Triumphs Through Transactional Six Sigma

BY: CHUCK WERNER

First introduced in the 1980s as a descendant of much older statistical tools, then polished and (some would say) nearly perfected in the 1990s, the Six Sigma methodology has driven process improvement on manufacturing floors around the globe for decades.

But what about the carpet side of the business?  Can this same methodology be successfully employed in an environment of transactions and shifting complexity?  Of course the answer is “yes,” although each project selected will have specific needs based on how it is identified.

APPLYING SIX SIGMA TO TRANSACTIONAL ENVIRONMENTS: IT’S A PROCESS
When properly applied, the DMAIC Methodology (Define, Measure, Analyze, Improve and Control) will improve any process through the identification and control of the inputs critical to ensuring customer satisfaction. In this case, a process is any sequence of actions where raw materials are run through a series of activities with the intent of supplying a desired product.  But these “raw materials” don’t always need to be physical in nature, and the transformation doesn’t always involve a manufacturing process. 

Even in the realm of transactions and services, inputs (like data, request forms, orders, etc.) are run through processes and the results are delivered to customers. As with their manufacturing brethren, these processes also can benefit from continuous improvement methodology.

FROM WHENCE IT CAME?
Project identification typically comes from one of three sources: the Voice of Customer, or communication of customer satisfaction regarding the service or product provided, the Voice of Business, or the impact of the process on current business results or future opportunities, and the Voice of Process, or how the operation performs compared to the expectations or goals. Each of these can have their own special intricacies and each project selected may have specific needs based on how it was identified. Let’s take a second to look at each of these main project sources:

• Voice of Customer (VOC):  Since the goal of Six Sigma is customer satisfaction, VOC often is the first area used to identify projects. It is always a good idea to start improvement efforts on the end of the process closest to the external customer so they may quickly feel the improvements.  Businesses often measure customer satisfaction based on metrics such as on-time delivery of services or complaints from mistakes in the service provided. These can make fine projects, but they may be neglecting to collect data upstream in the process where the causes for these defects and delays are occurring, which is critical for root cause analysis.
• Voice of Business (VOB): Transactional processes usually are viewed by the organization as a “cost of doing business.” It is common for the only glimpse of VOB in transactional processes to be the overall cost of providing the service or completing the activities. The typical response to any investigation of a service or transactional process is, “Well, we can’t NOT do it.”  However, while the process may be critical to customer satisfaction, it doesn’t guarantee that it is efficient or effective from either a business or cost perspective.  But since only a high-level – often budgetary – understanding of the area exists, recognition of opportunities for improvement can be unknown.
• Voice of Process (VOP): VOP is usually the hardest voice to “hear” in transactional Six Sigma.  This is due to the high amount of variation that is inherent in a service or transactional function. Differences in requests, interactions, services, functions needed and other details often can make it seem like every transaction is individual in nature and that there can be no comparison of one to the other.  As a result, data collection is not set up to view the effectiveness of the processes.

As demonstrated above, each of the three main sources for project identification have challenges, and quite frequently these challenges involve what is – or, more likely, isn’t – measured within the processes. 

STAY THE COURSE
Let not our hearts be troubled, for the answers to these challenges reside within adherence to the DMAIC methodology. The main difference in the application of DMAIC to transactional versus traditional manufacturing processes is the amount of focus (and often time) that needs to be brought to bear on certain phases. 

In manufacturing, the data and measurement systems typically exist, even if they may not be 100% valid. In transactional, as outlined above, data often is unavailable because task completion, defect-free service and on-time delivery typically are the main performance “metrics” observed, if not tracked. 

When working on continuous improvement projects of a service or transactional nature, consider the following strategies:

• Chartering: While the initial goal for the improvement project may be obvious (for example, targeting high defect rates, poor on-time delivery, high costs to the bottom line, customer complaints, etc.), these are known as “boiling the ocean” projects. The innumerable inputs that may need to be dealt with to address all potential root causes will inevitably result in scope creep, delays and frustration.  For transactional processes, the project manager, champion and process owner must all accept that the project is, on average, going to take a little longer to successfully complete since data collection will be needed upfront to properly define the project.  If it doesn’t already exist, collection points will need to be implemented to collect reason codes, durations and/or frequencies for the outputs.  They help to determine what the project focus will be as well as to help determine the project impact.
• Process Mapping: Another characteristic common to transactional processes is that everyone believes they know the best way to do the job. None of them are doing it the same, but they are all secure in their “best practice.” In order to avoid generating a process map that gets too confusing and creates much lamentation and gnashing of teeth, keep the process steps at a higher level for the initial mapping and instead put extra diligence into focusing on the inputs and outputs of the steps.  While many maps are good for showing process steps in detail, consider the use of a SIPOC (Supplier-Inputs-Process-Outputs-Customer) map to keep the amount of detail at an appropriate level while putting specific emphasis on what each step needs to be successful, as well as what they need to supply for the next step to also succeed.  Remember to speak with multiple people who perform the functions and ALWAYS WALK THE PROCESS.
• Metrics & Measurement: The process map should have identified several output requirements that are Critical to Satisfaction (CTS). These requirements should be primary candidates for data collection points throughout the process. This data should count the number of times a CTS requirement was not met and the reason for the failure. From this data, the project team will not only be able to determine frequencies of defects, but also can determine targeted performance as well as baseline performance/capability. Remember to validate the measurement system at these data collection points. While it adds time to the overall project, a fast project based on the philosophy of “garbage in/garbage out” isn’t going to be a benefit to anyone.  Additionally, seek opportunities to make the new data collection as easy to comply with as possible. Never make it harder to do the right thing than the wrong.
• Analyze/Improve: If the proper emphasis is given to “frontloading” the project work in the Define and Measure phases, the root cause analysis and identification of improvements takes less time than is usual in manufacturing processes.  Barring the need to implement an entirely new system, the countermeasures to improve often are of a procedural or habitual nature and based on best practices identified through the metrics that have been put in place.
• Control Phase: Commonly, all that must be accomplished in the Control Phase is to change the behaviors of a group of people. All kidding aside, it takes roughly three months of reinforcement to replace an old habit with a new one (studies by the University of London suggest 66 days).  Ensure that the process reinforces the new steps, audits are completed frequently and remember that the team is making a change that (scientifically-proven) takes a reasonable amount of time.

Six Sigma using the DMAIC methodology can have significant impacts on both the processes and bottom line of any business, whatever the business may be. All it takes is patience and a diligent adherence to the continuous improvement process.


MEET OUR EXPERT

Chuck Werner, Manager Operational Excellence/Lean Six Sigma Black Belt
Chuck has been a Lean Program Manager at The Center since 2016. His areas of expertise are in Lean, Six Sigma and Quality. Chuck has devoted many years to practicing Six Sigma methods, ultimately earning a Six Sigma Master Black Belt in 2011. He is passionate about helping small and medium-sized manufacturers become more prosperous using a variety of tools and methods gathered from over 27 years of experience. Additionally, Chuck is a certified ISO/QS9000 Lead Assessor, Training Within Industry (TWI) Master Trainer and is certified in OSHA Compliance and Accident Reduction.

Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.