| INTRODUCTION | | | | and techniques to measures process errors, identify |
| Everyone knows the prime directive of business: | | | | variances, eliminate them, and bring the process under |
| faster, better, cheaper. Yet, when pressed for an | | | | Statistical Process Control (SPC). Lean Six Sigma for |
| explanation of what that really means, most | | | | Services focuses on speed and efficiency. |
| executives can only express the desire to get the | | | | Lean Six Sigma for Services is perfect for improving |
| most work, in the least time, with the fewest people. | | | | service processes for the following reasons: |
| When probed further on what is wrong with their | | | | - It separates "value-added" from "non-value-added" |
| business processes, responses are varied but | | | | work with Six Sigma tools to eliminate the root causes |
| predictable. We need more people. The computer | | | | of non-value-added activities and (thus) their cost. |
| systems are lousy. The customer's demands are | | | | - It provides a means for quantifying and eliminating the |
| excessive. | | | | cost of complexity. |
| Most executives fail to see the real problem. The real | | | | - Like its Six Sigma counterpart, it focuses on |
| problem is the poor alignment of the business process | | | | customer satisfaction and quality by recognizing |
| to the customer needs and the excess steps in the | | | | opportunities and eliminating customer defined defects. |
| process that brings no value to the customer | | | | - It recognizes that variation hinders the ability to reliably |
| experience. | | | | deliver high-quality services. |
| Besides customer satisfaction, investing in service | | | | - It requires data-driven decisions and incorporates a |
| process improvement can quickly add real dollars to | | | | comprehensive set of quality tools under a powerful |
| the bottom line. It is well established that approximately | | | | framework for effective problem solving. |
| 80% of a company's invested capital is the cost of | | | | - It provides a highly prescriptive cultural infrastructure |
| people performing service related duties. So invested | | | | for sustainable results. |
| capital is really the "Cost of people." Combined with | | | | I have found that it is better to bring a process into |
| empirical data that has shown that service costs are | | | | statistical process control first (Six Sigma), then work |
| inflated by 30% to 80% waste, it makes logical sense | | | | on improving its capability (Lean). In other words, |
| to focus energy on improving service-side processes. | | | | remove variation then raise performance level. When |
| HOW LEAN SIX SIGMA FOR SERVICES | | | | a business process has been "Leaned" it has the |
| IMPROVES THE BOTTOM LINE | | | | following characteristics: |
| "Services" normally encompass a company's | | | | - The process is under statistical control (i.e. assignable |
| service-side infrastructure such as Human Resources, | | | | cause variation have been eliminated) |
| Operations, Marketing, Sales, Finance, etc.. A | | | | - The process operates at a cycle efficiency > |
| fundamental characteristic of most service-side | | | | 20%. Cycle efficiency is the value-add time within a |
| processes is it that they rely on humans to accomplish | | | | process. |
| their objective. | | | | - It has a maximum cap on WIP to control velocity. |
| Service process improvement is challenging for the | | | | - It uses a pull system where new work is released |
| following reasons: | | | | into the process only when old work has exited. |
| - They are slow and expensive because there is | | | | - It uses visual controls to manage and monitor the |
| always to much Work-in-Process (WIP). This is | | | | process. |
| primarily due to a failure to control WIP velocity (i.e. | | | | CONCLUSION |
| work is pushed into the process without regard to | | | | Lean Six Sigma for Services maximizes shareholder |
| work exiting the process). | | | | value by achieving the fastest rate of improvement in |
| - Less than 20% of service process time adds value | | | | customer satisfaction, cost, quality, speed, and invested |
| or enhances a customer's experience. | | | | capital. It is a methodology, set of principles, and tools |
| - The less visible nature of service processes make | | | | that focus on accelerating the speed of all processes |
| the process harder to track and problems harder to | | | | across the enterprise by eliminating waste and |
| identify, quantify, and fix. | | | | non-value added steps. |
| - They have a tradition of individuality, freedom, and | | | | Companies who have invested heavily in business |
| creativity. | | | | process improvement have recognized several |
| - They are characterized by a lack of meaningful data | | | | fundamental truths: |
| for decision making. | | | | - Getting fast can actually improve quality |
| - People, your major asset, are also the major cause | | | | - Improving quality can actually make you faster |
| of process variation. | | | | - Reducing complexity improves speed and quality |
| - Customers cannot be treated like inventory. | | | | As you embark on improving business processes, stay |
| Lean Six Sigma for Services is an extension of Six | | | | focused on the the above fundamentals using Lean |
| Sigma not a replacement. Lean Six Sigma for | | | | SIx Sigma for Services and you will see an improved |
| Services and Six Sigma work in tandem. Six Sigma | | | | bottom line. |
| brings disciplined, customer-centric, data-driven tools | | | | |