Those who lead Six Sigma improvement projects often are in a teaching position, instructing employees who participate on project teams but have no experience with the methodology. Obviously, the inexperienced employees learn as they work on a project. But what is not as obvious is that the leaders also learn – no matter how much Six Sigma expertise they may have. By listening to the employees tell what they expected of Six Sigma, what actually occurred, and why things worked or did not work, project leaders learn valuable lessons that can be applied immediately or help in future deployments.
This employee perspective is illustrated in the Six Sigma experiences at three companies.
Federated Department Stores: Cycle Time
Federated Department Stores is one of the leading department store retailers in the United States, with annual sales of more than $15.6 billion. Under the names Macy’s and Bloomingdale’s, the company operates more than 450 stores in 34 states, Guam and Puerto Rico. Beth Fitzgerald is the manager in the logistics and operations group, based in Cincinnati, Ohio. As such, she is in charge of ensuring that vendor merchandise is “there and paid for” in Federated’s various warehouses. Fitzgerald participated on a Six Sigma project team whose members were pooled from the various distribution centers. Its purpose was to reduce cycle time in getting merchandise into the buildings.
Fitzgerald characterized herself as “the most resistant” team member in the beginning.. “There is a sense of exposing yourself and your process when the data collection begins,” she said. Process owners often feel vulnerable to this scrutiny, explained Black Belt Shatika Britton, a vice president who was involved in the project from the outset. “There is a perception when you begin to look at a process that, ‘They’re coming after me!'” But, Britton said, “The beauty of the data “allowed Beth to ‘sell’ her data,” and the comfort level went up.
The old system, which Fitzgerald had inherited, worked well, but the feeling was it could be improved through Six Sigma. It was a very manual process, with multiple vendors and multiple distribution centers. Looking at the process closely allowed the team to see what the root causes of certain delays were, and then address them. The advantages, as both Fitzgerald and Britton noted, are gaining a systems team person, “an invaluable aid,” and also finding new ways to use, manage and adapt the existing system. The result was less an overhaul than a kind of verification of what worked and what did not. Fitzgerald’s advice to those about to embark on a Six Sigma initiative? “Stay open minded, as vulnerable as you feel. You won’t be sorry!”
The Vanguard Group: Dealing with Clients
While Federated’s initiative was focused on a process that involved retail stores and outside vendors, and not customers per se, the Vanguard Group found itself faced with a different kind of situation: How to better handle client account queries and questions over the phone?
Vanguard, headquartered in Valley Forge, Pennsylvania, USA, is the nation’s second-largest mutual fund firm and a leading provider of company-sponsored retirement plan services. Vanguard manages more than $850 billion in U.S. mutual fund assets, including more than $245 billion in employer-sponsored retirement plans. Customer calls and queries are, understandably, of great concern. Handling them quickly, efficiently and knowledgeably is a first priority. Vanguard’s own Six Sigma program, Vanguard Unmatchable Excellence (VUE), played a major part in one initiative: to analyze calls, triage them, and find ways for problem resolution quickly.
The process improvement project was slated to run between 18 and 24 months. Stalled in the first attempt due to lack of staff resources, it was restarted, this time with a Black Belt and appropriate staff. Andrew Bevan, who is a supervisor in Vanguard’s Valley Forge Core Contact Center, described himself as “all for it” from the outset. He had read the autobiography of Jack Welch, former GE chairman and promoter of Six Sigma, and was not entirely unfamiliar with Six Sigma methodology. But what about feeling protective of his processes? Bevan had taken part in training rotations which Vanguard provided to familiarize employees with VUE. Since VUE is all about making processes more efficient everywhere at Vanguard, individual implementations are natural extensions of that philosophy. Bevan was eager to “get his hands dirty” and implement change.
Many clients, it was determined, send checks through a deposit system. If those checks are not credited correctly, the customer’s account is wrong. Bevan and his team found that if these situations can be handled by a contact person effectively, it builds even more client loyalty. After it had collected and analyzed the data, the team decided to “bucket” the calls into three tiers:
- Tier 1: On-the-spot fixing (i.e., the problem could be handled and fixed in the initial phone call)
- Tier 2: Sending to another department, but still a fairly straightforward fix.
- Tier 3: Sending to a “specialist” for fixing.
The resulting efficiency gained meant less time spent in a “work state” (i.e., researching or investigating). The gained time (25 to 30 seconds) created capacity in the frontline service centers to answer more calls – thus, each call is answered more quickly. Assigning the more complex problems to specialists translated to much happier clients. They felt that “ownership” of the problem was there, and that they would not be handed over to yet another customer service representative in subsequent calls.
The savings was a reduction of approximately 50 percent of the “handle time” for calls, but the soft savings went much farther. Client loyalty was increased because the problem was recognized and fixed in a minimal amount of time.
“Seeing it all come together at the end is the best reward,” said Bevan. A result that looks different – and better – from what the company had at the outset becomes a “story” to tell other employees. That, in turn, gets those employees interested in Six Sigma. And the apprehension lessens as the stories go on, and corporate “folklore” lets others know the methodology is not scary.
GAI-Tronics: Informal to Formal Six Sigma
Blair Hogg, quality assurance manager and Kaizen event promotion office coordinator, tells a similar, but “back door” approach to Six Sigma. Hogg works for GAI-Tronics, a firm that manufactures printed circuit boards for industrial communications. Headquartered in Mohnton, Pennsylvania, USA, GAI-Tronics was acquired by Hubble in mid-2000. Before that, Hogg said, the company had collected data for at least 10 years (predating his tenure with them). The effort was to reduce defects on the line, Hogg said, but “they weren’t doing it as a real Six Sigma initiative.”
In late 2001, the company began working with a consultant, hoping to introduce some Lean methodology to help reduce inventory levels, reduce cycle time and eliminate waste. But, Hogg remarked, “it wasn’t used as extensively as it could have been from a quality standpoint.” The effort to change a process does not really upset the 10 people doing the analysis. The “60 or so people whom the process involves are the ones harder to change,” he said. “Often the efforts to change a process don’t really help. At first, in fact, they often make things worse.” And try explaining where the benefit is in that, Hogg noted.
Still, with the resultant corporate shift toward quality improvement, Kaizen events were used to introduce minor improvements. No Black Belts were trained or hired, but the methodology “crept in.” As Hogg put it, “if you sit around fat, dumb and happy, you’re never going to try for improvements.” Continuous or otherwise, improvement was mandated. And so, with the Kaizen events came the usual cycle of change: Kaizen plus Lean began to show decreases in defects, and noticeable increases in efficiency. For example, in the company’s highest volume production lines, workers’ time went down between 20 and 25 percent.
The most important lesson learned, said Hogg, is that communication about what is going on is paramount. Often this simple fact gets lost in the hubbub of a new initiative. His advice is, “Keep as many people informed and educated about the importance of the project or initiative, the expected results it will have on the business, and why it will be beneficial for everyone. You’ve got to include everyone, from the plant manager to the line workers, in your communication.”
The most interesting outcome of this “informal” approach to Six Sigma has been the aftermath. Hogg is hoping to be trained as a Black Belt himself in the fall and bring that expertise to GAI-Tronics. Instead of fearing what might come of a systematic formal approach, rather, Hogg and his coworkers embraced it and the changes it will inevitably bring.