Analysis of Six sigma and Business Process Reengineering

胡曼妮　余雪

Abstract：Business Process Improvement has different approaches or techniques，each having its advantages and disadvantages.No single technique is suitable for all business situations;it depends on the context.There is no best practice due to constant change.Though there are many BPI techniques to choose from，this paper analyzed Six Sigma and BPR.These have a long track record of success in many industries，from manufacturing to financial services，and have been utilized for well over 20 years.

Keywords：Business Process Improvement;Six sigma;Process Reengineering

Six sigma Overview

Six Sigma is a technique originating from manufacturing in the 1980s.For over 25 years，it has been significant for thousands of companies.In simple terms， Six Sigma is defined as a management method that provides customers with some product or service using the minimum amount of resources in the shortest time，all with the goal of creating and delivering more value to the customer.The primary focus of Six Sigma is to raise efficiency and reduce waste，and thus meet customer needs.

There are three main reasons Six Sigma is useful in industries like insurance.Firstly，Six Sigma can help improve customer satisfaction.The homogeneity of the insurance products calls for new product development methods such as Design For Six Sigma.Secondly，it aims to reduce operation costs caused by HR，complexity of processes，and barriers between departments.Lastly，because risk management and control is key in insurance，the reduction of process variability is critical.

Business Process Reengineering overview

BPR，refers to creating radically new structures and processes of working in order to reduce costs and achieve strategic goals.Reengineering is based on the concept of discontinuous thinking.It refers to recognizing and parting from archaic rules and assumptions so that meaningful progress can be attained.When done correctly，BPR can result in significant performance enhancements that enable organizations to deliver greater value to their customers and create greater profits for shareholders.

Re-engineering implementation includes initial effort，adoption and institutionalization of the changed approaches.Firstly，the organization should align the BPR goal with the companys vision，identify the re-engineering opportunities，IT enablers.Secondly，they must garner support of the senior management team，making direct communication between top management and operating employees to overcome blockers.Finally，institutionalizing new business processes as literature sources，will continue improvement.

Evaluation and Comparison

BPR needs a clear vision for organization wide improvement of critical，cross-functional processes.It can only work with a top-down approach，with a set radical goal.For dramatic change，the ultimate goal must be clear.Technology must be creatively applied to question all assumptions and constraints.BPR empowers individuals with access to more information.They make more decisions with support of expert systems.The result is a process built around outcomes not tasks，with radically simplified work flows that minimize non-value adding steps to produce better customer and business outcomes.Six Sigma on the other hand is a deliberate，data driven technique，that relies heavily on statistical methods to achieve reductions in variability.It directly affects some strategic goals of the business and requirements of the customers.Unlike BPR，Six Sigma uses a well defined framework like DMAIC and has incredible precedent for continuously improvements.

Conclusion

BPR is for organizations that are clearly off in comparison to industry benchmarks or who have not changed their established ways for a long period.Six sigma is a longer term，perhaps slower strategy，for measured improvements over time.Six sigma projects will take longer to get significant organization-wide returns，but over the create aggregate process improvement across many different areas of the business.

BPR can only be done top-down.Six sigma can be top-down，middle-down，bottom-up.Though，drastic change projects require top-down support and buy in for either technique.With Six Sigma，bottom or mid-level managers can create support and build evidence within organizations，allowing for a gradual change in culture and acceptance of process improvement.There are auxiliary benefits to consider for picking a more stable and slower technique that sets up the organization for long-term achievement of strategic business objectives and customer satisfaction.

References

[1] Hammer，M.Reengineering work：don't automate， obliterate.1990.

[2] Goh，T.N.Six Sigma in industry：some observations after twenty-five years.2011.

[3] Montgomery&Woodall.An Overview of Six Sigma. International Statistical Review.2008.

[4] Heckl，D.Moormann，J&Rosemann，M.Uptake and success factors of Six Sigma in the financial services industry[J].2010.

作者簡介：胡曼妮，女，碩士研究生，江西工業職業技術學院，330039，研究方向電子商務