Applying Six Sigma Techniques in Service  Industries

Recently, a comment on our LinkedIN Group (check it out here if you haven’t already) provoked an interesting question: Is Six Sigma better suited to manufacturing processes, or can it be employed in a service environment?

 

If you aren’t familiar with management consulting lingo, you may be wondering what Six Sigma is. Basically, Six Sigma is a quality control methodology that can be employed to drastically improve efficiency and cut down on mistakes. Lean Flow, a related concept, focuses on eliminating redundancy and waste to keep a given business process as “lean” as possible.

 

The U.S. economy is largely based in services as opposed to manufacturing today, and as service companies have sought to remain profitable in the recent economic downturn, many of them have looked to methodologies like Lean Six Sigma (the term given to Six Sigma and Lean Flow used in concert) to boost their profit margins while keeping customers happy. Which, after all, is vital to a service economy.

 
Of course, service organizations are dramatically different from manufacturing in terms of the challenges they face. The most important factors in terms of quality and efficiency are flow of information and human interaction (especially customer service interaction.) At first glance, the more “qualitative” nature of these data sets might give the impression that they cannot be measured and improved mathematically. The reality is that human interaction is complex, but within a given entity, those interactions are highly measureable and indeed malleable. If a business takes the time to understand how its people work and how that affects process, then it can improve interactions and processes across the board using the mapping and analysis tools encompassed in Lean Six Sigma.
 

 A big part of the picture here is the importance of organizational culture. Upper management needs to have a clear picture of the nature of their organization’s culture. Once they understand how things are done and why, then necessary shifts can be made with an eye toward improving process. Learning the tenets of Six Sigma will give an organization the necessary tools to implement this type of cultural change in a positive and effective manner, ultimately having lasting positive effects on the bottom line.

 

So, what do these cultural changes look like up close? It’s a great question that depends on the nature of your business and its objectives. Six Sigma can help a company address issues around:

               -Process cycle times; i.e. how long it takes to get a certain task done
               -Customer service interactions
               -On-time delivery of targets
               -Cost-effectiveness
               -Control of complex processes
               -Performance and response time on core services
               -Resistance to change

 

These things are achieved through a systematic capturing of a business’s current processes (including organizational culture), analysis of said processes and implementation of well-designed improvements to customer/client interaction, employee productivity and profit margins.

 

It is widely agreed that Lean Six Sigma and related process improvement techniques can and should be applied to service companies looking to achieve measurable and lasting results. We’ll be writing more about this as time goes on, including an upcoming post on how Six Sigma can be applied to the title insurance industry specifically. In the meantime, we would like to hear your opinion.

 
Do you see how this could work at your company? What do you think your most significant challenges would be? Is Six Sigma a topic of conversation among your company’s decision makers? Let us know in the comments.
 
Authored by Rusty Solomon and Meg Scarborough
2010-12-01 | Add a Comment
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