Six Sigma in Action. Data-driven process improvement. Process Improvement Brief February

Six Sigma in Action

Process Improvement Brief

February 2015 www.datamark.net

Data-driven process improvement

Six Sigma Methodology

Applied to clients’ business processes at our U.S. and offshore sites, Six Sigma is a fundamental part of DATAMARK’s business process improvement philosophy.

The Six Sigma methodology was developed by Motorola in the 1980s and popularized by General Electric in the 1990s. Six Sigma improves output quality by focusing on reducing process variation to a point where the output is practically error free. In the Six Sigma community, this goal of near-perfection is popularly referred to as a 99.99966%. error-free rate.

Initially applied to manufacturing processes, Six Sigma has since been adapted and proven to be effective for business, service and design processes. DATAMARK’s application of Six Sigma to its clients’ outsourced business processes has proven effective for reducing process cycle times and costs while increasing output quality and customer satisfaction.

The Six Sigma Difference

Examples of how a Six Sigma approach to reducing variation can radically decrease the number of errors in a business process:

Process errors 99% good (3.8 Sigma) 99.9966% good (Six Sigma)

Lost pieces of mail per hour Incorrect drug Rx per year Incorrect stock trades per day

20,000 200,000 11.8 million

7 68 4,021

Why is it called “Six Sigma”?

In statistics, “sigma” refers to standard deviation. Standard deviation is a measure of a group of data’s variability--how much it spreads out from the data’s average.

Sigma is represented by σ, the 18th letter of the Greek alphabet.

The name “Six Sigma” reflects the process improvement methodology’s pursuit of near perfection: the higher the sigma value, the more the process will approach a variation of zero--and thus, zero defects.

What about “Lean Six Sigma”?

“Lean Six Sigma” combines Six Sigma with the Lean Manufacturing principles popularized by Toyota.

While Six Sigma focuses on quality by removing defects, Lean focuses on speed and efficiency by removing non-value-added activities from processes.

The result is a powerful process-improvement tool useful for any organization.

Q&A

DMAIC: The Core of Six Sigma

D ^efine M ^easure A ^nalyze I ^mprove C ^ontrol

Data should indicate a problem with the process. The Six Sigma team develops a “project charter”--a business case that identifies the significance of the problem and the stakeholders affected. Improvement goals are established, clearly identifying business impacts such as improved revenue or cost savings.

Data collection is further refined to discover the root cause of the problem and a baseline is established to measure improvement. The team creates a data collection plan, identifying the source of the data and who will collect it. The project charter is updated and adjusted as better data becomes available.

Depending on the process, the team applies any number of tools from the data analysis toolkit, including histograms, time charts, Pareto charts, scatter plots, and bar and pie charts.

The goal is to identify the “vital X’s.” These are the root causes affecting the “big Y”: the issue in need of improvement.

Armed with reliable and accurate data, the team brainstorms solutions to the problem. They test and prioritize possible solutions, creating “To-Be” maps of the improved process. The team evaluates, selects and implements the best solution and begins collecting data to measure its effectiveness.

In this final phase, the team knows what measurements to monitor to ensure sustained process improvement. Documentation--process maps, checklists, etc.--is finalized, making it easy to adopt a new way of doing work. The improved process is shared across the

Six Sigma methodology is supported by the backbone of DMAIC. DMAIC is a problem-solving approach consisting of five phases: Define, Measure, Analyze, Improve and Control.

Using statistical analysis to identify and reduce variation, DMAIC is driven by collectable, measurable data.

DATAMARK implements rigorous internal training programs to ensure Six Sigma is ingrained into its mission of providing the best business process solutions for its clients.

Staff across all departments participate in Six Sigma projects year-round as they apply their training and expertise at various levels, from yellow belt to green belt to black belt and beyond.

Below are just a few examples of how Six Sigma teams have improved our clients’ processes:

Fostering a Six Sigma Culture

Escalations Reduced Throughput Increased

Turnover Reduced Errors Reduced

Reduced escalations for a financial services client’s business process by developing a staff training program and quality control system.

Complete documentation was

developed so incoming staff could be trained on the new procedures-- assuring continuity of the improved process.

Increased throughput for a logistics client’s data entry process by

incorporating prefilled form fields where possible and resolving technology issues that slowed operators’ workflow.

Reduced turnover for an international courier’s process by identifying issues through data analysis, staff interviews and surveys.

The solution delivered improved training and retention programs and upgraded equipment for employees.

Reduced form coding errors in an F&A process for a financial services client.

The solution included identifying the

cause of errors through data analysis and

retraining staff on proper procedures,

which were fully documented.

Six Sigma is one of the most powerful process- improvement methodologies used by

DATAMARK’s Business Engineering teams.

Applied in combination with Lean Enterprise, Kaizen, Business Process Re-engineering, and other approaches, Six Sigma can radically improve the quality, efficiency and cost-effectiveness of any business process.

Contact us to learn more about our data-driven process improvement methodologies and see how putting Six Sigma into action can change the way you do business.

Putting Six Sigma into Action

About DATAMARK

Now in its 25

year in business, DATAMARK has provided mailroom management, data entry, document processing, contact center, business process improvement consulting and other outsourcing services for Fortune 500 companies across all industry sectors.

If you have questions or need assistance in developing your organization’s case for outsourcing and business process improvement, DATAMARK’s business process outsourcing specialists are available for a

complimentary initial consultation.

Contact us at:

www.datamark.net Toll-free: 800.477.1944 Info: [email protected]

Six Sigma Belt Ranks

Using colored belts to describe expertise originated from the early days of Six Sigma at Motorola and is a nod to the martial arts ranking system. Some organizations have adopted variations of the naming convention, using designations such as “expert” or “guide.”

Black Belts are highly trained and lead project teams and provide training and coaching for team members.

Green Belts are experts in data collection and process-change implementation. They may also manage project teams.

Yellow Belts participate as project team

members, earning valuable experience and skills

to progress through the belt ranking system.