The unorthodox implementation of Six Sigma in the services industry

Although Six Sigma, as David Kiger has previously asserted, was originally conceived as a way to eliminate waste and improve manufacturing conditions—increasing productivity, reducing idle times—in hopes of reaching a no more than 3.4 defects per million opportunities, the method, nonetheless, is starting to find its place in the services industry.

Today, plenty of industries have been capitalizing on the perks of implementing Lean Six Sigma to support their staggering growth: banks and financial services companies, amongst others, use this methodology to put mergers back on track; energy companies to lower their overhead and the costs associated with the production of energy; telecommunications companies to improve their customer service; and, last but not least, retailers to increase both efficiency metrics and in-store customer service.

Yet Lean Six Sigma’s increasing popularity in the services industry embodies a downside: many businesses and organizations have trained, prepared and, furthermore, deployed bunches and squads of Lean Six Sigma experts—which are commonly referred to as Lean Six Sigma Black Belts—only to come across little to almost zero results from their work. According to a recent survey, out of 184 companies, almost 80% asserted that their Lean Six Sigma efforts were not proving to be useful for driving the anticipated value. And around 74% said they were failing to gain the expected and forecasted competitive edge.

Of course, this suggests that there is an immanent reason that lies beneath, maybe much deeper. In fact, after some research, the ugly truth resurfaced: mobilizing large and costly platoons of Lean Six Sigma Black Belts oftentimes, depending on the case, of course, actually, ends up being detrimental to the expected performance and improvement efforts. In that sense, it is common to see hesitant managers constantly unsure about how to deploy these people in the best possible way. Besides, perhaps too often, Black Belts use the same approach towards issues and challenges irrespective of their importance, which results in less-effective solutions. Thus, they fail to realize which improvements are the ones that will make the biggest impact. This, of course, is particularly nagging to companies and to the services industry in general as they struggle to reduce costs while boosting revenues. And while Lean Six Sigma, when used accordingly, can come in handy for addressing obvious issues like bottlenecks, it is less useful for uncovering possible pain points and identifying opportunities for overhead reduction and cost saving, waste reduction and, of course, income generation.

That being said, it is easy to understand that it is not necessary to run every corporate process through the Lean Six Sigma methodology approach. Just by coming up with a list of priorities, the scope of the Black Belts will span over a much wider area, thusly achieving to make the expected difference.

Companies that have managed to capitalize on the Lean Six Sigma methodology have previously deployed a scanning squad in order to identify the most critical pain points and opportunities prior to yielding the positive things that are commonly associated with it. Thus, such previous analysis consists basically of three different stages:

Mapping: the scanning team goes across the whole company and maps its processes in hopes of identifying the biggest pain points and opportunities to reduce costs, overhead, waste, and materials.

Benchmarking: the team compares the processes against benchmarks in order to determine a realistic guideline for establishing achievable targets.

Prioritizing: the scanning team assesses which processes are likely to provide the greatest results once the Lead Six Sigma Black Belts are deployed.

Only after this thorough scan has been carried out, companies can begin the classic and conventional five-step Six Sigma process, which consists of defining, measuring, analyzing, improving and controlling the targeted areas.

desk-office-workspace-coworking_service industry_lean six sigma_logistics
Image courtesy of Startup Stock Photos at Pexels.com

It is quite important to understand this scenario prior to rushing into action. The circumstances, although challenging, can be addressed accordingly. Many companies have achieved great success after realizing that the implementation of the Lean Six Sigma methodology in their industry required that they meet other standards. Bringing in a scanning team help companies determine and create benchmarks while setting proper performance targets and priorities for reducing waste—which, of course, results in the subsequent increase in revenue.

Nonetheless, and be that as it may, the first move should always be to have the scanning team develop the guideline and the map of the operations processes, identifying the costs that are commonly associated with them. The main goal, or, better, the whole idea behind performing this activity is to acknowledge the biggest inefficiencies and pain points, thusly enabling the Six Sigma Black Belts to develop business processes based on facts. By assessing the value chain, companies that belong to the services industry can determine how and when improved performance will deliver the greatest results without falling victim of having used the wrong benchmarks and KPIs while at it.

* Featured Image courtesy of Mike Gifford at Flickr.com

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