Lean Six Sigma Demystified, Second Edition by Jay Arthur

Author:Jay Arthur
Language: eng
Format: epub
Published: 2018-08-12T16:00:00+00:00

Your Product or Service May Be Different, But ...

Whenever I talk to business people, they all tell me how their business is different from every other kind of business. Your product or service may be different or the way you deliver it may be different, but you still have to take orders, purchase supplies, issue invoices or bills, write checks, apply payments, and handle the same financial transactions as any other business. The core of your business may be a product or service, but the key to whether you make a profit lies in how good you are at transaction processing.

With financial transactions, your cash flow depends on

• Accuracy. Right quantities, pricing, taxing, and so on. It doesn’t matter if you build the perfect product, if the customer asked for something else.

• Speed. How fast the transaction is created and processed (and how fast you can fix an incorrect one). It doesn’t matter if you make the best product, if it takes too long to get it ordered, delivered, installed, or paid for.

• Cost. What does it cost to create and process the transaction (and what are the scrap and rework costs when you have an incorrect transaction)?

The basic tools of Six Sigma such as Control charts, Pareto charts, and fishbone diagrams can be used to find and fix errors in orders, bills, and so on. A p chart and XmR chart can be used to monitor transaction errors and cash flow.

The basic tools of Lean can be used to find and eliminate the delays in transaction processing in ways that will accelerate your cash flow. If you’re only using Lean Six Sigma on your product or service, you’re missing a golden opportunity to plug the leaks in your cash flow.

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