Second Merging Point

Once the Six Sigma project was started and the project charter was defined, a balance matrix was used to match the project’s business opportunities against the BSC strategic goals.

(See project charters, Appendix A). The goal of all the activities during this phase was to ensure that internal and external conditions play in favor of the correct implementation of the proposed methodology. The fit score of the automobile credit project was 7.88. This score was obtained from the average of scores assigned in the business opportunities-BSC goal matching matrix by Six Sigma team members in consensus. These calculations were based on the scores assigned to each one of the business objectives on a 1 to 10 scale where 1 represents the lowest level of consensus between project objectives and strategic objectives and 10 the maximum level of consensus between project objectives and strategic objectives. This is an interactive process where negotiation is key to allow changes in the project objectives until the final scores of the project reached a minimum target. This minimum target is established by the improvement project team according to the Institution’s CEO expectations. In this Case study/action research the minimum consensus target was set up at 70% or 7 points.

The improvement project was assessed following the DMAIC methodology as defined in the Six Sigma Scorecard framework. Before the SSS implementation, the automobile credit approval and funding was done manually, following the flow diagram on Figures 4 and 5.

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Figure 5. Auto Credit Flow Chart Jan-07. Continuation

Institution Z required a formalized measuring system that described the initial situation of the auto credit process. The baseline for this project was collected from a PowerPoint

auto credit loans and consumer loans processed and approved from January to July 2006. Information about sample size and confidence was not available. This information was confirmed in open-ended interviews conducted by the SSS team with Institution Z’s middle managers and executives. Table 15 summarizes the average cycle time for the auto credit process in Institution Z during the first half of 2006.

Table 15. Auto Credit Cycle time in days January-06 to June-06

Regions Application _Analysis Credit (verification Risk and approval) Legal (Document) Reimbursement Cycle time (working days) Guayana 9-11 11 20 East 9-11 16 25 Central 9 15 24 West 12 20 32 Institution Z 26

Based on the indicators expressed in Institution Z’s Balanced Scorecard, which set a target for all credit processes of six days for the whole process and 2 days for the approval part of the complete processes, the goal of the SSS project was to decrease the auto credit total cycle time by 70% by May 2007. (See project charter. Appendix A)

An important point was the benefits that were obtained from the Shareholder analysis. The Shareholder analysis tool was used to identify the impact of the Six Sigma project on the auto credit’s shareholders within Institution Z. As a result of the analysis, the predetermined negative response some managers had to the Six Sigma methodology was identified as a potential weakness. For example, the Technology and Operations VP did not believe in the Six Sigma methodology and stated that Institution Z was not yet prepared for the application of the Six Sigma methodology. (See Shareholder Analysis, in Appendix A and tables 19 and 20.)

Some of the Six Sigma rejection came from the belief that Institution Z’s processes were out of statistical control. After a concentrated analysis process, the Six Sigma team agreed that the principal problem within Institution Z was the lack of a standardized measuring system but not necessarily the lack of statistical control. The Six Sigma team realized that most of the improvement indicators can be obtained from the information system in place, but nobody had asked for them before.

Based on the analysis, the first strategy used was not to name the improvement project Six Sigma. Although the DMAIC methodology and Six Sigma tools were followed, the project was called Auto Credit Improvement Project. Then, it was decided to add some flexibility to the DMAIC methodology because of the necessary overlapping phases that occurred during the complete implementation of the proposed methodology. Specifically, the Measure and Analysis phases cycled back and forth until all of the indicators could be generated from the information system in place.

It is important to explain that, starting in October 2006, the SSS team was asked about the migration of the credit process to an automatic information system, known as ABANKS,

designed for Institution Z. The migration to ABANKS was one critical improvement because it affected one of the detected causes of delays in the process. The migration to the ABANKS system was not directly related to the SSS but occurred during the SSS implementation. The SSS team supported the migration to the ABANKS system based on three points: first, the ABANKS deployment was a strategic priority expressed on the main BSC; second, the cause- effect diagram and the multiple interviews conducted with Institution Z’s employees expressed

the waste of time and risk that a normal mail system creates for the auto credit process; and third, technology supported Institution Z’s processes.

The migration of the auto credit process to the ABANKS system was made without redesigning the process, which cause duplication of manual and automatic tasks. Although the migration to ABANKS system seemed to short the cycle times, it increased the variability and most of the savings were losing by duplications of activities, lack of training, and lack of knowledge about what the system can do and can not do, etc. After ABANKS implementation, the SSS team started to value stream map the process in order to eliminate activities that did not add value.

During these phases, the researcher put much time and effort into assuring the proper implementation of the methodology and keeping the case study under control. Instructional study guides and interactive classes (e-learning) were some of the techniques used to explain the purpose of each tool. The proper planning assures that the job was done correctly. (See Appendix B)