Following are a number of examples featuring different disciplines and industries in which Six Sigma was successful.
- Improve Accounts Payable Process
- Business Growth Goals Met Using New Process
- Strategic Sourcing Teams Created to Deliver Savings and Efficiency
- Clearly Defining and Monitoring the Results of Capital Investments
- Satisfaction of Key Customer Improved
- Improving Customer Loyalty
- “Best in Class” Process Creation for IT
Improve Accounts Payable Process
- Suppliers to this Fortune 100 Company were complaining about late payments.
- Sourcing was concerned these complaints would damage ongoing negotiations with suppliers.
- Initial analysis/data showed payments took an average 41 days on a volume of 40K invoices per month. (35 days for invoices with no ‘exception issues’, 58 days for invoices with ‘exception issues’)
Six Sigma Technique Used
Over one year, a project team including both finance and sourcing, used the following focused approach:
- Analyzed current processes
- Created Scorecard to focus on most important parameters
- Utilized “lean” tools & techniques to shrink overall cycle time
- Engaged the leadership team to drive behavior
- Implemented several process solutions, including focusing on driving down invoice ‘exceptions’ and measuring timeframe in which they were handled by sourcing personnel
After 1 year, cycle time for the volume of 40,000 invoices was reduced from 35 to 25 days for invoices with no issues and from 58 to 46 days for invoices with issues. This resulted in an improvement of on-time payment (from suppliers’ perspective) from 75% to 85%.
- Use of scorecard, which is visibly shared with leadership team, is critical to results
- Joint functional leadership is required for processes which cross multiple functions
- Where external parties, such as suppliers are concerned, projects can be slow to deliver
results as it takes time to train the external party on new expectations/process changes
Business Growth Goals Met Using New Process
- An established Fortune 100 Company was looking for major growth in an existing chemical product line.
- The leadership team was challenged to grow the business by $1B over a 3-5 year period.
- There was no historical model to help identify the optimal process growth.
Six Sigma Technique Used
- A project team was assembled to determine the strategy and tactics for growth. The multi-functional team included Marketing, Sales, Operations and Technology.
- Interviews with internal experts from Marketing and Field Sales revealed that there was a significant opportunity for growth. It also revealed that the business had some unique strengths that could be harnessed to accelerate growth.
- Over 6 months, the project team defined a new process to identify opportunities for growth and to sharpen its value proposition. Through consistent engagement with the leadership team responsible for the $1B growth, they:
- Documented and communicated the new process
- Developed project leaders who would investigate and document the market opportunity
- Gave the project leaders a month of full-time focus to investigate the opportunities
- Conducted a decision-making meeting to prioritize opportunities and resource the projects most likely to yield results
- Decided to focus on several new projects with the best potential to deliver growth
After 1 year, the business delivered a 10% improvement in revenue. This was due to growth from the selected projects and improved pricing based upon a better recognition of the offering value.
- Even successful, mature businesses can substantially improve processes to identify, evaluate and capture potential growth
- A multi-functional team can bring real power to growth process development
- A full-time focus on markets and customers’ needs is key to quickly identifying and developing new processes to deliver growth. Providing these full-time sabbatical opportunities to business leaders can result in breakthrough thinking and regenerate employee passion.
Strategic Sourcing Teams Created to Deliver Savings and Efficiency
- An established Fortune 100 Company was looking for a process to help them leverage their buying of commodities across all regions.
- The Sourcing people were located around the world. This distance and time gap made communications a challenge. They did not see themselves as part of a team. This resulted in insufficient leverage on some very large global purchases of materials.
- There was no defined, documented strategic commodity sourcing process; hence, there was no clear view of the opportunities and no clear metrics by which to gauge success.
- Leadership thought there was a very large opportunity to bundle purchases and optimize savings.
Six Sigma Technique Used
- Several facilitated 3 day Workout Session were conducted with a global representative sampling of sourcing experts. This helped to identify and communicate a process that could uniformly and quickly determine commodity strategy development.
- Metrics were put in place to measure the successful implementation of this new process.
- The new process shrunk the commodity strategy development for products from 1.5 – 3 years to 90 days.
- Several teams achieved immediate success after using the new process.
- The company not only adopted the new strategic process but also adopted the use of Workout throughout the sourcing organization to achieve faster team results.
- Gathering the appropriate global players in a face-to-face session can achieve substantial improvement in a remarkably short period of time.
- Ensuring the strategic process utilizes a mix of face-to-face, virtual pulsing mechanisms and real scorecards enables teams to prioritize efforts, pursue results and measure effectiveness on a global scale.
Clearly Defining and Monitoring the Results of Capital Investments
- An established Fortune 100 Chemical Company wanted to create a process to track the results from the numerous acquisitions it was making in small technology companies.
- A documented follow-up process was needed to enable timely decisions regarding both expansion and disinvestment.
Six Sigma Techniques Used
A small project team of two people was established to develop the process which included a scorecard for the investments and for the team monitoring the investment.
- The new process was defined and implemented within 3 months of the project start.
- All new investments followed the recommended approach.
- This process resulted in better decision making due to better and more timely information.
- Six sigma tools are especially helpful to enable process development / analysis in a complex and data rich environment.
- Six Sigma projects do not always require a large core team. Even two individuals, with leadership support, can quickly develop and execute a new process.
Satisfaction of Key Customer Improved
- One of a National Telecomm Service Provider’s top 5 B2B customers was expressing high dissatisfaction with their service.
- Specifically, there were problems with the implementation of a new pricing contract which had resulted in numerous cases of incorrect prices on services provided.
- The customer threatened to move the service to a competitor.
Six Sigma Technique Used
A cross-functional project team was established. It included operations team members responsible for ordering equipment, customer service team members responsible for servicing the account, and billing and sales team members responsible for account relationship management.
Over an 8 month period, the team:
- Conducted meetings with the customer to document and prioritize their concerns
- Created a scorecard with metrics that defined the key areas that were needed for a successful implementation of the contract and sustainably good relationship
- Established a team process that used Six Sigma tools & techniques to improve the process to address the customers’ concerns
- Set up monthly meetings with the customer to review the scorecard, commit to action and resolve their concerns in an ongoing manner.
This team changed the customer’s Net Promoter Score Rating from a 1 (the worst possible score) to a 10 (the best possible score).
- Use of a scorecard keeps everyone (customer and supplier) on track with the impact of the process improvement
- Keeping the customer at the center of the process substantially increases the probability of a successful outcome.
- Having all functions on the team is a powerful way to gain internal buy-in and the insights needed to deliver sustainable improvement.
Improving Customer Loyalty
- A national wireless telecomm service provider was seeking to sustainably improve its Net Promoter Score with their Business to Business (B2B) customers.
- Using a data-driven, project-focused effort was new for this provider
Six Sigma Technique Used
The team focused on:
- Analyzing the survey results of the Net Promoter Scorecard
- Determining the most frequently occurring customer concerns
- Targeting these concerns with individual project actions and direct follow-up with customers.
The team also applied a lean six sigma approach to reduce the amount of time it took to respond to customer inquiries.
- Using a new model for routing customer requests and responding to these requests, the company’s Customer Service Center was able to reduce its cycle time from several days on average to several hours, a reduction of 80%.
- The company consolidated operations between two separately located Customer Service Centers to ensure that customer orders were fulfilled and then service was provided on any of these orders all from within one location and one team of individuals.
- Overall, the provider was able to improve their Net Promoter Score metric by a factor of four over the course of one year.
- Strong leadership from the top was an essential element in their success.
- Understanding the waste due to wait time required by the current process was critical to helping the enter Customer Service Center understand the need to make drastic change in the way work was routed to individuals.
- Piloting the new process was effective in providing both feed back to the process owners and buy-in from the front-line employees ensuring a smooth transition to the final solution.
- After utilizing the Six Sigma approach, this company became ardent believers in its effectiveness and continued to use a data-driven decision making process on additional projects.
“Best in Class” Process Creation for IT
- The Corporate IT Leadership of a Global, Fortune 10 conglomerate was interested in improving its billing process for internal charges for IT services.
- The IT management team perceived that their process was already “best in Class” despite their leaders’ difference of opinion.
- The team was challenged to document the current process, provide benchmark analysis to best in class and recommend permanent solutions to address the issues within six months.
Six Sigma Techniques Used
- A cross functional core team was formed. It included product ownership, finance, operations and billing team.
- A scorecard was developed to document billing defects and customers’ satisfaction.
- The billing processes were documented and then benchmarked externally to help the team assess gaps versus “Best in Class.” Solutions were developed to close the gaps.
- Virtual meeting tools such as webinars and teleconferences were used to conduct weekly action-oriented reviews for team and monthly updates for the project sponsors to track and drive accelerated results.
- The team was able to deliver on all objectives within 6 months.
- They identified a scorecard and metrics for more effective pricing and billing mechanisms for these IT services.
- When it comes to billing processes, reduction in billing defects and improvement in customer satisfaction can often be primarily related to inputs far upstream of the billing mechanics. In particular, improvement in the billing process often necessitates a focus on simplifying pricing mechanisms in order to reduce complexity.
- Results included reduced refunds, more accurate billing, improved teamwork between those providing the billing and those providing the services and, importantly, improved customer satisfaction.
- Much progress can be made in terms of team formation and group processing using virtual meeting technology such as webinars even in environments where travel and living expense is limited.
- Even Six Sigma Cultures, abound with Black Belt resources, can benefit from the focus provided by an external Six Sigma consultant.