Lean Sigma
Methods and
Tools for Service
Organizations
The Story of a Cruise
Line Transformation
Jaideep Motwani
Rob Ptacek
Richard Fleming
The Service Systems and Innovations
in Business and Society Collection
Jim Spohrer and Haluk Demirkan, Editors
Lean Sigma Methods
and Tools for Service
Organizations
Lean Sigma Methods
and Tools for Service
Organizations
The Story of a Cruise Line
Transformation
Jaideep Motwani, Rob Ptacek,
and Richard Fleming
Cruise Line Transformation
Copyright © Business Expert Press, 2012.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording, or any other except for brief quotations, not to exceed 400 words, without the prior permission of the publisher.
First published in 2012 by Business Expert Press, LLC
222 East 46th Street, New York, NY 10017 www.businessexpertpress.com
ISBN-13: 978-1-60649-407-3 (paperback) ISBN-13: 978-1-60649-408-0 (e-book) DOI 10.4128/9781606494080
Business Expert Press Service Systems and Innovations in Business and Society collection
Collection ISSN: forthcoming (print) Collection ISSN: forthcoming (electronic) Cover design by Jonathan Pennell
Interior design by Exeter Premedia Services Private Ltd., Chennai, India
First edition: 2012 10 9 8 7 6 5 4 3 2 1
Every business aspires to be competitive and profi table in their markets. To do this, an organization needs to off er customers value propositions, whether it is manifest in the product they produce or in the service they provide. Th is in turn will create customer loyalty and growth. Th ere are a number of organizational philosophies and strategies used by busi-nesses to help accomplish this goal, among which are the concepts of Six-Sigma and Lean. Both are widely recognized and implemented, and both have been successful in improving value propositions of a variety of organizations, mostly in manufacturing concerns. Lean Sigma
Meth-ods and Tools for Service Organizations proposes to integrate the best
practices from each of these philosophies and apply them to a customer-focused organization—a cruise ship—whose overriding mission is to deliver superior service to its customers. Th e authors demonstrate in this book how key components of both Six-Sigma and Lean, such as identifying and removing defects, elimination of waste, metrics, speed of delivery, and the seamless integration of these concepts and practices throughout the operation, serve to enhance the kind of value proposi-tions that customers recognize and which allows the organization to be successful.
Th is book illustrates Lean Sigma on a full range of service off erings: a cruise ship off ers “whole service” to their guests including gaming, entertainment, food and medical services, retail sales, security, events and adventure planning, operations and maintenance, purchasing and logistics, human resources and training, and administration of payroll and accounting. By covering Lean Sigma applications in each of these areas in a story book format, service providers can begin to understand how Lean Sigma methods and tools can be applied in their service organizations. Th rough a unique and captivating story of two competi-tive brothers, one (Joe) who has had phenomenal success with Lean Sigma methods and tools in a manufacturing business, and the other (Larry), the manager of a cruise line desperately in need of improvement in all performance areas, this story illustrates the discovery, application, and transformation of a variety of service organizations supporting the cruise line operations.
lean, lean sigma, service, waste elimination, continuous improvement, service excellence
Contents
Chapter 1 Th e Lean Sigma for Service Challenge ...1
Chapter 2 Identifi cation and Understanding of Lean Sigma Implementation ...5
Chapter 3 Lean Sigma Methods and Tools—Basic Concepts ...13
Chapter 4 Comparing Manufacturing and Service Environments ...37
Chapter 5 Key Enablers—Policy Deployment, Accountability Sessions, Employee Training and Involvement, and Lean Sigma Tool Selection and Application ...45
Chapter 6 Analysis of the Current State ...53
Chapter 7 Application of Lean Sigma Tools and Results ...73
Chapter 8 Making Cultural Transitions ...107
Chapter 9 Achieving, Sustaining, and Celebrating Success ...115
References ...121
CHAPTER 1
The Lean Sigma for Service
Challenge
“Shut up Joe! Everyone’s tired of your bragging,” Larry said as he slammed his chicken bone down on his plate and stood up from the picnic table.
Joe shouted back, “It’s not bragging, it’s just the truth, and you’re the only one tired of it ‘cause you’re such a miserable loser and your so-called cruise line is about to sink!”
Joe and Larry have been fi ghting in some way since the day Larry was born. Th eir fi erce sibling rivalry had overshadowed other family outings in the past. Th ere was the time Larry challenged Joe to a foot race around the house, which ended up in a wrestling match, and the time Joe beat Larry at darts, and Larry tore the dart board off the wall. Th eir competitive nature seemed to know no end. Th is time things seemed diff erent though. Joe was right that Larry’s cruise line was in terrible trouble. While other cruise lines were enjoying banner years, Larry’s was barely breaking even, and the booking rate was declining. Larry had already cut many expenses but this only seemed to make things worse. Joe always said “You can’t cut your way to prosperity.”
Joe, on the other hand, was enjoying great success in his manufacturing company. He was leading his organization’s continuous improvement (CI) program and had received several promotions over the past few years as a result of the improvements. Th e local newspaper had even written a nice article about Joe and his company’s improvement eff orts. Th e article titled “DR Products (DRP) Wins Prestigious Continuous Improvement Award,” had several quotes from Joe regarding his role in the eff ort. Joe was telling his cousins about the article when Larry blew up at the picnic table.
Larry had always thought CI was easier for a manufacturer as compared to a service organization and that Joe had practically had the CI process given to him by his company’s leadership. Most of the CI books and methods were for manufacturers, not cruise lines. All Joe did was to follow the plan in the books to get the CI award. For the past 3 years DRP had been credited with establishing “best practices” in CI. Many of the best practices were credited to Joe and his produc-tion teams.
Larry, on the other hand, was in trouble. Not only was his cruise line barely breaking even and losing customers, the employees weren’t happy either. Just last week two more key people had quit. Larry was spending so much time trying to replace these people that he didn’t have time for CI.
It was time for Larry to swallow his pride and talk to Joe about business. As Joe came into the kitchen, Larry mustered up a meek apology. “Sorry I blew up out there Joe, I’ve been under a lot of stress lately.”
“Nothing you didn’t bring on yourself.” Joe shot back. “Seriously Joe, how do you do it at DRP?” asked Larry. “Do what?” replied Joe.
“You know, that CI thing. What do you call it—Lean Sigma?” said Larry.
“Yeah that’s the name. I’m surprised you remembered.”
“Yeah, I remembered. But it seems like a manufacturing thing. Would it work for a cruise line?” asked Larry.
“I’m certain it would. It’s just a systematic approach to seeing and reducing the waste in a process. Your cruise line operation is just a bunch of processes. Sure the customers may want and expect diff erent things, but the delivery of the services is simply a series of processes.” Joe replied.
“But we are so diff erent than a manufacturer.” said Larry. “Th at’s what they all say.” commented Joe.
“Th ey do? Who? And what else do they say?” Larry quickly replied. “Th ey say ‘We’re diff erent. Lean Sigma won’t work here.’ Even manufacturers say that, but they’re all wrong. Lean Sigma CI methods
are just a scientifi c or data-driven way to systematically and continually improve a process. Everything an organization does, whether they’re a service organization or manufacturer, can be defi ned as a process. Lean Sigma methods and tools describe a standardized way to address waste reduction in a process. I’m certain it will work for you, but I’m not sure you’re bright enough to lead it!”
“Yeah right!” responded Larry. “If you can do it, anybody can do it! Anything you can do, I can do better.” boasted Larry.
“Care to make a wager on that?” asked Joe. “Sure, what are you thinking?” added Larry.
“Well, if it works, you give my family and me a free 7-day cruise. If it doesn’t work, I’ll give you a job at DRP when you go bankrupt!” Th ey both laughed, and then Larry groaned.
“I’m even willing to help you,” added Joe. “One concept of Lean Sigma is to share the knowledge freely. Why don’t you come to the factory tomorrow and I’ll give you a tour and show you some of the Lean Sigma activities we’re doing. I could even have you attend a current Lean Sigma work session, and maybe a team huddle.” off ered Joe.
Without hesitation, Larry said “What time?”, and the plan was set. Tomorrow, Larry would arrive bright and early at DRP for a full day of Lean Sigma learning.
Larry’s perspective that his organization is diff erent and Lean Sigma may not apply is very common. In fact, no two organizations are exactly alike; therefore, Lean Sigma methods and tools may work diff erently for diff erent organizations. Yet, Lean Sigma philosophy, principles, and concepts of waste elimination (conservation of resources) and improving fl ow are universal. Lean Sigma is a never-ending, systematic/scientifi c approach to identify and eliminate or reduce waste for any organization that delivers any product or service. By viewing a business as a series of processes with Suppliers, Inputs, a Process, Outputs, and Customers (the Six-Sigma acronym is SIPOC), any organization can employ Lean Sigma methods and tools to improve their quality, productivity, customer satisfaction, and fi nancial performance.
Chapter 1—Discussion Questions
1. Why did Larry seek help from Joe? Do you think the two bitter rival siblings could work together?
2. Do you think it is a good idea for Larry to benchmark Joe’s organization? What are some of the challenges that Larry may encounter?
3. Discuss Joe’s success with continuous improvement and Lean Sigma initiatives in his organization. What lessons can Larry learn from DRP’s approach?
4. Do you think Lean Sigma can be successfully implemented in Larry’s company? How would you address Larry’s skepticism that “But we are so diff erent from a manufacturer.”
5. What is Lean Sigma? Do you think Lean Sigma can be applied to any business? Why or why not?
6. Why do you think Joe is willing to help Larry?
7. Larry has been spending a lot of time replacing people. Do you think he has the time to devote to continuous improvement and Lean Sigma initiatives?
CHAPTER 2
Identifi cation and
Understanding of Lean
Sigma Implementation
Larry arrived at DR Products (DRP) before dawn the next morning. Joe met Larry at the gate, had him sign in and get a visitor’s badge. Larry had to read a brief statement of DRP’s values, vision, mission, and safety rules in order to enter the plant.
Joe said, “Come on, we have to get going. I don’t want to be late for my walk.” Before Larry even got a cup of coff ee, Joe had them walking around on the factory fl oor.
Joe walked at a brisk pace. Th e fi rst stop was in shipping and receiving. Larry had a shipping and receiving area on the cruise ship as well. It didn’t look this organized. Joe went right to the 4′ × 8′ shipping scoreboard which showed the planned inbound and outbound materi-als, supplies, and products due for the day. Th e area was neat and tidy. Larry could almost see how the organization on the fl oor matched the details on the board. “Everything’s to plan here, let’s get to the next operation,” Joe said.
DRP’s primary products are metal cabinets and work surfaces. Upstream from shipping was the assembly area. In the assembly area, they had three U-shaped cells. Joe explained to Larry that each cell pro-duced several similar models of cabinets or work surfaces. Specials were produced in the cell where they had the most commonalities as deter-mined by engineering. Th e cabinets were coming out of the cells like clock-work. Each worker in the cell seemed to work in unison with the others, moving parts to the next station in the cell at about the same time. Larry thought to himself that it looked like an orchestrated dance. As soon as one cabinet was completed and on the skid, a forklift would magically
appear to take it to the shipping area where fi nal shipping paperwork was prepared. Everything seemed to be in sync, like the interlocking teeth of gears that always match up exactly to the timing or fl ow. At the assembly area, Joe studied each cell’s scoreboard. Larry noticed that the scoreboards had red and green coloring in certain areas. Larry assumed that green meant good and red meant bad, and he was right.
Joe made some notes, and said “Let’s go,” and off to the paint line they went. Larry thought the cells were very similar to the laundry area on the ship, except they weren’t quite as structured. Any laundry basically just went into any available machine. Larry made the following sketches of the cells and scoreboards.
Th e paint line was manually operated. People hung cabinet parts and panels on hooks or racks and placed them on an overhead conveyor. Th e conveyor system carried the parts through several cleaning steps and then through a paint booth where two painters manually sprayed each part with the desired color. Th e parts would then be conveyed through an oven to dry or cure the paint. After drying, the parts would be inspected and set on roller carts to move to the assembly area. Just like in assembly, when a painted parts cart was full, someone would magically appear to
take the cart away to the assembly area. Joe studied the paint line score-board for several minutes. Th e board was very colorful: red, green, and yellow highlights covered the board. Joe made some notes and moved on to the metal fabrication area. Larry made the following sketch of the paint line scoreboard showing the red and green coloring.
Joe went right to the metal fabrication scoreboard, made some notes, and stopped at the “quality hold” area to look at some parts. Larry watched as Joe picked up the parts tagged with red tags and examined them closely. Larry couldn’t help but think how this looked like his chef inspecting the shipments of fruit coming on the ship. Joe made some notes about the quality hold area and moved on. Larry sketched the red tag below.
Trying to keep up with Joe’s pace, Larry said “When do we get some coff ee? You do have coff ee don’t you?”
Joe chuckled, “Yes, we have coff ee. We’ll get some at our daily huddle,” he replied.
“Huddle? Are we playing football now?” Larry said with a smile. Joe replied, “No. Our daily huddle is similar to a football huddle in that we review the current situation, and set the plan for the day. Like a quarterback calls a play, we cover the plan for the day and then get to working the plan. It’s part of our ‘Plan–Do–Check–Act’ (PDCA) Lean Sigma process for CI. Th e walk we just completed, we call a ‘Gemba Walk.’ ‘Gemba’ means ‘where the work is done’ and we do a Gemba Walk to check on the progress to plan and then huddle to adapt, adjust, and act with countermeasures as needed. Th e huddle aligns everyone on the action plan.”
“Do you do the Gemba Walk every day?” asked Larry.
“At least once in the morning as part of my standard leader work, but I sometimes take the walk several times a day to stay on top of things. Th e walk makes it easier for me to spot waste and abnormalities to the plan, and for me to off er help to the teams to make the proper adjustments quicker,” replied Joe.
“I thought standard work was only for the workers,” Larry replied. “Absolutely not! Standard work is for everyone in the organization. Each person in the organization has standard work to complete. It’s part of our Lean Sigma CI initiatives,” Joe replied. Larry sketched the follow-ing standard work form.
Joe explained, “Th e process is pretty simple. Everyone has standard work that’s kept track of on a scorecard. We measure our actual perfor-mance and post this on our scoreboards several times during the day so we can compare our actual performance to the standards. Th is method of ‘Scoreboarding’ allows us to quickly identify abnormalities and non-standard performance throughout the day. Th en we can make appropriate adjustments or counter measures. We’re ‘PDCAing’ continually through-out the day. Th is increases the likelihood that we’ll meet our schedule consistently every day.”
“It’s not. It’s really easy once you get used to it. As I said, I do the Gemba walk two or three times a day to stay connected with the work fl ow. With a 15-minute Gemba walk I can get critical information such as:
• How many parts have been produced? • How many parts should have been produced? • Are we to schedule?
• What issues are preventing us from meeting schedule? • What job is next?
• Do we have all the materials we need to continue? • Are there any quality problems?
• Th e who, what, when, where, and why for the current situations.
Every leader in the organization can get this information just by going to Gemba,” Joe said with a grin.
“Well, when you lose your cruise line you can do it for me,” quipped Joe.
Joe had a series of activities lined up for Larry. Th rough the day, Larry would visit with several leaders and workers and near the end of the day, Joe had arranged for Larry to sit in on a Lean Sigma overview session for a small group of new employees. Every employee at DRP received basic Lean Sigma CI training within the fi rst few weeks of employment.
In each of the work sessions with the leaders, Larry reviewed depart-ment, team, or area scorecards and standard work for the leaders. Every-one seemed to tell the same story regarding how they worked, how they communicated, and how they made improvements.
By the end of the day Larry was exhausted. He couldn’t wait to get home, have a beer, and relax. Joe arrived at the training room and asked, “Are you ready for another Gemba walk?”
“Again?” questioned Larry.
“Come on Larry, it’s only 15 minutes and it’s needed to set up second and third shift plans. We run three shifts here you know…” prodded Joe, and off they went to the Gemba walk.
On the drive home, Larry couldn’t help but think of all the reasons Lean Sigma would not work for his cruise line.
• A cruise line is completely diff erent from a manufacturing company.
• We work with people, not parts.
• No two customers are the same—ours is not a consistent process.
• Our products and deliverables are diff erent. • Our customers expect diff erent things. • We don’t measure things like a factory does. • We deliver service to customers, not products.
Th en Larry remembered what he’d said to Joe at the picnic, “Anything you can do, I can do better!” He’d taken some great notes throughout the day and at the Lean Sigma overview session. Intrigued, he made a commitment to himself to go through the notes, and to determine what
might work versus what wouldn’t. It was a good thing he had some time the next day to review his notes and make a plan.
Chapter 2—Discussion Questions
1. Critically evaluate Larry’s visit to Joe’s organization. What lessons can organizations learn from this visit?
2. Discuss the manufacturing process at DRP. What lessons can Larry learn from this process?
3. According to Joe, why is it necessary for every organization to have a “daily huddle”? If you were in charge of the “daily huddle” in your organization, how would you go about doing it?
4. Why is “score boarding” so critical to Lean Sigma and CI success? Compare your organization’s approach to “score boarding” with DRP’s?
5. What do you mean by a “Gemba walk”? Why do you think Joe put so much emphasis on it?
6. Why is it necessary for all organizations to conduct a Lean Sigma overview session for their employees? If you were organizing one, what would you cover in this session?
7. On the drive home from DRP, Larry identifi ed several reasons why Lean Sigma would not work in a cruise line? Do you think these concerns are valid? What made Larry motivated to pursue it?
CHAPTER 3
Lean Sigma Methods
and Tools—Basic Concepts
Th e next day Larry went over his notes and the training content provided at the Lean Sigma overview. He started to organize the fi les and notes in a logical format. Th e following are Larry’s notes from the fi rst day at Joe’s factory:
1. Lean Sigma is the most successful continuous improvement (CI) method in the history of the world.
2. It combines the simple and versatile methods and tools of Lean with the powerful analytical approach of Six-Sigma methods to provide continuous incremental improvement with Lean and signifi cant increases in productivity and quality with Six-Sigma techniques. 3. Lean Sigma is the combination of these powerful tools.
4. Th e origin of these methods goes back to the industrial revolution and the concept of time and motion studies with Fredrick Taylor and Henry Ford’s production lines. Lean Sigma represents the philoso-phy of total conservation of resources.
5. Edwards Deming brought this to Japan after World War II and is credited with Lean Sigma’s predecessor, Total Quality Management (TQM), which focuses on the customers’ needs, CI, and employee involvement.
6. Dr. Deming worked with the Toyota Motor Company, Motorola, and others to implement his TQM systems and develop the methods and tools we now know as Lean Sigma. Often, the Toyota Produc-tion System (TPS), waste eliminaProduc-tion, and process or continuous improvement are used synonymously with Lean Sigma methods throughout the world.
Larry thought to himself how smoothly things worked at DR Prod-ucts (DRP), and wondered how his observations fi t with the training materials he’d received at the session. Larry continued to review his notes.
What is Lean, Six-Sigma, and Lean Sigma?
Lean is a way of thinking and can be applied to every type of organi-zation, whether it manufactures a product or delivers a service. Lean methods and tools are simple to learn and apply and have broad appli-cations. Lean methods even work in people’s personal life! People can apply Lean tools to their hobbies, chores, and households to make things simpler, easier, more enjoyable, and cost-eff ective. Th e goal of lean is to strive for perfection by minimizing and ultimately eliminating waste which causes variation throughout the value stream. Th e entire focus of lean is customer-driven and it’s the customer who determines the value and the amount they’re willing to pay for the product or service. Th e customer enjoys the fruits of the information and material fl ow. Information and material fl ows are often documented in Value Stream Maps as shown below.
or
The 30-year fixed mortgage application current state value stream map
Client
Pitch
Order appraisal
& title = 20 m Notify parties &confirm = 120 m Schedule location = 5 m Print docs = 120 m File paperwork pending = 5 m Pre-application Gather financial data = 15 m Run credit report = 15 m Determine prgm = 120 m
Verify emply & assets = 60 m Underwriting = 120 m
Application Approval/title Closing prep 5S Butter/ safety 150 m 180 m 25 m 245 m 4 hrs 4 hrs 40 hrs 40 hrs 40 hrs 40 hrs 40 hrs 40 hrs S S B B Q Q Q Q
Source: Ptacek and Motwani (2011a).
Like Lean, Six-Sigma (or 6s) is another approach that an organiza-tion can implement to achieve excellence. Six-Sigma is a statistical term. Sigma (s) defi nes the variation or “spread” of a process. Six-Sigma defi nes how much of the total process falls within the normal process variation.
Th e term “Six-Sigma” refers to the number of standard deviations away from the mean in a bell-shaped normal distribution curve (see below). Why?
Mean or average
–6s–5s –4s–3s–2s –1s 0 1s2s3s4s 5s 6s
Sigma
Th e goal of Six-Sigma is to eliminate defects and minimize variability. In statistical terms, if an organization achieves Six-Sigma level of performance, 99.99966% of its customers are satisfi ed as they are receiving services that are defect-free and meet their expectations. In other words, an organization that has achieved Six-Sigma status will have no more than 3.4 complaints, defects, or errors per million opportunities. Th e table below summarizes sigma or variation level and error rate per million opportunities.
Process capability or sigma level
Defects (or errors) per million opportunities (DPMO) Percentage acceptable (%) 6s 3.4 99.99966 5s 233 99.9767 4s 6,210 99.379 3s 66,807 93.32 2s 308,538 69.15 1s 691,462 30.9
Source: Ptacek and Motwani (2011a).
Six-Sigma forces organizations to pursue perfection by asking if 99% acceptability is good enough? If 99% acceptability is good enough, con-sider the following:
99% Good (3.8s) 99.99966% Good (6s)
20,000 lost articles of mail per hour (based on 2,000,000 per hour)
7 lost articles per hour
Unsafe drinking water for almost 15 minutes each day
One unsafe minute every 7 months
5,000 incorrect surgical operations per week
1.7 incorrect operations per week
Two short or long landings daily at an airport with 200 fl ights per day
One short or long landing every 5 years
2,000,000 wrong drug prescriptions each year
680 wrong prescriptions per year
No electricity for almost 7 hours each month
One hour without electricity every 34 years
Lean Sigma is the most powerful improvement technique as it systematically blends the best of the two approaches above to elimi-nate all waste or non-value-added activities from processes. Th is, in turn, lowers the cost and improves the quality of the process. Th e con-tinued focus on the elimination of waste should be a daily, hourly, or minute-by-minute concern. Lean Sigma is designed to use people and materials wisely to satisfy customer needs. With that thought in mind, work elements or job duties may need to be modifi ed to accommo-date a waste-free Lean Sigma environment. Th is will allow companies to remain globally competitive, develop a cross-trained workforce, and establish a safe workplace.
Lean Sigma tools are used to
• improve customer satisfaction and total customer experience; • identify and eliminate waste quickly and effi ciently;
• increase communication and speed at all levels of the organization;
• reduce costs, improve quality, and meet delivery obligations of a product or service in a safe environment;
• initiate improvement activities and empower employees to make improvements themselves;
• track and monitor improvements to ensure sustainability.
Lean Sigma is truly a compilation of world-class CI practices.
To understand Lean Sigma, one must understand that Lean Sigma is, in its broadest sense, a philosophy of conservation of resources
and waste elimination. Building on the Lean Sigma philosophy are
Lean Sigma principles, concepts, methods, and tools. Th ese ideas are building blocks of a structured and supported approach to a total Lean Sigma transformation. Lean Sigma principles must be built on a basic understanding of Lean Sigma philosophy. Many organizations have forgone a basic understanding of Lean Sigma philosophy and tried to build a Lean Sigma organization on a weak foundation, only to be disappointed with their results. It truly pays to start with and build on a strong foundation of Lean Sigma understanding.
Conceptually, these building blocks are illustrated in the follow-ing diagram. Startfollow-ing with a strong foundation of Lean Sigma philoso-phy, Lean Sigma principles can be used to support an organization in utilizing Lean Sigma concepts, methods, and tools to become a superior organization.
Larry was starting to understand his role as a leader and continued to review the training materials from the class at DRP. He took a closer look at each of the Lean Sigma building block levels.
Delighted customers and profitable growth
Best quality, lowest costs, fastest delivery, and innovation
Lean
Value and waste
Flow
Plan-Do-Check-Act
Quality first
Speak with data and facts
Performance measures Seek perfection Customer focus Waste elimination Concepts Six-Sigma Concepts
Lean Sigma tools*
5S Continuous flow Data collection and presentation
Employee balance chart Just-in-time (JIT)
Layout Leveling (heijunka) Mistake (or error) proofing
Performance dashboards Plan-Do-Check-Act
Problem solving Pull systems and kanbans
Quick changeovers Standard work Statistical process control
Statistical methods
Takt time and demand analysis plots Teamwork Total productive maintenance (TPM)
Valve stream mapping Visual controls Voice of the customer (VOC)
* Not all inclusive of Lean Sigma tools Lean Sigma philosophies
Conservation of resources (sustainability or becoming green) Relentless pursuit of waste elimination
Total employee involvement
Lean Sigma principles
Continuous improvement in processes and results Focus on customers and value streams
Total employee involvement
Common goal of Six-Sigma
Zero defects
Voice of the customer
Look for hidden wastes
Quantitative analysis
DMAIC
Proven methodology
Focus on variation
Scientific method
Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect Service—Using a Practical Approach to Lean Six Sigma to Improve the Customer Experience and Reduce Costs in Service Industries. Chelsea,
MI: MCS Media, Inc.
Lean Sigma Philosophies and Principles
Th e overriding philosophy of Lean Sigma is defi ned by the continuous elimination of waste and non-value-added activities in everything we do, the conservation of all resources at every level of operation. Additionally, Lean Sigma philosophies include continuous learning and improvement in everything that’s done. Lean Sigma philosophy calls for the simplifi ca-tion of all tasks and eff orts to eliminate waste and improve fl ow. Absolute perfection is seen as the goal. Very few organizations embrace Lean Sigma philosophies at this level. Toyota Motor Company has been practicing Lean Sigma for over 60 years, and they still believe they need to improve!
Lean Sigma principles are the bedrock for Lean Sigma transfor-mations. Th ey provide the unchanging, solid foundation to build and improve upon. Th e three key Lean Sigma principles, supported by Lean Sigma philosophies, are as follows:
• Continuous improvement in processes and results—Do not be “results or bottom-line only” focused. Instead, focus on processes that deliver consistent, waste-free results.
• Focus on customers and value streams—Focus on the entire process, from the customer pull or demand to demand fulfi llment and customer satisfaction. Focus on how materials and information fl ow through a process.
• Employee participation in a non-blaming, fear free environment— Organization leaders must make it safe for people to suggest possible improvements in the way things are done.
Lean Sigma Concepts
Lean Sigma concepts drive Lean Sigma transformations. It is essential that people at all levels be trained in and understand Lean Sigma concepts to facilitate a smooth and eff ective Lean Sigma transformation. Do not underestimate the power of these concepts.
Larry knew he had a lot of training and communicating to do if he wanted his cruise line to apply Lean Sigma methods and tools, and continued to review his notes shown on the following page.
Th e Lean Sigma concepts are as follows: • Add value and remove waste
Value Adding
Organizations add value when they change the weight, shape, confi guration, properties, or attributes of materials or information. Th ese are the things the customer is willing to pay for.
Waste (Non-Value-Adding)
Waste is anything that does not add value. Non-value- adding activities fall into the 12 categories of waste. Th ings that consume time, resources, space, or both, but do not contribute to satisfying customer need.
Th e 12 categories of waste are as follows:
1. Overproduction—Making more than is needed. 2. Expertise—Not using people’s knowledge. 3. Transportation.
4. Inventory and Work in process (WIP). 5. Motion.
6. Rework or Corrections.
7. Overprocessing—Processing more than is needed. 8. Waiting or delays.
9. Overload or straining a system—Overloading systems capabilities usually leads to other forms of waste.
10. Unevenness—Unevenness in work fl ow usually leads to other wastes.
11. Environmental waste—Pollution, excess consumption. 12. Social waste—Social networking while at work. Literacy,
hun-ger, or cultural oppression.
Larry wondered why Time was not a waste. He concluded that each of the 12 wastes wastes time as well! He continued to review his notes on the following Lean concepts:
• PDCA process for implementing improvements. Th is is process mirrors the scientifi c method and drives improvement activities.
• Next process or operation is the customer—Serve them. • Upstream quality—Build quality in; do not “pass along” poor
quality.
• Customer needs fi rst—Always focus on the customer and their requirements
• Decisions at the lowest appropriate level—Go to where the work is done or the value is added. Sometimes called “Gemba.”
• Speak with data—Use objective information to evaluate process performance. Use other statistical tools to turn subjective information into objective data.
• Variation reduction and control through statistical process control (SPC).
• Defi ne and seek PERFECTION.
Adding value through waste identifi cation and elimination is a funda-mental concept of Lean Sigma. Th e customer is paying for value; waste is anything that your organization does to a product or service for which the customer may be paying, and probably should not be. Waste is anything that adds time, resources, or cost without adding value to the fi nished product or service. When waste is removed value increases. Waste can occur in customer processes as well.
Twelve Forms of Waste—The Dirty Dozen
Lean Sigma tools and concepts assist employees (and customers in service processes) in identifying and eliminating all types of waste. It is critical that employees have a fundamental knowledge and understanding of “waste” in order to identify and eliminate it. Th e purpose of Lean Sigma practices is to identify, analyze, and eliminate all sources of process ineffi ciency.
Th e following table was a handout Larry had from the training ses-sion. Th e table summarizes the 12 wastes with examples.
The Dirty Dozen: 12 Forms of Waste
Form Description Examples
Ways to eliminate
Overproduction More than required is made or served • E-mailing, faxing the same document multiple times • Ineffective meetings • Task time • Proof of need survey • Make to order Expertise Under-utilization due to placement of people into positions where their knowledge, skills, and abilities aren’t used to the fullest
• Workloads not being completed due to lack of cross-training • Assigning employees two jobs due to understaffi ng • Standard work • Lean Sigma File
System • Business case for
Lean Sigma • Offi ce quick-starts
Transport Any transport of fi les, information, or materials • Delivering unneeded documents • Updating customer records in different systems • 5S • Value stream mapping • Standard work • Lean Sigma File
System • Visual controls • Colocation of
workers Inventory Excessive piles of
paperwork, computer fi les, supplies, and time spent searching for documents • Files awaiting signatures or approvals • Keeping multiple copies of reports • 5S • Value stream mapping • Standard work • Lean Sigma File
System
• Kanbans for offi ce supplies
• Level loading-heijunka
Motion Any movement
of people, paper or electronic exchanges, or both, that does not add value • Hand carrying paper to another process • Using an excessive number of transaction screens to support decision making • Standard work • New offi ce layout • Kanbans for offi ce
supplies • Pull systems and
supermarkets
Form Description Examples
Ways to eliminate
Corrections All processing required in creating a defect and the additional work required to correct it
• Data entry errors • Not having
integrated IT systems
• Standard work • Lean Sigma File
System • Visual controls • Mistake proofi ng Overprocessing Putting more work
or effort than required into the work requested by internal or external customers • Duplicate reports or information • Constantly revising documents • Excessive approvals • Standard work • Lean Sigma File
System • Data collection
techniques • Document tagging
Waiting Waiting for anything (people, signatures, information, etc.) • Excessive signatures or approvals • Delay in feedback from high-level management • Waiting for a meeting to make a decision • Value stream mapping • 5S
• Lean Sigma File System • Runners • Pitch • Standard work • Scoreboards Overload Overburdening or overloading a work system, machine, or process • An 18-person bus carrying 25 people • A new contract requiring 80 additional hours of work and not enough staff to complete the work
• Standard work • One piece fl ow • Statistical analysis • Workload
balancing
Unevenness Lack of consistent fl ow of inputs/ information/ scheduled work from upstream processes causing many of the other types of waste previously mentioned
• Scheduling all work to be completed at the end of the month and not during the month at even intervals • Poor offi ce processes for locating documents when a staff member is on leave • 5S • Value stream mapping • Standard work • Workload balancing (Continued)
Form Description Examples
Ways to eliminate
Environmental Any waste that is generated by a service organization that impacts the environment, whether it is heat, solid, liquid, or gas
• Paper or plastic used in a cafeteria that isn’t recycled • Unnecessary use of power when machines and equipment aren’t in use • Reduce, reuse, recycle • Sustainability or Green metrics
Social Waste from the other areas of society, such as poverty, discrimination, malpractice, health and injuries, nutrition, literacy and education, and also waste on account of social media networking • Time spent by employees at work socializing • Advertising products on social networking sites that are not read by target audience • Plan–Do–Check– Act • Sustainability metrics • Performance/gap analysis
Larry thought about where these wastes could be present at his cruise line and made the following notes.
1 of 12: The Waste of Overproduction
Producing some type of work prior to it being required is waste of over-production. Providing a service above and beyond what is needed is also considered overproduction. Overproduction is when too much of some-thing is made or served. Th is is the greatest of all the wastes. Overproduc-tion of work or services can cause other wastes. For example, by preparing extra copies of a report, you are using extra paper, extra time to handle the reports, and extra motion and transportation to dispose of the reports, and so on. Activities without direct immediate purpose should be elimi-nated or reconfi gured unless they are already understood as essential to a perfect process.
2 of 12: The Waste of Expertise
Th e under-utilization of people’s expertise is a result of not placing people where they can (and will) use their knowledge, skills, and abilities to the fullest providing value-added work and services. An eff ective performance management system will reduce this waste signifi cantly. Use company policies and procedures to eff ectively place people where they will most benefi t the organization.
3 of 12: The Waste of Transport
Excess transport aff ects the time of delivery of any work within an offi ce. Even with the Internet and e-mail readily available, too often, or not often enough, documents (i.e., fi les) that provide little or no value are moved downstream regardless of need. Reducing or eliminating excess transport waste is important. Locating all work in sequential process operations and as physically close together as possible will help eliminate or reduce this waste. Transport between processes that cannot be eliminated should be automated as much as possible. Ask questions such as, “Is the offi ce layout optimal?”, “Is the release and request for work automated?” and “Is IT aware of the problem and can they help?”
4 of 12: The Waste of Inventory
Excessive piles of paperwork, computer fi les, supplies, and time spent searching for a document is waste. Th ey all take up space or require someone’s time. If a document is waiting for additional information (i.e., signature, review, approval, etc.) and there is a change, then the time the document has been waiting is waste. Th ere are basically two types of inventory waste related to administrative areas: (1) offi ce supplies and (2) information.
5 of 12: The Waste of Motion
Any movement of people that does not add value is waste. Th is waste is created by poor offi ce layout or design, faulty or outdated offi ce
equipment, supply inaccessibility, and movement of information or data that does not add value. Th e waste of motion is insidious and is hidden in service procedures that have not been reviewed for CI initiatives. Regardless of the industry, motion waste may appear as someone who is looking “busy” but not adding value to the work or service. Lean Sigma tools will assist to identify, reduce, and eliminate this waste.
6 of 12: The Waste of Corrections
Correction waste refers to all processing required in creating a defect, or mistake, and the additional work required to correct a defect. And defects (either internal or external) result in additional administrative processing that will add no value to the product or service. It takes less time to do work correctly the fi rst time than the time it would take to do it over. Rework and corrections are wastes and add more costs to any product or service for which the customer will not pay. Th is waste can reduce profi ts signifi cantly.
7 of 12: The Waste of Overprocessing
Putting more work or eff ort into the work required by internal or exter-nal customers is waste. Excessive processing does not add value for the customer and the customer will not pay for it. Th is is one of the most diffi cult administrative wastes to uncover. Some questions to ask to assist in the identifi cation of this waste are, “What are the most basic processes required to meet the customer needs?” or “Is there a clear understanding of the customer’s needs?”
8 of 12: The Waste of Waiting
Waiting for anything (people, signatures, information, etc.) is waste. Th is waste of waiting is “low hanging fruit” which is easy to reach and ripe for the taking. We often do not think of paper sitting in an “In” basket or an unread e-mail as waste. However, when looking for the item (document or e-mail), how many times do we mull through that “In” basket or the
Inbox folder and try to fi nd it? How many times do you actually touch something before it is completed? It is the fi nish it, fi le it, or throw it away system that can help eliminate this waste. Th is waste closely related to “wasting time.”
9 of 12: The Waste of Overload
Th e overburdening or overloading of a work system or process typically causes other wastes to occur. Overload must be handled as a separate waste as it can be identifi ed easily during the value mapping process, and is often expressed in terms of capacities of equipment or people. Usually this waste causes a great sense of frustration and aggravation, for custom-ers and employees, and often leads to other wastes and loss sales.
10 of 12: The Waste of Unevenness
Lack of a consistent fl ow of inputs/information/scheduled work from upstream processes causes many of the other types of waste previously mentioned. Unevenness such as traffi c jams, loading and unloading ten-der boats, lunch hour rushes, and the like create special needs for service organizations wanting to provide the highest level of service.
11 of 12: Environmental Waste
As service organizations become more sustainable or “Green,” they have to make extra eff orts to protect the environmental resources as they are becoming very scarce. Any waste that is generated by a service organiza-tion that impacts the environment, whether it is heat, solid, liquid, or gas, is classifi ed as environmental waste. Th ese items can be observed in an organization’s trash containers and dumpsters. Th is is a huge opportunity for Larry’s cruise line—Larry double starred this item!
12 of 12: Social Waste
Social waste is another category of waste that service organizations need to focus on if they wish to become more sustainable. Th e term social waste
is broad and includes areas such as poverty, discrimination, malpractices, health and injuries, nutrition, literacy and education, and also waste on account of social media networking. When people who are suppose to be working are using their social media when not allowed, or when an organization is not capitalizing on the use of social media applications where appropriate. Larry triple starred this waste!
Larry knew that each of the 12 wastes existed for his cruise line and reviewed the leading waste questions identifi ed in class.
Leading Waste Questions
1. Where is waste causing us to spend excess time, resources, and money?
2. How can I communicate these wastes throughout the organization? 3. What are some of the obvious wastes (“low hanging fruit”)? 4. What can be done to immediately improve customer satisfaction? Larry thought he’d use these questions to stimulate people and promote more open communication regarding waste and continuous improve-ments.
Larry reviewed the following Lean Sigma Service Excellence “Waste Walk” form. Th e form can be used by teams or individuals to identify waste in their work environments. Simply take the form into the work environment and look for a waste or two in each of the “Dirty Dozen” waste categories. Th is exercise develops a deeper understanding for waste and may provide a starting point for an initial project. At a minimum, the results will stimulate discussion, learning, and waste observation. Larry thought about how he could use this form to help teach his team about wastes and CI opportunities.
Larry continued to review his notes from the training session at DRP.
Lean Sigma Methods
Th e Lean Sigma methods used for Lean Sigma transformations include a systematic approach or steps to initiate improvement in an organization.
Lean Sigma Service Excellence “Waste Walk” Check List Types of waste Waste observations Overproduction
Producing more material or information than is needed or used.
Expertise
Not using people’s minds and getting them involved.
Transport
Moving tools and materials to the point of use.
Inventory
Materials or information. This includes all work in process and fi nished goods.
Motion
Movement of people. This includes walking or riding, as well as smaller movements.
Corrections
This includes rework or fi xing of products or information that is wrong the fi rst time.
Overprocessing
This includes work above and beyond the minimum requirements or needs.
Waiting
This includes any time delayed or waiting for materials, information, or people.
Overload
This is when workload is too much and machines break and people burnout.
Unevenness
This is when workload varies from slow to fast uncontrollably.
Environmental
This includes pollution and other wastes of the environment.
Social
Th e systematic approach is defi ned at three levels of engagement. Each level must use the PDCA improvement process. Larry recalled the various levels of engagement from his day at DRP.
Leadership Level
• Develop Lean Sigma understanding and commitment for organization leaders.
• Develop and communicate Lean Sigma strategy to the organization.
• Develop and deploy a tactical plan to transform the organization into a Lean Sigma enterprise.
• Set, align, and communicate measureable goals and rewards to sustain and support the Lean Sigma enterprise and thinking. • Conduct regular organizational performance reviews. Project, Systems, or Team Level
1. Use the Defi ne–Measure–Analyze–Improve–Control (DMAIC) improvement process. Th e DMAIC improvement process phases are defi ned as follows:
• Defi ne the project scope, resources, and objectives. • Measure the current state process key performance
measures, drivers, capabilities, fl ows, and outcomes. • Analyze the current state process data to identify and
prioritize improvement opportunities.
• Improve the process by applying Lean Sigma improvement tools and techniques.
• Control the process so that the improvements are sustainable.
Worker Level
1. Implement a housekeeping and visual control eff ort at all worksites. 2. Conduct hourly or daily mini-experiments to improve processes.
By engaging at these three levels, an organization can truly begin to trans-form their culture to a CI-driven environment. Further, discussion and cases are analyzed elsewhere to further illustrate how these levels work together to transform an organization.
Lean Sigma Tools
Larry reviewed the following Lean Sigma Tool Application Chart and his notes on Lean Sigma tool applications.
Th e Lean Sigma Tool Application Chart presented here is not all inclusive. It covers the Lean Sigma tools identifi ed in the applications chart. Th ese tools are found to be the most applicable for organizations. Not all Lean Sigma tools will work the same in every environment. Lean Sigma tools that apply directly in a mass production manufacturing envi-ronment apply to a service envienvi-ronment, but might not be a direct fi t. Just as one would not use a screw driver to loosen a hex-head bolt, not every Lean Sigma tool will apply to every environment and culture. Th e savvy Lean Sigma practitioner will identify the key applicable Lean Sigma tools and apply them as needed.
DMAIC Alphabetical Tool Application Chart
Lean Sigma tools
Lean Sigma improvement phases Defi ne Measure Analyze Improve Control
1 5Ss X X
2 5-Whys X X
4 Cause and effect diagrams X X X 5 Check sheets X X 6 Constraint or Bottleneck analysis X X 7 Cross-training to develop worker fl exibility X X 8 Flow, process, Swim lane, or value stream maps
X X X X
Lean Sigma tools
Lean Sigma improvement phases Defi ne Measure Analyze Improve Control
10 Frequency charts X X
11 Future state fl ow maps
X
12 Histograms X X X X
15 Key metric data profi les
X X X
16 Leveling service fl ow, pull signals (kanbans), and paced work fl ow (Heijunka) X X 17 Mass customization X 18 Mistake proofi ng (Poka yoke) X X
20 Pareto and pie charts X X X 21 Performance management and improvement X X 22 Plan–Do–Check– Act process X X X X 23 Problem solving— Corrective and preventative actions X X X X 25 Project management X X X X 26 Quality function deployment (QFD) X X 27 Queue time X X X X 28 Radar chart X X X 29 Rapid improvement events X
30 Run and control charts
X X X
31 Scatter plots X
(Continued)
Lean Sigma tools
Lean Sigma improvement phases Defi ne Measure Analyze Improve Control
32 Spreadsheets and pivot tables
X X X
33 Standard work for leaders X X X 34 Standardized work X X X 35 Statistical process controls X X X 37 Supplier/Input > Process > Output/ Customer (SIPOC) X X X 38 Talk time, predictive selling or service rate analysis X X X 39 Value-added versus non-value-added analysis X X X 40 Visual controls X X 41 Visual management and performance scoreboards X X X X 42 Voice of the customer (VOC) X X X
Source: Ptacek and Motwani (2011a).
Larry knew he had to do something diff erent with his cruise line but he was beginning to feel a bit tired until he got to his notes on the Lean Sigma outcomes listed below. His notes on these potential results gave him a bit of inspiration.
Lean Sigma Outcomes
Successful Lean Sigma transformations have been documented for hun-dreds of enterprises in nearly all sectors of the economy. In planning your Lean Sigma transformation, be careful not to set your expectations too low. Organizations implementing Lean Sigma transformations can expect to realize some or all of the following:
Chapter 3—Discussion Questions
1. In his notes from his visit to Joe’s factory, Larry stated “Lean Sigma is the most successful continuous improvement (CI) method in the history of the world.” Do you agree with this statement? Why or why not?
2. Discuss the similarities and diff erences between Lean, Six-Sigma, and Lean Sigma? Which of these is the most powerful and why? • High organization morale, teamwork and eff ort through
alignment of goals and measures, and improved leadership • Clear communication of priorities, expectations, and results
through visual and statistical controls. Th e “Right” things get done “Right”
• Clean, organized, and effi cient worksite—minimal waste or errors
• High quality outputs and results • Smooth fl ow of work or services • No unscheduled downtime or surprises • Perfection—Zero defects or errors
• Less inventory, delays, transportation, motion, and rework • Less costs and more profi t and returns on investment (ROIs) • Increased capacity and sales growth potential
All of this information was a bit overwhelming for Larry. He still wasn’t convinced that Lean Sigma would work for his cruise line but he didn’t have many alternatives. He knew that doing the same thing and expect-ing diff erent results would just not work! Larry wanted to ask Joe some more questions about the process so he gave Joe a call and invited him for a tour of the cruise ship. Larry thought he’d have some time to pick Joe’s brain about how to begin. Larry just needed to know what the next step was and how to get started.
Joe agreed to the tour if his family could spend the day on-board with a full pass to the amenities. Larry agreed and the tour date was set.
3. Why do the authors recommend understanding the building blocks in order to understand what Lean Sigma is? Discuss the building blocks and how can it help an organization prepare for its Lean Sigma journey?
4. What are the three key Lean Sigma principles? Does your organi-zation address these principles eff ectively? If not, how would you go about doing it?
5. Discuss briefl y the fundamental Lean Sigma concepts. Can they be easily applied by Larry in his organization?
6. By means of examples, briefl y explain the 12 categories of waste? Why is it important for an organization to be aware of and to address these wastes using the waste walk checklist?
7. Why is it important that a Lean transformation be conducted at three levels? If you were Larry, what steps would you take to ensure a smooth transformation at all three levels? What outcomes would you expect to achieve?
CHAPTER 4
Comparing Manufacturing
and Service Environments
Joe and his family were up early on the morning of the ship tour. Joe’s wife had cooked a pancake breakfast and the sugar high was just kick-ing in for the kids as they arrived at the port. Joe spotted Larry talkkick-ing with a crew member outside the ship boarding area. “Larry!” yelled Joe with a wave. Larry wrapped up his conversation and walked over to Joe.
“Boy, we are sure ready for this. What’s the day-plan?” asked Joe. Larry explained that he thought he’d drop Joe’s wife and children off at the family pool and set everyone up with a day pass for the ship’s amenities. Th e ship was at port today preparing for the next voyage. Many of the restaurants were in a changeover mode, yet there were plenty of things to do and places for Joe and his family to eat. Once Joe’s family settled in, Joe and Larry would take a walk around the ship.
Th e walk with Larry started in his offi ce. Larry liked his offi ce and thought it would impress Joe. As they walked into the offi ce, Joe said, “Pretty fancy! At least it looks like you’re doing well!” “Yeah Joe, this is one of the ways service is diff erent from manufacturing. If you had an offi ce this nice your customers would assume you were making too much money. When they see my offi ce they assume the entire ship has such nice features,” Larry replied with a smile.
“Yeah this is nice, but you probably shouldn’t spend too much time in here,” said Joe.
“Well I wanted to start here to show you how we are organized and how diff erent we are when compared to a manufacturer.” Larry showed Joe the list (see next page) of the key areas he was responsible for in the cruise line.
Cruise Line Departments
1. Navigation—Captain and crew
2. Guest services—Bookings and onboard guest services 3. Entertainment
4. Gaming—Onboard casino
5. Housekeeping—Maid services and laundry 6. Medical—Onboard medical center
7. Food services—Multiple onboard restaurants 8. Retail sales—Multiple onboard stores 9. Security—Onboard police
10. Adventures and event planning 11. Operations and maintenance
12. Purchasing and logistics (supply chain) 13. Human resources and training
14. Administration—Payroll and accounting
Joe was impressed. “Th ere are a lot of areas on this ship, it’s like a small city!” Joe said.
“It’s not all about speed and effi ciency on a cruise ship,” said Larry. “Sometimes our customers want slow, relaxing services. Th ey want to be pampered, they want opulence!” explained Larry. He continued, “For example, if we charge $150 for a foot massage, we don’t want to rush through in 10 minutes.”
Joe smiled a knowing smile, “Th at may be true, but they might not want to wait 45 minutes in the lobby before getting their massage either. Are guests ever put on hold when trying to schedule an appointment? I get what you are saying, but there are a lot of other areas on the ship where you do need improved speed and effi ciency. You might want to focus on those areas before it’s too late! Let’s take a walk—I can’t stand sitting still,” said Joe, and off they went.
“How do you know what your customers want?” asked Joe.
“What do you mean?” asked Larry, seeming a bit confused by the question.
“Well, how do you know if the customer wants a $150, 2-hour ‘foot massage experience,’ or only a simple foot rub for a couple minutes?” clarifi ed Joe.
“Well, we set up standard services and let our customers select the service or option they want. It’s like our food services, in that we provide a full ‘all you can eat’ buff et where the customers can select what food items they want, or we off er other locations where customers can experience full service, ‘a la carte’ menu items. Th eir choice is how we know what they want,” said Larry.
Joe elaborated, “Th at’s great! We call that ‘Mass Customization,’ which is a Lean Sigma tool that allows customers a unique selection of exactly what they want. You see it a lot in food services, but what about the other services you provide? I studied a little about cruise lines before coming today. Your brochure does a great job of explaining the diff erent areas on the ship where you provide multiple types of services. Some of them can be easily customized and off ered to the customers, some can’t. For exam-ple, security, maintenance, and housekeeping are all services. Some have direct ties to customers, some don’t. Some have tangible or measurable outcomes, some don’t. In fact, services can fall into three categories:
Service Delivered to an External Customer which is characterized by a
high level of customer interaction and total number of transactions completed by an organization. Organizations providing services to external customers may have to face extreme competitive pres-sures and may be engaged in marketing campaigns in an eff ort to gain additional clients. In this category, a service provider or person interacts with the customer directly and typically performs a task or physical deliverable. Delivered services usually have more tangible outcomes than service process completions. Organizations compete on quality of outcomes. Examples include fast food restaurants, bank tellers, lawn maintenance services, laundry services, and the like.
Service Process Used by an External Customer is similar in that they
typically face extreme competition, yet are diff erent in that the service provider may also have to educate their potential clients on how to use the service process. Many of these organizations are using the power of the Internet to improve their process delivery and options, by having customers complete the ordering pro-cess, or data entry rather than direct interaction between a ser-vice worker and a customer. Serser-vice processes typically have less tangible outcomes than delivered services. Organizations compete
on speed and simplicity of the process. Examples include auto-mated teller machines (ATMs), self check-in monitors for air-lines, self check-outs at retail stores, vending machines, and all other service types where customers use a process directly without “direct” person-to-person interaction.
Service Process Internal to an Organization typically faces less
competitive pressures because they have been established by the organization to serve the organization. However, they too must educate their users regarding the features and use of their internal service processes. Examples include human resources, Information Technology (IT), counseling, internal supply rooms, or janitorial services within an organization.
(Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect Service—Using
a Practical Approach to Lean Six Sigma to Improve the Customer Experience and Reduce Costs in Service Industries. Chelsea, MI: MCS Media, Inc.) Each of these services has either objective and measurable, or subjective and more diffi cult to measure outcomes. For example, subjective out-comes might be the feeling of relaxation, enjoyment from a concert or show, and similar things. Objective outcomes are things like the drinks being served on time, rooms being cleaned to standard, the ship sailing to the next port on schedule, and the like.”
“Wow! You sound like a service expert Joe!” said Larry.
“Well, we learned about processes in our Lean Sigma training and each of these types of service is a process with a Supplier, Inputs, a Process, Outputs, and Customers. We learned this analysis as the ‘SIPOC’ process defi nition. Get it? Supplier–Input–Process–Output–Customer = SIPOC. Th is defi nes and measures a process so we can make improvements. ‘Defi ning’ and ‘Measuring’ are the fi rst two steps in the DMAIC improve-ment process,” said Joe. Joe continued, “Let’s get on to the tour! I’ve talked enough and I’m tired of this offi ce already!”
Larry provided Joe with an extensive tour of each of the main areas. Joe made notes about his observations regarding the 12 wastes as they visited each area. When they returned to Larry’s offi ce, Joe wrote his observations on the white board. Joe’s notes are summarized in the following table.
Area
Lean Sigma ideas already
in use
W
astes
observed
Improvement ideas
Navigation— Captain and crew
Some goo
d visual controls exist in the
helm for maneuvering the ship.
The helm looked a bit disorganized. This caused a waste in motion and delay while crew members look for key items and information. 5S the helm. Perhaps add some visual controls to identify key fi
les and information.
Guest services— Bookings and onboard guest services The boarding had many visual controls, from directional arrows to color
-co
ded
alphabetical registration signage.
This onboard areas all looked disorganized. This caused customers to wait while workers tried to fi
nd critical
information. Making the customer wait is worse than making a coworker wait, but both are wasteful.
Perform a 5S in the onboard guest services areas.
Entertainment
Many of the backstage areas were well organized. Clearly the entertainers are used to quick costume and act changes.
Some of the storage areas were overfl
owing with props and
costumes. This represented waste in inventory as some of the props were no longer being used. W
orking around
useless props and items causes a bit of waste of waiting.
A 5S would ensure the excess and or old items are removed thereby reducing inventory and delays.
Gaming— Onboard casino Casinos and gaming areas use a high level of visual controls and visual stimulation to attract and direct the customers. The casino area was a bit outdated, and many manual metho
ds of monitoring the area were observed. This is a
waste of overload and motion as the monitoring group did not have the tools to do the rework without undue wastes. The casino area only had one cashier; this sometimes causes customers excessive motion and waiting.
Develop a low-cost standard work metho
d to
improve monitoring and create a mobile cashier to reduce wait times and motion for customers.
Housekeeping— Maid services and laundry The maid services were using standard carts with everything they needed to service guest quarters. This prevented waste of motion and transportation as items were consumed or needed.
Driers were running well after the clothes were dry
.
This is a waste of overprocessing. There was also an unevenness and overload of laundry processing. Some days were extremely busy
, and some days were very slow
.
T
o
further improve the maid services, a scheduled
runner could deliver new linens and supplies on a specifi
c pitch. This is a paced fl
ow of Heijunka
system, with the use of a runner or water spider
.
In the laundry area and Kanban system make sure washers and driers process the exact time, and no less or more.
(Continued
