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6s in Sales

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  • #42712

    Lost salesman
    Participant

    Would anyone know of any links to a good article on 6s in a sales department? I am also looking for some good project ideas – any help would be much appreciated!

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    #135005

    Heebeegeebee BB
    Participant
    #135007

    Adrian P. Smith
    Participant

    Off the top of my head, here are some areas of focus for Six Sigma projects in sales:
    1. CRM2. Lead generation3. Marketing program effectiveness4. Sales force productivity5. Pricing process6. Improving margin7. Better forecasting8. Sales team effectiveness9. Channel effectiveness10. Customer retail experience
    Googling “Six Sigma sales” should net you more articles and documents than you will know what to do with. Up to you to decide whether they are useful to you or not.
     

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    #135013

    Andejrad Ich
    Participant

    Okay – this is classic, classic, classic muddying of Six Sigma.  6s may apply to some of these, but in order for that to be true each must fit the very simple test of….”Is there an identifiable, flowchartable process here having a defective output that can be improved?”
    So…for example….”lead generation” — is there a process here?  Let’s say we have identified a single system source of leads like “magazine insert card responses.”  Fine.  What is a defective output of that process?  Is a response card received in error because the reader simply didn’t understand what the product was a defective output of the process?  Are magazine insert card responses that don’t result in actual sales considered defective leads?  Is a response card sent in a magazine and not returned (because the reader isn’t at all interested in the product) considered a defect in the process of generating leads?
    “Pricing process” might work as a 6s project if you have standard, published pricing that is occasionally misquoted by sales clerks to callers placing orders by phone. 
    “Better forecasting” — ?  It sounds like this might be a process that can have a component of defective output (e.g., “what made us EVER think we would sell 22 million Condoleeza Rice bobble head dolls?!  – how did we come up with THAT?)
    BUT, while the industry is FULL of consultants who want to sell you on the idea that Six Sigma can be used to fix anything and everything, you would be hard pressed to legitimately apply Six Sigma to “marketing program effectiveness” or “sales force productivity” or “improving margin” (i.e., “we got the sale, but maybe they would have paid more” – is this a defect in a pricing process?  If you are trying to improve margin by reducing cost, then that is a lean and straightup industial engineering project) or “sales team effectiveness.”  Again ….”Is there an identifiable, flowchartable process here having a defective output that can be improved?”
    Andejrad Ich

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    #135016

    Adrian P. Smith
    Participant

    You are of course entirely correct, however we were asked for project ideas, not to write the project charter!
    ;)Adrian
     

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    #135019

    Adrian,
    I agree with you … there is plenty of scope amonst these processes. One of the most important of these is pricing, which can be combined with ‘pocket margin,’ and it’s got nothing to do with ‘defects.’
    Cheers,
    Andy

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    #135020

    Andejrad Ich
    Participant

    “nothing to do with defects”?
    …then it has nothing to do with Six Sigma.
    Period.
    Andejrad Ich

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    #135021

    Adrian P. Smith
    Participant

    One possible defect in the pricing process could be a product sold at a unauthorised price.

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    #135022

    You mean nothing to do with your consultancy :-)

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    #135023

    My advice is to stop thinking in terms of defects and start thinking about performance …

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    #135024

    Andejrad Ich
    Participant

    “performance”?
    See….. that’s what lean and industrial engineering are for.
    Six Sigma is about minimizing/eliminating defects.  If it’s not about eliminating defects, then it’s not an application for Six Sigma.
    Period.
    Andejrad Ich

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    #135025

    I bet you’re a quality engineer who has never taken responsbility for a process and has never had to adjust a process mean to optimise performance.
    Perhaps you forgot the ‘r’ in Lean ..buddy :-)
    Andy

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    #135026

    The Lorax
    Member

    Replace the word “defects” with the word “variation”?

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    #135027

    Andejrad Ich
    Participant

    I hope that when you are adjusting the mean to “optimize performance”, you are doing so to minimize the probability of generating output out of specification (you know….to increase the sigma level….you know…the sigma level that indicates defect rate…….the sigma level that is the basis for Six Sigma…..that sigma level).
    Andejrad Ich

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    #135028

    No that’s not correct .. there are many process that meet 3.4 ppm, but are still have to be adjusted to a target.
    I’ll leave it to you to figure out why.
    Andy
     

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    #135030

    march
    Participant

    Andy, why so cynic ? Explane him why …

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    #135031

    March,
    It’s just a question of style … If Mr. Ich feels he knows it all, who am I to correct him.
    If you want the information you can contact me directly.
    Cheers,
    Andy

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    #135033

    Andejrad Ich
    Participant

    …this should be good…….I’m anxious to see such an explanation that doesn’t include “to increase sigma level” – particularly when posted on a Six Sigma site.
    (such a post would be considered “defective”)
    Andejrad Ich
     

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    #135039

    Mr IAM
    Participant

    I’m taking a stab at this one because you have me curious Andy.  It wouldn’t be as simple as “because the specifications are wrong” would it?
    Cheers, M

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    #135042

    Mr. Iam,
    Most process tolerances are univariate. This means to match subequent process steps, you have to adjust one process mean to other process mean  – a process of ‘matching.’ Matching is important – even if the process has a natural process capability.
    To see this more clearly draw a bivariate distribution with a ‘tight interference.’ Do all points within tolerances function equally? No they don’t, and anyone who has worked in the field of yield enhancement and failure analysis should know this.
    Now the question is how does this apply to transactional processes :-)
    Cheers,
    Andy
     
     

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    #135053

    Mr IAM
    Participant

    Andy, 
    Thanks… So now I’m wondering does this apply to transactional processes that are not independant? I.e.. the two process means have to match for their combined output to be on target?
    I think I see the logic of how having process means match would be more valuable then simply having two “six sigma” processes, as you can have a six sigma process without being centered.  Interesting.
    Thanks, M

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    #135054

    Mr. Iam,
    Of course this is just a simple model.
    You can now apply this thinking to the pricing process … and the pocket margin. It’s not just a question of the wrong price (a defect approach) but knowing how each step of the process matches the others – particularly the discounts.
    Andy
     

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    #135055

    Andejrad Ich
    Participant

    And so, conducted as a Six Sigma project, it is determined that control of centering of the contributing sub-processes is critical to producing a centered, on-target final assembly. 
    …and the reason the final assembly needs to be centered?  That’s right — to minimize the occurrence of  DEFECTS produced out of specification.
    If it’s not about defects, then it’s (still) not about Six Sigma. 
    Andejrad Ich

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    #135056

    Andejrad Ich
    Participant

    This sounds just almost meaningful………until……
    ……..until you stop and think ‘oh yeah……sigma level’ — there can’t be any calculation of a sigma level. 
    If all legitimate applications of Six Sigma can be measured using a calculated sigma level.
    And the pricing process example does not allow calculation of sigma level.
    Then the pricing process example is not a legitimate application of Six Sigma.
    Andejrad Ich

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    #135057

    Mr IAM
    Participant

    Andejrad Ich,
    “if it’s not about defects, then it’s (still) not about six sigma.”
    So.. what then is a “defect”?  With that definition – six sigma is about everything.  Is there anything that cannot be measured in terms of defects?
    Six sigma is about buisness.  Business is about making money.  If it’s not about money it’s not about six sigma.
    What came first? The chicken or the egg?  Please.
    – M

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    #135062

    Rubbish …

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    #135063

    Rubbish

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    #135064

    BTDT
    Participant

    Andejrad, Andy U, MR Iam: *

    Andejrad, Andy U, MR Iam, Lorax: *The problem of two interdependent processes in Six Sigma
    projects for sales is addressed by measuring “Variance to Want” – VTW.
    This was a big change in the Six Sigma program for GE when Piet vanAbeelen was
    the Exec VP of Six Sigma. The program was variously called “Stable
    Operations” “Span” and “Variance Based Thinking” and
    piggy-backed onto Six Sigma in mid 1999.For sales processes with an extended relationship with the
    customer, the biggest complaint was not, “Get it fast”, but “Get
    it to me when you said you’d get it to me.” For each transaction this
    required a predictable time-frame on the part of the company to match a delivery
    expectation for delivery on the part of the customer. These projects usually
    would bridge many different functional units of the company as each transaction
    passed through initial lead generation, scope definition and pricing, quote
    generation, order entry, order management, engineering, delivery, billing and
    collection, warranty and after market service. The metric was the width of the
    distribution of VTW as defined by the difference between the P5 and P95
    percentiles. This could be for the entire transaction or individual parts.VTW = delivery date – customer want date (negative is early,
    positive is late)The distributions were always non-normal. The specifications
    were mandated by corporate.”All processes must have a span of less than 10 days.
    So let it be written, so let it be done.”As Lorax pointed out,
    “replace defect with variation.”The causes of large span were analysed using Mood’s median
    test and Levene’s test for homogeneity of variance. The cause of large span
    could be a poorly controlled capacity on the supply side, or unrealistic
    promises to customers on the sale side.If the non-normal distribution of VTW could be transformed
    or recognized as a well-known distribution, then the sigma level and DPMO could
    be calculated using the continuous data available. If the data could not be
    transformed, the data was treated as discrete and shipments either too early or
    too late were merely counted. The DPMO was converted to a sigma level and
    reported.Lots of really smart sales people did lots of projects based
    on these ideas and metrics.Hope this helps,Cheers, BTDT* In order of appearance

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    #135065

    Ingore this guy he doesn’t know what he’s talking about. His knowledge is limited to quality inspection.
    If Six Sigma is all about defects then why would anyone want to optimise a process using Evop or Simplex.

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    #135066

    Good point BTDT ..
    We have to move away from the focus on defects and concentrate on the cause of defects, which are not other defects just variation as you comment, such as the edge film speed fo film. So when there is a differential film speed across the width of the film defects such as ‘stuck film’ and ‘skew film’ arise.
    If this isn’t six sigma what is it?
    Cheers,
    Andy

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    #135068

    pradeep kanan
    Participant

    i like ur project

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    #135070

    Andejrad Ich
    Participant

    “Is there an identifiable, flowchartable process here having a defective output that can be improved?”  If there is, then Six Sigma is applicable. 
    If there are no specifications, there cannot be any defects (and certainly cannot be a calculated sigma level).  Anyone trying to apply Six Sigma to a project for which the question above cannot be anwered with a “yes” is misunderstanding and misapplying an otherwise respectable approach.  I’ve seen a lot of crap improvement projects (usually someone’s pet project – like “improve sales force efficiency”) get jammed into Six Sigma clothes.  And the truth is, they never end up looking good when you’re trying to explain how one part of the pile of B.S. fits in “Define” and another part of the collected B.S. fits in “Analyze”.  Except no one GETS that the problem is that the project should never have been pursues as Six Sigma.  No one gets that it’s a misfitting project, and Six Sigma ends up taking the rap.  The more you diverge from the pristine intent to minimize/eliminate defects output from an identifiable process, the more you risk making Six Sigma look like a foolish waste of time (or look like…..”rubbish”).  The more you try to claim that you can use Six Sigma to fix anything, the more you tear down the foundation of a great discipline WHEN APPLIED TO THE TYPE OF IMPROVEMENTS FOR WHICH IT WAS INTENDED.
    Andejrad Ich

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    #135078

    Ritz
    Member

    And all this time I thought that Six Sigma was a collection of tools used to solve problems. 
    Mr. Ich, thank you for your enlightenment. 
    I’ll be sure to tell the derivative folks that “pricing” is not a process.
    I’ll also be sure to explain that millions of dollars in improvements must now take off their clothes, since they are masquerading as six sigma improvements and they never looked good in them anyway.
    I just love fundamentalism.
     
     
     

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    #135089

    Andejrad Ich
    Participant

    You are welcome.
    Andejrad Ich

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    #135093

    Swaggerty
    Participant

    you need to watch these sales guys.  Try paying attention to their behaviou.  this sounds cheesy, but ask them to fill in a time sheet that details every hour of work in a month.  You will soon see what they are doing, by paretoing the factors.  travelling will probably be top and customer facing will probably be bottom….they won’t like filling in the time sheet and will probably cheat a bit.  In our firm, some of these guys are expensing over 1.5k usd per week inc air travel.  they do stay in the nicest hotels.  It’s all about value for money.  Sometimes the answer can be to employ another guy in a different location and cut out some of the travel and increase the customer facing time.  You need to determine what value added is for a sales guy first though.  Also, start getting your accounts dept to go through their expenses with a fine tooth comb, they are throwing good money away and could be having the easy life…or not.  Good project stuff though and a real eye opener.

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    #135105

    Andejrad Ich
    Participant

    This is absolutely all true (and likely correctable) waste.
    Just don’t call it a Six Sigma project.
    Andejrad Ich

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    #135141

    Swaggerty
    Participant

    why on earth would you not call this a 6s project?  pareto analysis of defects included….any non value added is classed as a defect?  There are potential cost avoidance here, why on earth would you not send a BB arter it..  your take is it must eliminate defectives not waste.  I call un needed spending a defective practice.  You on the other hand are a looney!

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