Some companies are taking Six Sigma tools and methodologies outside their regular operations and finding ways to apply them directly to their customers’ needs. It is proving to be a great sales tool that keeps them ahead of marketplace competitors.
By Mary Ruff, iSixSigma Contributing Writer
Some companies – having implemented Six Sigma in many, if not all, aspects of their business – are taking the tools and methodologies outside their regular operations and finding ways to apply Six Sigma directly to their customers’ needs. By providing such services to customers and clients, companies can build better relationships, identify customers’ needs more clearly and therefore stay ahead of their competitors in the marketplace.
Engaging the Customer
A company with a product line to sell has to be much more savvy in the increasingly cluttered world of marketing that exists today. Customers may be wary of the usual sales process, in which they see themselves being “sold to.” Sales and selling tools must have a distinct edge. One way a company can make that happen is to identify a customer’s special need in advance of the sales process. Motorola has done just that in their customer engagement process.
Tom McCarty, vice president of Motorola University Six Sigma Services and co-author of the book, The New Six Sigma, describes this process as looking for opportunities for customer engagement. By hearing the voice of the customer, and then working in partnership with them to develop strategic growth plans, a company will not only understand the direction its customers are heading and why, it also will create a relationship of trust.
An example McCarty gave is that of Motorola developing a logistics tracking system to log and track containers in various ports around the world. “Because we went to them (the customer) and said that we knew where the technology was going, we were able to engage them, and take them down a different path,” McCarty said. This particular customer had a special need, and Motorola knew how to fulfill that need. Motorola developed a partnership and a process that is ongoing and repeatable. And, the fact the customer in this case was involved in the data collection process during development made them trust the product all the more.
Another case McCarty cited is one in which Motorola worked on a project with a major city in the Northeast. The city had a customer service call-in system (like 9-1-1, but using 3-1-1 for non-emergency services). Motorola devised a system whereby all citizen calls could not only be logged in, but also tracked from the time of the original request to the time that request was filled.
Going Beyond Product Training
Motorola used Six Sigma at the front end, to identify specific areas of improvement for city responses. They established metrics at key city areas, and trained city employee as Green Belts to analyze the data. The result? A much more efficient customer response system, with requests being identified and filled in a much more timely manner. Because the city employees had participated in the training, they were able to speak the Six Sigma language and understand and trust the data they had collected, and then act on it.
McCarty sees three ways that this engagement process benefits both parties.
- Motorola uses the engagement model to involve their customers from the outset.
- As the customer invests (and in the case of some technologies, this can be a large investment) in the Motorola technology, they begin to see quantifiable improvements, actual hard savings. Six Sigma helps them to change themselves for the better.
- Six Sigma can then help them to grow more effectively, and this can continue into the next phase. McCarty sees this as “extending the value chain of Six Sigma.” Suppliers can be involved in the process, the manufacturer continues the chain, and customers, whose needs have been identified and met, complete the value chain. Having been involved from the outset, the customer establishes a pattern of growth, and both companies benefit from the exchange.
‘A New Tool for Their Toolkit’
Another way of looking at Six Sigma and the strategic client has been developed at GE Commercial Finance. Ned Reynolds, senior vice president for marketing communications for GE, explained this special niche in the commercial finance business. Unlike its competitors in the lending business, such as banks or finance companies, GE can offer its own industrial heritage to smaller companies which are likely to be growing, he said.
GE’s “At the Customer, For the Customer” (ACFC) initiative has been used to effectively communicate with clients. Cari Windt, senior vice president and ACFC leader of GE Commercial Finance’s Corporate Financial Services, described it this way: “It’s like asking the client, ‘If you had the ability to talk to GE, what would you ask for?'” As many as 30 percent of the companies queried by GE asked for Six Sigma, she noted.
Many of these companies do not have the size or capability to mount an entire Six Sigma effort. So, not only does GE provides long-term credit, it also shares with these companies the Six Sigma skills and resources that have made it successful. That makes customers “think warmer thoughts about GE,” Reynolds said. The end results are customers whose businesses are prosperous and expanding, and who are pleased to continue doing business with GE. In simple business terms, GE is using its ACFC program to increase current customer loyalty and to increase sales to those current customers.
Like Six Sigma, It Works in All Industries
GE has been involved in a wide diversity of engagements since 1999.”There is no industry that GE doesn’t lend to – from a radio station to a metal-forging company,” Windt said. Because many of today’s companies are feeling similar challenges, the Six Sigma methodology, which works across many different disciplines and industries, can be of great help to all of them. “You don’t have to be a statistician,” she remarked, “to be successful at Six Sigma.” Whether the particular challenge is reducing cycle time, improving manufacturing quality, ensuring on-time delivery, improving employee retention or overall efficiency gains, GE works within the particular company’s culture to provide a customized toolkit. Windt described the knowledge transfer as “putting GE’s tools in their toolkit.”
All businesses have existing cultures, and the key to a successful implementation of change management is finding a way to incorporate the change into that existing culture. How is this done? Windt described a scenario with a real customer, Berry Plastics, which wanted to improve its quality management system. GE met with the company and discussed all aspects of its system, then provided a customized, one-and-a-half day “Champion level” training program for Berry’s executives. This gave them the working language to continue the Six Sigma effort.
Because GE provided mentoring up front and continued to work with Berry, the plastics company saw a quantifiable change. GE helped to get 50 teams and projects working there, and the financial benefits have been more than Berry expected. Particular among them was a 50 percent reduction in costly customer complaints in one particular plant.
Stephen White, a GE Commercial Finance spokesperson, put it like this: “For GE and their customers, it’s really a win-win situation.” Not only can GE provide financial capital, but their services can go beyond that. Their 120-plus years of manufacturing experience can go a long way in a company that is looking for advice in improving cycle times and dealing with manufacturing problems. This kind of expertise provides real added value to any aid, financial or otherwise. White explained further, “Just at GE Commercial Finance alone, there are 50-plus Black Belts and Master Black Belts whose only job is to help customers solve their problems.” Not a bad backup team for a company in need of Six Sigma advice.
Judy Lenhardt, in a recent interview with the Cleveland Plain Dealer, explained the additional benefits of GE’s ACFC program. Lenhardt, the program’s leader, noted that in addition to the many Black Belts and Master Black Belts, there are thousands of GE employees with experience in manufacturing or management. Their expertise is part of the package when lending is involved. And the cost to the customer? Nothing. Good will, and the hope that in the future, that company will choose GE Financial Services again in their quest for better business practices.
The second win in GE’s ACFC program is internal. White characterized it as another component to the “customer-centric” way of thinking. This program, he stated, serves a marketing, or business development function for GE itself. Through ACFC, GE’s Black Belts get real one-on-one customer experience. Not only does GE get a better feel for that customer’s needs, but the Black Belts involved get to put a face to the customer. “Customer facing” – GE’s in-house term for this relationship – is only logical. The more interaction GE has with a variety of customers, the better its experience and skills will be in a variety of different areas and industries. Plenty of companies can lend money; how many can lend experience in manufacturing, or process evaluation or management?
GE’s benefit from this? Better leaders, better Black Belts, and employees who are better poised to move up in their own company. Not a bad deal. What starts as a learning experience for the Black Belt ends as training on both sides. And the result is often that the company will seek out GE again when they wish to expand and grow.
As did Ranpak Corporation’s Dave Gabrielson, who said that he was so impressed with GE’s help, he asked them back a third time. Seeking to streamline the machine that crinkles kraft paper into box-packing material, Gabrielson sought the advice of his lending institution, GE. The Ranpak workers and the GE process evaluators worked together to reduce the number of workers who build the custom machines that produce the packing material. Gabrielson remarked that he was “astounded” at his own employees’ reaction to the changes. Because they had been instrumental in engineering the change, there was no “buy into” needed – they had done it themselves, with GE’s help and experience to lead the way.
Conclusion: Everyone Benefits
Everyone reaps benefits from ACFC, whether the exchange of customer/lender advice is a short conference call, a week-long training session, or a GE Black Belt who works several months at a firm’s facility. GE helps a firm to grow, financially and culturally. The firm’s customers are happy. And GE forms a working relationship with its customer that can continue. Again, the value chain is extended for both client and lender, and each leaves with goals having been met and better results achieved.
Both GE and Motorola, having profited from what Six Sigma did for them, are taking that experience outside their own firms and using it to forge new business relationships that are beneficial for them and their customers.
About the Author: Mary Ruff is a freelance writer who lives in Pennsylvania, USA. She can be reached at [email protected].