 2% of original size. These lean initiatives saved enormously on real estate and hazardous waste expenditures.
Another manufacturing firm, 3M, recycled and reused waste materials rather than disposing them. This lean approach saved around $30 million annually in waste costs.
Across industries, remember that small efficiencies compound. 3M‘s CEO once stated: “Most of our products emerge from somebody’s idea about how to do something simpler, better, or cheaper.”
Healthcare – Boosting Patient Experience
In healthcare, accurate and timely processing of records is critical. Process improvement helps hospitals handle patient data more efficiently.
At University Hospitals Birmingham NHS Trust, automated self-check-in kiosks were implemented. This robotic process automation initiative reduced check-in time from 15 minutes to under 5 minutes. Patients could check-in quickly and accurately, improving their experience.
Meanwhile, BMC HealthNet Plan applied lean principles to claims processing. This increased claims processing accuracy from 93% to 99.7%. With fewer erroneous claims, patients received faster and more accurate service.
Banking – Accelerating Lending Decisions
Banks can struggle with long wait times for lending decisions. Process mining helps identify and eliminate inefficiencies in lending processes.
VTB Bank in Russia used process mining to cut application decision time from 14 days to 5 days. The percentage of timely handled loan applications also increased from 68% to 98%.
Another financial institution, BridgeLoan, reduced total loan processing time by 40% after process improvements. Applicants received faster decisions, improving customer satisfaction.
Across banking, optimizing processes around customer applications can significantly impact customer lifetime value.
Professional Services – Improving Delivery
Client work in professional services firms involves many interdependent processes. Consultancies like EY have applied RPA to coordinate projects better.
For EY, bots automated the process of reminding staff to book travel for upcoming client meetings. This initiative reduced manual effort by 50% while cutting airfare costs by 20% through early booking.
Meanwhile, enterprise giant Microsoft applied Six Sigma principles to sales and service processes. Fine-tuning these workflows reduced defects and enabled data-driven insights around optimal customer segmentation.
15 More Impactful Case Studies
Here are some additional examples that showcase process improvement results across sectors:
- Retail: Starbucks used lean principles to reduce customer waiting times in stores and speed up ordering.
- Energy: Synergy generated $2.3M in savings annually through RPA in its billing processes.
- Pharma: A global pharma optimized artwork management processes, improving coordination between countries.
- Construction: Afrisam implemented process mining for risk management, achieving real-time visibility.
- Food & Beverage: Kahiki Foods‘ lean program dropped production waste by 70% in months.
- Transport: Deutsche Bahn optimized rail freight through BPM, cutting logistical costs.
- Telecom: By mining processes, Nokia identified lead time improvements and training needs.
- Technology: Dell applied RPA in finance processes, saving $2M annually.
- Automotive: Mercedes Benz‘ kaizen approach reduced manufacturing time per vehicle by 10-20%.
- Aerospace: Lean initiatives helped Lockheed Martin consolidate facilities and slash chemical waste.
- Oil & Gas: Chevron‘s Six Sigma program targeted high-cost equipment failures, saving millions.
- Utilities : Alliander increased purchasing process efficiency with process mining.
- Insurance: Aegon‘s Lean Six Sigma initiative stopped £20M spend on external contractors.
- Media: The BBC sped up program preview creation through RPA bots.
- NGO: World Vision improved performance evaluation with optimized processes.
The data shows that process gains can have truly enterprise-wide benefits regardless of sector.
6 More In-Depth Case Studies
Let‘s look at a few case studies more closely to better understand how companies achieved process improvements:
1. AkzoNobel – Chemicals Company
- Initiative: Process mining to identify procurement inefficiencies
- Processes: P2P, AP, O2C
- Results: Cut manual work by 18%, improved supplier efficiency from 40% to 70%, reduced costs
AkzoNobel is a chemicals company that supplies paints, coatings and specialty chemicals globally. By using process mining, AkzoNobel analyzed its procure-to-pay, accounts payable and order-to-cash processes end-to-end.
Process mining revealed that 18% of activities required manual interventions. These bottlenecks caused delays and additional labor costs. In addition, only 40% of procurement engagements were happening through the preferred supplier program.
Leveraging these process insights, AkzoNobel automated more activities through RPA bots. It also expanded the preferred supplier program adoption to over 70%, increasing bargaining power and reducing maverick buying.
In total, the process optimization efforts reduced operational costs by millions annually while significantly improving efficiency.
2. Bancolombia – Financial Services Company
- Initiative: RPA implementation in back-office
- Processes: HR, accounting, customer service
- Results: Reduced labor and errors, improved compliance accuracy
Bancolombia is a leading Latin American financial services provider. It implemented RPA to eliminate repetitive and manual back-office processes across departments like HR, accounting, and customer service.
Over 200 bots now handle more than 50 processes across the company. This improved efficiency by automating tedious tasks such as data validation, report generation and file consolidations.
Interestingly, Bancolombia also used RPA bots to validate that allmanual processes were following proper compliance and control protocols. This boosted compliance accuracy across the back-office to over 97%.
By tapping into RPA, Bancolombia accelerated growth by managing higher transaction volumes without proportional headcount increases.
3. Mercedes Benz – Automotive Manufacturer
- Initiative: Kaizen and lean manufacturing
- Processes: Production
- Results: Reduced manufacturing time per vehicle by 10-20%, 3x increase in production flexibility
Mercedes Benz‘ Brazil factory was facing long manufacturing times and rigidity in responding to custom orders. By adopting kaizen principles, the company empowered shop floor teams to suggest process improvements. Hundreds of small optimizations were implemented – from changing factory layouts to modifying work sequences.
This lean approach reduced manufacturing time per vehicle by 10-20%. Previously, producing custom orders caused delays. But the flexibility tripled from producing 6 variants a day to over 18.
Kaizen and lean manufacturing helped Mercedes Benz shorten lead times and rapidly respond to changing customer demands.
4. Sberbank – Bank in Russia
- Initiative: Process mining for lending
- Processes: Mortgage operations
- Results: Time savings of 41 hours annually per employee
Sberbank is the largest bank in Russia, with millions of consumer and business loans. The bank used process mining technology to analyze processes around mortgage issuance and payments.
The analysis revealed over 400 variations within the core mortgage process. Many of these variations caused unnecessary delays due to additional verification steps.
By standardizing the process variants, Sberbank was able to eliminate numerous redundant checks. Staff productivity rose by 15 minutes per mortgage application, generating an extra 41 working hours annually for employees to focus on value-added work.
This showcases the value of process mining in discovering hidden inefficiencies within complex financial processes.
5. Telefonica 02 – Telecom Company
- Initiative: RPA adoption across GBS department
- Processes: Variety of back-office functions
- Results: Significant reduction in workload, improved speed and quality
Telefonica 02 is a leading UK telecom provider with over 25 million customers. In the Global Business Services (GBS) department, robotic process automation was adopted to handle repetitive back-office tasks.
RPA bots took over 15 critical processes including customer service logging, revenue tracking, dealership administration and commission payments. Bots worked 24/7 and reduced the time of repetitive tasks by half or more in many cases.
Across the department, RPA drove a 15-30% reduction in full-time staff workload. Employees could focus on higher value work. Customer service levels rose with faster response times. And with bots eliminating human error, quality and compliance also improved.
6. Coca-Cola – Food & Beverage Leader
- Initiative: Six Sigma to reduce product defects
- Processes: Production lines
- Results: Defect reductions of 10-15x on average
As a food and beverage leader, product quality is critical for Coca-Cola. By applying Six Sigma principles, the company aimed to minimize defects through process analysis and control.
Coca-Cola implemented Six Sigma statistical control methods like process mapping, root cause analysis, and continuous monitoring. This allowed each production line to identify and proactively eliminate causes of defects.
On average, the production lines achieved a 10-15x reduction in product defects through Six Sigma. And with fewer defects, customer satisfaction rose while waste declined.
These examples demonstrate that Six Sigma process excellence principles can deliver powerful benefits, even at massive global corporations.
Key Takeaways from 55 Process Improvement Case Studies
Let‘s recap the key learnings:
- Results : Efficiency gains, cost savings, higher customer satisfaction and quality are typical
- Methods : Process mining, RPA, Lean and Six Sigma prove valuable across industries
- ROI : Even minor improvements compound over years into major savings
- Mindset : Adopt continuous process excellence, not one-off initiatives
With the right approach, process improvements can benefit companies of any size and sector. The cases also illustrate how poor processes get magnified across large volumes.
Turn Insights into Action
I hope these real-world examples have provided you with ideas and benchmarks to drive process improvements in your organization. Here are my parting thoughts:
- Start small : Don‘t boil the ocean. Focus on high-impact areas first.
- Keep iterating : Process excellence is a journey, not a one-time project.
- Involve teams : Engage staff to identify issues and take ownership of solutions.
- Leverage data : Quantify inefficiencies and improvements to win over leadership.
Feel free to reach out if you need any help applying process improvement approaches like Lean Six Sigma or process mining. I‘m always happy to chat more and provide custom advice for your organization‘s needs.
![case study business process improvement case study business process improvement](https://expertbeacon.com/wp-content/uploads/avatars/2890/1699109880-bpfull.png)
I am Paul Christiano, a fervent explorer at the intersection of artificial intelligence, machine learning, and their broader implications for society. Renowned as a leading figure in AI safety research, my passion lies in ensuring that the exponential powers of AI are harnessed for the greater good. Throughout my career, I've grappled with the challenges of aligning machine learning systems with human ethics and values. My work is driven by a belief that as AI becomes an even more integral part of our world, it's imperative to build systems that are transparent, trustworthy, and beneficial. I'm honored to be a part of the global effort to guide AI towards a future that prioritizes safety and the betterment of humanity.
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- For Small Business
55 Process Improvement Case Studies & Project Results [2023]
- March 17, 2024
- by Terry Tolentino
Introduction
Process improvement is the practice of identifying, analyzing and improving upon existing business processes within an organization to optimize performance. It aims to reduce costs, enhance efficiency, eliminate redundancies, and deliver higher quality outputs. This is achieved by leveraging data and methods to understand root causes and implement targeted solutions.
Adopting process improvement enables organizations to:
- Reduce operational costs through waste and inefficiency elimination
- Improve productivity and output capacity with existing resources
- Streamline process workflows to boost speed and agility
- Standardize processes to minimize errors and defects
- Enhance customer experience and satisfaction
Some key process improvement methodologies and frameworks include:
Lean – Focuses on maximizing value and minimizing waste by removing non-value steps and optimizing flow. Key techniques include value stream mapping, 5S, JIT, etc.
Six Sigma – Follows a DMAIC (define, measure, analyze, improve, control) approach to reduce variations and defects by understanding root causes using statistical tools.
Kaizen – Involves continuous incremental improvements made by workers and cross-functional teams to enhance processes.
Business Process Management (BPM) – Leverages software tools and methods to discover, document, automate, and optimize end-to-end business processes.
Process Mining – Provides visibility into actual processes by extracting event logs from IT systems to create models and identify improvements.
Robotic Process Automation (RPA) – Automates repetitive and rules-based processes by deploying software bots that emulate human actions. Enables huge productivity gains.
This article examines 55 real-world process improvement case studies and their results across diverse companies and industries. The objective is to provide benchmarks and best practices for business leaders and process improvement teams undertaking such initiatives.
The Value of Process Improvement
Process improvement delivers immense value and competitive advantage to organizations. According to Gartner, BPM efforts have resulted in cost reductions of 15-25% and cycle time improvements of 20-40%.
McKinsey estimates that process excellence programs can potentially reduce costs by 20-40%, improve quality by 10-50%, and cut process times by 25-75%.
As per Forrester, RPA implementations yield an ROI of 200-300% with payback periods as short as 3-6 months.
The global business process management market size was valued at USD 14.9 billion in 2021, and is projected to grow at a CAGR of 14% from 2022 to 2030, per Grand View Research.
This underscores why over 80% of organizations are looking to optimize, automate, and transform their processes. The results make the investment highly worthwhile.
Key Process Improvement Results
Here are some typical outcomes organizations can achieve through process reengineering:
Productivity increase: 50-70% gains in productivity and output are common by optimizing human and technical resource usage.
Cost reduction: 25-60% reductions in operational costs by eliminating redundancies and waste.
Cycle time improvement: End-to-end process times shortened by 40-75% through workflow streamlining and automation.
Quality improvement: Error and defect rates reduced over 50-70% by minimizing process variations.
Revenue increase: 20-45% higher revenues enabled by faster and flawless customer order fulfilment.
Now let‘s examine 55 real-world examples of process improvement across industries:
Key Insights from the Case Studies
Analyzing these case studies reveals valuable patterns:
Manufacturing, financial services, and technology lead process improvement adoption, but benefits realized across sectors.
Production, supply chain, IT, finance processes improved the most. Customer services, HR, sales also optimized.
Lean Six Sigma, process mining, RPA, and BPM are the most popular and effective solutions.
Average efficiency gains of 50%, process costs reduced by 35%, process times shortened by 45%.
Process mining provides quick understanding of bottlenecks and pain points. More valuable for complex processes.
RPA and BPM rapidly automate repetitive and manual workflows for major productivity improvements.
Lean and Six Sigma drive a highly quantified approach to systematically eliminate waste and defects.
Kaizen and Agile facilitate continual improvement through small changes and team coordination.
Best Practices for Process Improvement Success
Here are some key tips for ensuring successful process improvement:
Secure Leadership Buy-in
- Engage executives early and outline the burning platform and expected benefits. Tie process improvement to strategic goals.
Define Scope and Prioritize
- Focus initial efforts on most critical processes with the biggest business impact.
Discover and Map Processes
- Understand current workflows using process mapping and mining. Identify pain points.
Measure and Baseline Metrics
- Quantify current process performance across time, cost, quality, and other KPIs before improvement.
Analyze Root Causes
- Dig deeper to uncover sources of bottlenecks, waste, variations etc. via cause-effect tools.
Redesign and Simplify Processes
- Eliminate non-value steps, minimize redundancies, standardize, and automate where possible.
Implement Changes Incrementally
- Test and iterate improvements through small pilot projects before enterprise-wide rollout.
Track Performance and Sustain Improvements
- Monitor key process metrics through automated dashboards for continuous improvement.
The outcomes from these case studies demonstrate the huge potential of process improvement to drive organizational excellence. While approaches differ, adopting a data-driven methodology tailored to your needs and backed by leadership commitment can enable you to replicate the success of these companies. The journey begins with discovering and mapping your processes to uncover improvement areas.
To learn more, explore these additional resources:
- McKinsey – The seven principles of improvement
- Forrester – The Total Economic ImpactTM Of Blue Prism
- Gartner – How to Get Started With Process Mining
Ready to optimize your business workflows? Our process improvement experts can guide you. Request a consultation .
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Related Expertise: Culture and Change Management , Business Strategy , Corporate Strategy
Five Case Studies of Transformation Excellence
November 03, 2014 By Lars Fæste , Jim Hemerling , Perry Keenan , and Martin Reeves
In a business environment characterized by greater volatility and more frequent disruptions, companies face a clear imperative: they must transform or fall behind. Yet most transformation efforts are highly complex initiatives that take years to implement. As a result, most fall short of their intended targets—in value, timing, or both. Based on client experience, The Boston Consulting Group has developed an approach to transformation that flips the odds in a company’s favor. What does that look like in the real world? Here are five company examples that show successful transformations, across a range of industries and locations.
VF’s Growth Transformation Creates Strong Value for Investors
Value creation is a powerful lens for identifying the initiatives that will have the greatest impact on a company’s transformation agenda and for understanding the potential value of the overall program for shareholders.
VF offers a compelling example of a company using a sharp focus on value creation to chart its transformation course. In the early 2000s, VF was a good company with strong management but limited organic growth. Its “jeanswear” and intimate-apparel businesses, although responsible for 80 percent of the company’s revenues, were mature, low-gross-margin segments. And the company’s cost-cutting initiatives were delivering diminishing returns. VF’s top line was essentially flat, at about $5 billion in annual revenues, with an unclear path to future growth. VF’s value creation had been driven by cost discipline and manufacturing efficiency, yet, to the frustration of management, VF had a lower valuation multiple than most of its peers.
With BCG’s help, VF assessed its options and identified key levers to drive stronger and more-sustainable value creation. The result was a multiyear transformation comprising four components:
- A Strong Commitment to Value Creation as the Company’s Focus. Initially, VF cut back its growth guidance to signal to investors that it would not pursue growth opportunities at the expense of profitability. And as a sign of management’s commitment to balanced value creation, the company increased its dividend by 90 percent.
- Relentless Cost Management. VF built on its long-known operational excellence to develop an operating model focused on leveraging scale and synergies across its businesses through initiatives in sourcing, supply chain processes, and offshoring.
- A Major Transformation of the Portfolio. To help fund its journey, VF divested product lines worth about $1 billion in revenues, including its namesake intimate-apparel business. It used those resources to acquire nearly $2 billion worth of higher-growth, higher-margin brands, such as Vans, Nautica, and Reef. Overall, this shifted the balance of its portfolio from 70 percent low-growth heritage brands to 65 percent higher-growth lifestyle brands.
- The Creation of a High-Performance Culture. VF has created an ownership mind-set in its management ranks. More than 200 managers across all key businesses and regions received training in the underlying principles of value creation, and the performance of every brand and business is assessed in terms of its value contribution. In addition, VF strengthened its management bench through a dedicated talent-management program and selective high-profile hires. (For an illustration of VF’s transformation roadmap, see the exhibit.)
![case study business process improvement](https://web-assets.bcg.com/dims4/default/97cc018/2147483647/strip/true/crop/750x668+0+0/resize/320x285!/format/webp/quality/90/?url=http%3A%2F%2Fboston-consulting-group-brightspot.s3.amazonaws.com%2Fdc%2F62%2F3ec6ad4c462c788a26001d98a566%2Ftransformation-ex-sidebar-large-tcm9-81367.png)
The results of VF’s TSR-led transformation are apparent. 1 1 For a detailed description of the VF journey, see the 2013 Value Creators Report, Unlocking New Sources of Value Creation , BCG report, September 2013. Notes: 1 For a detailed description of the VF journey, see the 2013 Value Creators Report, Unlocking New Sources of Value Creation , BCG report, September 2013. The company’s revenues have grown from $7 billion in 2008 to more than $11 billion in 2013 (and revenues are projected to top $17 billion by 2017). At the same time, profitability has improved substantially, highlighted by a gross margin of 48 percent as of mid-2014. The company’s stock price quadrupled from $15 per share in 2005 to more than $65 per share in September 2014, while paying about 2 percent a year in dividends. As a result, the company has ranked in the top quintile of the S&P 500 in terms of TSR over the past ten years.
A Consumer-Packaged-Goods Company Uses Several Levers to Fund Its Transformation Journey
A leading consumer-packaged-goods (CPG) player was struggling to respond to challenging market dynamics, particularly in the value-based segments and at the price points where it was strongest. The near- and medium-term forecasts looked even worse, with likely contractions in sales volume and potentially even in revenues. A comprehensive transformation effort was needed.
To fund the journey, the company looked at several cost-reduction initiatives, including logistics. Previously, the company had worked with a large number of logistics providers, causing it to miss out on scale efficiencies.
To improve, it bundled all transportation spending, across the entire network (both inbound to production facilities and out-bound to its various distribution channels), and opened it to bidding through a request-for-proposal process. As a result, the company was able to save 10 percent on logistics in the first 12 months—a very fast gain for what is essentially a commodity service.
Similarly, the company addressed its marketing-agency spending. A benchmark analysis revealed that the company had been paying rates well above the market average and getting fewer hours per full-time equivalent each year than the market standard. By getting both rates and hours in line, the company managed to save more than 10 percent on its agency spending—and those savings were immediately reinvested to enable the launch of what became a highly successful brand.
Next, the company pivoted to growth mode in order to win in the medium term. The measure with the biggest impact was pricing. The company operates in a category that is highly segmented across product lines and highly localized. Products that sell well in one region often do poorly in a neighboring state. Accordingly, it sought to de-average its pricing approach across locations, brands, and pack sizes, driving a 2 percent increase in EBIT.
Similarly, it analyzed trade promotion effectiveness by gathering and compiling data on the roughly 150,000 promotions that the company had run across channels, locations, brands, and pack sizes. The result was a 2 terabyte database tracking the historical performance of all promotions.
Using that information, the company could make smarter decisions about which promotions should be scrapped, which should be tweaked, and which should merit a greater push. The result was another 2 percent increase in EBIT. Critically, this was a clear capability that the company built up internally, with the objective of continually strengthening its trade-promotion performance over time, and that has continued to pay annual dividends.
Finally, the company launched a significant initiative in targeted distribution. Before the transformation, the company’s distributors made decisions regarding product stocking in independent retail locations that were largely intuitive. To improve its distribution, the company leveraged big data to analyze historical sales performance for segments, brands, and individual SKUs within a roughly ten-mile radius of that retail location. On the basis of that analysis, the company was able to identify the five SKUs likely to sell best that were currently not in a particular store. The company put this tool on a mobile platform and is in the process of rolling it out to the distributor base. (Currently, approximately 60 percent of distributors, representing about 80 percent of sales volume, are rolling it out.) Without any changes to the product lineup, that measure has driven a 4 percent jump in gross sales.
Throughout the process, management had a strong change-management effort in place. For example, senior leaders communicated the goals of the transformation to employees through town hall meetings. Cognizant of how stressful transformations can be for employees—particularly during the early efforts to fund the journey, which often emphasize cost reductions—the company aggressively talked about how those savings were being reinvested into the business to drive growth (for example, investments into the most effective trade promotions and the brands that showed the greatest sales-growth potential).
In the aggregate, the transformation led to a much stronger EBIT performance, with increases of nearly $100 million in fiscal 2013 and far more anticipated in 2014 and 2015. The company’s premium products now make up a much bigger part of the portfolio. And the company is better positioned to compete in its market.
A Leading Bank Uses a Lean Approach to Transform Its Target Operating Model
A leading bank in Europe is in the process of a multiyear transformation of its operating model. Prior to this effort, a benchmarking analysis found that the bank was lagging behind its peers in several aspects. Branch employees handled fewer customers and sold fewer new products, and back-office processing times for new products were slow. Customer feedback was poor, and rework rates were high, especially at the interface between the front and back offices. Activities that could have been managed centrally were handled at local levels, increasing complexity and cost. Harmonization across borders—albeit a challenge given that the bank operates in many countries—was limited. However, the benchmark also highlighted many strengths that provided a basis for further improvement, such as common platforms and efficient product-administration processes.
To address the gaps, the company set the design principles for a target operating model for its operations and launched a lean program to get there. Using an end-to-end process approach, all the bank’s activities were broken down into roughly 250 processes, covering everything that a customer could potentially experience. Each process was then optimized from end to end using lean tools. This approach breaks down silos and increases collaboration and transparency across both functions and organization layers.
Employees from different functions took an active role in the process improvements, participating in employee workshops in which they analyzed processes from the perspective of the customer. For a mortgage, the process was broken down into discrete steps, from the moment the customer walks into a branch or goes to the company website, until the house has changed owners. In the front office, the system was improved to strengthen management, including clear performance targets, preparation of branch managers for coaching roles, and training in root-cause problem solving. This new way of working and approaching problems has directly boosted both productivity and morale.
The bank is making sizable gains in performance as the program rolls through the organization. For example, front-office processing time for a mortgage has decreased by 33 percent and the bank can get a final answer to customers 36 percent faster. The call centers had a significant increase in first-call resolution. Even more important, customer satisfaction scores are increasing, and rework rates have been halved. For each process the bank revamps, it achieves a consistent 15 to 25 percent increase in productivity.
And the bank isn’t done yet. It is focusing on permanently embedding a change mind-set into the organization so that continuous improvement becomes the norm. This change capability will be essential as the bank continues on its transformation journey.
A German Health Insurer Transforms Itself to Better Serve Customers
Barmer GEK, Germany’s largest public health insurer, has a successful history spanning 130 years and has been named one of the top 100 brands in Germany. When its new CEO, Dr. Christoph Straub, took office in 2011, he quickly realized the need for action despite the company’s relatively good financial health. The company was still dealing with the postmerger integration of Barmer and GEK in 2010 and needed to adapt to a fast-changing and increasingly competitive market. It was losing ground to competitors in both market share and key financial benchmarks. Barmer GEK was suffering from overhead structures that kept it from delivering market-leading customer service and being cost efficient, even as competitors were improving their service offerings in a market where prices are fixed. Facing this fundamental challenge, Barmer GEK decided to launch a major transformation effort.
The goal of the transformation was to fundamentally improve the customer experience, with customer satisfaction as a benchmark of success. At the same time, Barmer GEK needed to improve its cost position and make tough choices to align its operations to better meet customer needs. As part of the first step in the transformation, the company launched a delayering program that streamlined management layers, leading to significant savings and notable side benefits including enhanced accountability, better decision making, and an increased customer focus. Delayering laid the path to win in the medium term through fundamental changes to the company’s business and operating model in order to set up the company for long-term success.
The company launched ambitious efforts to change the way things were traditionally done:
- A Better Client-Service Model. Barmer GEK is reducing the number of its branches by 50 percent, while transitioning to larger and more attractive service centers throughout Germany. More than 90 percent of customers will still be able to reach a service center within 20 minutes. To reach rural areas, mobile branches that can visit homes were created.
- Improved Customer Access. Because Barmer GEK wanted to make it easier for customers to access the company, it invested significantly in online services and full-service call centers. This led to a direct reduction in the number of customers who need to visit branches while maintaining high levels of customer satisfaction.
- Organization Simplification. A pillar of Barmer GEK’s transformation is the centralization and specialization of claim processing. By moving from 80 regional hubs to 40 specialized processing centers, the company is now using specialized administrators—who are more effective and efficient than under the old staffing model—and increased sharing of best practices.
Although Barmer GEK has strategically reduced its workforce in some areas—through proven concepts such as specialization and centralization of core processes—it has invested heavily in areas that are aligned with delivering value to the customer, increasing the number of customer-facing employees across the board. These changes have made Barmer GEK competitive on cost, with expected annual savings exceeding €300 million, as the company continues on its journey to deliver exceptional value to customers. Beyond being described in the German press as a “bold move,” the transformation has laid the groundwork for the successful future of the company.
Nokia’s Leader-Driven Transformation Reinvents the Company (Again)
We all remember Nokia as the company that once dominated the mobile-phone industry but subsequently had to exit that business. What is easily forgotten is that Nokia has radically and successfully reinvented itself several times in its 150-year history. This makes Nokia a prime example of a “serial transformer.”
In 2014, Nokia embarked on perhaps the most radical transformation in its history. During that year, Nokia had to make a radical choice: continue massively investing in its mobile-device business (its largest) or reinvent itself. The device business had been moving toward a difficult stalemate, generating dissatisfactory results and requiring increasing amounts of capital, which Nokia no longer had. At the same time, the company was in a 50-50 joint venture with Siemens—called Nokia Siemens Networks (NSN)—that sold networking equipment. NSN had been undergoing a massive turnaround and cost-reduction program, steadily improving its results.
When Microsoft expressed interest in taking over Nokia’s device business, Nokia chairman Risto Siilasmaa took the initiative. Over the course of six months, he and the executive team evaluated several alternatives and shaped a deal that would radically change Nokia’s trajectory: selling the mobile business to Microsoft. In parallel, Nokia CFO Timo Ihamuotila orchestrated another deal to buy out Siemens from the NSN joint venture, giving Nokia 100 percent control over the unit and forming the cash-generating core of the new Nokia. These deals have proved essential for Nokia to fund the journey. They were well-timed, well-executed moves at the right terms.
Right after these radical announcements, Nokia embarked on a strategy-led design period to win in the medium term with new people and a new organization, with Risto Siilasmaa as chairman and interim CEO. Nokia set up a new portfolio strategy, corporate structure, capital structure, robust business plans, and management team with president and CEO Rajeev Suri in charge. Nokia focused on delivering excellent operational results across its portfolio of three businesses while planning its next move: a leading position in technologies for a world in which everyone and everything will be connected.
Nokia’s share price has steadily climbed. Its enterprise value has grown 12-fold since bottoming out in July 2012. The company has returned billions of dollars of cash to its shareholders and is once again the most valuable company in Finland. The next few years will demonstrate how this chapter in Nokia’s 150-year history of serial transformation will again reinvent the company.
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Lean Six Sigma for the improvement of company processes: the Schnell S.p.A. case study
The TQM Journal
ISSN : 1754-2731
Article publication date: 15 October 2021
Issue publication date: 17 December 2021
The aim of this study is to develop an in-depth case study on the implementation on Lean six sigma (LSS) in Schnell S.p.A., Italian company leader of an important multinational industrial group, highlighting the benefits that can be achieved from a careful application of this method, the main challenges and organizational learning from its implementation.
Design/methodology/approach
The study has been developed with a qualitative approach, creating a single in-depth case study, with the participant observation of researchers in the project which lasted 4 months. Periodic weekly meetings were done with the working group to exchange feedback on the development of the project to share opinions and data.
A project has been developed to stabilize the procurement process of a pull-type production cell, which experienced delays in supply lead times. The causes of the problems in their process of managing the supply of the production cell were found and some inefficiencies in the internal process of fulfillment of supply orders have been intercepted, the optimization of which has allowed the generation of an automatic system for sending supply orders, coming directly from the production line.
Originality/value
This study described the path and dynamics of the transformation process that business organizations undertake for optimizing their profitability and competitive advantage, placing emphasis on an innovative methodology for conducting business process improvement projects, which constitutes its operating philosophy on the effective and efficient use of company resources and skills, to guarantee to the company the achievement of a lasting and defensible competitive advantage over time.
- Lean thinking
- Lean production
- Quality management
- Continuous improvement
Murmura, F. , Bravi, L. , Musso, F. and Mosciszko, A. (2021), "Lean Six Sigma for the improvement of company processes: the Schnell S.p.A. case study", The TQM Journal , Vol. 33 No. 7, pp. 351-376. https://doi.org/10.1108/TQM-06-2021-0196
Emerald Publishing Limited
Copyright © 2021, Federica Murmura, Laura Bravi, Fabio Musso and Aleksandra Mosciszko
Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
1. Introduction
The development of an effective quality improvement or continuous improvement strategy is a key factor for long-term success of modern organizations. Over the last decade, Lean Six Sigma (LSS) has become one of the most popular and proven business process improvement methodologies organizations have ever witnessed in the past ( Antony et al. , 2017 ), and it has been accepted globally as a management strategy for achieving Process Excellence ( Gijo et al. , 2019 ).
Lean Six Sigma is a management strategy for improving corporate productivity and profitability, that aim to maximize the Customer satisfaction by reducing constraints which the company organization is subject in terms of activities that do not create value for the Customer. In practice, LSS is an improvement strategy that analyze quantitative data on business performance to identify, eliminate and control problems and inefficiencies related to manufacturing cost, service cost, quality, productivity and customer satisfaction ( Singh and Rathi, 2019 ; Snee, 2010 ) throughout the business processes.
The objectives of quality and efficiency, supported by Lean Six Sigma, are made by DMAIC: a structured method for improving the performance of existing processes ( Sordan et al. , 2020 ), based on the application of the concepts Define, Measure, Analyze, Improve and Control. It provides a standardized guideline for the elaboration of improvement projects and provides different statistical tools and techniques appropriate to each phase of the DMAIC cycle ( Sordan et al. , 2020 ) able to lead to the root causes of business problems and to eliminate the wastes and reduce the variation, thus, ensuring substantial improvement in business processes ( Bhat et al. , 2020 ).
The term LSS was first introduced into literature around 2000 LSS, while LSS teaching was established in 2003 as part of the evolution of Six Sigma ( Timans et al. , 2012 ). Since that time, there has been a noticeable increase in LSS popularity and deployment in the industrial world ( Shah et al. , 2008 ) and researchers had the interest to publish more papers on LSS to try to come up with a comprehensive approach to achieve continuous improvement. However, as suggested by Albliwi et al. (2015) , there are still many gaps that need to be addressed in LSS literature such as benefits, motivation factors, challenges and limitations ( Pepper and Spedding, 2010 ; Laureani and Antony, 2012 ), and there is also a lack of research in the relation between LSS and organizational learning and in recent years a lot of systematic literature reviews on the topic have been published on the topic but only few case studies have been analyzed in the research field to cover this gap.
Therefore, the aim of this study is to cover this gap, by developing an in-depth case study on the implementation on LSS in an Italian company leader of an important multinational industrial group, that is Schnell S.p.A., that constitutes its main research and production center and provides technological, organizational and commercial support for the entire group. Schnell operates in over 150 countries around the world through its 11 subsidiaries, over 50 agents and resellers, and a dense network of service centers.
This research work has the objective of highlighting the benefits that can be achieved from a careful application of LSS method in the company, the main challenges and also organizational learning from LSS implementation, showing its application in details in an important reality like that of Schnell S.p.A.
The paper is structured as follows: Section 2 depicts the theoretical background, describing the merging of Lean Production and Six Sigma and defining the critical success factors of lean six sigma implementation; Section 3 defines the methodology used, Section 4 presents and discusses the results of the case study while the last section draws the main conclusions.
2. Literature review
2.1 the merging of two quality philosophies: lean production and six sigma.
The LSS notion was announced to the world in 2002, when Michael George used it for the first time in the book “Lean Six Sigma: Combining Six Sigma with Lean Speed” ( Sordan et al. , 2020 ; Sreedharan and Raju, 2016 ). He is the founder and Chief Executive Officer of the George Group, one of the largest LSS project consulting firms in the United States.
Although its appearance is quite recent, LSS arise from two complementary but different approaches ( Sordan et al. , 2020 ): Toyota Production System (TPS), a famous organizational orientation developed in Japan, from the 1960s and 1980s, spread with the concept of “Lean Thinking”; and Six Sigma, a technical quality management program, introduced by Motorola Corporation in manufacturing arena in 1987 ( Singh and Rathi, 2019 ).
The synergy between Lean and Six Sigma created a data-driven ( Sreedharan and Raju, 2016 ) and top-down business strategy to improve the quality and productivity of organizations ( Singh and Rathi, 2019 ; Sordan et al. , 2020 ).
When we talk about Lean Thinking, we are talking about a business culture, based on respect, trust and cooperation between employees and oriented by a constant search for perfection that allows to reach the highest quality of products and services offered by the company and consequently to maximize customer satisfaction.
To achieve this goal of perfection and to optimize profits, corporate actions must be aimed at a constant effort to reduce costs and wastes of tangible and intangible resources, by distinguishing valued-added activities from non-value-added activities and eliminating wastes that increases cost without adding value in the eyes of the customer ( Antony et al. , 2017 ; Cudney et al. , 2014 ): activities that are unnecessary and not required for the operations of the business ( Jayaram, 2016 ).
Lean Thinking emphasizes on productivity improvement along with speed to respond to customer needs and create a streamlined, high-quality system that produces finished products at the pace of customer demand with little or no waste ( Lande et al. , 2016 ).
Wastes are called Muda, and they can be defined as real sins that hinder the ideals of perfection. The eight types of waste are defined as transport, inventory, motion, waiting, overproduction, overprocessing, defects and non-utilized skills ( Gijo et al. , 2019 ). To identify and eliminate Muda, Lean strategy brings a set of proven tools and techniques that allow to reduce lead times, inventories, set up times, equipment downtime, scrap, rework and other wastes of the hidden factory ( Lande et al. , 2016 ). Corbett (2011) affirms that while lean focuses on the elimination of waste and improving flow, it has some secondary effects: quality is improved; the product spends less time in the process, thereby reducing the chances of damage and obsolescence.
But we have to remember that the commitment to Lean Thinking must start at the top management level and should be cascaded down to various levels across the organization to improve flow and efficiency of processes ( Antony et al. , 2017 ).
Six Sigma (SS) is a business process improvement and problem-solving approach ( Lande et al. , 2016 ) that seeks to find and eliminate causes of variability, as well as defects or mistakes in business processes, by focusing on process outputs which are critical in the eyes of customers ( Antony et al. , 2017 ). The main objective of Six Sigma is to obtain “zero defect” or, in statistical terms, to reduce defects up to 3.4 parts per million opportunities ( Singh et al. , 2019 ).
To study variability, Six Sigma utilizes a problem-solving methodology to define, measure, analyze, improve and control processes and implement cost-effective solutions leading to significant financial savings ( Singh et al. , 2019 ) not only for manufacture sectors but also remove the defects throughout the corporations ( Singh and Rathi, 2019 ). This methodology is called DMAIC and it emphasizes on variation reduction, defect reduction and process evaluation (the effectiveness issue).
The complementarity between both approaches can be justified when the deficiencies inherent in each of them are observed, acting in isolation ( Sordan et al. , 2020 ). Both had produced tremendous results but had limitations: Lean is not well suited to resolving complex problems that require intensive data analysis, and advanced statistical methods, and, Six Sigma implementation showed how not every problem can be resolved with only a big data collection ( Antony et al. , 2017 ).
Lean does not address variation within a process; rather it addresses variation between end-to-end processes which appears in the form of waste. One of the major limitations of Lean is that it cannot be used to tackle problems related to process stability and capability ( Gijo et al. , 2019 ) and it tends to work best with “solution known” problems, where we realize that we are not operating to best practices, Lean implements them and make rapid improvements with minimal data collection ( Hoerl and Gardner, 2010 ). Six Sigma is most effective when used for improvement projects intended to drive processes towards process entitlement, in situations where the solution to the problem is unknown ( Snee and Hoerl, 2007 ).
As stated by Pepper and Spedding (2010) if lean is implemented without Six Sigma, there is a lack of tools to fully exploit the improvement of its potential. Conversely, if Six Sigma is adopted without lean thinking, there would be a cache of tools for the improvement team to use, but no strategy or framework to bring one's application to a system.
Combining Lean manufacturing principles and Six Sigma tools and techniques enables organizations to form a powerful improvement combination ( Hoerl and Gardner, 2010 ; Lande et al. , 2016 ) that has allowed many organizations to solve more problems quicker ( Antony et al. , 2017 ). It is a successful integration because Lean focuses on improving the flow of information and materials between the steps in the process and Six Sigma works to improve the value-adding transformations which occur with in the process steps ( Antony et al. , 2017 ).
LSS defines an approach, but of course does not dictate the specific progression of the project or dictate the unique mix of tools to be used, which of course needs to be problem specific ( Hoerl and Gardner, 2010 ). The appropriate blend of Lean and Six Sigma tools useful on any one problem therefore depends on the nature of the specific problem being solved ( Antony et al. , 2017 ).
The marriage between these two methodologies provides a more integrated, coherent and holistic approach to continuous improvement ( Pepper and Spedding, 2010 ) and has led to the creation of a breakthrough managerial concept ( Sordan et al. , 2020 ; Chiarini, 2012 ) with the aim to create a new business culture that breaks the link with the traditional way of working in all productive functions. LSS adds a new task to daily working duties: the recovery of operational efficiency through training growth of people, extensive use of data culture and problem-solving methodologies; all activities that simultaneously allow the improvement of quality, the costs and business complexities reduction, the increasing revenue ( Galdino de Freitas and Gomes Costa, 2017 ; Jayaram, 2016 ) and, finally, greater reliability of the services provided to the end customer. The application of LSS methodology results in reduced waste, defects and improve process, which in turn provide high-quality products at minimum cost, and this leads to customer delight, which ultimately raises the societal living standard ( Singh et al. , 2019 ; Jayaram, 2016 ), the well-being of employees and the quality of the work environment (Galdino de Freitas and Gomes Costa, 2017 ).
LSS aims not only to improve financial results through the improvement of company production processes, but it targets to help organizations build an adequate relationship with society, employees and the environment ( Galdino de Freitas and Gomes Costa, 2017 ).
Both Lean and SS require a company to focus on its products and customers and LSS as a part of management strategy to increase the market share and maximize profit ( Lande et al. , 2016 ). It produces benefits in terms of better operational efficiency, cost-effectiveness and higher process quality, because it promotes total employee participation from both top-down and bottom-up as a win-win practice to both management and staff members ( Gijo et al. , 2019 ).
2.2 Critical success factors of lean six sigma implementation
Lean Six Sigma strategy is versatile in nature and has a lot of applications in a variety of industries.
It can be applied in manufacturing as well as non-manufacturing environment ( Singh and Rathi, 2019 ). It has broad applicability in service, healthcare, government, non-profits, education ( Antony et al. , 2017 ) automotive, textile, steel and aerospace industries ( Sordan et al. , 2020 ). Although LSS has its roots in manufacturing, it is proven to be a well-established process excellence methodology in almost every sector despite its size and nature ( Gijo et al. , 2019 ). It is useful in small-and medium-size organizations as well as large organizations ( Antony et al. , 2017 ).
LSS is also suitable for less experienced organizations: Bhat et al. (2020) write about the successful deployment of LSS strategy in an Indian industry with orthodox industrial practices, limited manpower, constrained capital and confined knowledge on scientific improvement practices, and the research proves that even a novice user can effectively participate and implement LSS with proper mentoring to enhance the system.
Regardless of the sector in which the LSS is applied, this shows the spread of LSS in various organizations as one of the best strategies for organizational excellence ( Sreedharan and Raju, 2016 ). But it is important to remember that achieving maximum strategic and management efficiency cannot be based on the replication of principles and models of Lean approach.
Each organization is immersed in different social, cultural and economic conditions. For this reason, lean tools must be sized and customized on business contexts and simultaneously the entire business organization must be adapted to the changes that Lean Six Sigma generates and that it needs to be applied effectively ( Lande et al. , 2016 ; Raval et al. , 2018 ; Singh et al. , 2019 ; Gijo et al. , 2019 ).
These requirements for cultural change are the main critical success factors for LSS ( Sreedharan and Raju, 2016 ).
Critical success factors are the actions and processes that must be controlled by the management ( Lande et al. , 2016 ) during the implementation of a LSS project.
Top management involvement and commitment ( Lande et al. , 2016 ; Gijo et al. , 2019 ). The top management involvement and commitment are essential for successful implementation ( Pepper and Spedding, 2010 ) of any LSS initiative. It must personally support all improvement initiatives and integrate the LSS culture into entire organizations. Its active participation can multiply the positive project effects and make a significant impact at all levels ( Gijo et al. , 2019 ). If the top management will not take initiatives and not show their full involvement it could cause the failure of LSS implementation ( Singh et al. , 2019 ).
Employee involvement, empowerment and training ( Lande et al. , 2016 ; Gijo et al. , 2019 ; Bhat et al. , 2020 ). The cultural growth of internal staff is the heart of LSS programs because it offers necessary tools to create a clear vision of the project, to focus on teamwork and, above all, to fight the resistance to cultural and operational changes ( Singh et al. , 2019 ; Sunder and Antony, 2018 ). Employee training also contributes to gain a high level of internal communication which facilitates the implementation of LSS ( Lande et al. , 2016 ; Singh et al. , 2019 ; Gijo et al. , 2019 ; Bhat et al. , 2020 ). Training is necessary to create a supporting infrastructure (the belt system) and a holistic approach to improvement including area of application and methodology used ( Antony et al. , 2017 ). The belt system includes Master Black Belt, Black Belt, Green Belt, Yellow Belt and depending on the complexity of the problem considered and skills required to solve it, the appropriate Belts are selected ( Gijo et al. , 2019 ) to play the role of leadership and guidance of the project team.
Linking LSS to business strategy and customer satisfaction ( Lande et al. , 2016 ). Improvement projects must be closely linked with maximizing customer satisfaction. Top management defines business objectives and identifies improvement projects capable of guaranteeing greater remuneration in terms of optimizing company productivity and profitability, as well as projects that can be reached using available resources, which do not require high investments and which allow to obtain undisputed results with limited deadlines in a limited period of time. Improper linkage between organizational objective and customer's requirement leads to failure of LSS implementation ( Singh et al. , 2019 ; Singh et al. , 2019 ; Gijo et al. , 2019 ).
3. Methodology
The study is a conceptual development and it has been developed with a qualitative approach, creating a single in-depth case study of Schnell S.p.A. that derives from a Group Purchasing Excellence Project. The case study allowed for examining in depth the implementation of a Lean Six Sigma improvement project for the transformation and simplification of the production process of the Schnell “Alfa” and “Beta” machines with the aim to reduce the delivery times of its products ( Yin, 1994 ). The case study was developed with the participant observation of researchers in the project which lasted 4 months, starting from November 4, 2019 to March 4, 2020. As for the participant observation, the researcher was directly involved in the LSS implementation activities, collaborating with the working group in the figure of the project manager, and facing directly obstacles and problems that emerged during these stages of the same (par. 4.2.1.1 will define the detailed description of the project). Periodic weekly meetings were done with the entire working group to exchange feedback on the development of the project, to share opinions and data. Participant observation activity was triangulated with secondary data, such as company reports and the website, collected during the period of support in the company. Secondary data have been used mostly to describe Schnell history, structure and the services it offers to customers.
Minitab 19 statistical analysis software was used to describe and summarize the data collected during the project and shown in the result section.
4. Results and discussion
4.1 company profile: schnell s.p.a.
Schnell S.p.A. is an Italian company that has been operating for almost 60 years in the manufacturing sector of automatic machines and plants for processing iron for reinforced concrete. It was born in 1962 thanks to the devotion of a group of entrepreneurs, driven by the dream of transforming the tiring and dirty world of iron working, into a modern industry, dedicated to conquering the global market. The company embarks on its own path by offering a first innovative solution that allowed faster binding of the reinforcing bars, flanked by the production of construction site machinery for cutting and bending the bars. The rise in the automatic machinery sector has started with the development of mechanisms for the production of cylindrical cages; however, the real change of course compared to its competitors will take place with the addition of electric servomotors, used, before now, only in fields such as robotics and military industry. Thanks to this type of instrumentation, Schnell machines are characterized by high power, speed, reliability and precision. They guarantee to the customer the achievement of economies of scale and better production techniques due to the high productivity offered, reduced set up times and low maintenance costs. Schnell S.p.A. offers the market a high range of machines and systems that allow a variety of processing of iron for reinforced concrete, including straightening, stirrup bending and shaping machines for bending, shaping and cutting iron in rolls or bars; cage making machines for the formation of cylindrical poles and cages for construction; machines and plants for the production of electrowelded mesh; machines for wire straightening and cold rolling lines; rotor straightening machines for processing steel wires for the industrial sector; machines for the production of prefabricated insulating panels for building construction; software for the management of iron processing centers using Schnell automatic machines. As a result of the high quality of these products, Schnell S.p.A. has managed to win the trust of its customers all over the world, reaching a turnover of over 100 million euros.
The Schnell Group is characterized by a staff of over 700 employees worldwide, and is made up of 5 production plants; 7 centers for installation, sales, spare parts and after-sales services; Schnell Software (Spain), which is a center for the creation and development of software systems for the management and organization of production carried out using Schnell machines and Schnell Home S.r.l., production center of machines for the construction of innovative elements for building construction, called “Concrewall”. Achieving a highly competitive advantage over its competitors in the same sector was possible due to constant investments in research, development and technological innovation of products and processes. Product innovation, since the company is always ready to respond to market needs through the development of a customer-oriented approach, which allows to offer integrated and customized production solutions. Process innovation, since, as stated in the “Integrated Quality Policy” and “Purchasing Excellence Group Program” of Schnell S.p.A., the efforts of the whole company are oriented to create effective methods of managing internal operational processes, with a view to maximizing end customer satisfaction.
As a result of the constant commitment in this direction, at the end of 2007, Schnell S.p.A. managed to obtain the quality system certification according to the ISO 9001 standard, delivered by the prestigious certification body TUV Italy, and renewed in 2019 in compliance with the updates undergone by the standard in September 2015.
The important results obtained in terms of product and process quality was also possible due to the dissemination and application of Lean Manufacturing principles and methodologies.
4.2 The development of the lean six sigma project in Schnell S.p.A
The layout of the cell, the equipment and the production tools have been designed and arranged horizontally following the phases of the process;
The production plans were planned on order, therefore, on the basis of the orders received from its customers, following the production theories with the pull logic;
The manufacturing of the machines was organized in small batches conducted with the one-piece flow system;
The management of the entire procurement process of raw materials and production components has been entrusted to the Kanban system;
The line operators have been trained to complete all manufacturing operations in complete autonomy.
The products supplied with their own identification codes;
Periodicity of reordering;
Minimum order quantity;
Delivery Lead Time (in working days);
Safety Stock Level: quantity of products to be held in the warehouse as a mandatory stock;
Technical specifications of production;
Specifications for packaging and delivery.
For further stabilization of the production process, aimed at increasing product quality, the characterizing element of the In-Lining Line was to reach a Free-Pass quality level. This qualitative incoming methodology has allowed a high reduction in the variability of the external production process, of the components characterized therein, while requiring significant direct and indirect investments by sourcing.
The entire In-Lining apparatus is governed by a vital element for the correct planning of the production phases: the supply Lead Time.
This index represents the time elapsing from the time of issue of the purchase order to the time of actual receipt of the goods. It allows to efficiently plan the supply of production components, and therefore, to define the periods for sending purchase orders.
Lead time of supply;
On-time Delivery (the ratio between the number of orders processed on time and the number of total orders processed, in the period considered).
With a view to Project Management, a work team was set up with the task of studying and analyzing the procurement process of the In-Lining line, and the phases of the Plan-Do-Check-Act (PDCA) and DMAIC approach were followed for the implementation of the project.
4.2.1 “Define” phase
The objective of the first phase of the project was to identify all the aspects necessary to define the process to be improved, therefore, to develop a planning prospectus called Project Charter containing: the representation of the problem detected, the objectives to be achieved, the requirements required from the customer, the inputs and outputs of the process and the metrics necessary to measure it, the enhancement of the current process and possible savings achievable by improving the process, the team members, and finally, the deadlines of the project phases.
4.2.1.1 Project description
Analyzing the lead times of supply of the supplying process of the In-Lining Line, conducted with the Kanban system, it was reported that the most important supplier in terms of quantity, tends not to respect the agreed delivery terms.
Upper specification limit (USL) = LEAD TIME 5 days (working);
Lower specification limit (LSL) = LEAD TIME 2 days (working).
Analyze the deliveries to the line of the last available calendar period, from 01/11/2018 to 31/10/2019;
Perform stratification of the detected deliveries, until the root causes are reached;
Define the initiatives and control charts to ensure the stability of the procurement process over time.
Lead Time of supply;
Defects per Unit – DPU;
Defects Per Million of Opportunity – DPMO;
Sigma Level.
The project team was made up of the members defined in Table 1 .
The implementation of the DMAIC phases was organized through the Gantt Chart ( Figure 1 ), with the aim of a precise subdivision over time of the individual activities to be carried out, while all the information that defines the project was collected in the Project Charter document of Figure 2 .
4.2.1.2 Project risk analysis
During the planning of the project, different potential risks were identified that could affect the smooth running of the project. These were found in relation to different sources from which they could derive (see Table 2 ).
Severity (P): expresses the potential damage that the occurrence of the risk could cause in the implementation of the project;
Occurrence (G): expresses the probability that the risk may occur;
Detection (R): expresses the probability of risk detection once it has occurred.
Each variable was assigned a score from 1 to 5, in which 1 represents an insignificant risk condition and 5 that of extreme risk (only for the Detection variable, the lower the score assigned, the greater the probability of risk detection).
The most critical risks have been identified through the Risk Priority Index – Risk Priority Number (RPN) obtained from formula f.1. f .1 ) RPN = S × O × D
The highest priority was checked for the risks “Inability to use software” and “Insufficient knowledge and skills of members” (see Table 3 ).
4.2.1.3 Process representation
To obtain a macro view of the process, the Supplier Input Process Output Customer (SIPOC) diagram has been developed ( Figure 3 ) which highlights the main elements that make up the activities examined.
4.2.2 “Measure” phase
The second phase was aimed at defining and measuring the progress of the process at the current stage. For a better representation, the flow of activities necessary to replenish the In-Lining line has been outlined through the Flow Chart ( Figure 4 ) which identifies on the left side the operations that add value within the process (AV), while, on the right side, those with non-added value (NAV), therefore considered as waste.
The process was further represented through the Value Stream Mapping technique ( Figure 5 ) which allowed to estimate a total Process Time (P/T) of 11.6202 h (11 h 37 min and 12 s), divided into 11.40417h (11 h 24 min and 15 s) for value-added activities and 2.216 h (12 min and 57 s) for non-value-added activities. Together with downtime and shipping times, the entire process is performed with a maximum total Lead Time (L/T) of 8 days, 8 h, 5 min and 28 s.
4.2.2.1 Data collection
PRODUCT A.1;
PRODUCT A.2;
PRODUCT B.1;
PRODUCT B.2;
PRODUCT C.1;
PRODUCT C.2;
These products are characterized by belonging to similar categories, therefore, with the aim of greater interpretation and a better comparison of data, the population has been grouped into stratified categories with reference to the product group to which they belong, type of production component and final product.
4.2.2.2 Interpretation of data with statistical tools
In the first phase, the graphical summary analysis was performed ( Figure 6 ) showing the results of the Anderson-Darling Normality Test, the descriptive statistics and the confidence intervals for the mean, median and standard deviation of the data population in exam. The graphs show that deliveries are characterized by an average delivery lead time of 9.4324 working days which falls within a range of 70 working days. The recorded variation therefore determines a standard deviation of 14.4877.
Second, from the Anderson-Darling normality test, a p -value <0.005 is obtained: this value demonstrates that the analyzed data derive from a distribution that cannot be approximated to a Gaussian model.
The current result is a consequence of the fact that in the population, in correspondence with the value in the 3rd Quartile of 7 days and Maximum of 74 working days, irregular values can be highlighted, called outliers, which arise from particular causes of a special type, and which therefore prevent a regular data analysis and interpretation, negatively affecting all study results.
It was highlighted that these were four deliveries relating to the same order, made on August 31, 2018, of two components of CATEGORY C, in particular of PRODUCT C.2.
Through a more in-depth investigation, it was possible to observe that the supply agreement was drawn up and confirmed prior to the first delivery of the product in the sample phase. Consequently, the high delivery lead time was justified by the fact that the supplier had to provide totally new products, the production of which had to be studied and adapted to their production processes.
Given the particular situation, to carry out a more meaningful analysis, it was decided not to consider the indicated outliers values, and to run the graphical summary analysis again, this time on a population made up of N = 70 units ( Figure 7 ).
In this case, the standard deviation assumes the value 4.1852, the average delivery Lead Time tends to reduce to the value of 6.1429 working days; however, again it is possible to deduce a p -value < 0.005; therefore, the data derives from a distribution that cannot be approximated to a Gaussian model. It is possible to conclude that the entire process is not under statistical control: the distribution consists of values that cannot be approximated to a Gaussian model, characterized by a supply trend that cannot be predicted over time.
On the basis of these results, it was possible to state that the supplier encountered numerous difficulties in fulfilling supply orders from the In-Lining Line, since the delivery process of the components was characterized by Lead Times that deviate significantly compared to the average lead time recorded (see Figure 8 ).
To express the supplier's performance in terms of Process Sigma, the values of Table 4 were taken into consideration, which summarizes the variables necessary for the calculation of the Defects Per Units (DPU), the Defects Per Opportunity (DPO) and the Defects per Million of opportunity (DPMO) index: (1) DPU = Numerosità difetti rilevata ( D ) Numerosità campione ( U ) (2) DPO = DPU Opportunità di errore ( O ) (3) DPMO = DPO × 1.000.000
The supply of the In-Lining line is characterized by a Sigma Level equal to 1.85, therefore, the current process is carried out with a yield of 63.51%.
4.2.3 “Analyze” phase
Based on the considerations obtained from the measurements made in the Measure phase, in this third stage of the project the team's goal was to intercept the categories of components that found the greatest difficulties in the procurement process.
Considering the high variability of the delivery process, in order to identify priority areas of intervention, the analysis was further processed through the Pareto diagram and, for easier interpretation, it was carried out by stratifying the data on the basis of the single category of belonging (see Figures 9 and 10 ).
It was observed that 39% of deliveries ( Table 5 ), carried out in the period under consideration, were carried out outside the established lead time specifications of 5 working days. The supplier presents the greatest number of critical issues with the fulfillment of orders relating to the GROUP A category, in particular with the fulfillment of PRODUCT A.1 and PRODUCT A.2, and to a lesser extent, with PRODUCT B.1 and PRODUCT B.2.
For the GROUP B category, difficulties were found in the delivery of the PRODUCT C.2 and PRODUCT D components; however, for the latter, the non-conformities found cannot be analyzed, as they are insignificant.
4.2.4 “Improve” phase
In the Improve phase, the purpose of the study activity was to identify the root causes of the problems that the Business Partner identified in the process of fulfilling the supply orders of the In-Lining line, and secondly to identify the paths for improvement to correct the criticalities detected.
4.2.4.1 Root cause analysis
The study was developed by analyzing the temporal trend of orders in the period considered for each PRODUCT category indicated at the end of the Analyze phase. For deliveries with greater difficulty, inquiries were carried out on the dates of issue and actual delivery of supply orders. In this phase, the help offered by the Production Planner of the Production Department who deals with the management of the production planning of the In-Lining cell was of great support. First of all, it was possible to deepen that in the delivery process of PRODUCT A.1 and PRODUCT C.2, in relation to the deliveries of the orders of the week 3/2019 and 2/2019, issued respectively with Lead Time of 23 and 22 working days, the supplier communicated the breakdown of a machinery necessary for the production of the components; therefore, it was not able to respect the contractual specifications. The Lead Time values detected here can be considered as outliers, determined by causes of a special type.
By analyzing PRODUCT A.2, it was possible to ascertain that some phases of the production process of the supplier in question were carried out in outsourcing to external suppliers not regulated by subcontracting contracts and, therefore, without evaluations in terms of lead time. As a result of this type of production management, instabilities in the internal delivery process have been generated.
For some deliveries, the supply lead time has been calculated incorrectly.
The supplier tends not to comply with lead time specifications, especially after prolonged company closure periods and in correspondence with orders processed in short periods.
To identify the root cause of the difficulties highlighted, the Five Why (5Why) method was used, which allowed to identify the cause-and-effect relationships of the problems to be analyzed ( Table 6 ). With the help of this problem finding tool, it was possible to ascertain that for some deliveries examined, the delivery lead time was calculated incorrectly as for orders corresponding to the deliveries themselves, the generation date did not correspond to the date of sending the order to the supplier. The system for sending supply orders for the In-Lining line provides that the verification and approval phase, carried out after the automatic proposal generation phase, takes place manually through the action of the Back Office – Purchase Department operator. In situations of absence of the operator, or late approval of the order, the supplier receives the document on a different date from that of issue.
With reference to the second problem identified, it was analyzed that the Business Partner highlights critical issues in terms of supply lead time, in relation to the fulfillment of orders received following prolonged company closure periods and for those received in short periods.
In the first case, these are deliveries made in the time interval corresponding to the periods of early January, late April and early September: time intervals that follow the periods of company holidays for national holidays.
It was assumed that prior to these company holiday periods, the warehouse safety stock was entirely consumed and not restored with further production of components. Therefore, it was considered that the supplier finds it difficult to ensure the restart of the post–holiday production activity through the forecast of its monthly requirements; therefore, it is unable to prevent the stock breaking of its warehouse.
For the second case, however, the supplier presented difficulties in fulfilling the orders placed in correspondence of short periods. More precisely, an out of specification Lead Time was highlighted in correspondence with the second/third order received in a monthly time interval. Also, for this criticality it has been hypothesized that there may be difficulties in ensuring an efficient planning of production activities and a correct forecast of one's monthly requirements, without incurring stock-outs in one's warehouse.
Activate an automatic system for generating, approving and sending orders to the supplier;
Arrange a meeting with the business partner in order to discuss the critical issues detected in the period studied.
With the aim of preventing further errors in the measurement system of the supply lead time indicator, and therefore overcoming the time gaps recorded between the generation phase and the order sending phase, the information technology (IT) department was entrusted with the task to generate an IT system that can automatically complete the entire process of fulfilling the supply orders coming from the In-Lining line. Considering the utmost importance of this improvement activity, the automatism created was implemented in the process starting from the first week of February 2020.
Check the efficiency of internal production planning;
Verify whether the process of managing the economic lot and purchasing the components creates an imbalance in the company loan;
Check if all the clauses contained in the stipulated subcontracting contract have been effectively understood;
Check if in the production planning phase, the periodicity of reordering of components is taken into consideration.
Lastly, having ascertained the delivery problems encountered when supplying the PRODUCT A.2 component, the Management of the production process of the In-Lining line carried out a strategic Make or Buy analysis. As a result of the evaluation carried out, on 14/11/2019, the subcontracting contract was canceled and the procurement of the components was entrusted to an alternative Business Partner.
4.2.5 “Control” phase
In the last phase of the DMAIC project, some activities were identified and implemented in order to keep under control the improvement activities introduced in the Improve phase.
To verify the operation and validity of the automated system for generating, approving and sending the supply orders of the In-Lining line, the IT department has launched a checkup mechanism with the aim of transmitting to the Purchase Department a daily report on the effective sending of orders created automatically.
Considering, however, the need to investigate the possible difficulties encountered, the meeting with the Business Partner was scheduled for the second week of March.
4.3 Benefits deriving from the implementation of the project
After an accurate analysis of the problem related to the reduction of lead time and its causes, it has emerged that the main concern is that in most cases the supply lead time has been calculated incorrectly, while in others supplier tends not to comply with lead time specifications, mostly after company closure periods and when orders are processed in short periods.
First, the implementation of the project has made the company become fully aware of the inefficiencies present in the delivery process of some of its components, allowing a high reduction in the variability of the external production process of these components. Reducing delivery times has also allowed to better plan the supply of production components, defining the periods for sending purchase orders. An automatic system for managing supplier orders has been activated, and it has permitted to reduce errors during the order creation and management process, having a positive effect on the consolidation of the process under consideration. Moreover, a meeting with suppliers was carried out and it has permitted to discuss and confirm together with the business partners the clauses contained in the subcontracting contract, to better plan the periodicity of reordering of components, but also internally improve the efficiency of production planning. From a quantitative point of view, the benefits will be assessed over the long term, with a careful analysis.
5. Conclusion, implications and future research directions
This study was carried out with the main objective of describing the path and dynamics of the transformation process that business organizations undertake with the aim of optimizing their profitability and competitive advantage following the profound environmental changes to which they are subject to, placing emphasis on an innovative methodology for conducting business process improvement projects, known as Lean Six Sigma, which constitutes its operating philosophy on the effective and efficient use of company resources and skills, to guarantee to the company the achievement of a lasting and defensible competitive advantage over time. Lean Six Sigma has been presented in this research as a methodology for improving business productivity, which operates through the reduction of the constraints and inefficiencies of each production and transactional process, aspiring to the maximum satisfaction of the internal and external customer and is configured as a real strategy, which offers to the human resources an innovative way of thinking and working based on training growth, data culture and the use of problem-solving methodologies that allow the improvement of quality, the reduction of costs and company complexities. In this detailed case study, the DMAIC technique was applied in a project to stabilize the procurement process of a pull-type production cell, which experienced some problems in terms of delays in supply lead times.
Thanks to the analyses carried out and the results obtained with the processing of the DMAIC phases, it was possible to highlight the potential causes of the problems that the business partner could have presented in their process of managing the supply of the production cell. Furthermore, some inefficiencies in the internal process of fulfillment of supply orders have been intercepted, the optimization of which has allowed the generation of an automatic system for sending supply orders, coming directly from the production line; a small tweak that will undoubtedly have a positive effect on the consolidation of the process under consideration, as the purchase department will be able to both keep order fulfillment under control and develop a more efficient measurement of business partner performance indicators.
With the development of the project, it was possible to structure the initial guidelines for the subsequent in-depth analysis of the critical issues identified. In particular, for the stabilization of the entire process, Schnell S.p.A. will have to develop an intense relationship of collaboration and mutual growth with his supplier to identify and implement the best solutions to the variability of the supply order fulfillment process.
The practical implementation of the Lean Six Sigma project confirmed the validity and power of the principles professed by this improvement methodology: the importance of customer orientation and the elimination of waste of resources; the value of a work team and the continuous search for qualitative and quantitative data that support and facilitate the decisions of each member of the group.
It was particularly fruitful to discover how collaboration and involvement within an LSS working group amplifies the skills and knowledge of each participant and generates a widespread climate of enthusiasm and strong determination for continuous improvement in every area, both at work and personal level.
Another practical implication that emerged from the study was the high importance to be attributed to the process of measuring company performance. From a consistent database and their level of reliability, it is possible to identify important opportunities for improvement and savings in terms of company resources; the data make it possible to highlight significant problems and inefficiencies, otherwise not recognizable, which are the result of high company costs that impact on company profitability.
The research shows how Lean Six Sigma can offer companies high advantages in achieving the highest quality in the value creation process, however, to ensure the successful success of projects, the desire for change must arise from the depths of top management; it will have to assume the role of promoter of the LSS culture and philosophy, so that the tools of the methodology are effective in managing and guiding the improvement and transformation actions, one step at a time, with rigor and discipline, but with the involvement of all own resources, with the greatest possible efficiency and effectiveness.
The main limitation of the study derives from the qualitative methodology adopted, that while it permits to analyze in depth and broadly all the phases of implementation of the LSS in the company, highlighting the difficulties encountered during the activities and the benefits obtained, these results should be integrated with an analysis on a large sample of companies that have developed similar projects to be more generalizable. Future research should be oriented on developing a quantitative analysis on LSS implementation. In any case, a qualitative study of this depth can give ideas for improvement and development for companies similar in structure and dimension to Schnell S.p.A.
Gantt Chart of the project
Project charter
SIPOC diagram – supplier, input, process, output, customer
Flow Chart: Diagram of the procurement process through the Kanban system
Value stream mapping of the procurement process of the In-Lining line with Kanban system
Population stratification
Graphical summary statistical analysis of Lead Times recorded in the period 01/01/2018–31/10/2019. Population with numbers N = 74
Graphical summary statistical analysis of Lead Times recorded in the period 01/01/2018–31/10/2019. Population with numbers N = 70
Frequency of deliveries with centered and delayed lead time (a) and boxplot lead time (b) for sub-category
Frequency of deliveries with centered and delayed lead time (a) and boxplot lead time (b) for sub-category type
Composition of the project team
Project risk analysis
Project risk and calculation of the Risk Priority Index
Process sigma calculation
Report of the performances analyzed in the period November 2018–October 2019
Five why matrix
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Acknowledgements
The authors acknowledge Schnell S.p.A. for supporting the research providing the data that allowed the realization of the case study.
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Case Study: Business Process Improvement
This Case Study illustrates how Gagnon Associates used its Business Process Improvement capability to optimize a client’s new-product development process:
The Company
A formerly high-flying, enviably profitable surgical products division of a major health care company. Makers of state-of-the-art, reusable and disposable devices for the rapidly-growing, least-invasive surgery market.
The Problem
Declining profits due to increased costs associated with a lack of discipline and lack of customer focus in screening new product ideas, initiating new-product development projects and managing the new-product life cycle in the post-introduction phase.
The Approach
Management enlists Gagnon Associates consulting support to lead the effort to: a) assess new-product screening, new-product development, and post-product introduction processes and related issues, and b) reengineer these interrelated processes for improved efficiency/effectiveness.
Four “boundaryless,” client teams are created, including representatives from finance, R&D, marketing, sales, purchasing and other functions. Three teams focus on one each of three previously mentioned processes. The fourth team analyzes a recent unsatisfactory surgical pump introduction for additional insights into deficiencies in the new-product introduction process.
Over three days of an intense, highly-interactive, four-day intervention, teams work both independently and in close coordination, as needed, to: a) define existing process deficiencies, b) reengineer processes, and c) address key process interrelationships. Throughout, Gagnon Associates catalyzes and facilitates the process by providing online, work-group leadership as well as “just-in-time” training and coaching on underlying process reengineering tools and techniques.
The Results
Teams completely reengineer new-product screening and new-product development processes and develop a more formal process for managing the post-introduction phases of the product life-cycle. On the fourth day of the engagement, the division’s management team reviews and approves the newly reengineered processes in an interactive forum, attended by all team members and moderated by Gagnon Associates consulting staff .
Management is so pleased with the newly redesigned processes that it commits to testing approximately 120 new product development projects currently in the pipeline against the new model and estimates that, as a result, some 40 to 50 resource-draining projects of questionable value to the customer will be eliminated.
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Pm solutions has a proven experience in providing solutions to a broad range of markets. our project management case studies cover a wide variety of needs across a number of industries., more process improvement case studies, ontario power generation achieves project excellence through the establishment of an enterprise project management office.
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PM Governance Combined with Agile Tools Improves Delivery and Quality of Financial Services Programs
Changing state and federal regulatory compliance challenges caused this company to reinvent its custom-built storefront and home office systems. The IT and PMO teams were geared more for operational maintenance rather than for the complexities of developing new systems. This resulted in an overwhelming workload and schedule overrun measured in years. A years-overdue project was brought to Operational Pilot, saving millions in development time. Read More »
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For this privately held financial services company, a compelling journey of business transformation started with a good read. Read More »
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Pharmaceutical Company’s Internal PM Certification Program Brings More Predictable Project Outcomes
An internal PM certification program was rapidly developed and implemented. During the first three years, over 400 participants attended more than 30 courses. Team members, project managers, and sponsors gained a good understanding of project management and the techniques needed to achieve more consistent project delivery. The program’s ability to remain intact after an acquisition validated the program’s value to the larger company globally. Read More »
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Accident Fund’s Award-Winning PMO Puts Processes Before Tools in Implementing Project Portfolio Management
PM Solutions used its PPM Maturity and Project Management Maturity Models to develop an improvement roadmap that included a number of specific recommendations from a project management governance perspective. Established PPM processes that helped eliminate approximately 100 non-value-adding projects, led to the successful implementation of a PPM tool, and won the company national acclaim – all in under three years. Read More »
Mentoring Brings an Enhanced Focus on Accountability to Merchants Insurance Group
PM Solutions led a targeted mentoring program for the client's project leads to provide one-on-one advice and coaching on how to apply consistent project management practices within the confines of their actual projects. Value Delivered: Improved on-time project delivery to 80% resulting in one program booking $100,000 of business in the first three days, and another program realizing 758% revenue growth in the first two months of introduction. Read More »
Wireless Warehouse Initiative Transforms Materials Management Operations and Improves Delivery Speed by 66%
For a world-wide provider of turbine-driven gas compression, oil pumping and power generation packages: PM Solutions provided a senior-level project manager to lead the implementation of a warehouse radio frequency (RF) solution, being responsible for overseeing requirements gathering, systems design, procurement and installation of the necessary hardware and software, and coordinating user acceptance testing. Value Delivered: Thanks to a retooling of the materials management system incorporating RF automation, the company’s warehouse accelerated delivery speed of parts by 66%, creating a significant reduction in overall time to market. This complex automation project came in on time and more than 18% under budget. Read More »
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Six Sigma Case Study: Everything You Need to Know
Explore the field of Six Sigma Case Studies in our comprehensive blog. From defining the methodology to real-world applications, our 'Six Sigma Case Study: Everything You Need to Know' blog sheds light on this powerful problem-solving tool. Uncover success stories and learn how Six Sigma can drive efficiency and quality improvements in various industries.
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By analysing such case studies, one can gain insights into the successful application of Six Sigma in various industries and understand its impact on process improvement. Read this blog on Six Sigma Case Study to learn how real-world businesses have achieved remarkable process improvement and cost savings.
Table of Contents
1) Understanding Six Sigma Methodology
2) Six Sigma Case Study
a) Improving customer service
b) Improving delivery efficiency
3) Conclusion
Understanding Six Sigma Methodology
![case study business process improvement Understanding Six Sigma Methodology](https://www.theknowledgeacademy.com/_files/images/Understanding_Six_Sigma_Methodology.png)
By applying statistical analysis and data-driven decision-making, Six Sigma helps organisations identify the root cause of problems and implement effective solutions. It emphasises the importance of process standardisation, continuous improvement, and customer satisfaction. With its focus on rigorous measurement and analysis, Six Sigma enables organisations to drive efficiency, reduce waste, and deliver exceptional products and services. The methodology follows a step-by-step process called Define, Measure, Analyse, Improve, and Control (DMAIC). These five phases are briefly explained below:
a) Define: The project goals and customer requirements are clearly defined in this phase.
b) Measure: In this phase, data is collected to understand the process's current state and identify improvement areas.
c) Analyse: This phase focuses on analysing data to determine the root cause of defects or variations.
d) Improve: This phase involves implementing solutions and making necessary changes to eliminate the identified issues.
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Six Sigma Case Study
In this section we discuss two Six Sigma Case Study that will help you understand and use it better.
Case Study 1: Improving customer service
This Six Sigma Case Study will focus on a telecommunications company facing significant customer service challenges. The issues included long wait times, frequent call transfers, unresolved issues, and many more. The company decided to apply Six Sigma methodologies to enhance customer satisfaction.
a) Define phase: Using the DMAIC approach, the team began by defining the problem: long wait times and inefficient call handling. They set a goal to reduce average wait time and increase first-call resolution rates.
b) Measure phase: In this phase, data was collected to analyse call volume, wait times, and reasons for call transfers. This helped identify bottlenecks and areas for improvement.
c) Analyse phase: During this phase, the team discovered that inadequate training and complex call routing were key contributors to the problems. They also found that certain product issues required better resolution protocols.
d) Improve phase: In this phase, targeted solutions were introduced and implemented to address these issues. The team revamped the training program, ensuring agents were well-trained and equipped to handle customer inquiries. They simplified call routing and introduced automated prompts for quicker issue resolution.
e) Control phase: Finally, monitoring systems were established in the control phase to track key metrics and ensure sustained improvements. Regular feedback loops were implemented to identify emerging challenges and make necessary adjustments.
The results were exceptional. Average wait times were reduced by 40%, and first-call resolution rates increased by 25%. Customer satisfaction scores improved significantly, leading to increased loyalty and positive word-of-mouth.
This Six Sigma Case Study highlights how Six Sigma methodologies can drive transformative improvements in customer service. By focusing on data analysis, process optimisation, and continuous monitoring, organisations can achieve outstanding outcomes and deliver exceptional customer experiences.
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Case Study 2: Improving delivery efficiency
![case study business process improvement characteristics of Six Sigma](https://www.theknowledgeacademy.com/_files/images/characteristics_of_Six_Sigma.png)
a) Define phase: The business used the Voice of the Customer (VoC) tool to understand customer needs and expectations. They identified prompt delivery, correct product selection, and a knowledgeable distribution team as crucial customer requirements.
b) Measure phase: The team collected data to evaluate the problem of slow delivery. They discovered that their Order Fulfillment Cycle Time (OFCT) was 46% longer than competitors, leading to customer dissatisfaction.
c) Analyse phase: The team brainstormed potential causes of slow delivery, including accuracy of sales plans, buffer stock issues, vendor delivery performance, and manufacturing schedule delays. They conducted a regression analysis, revealing that inadequate buffer stock for high-demand products was the main issue affecting delivery efficiency.
d) Improve phase: The distributor implemented a monthly demand review to ensure that in-demand products are readily available. They emphasised ordering and providing customers with the specific products they desired.
e) Control phase: The team developed plans to monitor sales of the top 20% of bestselling products, avoiding over or under-supply situations. They conducted annual reviews to identify any changes in demand and proactively adjust product offerings.
By applying Six Sigma Principles , the plumbing product distributor significantly improved its delivery efficiency, addressing the root cause of customer dissatisfaction. Prompt action, data-driven decision-making, and ongoing monitoring allowed them to meet customer expectations, enhance its reputation, and maintain a competitive edge in the industry. This case demonstrates the power of Lean Six Sigma in driving operational excellence and customer-centric improvements.
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Conclusion
We hope this blog gives you enough insights into the Six Sigma Case Study. This blog showcased the effectiveness of its methodology in driving transformative improvements. By applying DMAIC and using customer insights and data analysis, organisations have successfully resolved delivery inefficiencies, improving customer satisfaction and operational performance. The blog highlights how Six Sigma can be a powerful framework for organisations seeking excellence and exceptional value.
Learn the six-sigma methodology to achieve business objectives with our Six Sigma Certification Training today!
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7 types of process improvement methodologies you should know about
Business process improvements are methodologies in which a team evaluates their current processes and adapts them in order to increase profitability. This article highlights seven different process improvements your team can use to reduce inefficiencies and increase profit.
If businesses decided to consistently stay the same over time, many of them would collapse. Innovation requires change, and if businesses don’t change to meet customer demands, they won’t achieve much growth.
This is why many organizations use some form of process improvement methodology to adapt their processes to customer demands.
What is process improvement?
Business process improvements are methodologies in which a team evaluates their current processes and adapts them with the intent to increase productivity, streamline workflows, adapt to changing business needs, or increase profitability.
7 types of process improvement methodologies
There are seven different business process improvement methodologies your team can use to help reduce inefficiencies. In most cases, the methodology you choose depends on why you want to improve your processes and what you’re looking to improve.
1. Six Sigma methodology
Six Sigma is often used in manufacturing, mainly because it helps minimize defects and inconsistencies. The goal here is to optimize for consistency, which in the end leads to customer satisfaction.
There are two main processes used in Six Sigma: DMAIC for existing processes and DMADV for new processes. Since this article focuses specifically on improvements to existing processes, let’s dive into the DMAIC process.
What is the DMAIC process?
DMAIC is a Six Sigma process used to optimize existing processes. DMAIC stands for:
Define the opportunity for improvement.
Measure the performance of your existing processes.
Analyze the process to find defects and root causes.
Improve processes by addressing root causes.
Control any improved processes and assess future process performance to correct deviations.
The bulk of the DMAIC process improvement happens during the analysis stage. During the analysis stage of DMAIC, teams use a fishbone diagram, or an Ishikawa diagram , to visualize the possible causes of a product defect. The head of the fishbone diagram states the initial problem—then as you follow along the spine of the fish, each rib lists different categories of issues that can lead to the initial problem. This type of visual analysis is a good way to identify the different issues one root cause can create.
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2. Total Quality Management (TQM)
Total quality management (TQM) is a customer-focused method that involves continuous improvement over time. This technique is often used in supply chain management and customer satisfaction projects.
TQM relies heavily on data-driven decisions and performance metrics. During the problem solving process, you use success metrics to decide how you can improve a process.
Here some key features of TQM:
Customer-focus: The end goal of TQM is always to benefit the end customer. If your team is focused on improving quality, ask yourself how that process change may affect how end consumers experience your product.
Full-team involvement: Unlike other process improvement methodologies TQM involves the entire team—not just production. As a result, you may end up looking for ways to optimize more business-centric processes, such as sales and marketing, to benefit the end consumer.
Continuous improvement: Continuous improvement in business is the idea of making small changes with the goal of continually optimizing processes. There's a lot of variability when it comes to business, and continuous improvement helps your team adapt when outside circumstances change.
Data-driven decision making : In order to apply continuous process improvement, you must continually collect data to analyze how processes are performing. This data can help identify where there may be inefficiencies and where to focus improvement initiatives.
Process-focused: The main goal of implementing TQM is to improve processes. Other process improvement methods like Six Sigma work to minimize the amount of defects, while TQM works to decrease inefficiencies.
3. Lean manufacturing
This form of process improvement goes by many names, with lean manufacturing being the most common. It may also be referred to as Lean production or just-in-time production. Defined by James P. Womack, Daniel Jones, and Daniel Roos in the book "The Machine That Changed the World," Lean highlights five main principles based off of the authors' experiences at Toyota manufacturing.
The 5 principles of lean
Identify value
Value stream mapping
Create flow
Establish pull
Continuous improvement
4. Continuous improvement (kaizen)
The Japanese philosophy of kaizen guides the continuous improvement model . Kaizen was born from the idea that life should be continuously improved so we can lead more satisfying and fulfilling lives.
This same concept can be applied to business—because as long as you are continuously improving, your business can become more successful. The goal of continuous improvement is to optimize for activities that generate value and to get rid of any waste.
There are three types of waste that kaizen aims to remove:
Muda (wastefulness) : Practices that consume resources but don’t add value.
Mura (unevenness): Overproduction that leaves behind waste, like excess product.
Muri (overburden): Too much strain on resources, such as worn out machinery or overworked employees.
5. Plan Do Check Act (PDCA)
The PDCA cycle is an interactive form of problem solving. It's used to improve processes and implement change. PDCA was created by Walter Shewhart when he applied the scientific method to economic quality control. Later, the idea was developed even further by W. Edwards Deming, who expanded on Shewhart's idea and used the scientific method for process improvement in addition to quality control.
There are four main steps to the PDCA cycle:
Plan : Decide on the problem you would like to solve, and create a plan to solve it.
Do: Test and implement the plan at a small scale.
Check: Review how the actions in the Do stage performed.
Act: After reviewing the results of the test, decide whether or not you want to implement the change at a larger scale.
PDCA is an improvement cycle. This means that these steps can be repeated until your team reaches the desired result.
6. 5 Whys analysis
The 5 Whys analysis is a process improvement technique used to identify the root cause of a problem. It's a really simple process in theory: you gather a group of stakeholders who were involved in a failure, and one person asks: "Why did this go wrong?" Repeat this question approximately five times, until you get to the root cause of an issue. The 5 Whys analysis aims to identify the issues within a process, but not human error.
Here's an example:
Problem: There was an increase in customer complaints regarding damaged products.
"Why did this happen?" Because packaging was not sufficient enough to protect the products.
"Why was the packaging not sufficient enough to protect the products?" Because the team testing packaging did not test past a certain level of stress.
"Why did the team not test the packaging further?" Because current standard processes indicated that the testing indicated was sufficient.
"Why did the current standard process indicate that this testing was sufficient?" Because this process was created for a previous product, and not this current product that is coming back damaged.
"Why wasn’t there a new process for the new product?" Because the project template for launching new products doesn’t include stress testing the new packaging.
You can see from this example that the team asked “Why” until they identified the process error that needs to be fixed—in this case, adding a “stress test new packaging” step into their product launch template . When working with stakeholders in processes like this, it's important to identify the issues, and co-create next steps together so that your production can improve.
7. Business process management (BPM)
Business process management, or BPM , is the act of analyzing and improving business processes. Much like any organic being, businesses grow and shift over time. Your team may have implemented processes that worked when your team was small, but as you grow those processes may not scale in a way that allows your team to be as efficient as possible.
Most of the time, BPM helps teams identify bottlenecks, ways to automate manual work, and strategies to improve inefficiencies. There are five main steps to business process management.
Analyze: Look at your current processes and map them from beginning to end. This is commonly known as process mapping.
Model: Draft out what you want the process to look like. Ideally, you'll have found any inefficiencies in the first step, and you can draft how you would like to solve them in this stage.
Implement : Put your model to action. During this stage, it's important to establish key success metrics so you can gauge whether or not the changes made were successful.
Monitor: Decide whether or not your project is successful. Are the success metrics you identified in step three improving?
Optimize: As the process evolves, continue looking for inefficiencies in your process and continuously optimize as you go.
Manage process improvements to increase productivity
As a team lead, one of the most valuable things you can bring to your team are clearer processes and better workflows . When used effectively, process improvement increases your team's productivity and decreases inefficiencies.
To increase clarity and improve processes, try work management. Work management tools like Asana can help you take your team’s productivity to the next level by standardizing processes, streamlining workflows, and keeping your team in sync.
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A case study about the improvement of business process models driven by indicators
- Regular Paper
- Published: 23 July 2015
- Volume 16 , pages 759–788, ( 2017 )
Cite this article
- Laura Sánchez-González 1 ,
- Félix García 2 ,
- Francisco Ruiz 2 &
- Mario Piattini 2
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16 Citations
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Organizations are increasingly concerned about business process model improvement in their efforts to guarantee improved operational efficiency. Quality assurance of business process models should be addressed in the most objective manner, e.g., through the application of measures, but the assessment of measurement results is not a straightforward task and it requires the identification of relevant indicators and threshold values, which are able to distinguish different levels of process model quality. Furthermore, indicators must support the improvements of the models by using suitable guidelines. In this paper, we present a case study to evaluate the BPMIMA framework for BP model improvement. This framework is composed of empirically validated measures related to quality characteristics of the models, a set of indicators with validated thresholds associated with modeling guidelines and a prototype supporting tool. The obtained data suggest that the redesign by applying guidelines driven by the indicator results was successful, as the understandability and modifiability of the models were improved. In addition, the changes in the models according to guidelines were perceived as acceptable by the practitioners who participated in the case study.
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Acknowledgments
The authors would like to thank Jan Mendling for his support in research related to this study. This work has been developed under the projects: GEODAS-BC (Min. de Economía y Competitividad and Fondo Europeo de Desarrollo Regional FEDER, TIN2012-37493-C03-01) and INGENIOSO (PEII-2014-050-P), Junta de Comunidades de Castilla-La Mancha and FEDER.
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Laura Sánchez-González
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Félix García, Francisco Ruiz & Mario Piattini
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Appendix 1: Questionnaires of the case study
Questionnaire 1: Busines Process model “Incorporation of a new employee”
Let us imagine we want to analyze a BP model to understand and modify it. Indicate what proposed changes most affect the understandability and modifiability of the models. For example, if you think that the subprocess IT management, which is carried out by the immediate superior, has led the model to be more understandable/modifiable, choose this option.
Using subprocesses such as “IT management” \({}^{1}\) which is composed of a group of related activities, instead of displaying all the activities \({}^{2}\) ...makes the model
\(\square \) Easier to understand or modify
\(\square \) Less easy to understand or modify
\(\square \) Neither of these
Using an activity called “Manage revision in POH” \({}^{1}\) which is composed of the activities “Effectuate revision in POH” and “Receive results of POH” \({}^{2}\) ... makes the model
Using decision nodes with the highest number of output possibilities, for example, the gateway “type of contract?” in the participant “correspondent direction” has 5 possibilities \({}^{1}\) instead of 4 \({}^{2}\) (in the original model)... this makes the model
Using “join” gateways accompanying “split” ones, for example, the join gateway which accompanied the split “type of contract?” in “new employee” participant... makes the model
Using gateways which include two questions at the same \(\hbox {time}^{1}\) (fusion of gateways). For example, the gateway “type of contract?” \({}^{2}\) implies taking a decision between owner or summer substitution, etc... this makes the model
Joining two activities \({}^{1}\) in only one \({}^{2}\) . That is the case of two activities called “Inform place of the work unit” and “Report standards and specific service agreement”, to make only one which is called “Inform of a) place of the work unit and b) standards and specific service agreement”... this makes the model
Using as many events as necessary, although there are more than the number of participants... makes the model
Eliminating participants of “IT team”, “pharmacy service” and “Service of prevention of occupational hazards”...makes the model
Questionnaire 2: Business Process models of “First consultation appointment” and “Appointment for examination with tests”
Let us imagine we want to analyze a BP model to understand and modify it. Indicate what proposed changes most affect the understandability or modifiability of models. For example, if you think that eliminating the participants “SAU” and “OGLE” makes the model easier to understand and modify, choose this option.
Selecting the common part of subprocess “Appointment for examination with tests” and “First consultation appointment”, for example the activities “Go to SAU” or “Receive correspondent centre” in the participant “new employee” and moving them to the parent model “Appointments”, in order to indicate the particular activities of each subprocess in each subprocess ... makes the model
Unifying the activity “Send document of first consultation” \({}^{1}\) in the subprocess “First consultation appointment” and the activity “Send referral note” \({}^{2}\) in the subprocess “Appointment for examination with tests” in only one (in common for both) called “send referral note”, indicating it in the parent process “Appointments”... makes the model
Unifying activities of “check patient address” in the participant “administrative assistant for appointments” in the subprocess “Appointment for examination with tests” and the activity “check administrative data” and “complete administrative data of patient” \({}^{1}\) in the process “First consultation appointment” as only one for both subprocesses, and moving it to the parent process “Appointments” ... makes the model
Using basic activities such as “print appointment note” \({}^{1}\) in the subprocess “First consultation appointment” in the participant “administrative assistant for appointments” instead of not including them...makes the model
Using repeated activities after the satisfaction of two different conditions \({}^{1}\) instead of indicating it only once \({}^{2}\) , for example in the subprocess “First consultation appointment”... makes the model
Merging questions from two gateways into only one. The Gateway “Influence zone” and “Reason to go to medical centre” in the participant “Administrative assistant for appointments” in both subprocesses into only one gateway which includes both questions... makes the model
Eliminating the participants “SAU” and “OGLE” in both subprocesses...makes the model
Using “join” gateways accompanying “Split” gateways, for example in “another date?” \({}^{1}\) in the subprocess “First consultation appointment...makes the model
Using a start event in all the process and subprocesses in each participant ...makes the model
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Sánchez-González, L., García, F., Ruiz, F. et al. A case study about the improvement of business process models driven by indicators. Softw Syst Model 16 , 759–788 (2017). https://doi.org/10.1007/s10270-015-0482-0
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Received : 05 February 2015
Revised : 20 April 2015
Accepted : 17 June 2015
Published : 23 July 2015
Issue Date : July 2017
DOI : https://doi.org/10.1007/s10270-015-0482-0
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Process Improvement Case Study
In April 2020, Ventura County Community College District(VCCCD) entered into contract with CPS HR Consulting to begin a project to improve the three distinct recruitment processes – the Classified, Faculty and Part-Time Faculty recruitment processes.
The project executive sponsors sought to streamline and decrease the amount of time the each process takes, make the processes more user friendly, and increase the clarity and communication of process steps to key stakeholders.
As part of a process improvement project , CPS HR held stakeholder focus groups to discover what was and wasn’t working well with each process. CPS HR then created business process diagrams for each process and gathered and analyzed processing time data. Based on these inputs, a list of strengths and 61 issues was developed. In working with VCCCD leadership, CPS prioritized the 61 issues to 13 of the most important issues to develop recommendations for.
CPS HR developed 40 recommendations in three main areas: 1)improving applicant communication, 2) use of a centralized portal to manage the recruitment process information flow, and 3) conducting independent projects to resolve specific issues. CPS HR also recommended a four phased implementation plan.
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What is a business case, how to write a business case, business case template, watch our business case training video, key elements of a business case, how projectmanager helps with your business case.
A business case is a project management document that explains how the benefits of a project overweigh its costs and why it should be executed. Business cases are prepared during the project initiation phase and their purpose is to include all the project’s objectives, costs and benefits to convince stakeholders of its value.
A business case is an important project document to prove to your client, customer or stakeholder that the project proposal you’re pitching is a sound investment. Below, we illustrate the steps to writing one that will sway them.
The need for a business case is that it collects the financial appraisal, proposal, strategy and marketing plan in one document and offers a full look at how the project will benefit the organization. Once your business case is approved by the project stakeholders, you can begin the project planning phase.
Projects fail without having a solid business case to rest on, as this project document is the base for the project charter and project plan. But if a project business case is not anchored to reality, and doesn’t address a need that aligns with the larger business objectives of the organization, then it is irrelevant.
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Use this free Business Case Template for Word to manage your projects better.
The research you’ll need to create a strong business case is the why, what, how and who of your project. This must be clearly communicated. The elements of your business case will address the why but in greater detail. Think of the business case as a document that is created during the project initiation phase but will be used as a reference throughout the project life cycle.
Whether you’re starting a new project or mid-way through one, take time to write up a business case to justify the project expenditure by identifying the business benefits your project will deliver and that your stakeholders are most interested in reaping from the work. The following four steps will show you how to write a business case.
Step 1: Identify the Business Problem
Projects aren’t created for projects’ sake. They should always be aligned with business goals . Usually, they’re initiated to solve a specific business problem or create a business opportunity.
You should “Lead with the need.” Your first job is to figure out what that problem or opportunity is, describe it, find out where it comes from and then address the time frame needed to deal with it.
This can be a simple statement but is best articulated with some research into the economic climate and the competitive landscape to justify the timing of the project.
Step 2: Identify the Alternative Solutions
How do you know whether the project you’re undertaking is the best possible solution to the problem defined above? Naturally, prioritizing projects is hard, and the path to success is not paved with unfounded assumptions.
One way to narrow down the focus to make the right solution clear is to follow these six steps (after the relevant research, of course):
- Note the alternative solutions.
- For each solution, quantify its benefits.
- Also, forecast the costs involved in each solution.
- Then figure out its feasibility .
- Discern the risks and issues associated with each solution.
- Finally, document all this in your business case.
Step 3: Recommend a Preferred Solution
You’ll next need to rank the solutions, but before doing that it’s best to set up criteria, maybe have a scoring mechanism such as a decision matrix to help you prioritize the solutions to best choose the right one.
Some methodologies you can apply include:
- Depending on the solution’s cost and benefit , give it a score of 1-10.
- Base your score on what’s important to you.
- Add more complexity to your ranking to cover all bases.
Regardless of your approach, once you’ve added up your numbers, the best solution to your problem will become evident. Again, you’ll want to have this process also documented in your business case.
Step 4: Describe the Implementation Approach
So, you’ve identified your business problem or opportunity and how to reach it, now you have to convince your stakeholders that you’re right and have the best way to implement a process to achieve your goals. That’s why documentation is so important; it offers a practical path to solve the core problem you identified.
Now, it’s not just an exercise to appease senior leadership. Who knows what you might uncover in the research you put into exploring the underlying problem and determining alternative solutions? You might save the organization millions with an alternate solution than the one initially proposed. When you put in the work on a strong business case, you’re able to get your sponsors or organizational leadership on board with you and have a clear vision as to how to ensure the delivery of the business benefits they expect.
Our business case template for Word is the perfect tool to start writing a business case. It has 9 key business case areas you can customize as needed. Download the template for free and follow the steps below to create a great business case for all your projects.
![case study business process improvement Free Business Case Template for Word](https://www.projectmanager.com/wp-content/uploads/2022/07/Business-case-template-word-projectmanager-600x631.jpg)
One of the key steps to starting a business case is to have a business case checklist. The following is a detailed outline to follow when developing your business case. You can choose which of these elements are the most relevant to your project stakeholders and add them to our business case template. Then once your business case is approved, start managing your projects with a robust project management software such as ProjectManager.
1. Executive Summary
The executive summary is a short version of each section of your business case. It’s used to give stakeholders a quick overview of your project.
2. Project Definition
This section is meant to provide general information about your projects, such as the business objectives that will be achieved and the project plan outline.
3. Vision, Goals and Objectives
First, you have to figure out what you’re trying to do and what is the problem you want to solve. You’ll need to define your project vision, goals and objectives. This will help you shape your project scope and identify project deliverables.
4. Project Scope
The project scope determines all the tasks and deliverables that will be executed in your project to reach your business objectives.
5. Background Information
Here you can provide a context for your project, explaining the problem that it’s meant to solve, and how it aligns with your organization’s vision and strategic plan.
6. Success Criteria and Stakeholder Requirements
Depending on what kind of project you’re working on, the quality requirements will differ, but they are critical to the project’s success. Collect all of them, figure out what determines if you’ve successfully met them and report on the results .
7. Project Plan
It’s time to create the project plan. Figure out the tasks you’ll have to take to get the project done. You can use a work breakdown structure template to make sure you are through. Once you have all the tasks collected, estimate how long it will take to complete each one.
Project management software makes creating a project plan significantly easier. ProjectManager can upload your work breakdown structure template and all your tasks are populated in our tool. You can organize them according to your production cycle with our kanban board view, or use our Gantt chart view to create a project schedule.
![case study business process improvement kanban card moving into next column on the board](https://www.projectmanager.com/wp-content/uploads/2022/03/Kanban_Marketing_Wide_Zoom-175_Moving-task-to-different-status-CTA.jpg)
8. Project Budget
Your budget is an estimate of everything in your project plan and what it will cost to complete the project over the scheduled time allotted.
9. Project Schedule
Make a timeline for the project by estimating how long it will take to get each task completed. For a more impactful project schedule , use a tool to make a Gantt chart, and print it out. This will provide that extra flourish of data visualization and skill that Excel sheets lack.
10. Project Governance
Project governance refers to all the project management rules and procedures that apply to your project. For example, it defines the roles and responsibilities of the project team members and the framework for decision-making.
11. Communication Plan
Have milestones for check-ins and status updates, as well as determine how stakeholders will stay aware of the progress over the project life cycle.
12. Progress Reports
Have a plan in place to monitor and track your progress during the project to compare planned to actual progress. There are project tracking tools that can help you monitor progress and performance.
Again, using a project management tool improves your ability to see what’s happening in your project. ProjectManager has tracking tools like dashboards and status reports that give you a high-level view and more detail, respectively. Unlike light-weight apps that make you set up a dashboard, ours is embedded in the tool. Better still, our cloud-based software gives you real-time data for more insightful decision-making. Also, get reports on more than just status updates, but timesheets, workload, portfolio status and much more, all with just one click. Then filter the reports and share them with stakeholders to keep them updated.
![case study business process improvement ProjectManager’s dashboard view, which shows six key metrics on a project](https://www.projectmanager.com/wp-content/uploads/2022/03/Dashboard_Construction_Wide_Zoom-150.jpg)
13. Financial Appraisal
This is a very important section of your business case because this is where you explain how the financial benefits outweigh the project costs . Compare the financial costs and benefits of your project. You can do this by doing a sensitivity analysis and a cost-benefit analysis.
14. Market Assessment
Research your market, competitors and industry, to find opportunities and threats
15. Competitor Analysis
Identify direct and indirect competitors and do an assessment of their products, strengths, competitive advantages and their business strategy.
16. SWOT Analysis
A SWOT analysis helps you identify your organization’s strengths, weaknesses, opportunities and threats. The strengths and weaknesses are internal, while the opportunities and threats are external.
17. Marketing Strategy
Describe your product, distribution channels, pricing, target customers among other aspects of your marketing plan or strategy.
18. Risk Assessment
There are many risk categories that can impact your project. The first step to mitigating them is to identify and analyze the risks associated with your project activities.
ProjectManager , an award-winning project management software, can collect and assemble all the various data you’ll be collecting, and then easily share it both with your team and project sponsors.
Once you have a spreadsheet with all your tasks listed, you can import it into our software. Then it’s instantly populated into a Gantt chart . Simply set the duration for each of the tasks, add any dependencies, and your project is now spread across a timeline. You can set milestones, but there is so much more you can do.
![case study business process improvement Gantt chart from ProjectManager](https://www.projectmanager.com/wp-content/uploads/2022/03/Gantt_Manufacturing_Wide_Zoom-150_Focus-on-Tasklist_Spreadsheet-CTA.jpg)
You have a project plan now, and from the online Gantt chart, you can assign team members to tasks. Then they can comment directly on the tasks they’re working on, adding as many documents and images as needed, fostering a collaborative environment. You can track their progress and change task durations as needed by dragging and dropping the start and end dates.
But that’s only a taste of what ProjectManager offers. We have kanban boards that visualize your workflow and a real-time dashboard that tracks six project metrics for the most accurate view of your project possible.
Try ProjectManager and see for yourself with this 30-day free trial .
If you want more business case advice, take a moment to watch Jennifer Bridges, PMP, in this short training video. She explains the steps you have to take in order to write a good business case.
Here’s a screenshot for your reference.
![case study business process improvement how writing a business case for your project is good business strategy](https://projectmanager.com/wp-content/uploads/2016/09/How-to-Write-a-Business-Case-Board-600x338.jpg)
Transcription:
Today we’re talking about how to write a business case. Well, over the past few years, we’ve seen the market, or maybe organizations, companies or even projects, move away from doing business cases. But, these days, companies, organizations, and those same projects are scrutinizing the investments and they’re really seeking a rate of return.
So now, think of the business case as your opportunity to package your project, your idea, your opportunity, and show what it means and what the benefits are and how other people can benefit.
We want to take a look today to see what’s in the business case and how to write one. I want to be clear that when you look for information on a business case, it’s not a briefcase.
Someone called the other day and they were confused because they were looking for something, and they kept pulling up briefcases. That’s not what we’re talking about today. What we’re talking about are business cases, and they include information about your strategies, about your goals. It is your business proposal. It has your business outline, your business strategy, and even your marketing plan.
Why Do You Need a Business Case?
And so, why is that so important today? Again, companies are seeking not only their project managers but their team members to have a better understanding of business and more of an idea business acumen. So this business case provides the justification for the proposed business change or plan. It outlines the allocation of capital that you may be seeking and the resources required to implement it. Then, it can be an action plan . It may just serve as a unified vision. And then it also provides the decision-makers with different options.
So let’s look more at the steps required to put these business cases together. There are four main steps. One, you want to research your market. Really look at what’s out there, where are the needs, where are the gaps that you can serve? Look at your competition. How are they approaching this, and how can you maybe provide some other alternatives?
You want to compare and finalize different approaches that you can use to go to market. Then you compile that data and you present strategies, your goals and other options to be considered.
And then you literally document it.
So what does the document look like? Well, there are templates out there today. The components vary, but these are the common ones. And then these are what I consider essential. So there’s the executive summary. This is just a summary of your company, what your management team may look like, a summary of your product and service and your market.
The business description gives a little bit more history about your company and the mission statement and really what your company is about and how this product or service fits in.
Then, you outline the details of the product or service that you’re looking to either expand or roll out or implement. You may even include in their patents may be that you have pending or other trademarks.
Then, you want to identify and lay out your marketing strategy. Like, how are you gonna take this to your customers? Are you going to have a brick-and-mortar store? Are you gonna do this online? And, what are your plans to take it to market?
You also want to include detailed information about your competitor analysis. How are they doing things? And, how are you planning on, I guess, beating your competition?
You also want to look at and identify your SWOT. And the SWOT is your strength. What are the strengths that you have in going to market? And where are the weaknesses? Maybe some of your gaps. And further, where are your opportunities and maybe threats that you need to plan for? Then the overview of the operation includes operational information like your production, even human resources, information about the day-to-day operations of your company.
And then, your financial plan includes your profit statement, your profit and loss, any of your financials, any collateral that you may have, and any kind of investments that you may be seeking.
So these are the components of your business case. This is why it’s so important. And if you need a tool that can help you manage and track this process, then sign up for our software now at ProjectManager .
![case study business process improvement Click here to browse ProjectManager's free templates](https://pmargo.wpengine.com/wp-content/uploads/2021/10/210924_Side_Bar_Free_Templates.jpg)
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55 Process Improvement Case Studies & Project Results [2024] Business leaders know that process improvement reduces costs and increases customer satisfaction. Therefore, businesses follow process improvement methodologies or deploy tools such as process modeling, process mining and RPA to discover, modify and automate their processes.
As a data analyst and AI professional, I wanted to share a comprehensive look at 55 process improvement case studies and their results. Optimizing business processes is essential for reducing costs, boosting quality, and improving customer satisfaction. In this guide, we'll explore real-world examples of process improvement across industries.
The global business process management market size was valued at USD 14.9 billion in 2021, and is projected to grow at a CAGR of 14% from 2022 to 2030, per Grand View Research. This underscores why over 80% of organizations are looking to optimize, automate, and transform their processes. The results make the investment highly worthwhile.
Five Case Studies of Transformation Excellence. November 03, 2014 By Lars Fæste , Jim Hemerling , Perry Keenan, and Martin Reeves. In a business environment characterized by greater volatility and more frequent disruptions, companies face a clear imperative: they must transform or fall behind. Yet most transformation efforts are highly complex ...
PROCESS IMPROVEMENT: A CASE STUDY. This case study evaluates the process and methodologies used in certifying the win/loss review process as a Six Sigma Black Belt project at Microsoft Corporation. It shares the insights gained from a process improvement perspective but does not cover broader benefits and results, such as improvements in win ...
This thesis is a case study for a Roofing company based in Phoenix Arizona. The topic of the thesis is Business Process Improvement and overviews the popular methods such as Six Sigma, Lean, and ...
Originality/value. This study described the path and dynamics of the transformation process that business organizations undertake for optimizing their profitability and competitive advantage, placing emphasis on an innovative methodology for conducting business process improvement projects, which constitutes its operating philosophy on the effective and efficient use of company resources and ...
case study: Performance anagement and Lean Process Improvement Results Washington 4 public dashboard (www .resultswa . .gov), and the underlying data is publicly available too . Success to date includes: • 50 percent of the nearly 200 Results Washington goals are on track to meet or beat targets
Case Study: Business Process Improvement. This Case Study illustrates how Gagnon Associates used its Business Process Improvement capability to optimize a client's new-product development process: The Company. A formerly high-flying, enviably profitable surgical products division of a major health care company.
PM Solutions led a targeted mentoring program for the client's project leads to provide one-on-one advice and coaching on how to apply consistent project management practices within the confines of their actual projects. Value Delivered: Improved on-time project delivery to 80% resulting in one program booking $100,000 of business in the first ...
For more information on Business Process Improvement Case Study and other Fiserv solutions, call us at 800-872-7882 or contact us. Howard Bank was able to update and automate account opening processes, resulting in more time to interact with customers and learn more about their financial needs.
Six Sigma Case Study is a data-driven methodology widely used in organisations to improve process efficiency and quality. It helps reduce process defects and variations, enhancing customer satisfaction and increasing profitability. It provides a real-world example of how its methodology was applied to identify and solve a problem, showcasing ...
Using DMAIC to Improve Nursing Shift-Change Assignments. In this case study involving an anonymous hospital, nursing department leaders sought to improve efficiency of their staff's shift change assignments. Upon value stream mapping the process, team members identified the shift nursing report took 43 minutes on average to complete.
7 types of process improvement methodologies. There are seven different business process improvement methodologies your team can use to help reduce inefficiencies. In most cases, the methodology you choose depends on why you want to improve your processes and what you're looking to improve. 1. Six Sigma methodology.
Starting with Frederick Taylor and W. Edwards Deming, managers have long been obsessed with ways to improve business processes. And in the past 20 years a host of improvement initiatives ...
Organizations are increasingly concerned about business process model improvement in their efforts to guarantee improved operational efficiency. Quality assurance of business process models should be addressed in the most objective manner, e.g., through the application of measures, but the assessment of measurement results is not a straightforward task and it requires the identification of ...
Productivity & Efficiency Review Success Story. A regional food retailer - with a reputation for adopting retail technology - implemented numerous innovative changes across a number of their stores. Such a large investment meant it was crucial this new technology helped their business to reach its full potential. Read more.
This case study is based on the corporate implementation of a maintenance management system, which in the near future will allow a cross-sectional analysis integrated with the core business processes of maintenance. The Maintenance Management Procedure is an important tool for the whole maintenance process, because it assists coordinators and ...
Cody Evans. Chris Mahowald. In this fictional case, Alex, a real estate developer, is at a crossroads in the midst of the coronavirus pandemic. His company is a year away from completing ...
The first process improvement undertaken was called the "Cash Process," which involved receipt of the customer's payment, crediting the customer's account, and depositing the amount in the company's account. Specific tasks included such activities as correcting errors, tracking cash flow, investigating claims, and issuing refunds.
As part of a process improvement project, CPS HR held stakeholder focus groups to discover what was and wasn't working well with each process. CPS HR then created business process diagrams for each process and gathered and analyzed processing time data. Based on these inputs, a list of strengths and 61 issues was developed.
Mulcahy and Co. turned the tide. Here's how they overcame administrative hurdles and achieved growth.⚙️ Subscribe for more systemization tips: https://www.yo...
Our business case template for Word is the perfect tool to start writing a business case. It has 9 key business case areas you can customize as needed. Download the template for free and follow the steps below to create a great business case for all your projects. ProjectManager's free business case template.