1、Six Sigma in the Service Industry Scott Kowalski Technical Training Specialist Minitab Inc. December 20042 Minitab Inc., 2004 Six Sigma is less about overall accuracy and more about reducing variation Airline passengers want improved on-time performance but are more concerned with eliminating delays
2、 45 minutes Fed-Ex, what if they averaged 12 hours but had tremendous variation Patient waits 5 minutes one time and 55 minutes the next time-probably not satisfied with average = 30 minutes3 Minitab Inc., 2004 Realize Control Improve Analyze Measure Define Create the business case, the problem stat
3、ement, the objective statement and launch the project Understand the process, validate the data accuracy and determine process capability Determine the relationship of Y=f(X) and screen for the potential causes Determine, validate and implement solutions to achieve the objective statement Implement
4、process control methods and monitor performance to sustain results Obtaining ongoing business benefits as a result of finding the solution to the problem 4 Minitab Inc., 2004 System - A group of interactive and dependent activities which operate in control to repeatedly achieve an expected result wi
5、th little or no Management Six Sigma System - An enterprise wide strategy that recognizes problematic areas of the business, defines improvement efforts and projects, determines and implements data driven breakthrough level solutionsin a predictable and repeatable manner to improve business results5
6、 Minitab Inc., 2004 Focus of a project is to solve a business problem Affecting the success of the organization Affecting costs Affecting employee or customer satisfaction Impacting a Customer (external and/or internal) Characteristics of a project They are not easily or quickly solvable using tradi
7、tional methods Targeted to reduce the defect rate by 70% over existing performance levels Target an average annual impact of $150K6 Minitab Inc., 2004 Six Sigma has evolved from a “Quality Goal” to an enterprise wide strategy for business management and improvement Six Sigma has been successfully de
8、ployed in multiple industry segments over the past 15 years If error reduction is warranted within manufacturing industries such as plastics or electronics, it should be considered even more crucial to financial areas, government sectors, and the delivery of healthcare7 Minitab Inc., 2004 Six Sigma
9、Statistical Tools D/M A I C D/M A I C Pareto Gage R&R Control Charts Capability Graphics Gage R&R Hypothesis Tests ANOVA Correlation Regression Capability Graphics DOE ANOVA Regression DOE Response Optimizer Capability Hypothesis Tests Gage R&R Control Charts Capability Reliability8 Minitab Inc., 20
10、04 In many cases, data for service quality projects tends to be attribute in nature. Gage R&R Attribute Agreement Analysis Control Charts P & NP or C & U Charts Hypothesis Tests One and Two Sample Proportion Regression Logistic Regression ANOVA Logistic Regression DOE Logistic Regression Capability
11、Binomial and Poisson9 Minitab Inc., 2004 Healthcare Alexandra Hospital (AH), Singapore Shanghai Jiao Tong University Affiliated First Peoples Hospital Quest Diagnostics Charleston Area Medical Center The University of Wisconsin Hospital and Clinics Thibodaux Regional Medical Center (TRMC) Northshore
12、 LIJ Health System Yale-New Haven Hospital Wellmark Blue Cross & Blue Shield Decatur Memorial Hospital McLeod Regional Medical Center10 Minitab Inc., 2004 In December 1999, the Institute of Medicine (IOM) released its report with the following data: Estimates of up to 98,000 people die every year in
13、 the United States from medical mistakes made by health care professionals Medical mistakes ranked as the fifth leading cause of death in the countrybehind heart disease, cancer, stroke and lung disease The cost of these errors could be as high as $29 Billion a year Harvard University study for the
14、state of New York This study, extrapolated to the national population, suggested that 1.3 million people are injured each year in hospitals 180,000 will die from the injuries The report also suggested that most of those injuries were actually preventable Annals of Internal Medicine reported that 19%
15、 of medications dispensed in hospitals are still erroneous on one or more criteria.11 Minitab Inc., 2004 Wrong Prescriptions Bed falls Incorrect Surgical Procedures Billing / Insurance Dropped Babies Scheduling of Procedures/ Appointments Medical Transcription Errors Patient Satisfaction Staffing12
16、Minitab Inc., 2004 Case Studies: Shanghai Jiao Tong University Affiliated First Peoples Hospital Training sessions helped the hospital acquire valuable skills and develop an internal team of Six Sigma Green Belts. Six Sigma team began a range of eight projects across the organization with the target
17、 of lowering costs and enhancing process efficiency. After six months, the eight projects had helped the customer realize the equivalent of US$135,000 benefit in clinical, nursing, diagnostic, logistic and administrative departments, 13 Minitab Inc., 2004 Increase Stomatology Department Revenue Coll
18、ected 1,146 data points to analyze customer needs, doctor competency and nurse performance Project team provided several suggestions on marketing promotion, new product introduction and doctor performance evaluation Ideas led to an 80-percent increase in the departments revenue14 Minitab Inc., 2004
19、Project analysis and output included: Pareto chart for new product introduction survey. Doctor technical skills analysis for different service types. This was compared with customer needs and revenue from this service to make suggestions on which technology skills need further training and enhanceme
20、nt. Doctor communication skills survey. This was used to determine areas for improvement in the way doctors communicate, set up the communication process and provide training/role play to enhance doctors communication skills. The financial results are indicated by the increase in monthly revenue15 M
21、initab Inc., 200416 Minitab Inc., 2004 Case Studies: Problem: Excessive cycle times for processing disability claims. For 67% of all cases, it took longer than 8 days from the receipt of the request to mail the claim to the insurance company. Summary of Analysis: Problems were found in the originati
22、ng department and accounts receivable areas. The variation in each of several processing steps were found to be statistically significant. For example, it could take anywhere from 1 to 12 days address a claim within accounts receivable. A value added analysis was performed on the various steps. This
23、 analysis found that only a few of the process steps were considered value added in obtaining a reimbursement. Only 35% of the cases actually needed a referral to an MD, while the existing process required a 100% referral.17 Minitab Inc., 2004 Improvement: 1. Referral process modified based on preli
24、minary diagnosis results. 2. It was also discovered that the originating department was already maintaining electronic files of patient record. The Accounts Receivable department was allowed to access this system which eliminated the need to request the patients files. 3. A first in first out (FIFO)
25、 process was implemented in all process steps. Results: Total cycle time was reduced from an average of sixteen days to less than 8 days, variation was reduced by 56%, and less than 15% of all cases took longer than eight days. The financial impact was a significant improvement in cash flow.18 Minit
26、ab Inc., 2004 Cases Studies: Thibodaux Six Sigma quality improvement program has raised the level of care the hospital provides. Using MINITAB and the Six Sigma methodology, the Six Sigma teams have reduced medication errors by 42%, UTIs (urinary tract infections) by 38%, and radiology turn-around t
27、ime for inpatient results by 29% - improvements that have propelled Thibodaux into the top 1% of hospitals in the country for patient satisfaction. Six Sigma projects, like the one that reduced inventory and supply costs by $489,000, have increased the hospitals operating margin to 12% and created a
28、 cash reserve of $24 million in just two years.19 Minitab Inc., 2004 But perhaps the single most impressive - and lucrative - project has been the finance departments initiative to decrease its number of Accounts Receivable (AR) days. At the start of the project, the team calculated that $3.3 millio
29、n of hospital revenue was “sitting in limbo” because the related claims lacked the coding or processing necessary to collect it. By using regression analysis to analyze their billing process, the team identified the factors that most significantly slowed the process, changed their coding procedures
30、so that bills were ready much sooner, and reduced their average number of AR days by ten. With each AR day costing the hospital roughly $178,000, the project has saved Thibodaux nearly $2 million.20 Minitab Inc., 2004 Financial GE Capital Bank of America Siemens Nationwide Insurance Union Pacific Ra
31、ilroad Merrill Lynch American Express Manufacturing Companies21 Minitab Inc., 2004 Quality Scores of Loan Processing Commodities Processing Claims Departmental Variation Abandon Rates at Call Center Delinquent Accounts Credit Cards Insurance rates Billing Cycles Cycle Times22 Minitab Inc., 2004 Case
32、 Studies: Power Distribution Company in India Not meeting performance standard regulations for metering and billing of Electricity Regulatory Commission Standard require the company to provide new power connections within 30 days of application If they do not meet deadline, they pay penalty Annual c
33、ost of delay fines: 1,980,000 rupees23 Minitab Inc., 2004 Defect defined as any connection longer than 30 days24 Minitab Inc., 2004 Sub-Cycle Time-I (SCT-I) Time between date of receipt of application and date of demand note preparation Sub-Cycle Time-II (SCT-II) Time between date of demand note pre
34、paration and date of printing of demand note Sub-Cycle Time-III (SCT-III) Time between date of printing of demand note and date of payment by customer Sub-Cycle Time-IV (SCT-IV) Time between date of payment by customer and date of progress card generation Sub-Cycle Time-V (SCT-V) Time between date o
35、f progress card generation and date of energizing 25 Minitab Inc., 200426 Minitab Inc., 2004 The application form and agreement form were combined, reducing the number of required documents and eliminating duplicate information. Databases related to meter reading status and bill payment status of ex
36、isting customers were made accessible online to detect potential status issues before accepting the application. Detection at the application receiving stage rather than at a later stage helped reduce rework and improve customer satisfaction. Systematic calculations of charges and implementation of
37、an e-mail messaging system for communication of potential issues made the process flow faster and be less prone to errors.27 Minitab Inc., 2004 Savings/per annum from: Penalty money 1,980,000 Expenditure on local 1,008,000 Total Annual Savings 2,988,000 Expenditure per annum for: Purchase of two mob
38、ile vans 160,000 E-mail costs 960,000 Total Annual Expenditures 1,120,000 Total Net Annual Savings 1,868,000 28 Minitab Inc., 2004 Government Public Schools Transportation Community development Human resources Pollution control Permit applications Garbage disposal Emergency responses Call centers29
39、Minitab Inc., 2004 Assessing poor air quality in schools Reduce water main replacement bid costs Fire code re-inspections Body of knowledge differences unified textbook Firing Employee handbook publication Employee satisfaction On-line employment applications Days to approval for permits Missed tras
40、h pick-ups Response time to pothole complaints30 Minitab Inc., 2004 Case Study: Fort Wayne, Indiana Police Department Dispose of Robbery cases in the Southeast Division within 45 calendar days: Current Average 58 days 300 200 100 0 -100 -200 USL USL Process Capability Analysis for Days to Disp PPM T
41、otal PPM USL PPM USL PPM USL PPM LSL Ppk PPL PPU Pp Cpm Cpk CPL CPU Cp StDev (Overall) StDev (Within) Sample N Mean LSL Target USL 576297. 61 576297. 61* 597008. 08 597008. 08* 381578. 95 381578. 95* -0.06* -0.06* -0.08* -0.08* 68. 9927 54. 0544 76 58. 2763* 45. 0000 Exp. “Overall“ Performance Exp.
42、“Within“ Performance Observed Performance Overall Capability Potential (Within) Capability Process Data Within Overall 2001 Day s to Disposition All Cases - Jan-June31 Minitab Inc., 2004 Review of Improvements Implemented Typing pool minimum counts established Quality control report review guideline
43、s for Uniform Division Sergeants off days are now covered by another section Sergeant Assignment Analysis completed and reviewed monthly Lack of Solvability Case Investigator Job Implemented Informal Solvability Factor Analysis Implemented 32 Minitab Inc., 2004 100 75 50 25 0 -25 -50 USL USL Process
44、 Capability Analysis for Days to Disp PPM Total PPM USL PPM USL PPM USL PPM LSL Ppk PPL PPU Pp Cpm Cpk CPL CPU Cp StDev (Overall) StDev (Within) Sample N Mean LSL Target USL 265587.48 265587.48* 242710.96 242710.96* 285714. 29 285714. 29* 0. 21* 0. 21* 0. 23* 0. 23* 24.4351 21.9343 63 29.6984* 45.00
45、00 Exp. “Overall“ Performance Exp. “Within“ Performance Observed Performance Overall Capability Potential (Within) Capability Process Data Within Overall 2002 Days to Disposition All Cases - Jan-June33 Minitab Inc., 2004 150 100 50 0 400 300 200 100 0 -100 Observation Number Individual Value Days to
46、 Disposition by Year 1 1 1 1 1 Mean=29.70 UCL=95.50 LCL=-36.10 Bef ore Af ter 2002 2001 All Cases Jan-Jun34 Minitab Inc., 2004 Cases to be assigned on the first available work day Typing pool to be available to process cases daily Solvability factors reduce caseload when properly utilized No solvabi
47、lity cases had cluttered the system Changes in the Robbery Section Southeast will also positively impact the other sections throughout the division35 Minitab Inc., 2004 Human Resources Minitab Inc. GE Capital Bank of America Siemens Nationwide Insurance Union Pacific Railroad Merrill Lynch American
48、Express Manufacturing Companies36 Minitab Inc., 2004 Payroll administration and Benefits HR information - consolidating databases Absenteeism Safety Firing Employee handbook publication Employee satisfaction Design of job posting template Application process and retention of information Improving learning modules / evaluations Insurance claims37 Minitab Inc., 2004 Summary There are many opportunities for Six Sigma in Service Industries In the end, it is still a processThank you for your time
