How to improve business processes

Management systems, like fashion, have gone through periods of trendy approaches through eras, with businesses dynamically abandoning some in favour of newer ones in the course of time.

Today, there is a wide range of management trends/philosophies, including: Theory of Constraints, Just in Time, Six Sigma, Lean Thinking and Total Quality Management (TQM), among others.

Most of these methods tend to focus on quality and efficiency as well as cost reduction as their primary method of improving productivity.
Let’s delve into some of these a bit deeper.

TQM began in the 1920s with some of the first seeds of quality management being the principles of scientific management that swept through the US industry.

During this time, businesses clearly separated the processes of planning and carrying out the plan, and union opposition arose as workers were deprived of a voice in the conditions and functions of their work.

Subsequently, the Hawthorne experiments in the late 1920s showed how worker productivity could be impacted by participation.

During the 1940s, TQM gurus made major contributions to the subject. First, W. Edwards Deming who is easily considered the father of TQM, taught methods for statistical analysis and control of quality to Japanese engineers and executives.

This can be considered the origin of TQM. Secondly, Joseph M. Juran taught the concepts of controlling quality and managerial breakthrough. In 1968, the Japanese named their approach to total quality companywide quality control. 

It is around this time that the term quality management systems arose. TQM led to the introduction of quality standards such as the ISO 9000 series and quality award programmes.

The late 1980s and early 1990s saw a global realisation of the strategic importance of TQM and many countries established programmes to recognise quality and excellence. Despite all these positive initiatives, the uptake of the quality management tools lags.

McKinsey & Co did a study in 2007 of 30 quality programmes and found that two-thirds of them had stalled or fallen short of yielding improvements. Interest in TQM as a tool to improve practice has all but disappeared.

On the other hand, the “Six Sigma,” which is one of the still new quality management innovations in the Kenyan market that several companies have implemented, with the aim of enhancing business performance and customer service, was first introduced in 1987 by Motorola in USA.

The “Six Sigma,” is a methodical and data-driven approach to implementing process improvement in an organisation and serves the purpose to improve organisational performance by reducing process output variation. It was registered in June 11, 1991 as a US Service Mark.

From literature, numerous companies have gained substantial benefits from the Six Sigma programme, though not all are successful. By the late 1990s, about two-thirds of the Fortune 500 organisations had begun Six Sigma initiatives with the aim of reducing costs and improving quality.

The Kenya Institute of Management (KIM) was the pioneer trainer and champions of Lean Six Sigma (a combination of Lean and Six Sigma methodologies) in Kenya and has so far facilitated over 20 organisations to introduce it into their systems.

Among other things, TQM has been labelled as the biggest fad in corporate management that is now floundering or simply as a fad of the month whose time has come and gone.

Consequently, in recent years, some practitioners have combined Six Sigma ideas with lean manufacturing to create a methodology named Lean Six Sigma.

This methodology views lean manufacturing, which addresses process flow and waste issues, and Six Sigma, with its focus on variation and design, as complementary disciplines aimed at promoting business and operational excellence.

Companies in USA, such as GE, Verizon and IBM, among others use Lean Six Sigma to focus transformation efforts not just on efficiency but also on growth.

It serves as a foundation for innovation throughout the organisation, from manufacturing and software development to sales and service delivery functions.

The International Organisation for Standardization (ISO) published in 2011 the first standard “ISO 13053: 2011” definition of Six Sigma, as collection of process improvement techniques and tools which can be used to improve the processes, and can be applied to processes within the quality management system.

In Kenya, KIM is the sole licensed agent of the Institute of Six Sigma, UK, to deliver Lean Six Sigma training. A number of companies some of whom have reported good results, have embarked on this process such as KenGen #ticker:KEGN, KCB #ticker:KCB, National Bank #ticker:NBK and Kebs, among others.