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Archive for the ‘Six Sigma Improvement’ Category

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Ask any heavy user of Pivot Tables in Microsoft Excel and they will tell you hundreds of stories on how they wasted time, effort and money creating other versions of Pivot Tables from the ones they already had.

For example, say you are analyzing how much time each agent in a customer support call center for Symantec Anti-Virus products or Intuit Tax or Accounting products is spending, resolving issues with the software products they support.

The Call Center is interested in monitoring and making sure that agents resolve issues over the phone, keep the customer happy, but at the same time do not spend more than say 15 minutes per call on any issue. So it slices and dices Agent-wise times and then drills down to Product Type and sees if that particular agent has any more problems resolving issues with Product X Vs. Product Y.

On the other hand, the company is interested in seeing how Product X and Product Y support is going, and so it drills down to Product Level totals and if needed then drilldown to an Agent level.

You would think that with the same data, creating these two pivot tables would be easy. Not so with just Excel spreadsheets alone. When data sets are huge, doing any kind of reorganized reporting takes days and even weeks manually.

Enter a lot of Drag and Drop Business Intelligence solutions that you can just drag and drop columns and the system instantly recalculates the totals and shows you the reorganized reports. Recalculation takes time and computing resources since they will have to redo the totals if the columns are interchanged for proper slicing and dicing.

Now watch this video about In-Memory Analysis from Jaspersoft.

This Commercial Open Source Software from Jaspersoft, makes it even simpler and easier, by doing all the calculations on the fly, In Memory. Multi-dimensional Cube Operations in dealing with slicing and dicing is very compute intensive and in-memory calculations make the whole thing fly faster.

You would not think that such technical arcana have little to do with cutting waste in money, time and resources but with the right technology, you can achieve a lot of your Lean Improvement goals, as well! After all if you are spending time creating the reports rather than acting on them to put in course corrections, you are wasting time, money and resources.

Don’t use a lot where a little will do – Proverb

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Finace and Accounting processes in a company belong to a whole class of non-value adding activities, if you really think about it. They are needed by the regulatory authorities, shareholders and other stakeholders that have business with the company but for the life of me could not think of one way in which it adds value to me, the end customer.

How Ford Motor Company does its Finance and Accounting function has very little to do with the value it is adding to the Ford car I am thinking of buying!

It is interesting that even large companies like Dell and Cisco spent time thinking about how to make the Finance and Accounting function leaner.  

What they found was interesting. They unearthed lots of unnecessary processes and wasted human effort in all of their financial forecasting and regular accounting functions.

The surprising result of all of this is the elimination of a lot of unncessary reports.

As anyone who has watched the movie OfficeSpace and/or worked in a middle management or lower position in any company, we all know the reports we need to fill out periodically that we were convinced wasn’t going to be useful to anybody within the company.  

Time wasted in useless reports so satirized in OfficeSpace that people have designed coversheets for Initech T.P.S Report as a joke! IniTech is the fictitious company that features in the movie.

But seems like wasted human efforts and unnecessary reports are a reality in the world of Finance and Accounting and companies have found a lean approach to eliminating them!

But if you have not seen OfficeSpace yet, do not miss it! It’s widely available on DVD!

There’s no business like show business, but there are several businesses like accounting. – David Letterman

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Many a well-intentioned organizational change effort has been derailed by human beings!

Ask any of the large corporations that have spent millions and millions of dollars in ERP software the last two decades, only to find that the implementations were struggling to stabilize and work properly. All that money may just have been flushed down the toilet!

Checkout this story that documents well known ERP disasters at even companies like Hershey, Nike and HP that are supposed to be good places to work! – 10 Famous ERP Disasters, Dustups and Disappointments .

Many of them failed for many disparate reasons,  but one common thread among many of them would be failure to get buy-in from end users, and their inputs in trying to adopt the new way of doing things!

Therein, lies a very important lesson for many a Lean Improvement effort – Failure to get buy ins from end users!

When you change the way something has been done in the past, you are disturbing the steady state of many human beings involved in that process.

In ERP systems, the warehouse clerk may be used to doing things a certain way, and may be that’s all the skills they have to do, and care to do. Unless that person’s buy-in is obtained in the beginning or somebodyelse who will provide you that buy-in is brought in, the whole effort has a lot of potential pitfalls!

The warehouse clerk likes doing his work by filling out a paper form and is quite comfortable with it. Now you introduce a totally different way of doing things like fill out an online screen on a computer, they may not like the way it is done for whatever reason. It could simply be a case of “they didn’t ask me what I thought about this change”. They may be trying to sabotage the whole effort when no one is looking!

This is the Achilles Heel in not considering the Change Management, Human impact aspects of Lean Improvement upfront, before the analysis and redesign of the mechanical aspects of a process. If a certain person is likely to lose their job because of the improvement, it will be very difficult for that person to accept with happiness, how it is helping the company improve its bottom line. There is nothing in it for him, except bad consequences. On the other hand, if that person is convinced that they will be moving on to bigger and better things after the improvement is in place, they may be persuaded to enthusiastically engage in managing the change.

Lean Improvement is not just about cutting waste and doing things in a better way. It is also paying attention to ALL the factors BEFORE the effort is taken up so that the effort itself is successful.  What’s the point in undertaking an effort in cutting waste if that entire effort turns out to be a bigger waste of time, money and resources?

Failed ERP implementations are great instances for learning valuable lessons for planning and executing Lean Improvement efforts!

People are very open-minded about new things – as long as they’re exactly like the old ones – Charles F. Kettering

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Lean and Research and Development (R&D) don’t seem to fit together.

Lean is about cutting waste in effort, unnecessary movement and making sure anything you do adds value to the end customer.

Research and Development is about conquering new frontiers in Scientific Exploration, and in Industrial settings (Not academic), turning that research into Innovations, Advanced Development and Products.

In theory,  they could be poles apart. In practice, not quite!

We have all heard of legendary stories of very good research and advanced development not really making money for the company that invested in that research. Xerox PARC (Palo ALto Research Center) is famous for inventing the computer mouse but Apple was the company that made it into a commercial product. Corporate histories are laden with beauracracies totally killing innovative ideas.

The latest one is that General Motors spending millions of dollars developing an electric vehicle EV1, making many succesful production versions of it, leasing them, but buying every one of them and crushing them! There is a whole website devoted to this colossal waste of effort. money, research and innovation! . Now they are talking about producing an Electric Car! They had one and they threw it away before!

You might be surprised at the amount of money spent on R&D by companies that does not make a dime for the company. There is research for research’s sake but there are many companies that turn research ideas into products, ready for production, only to be killed by politics, economics or some other consideration!

Making sure that all your efforts at R&D are turned into something useful for the company is itself, Lean!

In addition, there are lots of others things companies can do for Lean R&D. Laboratories can be shared, resources can be shared by many research groups, cutting waste in the process.

There are some recent examples of how Pharmaceutical Companies have rationalized and Leaned their drug discovery efforts even! These are very large, very risky, very expensive projects and it only makes sense that you at least do not waste resources, efforts and the final outcomes are what you want as a corporation! 

Whoever thought that Lean and R&D could actually make sense together!

Misery acquaints a man with strange bedfellows. – William Shakespeare.

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My daughter was biding her time to buy a new laptop after she ground the last one to death for four years, We pounced on a great deal last week at one of the local Office Supply chains.

Of course, these kinds of deals always comes up with some mail-in rebates where you pay the store and get the money back from the store headquarters or the manufacturer.

The mail-in rebate we got this time was different like night and day from my previous experiences with mail-in rebates.

To me, they always appeared to be epitomes of waste;  involving me doing all kinds of cutting bar codes, filling out forms, sending them in with all the right attachments, and then waiting 6 to 8 weeks for the check to come in.

Usually these things are not worth the time or attention of any one, for anything less than $50 or so.

But this experience was an eye opener on how you can lean some of these processes, cutting a whole of waste of my time, their time and everything in between. They had leveraged the Internet very effectively for this one.

After we bought the system, all we had to do was go to a web site, type in the 20 digit number on the receipt, type in the serial number of the system, name and address and done!  From the 20 digit number, they figured out the offer, the store number, type of system, whether the serial number was a valid one, etc and all I had to do was just fill out the address details additionally.

To understand how much waste in people’s time, resources, etc that were cut out of this process, you need to follow how it was done otherwise. I had to fill out the form, cut the bar code out ofthe box, make sure that all necessary pieces of documents were all attached together, made sure that the envelope had enough postage and then mailed it.

Usually you mailed it to some rebate processing third party business in Minnesota. There someone opened up the envelope and checked if all the documents are in place, whether the rebates were all sent in on time, then someone manually entered all the information into a computer application for cutting the checks.

This entire manual cycle has been now cut out, cutting I imagine lots of my time, their time, and people’s time.

Of course, some one made a living doing this thing but I bet they were bored out of their mind doing this day in and day out.

The Internet has the potential of simplifying and cutting waste out of mindless ways of doing things like this one. If only, some one thought about the Internet as the first tool to explore before fancy Business process automation software!

Simplicity is the ultimate sophistication – Leonardo Da Vinci

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Suppose a Customer Service agent throws all Handle Time metrics out the window and helps a customer shop their web site much more thoroughly or stays with the customer till the problem she was facing with the product is fully addressed, the customer truly happy!

Now is that a lean operation? Has the customer service agent wasted his time doing all of this?

It depends, I guess. If you are selling Gizmo X that uses Techno Y technology that no one else in the world sells, may be a lot of wasted time. Where else is the customer going to go get Gizmo X?

This hardly happens in the real world. There is always competition – if not directly, indirectly! For every Razor scooter sold online, there are hundred other brands in scooters, another hundred other options that are indirect competition.

But service, word of mouth, excellent sincere service are the ones that make a business thrive. That’s where being lean may really mean keeping the metrics flexible when you have to.

Make no mistake, Lean and Six Sigma insisting on consistent service without too many variations is still the best way to go but there are always outliers or exceptions for which you need to throw the book out the window and let common sense take over! And there needs to be formal way in the company to recognize what these outliers and exceptions are and an approved way of handling them!

Often, silos within companies are forced on to employees by upper management and metrics within each silo rules! If customer service is measured only by Handling time for each call, they will do things only consistent with that. But if there is a way of properly identifying outliers and exceptions and making them part of regular measurement and rewards, a positive environment is created for the company overall to do well!

Six Sigma has its own way of ensuring that customers have a positive, consistent experience with the company. Calls are handled within 15 minutes, waiting time on hold on the phone is no more than 10 seconds, etc. Six Sigma by minimizing the variation or the Standard Deviation in these metrics ensures that customer can expect a certain kind of service and that does not vary from agent to agent or from problem to problem. This is also important. But overemphasis on this will ensure that outliers are not handled properly! There are stories of call centers where agents, in order to meet their handling time metric on the phone, are known to suddenly say on the phone “Hello, Hello, Can’t hear you properly.” and hang up the phone so that they can meet their handling time metric!

Quality in a service or product is not what you put into it.
It is what the client or customer gets out of it.

PETER DRUCKER

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How often have you come across that one person within a company that solves your problem right away while you have been spinning your wheels with many people before that, being frustrated at every turn?

How often have you come across that one salesperson at your department store that helps you find *Exactly* what you were searching for?

How often have you come across that one repair shop that was able to fix the problem with your automobile when you tried five others without any success?

“Lean” does not always mean cutting people or squeezing more out of that same person!

In Call Centers and other electronically oriented service centers, “First Call Resolution” is the Holy Grail! They want to resolve a customer’s problem by the first person that takes the call, not after going through initial call taker, level 1, level2 and then the level 3 . By that time, the customer is red with rage and it will take a while for him or her to unclench those fists!

In programming circles it is very common to find productivity differences of 20 times or more between one programmer and the next!

All this means is that Lean may also mean paying a lot of attention to hiring the right person with the right skill sets, attitudes and more importantly, spending money on training them to aquire the right skill sets for doing their jobs.

If you are trying to get productivity improvements, sometimes the best answer may not be in spending huge amounts of money on a faster, latest technology for everybody. It may mean looking at how “Lean” or productive, the actual skill sets of people are in doing their jobs!

They may cost even twice as much money as an ordinary person but they may be instantly four times more productive, and if enough money is spent on training, may be even more.

This is one of those neglected areas of Lean thinking. In our rush to cover quantifiable things our leaning process, we may forget that we get more mileage out of qualitative things as well! Something to think about!

The quality of an organization can never exceed the quality of the minds that make it up – Anonymous

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