Lean SixSigma for Services Operations

Introduction: Lean Six Sigma or Lean Sigma has gained importance in a variety of businesses in recent times given its ability to identifying wastes in the process and outline needed process improvements.  The following is based on my work at a major software company in their $2.2 B services division. 

The problem: The company in question has worldwide operations following the clock in three continents - North America, EMEA and APAC.  As we started the project we found a variety of issues right upfront using the Ishikawa Diagram, also known as the cause and effect diagram.  We picked the top causes and did a root cause analysis.  It was found that wait times were roughly constituting 97% of the time and work time was a mere 3%.  While some services Industries are notorious for long wait times, with the advent of fast services such as Amazon 2 day prime shipping, there is a lot of pressure to improve the Order to Cash and End to End cycle times in the services Industry. 

The yellow clouds in the graphic above are Kaizen opportunities.  Several Kaizen meetings were scheduled to identify process improvements - the participants were the people actually doing the work and in some cases the managers.  We saw an unusual level of cooperation between management and workers once it was made clear this is not a performance management exercise. 

The process was definitely not in control; by applying the "rule of seven" which is a simple technique from elementary statistical process control we came to this conclusion.

Value Stream Mapping:  Value Stream mapping is a technique that allows you to clearly separate the waiting time from work time in order to identify the scope of opportunity.  In our case we identified that 97% of the time was waiting or hold time and actual work time was only 3%.  If only can we shave off half of the waiting time!!

Next we performed a FMEA analysis to identify the failure modes.  The failure modes revealed that some of the failures are preventable and need gentle updates to the process.

KPIs:  The following KPIs were developed aligned to the business capabilities to track the business and a dashboard was developed to track these monthly

• E2E Cycle Time
• Operations Center SLA
• Order to Billed Cycle Time
• Rework ratio
• Credits and Rebill:  Credit as % of Sales
• Revenue Left on the Table at month end

Process Improvements:  Some process improvements required simple process updates and these were done by updating the scripts for training.  Training was conducted on a quarterly basis and we did not disrupt that cycle.  There were other improvements which required system changes to SAP ECC and other systems.  These were planned as change requests.

Results: By combining the techniques from LEAN Cycle time reductions of 8 - 10% were realized.