The Finance Factory 69 The problem with these approaches to improvement is not what they con- tain or omit, it's what we expect from them and how we use them. Before you can judge whether any of these approaches is right for you, understand what they are, their underlying philosophy and how they differ from each other. In reality, there is considerable overlap between many of these approaches, even when their underlying philosophy differs. It is best to think of each as a toolbox that is filled with a collection of techniques. Each toolbox has dif- ferent, but overlapping, techniques from a shared pool. Depending on which techniques are included, the overall philosophy of the toolbox will be dif- ferent. Further, as they develop over time, they may acquire more techniques from the shared pool, or from each other. For example Six Sigma started out as a simple technical process control technique and has since adopted many other techniques into its toolbox. To help you to understand the similarities and differences, we have mapped the different toolboxes against two criteria. The first is whether the toolbox emphasizes a gradual, continuous approach to improvement, or whether it recommends a more radical, breakthrough level of change. The second difference is whether the toolbox prescribes what changes should be made or emphasizes how changes should be made. Some toolboxes have a firm view of the best way to organize processes and resources. Others hold no particular view on what an operation should do, but concentrate instead on how the managers should decide what to do. Figure 3.5 maps four of the most common approaches against these two dimensions. Business process re-engineering (BPR) for example is relatively clear in what it is recommending. It has a definite list of what operations' resources should or shouldn't be ­ processes should be end-to-end, non-value added work should be eliminated, inventory should be reduced, technology should be flexible and so on. BPR also assumes fairly dramatic change. Contrast this with both Six Sigma and TQM, which focus to a far greater extent on how operations should be improved. Six Sigma in particular has relatively little to say about what is good or bad in the way processes are organized, except that it emphasizes the negative effects of process vari- ation. It concerns itself largely with the way in which improvements should be made, using evidence, quantitative analysis and a particular improvement cycle. TQM and Lean both incorporate ideas of continuous improvement, while Six Sigma is relatively neutral on this issue.