Six Sigma, the quality improvement
methodology made famous by Motorola in the 1980s, has garnered
much-deserved recognition in the last few years as more
and more companies swear by its effectiveness in improving
their bottom lines.
It may sound odd to hear
accolades of Six Sigma methodology coming from a service,
not a manufacturing, industry. However, “Six
Sigma processes in service and manufacturing environments
are actually more similar than you might think,”
emphasizes Sharon van Wyk, GE Financial Employer Services
Group’s vice president of Six Sigma. “The
basic process and principles are the same.”
ESG, the employee benefits division of GE Financial,
recently used Six Sigma to implement its unique approach
to customer service: Signature Service Teams. ESG’s
Signature Service Teams are, in essence, high-end
consultant groups for employee benefits producers
and plan administrators. Each SST partner has in-depth
knowledge to answer customer questions immediately
or find someone who can—all with the ease of
one point-of-entry for the customer.
“It’s about anticipating our customers’
needs and educating them so they can better use their
benefits,” says Mary Fay, customer service leader.
ESG quality experts designed the teams using Voice
of the Customer, a Six Sigma-based quality tool. “VOC
is a constant outreach to listen to our customers,”
notes van Wyk. At ESG, we constantly measure ourselves
against the customers’ wants and needs, and
align our entire organization to meet and exceed customers’
Marcia Cantor-Grable, ESG’s president and
CEO, adds: “Our producers and employers asked
us for fast, one-stop answers to their employee benefits
inquiries. We listened to their input and ideas, combined
them with some of the data we already had, and designed
what we believe is new cutting-edge service for customer
solutions in our industry.”
For more information on ESG and Signature Service
Teams, visit www.gefinancialbenefits.com.
It only takes a glance at the long list of manufacturers
--Ford Motor Co., General Motors, GE, Honeywell --to reveal
not only Six Sigma's potential for quality improvement,
but also its unprecedented success.
Many organizations, however, have taken a look at Six
Sigma's track record and surmised that it won't work for
them. Why? Because Six Sigma was developed in and for a
manufacturing environment; so, how would it apply to a nonmanufacturing
environment? Organizations such as financial service providers,
health care systems and educational facilities are asking
this question. Others have gone so far as to take that leap
toward Six Sigma and have witnessed the results first-hand.
Often referred to as "transactional Six Sigma,"
the methodology is proving to be a useful tool in environments
that focus more on people and less on product.
"Six Sigma's historical roots are in manufacturing,"
says Rick Schleusener, master consultant at Six Sigma Academy.
"Without really understanding Six Sigma, someone in
the service industry could think, 'this doesn't fit us because
we're in service.' In fact, our recent experience has shown
service companies that invest in Six Sigma are saving millions
of dollars per project."
Experts agree that the most common reason service companies
shy away from Six Sigma is that they see it as a manufacturing
solution. One of the major hurdles service organizations
must overcome is the notion that, because their company
is human-driven, there are no defects to measure. This is
wrong, say the experts.
"Service companies are often dependent on people
processes," explains Excelsis Magno, deployment champion
and Master Black Belt at Volt Services Group, the staffing
business unit of Volt Information Sciences Inc. that has
recently implemented Six Sigma. "Human intervention
is common practice in the service sector, which results
in a lot of hidden factors. However, human resources are
core to service companies." To overcome this challenge,
Magno and her teams train functional leaders in Six Sigma
to balance their staffing expertise with statistics-based
Another hurdle that must be jumped is the fear of metrics.
"When some people explain Six Sigma, it sounds too
techie," notes Forrest Breyfogle, president and CEO
of Smarter Solutions Inc., a Six Sigma services provider
and author of Implementing Six Sigma (John Wiley & Sons,
2003). "They don't appreciate the importance of creating
meaningful metrics that give insight into how their business
processes perform over time. This can lead to firefighting
common-cause variability issues as though they were special-cause.
"High-level control charts get organizations out
of firefighting mode and into fire prevention mode. When
one of these charts identifies an in-control or predictable
process that isn't capable of consistently producing a desired
level of response, we can 'pull' for the creation of a Six
Sigma project to improve the process. This is much better
than 'pushing' projects that have questionable value into
a Six Sigma system.
"Companies need to focus on creating Six Sigma projects
that are aligned to business needs (i.e., creating more
customers and cash)."
Schleusener urges service companies to adopt three principles
of statistical thinking: All work is a process, all processes
have variability and all processes create data that explains
For example, if you were to apply Six Sigma to a company
that provides housekeeping services, you must first understand
what the work (process) involves. Using Six Sigma's definemeasure-analyze-improve-control
method, a housekeeping service company can implement quality:
Define. Because Six Sigma is aimed at reducing defects,
the first step is to figure out what a defect would be.
For example, the company may decide that leaving streaks
on the windows is a defect because it is a source of customer
Measure. The next step is to collect data to find out why,
how, and how often this defect occurs. This might include
a process flow map of where employees start and finish cleaning
houses. Other metrics may include recording what products
and tools the employees use to clean the houses.
Analyze. After the data is measured, the company's Six Sigma
team realizes that a particular employee is better at cleaning
windows than the other employees.
Improve. The team implements that employee's process as
a standard way of cleaning windows.
Control. The company teaches new employees the correct technique
to wash the windows. Over time, there's significant improvement
in customer satisfaction and increased business.
It may have taken the Six Sigma team one or two brainstorming
sessions to clearly define its process, but the DMIAC model
remains the same for housekeeping services as it is for
a window manufacturer.
Convincing the service industry of Six Sigma's benefits
is a major challenge. As noted before, many companies still
conform to the idea that the methodology is only for manufacturing.
An effective way to convince a service organization to implement
transactional Six Sigma is to show relevant examples.
The following case studies can be found in Schleusener's
paper "Jet Engines and Sales: How Six Sigma Brings
Breakthrough Results to the Service Sector":
Does wining and dining prospective customers lead to sales?
The conventional wisdom of a product sales team is that
such entertaining is necessary to close the deal. But, a
Six Sigma project that examined sales data found that although
face time with customers is important, wining and dining
is not. The data showed that regular face time helped close
sales, but that time could be spent over a cup of coffee
instead of golfing at a resort. In addition, the data showed
that too much face time with customers is counter-productive.
A regularly scheduled customer picnic was found to be detrimental
to closing sales because it was held at a busy time of year,
when customers preferred not to be away from their offices.
Changing this process resulted in an increase of more than
10 percent of sales for the product.
A financial services firm believed it was paying an inordinate
amount of money to provide customer service. Although using
the Web-based contact approach was the least expensive,
customers continued to turn to the call center to get account
information. The firm wanted to keep its tradition of high
customer service but needed to deliver it in a less expensive
way. A Six Sigma project examined call center and Web site
data. It found that if the Web site was reconfigured in
a way that reflected the questions being asked at the call
center, costs would decrease as the quality of customer
service increased. The result was the movement of customers
to the Web, rather than the phone, to get account information.
Prior to applying Six Sigma tools and methodologies, one
large insurance company's cycle time for claims was 41 days.
Because nearly 89 percent of past claimants deemed 14 days
sufficient time for completion, customer satisfaction was
at an all-time low. In less than five months, the project
team not only assessed the organization's defect rate and
identified the key factors involved, but it also reduced
the defect rate by more than 70 percent. In addition, the
company's project savings exceeded $250,000 in the first
five months, and customer satisfaction increased dramatically.
A facility management company had a high level of "days
sales outstanding." Initially, the company tried to
fix this by reducing the term of days in its billing structure.
This, however, upset customers. A Six Sigma project examined
the process data and found that a large percentage of the
accounts with high DSO received error-ridden invoices from
the company. The project then worked to understand how the
errors were produced, and process changes were made to prevent
such errors in the future. The result was a better invoice
process and reduction in DSO.
Schleusener also recounted his recent work with a college's
janitorial crew. The key objective in the organization was
to cut the amount of overtime janitors were working without
compromising the quality of the service. "We collected
some data and came up with a concentration diagram,"
explains Schleusener. "We found that there were certain
parts of the classroom where trash accumulated most. So,
we put a trash can in those places. We also noticed a fair
amount of dirt being tracked into the classrooms, so they
put mats in the doorways of each classroom." After
collecting and analyzing the data, Schleusener and the janitorial
crew had indeed found opportunities for reducing work time.
These examples help service organizations see the positive
effects of a transactional Six Sigma system. For another
example, see the case study of GE Financial Employer Services
Group on page 26.
After a company decides to tackle Six Sigma, the next
step is to learn more about it. One resource is a new Transactional
Six Sigma course from the Center for Lifelong Engineering
Education at the University of Texas at Austin.
"In the six years that we've been teaching Six Sigma,
we find more and more service organizations coming to us,"
comments Cath Polito, executive director of CLEE. "They
say, 'What about us? How can we streamline all our paper
The three-week course teaches basic elements of Six Sigma
using a "keep it simple statistically" approach,
design of experiments and knowledge-based management. It
also features case studies that are specific to paper processes.
"We go into more detail in terms of improving customer
satisfaction, generating business growth, and understanding
and gaining knowledge about processes," Polito adds.
"It gets more into the soft skills because the applications
are in areas like finance, sales and marketing, and human
Week one of the course is set for June 23 to 27; week
two will be July 21 to 25; and week three will follow Aug.
18 through 22. So far, Polito says companies from several
service sectors have signed up, including financial services,
educational institutions, state agencies and high-tech companies
that are interested in how Six Sigma relates to software
The health care industry is one that Polito is interested
in targeting. "We've had several calls, but nobody
has signed up from health care organizations," she
says. "But I believe there's a heightened interest
in this sector."
Another resource is iSixSigma (www.isixsigma.com).
The online forum for all things Six Sigma-related includes
an introductory section, numerous articles on Six Sigma
implementation, a forum, news, deployment tips and more.
"Service companies also are taking advantage of the
expertise of outside consultants or hiring deployment champions
who have led successful Six Sigma implementations at other
organizations," adds Magno. "Organizations such
as the American Society for Quality also provide an outstanding
venue for networking and exchanging ideas."
Kennedy Smith is Quality Digest's associate editor.
Letters to the editor regarding this article can be sent