Six sigma example in service industry!
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Nolan.
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December 14, 2008 at 6:41 pm #51510
Dear Friends,
Could some one please help me understand application of six sigma in service industry with an example.
I have tried to find out from internet and have also recently gone thru (rather quickly) Michael L Goerge’s ”Lean six sigma for service”. But I have not found answer yet.
My own opinion so far (and I probably am wrong since people have written books on this topic) is that it is probably not practical to achieve six sigma in service industry.
Regards
Manish
0December 15, 2008 at 3:30 pm #178726
TierradentroParticipant@john
Include @john in your post and this person will
be notified via email.Good question
0December 15, 2008 at 4:29 pm #178728
LangseeParticipant@LangseeInclude @Langsee in your post and this person will
be notified via email.Try this: Look at database of On-Time Delivery, Lead Time, Return Material Authorization (RMA) rate, Complaint, Voice Of Customer (VOC), 0-for NO and 1-for YES — attribute data… I think you get the idea, yes?
Langsee0December 15, 2008 at 9:47 pm #178742Langsee,
Could you take it slightly further please.
Lets take one made up example on ‘on time delivery’.
Customer is expecting delivery in 3 days. To meet 6 sigma conditions, would it mean that our process should be capable of delivering with in a day (upper process control limit) or near around in routine (I am taking a very simplistic view for understanding).
Now above doesn’t seem practical to me in a service industry. If yes then what is the methodology to achieve it. Does it mean we have surplus resources at hand (goes against Lean) or that we have to simplify our steps to such a level (seems far fetched idea) that he efficiency is very high.
Regards
Manish
0December 15, 2008 at 10:22 pm #178745Manish,
You can certainly use the “Six Sigma Methodology” in the service industry (or any other industry that follows any kind of process). If your question is more about the practicality of a transaction-based process trying to achieve a level of 6-sigma reliability, that is a harder question.
A common misconception is that the “six sigma methodology” should be used to move every process to 6-sigma performance. Any process improvement effort must be tempered with a good dose of business and common sense. In some cases, 6-sigma may not be reliable enough while in other cases, 3-sigma may be the sweet spot. That decision must be driven by the business.
In general, listen to the customer and strive for perfection. Control everything that is controlable, and make your process robust to things you can’t control. But balance those things with a dose of practicality.
Outlier0December 15, 2008 at 10:47 pm #178746Outlier
I think, your explaination that one could go for lower sigma levels instead of six sigma reliability makes some sense. Hopefully I would get my hand on a real practical exapmle some day.
But I wonder if that makes ”six sigma for service industry” less attractive tool since it can not achieve the reliability of six sigma.
Thanks
0December 15, 2008 at 11:10 pm #178747It isn’t about a sigma score – it’s about doing things quicker, cheaper, better…or whatever matters to your customer.
Quit worrying about it and go fix something!0December 16, 2008 at 8:16 pm #178773I didn’t say it cannot achieve six sigma reliability in the service sector, I said it might not be practical from a cost/benefit point of view to try to push a transaction based process to six sigma reliability. That goes for any process whether it is an industrial manufacturing process or a people-driven transaction process. The appropriate level of “perfection” must be determined by diligent cost/benefit analysis.
The “Six Sigma Methodology” is a great tool to improve any kind of process to any appropriate level of reliability. But of course, it is not a cure-all, it is just a tool.
Outlier0December 16, 2008 at 10:09 pm #178778I agree with you, since thats what I practice in real life and exactly the reason why I am asking this question.
All I wanted is to confirm if following statements are true –
”six sigma levels cannot be realistically achieved in a service industry as a tool to achieve better consistency & quality”
and that ”six sigma level is not practical in terms of cost / benefit and even might not be possible to achieved in the real world,”
If answer is yes than I would rather use my precious time on what I know best.0December 16, 2008 at 10:20 pm #178779It would help me a great deal if you could give me a real example where six sigma tool was used to achieve whatever level of reliability. But please do mention the control limits and the service levels achieved.
I have been working in a service industry for more than 10 years and would love to use it to improve the consistency.
Thanks0December 17, 2008 at 12:31 am #178782I work as a transactional BB. We did one project this year in which our starting sigma level was .63. We improved the process to a sigma level of 1.05 (nothing earth shattering). There are several factors which prohibit this process from producing at a 6 sigma level but as Outlier stated it doesn’t neccessarily need to be. Our savings were close to 1M. I can tell you that many folks weren’t worried about the sigma level. The process is also very manual and spawned a DFSS project to improve it even more but we justified that the benefits were there. We’ll probably wind up around the 2 sigma level but that will be a huge success in everyone’s eyes.
Another thing I’ve found is that the lean toolbox works great in transactional at eliminating waste and the best part is you don’t need sigma levels to show you’ve made improvement:)0December 17, 2008 at 12:46 am #178783Xgames made an excellent point in his/her final sentence. What is
most important is to improve. Too often we get wrapped around
the axle worrying about how many bell curves we can squeeze in
between two limits.”Six Sigma” as an approach to business excellence has grown to
become much broader than that — just as Lean has. If you look at
the Six Sigma BOK or the Lean philosophy and tool set, basically
they encompass finding better ways to conduct all aspects of your
business.I am not discounting the importance of data-driven improvement.
But we just need to keep things in perspective.
DLW – BPEX0December 17, 2008 at 1:14 am #178784Manish, I think you may be misguided alittle or confused about six sigma….let me begin with your quote:
”six sigma levels cannot be realistically achieved in a service industry as a tool to achieve better consistency & quality”
this is not true…six sigma is all about variation and decreasing that variation, becoming more consistent in meeting your customer expectations. Now if you are asking if you can hit six sigma in services using the methodology, i would say yes…with the caveat of implementing process improvement along with automation. But someone said it in another post….its about meeting your customer expectations consistently. If you know of another methodology that will help you achieve that (outside of completely re-engineering and automation)…please share it with us.0December 17, 2008 at 3:36 am #178787I did a very successful Black Belt project that improved the pre-sale process and improved the 1st time service successful install metric.
We also significantly improved customer satisfaction and the cancellation rate.
My company has done many projects in the service area.
0December 17, 2008 at 7:05 am #178792Very interesting discussion . Xgames was almost spot to the query with real time data. 1M saving was significant enough for applying Six Sigma into any industry.
However I also have some apprehensions about applying it into IT industry. When we do the testing for an software application / product , there is a time where we need to stop testing even when we are sure there are few minor bugs left. Because beyond a point testing costs more than a bug. So it boils down to what is the Critical To Quality / Crictial To Customer that we are concerned about. In this case cost saving is more important than achieving 3.4 DPMO. If Customer requirements (both baisc and exciter elements) are met we can safely conclude that as CTC and work around making breakthrough improvements in terms of value / benefit / less defect / quicker turnaround time etc as the case may be.
Just my thoughts
Krshna0December 17, 2008 at 8:11 am #178795I think the main point of the discussion was whether Six Sigma methodology is a practical approach to follow in the service industry. I think it certainly is, because it is not just a set of tools, but a complete philosophy of how to look at processes / activities and how to approach them towards making the output of such processes more predicatble and consistent.
Any tool is only as good as the person using it, and that applies to the tools used in any process improvement initiative as well.
The end goal is delivering what the customer wants, and delivering that reliably and consistently. What industry one represents is secondary.
Why must we feel that we cannot hope to achieve a high degree of reliability in people-driven, transactional systems? Why can’t i ensure that if the upper spec limit is deliver within 3 days, my processes ensure that i meet that spec?0December 17, 2008 at 1:11 pm #178798There are alot of “best practice” examples located right on this website. Go to the isixsigma.com “home page” and scroll to the bottom of the page. There is a heading titled “six sigma directory”. In that section, there is a link called “Best Practices”. I think you may find what you are looking for in here….. Good Luck!
0December 17, 2008 at 4:32 pm #178807DLW..thanks and just to clarify I am a “him”. I like your point on data driven analysis. There are a lot of measurements you can use to show improvement using lean without attaching a sigma level. To name a few..reduction in NVA activities, cycle time, distance traveled, and paper reduction (PC). Like you mentioned the name of the game is to continually improve.
Krshna..I agree with your statement about cost benefit analysis vs. improvement. However with my IT group we use the DFSS tools with great success. You mentioned CTQ these are developed using QFD. This will also rank your requirements to show where you can make that cut off regarding bugs. The DFMEA is also critical to mitigate any risk. If this is all done upfront your risk of having bugs and rework in the first place is greatly diminished.
my 2 cents
Xgames0January 1, 2009 at 2:42 pm #179203hey ta dabba wallas in mumbai , they take lunch from home and deliver it to the offices , they were the first ones to even be awarded wid the deming award in india
0January 2, 2009 at 5:55 pm #179220Hi Guys,
Big thanks to all the contributors. It has definitely helped me in my understanding. Message I get is as below –
1) Number of you have pointed that its about using six sigma methodology & reducing the variation rather than worrying about achieving 6 sigma levels. I always associated six sigma with achieving 6 sigma levels so that is very helpful.
2) Number of contributors have used six sigms methodology in service industry to control & monitor the process so that answers my question.
However only thing I would add here is that it would be more helpful in my understanding if any one of you could mention following in your examples – a) what actual parameter were you trying to control, b) spec levels c) control limits achieved d) what was the frequency of collecting samples & how many observations were taken each time e) Very Important -Was it possible to detect from the trends before the process actually went out of the control (please answer even if you thought this was a dumb question as this very important for me)
As Tony asked me, I would like to share my experience of achieving higher efficiency in service industry. My experiene tells me that following factors are very helpful –
1) Prioritising the work in order of its importance to the timely completion of entire process. I have seen process delayed because of FIFO. Moreover I find it very useful if tasks that take lesser time are completed side by side while doing a task that takes longer time.
2) Record keeping – Often doesn’t get that priority, data is not readily available & we lose time in tracking information.
3) It would always improve the quality & make process lean if any work being done is not left half done. What I mean is that the work must be left at a clear stage with notes as to what is to be done next. Often the work is left half cooked and we loose lots of time in getting the pieces together before proceeding further.
4) For projects – Spending time on project planning using tools such as gantt charts (identifying all activities)& identifying critical path (CPM).
5) Clearly identifying & communicating responsibile person for each activity – seems obvious but I find that in real scenario this is one of the key reasons for work not being done on time.
6) Communication & training – Often it is assumed that the activity is simple and training is not required. Key cause of the quality problem. In my expereince, I have seen things being interpreted in different light.
7) Last but not the least – Use of DMAIC principles to improve the process & make it as simple as possible. One thing that I would add after this discussions is to control the variations as well.
In the end, I would like to add that in the last couple of weeks, I had little more time to go thru Michael George’s ”Lean six sigma for services”. It was interesting to find that above fit in very well with things described in the book.
In my experience, I have seen one person doing the same work by using above principles that 3 persons used to do previously.
Manish
0January 2, 2009 at 6:34 pm #179221Thats quite useful. Could you please also explain the following –
1) What do you mean by transactional? Is it another word for service processes or does it mean process where money is exchanged ( e.g. invoicing process, payment on internet or tills etc.) Could you please actually mention the parameter that was controlled.
2) Have you been able to detect trends in the process and correct it before it went out of control limits. Actually it has been one of my doubts that in service scenario, it might be difficult to detect trends and timely correct it. Please do let me know.
Manish0January 2, 2009 at 7:01 pm #179222Manish, it’s been my experience that transactional & service are used to mean the same thing.
Re: Trends – difficult to assess when people are involved – they are highly variable mechanisms. More so trends can be predictive with equipment where drift can be detected due to – wear, temperature, humidity, et al. About all you can trend with people is a group variance based on day of the week, time of the day, holiday impact, season impact, their team in a playoff game impact, etc.0January 3, 2009 at 10:15 am #179233Les, Your answer takes me nearer to my destination. Your comments about the trends have actually helped me in framing a question for me. I was struggling to put the same into words. Your answer was precisely one of the key reasons for me to start this topic in first place.
Please consider the following statement –
Prior to these discussions, as I understood over the years, six sigma was all about controlling the process with in a defined limits so that we could prevent producing non conforming parts by actually observing the trends and taking corrective actions before hand. That for me was core of six sigma philosophy.
Now as you have answered (precisely what I have always thought for service scenario), should we use the word six sigma while using various improvement methodologies known by different names as DMAIC / PDCA / IS0 9001:2000 (NOW 2008) / STATISTICAL TECHNIQUES / KAIZEN / 8D etc.
Is six sigma not a misnomer in that scenario. Ofcourse by using any of the above techniques, we would be able to show the improvement, reduce the variation as well as improve the quality.
0January 3, 2009 at 3:48 pm #179235I’ve never worried about the symantics. To me six sigma means a DMAIC approach to problem solving not the silly 3.4 defects yada, yada, yada.
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