Lean Six Sigma in SAP Project Management
For years, companies of all types of sizes have been using Lean and Six Sigma methods to improve their processes. Lean (which ensures optimal performance through continuous improvement and waste elimination) and Six Sigma (which eliminates defects and process variation) combine into a simple and effective method based on common sense.
A SAP implementation project, such as the Lean Six Sigma approach, follows several key steps and aligns with the three core continuous improvement goals:
- Deliver to customers on time,
- With the required level of quality,
- At the lowest possible cost.
SAP is a German multinational that develops enterprise software for managing business operations and customer relationships. The company is best known for its ERP (Enterprise Resource Planning) software. SAP is the largest non-US software company by revenue, the third largest publicly traded software company in the world by revenue, and the largest German company by market capitalization.
Many companies are attempting to implement SAP for several reasons, including a desire for long-term marketplace success. As the implementation of a SAP system often includes several integrated modules, SAP project managers must be able to efficiently organize the collaboration of several departments and teams, consider a variety of factors, and meticulously follow the necessary implementation steps.
As a SAP implementation project manager, you may feel that your goals do not fit within a Lean Six Sigma framework. However, you and your teams can benefit from the optimized efficiency that a Lean Six Sigma mindset can create.
What Lean Six Sigma tools can you use to get the most out of your project?SAP implementation projects are increasingly developed using Activate, a 5-phase methodology (just like a Lean Six Sigma project) that helps in structuring the process and ensuring that all activities critical to the project’s success are completed.
Each has its own objectives and activities. For each, several continuous improvement tools and techniques can be used.
Phase 1 : Prepare
At this stage of the SAP project, an overall transformation strategy, implementation plan (logistics, team, budget, and timeline), scope definition, and risk/impact assessment are developed. It is important at this stage to understand the client’s needs and expectations, establish a scope, and determine all necessary objectives (financial and performance). Some Lean Six Sigma tools can be useful:
RACI (Responsible, Accountable, Consulted, Informed) : this matrix represents the levels of responsibility for a project’s task. It is a mapping system that illustrates a given task’s purpose along with the action required of each team member.
Kano Analysis : a technique to evaluate the relative importance of the client’s requirements and to identify the level of quality expected by the client.
Stakeholder Analysis : a process of assessing a system and the potential changes it brings about in regards to affected and interested parties. This information is used to assess how the interests of these stakeholders should be addressed in a project plan.
VSM (Value Stream Mapping) : a visual tool used to map production flows. By identifying the current and future state of processes, opportunities for improvement are revealed. A value stream map identifies waste in current processes and provides a roadmap to converge on an improved future state.
Cost-Benefits Analysis : the process of comparing the projected or estimated costs and benefits (or opportunities) associated with a project decision. It helps determine whether it makes good business sense.
Phase 2 : Explore
At this stage, the design of the future SAP solution is defined and documented. Functional gaps are also documented, prioritized, and validated. Ideally, “Fit-Gap” workshops are conducted to determine development needs. New business requirements as well as the organizational structure are defined. It is important at this stage to understand the processes currently in place as well as those to come according to good business practices. Some Lean Six Sigma tools can be used:
SIPOC (Suppliers, Inputs, Process, Outputs, and Customers): this structure helps the process owner and workers to clarify all primary elements and accept the boundaries of what they will be working on. This tool is very useful due to its high level of detail.
VSM (Value Stream Mapping).
Mapping: a visual representation of the activity of a company, a part of a company, or any type of organization. It facilitates rationalization operations and allows for better targeting of the progress strategy.
Data Collection: to measure and define certain parameters to be used in the system (e.g. safety stocks, production or purchase lot sizes, times in operating ranges, etc.).
Benchmarking: a specific approach to compare one’s company, its organization, and its processes with its partners and, in the best case, with its competitors. The goal is to identify best practices and then deploy them internally.
Phase 3 : Realize
At this stage, the technical and functional changes developed in the SAP software are put into effect. The new functions are implemented, configured, integrated, and tested. Data conversion begins and preparations are made for end-user training and other change management activities. It is important at this stage to solve business process performance issues. During the preparation activities to support SAP system operations, Lean Six Sigma tools can be used in parallel to improve the company’s internal processes:
Brainstorming : an indispensable tool in many phases of your project. Brainstorming helps to capture ideas within a group. This can be accomplished in several ways (sharing ideas in turn, without time for reflection or with a set time for reflection, etc).
The 5 Whys (or Root Cause Analysis): a problem-solving methodology that focuses on solving the underlying issue, rather than applying quick fixes that only address the problem’s immediate symptoms. This analysis can be used to solve issues that arise during the development of the SAP solution.
Cause and effect diagram: a graphic representation that structures the search for the root causes of a problem. Using the brainstorming technique in a group session, we try to identify the origins of a specific issue. This tool is often used to understand how to solve a complex problem at its source.
Mind Mapping: a tool for organizing ideas by establishing relationships through association. With mind mapping, you can create a tree of ideas or concepts by identifying the links that connect them.
Risk Assessment: identifies and evaluates the threats and risks of a specified situation. If you are aware of a potential hazard, it is easier to minimize damage or even prevent it altogether than to deal with the aftermath. A risk assessment can be performed by using the brainstorming technique to collect ideas.
Simulations and Pilot Testing: a selected group of end-users try out the tested system and provide feedback before full deployment. In other words, a dress rehearsal is conducted for the usability test that follows.
Phase 4 : Deploy
The goal of this phase is to finalize the preparation of the SAP solution and business processes. This includes final testing, finalization of data conversion, rehearsal for implementation, and support preparation. User training is also completed during this stage. After its implementation, the ERP (Enterprise Resource Planning) solution will be available for users to log in. Operations will still require optimization. If necessary, issues and performance will be amended.
It is important at this stage to ensure that all problems encountered during testing have been resolved and that the system and users are ready to use SAP. A few Lean Six Sigma tools can be applied:
FMECA (Failure Modes, Effects, and Criticality Analysis): an indispensable tool to ensure the feasibility of a specification in compliance with client and regulatory requirements. This analysis can be applied to the design of a new product, as well as to the development of a process helping to identify points of failure that are likely to hinder performance.
Standard Operating Procedures: the establishment of documented procedures. These ensure that transactions in the system are conducted systematically according to best practices, thus ensuring long-term consistency.
Visual Process Tools (Cheat Sheet): used to help end-users quickly integrate their understanding of how to use the system and to have a reference of required actions.
Phase 5 : Run
Operations are further stabilized and optimized in the execution phase. The new SAP system is continuously updated to make the latest customizations available to the company. It is important at this stage to continue to resolve issues related to the SAP system or processes and to build performance monitoring tools. Some Lean Six Sigma tools can be used:
Performance Indicator: a measure or set of measures fixed on a critical aspect of the overall performance of the organization.
Dashboard: the heart of any progress strategy designed with sustainable performance in mind. By reading the performance indicators, decision-makers are able to assess the relevance of the actions undertaken to achieve the tactical objectives. They are also better equipped to study opportunities for new actions. In this spirit, they ensure proactive (not only reactive) management.
Project Storyboards: used to describe the progress and enhancements made by the process improvement project. These storyboards emphasize the various tools used at different stages to define, analyze, and improve the process.
Team Feedback Sessions (Post Mortem): the post mortem is a meeting of project team members (ideally a multidisciplinary group), allowing the team to identify what went well during the SAP project and what ought to be improved.
Every day, companies are faced with increasing costs and competition. Lean Six Sigma (LSS) helps to overcome these obstacles and improve business performance in several ways:
Increased Profits: LSS streamlines processes, enabling faster and more efficient production without reducing quality or increasing costs.
Cost Reduction: by improving processes, expenses are reduced by eliminating tasks that do not add value (elimination of waste) and by dealing with the various problems that arise in each process (elimination of product defects resulting in customer returns).
Improved Efficiency and Effectiveness: LSS encourages more efficient processes, maximizing efforts to deliver a satisfactory product right out of the gate.
Sense of Ownership and Responsibility: involving the team in process improvement increases accountability, builds trust, and creates a sense of ownership. This is also an effective way to show that everyone in the company is valuable, motivating the team to perform at their best.
By optimizing a project’s overall process, the application of Lean Six Sigma in project management allows companies to reach higher levels of efficiency by ensuring a mitigation of waste, defects, and errors.
