As Deming once said, “If you can’t describe what you are doing as a process, you don’t know what you’re doing.”
The Methodologies of Lean, Six Sigma, and the combination of the two (Lean Six Sigma) were born in the manufacturing sector, but they are nothing new to the service sector. Healthcare, airlines, insurance, and financial service companies have all come to see the benefit of applying these methods, tools and approaches to removing waste and driving value for their customers.
Our GO team completed a printing reduction project with a financial services company, and were struck at how readily DMAIC (Define, Measure, Analyze, Improve, Control) process and lean tools were applied to helped guide the team through a process improvement. The result was a 65% reduction in printing and shredding costs. (Hint: the biggest cost is time, not paper, ink, or shredding services).
Figure 1: Printing Projections and Unnecessary printing waste
Throughout this project, several familiar principles held true:
- Create a Value Stream Map of the process to maximize the benefit to the organization and your customers.
- Data and root cause analysis are powerful tools for evaluating and ruling out hotly debated issues and hypotheses within the project team.
- Trust in the DMAIC process to drive results, even when it feels like the team is spinning its wheels.
1. Take a Value Stream Map
One key aspect of a value stream view is that it usually spans departments, from a supplier of material or information to the end customer or user; although, the value stream should always be mapped starting with the customer and moving backwards through the process to its origin. Value streams are obvious in manufacturing operations. Raw materials are sourced, received, transformed into finished goods, and distributed to customers in a process that generally adds value at every step. Value streams are not so apparent, however, in a knowledge-working environment in which data is collected, transported invisibly across departments via networks, analyzed silently by people or systems, and sliced, diced and disseminated in multiple directions as reports, documents and communications to end users and customers.
Visibility into process flow, linkages and impacts across departments is rarely clear in knowledge-based service organizations, despite the prevalence of ERP and other enterprise software developed to seamlessly (but invisibly) connect departments. It is critical, therefore, that project teams comprise knowledgeable individuals representing all major departments in the value stream. Many of our project’s “ah-ha” insights were achieved by clarifying the team’s understanding of what happened before and after each step in the process, particularly across departmental boundaries.
2. Stick to Data-driven Root Cause Analysis
We have all been to meetings that dissolved into an unproductive debate when two or more parties disagree on an issue or recommendation. The Measure and Analyze phases use facts, data, and root cause analysis to avoid becoming side-tracked by symptoms or individual interests. By objectively confirming or dispelling the team’s hypotheses, these debates are settled and the project moves forward.
Early in our project, the team had identified a rework loop in which some applications required that the Credit Manager re-engage the customer to collect additional information. The team disagreed on whether or not this was a controllable variable, but all generally accepted that it created additional work and occurred approximately 12.5% of the time (1 out of 8 submissions), so we accepted those as assumptions.
Eventually, in the Analyze phase, the team could not agree on whether or not this was a legitimate root cause and spent so much time debating it that we had to call for additional data collection. Low and behold, the 12.5% was in fact 3.5%. Furthermore, the feedback loop was more often a negotiation on loan structure than it was a simple error in submission, so it could even be classified as a value add activity rather than rework.
It can be tempting to welcome generally accepted assumptions and expert lore as truth. As we were reminded by this example, by accepting an assumption based on consensus rather than fact, teams can lose valuable time analyzing an issue that may not be an issue at all.
3. Trust in the process
It is not uncommon for team members to feel discouraged or lose faith in their ability to generate solutions when the project encounters challenges. Even after completing many projects, we still encounter political roadblocks, bad data, organizational constraints, and other tests of our resolve. These are exactly the moments when we should remind ourselves that Lean, DMAIC, and other approaches were developed by smart, experienced people to overcome these exact challenges and have proven their value many times over across organizations and contexts.
If you are facing challenges, be honest with yourself about where you may have cut corners or moved on to another phase without fully satisfying the requirements of the previous phase.
Our project required us to coach a team through the process improvement project to give them exposure to the principles, tools and approaches of Lean Six Sigma. There were many moments of doubt, confusion and anxiety regarding even the basic assumption that the process could actually be improved from the current state. It is not uncommon to encounter these feelings on your project team over the course of the project.
People often find themselves uncomfortable with the “slow reveal” nature of this work because it challenges familiar approaches to working and decision making. The team thankfully maintained their trust in us and maintained forward momentum throughout all the challenges, ambiguity and angst to deliver a solution that removed a significant amount of waste from the organization and exceeded their Executive team’s expectations for the project.
Nobody knows at the beginning of the project what the end will look like. We start by defining a target state against which to measure success and move ahead from there, but the end solution and its impacts are never known until the late stages of the project. (Otherwise, why do all the work in between!?) When you are the leader of a process improvement project and others put their trust in you, put your trust in the process and diligently, confidently forge ahead knowing that this has worked and will continue to work for you and many others.
Implications and next steps
Whether you are transforming raw material into finished goods or processing information to provide services, you have processes that can be improved. For those service organizations considering Lean, Six Sigma, or Lean Six Sigma but don’t know how it could apply in your knowledge-working organization, rest assured that everything is a process, there is plenty of waste to be identified and removed, and these methods, tools, and approaches work. We are always happy to help explore ideas on how to make them work for you.