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Evolving Process to
Achieve Better Quality
Discussion Topics
What is Six Sigma
99.9997%?!?!?
Elements of Six
Sigma
Six Sigma Lingo
Six Sigma Strategy
DMAIC
Case Study: PB
99.9997%?!?!?
3.4 million defects per opportunity
Whats the difference between 99% and
99.9997%
7 lost mail per hour instead 20000 per hour.
Unsafe drinking water for 2 minutes per year
instead of 15 minutes per day.
1 plane crash every 5 years instead 2 plane
crashes annually.
The Customer
Customers are the center of
any companys universe:
they define quality. They
expect performance,
reliability, competitive
prices, on-time delivery,
service, clear and correct
transaction processing and
more. Our customers
satisfaction is priority
number 1. If we don't keep
them happy, someone else
will.
The Process
Outside-In Thinking
By understanding the
transaction lifecycle from
the customer's needs and
processes, we can discover
what they are seeing and
feeling. With this
knowledge, we can identify
areas where we can add
significant value or
improvement from their
perspective
The Employee
Black Belt - Someone who has undergone intensive Six Sigma training, passed a certification exam,
becomes a full-time Six Sigma project leader and successfully implements Six Sigma projects with defined
business results within a certain time period. People who are taken out of their current roles, participate in
intense training, take the certification exam and lead two to four Six Sigma projects each year. At the end
of a two-year rotation, Black Belts will return to their business unit and continue to use their skills in new
assignments.
Champion - Business leaders and senior managers who identify Six Sigma projects and work with Black
Belts to promote successful implementation of Six Sigma methodology in their respective areas of
responsibility.
DMAIC - A Six Sigma methodology that involves five phases: Define, Measure, Analyze, Improve and
Control. Black Belts use DMAIC to improve processes, products and programs.
Green Belt - Unlike Black Belts, they do not leave their current work assignments or spend 100% of their
time on Six Sigma initiatives. Instead, they are trained in Six Sigma and then incorporate it into the way
work gets done in their current area of responsibility.
Master Black Belt - Someone who works with senior leaders to define Six Sigma projects, objectives, goals
and plans. Then, he/she works with Black Belts to track progress, continue training and coordinate efforts.
Root Cause - The fundamental cause of errors, which, if eliminated, would prevent recurrence of errors.
Six Sigma methodology strives to identify root causes of quality problems and implement plans to
permanently correct them.
Yellow Belt - Someone who typically has a basic knowledge of Six Sigma, but does not lead projects on
their own, like a Black Belt or Green Belt. A Yellow Belt often supports different phases of a Black Belts or
Green Belts project plan.
DMAIC
Define
Measure
Analyze
Improve
Control
Define
Define the Customer, their Critical to Quality (CTQ)
issues, and the Core Business Process involved.
Define who customers are, what their requirements
are for products and services, and what their
expectations are
Define project boundaries (scope) the stop and start
of the process
Define the process to be improved by mapping the
process flow
Measure
Measure the performance of the Core
Business Process involved.
Develop a data collection plan for the
process
Collect data from many sources to
determine types of defects and metrics
Compare to customer survey results to
determine shortfall
Analyze
Analyze the data collected and process
map to determine root causes of defects
and opportunities for improvement.
Identify gaps between current performance
and goal performance
Prioritize opportunities to improve
Identify sources of variation
Improve
Improve the target process by designing
creative solutions to fix and prevent
problems.
Create innovate solutions using technology
and discipline
Develop and deploy implementation plan
Control
Control the improvements to keep the process on
the new course.
Prevent reverting back to the "old way"
Require the development, documentation and
implementation of an ongoing monitoring plan
Institutionalize the improvements through the
modification of systems and structures (staffing,
training, incentives)
Case Study: PB
Why customers place calls to our customer care centers? The company found that over 12,000 calls related to an inquiry or dispute about sales
and property taxes. Another audit revealed that the same issue was costing the company more than $500,000 annually in uncollected taxes, interest
and fines. A cross-enterprise team was assembled to resolve the problem, using a Six Sigma methodology (DMAIC).
The team included: Bob Rosenblum, who championed the project, Janet Garner, Sandy Pfannkuch and Charlie Elms, who owned the processes
related to the project, Alan Daniels, the projects Six Sigma Black Belt, Alan Carlo and Bill Gowrie, the projects Six Sigma Green Belts, (Yellow
Belts) Pat Nissley and Dianne Askew, from our call center operations, Lynne Vidal and John McKenna from Voyager, Dawn Hallaman, Kirti Bhardwaj
and Mike Wilk from IT/Systems, Alesia Pratcher and Kathy Cracas from Tax
***Define The team defined the problem and scope of the project: inaccurate sales and tax exemption records resulted in over $500,000 in
uncollected taxes, interest and fines paid by Pitney Bowes in 2002. To resolve the issue, the team would look at the corporate, GMS and IBS sales tax
exemption processes and recommend changes/solutions that would permanently address the issue.
***Measure
The team collected one month of data from the daily processes performed at the corporate and IBS tax departments.
They also took a random sampling of 200 customers who were coded as tax exempt in our databases to check if we had valid certificates that proved
their status. The team also looked at how many times we approved or rejected customers requests for tax exempt status.
***Analyze
83% of exemption requests rejected because no certificate was received
When certificates are received, 78% of accepted result in a billing adjustment for taxes that billed on the first invoice
No process existed to identify expired certificates and request new certificates from customers
The team also analyzed what actions were critical to ensure a new process would permanently resolve the problem. They identified items
like timely submission and delivery of certificates, prompt reviews of customers requests, closed loop communications with customers and PB
departments and more.
***Improve
After all of this analysis, the team implemented a simpler, more disciplined process for managing tax exempt requests.
Now, the direct sales force and customers fax a tax exempt certificate directly to the Tax Department for review and imaging, rather than sending it
inter-office mail -- which caused a tremendous time and control delay. As a result, the process for handling tax exempt requests takes just two days
thats compared to 25 days under the old process.
***Control
To ensure the improvements would work and be maintained, the team assigned clear accountabilities for each part of the
process, implemented metrics to measure results and identified what the company should do to keep the process in check, should certain issues arise.
The Results: The number of customer calls related to tax exempt issues has decreased. The number of billing adjustments that have to be made as a
result of the tax departments not receiving certificates has decreased. The number of customer complaint letters about this issue has decreased. And
the new process is expected to save the company over $500,000 in 2004 and beyond.
Reference
http://www.ge.com/sixsigma/
http://eng-ed.ucsd.edu/six-sigma.html
Questions?