Detecting and Preventing Money Leaks in Your Processes

TL;DR: Start with a housekeeping exercise to identify inefficiencies, then implement targeted solutions to save money and streamline operations. Here’s a story of how we did just that using 6Sigma principles.

As a 6Sigma consultant, I always begin with a “housekeeping” exercise. This aligns perfectly with 6 Sigma’s principles: set in order, shine, standardize, sustain, and safety. Now, let’s dive into a story that showcases this approach in action, revealing how we tackled money leaks caused by process inefficiencies.

🚀 The Journey to Find and Fix Money Leaks

🔍 Uncovering the Problem

In one of my roles, my mission was to spot improvement opportunities and propose solutions for the Opp2Invoice end-to-end business process. Here’s how we tackled it:

1. 👥 User Interviews: We started with interviews, using a carefully crafted set of questions to uncover daily struggles and issues affecting efficiency.
2. 📊 Data Collection: We gathered as much data as possible to back up problem statements and set SMART goals.
3. 📜 Project Charter: We organized the information and presented it back to the teams in a project charter, documenting our findings and setting the stage for action.

We soon realized we were dealing with recurring issues in the supply chain. By focusing on one specific case, we could extrapolate solutions across all clients.

📈 AS-IS Situation Analysis

Our analysis showed that solving the problem required several initiatives, each with its own objectives based on expected qualitative and quantitative benefits.

🛠️ Crafting Solutions

Project #1: Decommissioning Unused Platforms

• 🎯 Objective: Cut unnecessary expenses and standardize processes.
• 💰 Outcome: By decommissioning platforms not in use, we saved over $20K annually in license costs.

Project #2: Enhancing Pricing Communication

• ⚠️ Problem: Delayed involvement in pricing decisions and outdated vendor prices led to significant extra costs ($200-300K for a specific client), reducing profitability.
• 🔧 Solutions:
  1. Introduced an extra triage step in the quoting process, allowing delivery and SMEs to validate initial pricing.
  2. Extended the price warranty period from 30 to 60 days, ensuring applicable prices post-deal.

Project #3: Accurate Cost Data Management

• ⚠️ Problem: Inaccurate cost data in the CMDB resulted in incorrect cancellation fee calculations, causing potential money leaks (over $10K).
• 🔧 Solution: Ensured accurate and up-to-date cost data in the CMDB to prevent incorrect invoicing.

By adhering to structured 6 Sigma methodologies and focusing on detailed analysis and proactive solutions, we identified and mitigated money leaks, leading to more efficient and profitable operations. The journey from identifying the problem to implementing effective solutions was not just a process—it was a transformation that demonstrated the power of 6 Sigma in optimizing business performance.

Enjoyed this story? Let’s apply these principles to your business and plug those money leaks! 💪🚀