Designing, Implementing And Improving Processes For Customer Satisfaction

Benchmarking

Discuss about the Designing, Implementing and Improving Processes for Customer Satisfaction.

Effectiveness and efficiency of business processes are required to be achieved in order to remain competitive in the market. Six sigma involves maintaining of desired quality of the business processes. Six sigma can be used for various purposes like enhancing customer satisfaction, improving quality, reducing wastes, reducing process cycle time, or reducing defects in products. Benchmarking can be used for building competitive advantage for an organization by achieving focused attention on areas of performance improvement in processes that can be achieved by making them more effective or more efficient (Juran, 2016).

Benchmarking involves understanding of decision processes, identification of best practices in processes, comparison between the two, and evaluation to come up with improvement plan. Benchmarking can take several forms like competitive benchmarking in which the performance is compared with industry leaders and strategic benchmarking in which world class performance is analysed (Attiany, 2014).

Process benchmarking can be used or improving business processes in order to achieve competitive advantages.

However, it can be very challenging to use process benchmarking because of sensitivity of information and the details required for exchange for benchmarking. A combination of different types of benchmarking such as process, generic, internal, and functional benchmarking can be used to achieve results. Together, these can lead to generation of competitive advantage in various ways such as by achieving low cost leadership, differentiation or building quick response processes. A study conducted on how benchmarking of different types can help organization achieve competitive advantage using hypothesis testing. The research confirmed benchmarking actually provides benefits such as error reduction, cost saving, profit enhancement, and customer satisfaction.

Types of benchmarking	Co-operation	Relevance of Information	Degree of Breakthrough	Cycle time	Partners	Results
Internal	High	High	Low	3-4 months	Within organization	Major improvement
External	Low	High	Medium	6-12 months	None	Better than competitors
Compatible	Medium	Medium	High	10-14 months	Same industry	Breakthrough
Trans-industry	Medium	Low	High	12-24 months	All industries	Changing rules
Combination	Medium	Medium	Very High	12-24 months	All industries	Best class

 Different types of benchmarking would need different levels of cooperation, information, time, partners and degree of breakthrough to get different levels of results from self-improvement, better than competition, breakthrough, rule changing or best in class (Six Sigma and Beyond: Design for Six Sigma, 2014).

Internal benchmarking: Internal benchmarking required is very high level of cooperation within different departments of the company compared and a high level of relevant information for comparison. Such a benchmarking can be achieved within 4 months as it does not require any external information and thus, it can be obtained easily for comparison. Such a benchmarking would result into major improvements in business processes (Taghizadegan, 2016).

External benchmarking: This requires a lot of data and information but less of collaboration as the data can be obtained from external sources like industry reports and research reports for comparison. This can be achieved within 6-12 months and would be useful in achieving performance a notch higher than competition.

Case Studies

Combination: Combination of internal and external benchmarking has medium levels of cooperation and information requirement but can help achieve a very high degree of breakthrough by achieving best in class processes and practices that are formed as a result of comparison of the company processes with all the industries. Such a breakthrough can be achieved between 12 months to 24 months.

Compatible: Compatible benchmarking can be achieved with medium level of cooperation and information relevant and still breakthrough would result. The comparison is done between processes used by the companies from same industry.

Trans-industry: In trans-industry comparison, a high breakthrough can be achieved with medium level of comparison with less need for information. The comparison is done with all industries and improvements are achieved through change of rules in the specific industry (Watson, 2007).

The actual impact of benchmarking may be understood by exploring various case studies from around the world that would tell how it was used for making process improvement by various organizations in practice.

Xerox: the CEO of the company had discovered from the strategic benchmarking that average cost of manufacturing printing machines in the Japanese companies was 50% of what it took Xerox to manufacture them. The result was an improvement made on undercutting of prices by establishing quality control and reducing manufacturing costs. The benchmarking helped company achieve quality leadership gaining them a comeback after a trouble business situation in the industry (ICMR, 2006).

Starwoods Hotels & Resorts: In 2005, the company revitalized their properties globally through re-branding after using a world class benchmarking that delivered them an information which was used for training their 125,000 employees across properties for cultural transformation resulting into operational improvements and revenue saving.

Brookfield Zoo: The top zoological institute was facing a decline in generating strong customer loyalty. When the managers from the company went to Orlando and did competitive benchmarking, a new loyalty building strategy was formulated and the company selected some Zoo facilitators to deliver training on service program to 1,500 crew members. The move resulted into service excellence and thus resulted into the satisfaction rating of visitors by 18%, non-member rating from first time visitors willing to come again increased by 7% and a drastic increase was seen in non-members connecting with zoo staff from 9% previously to 65% after changes were made.

Six Sigma provides measures for assessment of the effectiveness and efficiency of processes. It acts as a tool that can drive process excellence. Various business process design parameters can be integrated into the design framework of Six Sigma methodology such that a more streamlined business flow can be achieved and variability can be reduced from standards (Eckes, 2013).

Six Sigma

Two types of methodologies exists in Six Sigma practice including DMAIC that uses five steps including Defining, measurement, analysis, improvement and control and DMADV which involves somewhat different steps including Defining, measuring, analysing, designing, and verification (Keller, 2015). Six Sigma can be used around any of the six common themes including customer focus, data driven management, action oriented process, proactive management, boundary less collaboration, and failure toleration (ACAI, 2010).

Six Sigma methodology can actually be applied to business processes using certain tools like process maps, cause and effects diagram, failure Mode and Effects Analysis, pareto Diagram, statistical process control, design of Experiments, Control plan, and so on (Pyzdek, 2013). The level of excellence achieved by the players of Six Sigma divided them into four categories that include Green belts, black belts, champions and black belt champions. When Six sigma is used part time with small scope projects that lead to slight cultural changes in an organization then it is called green belt. Black belt practitioners use it full time for strategic projects and champions are the leaders who work on overseas projects using Six Sigma methodology and are capable of resolving issues on large scale (Lanham, WHA).

Process excellence has been an aim of most organization that want to achieve competitive advantage and Six Sigma methodology can offer such opportunity when combined with business processes or management concepts or ideas such as MET, BPM and lean.

Figure 1: 3i Model

A concept of Most Effective Technology has emerged to which Six Sigma model can be applied to improve best practices and innovate MET solutions. A 3i model has been formulated and applied to industrial practices to enable such enhancements. As per this model, a project charter goes through a process of evaluation and it is at this point when existence of MET is explored to understand if it can satisfy any business requirement. If a solution is possible then it goes through the next process of Six Sigma that includes measurement and analysis. This would reveal improvements in the current MET process would bring innovation or new innovation has to be carried out by adding a new MET. 3i Model acts as an interface between the functional actions taken in an organization and its business requests. Six Sigma here acts as a way to work and it can be integrated into improvement, implementation or innovation of processes. The first step is always the improvement in existing MET using Six Sigma and then the application moves higher to achieving innovation through complete migration (Costa, 2005).

Process Excellence with Six Sigma

Six Sigma can also be used in combination with the business process management to achieve process excellence. Six Sigma and BPM have common goals of process improvements and thus, it is easy to integrate them to achieve higher results. While BPM focuses on automation and optimisation of processes, Six Sigma can combine analytical approach to the processes thereby connecting the processes with the organizational goals (Breyfogle, 2004).

Combing lean with Six Sigma has some additional advantages that companies can make use of for enhancing their business processes (BSI, 2013). Lean principles can reduce lead times and train employees on eliminating wastes such that productivity can be achieved with efficiency. A simple example that can be taken here is freight handling process in which if lean principles are followed, sorting of merchandize would be carried out only after unloading goods for trucks which would ensure that goods are touched least times before placing them on shelves thereby reducing handling (TCS, 2015).

The actual impact of Six Sigma may be understood by exploring various case studies from around the world that would tell how it was used for making process improvement by various organizations in practice.

IDS: A companywide Six Sigma initiative taken by IDS which was a financial services organization was adopted after performing its benchmarking with Toyota’s lean thinking model. A consortium of six experts was formed including full time black belt champions and internal black belt experts (Desai, 2011). The company had identified 40 projects to implement DMAIC methodology. In the process, the company identified three major challenges that the company was facing and these included lack of strong cost and financial plans and multiple data sources. A value stream analysis tool was used to understand the process and then design improvements were made resulting into streamlining of processes and a significant reduction in cycle time was achieved. This helped the company save $130,000 of costs annually (Ansari, et al., 2013).

Wipro: Wipro is the first organization in the world to get CMMI 5 certified and runs over 40 centres of excellence across the world. As learning provided for communication solutions in USA, the company needed to contagiously improve its product performance and thus, started to focus on quality and built upon its strengths using Six Sigma methodology. The objectives were to reduce data transfer time, risk, avoid interruptions, and enable paralleled availability of multiple administrative tasks. The company used TQSS methodology for reducing defects in its transactional processes, DMAIC for improving non-transactional processes, CRPM for cross functional process mapping, and DSSS+ for developing new processes. The company had over 15000 of its employees trained on Six Sigma with over 180 of them provided with black belts certification and were involved in 1000 Wipro projects. As a result of this major restructuring of the organization, 250% of improvement was received as against the target of 200% in data transfer. Software defects were reduced by 50%, elimination of wastes resulting into 35% increase in productivity, software rework as reduced by 7% and failure rates went down from 4.5% to 1% (Sharma, et al., 2006).

Conclusion

The paper studied how latest methodologies like benchmarking and Six sigma can help organizations make major process improvements thereby resulting into process excellence. Some case studies were taken and it was discovered that major process improvements resulted from their application and companies were benefited majorly in terms of cost reduction and quality enhancements.

References

ACAI, 2010. Reaching Strategic Edge, s.l.: ACAI.

Ansari, A. et al., 2013. Application of Six-Sigma in finance: a case study. Journal of Case Research in Business and Economics , Volume 10, pp. 1-13.

Attiany, M. S., 2014. Competitive Advantage Through Benchmarking: Field Study of Industrial Companies Listed in Amman Stock Exchange. Journal of Business Studies Quarterly, 5(4), pp. 41-51.

Breyfogle, F. W., 2004. Leveraging Business Process Management and Six Sigma in Process Improvement Initiatives , s.l.: Smarter Solutions .

BSI, 2013. Lean Six Sigma:A guide to business improvement and certification, s.l.: BSI.

Costa, M. J., 2005. Applying Six Sigma to Business Process Excellence , s.l.: BPTrends.

Desai, D. (2010). Six sigma. Mumbai [India]: Himalaya Pub. House.

Eckes, G. (2003). Six sigma for everyone. Hoboken, N.J.: J. Wiley.

ICMR, 2006. XEROX – The Benchmarking Story, s.l.: ICMR.

Juran, 2016. Benchmarking as a Competitive Advantage, s.l.: Juran Global.

Keller, P. (2005). Six sigma demystified. New York: McGraw-Hill.

Lanham, B., WHA. Six Sigma Process Improvement Methodology, Milwaukee, WI: Froedtert Hospital.

Pande, P. and Holpp, L. (2002). What is six sigma?. New York: McGraw-Hill.

Pyzdek, T. (2003). The Six Sigma handbook. New York: McGraw-Hill.

Ray, S. and Das, P. (2010). Six Sigma project selection methodology. International Journal of Lean Six Sigma, 1(4), pp.293-309.

Sharma, M., Pandla, K. & Gupta, P., 2006. Case study on Six Sigma at Wipro Technologies: Thrust on Quality, s.l.: Jaipuria Institute of Management.

Six Sigma and Beyond: Design for Six Sigma. (2004). Technometrics, 46(3), pp.372-373.

Taghizadegan, S. (2006). Essentials of lean six sigma. Amsterdam: Elsevier.

TCS, 2015. A Lean Six Sigma Approach to Improving Efficiency in Retail Store Operations, s.l.: TCS.

Watson, G. H., 2007. Strategic Benchmarking Reloaded with Six Sigma: Improving Your Company’s Performance Using GLobal Practice. New Jersey: John Wiley & Son’s Inc..