Six Sigma methods and approaches : Their role and influence in a service environment.
TOTAL QUALITY MANAGEMENT
Six Sigma methods and approaches : Their role and influence in a service environment.
Laurent CHÉREAU
Six sigma was first developed by Motorola to optimize its industrial process, so as to better satisfy its clients. Therefore, this methodology was at first sight applied in manufacturing, given the fact that it is based on defect reduction. But the approach focuses on bringing the client exactly what he or she expects. Moreover the Services sector, like the Manufacturing sector, has to face this query for quality, but also a growing need to reduce costs and increase efficiency, whereas Services processes, because of the predominant "human factor", are harder to analyse and control, so harder to improve. This is where six sigma is nowadays presented as a solution : at the same time philosophy, indicator, benchmarking tool and method, it seems to be very beneficial to firms, which have adopted such an improvement programme.
But if the action of six sigma is obvious in industry, it is not the same with Services, where the concept of quality is hazier, where customer satisfaction is harder to measure. In these conditions, how exactly can six sigma make a Services company achieve these goals ? By what means and for which results ?
Actually, to which extent the six sigma approach is an answer to the problems of services improvement, in terms of quality control, regularity, effectiveness and customer satisfaction ?
First, we will try and define how six sigma applies to services. Then, we will confront this theoric aspect with a case study ; finally, we will be able to determine the actual scope of the six sigma in a service environment and its potential limits.
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Six sigma in services : a contribution on multiple levels
Six sigma was originally intended to reduce defects in products by reducing their variation from a standard. But the very methodology of six sigma allows its application to Services. Indeed, services and industry both have to satisfy customers. They both have provide them what they want, and in services, there can be variations between what the customer wants and what he actually gets. Therefore, it is possible to apply six sigma methodology :
- First, the company has to define what is important to the customer (in terms of price, lead time, information and "product"), but also what is important to employees and to financial results.
- Then, it has to measure the variations from what the customer expects.
- Which lets the company analyse why these variations occur.
- Then, the firm can improve and control the processes involved in these variations.
- Finally, it may be able to design and verify new processes, which are trying to achieve six sigma quality.
So we can see that on the sole subject of variation reduction, six sigma approach can bring a solution. However, it is more difficult in services to apply this methodology, because variation cannot be "measured", and especially its causes depend on the "human factor". And this is precisely why six sigma is a good response to defect, lack of quality and variations in services : first the methodology involves every part of the company, then it can be considered as an philosophy. Actually, the more difficult the process is, the more results it is likely to have, because it gives the company a vision of what it is doing, how it is doing, and which results it reaches.
In the first place the firm has to focus on the customers and identify the problems they may encounter : this process involves every part of the company, from the managers who define strategy to the sellers who deliver the service. Variation in services is not about actually measuring, it can occur at every step of the realisation of this service, and it can be difficult to apprehend. Detecting those variations is much more involving. Plus, the company, to match the desires of the client, has to avoid the four gaps described by Claire Moxham : between the expectations of the client and their perception by management, between management perceptions and actual level of quality achieved, between the service specifications and the actual service delivery, and between this delivery and the external communications about the service. Finally, identifying the problems of the clients means that the company needs a feedback, and on this point services are also different from industry. Its perception by customers is not a factual data, and consequently the company has to take extra care of it. All of this means that when a services company decides to focus on the client, it needs a real implication on all levels.
Then the firm has to measure the variations. Lord Kelvin used to say : "If you can not measure it, you can not improve it.". Once again, this is not a real metric measure, and can seem difficult at first sight, but the analysis of the four gaps and a good feedback about the perception of the service by the clients can help to achieve this goal. Indeed each negative feedback would give information about the gap which is concerned. Next, it is necessary to analyse the current process : the company needs to qualify these weaknesses and ...
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Then the firm has to measure the variations. Lord Kelvin used to say : "If you can not measure it, you can not improve it.". Once again, this is not a real metric measure, and can seem difficult at first sight, but the analysis of the four gaps and a good feedback about the perception of the service by the clients can help to achieve this goal. Indeed each negative feedback would give information about the gap which is concerned. Next, it is necessary to analyse the current process : the company needs to qualify these weaknesses and dissatisfaction. A grid of questions shoule help. Who is concerned ? What is it about ? Where does it happen ? When does it happen ? How does it happen ? And finally, how much does it happen ? Many tools can be used to identify the results of the process (Ishikawa diagramm, Process map, Paretos) an at this level the company should be able to isolate the internal problems and their causes. Once again, given the nature of services, this is a difficult exercice, but the complexity of the analysis allows management, and each department, to understand the actual running of the company : the more complicated the process is, the more problems it can be, and the more solutions it exists.
Next, the management has to define objectives and either improve and control, or design and verify new processes. These final steps follow from the descriptions of the problems and occur when the company is already commited to the six sigma methodology.
From this method of action, we can understand the role of six sigma within a Service environment, which could be seen as even more important than in industry. Actually processes in services are often complex and blurred, at least they involve many individuals, which add to them their way of functionning and thinking. For example the renting out of a hotel room goes from the reservation, arrival of the client and tidiness or compliance of the room to the disposal of facilities or checking out, and involves as much people. Six sigma approach has major benefits : it allows each person to become aware of the process in question, allows management to get to know more accurately this process and to find tools to improve it, and, in a sector rich in human factor, to make everybody aware of the importance of the customer.
Therefore influence of six sigma in Service is numerous : not only does it bring about cost reduction, cycle-time improvement, less waste (e.g. for information flux and paper, or just the extra electricity needed beforehand...), a better understanding of the customer desires and a better customer satisfaction, but it also revolutionizes the way of thinking about services. These can henceforth be seen as a whole process, with a starting and an end (which are widened to include the client both as the starting and ending point), and therefore problems can be treated with an unique, consistent an rational way. This way of thinking can lead to "continuous improvement", not seen as the concept, but as a result : management and employees are able to act on every stage of the process. What is more, it lets management become aware the human factor, not just towards the customers, but also towards the employees themselves, whose motivation -which is notably important when they have contacts with the latter, besides they have to be rewarded in case of success-, and abilities are better taken in account.
Finally, the application of six sigma in services in terms of costs should not be of the same level than in industry, given the fact that there is no physical process to improve. In the same way, whereas the application is complex, a success could happen much faster thanks to the reactivity and the adaptability of the employees.
We have seen that not only the application six sigma in Service trigger a beneficial evolution in the concerned firms, but it can also be a revolution, which affects the general functionning of the company, both in processes and in way of thinking.
To support this assertion, we are now going to study the effects of the six sigma approach on a service company -in the field of healthcare.
Case discussion : the example of a Radiology Film Library
The University of Texas M.D. Anderson Cancer Center Diagnostic Imaging Film Library (M.D. Anderson) recently adopted six sigma methodology to improve its performance, thanks to the appraisal of a General Electric's Health Care subsidiary, one of the leaders in six sigma applications. We will base our study on reports published on the Internet (www.ache.org, http://www.microsoft.com/). There are their most important findings :
- Six Sigma dramatically improves service activities,
- valid quantitative data about services can be very difficult and expensive to gather,
- personnel with limited education and work experience need extensive coaching to encourage creative and big-picture thinking, and
- change management must be an integral component to achieve and sustain dramatic changes.
The M.D. Anderson Cancer center
A radiology Film Library is the place where film are stored in a jacket and kept, being sent to any practitioners when the patient needs it and returned afterwards. M.D. Anderson, like other moder healthcare centers, is aimed to be "multidisciplinary, focused on patient satisfaction, and attentive to cost reductions." The goal of M.D. Anderson is to reduce "the time between the patient's first visit and the eventual development of a definitive plan of care" to four days, during which time the patient undergoes many consultations. This represents a challenge to make sure the jacket is always at the right place, at the right time. Moreover practitioners do not always inform the library of their needs and actions (like keeping the jacket). Processes are then "nonlinear, unpredictable, and difficult to quantify". The employees have no particular vocation. In this context M.D. Anderson wanted to apply six sigma to improve their performance.
Applying six sigma : difficulties
When M.D. Anderson felt it needed a revolutionary change, to lead to a flowing process of its four functions (storing films, receiving and in processing films from other institutions, and lending films to on- and off-campus users), it quickly realised it could not use the"rolled throughput yield" tool (improving success rate). This was not their only difficulty encountered. Because they had to adopt a package Radiology Information System (RIS) to run the library, they could not rely on a customized, efficient software that would have provided every piece of information needed. This RIS "focuses on the end points of processes and provides little information about intermediate steps" : For example it cannot calculate the time of response to an inquiry, they have to do it manually. And that is why they have had to collect and gather much information for six sigma manually (with problems of accuracy and time consumption). Plus, some data were impossible to obtain, they had to use tricks to calculate the percentage error rate.
They also had problems with the human factor : they could neither evaluate face-to-face interactions (when an employee speaks to a customer) nor machine interactions properly, the former being due to the impossibility for supervisors to survey employees, whereas the latter was a consequence of the lacks of the RIS. As a result those interactions were "surprisingly " difficult to quantify, notably the ratio of defects to opportunities.
Finally, almost every employee had difficulties to grasp the concept of six sigma and its statistical tools. Notably, "Explaining why 94 percent is good enough for an A in school, but not nearly good enough at work, [was] a leadership challenge."
Applying six sigma : Solutions
First they discovered that, during measure phase, when they gathered information out of new tools and techniques, substandard performance in some cases was precisely because there was no formal analysis beforehand. For example, they saw that "chasing down" the films from other institutions just when they were requested led -unsurprisingly- to bad results, but gave them a baseline to work on anyway.
Next, they (and especially the six sigma leader) understood that employees needed time to understand and apply six sigma techniques, and consequently lengthened project times.
Due to the revolutionary aspect of six sigma, they involved stakeholders, all management, and they also prepared employees to cope with change. They took time to avoid conflicts and to let the whole library "absorb" changes. During that time management had to take extra care on how well the change was performed.
Other threats to six sigma application in a medical environment
They speak about the levels of urgency expected by clients. During the change of process, if too many of them are unhappy about the delays, they send all their requests as STAT (most urgent), which needed to be handled properly.
They also quote the problem of conflicts between librarians and physicians, which tend to create a negative atmosphere due to the educational and wage differences. Librarians begin to feel "undervalued". Management had in this case to educate practitioners. As well as they had to make them understand the rules were meant to be applied (like giving back a jacket on time).
Another difficulty was to "communicate [about the new processes] and sustain" them all day, every day.
Finally, they explain that the change is costly on a short time analysis, both in terms of money and keeping best employees away from their original tasks.
Conclusions
The concept of applying DMAIC to a services model proved finally right. However, it appeared difficult to gather data and quantify processes and "subprocesses". The project took time and financial ressources, and it required efforts from management and employees. The cultural issues of a healthcare institution were hard to lie beyond, and jeopardized the success of the six sigma project. The methodology proved nonetheless to be an "effective tool for making dramatic improvements in [this] service activity and greatly improved the film library's performance.
This example of application of the six sigma in a service environment is symptomatic of what the role and influences of six sigmas are. While the change of process was a success, it became apparent that applying six sigma is more difficult for services than for industry, given the difficulty to gather coherent data and to make employees -and here clients too- adapt. The tools proved to be efficient in the end, with an lasting increase of performance and a new philosophy propitious to overall quality improvement and cost reduction. However we can see that applying six sigma in a service context entails drawbacks.
A further look on six sigma in service : limits & answers
We have seen that, both theoretically and in an wide example, six sigma are a powerful set of tools and techniques to improve customer relationship, cost control and quality management of a company within a Service environment. But it was originally designed for industry, and a few tools and aims of six sigma are difficult to put in place, indeed useless.
First, it is very difficult for a service company to generate, validate and analyse statistical data, the most important tool for six sigma. Actually, existing processes are difficult to understand given the strong influence of human factors, such as in customer relationship, information flux, or human and machine interface. We had already raised this problem at the beginning, but it appeared prevalent with the example of M.D. Anderson.
This established fact also reduces the durability of changes : because resistance to change doesn't affect machines (to a large extent...) but is a major problem with employees, and even management and stakeholders, the more people are involved in the process and the more human interaction you get, the more difficult are the habits to change. What is more, new processes are -for humans- habits, and contrary to machines, people can forget them and as the example showed, the six sigma leader and management have to be strongly involved and to make sure employees use, make use of new techniques, and do not forget or twist them in a wrong way.
Second, and this follows from the former point, we can assert that six sigma cannot be applied in every services sector. Because it is hard to deploy on account of the human factor, because six sigma needs powerful statistical analysis, which require exhaustive surveys that are hard to get, some services would require too much efforts and costs for too little benefits. We can, for example, assume that applying six sigma in sectors like software development would prove difficult (IEEE Software, may/june 2000, www.software.org).
Third, one of the techniques of six sigma is to observe, learn from and copy concurrence. In services, the perceived quality of concurrent's products is hard to get, and the processes would be even harder. So there is little "best techniques" to apply and each company has to learn by itself or from consultants (with the remarkable exception of our example...).
As a result, six sigma has proven to be an excellent technique to improve performance in a service environment, because it is "revolutionary", it focuses companies on customer relationship, quality management and cost control. The influence of the methodology can therefore be decisive, on every level of the company, and its role modifies the very structure of thinking and working in it. Nevertheless, it was designed for industry, and whereas its benefits are proven for services, six sigma may be hard to deploy, indeed useless.
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Can there be a solution to the problems of six sigma within a service context ? To my mind, and according to several studies published on the Internet, the answer would be yes.
First, we have to stress the point that, if six sigma brings up many problems and difficulties in service companies, those are only partially inherent to the method. The majority of them, actually, preexisted to its application and so they are revealed, as we could see in the example : six sigma raises problems it almost always has solutions to. It could never be bad for a company, whatever the cost, to adopt a coherent gestion of statistical data, and to educate workers of all levels to quality control and customer relationship. Management has to be very careful to apply the methodology (problems of resistance, planification, costs...) but it is never useless, and has outstanding and durable effects.
Most important, though, is that six sigma approach is not the only one. Notably, to counter the drawbacks of the "human factor", several tools have been designed, which fit perfectly well with six sigma : Q12 from Gallup, which emphasizes the importance of motivation amidst employees, Capability Maturity Model (CMM), which helps adapting the software to the needs, or ITIL (IT Infrastructure library), which stresses on the importance of Information Technology and provides methods for its improvement, are among them.
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REFERENCES :
General understanding :
http://etudiant.univ-mlv.fr/~sbrinste/introduction.htm
http://whatis.techtarget.com/definition/0,,sid9_gci763122,00.html
Case study :
http://213.11.172.220/PDF/Microsoft%20Word%20-%20FMQUAL~4.pdf
http://www.ache.org/mbership/AdvtoFellow/CASERPTS/benedetto01.cfm
Human factor :
http://213.11.172.220/PDF/Microsoft%20Word%20-%20FMQUAL~4.pdf
Further tools :
http://www.software.org/pub/externalpapers/sorting_out_six_sigma.pdf
http://www.remedy.com/corporate/ron/volume01_issue01/french/article_05f.htm
http://user929420.sf2000.registeredsite.com/sitebuildercontent/sitebuilderfiles/scorsixsigmaconvergence.pdf
