Lean Six Sigma (LSS) originated in the manufacturing sphere but more organizations are becoming aware of its benefits in other fields. Standards for finance and accounting principles are not consistent across the globe.
Important benefits can be achieved in this area due to this lack of standardization. This is particularly true when non-standardization in one country can impact processes and systems in the economy of another. LSS is a valuable tool that can help to minimize operational inadequacies to overcome risk.
Reducing billing errors in departments
Billing mistakes across departments can have a negative impact on organization revenues. Undercharging occurs in about 60 percent of accounts, which results in unneeded losses. Peter Peterka is the managing partner for 6sigma.us who has personal experience with the application of LSS.
LLS implementation almost completely reduces billing errors, according to Peterka, who has extensive experience in this field. The result is higher profits and cash flow once the billing errors have been almost totally eliminated through
LSS implementation. Just the simple act of analyzing operational issues and rectifying identified weaknesses, can improve processes and save money.
Identifying the problem
Quantitative measurement is the major strength of LSS. Use key points of impact (KPI) to highlight problem areas. Apply LSS to then resolve these problem areas. The process map helps to identify and resolve these problem areas. This critical tool is integrated with the KPI’s and quantitative methods to identify and resolve process and system issues.
Management should then undertake boundary definition and analyze specific process requirements. Experts then go to work identifying problems in the current procedures. Once the findings have been recorded, the next step is to redefine processes for maximum benefit or eliminate those that are simply not adding value.
Ultimately, this is the DMAIC system of ‘defining, measuring, analyzing, improving, and controlling.’ LSS and DMAIC become powerful tools for change when combined.
LSS and DMAIC in accounts payable and loans
The accounts payable department is a target area for maximum improvement and results. Management should analyze payment waiting and approval times to identify bottlenecks and areas for improvement. Management may also examine loan areas for betterment regarding data processing, collection and storage.
By applying LSS and DMAIC to every step of accounts payable or loans in the organization, areas for improvement can be noted. Once noted, steps can be taken to implement changes that will augment how these systems and processes are applied.
Costs, time and inefficiencies can be removed and replaced with far more effective steps. These new steps should hurry up the systems, make them more efficient and ultimately generate more revenues.
DMADV for continuous value and improvement
DMADV is the process of ‘defining, measuring, analyzing, designing and verifying.’ LSS, DMAIC and DMADV focus on continuous change to make processes better. Existing or new systems can be improved with DMADV.
Some benefits experienced from these applications encompass a reduction in capturing mistakes, improved customer satisfaction, and employee support of LSS tools such as DMAIC and DMADV.
Employees enjoy better working conditions because of greater efficiencies and can enhance their personal and career development with further learning.
Further learning in LSS
Employees who have specialized in accounting and finance find that additional learning in LSS has greatly enhanced their work satisfaction. This satisfaction has a knock-on effect in that it improves work efficiencies and customer satisfaction.
Certification is obtainable online for organizations wishing to be innovative and be a catalyst for change. Just because processes and systems have existed for decades, it does not mean that they are efficient.
Having an LSS Black Belt expert to help resolve this issue and instigate change, is beneficial to the organization, its employees, customers and is good for revenues.