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bb first project trasactional customer payment

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  • #44929

    si
    Member

    Please help
    I have just finished 3 weeks of black belt traing, and was under the impresion my first project would be manufacturing based eg reduce lead time improve eficieny reduce scrap etc, which i could not wait to get stuck into.
     
    I have however been given a transaction project (which i dont mind) basically i have been asked to look at why customers are taking so long to pay.
     
    Is this really a BB belt project, i can see a use for many tools but wonder if it is a meaty enough project has anyone done a similar one that could give me any advice

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    #144988

    Monk
    Participant

    Si,
    This can definately be a six-sigma project. You may need to sort out a few things before you decide to take up as a six-sigm project.
    – Do you have only one customer or a variety of customers, who can be covered under one head or a variety of customers under different heads. This is important to decide, which particular customer/s your project will focus on. Be careful on how to go about identifying the customer.
    – You can only improve, what is within your control. Is your customer payment process, within your organisations’ control? Obviusly answer is no. So you may need to get the support as well as representation from the customer end as well, if you think that there is also some part played from customer end as well. Get advise from your project champion or MBB.
    – What have you defined your metric? Howare you going to quantify the problem? Do you have any existing data on that and how good is that?
    Just think about the aove points and have a discussion with your MBB before you take it up as a project. Important thing to note is that, your customer should as well agree that this is a concern, the yare ready to work on with your support. Else your improvement actions to be implemented at the customer end process will be ineffective.
    Hope, you are able to get some insight into the problem.#
    Monk

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    #144996

    BTDT
    Participant

    Si:I have done dozens of projects like this. My first reaction was that finding ways of getting money from customers faster was not a Six Sigma, customer focused project. I was humbled.The general conclusions are ALWAYS the same: unhappy customers pay more slowly. The reasons for their displeasure will be different in all cases, but customers know that the best way of provoking a company to resolve their problem is to hold payment. It is usually their method of last resort.The project should cover enough of the customer touching process to be relevant. For example, problems in final acceptance by the customer can be caused by things a long way upstream, such as terms & conditions for freight charges in the final invoice.You will have to work with everyone from Sales to Finance. This project is a great opportunity to learn how your entire business works. Make sure you work closely with your MBB to manage scope.Cheers, BTDTCheers, BTDT

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    #144999

    boettler
    Member

    Your project on transactional improvement is beneficial for blackbelt esp. if its an issue plaguing the site level. Implement the lean six sigma transactional tools to make this happen and provide more value.  

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    #145012

    Cash flow
    Participant

    Rob,
    In order to fully get the credit for your project, I suggest to work with your accountants on establishing the impact of your project on the following critical financial indicators:
    – Improved cash flow
    – Debt outstanding -> reduction in interest on future loans
    – Current Ratio/Acid Ratio
    – Decrease in bad debt => asset/debt ratio and valuation of company
    – Earnings before Depreciation, Interest, Taxes and Amortization
    Depending on the size of the problem this might be one of those “bingo” kind of six sigma projects.
    It looks like there are still some Six Sigma organizations out there whose MBBs and Champions understand how to link Six Sigma to the bottom line :-). Take it as a compliment that your management team lets you work on this type of project.
     

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    #145036

    si
    Member

    does anyone have a BB project they have done, the issue is i am a manufacturing engineer, there are no accoutants or sales people trained in six sigma at the company i work for, and am a little wary as i know very little about transactional methodolgy

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    #145039

    Monk
    Participant

    Si,
    The role of a BB is that of a facilitator and not process expert. How good you facilitate will ensure that you are able to get the right information and do analysis, which will enable the process owner to take decision.
    I can share from my own experience that all my six-sigma project have been out of my area of expertise and believe me, that gives an unique advantage over others, as you do lot of ‘out of the box’ thinking.
    Go ahead! Fear not….that is your worst enemy. If you are able to visualise, how yo uare going to apply six-sigma tools in your project, half your battle is won.
    All the best !
    Monk 

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    #145047

    si
    Member

    Cheers monk
     
    my main concern is that i need this for accreditaion, i can see where i would use sipoc pareto fmea vsm mapping and many more but am unsure if there will be enough to it to get accredited i will probably be in a much dtronger position by this time next week. Ive done quite a bit of reaserch on the net and am looking forward to it.
     
    si

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    #146116

    NPope
    Participant

    This is a potentially fantastic and meaty BB project — given the complexity and variety of business operations to be explored in assessing the issue.
    My only recommendation as you start:  the framing of the project, “why customers take so long to pay” is very internally focused.  To derive maximum benefit from the project and the investment of time and resources you’ll be making, I would suggest a framing more along the lines of, “What are the customer drivers of loyalty and value in our interaction” and focus on the payment process as a symptom. The key questions you want to ask and answer are:  What causes good customers to pay quickly; What are the sources of dis-satisfaction that cause other customers to pay more slowly; Where in the value chain can we add more value and incent customers to pay more quickly?
    Although customer payment process is not inside your control, many of the factors that go into customers’ payment decisions (e.g., expediency of your invoice process; perceived value of your product / service; etc.) ARE within your control and can be leveraged to improve the desired results.

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