Six Sigma vs Business Process Reengineering (BPR) - A Comparison
What is Business Process Reengineering (BPR)?
BPR is process of streamlining the processes by challenging the each step of the current process. The classic example of BPR is from the banking industry. In the late 1980’s and late 1990’s, if we wanted to withdraw money from our bank account, following steps were involved:
Go to the bank during banking operation hours
Fill in the withdrawal requisition slip
Submit the slip and receive a token number
Wait until our token number is announced by the Cash Teller
Then receive the money
The above process had a lot of drawbacks. We could go to the bank only during their operational hours. Certain banks did not have many branches and thus, we had to go to the location of the bank. We had to fill the withdrawal requisition slip. We had to wait in a queue where others are also waiting to withdraw money and so on.
What did the banking industry do? They radically changed the entire process and in the early 2000’s got in the ATM machines. Do we now need to go to our banks? Do we have to wait in queues? Do we need to fill any withdrawal slips? Everything’s changed. This kind of a process improvement is called as Business Process Reengineering.
In contrast to BPR, Six Sigma is an approach which focuses on variation (or uncertainty) reduction in processes. It is the only methodology available which is a documented process improvement methodology. Unlike BPR, Six Sigma uses a five step method to identify root causes and provide world-class solutions. Six Sigma does not involve a complete overhaul of the process like BPR. However, it requires out-of-the-box thinking and questioning status-quo to identify and implement solutions. An example of a banking process will be as follows:
Consider that you are applying for an account opening process in a bank. You will need to go through the following steps:
Meet the banks representative and fill out Account Opening Form
Provide KYC (Know Your Customer) details and submit identification proofs
Telephonic verification takes place
Physical Home Address verification takes place
Account is created and check book and ATM card is sent to customer address
The above process may have an Account Opening timeline target of 48 hours and the mean performance of the process may be 40 hours, however, the variation may be as high as 8 days. There may be multiple instances where the account opening took place as late as 8 days. That’s a long time which is good enough to have angry customer!. And the customer does not look at the mean performance but looks at this specific variation just happened to him. When a Six Sigma project is applied to above process, it focuses on reducing this variation and streamlining the processes to achieve customer satisfaction. It may not necessarily change the entire process flow like it takes place in BPR. This is the key difference between Six Sigma and BPR.
Below is a brief comparison of BPR and Six Sigma:
Six Sigma vs Business Process Reengineering - A Comparison