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  • Intelligent automation’s role in redefining continuous improvement

    Seven Sigma– When great can be better

    kpmg.com

  • Intelligent automation can be a new beginning for traditional continuous improvement efforts. These digital-age technologies enable companies to automate many manual activities Lean Six Sigma process improvement targets.

    Intelligent automation does not make Lean Six Sigma irrelevant. Instead, it creates significant new opportunities for businesses to benefit where continuous improvement methodologies and these technologies intersect.

    Six Sigma is a well-proven set of methods intended to reduce variation and improve quality in business processes. When combined with Lean principles, Lean Six Sigma is the foundation of many continuous improvement programs. The advent of intelligent automation technologies allows companies to use software bots to automate manual processes Lean Six Sigma traditionally targets.

    © 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

  • Intelligent automation – a new beginning to continuous improvement Many of us have been involved in continuous improvement waves including Lean Six Sigma and business process engineering during our careers. We used tools and methods available at the time that were great at measuring and diagnosing quality and operational inefficiencies.

    Companies that use Lean Six Sigma, one of the most pervasive methodologies, have achieved extensive efficiency, quality and customer service improvements. However, nonstandardized processes and systems inherently limit these methods. They also keep work from being executed consistently as intended. For example, no- or low-value manual efforts, like data retrieval, manipulation, and entry are often unavoidable because of business systems shortcomings.

    An optimal solution often required changes to hard-coded systems that could take months or years and significant cost. It was also difficult to predict how redesigned processes might perform. Without a clear return on investment, many opportunities went unaddressed. Organizations outsourced as a workaround by simply moving ineffective processes to low-cost locations, which further masked the root issues.

    Intelligent automation challenges traditional continuous process improvement approaches. Intelligent automation, a spectrum of technologies including robotic process automation (RPA), machine learning, artificial intelligence, and cognitive systems, are intended to either automate or augment human activities and decisions. For example, what does “nonvalue-added activity” mean in an age of virtual workers? In our view, intelligent automation opens new possibilities to breathe life into established methodologies and take continuous improvement to a new level.

    This article presents continuous improvement from a new point of view. It is intended for anyone involved in planning or implementing continuous improvement and/or intelligent automation activities. In it, we propose opportunities to use intelligent automation technologies that can aid in improvement efforts. We also hope this new perspective will bring together those who focus on intelligent automation and Six Sigma activities and inspire them to act on these proposed approaches.

    So dust off your stack of old process improvement books and learn to apply familiar methods augmented with the power of intelligent automation. The potential results are even more extensive improvements to efficiency, quality, and customer service.

    Source: HFS Research, 2018

    2020+1990 1995 2000 2005 2010 2015 2020

    The internet Client/Server

    ERP Lean

    Six Sigma

    Y2K Euro Currency

    Conversion VOIP 3G

    Public Cloud eBusiness

    Digital Marketplace

    ASPs Sox

    Basel II Private Cloud Open Source

    Digital Business Models

    IOT

    RPA Enterprise IT dressed up as

    Digital Intelligent

    Automation Machine Learning

    AI Blockchain

    5G The Guerilla

    Sharing Economy

    Brexit

    Autonomous Supply Chain Self-Learning

    Cognitive Assistants Quantum

    Computing

    Shared Services /

    Nearshoring

    Outsourcing (Analog)

    Basic Digital (Responsive)

    The Digital OneOffice

    (Anticipatory)

    Hyper-Connected Enterprises (Interactive)

    Offshoring

    The voyage to the connected interactive enterprise

    1Intelligent automation’s role in redefining continuous improvement

    © 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

  • One of the world’s largest paper products companies used RPA technology to enhance process performance in its global procurement function. Legacy applications and process variations across multiple businesses and commodities resulted in significant manual interventions and work-arounds. The company planned a number of system replacements, but these were months or years in the future. RPA provided the means to reduce manual labor and improve process performance and quality.

    The company used RPA to automate critical business processes, eliminating manual activity, and increasing process velocity and quality. The company did not simply automate the existing as-is business processes. It integrated process improvement into automation design by incorporating common- sense process changes into automation requirements. An example is eliminating nonvalue steps like checking and approvals. The company implemented many of these automations before planned technology enhancements.

    As in this case, RPA technology can often delay the need to invest in costly new systems. RPA stitches together desktop screens, software apps, and manual tasks to process repetitive tasks unattended by humans at relatively affordable costs. Every broken process chain or poorly converged dataset slows down an organization’s ability to do business in realtime and stay ahead of its market. Traditional barriers between front, middle, and back offices hinder companies’ true abilities to operate in this real-time, responsive, and anticipatory digital fashion. Companies should evaluate the cost and benefits of each process improvement activity. When making these decisions, the legacy system label does not mean these systems should be immediately replaced.

    Quality and service levels remain top of mind. According to an HfS Research and KPMG State of Intelligent Automation 2018 survey of 590 business leaders, 30 percent of respondents selected “improve customer service quality and quality of interactions” as the key operational objective for their intelligent automation strategy.

    Another benefit for this paper manufacturer relates to requests for information the company’s procurement analysts and buyers submitted to vendors. The traditional process involved frequent email requests to vendors to verify or request additional information. This large group of buyers and procurement analysts sent these emails in nonstandard formats. Many of the vendor replies were incomplete, and the response rate was low. When bots took over this function, email formats were standardized and sent consistently. Within weeks, response rates jumped from about 30 percent to more than 80 percent. Response completeness also rose dramatically.

    RPA can delay new system purchases and boost quality

    2 Intelligent automation’s role in redefining continuous improvement

    © 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

  • 1 “Ready, set, fail? Avoiding setbacks in the intelligent automation race.” KPMG LLP, 2018.

    Software bots can augment continuous improvement Software bots execute a business process exactly the way a human operator would. A bot interacts with the same enterprise and desktop applications and uses most of the same interfaces as human workers. However, bots have many advantages over their human counterparts. They typically operate faster with shorter cycle times and execute processes with 100 percent consistency and compliance based on how they are configured. They also don’t make data entry, interpretation and omission errors that humans can rarely avoid.

    Bots can, in appropriate cases, be a substitute for reengineering, which used to require significant process or information technology changes. This is a major reason why companies are accelerating automation technology adoption. In a recent KPMG study, 75 percent of experts surveyed said they would use RPA and 49 percent would use cognitive and artificial intelligence at scale in the next 3 years.1 Process automation offers the potential to enable process performance beyond what has been possible through continuous improvement methods like Lean and/or Six Sigma alone.

    Some may assume RPA makes methods like Lean or Six Sigma obsolete. After all, how much should we care about nonvalue-added activities or process variations when a bot eliminates all or most of the human effort?

    Not so fast. Process improvement i

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