Since the 1980s, when Motorola first made famous the quality improvement methodology, Six Sigma has received much recognition and praise as companies have implemented it to improve their bottom line.
When looking at a list of companies who have implemented Six Sigma with great results – companies like General Motors, Ford Motor Co., Kodak, Boeing, 3M, Dell, and GE – it’s easy to understand why some industry professionals assume Six Sigma is only for manufacturers. But the methodology can be used effectively in service industries as well, such as healthcare, education and financial services, with equal results.
A Human-Driven Industry
Yes, Six Sigma’s historical roots are in manufacturing, but service companies that invest in it have been able to save millions of dollars. The key with these companies is to understand that human-driven businesses have their fair share of defects to measure.
Some managers in the service industry must also overcome their fear of relying on metrics; the very word “metrics” sounding too technical and cumbersome. But creating and applying meaningful metrics can give valuable insight into how business processes perform over time. Focus must be shifted from thinking about numbers to thinking about aligning processes to business needs.
Service Industry Case Studies
Often a case must be proven before people are willing to consent to change. The white paper “Jet Engines and Sales: How Six Sigma Brings Breakthrough Results to the Service Sector” provides proof that the methodology can benefit any industry.
One financial services firm mentioned in the white paper was concerned over the high amount it paid for customer service. Although they offered customers a web-based platform to contact them – an option that was the least expensive for the company – customers still continued to use the call center to receive their account information.
Wanting to deliver high customer service but in a less expensive way, the company implemented a Six Sigma project and examined all call center and website data. It eventually found a way to reconfigure the website which would decrease cost but elevate the level of customer service. The result was the movement of customers to the Web, rather than the phone, to get account information.
Another company, this one a large insurance firm, had a 41 day cycle time for claims, which was almost 3x the amount of days deemed appropriate by customers. Customer satisfaction was at an all-time low. After applying Six Sigma, and in less than five months, the project team assessed the organization’s defect rate and identified key factors involved. They also reduced the defect rate by more than 70% which resulted in increased customer satisfaction and a savings of more than $250,000.
As Six Sigma becomes more and more recognized as a methodology not just for manufacturers but for service providers as well, more organizations can benefit from its implementation and experience increased efficiencies, customer service and profits.
