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Lean Sigma
Methods and
Tools for Service
Organizations
The Story of a Cruise
Line Transformation
Jaideep Motwani
Rob Ptacek
Richard Fleming
www.businessexpertpress.com
Lean Sigma Methods
and Tools for Service
Organizations
Lean Sigma Methods
and Tools for Service
Organizations
The Story of a Cruise Line
Transformation
DOI 10.4128/9781606494080
10 9 8 7 6 5 4 3 2 1
References ..........................................................................................121
Index .................................................................................................123
CHAPTER 1
Larrys perspective that his organization is different and Lean Sigma may
not apply is very common. In fact, no two organizations are exactly alike;
therefore, Lean Sigma methods and tools may work differently for different
organizations. Yet, Lean Sigma philosophy, principles, and concepts of
waste elimination (conservation of resources) and improving flow are
universal. Lean Sigma is a never-ending, systematic/scientific approach to
identify and eliminate or reduce waste for any organization that delivers
any product or service. By viewing a business as a series of processes with
Suppliers, Inputs, a Process, Outputs, and Customers (the Six-Sigma
acronym is SIPOC), any organization can employ Lean Sigma methods
and tools to improve their quality, productivity, customer satisfaction, and
financial performance.
4 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Identification and
Understanding of Lean
Sigma Implementation
Larry arrived at DR Products (DRP) before dawn the next morning. Joe
met Larry at the gate, had him sign in and get a visitors badge. Larry had
to read a brief statement of DRPs values, vision, mission, and safety rules
in order to enter the plant.
Joe said, Come on, we have to get going. I dont want to be late for
my walk. Before Larry even got a cup of coffee, Joe had them walking
around on the factory floor.
Joe walked at a brisk pace. The first stop was in shipping and
receiving. Larry had a shipping and receiving area on the cruise ship as
well. It didnt look this organized. Joe went right to the 4 8 shipping
scoreboard which showed the planned inbound and outbound materi-
als, supplies, and products due for the day. The area was neat and tidy.
Larry could almost see how the organization on the floor matched the
details on the board. Everythings to plan here, lets get to the next
operation, Joe said.
DRPs primary products are metal cabinets and work surfaces.
Upstream from shipping was the assembly area. In the assembly area,
they had three U-shaped cells. Joe explained to Larry that each cell pro-
duced several similar models of cabinets or work surfaces. Specials were
produced in the cell where they had the most commonalities as deter-
mined by engineering. The cabinets were coming out of the cells like
clock-work. Each worker in the cell seemed to work in unison with the
others, moving parts to the next station in the cell at about the same time.
Larry thought to himself that it looked like an orchestrated dance. As soon
as one cabinet was completed and on the skid, a forklift would magically
6 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
appear to take it to the shipping area where final shipping paperwork was
prepared. Everything seemed to be in sync, like the interlocking teeth of
gears that always match up exactly to the timing or flow. At the assembly
area, Joe studied each cells scoreboard. Larry noticed that the scoreboards
had red and green coloring in certain areas. Larry assumed that green
meant good and red meant bad, and he was right.
Joe made some notes, and said Lets go, and off to the paint line
they went. Larry thought the cells were very similar to the laundry area
on the ship, except they werent quite as structured. Any laundry basically
just went into any available machine. Larry made the following sketches
of the cells and scoreboards.
The paint line was manually operated. People hung cabinet parts and
panels on hooks or racks and placed them on an overhead conveyor. The
conveyor system carried the parts through several cleaning steps and then
through a paint booth where two painters manually sprayed each part
with the desired color. The parts would then be conveyed through an
oven to dry or cure the paint. After drying, the parts would be inspected
and set on roller carts to move to the assembly area. Just like in assembly,
when a painted parts cart was full, someone would magically appear to
IDENTIFICATION AND UNDERSTANDING 7
take the cart away to the assembly area. Joe studied the paint line score-
board for several minutes. The board was very colorful: red, green, and
yellow highlights covered the board. Joe made some notes and moved on
to the metal fabrication area. Larry made the following sketch of the paint
line scoreboard showing the red and green coloring.
Joe went right to the metal fabrication scoreboard, made some notes,
and stopped at the quality hold area to look at some parts. Larry watched
as Joe picked up the parts tagged with red tags and examined them closely.
Larry couldnt help but think how this looked like his chef inspecting the
shipments of fruit coming on the ship. Joe made some notes about the
quality hold area and moved on. Larry sketched the red tag below.
8 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Trying to keep up with Joes pace, Larry said When do we get some
coffee? You do have coffee dont you?
Joe chuckled, Yes, we have coffee. Well get some at our daily huddle,
he replied.
Huddle? Are we playing football now? Larry said with a smile.
Joe replied, No. Our daily huddle is similar to a football huddle in
that we review the current situation, and set the plan for the day. Like
a quarterback calls a play, we cover the plan for the day and then get to
working the plan. Its part of our PlanDoCheckAct (PDCA) Lean
Sigma process for CI. The walk we just completed, we call a Gemba
Walk. Gemba means where the work is done and we do a Gemba Walk
to check on the progress to plan and then huddle to adapt, adjust, and
act with countermeasures as needed. The huddle aligns everyone on the
action plan.
Do you do the Gemba Walk every day? asked Larry.
At least once in the morning as part of my standard leader work, but
I sometimes take the walk several times a day to stay on top of things. The
walk makes it easier for me to spot waste and abnormalities to the plan,
and for me to offer help to the teams to make the proper adjustments
quicker, replied Joe.
I thought standard work was only for the workers, Larry replied.
Absolutely not! Standard work is for everyone in the organization.
Each person in the organization has standard work to complete. Its part
of our Lean Sigma CI initiatives, Joe replied. Larry sketched the follow-
ing standard work form.
Joe explained, The process is pretty simple. Everyone has standard
work thats kept track of on a scorecard. We measure our actual perfor-
mance and post this on our scoreboards several times during the day so
we can compare our actual performance to the standards. This method
of Scoreboarding allows us to quickly identify abnormalities and non-
standard performance throughout the day. Then we can make appropriate
adjustments or counter measures. Were PDCAing continually through-
out the day. This increases the likelihood that well meet our schedule
consistently every day.
It sounds confusing, said Larry.
IDENTIFICATION AND UNDERSTANDING 9
Its not. Its really easy once you get used to it. As I said, I do the
Gemba walk two or three times a day to stay connected with the work
flow. With a 15-minute Gemba walk I can get critical information such as:
Every leader in the organization can get this information just by going
to Gemba, Joe said with a grin.
Im not sure this would work for me, said Larry.
10 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Well, when you lose your cruise line you can do it for me,
quippedJoe.
Joe had a series of activities lined up for Larry. Through the day, Larry
would visit with several leaders and workers and near the end of the day,
Joe had arranged for Larry to sit in on a Lean Sigma overview session for
a small group of new employees. Every employee at DRP received basic
Lean Sigma CI training within the first few weeks of employment.
In each of the work sessions with the leaders, Larry reviewed depart-
ment, team, or area scorecards and standard work for the leaders. Every-
one seemed to tell the same story regarding how they worked, how they
communicated, and how they made improvements.
By the end of the day Larry was exhausted. He couldnt wait to get
home, have a beer, and relax. Joe arrived at the training room and asked,
Are you ready for another Gemba walk?
Again? questioned Larry.
Come on Larry, its only 15 minutes and its needed to set up second
and third shift plans. We run three shifts here you know prodded Joe,
and off they went to the Gemba walk.
On the drive home, Larry couldnt help but think of all the reasons
Lean Sigma would not work for his cruise line.
Then Larry remembered what hed said to Joe at the picnic, Anything
you can do, I can do better! Hed taken some great notes throughout
the day and at the Lean Sigma overview session. Intrigued, he made a
commitment to himself to go through the notes, and to determine what
IDENTIFICATION AND UNDERSTANDING 11
might work versus what wouldnt. It was a good thing he had some time
the next day to review his notes and make a plan.
or
The 30-year fixed mortgage application current state value stream map
Client
5S
Pitch
B Butter/
B
safety
Mean or average
6s 5s 4s3s2s 1s 0 1s 2s 3s 4s 5s 6s
Sigma
(Deviation from the mean)
16 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
5s 233 99.9767
4s 6,210 99.379
3s 66,807 93.32
2s 308,538 69.15
1s 691,462 30.9
Quantitative analysis
Just-in-time (JIT)
Common goal of Six-Sigma Zero defects
Layout
DMAIC
Flow
Leveling (heijunka)
Mistake (or error) proofing
Performance dashboards
Plan-Do-Check-Act
Problem solving
Pull systems and kanbans
Value and waste
Statistical methods
Scientific method
Quality first
Quick changeovers
Standard work
Statistical process control
Takt time and demand analysis plots
Teamwork
Total productive maintenance (TPM)
Valve stream mapping
Visual controls
Voice of the customer (VOC)
Larrys notes on the building blocks are shown on the following pages.
LEAN SIGMA METHODS AND TOOLSBASIC CONCEPTS 19
Larry wondered why Time was not a waste. He concluded that each of
the 12 wastes wastes time as well! He continued to review his notes on the
following Lean concepts:
LEAN SIGMA METHODS AND TOOLSBASIC CONCEPTS 21
(Continued)
LEAN SIGMA METHODS AND TOOLSBASIC CONCEPTS 23
Ways to
Form Description Examples eliminate
Corrections All processing Data entry errors Standard work
required in creating Not having Lean Sigma File
a defect and the integrated IT System
additional work systems Visual controls
required to correct it Mistake proofing
(Continued)
24 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
(Continued)
Ways to
Form Description Examples eliminate
Environmental Any waste that Paper or plastic Reduce, reuse,
is generated by a used in a cafeteria recycle
service organization that isnt recycled Sustainability or
that impacts the Unnecessary use Green metrics
environment, of power when
whether it is heat, machines and
solid, liquid, or gas equipment arent
in use
Social Waste from the other Time spent by PlanDoCheck
areas of society, employees at work Act
such as poverty, socializing Sustainability
discrimination, Advertising metrics
malpractice, health products on social Performance/gap
and injuries, networking sites analysis
nutrition, literacy that are not read
and education, by target audience
and also waste on
account of social
media networking
Larry thought about where these wastes could be present at his cruise line
and made the following notes.
Excess transport affects the time of delivery of any work within an office.
Even with the Internet and e-mail readily available, too often, or not often
enough, documents (i.e., files) that provide little or no value are moved
downstream regardless of need. Reducing or eliminating excess transport
waste is important. Locating all work in sequential process operations and
as physically close together as possible will help eliminate or reduce this
waste. Transport between processes that cannot be eliminated should be
automated as much as possible. Ask questions such as, Is the office layout
optimal?, Is the release and request for work automated? and Is IT
aware of the problem and can they help?
Any movement of people that does not add value is waste. This waste
is created by poor office layout or design, faulty or outdated office
26 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Putting more work or effort into the work required by internal or exter-
nal customers is waste. Excessive processing does not add value for the
customer and the customer will not pay for it. This is one of the most
difficult administrative wastes to uncover. Some questions to ask to assist
in the identification of this waste are, What are the most basic processes
required to meet the customer needs? or Is there a clear understanding
of the customers needs?
Inbox folder and try to find it? How many times do you actually touch
something before it is completed? It is the finish it, file it, or throw it
away system that can help eliminate this waste. This waste closely related
to wasting time.
Larry thought hed use these questions to stimulate people and promote
more open communication regarding waste and continuous improve-
ments.
Larry reviewed the following Lean Sigma Service Excellence Waste
Walk form. The form can be used by teams or individuals to identify
waste in their work environments. Simply take the form into the work
environment and look for a waste or two in each of the Dirty Dozen
waste categories. This exercise develops a deeper understanding for waste
and may provide a starting point for an initial project. At a minimum, the
results will stimulate discussion, learning, and waste observation. Larry
thought about how he could use this form to help teach his team about
wastes and CI opportunities.
Larry continued to review his notes from the training session at DRP.
Expertise
Not using peoples minds and getting them
involved.
Transport
Moving tools and materials to the point
of use.
Inventory
Materials or information. This includes all
work in process and finished goods.
Motion
Movement of people. This includes
walking or riding, as well as smaller
movements.
Corrections
This includes rework or fixing of products
or information that is wrong the first time.
Overprocessing
This includes work above and beyond the
minimum requirements or needs.
Waiting
This includes any time delayed or waiting
for materials, information, or people.
Overload
This is when workload is too much and
machines break and people burnout.
Unevenness
This is when workload varies from slow to
fast uncontrollably.
Environmental
This includes pollution and other wastes
of the environment.
Social
This is waste that impacts social issues.
30 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Worker Level
(Continued)
32 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
(Continued)
(Continued)
LEAN SIGMA METHODS AND TOOLSBASIC CONCEPTS 33
Larry knew he had to do something different with his cruise line but he
was beginning to feel a bit tired until he got to his notes on the Lean
Sigma outcomes listed below. His notes on these potential results gave
him a bit of inspiration.
All of this information was a bit overwhelming for Larry. He still wasnt
convinced that Lean Sigma would work for his cruise line but he didnt
have many alternatives. He knew that doing the same thing and expect-
ing different results would just not work! Larry wanted to ask Joe some
more questions about the process so he gave Joe a call and invited him for
a tour of the cruise ship. Larry thought hed have some time to pick Joes
brain about how to begin. Larry just needed to know what the next step
was and how to get started.
Joe agreed to the tour if his family could spend the day on-board with
a full pass to the amenities. Larry agreed and the tour date was set.
(Continued )
LEAN SIGMA METHODS AND TOOLSBASIC CONCEPTS 35
Comparing Manufacturing
and Service Environments
Joe and his family were up early on the morning of the ship tour. Joes
wife had cooked a pancake breakfast and the sugar high was just kick-
ing in for the kids as they arrived at the port. Joe spotted Larry talking
with a crew member outside the ship boarding area. Larry! yelled
Joe with a wave. Larry wrapped up his conversation and walked over
to Joe.
Boy, we are sure ready for this. Whats the day-plan? asked Joe.
Larry explained that he thought hed drop Joes wife and children
off at the family pool and set everyone up with a day pass for the ships
amenities. The ship was at port today preparing for the next voyage.
Many of the restaurants were in a changeover mode, yet there were plenty
of things to do and places for Joe and his family to eat. Once Joes family
settled in, Joe and Larry would take a walk around the ship.
The walk with Larry started in his office. Larry liked his office and
thought it would impress Joe. As they walked into the office, Joe said,
Pretty fancy! At least it looks like youre doing well! Yeah Joe, this is
one of the ways service is different from manufacturing. If you had an
office this nice your customers would assume you were making too much
money. When they see my office they assume the entire ship has such nice
features, Larry replied with a smile.
Yeah this is nice, but you probably shouldnt spend too much time
in here, said Joe.
Well I wanted to start here to show you how we are organized and
how different we are when compared to a manufacturer. Larry showed
Joe the list (see next page) of the key areas he was responsible for in the
cruiseline.
38 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Joe was impressed. There are a lot of areas on this ship, its like a small
city! Joe said.
Its not all about speed and efficiency on a cruise ship, said Larry.
Sometimes our customers want slow, relaxing services. They want to be
pampered, they want opulence! explained Larry. He continued, For
example, if we charge $150 for a foot massage, we dont want to rush
through in 10 minutes.
Joe smiled a knowing smile, That may be true, but they might not
want to wait 45 minutes in the lobby before getting their massage either.
Are guests ever put on hold when trying to schedule an appointment?
I get what you are saying, but there are a lot of other areas on the ship
where you do need improved speed and efficiency. You might want to
focus on those areas before its too late! Lets take a walkI cant stand
sitting still, said Joe, and off they went.
How do you know what your customers want? asked Joe.
What do you mean? asked Larry, seeming a bit confused by the
question.
Well, how do you know if the customer wants a $150, 2-hour foot
massage experience, or only a simple foot rub for a couple minutes?
clarified Joe.
COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS 39
Well, we set up standard services and let our customers select the service
or option they want. Its like our food services, in that we provide a full all
you can eat buffet where the customers can select what food items they want,
or we offer other locations where customers can experience full service, a la
carte menu items. Their choice is how we know what they want, said Larry.
Joe elaborated, Thats great! We call that Mass Customization, which
is a Lean Sigma tool that allows customers a unique selection of exactly
what they want. You see it a lot in food services, but what about the other
services you provide? I studied a little about cruise lines before coming
today. Your brochure does a great job of explaining the different areas on
the ship where you provide multiple types of services. Some of them can
be easily customized and offered to the customers, some cant. For exam-
ple, security, maintenance, and housekeeping are all services. Some have
direct ties to customers, some dont. Some have tangible or measurable
outcomes, some dont. In fact, services can fall into three categories:
(Continued)
42
(Continued)
Area Lean Sigma ideas already in use Wastes observed Improvement ideas
Medical Healthcare areas typically use visual Several people were surfing the web, when they should Establish standard work to address social
Onboard medical controls and signage to help people have been working. This is a social waste. The exam networking. Consider kanbans for supplies in the
center interact with their systems. rooms seemed to be missing many items. This can cause exam rooms.
the waste of waiting or delay as well as motion.
Food services Several signaling or kanban systems Cruise ships are well known for their lavish food Consider using statistical analysis to minimize
Multiple onboard were being used to inform chefs of the offerings, but where does all the excess food go? And food waste.
restaurants needed items. how do they know how much food to prepare? Excess
food waste is a waste of social responsibility and the
environment.
Retail sales Onboard stores were already using visual Even with the statistical tools in place, excessive and Consider using statistical tools to determine more
Multiple onboard controls to attract and direct customers obsolete inventories were observed. precise product needs and volumes. This will
stores and workers. reduce the waste of inventories.
Security The security group is using a mistake- At times several security personnel were overlapping in Consider flow maps and pitch times for the
Onboard police proofing method to ensure they are their standard routes. This is a waste of overprocessing. standard security routes. Also, consider providing
achieving proper coverage and support Additionally, the security group was continually having additional training to reduce errors and
to all key areas of the ship. to modify their reports as they were often incorrect. This corrections.
is a waste of corrections.
Adventures Similar to onboard stores, the Many corrections are needed as adventure sign-ups Consider a visual management system to plan and
and event adventures and event planning group are often overbooked. These wastes or corrections schedule customers onto adventures.
planning was using visual controls to attract and overburdened and caused customers to wait.
LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
guide customers.
Operations and The maintenance crew was using a Customer maintenance calls sometimes took several Consider an improved standard work practice
maintenance standard preventative maintenance hours to resolve. This is a waste of waiting. Often the to serve customers. Also, establish a standard
program to maintain the ship and engine maintenance member would make the initial visit to the maintenance tool cart to take on all calls.
room mechanicals. area requiring maintenance support, and then go to get This is mass customization and standardized
the proper tooling. This too is waste of waiting, as well work. Develop this plan through statistical and
as waste of transportation and motion. historical data analysis.
Purchasing and The purchasing and logistics group Several stock-out notices were found in the area. This Consider using kanban methods to prevent stock
logistics (supply was already using statistical analysis to causes customers and workers to wait. The group was outs. Also, develop a plan to engage peoples
chain) determine order quantities to reduce also not using the ideas from the various areas of the thoughts and improvement ideas.
costs. ship. This is a waste of people as resources.
Human resources The HR department used standard The HR department printed every e-mail they received, Consider a revised method of handling e-mails.
and training work regarding the orientation training and had multiple people read them. This is a waste of Use an office/software 5S. Develop standard work
program for all new members of the staff. environment, social responsibility, and overproduction for processing e-mails that will reduce printing.
or overprocessing.
Administration Payroll was using standard work to Quite often they had to make corrections in payroll and Consider mistake proofing methods for the payroll
Payroll and process check on a weekly basis for checks due to the hours accounting system. This is a and hours tracking system.
accounting all employees, as well as the regular waste on corrections, which causes waste of waiting by
financial reports. They also used double- the staff.
entry accounting techniques which is a
form of mistake-proofing.
COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS
43
44 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
There are a lot of opportunities for Lean-Sigma methods and tools here.
I think you should start a couple of improvement projects, commented Joe.
Great! How do I do that? We sail tomorrow! asked Larry.
First, you need to build a foundation to support Lean Sigma improve-
ments, so you have plenty of time. The first step starts with you, Joe said.
Me? Why me? Tell me more Joe, tell me more! replied Larry a bit
sarcastically, but with real surprise.
Not today. Ive done enough work for you today! I need to find my
wife and kids and enjoy your sinking ship! Joe said.
Quiet, Joe, Larry said while looking around to see who was near. I
dont want anything like that getting around. Ill set something up for us
next week.
Great, wheres the pool? Joe said with a sigh and a stretch. Larry
took Joe to the pool and went back to his office to stew.
Key EnablersPolicy
Deployment, Accountability
Sessions, Employee Training
and Involvement, and Lean
Sigma Tool Selection and
Application
Larry left Joes waste walk notes on his white board during the cruise and
through the next week. He studied the notes and at first was a little upset
about Joes comments. However, as time went by, he began to realize
Joe had some good points. Larry became excited about Lean Sigma and
invited Joe back to his office for the next session. Joe got to Larrys office
right on time. Youre going to have to put me on your payroll pretty soon
Larry, boasted Joe as he arrived at Larrys office. Joe handed Larry a single
piece of paper. On the paper was the following.
Key Enablers for Lean Sigma Success
(Source: Womack, J.P. & Jones, D.T. (1996). Lean Thinking: Banish Waste
and Create Wealth in Your Organization. New York: Simon and Schuster;
Ptacek, R. & Motwani, J. (2011). Pursuing Perfect ServiceUsing a Practical
Approach to Lean Six Sigma to Improve the Customer Experience and Reduce
Costs in Service Industries. Chelsea, MI: MCS Media, Inc.)
Joe explained where the document came from and each key to Larry.
Recently we visited several highly successful Lean Sigma organizations
in a variety of industries to learn what had made each of them so suc-
cessful. What we found was amazing; each company we visited generally
concluded the same eight keys to success. We found that this was an
enhancement to the current literature on Lean Sigma transformations,
explained Joe. Joe further explained each key enabler.
Joe continued.
(7) Integration
(2) Denial
and refusal
(6) Realization
(5) Learning
(3) Rational
understanding
The lack of resistance may mean that leaders are not pushing fast or
hard enough. Larry then decided to stay the course. His strategy to deal
with the resistance was to focus on the people who were showing interest
and nurture and cultivate their interest, rather than those who were resist-
ing. He was hopeful that this approach would convince people to try to
engage in the improvement effort. Other strategies to deal with resistance
are as follows:
With the managing change plan set, Larry led a series of sessions with
his leadership team. They established their mission, vision, and goals.
They reviewed the company value statement, and recommitted to holding
each other accountable to these standards. The leadership team discussed
a plan for daily work team sessions or huddles in each area to discuss the
days activities and key issues. The leadership team prepared to meet with
their respective teams to roll out the strategic goals, and define Key Per-
formance Indicators (KPIs) and develop a system to monitor and improve
their results. The mandate was clear: we must improve or cease to exist
as an organization. Staying the current course would not lead to success.
Change for the better was needed and expected from everyone. Full speed
ahead with Lean Sigma was needed!
Larry felt good that his work with the leadership team had addressed
the key enablers. He was disappointed that it had taken 6 weeks to get
52 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
this done, but Joe told him to Steady the ship, plan the work, and work
the plan. The next step was for Larry to share with the area teams the
results and notes from Joes waste walk that was still etched on his white
board. This represented the current state, which was filled with waste.
Larry thought hed ask Joe to attend these sessions as he thought there
could be some rough sailing and resistance!
Analysis of the
Current State
Joe arrived early as usual to the current state work sessions scheduled by
Larry. As he greeted Larry, Joe asked, So Larry, if you start your Lean
Sigma journey, how will you know youre getting better?
Larry looked puzzled. Well I thought itd be obvious. Wont our
KPIs tell us? Larry replied.
They should, but having the base-line or current state or base-line
Key Performance Indicators documented is critical to show the long term
success. So what are your high level KPIs and how will you show improve-
ment? Joe asked.
Joe and Larry continued their dialog. Larry indicated that the primary
key measures are sales revenue, and Earnings Before Income Taxes and
Adjustments (EBITA). If sales and EBITA do not improve there may be
no cruise line to worry about.
Joe asked Larry, Okay, so what leads to increasing sales revenue and
profit?
Larry replied, Well, for profit to go up our operating costs need to go
down, for sales to increase we need more customers.
What leads to more customers? Joe asked. Larry wrote the following
on the white board:
To increase customer bookings we need the following:
Okay, so how do you get any of these to happen? asked Joe. Larry
had that puzzled look again. Joe spoke up again, Well take a look at what
54 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Joe further explained that certain lower level activities and work lead
to improving the KPIs results at higher levels, and that this connection
defines a process of Policy Deployment that puts action to the plan. This
is the linkage between action items and worker level measures, and higher
level organizational results.
Okay, so how do you measure any of those, and how can my team
leaders drive this improvement? asked Larry.
ANALYSIS OF THE CURRENT STATE 55
Lets get to the current state work session and ask the team leaders,
said Joe.
To start the current state sessions, Joe and Larry agreed to cover the
CTQ diagram and concept, as well as the high-level objectives and KPIs.
They also decided to ask the area leaders to solidify KPIs in their areas that
will support the CTQ concepts as well as the high-level KPIs that Larry
and Joe had developed.
Joe encouraged Larry to be on the lookout for a team leader who
was energetic about the new approach. The goal was to establish a pilot
area for fast track improvement and to provide guidance to the rest of
thegroup.
Joe said, Initially, we want to spend our time and positive energy on
someone who wants to move forward.
Larry was skeptical about this. Dont we want to get them all on
board and moving forward at the same time? We have to make sure the
stubborn team leaders are bought in before taking the next steps. We
want them all to make progress as a team!
Joe smiled and said, Lets not waste energy trying to convince those
who are skeptical. When you spend time with the people who demon-
strate the behavior you want, others will take notice. Everyone will see
that the nay-sayers and complainers dont get all the attention anymore.
The fence sitters will then jump on-board and the momentum will drive
the improvement process forward. The nay-sayers will realize theyre
being left behind.
Larry slowly smiled an understanding smile. Larry quipped, Ah! I
need to change my people approach as well. Reinforce the behaviors I
want. The squeaky wheel shouldnt always get the grease!
At the current state work sessions Larry explained the current business
environment to the team. Larry didnt pull any punches. He told them
the brutal truth; if they didnt improve, they may have to close or sell the
cruise line. Everyone understood the seriousness of the situation but they
had no clue as to what to do about it. They all felt they were doing their
best. Larry mentioned that he was not dissatisfied with any of the teams
performance, but that the organization as a whole just wasnt getting
56 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
the job done. Basically, Larry felt that they were underachieving, and he
wanted to do something about it.
Larry provided a brief description of how the leadership team got
to this point. He described the walk through with Joe, and provided
a summary of Lean Sigma methods and tools, and the enablers.
WhenLarry shared the wastes summary table, there was a great deal
of resistance in the form of explanations and reasoning for doing
things the way Joe had observed. The leadership team heard comments
suchas:
Larry explained that the idea isnt to blame or point fingers, but to be able
to see the waste so improvements can be made. After the group calmed
down, a good discussion started to take place. During one of the breaks,
Sue, the food service team leader, pulled Larry aside. Larry, I have an idea
for an improvement that needs to happen in one of my restaurants, the
Good Time Diner. Id like to move ahead with an improvement project
with your help and Joes if thats okay.
Larry considered her idea for a minute or two, remembering
Joes pilot idea, and then said, Sounds good. Well support you any
way we can. Im sure Joe will help out when he can. What are you
thinking?
Sue responded, I want to do a customer survey and find out what
the customers think we need to do to get better. Satisfied customers equal
happy customers, dont you think?
Absolutely! Larry said excitedly. Conduct your survey and
let me know how I can help. Lets get back to our discussion on
improvements.
ANALYSIS OF THE CURRENT STATE 57
When the session reconvened, Larry asked the area leaders how
they could affect the CTQ factors illustrated in the CTQ diagram. The
following table summarizes the discussion on how each area could affect
the overall high-level objectives.
The next activity for the team leaders was to define their KPIs and
processes. Each area needed a base-line data set for the KPIs so they could
determine if experiments and trials were actually improving things. Joe
helped Larry explain that the KPIs should align with the strategic goals
and high-level KPIs identified for the organization. This would ensure
that their policy deployment efforts would be consistent and aligned to
the strategic plan and goals.
The process to establish and align KPIs and goals took several
work sessions. Larry led these work sessions without Joe, but kept
in contact with Joe as his team progressed. The results of the work
sessions are defined in the following table that Larry published after
the sessions.
In the meantime, during the weeks that area KPI discussions took
place, Sue began working on her idea. She developed and distributed a
survey to customers over several weeks. The responses she received were
eye-opening and proved to be quite useful.
Sue took this data and put together a Pareto chart, as Larry had shown in
one of their work sessions. This visually showed the results of the survey
and highlighted which responses represented 80% of the problems.
Ocean Treasure Cruise Line High-Level Key Measures
Metric category
Organization
high-level KPI
Navigation
Guest services
Entertainment
Gaming
Housekeeping
Medical
Food services
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Human
resources and
training
Administration
Accounting
Financial focus
Perfor- Fuel costs Supply Supply Supply Supply Supply Food costs Wholesale Supply Supply Supply Total Supply, Supply
mance to per costs to costs to costs to costs to costs to to budget costs to costs to costs to costs to spending training, costs to
budget nautical budget budget budget budget budget budget budget budget budget to budget and budget
(reduce mile recruiting
costs) costs to
budget
(Continued)
(Continued)
Metric category
Organization
high-level KPI
Navigation
Guest services
Entertainment
Gaming
Housekeeping
Medical
Food services
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Human resources
and training
Administration
Accounting
Customer Response
satisfac- rate
tion
survey
response
rate
Customer Passenger Survey Passenger Survey Survey Survey Survey Survey Survey Survey Survey Survey Survey Survey
satisfac- contact scores contact scores scores scores scores scores scores scores scores scores scores scores
tion hours hours
survey
Customer focus
scores
New New New New New New Security New
offerings offerings offerings offerings offerings offerings visibility offerings
per developed developed developed developed developed developed
quarter and par- and par- and par- and par- and par- and par-
ticipation ticipation ticipation ticipation ticipation ticipation
rates rates rates rates rates rates
Sales Number Number Number Number Number Number Number Number Number Number Number Number Number Number
revenue of crew of team of team of team of team of team of team of team of team of team of team of team of team of team
per members members members members members members members members members members members members members
employee
Sales Nautical Passengers Shows Rooms Patients Meals Service Bookings Un- Total Employee
revenue miles served delivered served served served calls made made planned spend training
per sailed break- hours
operating downs
Productivity focus
costs
Wait Rooms Wait Wait
times for complete times for times for
service by noon service service
Customer Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable
com- complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints
plaints to area to area to area to area to area to area to area to area to area to area to area to area to area to area
Repeat Report-
visits able
crimes
Quality focus
Percent
fill rate
Commit- On time On time Hours of Hours of Hours of Hours of Hours of On time On time Stock outs On-time
ments to ports to sched- operation operation operation operation operation to sched- to sched- from all payments
met per ule ule ule areas
schedule
or plan
Delivery focus
Stock outs
(Continued)
People focus Metric category
ism/
tions
Organization
hours
(Continued)
per day
promo-
Injuries
Internal
illnesses
Training
high-level KPI
Absentee-
x
x
x
Navigation
x
x
x
Guest services
x
x
x
Entertainment
x
x
x
Gaming
x
x
x
Housekeeping
x
x
x
Medical
x
x
x
Food services
x
x
x
Retail sales
x
x
x
Security
Adventures and
x
x
x event planning
Operations and
x
x
x
maintenance
Purchasing and
x
x
x
logistics (supply
chain)
Human resources
x
x
x
and training
Administration
x
x
x
Accounting
ANALYSIS OF THE CURRENT STATE 63
60
50
32%
40
30
20
10
0
D E B A H F C G
Series1 78 68 48 28 18 15 15 11
The Pareto chart indicated the biggest issue was that customers
waited too long to be seated. Sue was excited at the prospect of kicking
off a team in the restaurant to begin attacking this issue. She felt this
was right in line with her KPIs and the work that had taken place during
the sessions with Larry so far. Sue decided to share this information
with Larry and get some ideas for the next steps during the next work
session.
Larry smiled broadly as Sue explained what she had done so far and
what the survey responses revealed. Great job Sue! The Pareto chart
is perfect. Now we need to plan out some next steps to take following
the DefineMeasureAnalyzeImproveControl (DMAIC) approach.
We just so happen to be covering that information today. After the
meetinglets talk some more to make sure youre comfortable with all
the steps.
With the KPIs in place, the next step was for Larry to ask that each
area leader initiate an improvement project in their area that would
have a significant positive impact for the areas KPIs and the strategic
goals. Larry would lead sessions twice a month with the leadership
team to review project progress and monitor area KPIs and action
64 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Source: Modified from Ptacek, R. & Motwani, J. (2011). The Lean Six Sigma Pocket Guide XL
Combining the Best of Both Worlds Together to Eliminate Waste! Chelsea, MI: MCS Media, Inc.
The Lean Sigma flow diagram indicated that an initial Lean Sigma KPI
analysis would be required to document their current state situation. The
team felt this was a good idea and agreed to get moving on this effort.
Three weeks later while at port, Larry met with Joe. Larry shared what
was going on with Sue and how he had provided some coaching. Joe was
surprised at how well Larry had done. Youre a natural Larry, or did you
just get lucky? Joe teased.
This old dog can learn new tricks just as well as you, only quicker.
How long did you say you spent trying to understand this Lean Sigma
stuff? Larry countered.
You have a great teacher thats all, laughed Joe. Over the next few
hours Joe and Larry discussed next steps and went to visit Sue to answer
any questions she might have.
ANALYSIS OF THE CURRENT STATE 65
12%
10%
Week 1 Week 2 Week 3
Monday 8 9 9 8%
Tuesday 9 8 10 6%
Wed. 7 7 8
Thurs. 7 8 8 4%
Friday 6 6 7 2%
Sat. 4 5 5
0%
Sun. 3 4 4 M T WTH F S S M T WTH F S S M T WTH F S S
The team also collected data on other variables they thought might pro-
vide insight as to why and when waiting was occurring. They looked at
the times during lunch when waiting occurred, the number of customers
waiting and the reason customers were waiting.
The team had a discussion about tables not being available. One team
member blurted out during the discussion I know why! Customers are
lingering around after eating and not leaving to free up tables for others.
Theyre just rude.
Sue quickly asked Do you have data to support that?
No. I just know. Its obvious, retorted the team member.
Sue reminded the team to collect data to verify their hypothesis. The
team investigated further and determined that 83% of the time a table was
not available because the tables had not been cleaned and prepped quickly
enough for new seatings and not due to customers just lingering around.
The team asked the obvious question. So, why are tables not being
cleaned fast enough? Everyone was quiet for a moment and then a bus
boy complained Im working as fast as I can during the lunch rush. I
think all the bus boys are working really hard! Its not our fault.
Sue said This is not about blame. We need to look at the process.
Whats taking so much time to clean and prep dirty tables? Perhaps we
should draw up a layout of the restaurant and see what the work flow is all
about. An analysis using a Cause-and-Effect diagram would be useful as
well. What do you think? The team all agreed these were good next steps.
The team constructed the cause-and-effect diagram to determine if
any root causes popped out.
People Policy
We dont work Not enough bus boys Dont clear dishes until
as a team people leave table
at busy times
Hostess cant clear
tables when
Wait staff dont help High turnover free Dirty tables take too
clear tables long to be cleaned
Not enough bus and prepped
Takes too long to carts
take dishes to kitchen Best way not documented
Lack of training
Tables are too Staff not trained in
close together best approach
Physical Procedures
environment
After looking at the flow of work on the floor layout and brainstorming
using the fishbone diagram, the team concluded that the most likely cause
68 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
of tables not being cleaned and prepped quickly enough is the time spent
taking dirty dishes to the kitchen, particularly from the west side of the
restaurant. The group also felt they were not working as well as they could
as a team.
The team then brainstormed some improvement ideas. The list of
possible countermeasures included the following:
Out of this list, the team decided to conduct PDCA experiments with
two ideas first. The goal was to try out an idea quickly and cheaply to get
some data to verify if they were on the right track. The team decided to
experiment with having a temporary holding station located at the center
of the seating area, which could not be seen by customers, for placing
dirty dishes. They quickly put together and set up a temporary station.
The group also decided they would work as a team more and waitresses
would help clear tables whenever possible, even if it was only a few dishes
per table. This would be easier to accomplish with the temporary station
close by.
Within a day the team constructed a holding station and placed it
in position. They continued to collect data to see what the results would
be. After 3 weeks the team analyzed the new data and the results were
dramatic.
Sue decided it was time to conduct another survey to see if they had
met their first goal. The results excited everyone on the team.
Sue asked the team What did you learn following this process? She
wrote their responses on the team flip chart:
ANALYSIS OF THE CURRENT STATE 69
10%
8%
6%
4%
2%
0%
M T WTH F S S M T WTH F S S M T WTH F S S
90
No. of customer votes on survey
80
70
60
50
40
30
20
10
0
D E B A H F C G
Series1 78 68 48 28 18 15 15 11
Series2 11 42 5 24 9 5 8 6
what was happening to the cruise line in the market place and wanted to
make improvements. Some people were skeptical that this new approach
would be any better than the last new approach. Regardless, the leaders
pressed forward. Since Larry had standardized the approach, the teams
had many things in common when developing their Team Charters and
KPIs. The Team Charter elements listed below were thought to be com-
mon for all teams. They used Sues teams initial success as a guide.
The area teams spent additional time discussing specific wastes iden-
tified in their area, the area KPIs, how they would collect and display
the KPIs, and how they could use Lean Sigma tools to make measur-
able improvements. Each team was asked to select the vital few KPIs to
improve. The idea being that if each group focused on improving one or
two vital KPIs rather than trying to impact every KPI, the teams would
make better progress and be able to make key improvements to high
impact areas. Larry asked that every area include customer complaints as
one of their vital few KPIs to measure and improve.
Ocean Treasure Cruise Line High-Level Key Measures
Metric category
Organization high
level KPI
Navigation
Guest services
Entertainment
Gaming
Housekeeping
Medical
Food services
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Human
resources and
training
Administration
Accounting
Financial focus
Perfor- Fuel costs Supply Supply Supply Supply Supply Food costs Wholesale Supply Supply Supply Total Supply, Supply
mance to per costs to costs to costs to costs to costs to to budget costs to costs to costs to costs to spending training, costs to
budget nautical budget budget budget budget budget budget budget budget budget to budget and budget
(reduce mile recruiting
costs) costs to
budget
(Continued)
(Continued)
Metric category
Organization high
level KPI
Navigation
Guest services
Entertainment
Gaming
Housekeeping
Medical
Food services
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Human
resources and
training
Administration
Accounting
Customer Response
satisfac- rate
tion
survey
response
rate
Customer Passenger Survey Passenger Survey Survey Survey Survey Survey Survey Survey Survey Survey Survey Survey
satisfac- contact scores contact scores scores scores scores scores scores scores scores scores scores scores
tion hours hours
survey
Customer focus
scores
New New New New New New Security New
offerings offerings offerings offerings offerings offerings visibility offerings
per developed developed developed developed developed developed
quarter and par- and par- and par- and par- and par- and par-
ticipation ticipation ticipation ticipation ticipation ticipation
rates rates rates rates rates rates
Sales Number Number Number Number Number Number Number Number Number Number Number Number Number Number
revenue of crew of team of team of team of team of team of team of team of team of team of team of team of team of team
per members members members members members members members members members members members members members
employee
Sales Nautical Passengers Shows Rooms Patients Meals Service Bookings Un- Total Employee
revenue miles served delivered served served served calls made made planned spend training
per sailed break- hours
operating downs
Productivity focus
costs
Wait Rooms Wait Wait
times for complete times for times for
service by noon service service
Customer Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable
com- complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints
plaints to area to area to area to area to area to area to area to area to area to area to area to area to area to area
Repeat Report-
visits able
crimes
Quality focus
Percent
fill rate
Commit- On time On time Hours of Hours of Hours of Hours of Hours of On time On time Stock outs On-time
ments to ports to sched- operation operation operation operation operation to sched- to sched- from all payments
met per ule ule ule areas
schedule
or plan
Delivery focus
Stock outs
(Continued)
People focus Metric category
ism/
tions
Organization high
hours
(Continued)
per day
promo-
Injuries
Internal
illnesses
Training
level KPI
Absentee-
x
x
x
Navigation
x
x
x
Guest services
x
x
x
Entertainment
Targeted Improvement
Untargeted Improvement
x
x
x
Gaming
x
x
x
Housekeeping
x
x
x
Medical
x
x
x
Food services
x
x
x
Retail sales
x
x
x
Security
Adventures and
x
x
x
event planning
Operations and
x
x
x
maintenance
Purchasing and
x
x
x
logistics (supply
chain)
Human
x
x
x
resources and
training
Administration
x
x
x
Accounting
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 79
Larry then asked Sues team to present what they had accom-
plished using a storyboard laid out in the DMAIC format. After a brief
presentation by the whole team, all the area leaders went on a tour of
the Good Time Diner and discussed their success. Everyone was excited
and energized. The following table outlines the critical few KPIs selected
Section 2
What improvement PDCA experiments were completed in the past 4 weeks, and what
were the results and outcomes?
Section 3
Was there any individual outstanding performances or successes that should be
recognized? List the person, what they did, and how it helped the team or organization.
Be specific.
Section 4
What are 35 key issues, improvement targets, and or problems to resolve in the
upcoming 4 weeks?
Section 5
What resources or training might be required to achieve performance objectives in the
next 4 weeks?
(highlighted light gray), and some secondary KPIs (highlighted dark gray)
as identified by the area leaders.
The next steps were for each of the area leaders to establish a meeting
or work session schedule and meet regularly with their teams to begin the
improvement initiatives. Larry also asked that each of the area leaders pro-
vide a monthly progress report. Each month Larry asked the area leaders
to complete the following Monthly Highlights Report.
Since leading meetings or work sessions was a new requirement for
many of the area leaders, Larry provided the teams with some basic train-
ing on how best to lead a meeting and how to effectively document what
was discussed during the meeting.
(Continued)
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 81
Attendance Agenda
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
(Continued)
82 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
(Continued)
7. Try not to allow interruptions.
8. Avoid hidden agendas.
Sue was full of energy and excitement. She was eager to start moving
forward quickly. She took the initiative several weeks prior to other area
leaders jumping into action. She shared her story with Larry and he asked
her to present to the others what had been done. Sues story was inspiring
and each team kicked into high gear and started their work. They used
Sue and her team as a resource when they got stuck.
Over the next several months each of the area teams conducted
numerous CI work sessions and improvement PlanDoCheckAct
(PDCA) experiments. Each experiment was documented and veri-
fied with data to determine if it was an actual improvement or not. As
improvements were made, the teams documented their new methods
with standard work documents. Some were more formal than others,
but progress was seen everywhere and a new excitement had taken over
the ship.
The following reports summarize the activities, actions, and accom-
plishments from each area over a several-month period. Larry would
review the reports monthly with the group of area leaders, along with Joe,
when Joe had time.
time in the Navy when things were required to be better organized. The
team agreed to implement the 5Ss in their areas. They sorted (S1) items
out and only kept what was needed. They found many old, worn, and tat-
tered maps that were no longer in use. The captain had his crew sign these
and gave these to the sales team who would frame them and offer them for
sale as cruise mementos in the ships gift shops. The maps almost looked
like old treasure mapsa great new offering for the retail sales team! The
captains team then established an exact location to set things in order (S2),
they scrubbed (S3) things clean, and developed and standardized (S4) the
new rules to keep things clean and in the right place. The final step for
the teams 5S was to determine a way to sustain (S5) the gains. The captain
offered to perform an audit of sorts on his daily walk through.
Twice a day the captain walked the ship to observe all areas of opera-
tion. During his walks he would interact with the crew and passengers.
The purpose of this walk through was to connect with the passengers
and crew to communicate critical information about the voyage. The
crew later developed visual control boards in each area to streamline the
communication of information. This move alone allowed the captain
to complete his walk through in less time, usually in about an hour.
Before the visual control and communications boards were started, the
captains walk through took an hour-and-a-half to two to complete,
depending on how long he would chat with the crew. The visual con-
trol and communication boards helped him to gain more time to con-
nect with the passengers or to address adverse weather conditions with
thecrew.
The 5S effort by the captain and crew spread over into other areas as
well. As the captain observed untidy areas during his walk, he would radio
housekeeping or maintenance to quickly get the area cleaned up. It didnt
take long for others to follow the captains lead. The captain felt better
about being in control of the ship, and keeping it in ship shape!
At the next group report out, the Captain was proud to share the
following results.
worked the best. From the PDCA experiments, a new survey method
was implemented which involved a roving interviewer who would ask
as many passengers as possible several standardized questions each day.
The daily surveys eliminated the likelihood of negative responses from a
customer who angrily completed the survey on the last day of the cruise
while they were in a bad mood, possibly because the cruise was about to
end or because of some last minute unpleasant event that had happened.
The new method seemed to capture the information from the upset cus-
tomers in time for the team to take corrective actions as well as capture a
better cross section of happy passengers. Not only did the survey response
rate improve, but the overall scores did as well, because the data was more
representative of all the passengers.
Another improvement activity the team conducted was a simple
5S of the Guest Services office. The improvement from the 5S process
allowed the team to better serve the customers quickly and efficiently.
Some visual signals, including color coded signal cards for special die-
tary needs and requirements, were used to communicate the answers
to the most frequently requested services and adventure needs. This
further sped the process of helping the guests, by allowing them to
find the answers to their questions through visual communications.
This also served to reduce the amount of printing the group did in the
office.
At the next report-out session, the Guest Services team reported the
following results.
Entertainment
The vital few KPIs for the Entertainment team were customer
complaints and passenger contact hours. There were few complaints
for this team so the team focused on developing means to increase
their customer contact time. It had been previously identified that the
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 87
passengers like to meet and greet the performers of the many acts on
the cruise. The entertainers already provided some back stage passes so
they needed to come up with something fresh and exciting. The team
brainstormed ways to increase their passenger contact time and meet
the current schedules for performances and personal time. The per-
formers chief complaint was that to increase passenger contact time
would just increase the hours they needed to work. They needed to get
creative. The idea is to contact more passengers with the same amount
of time committed.
The team decided to address this improvement opportunity in
a couple ways. Some of the acts were able to take their performances
out onto the different decks of the ship to provide mini-impromptu
performances. These performers were excused from the standard back
stage meet and greet sessions to compensate them for their time. With
this new work method, the performers were able to connect with more
passengers than just those with back stage passes. When measured in
terms of total passenger contact time the team was able to show a sig-
nificant increase in the number of passengers contacted for the same
time spent by the performers. Not only did the customer contact hour
KPI improve, the team also realized an increase in show attendance and
sales revenue as more people wanted to see the performers acts on stage
after seeing one of the mini-performances. It was truly a winwin for
everyone.
Additionally, the team also performed a 5S event backstage in effort
to keep things better organized. They included some simple visual con-
trols to indicate the location of the costumes for each act and scene. This
helped the team improve the flow between acts and scenes.
At the next report-out session, the Entertainment team reported the
following results.
GamingOnboard casino
The vital few KPIs for the Gaming team were customer complaints and
survey scores. Everyone knew that they could achieve higher survey
scores if they let the guests win more money but that was not the desired
approach as they also were monitoring the revenue from gaming. The
team conducted an analysis of the customer complaints and available sur-
vey data/measures. They developed check sheets to organize the data and
then created Pareto charts to determine the most critical areas to address.
They found that one of the primary complaints was having to wait in
line for money exchange or a table. The team felt that they had more
than enough staff to handle the volume of passengers on the ship so they
wondered why the passengers felt they had to wait. The team decided to
conduct additional studies to determine when the waiting occurred and
how long people had to wait.
The team collected a participation count every hour for several cruises
of different lengths. The data showed a pattern for certain days and times
of day, on different cruise lengths, and destinations. From these patterns,
the team developed a better schedule for staffing based on projected
customer demand. This proactive scheduling made it easier to manage
this area.
Additionally, to reduce wait times for money exchange the team
tried a few PDCA experiments to make this process flow smoother.
They separated the lines by transaction size, which was found to cor-
relate with transaction time. They also implemented a roving cashier
to handle smaller cash exchanges. This new standard process and
scheduling technique significantly reduced the wait times for the
gaming team.
At the next report-out session, the Gaming team reported the follow-
ing results.
that, on the surface, they thought they had little control ofsea sickness.
The team ran some PDCA experiments regarding the proactive use and
availability of sea sickness medication and the most effective techniques
for administering the medication. They established a mini-training ses-
sion and note card for each guest and made it clear how to get the help
they needed. They found that through this proactive training approach
the overall emergency calls due to sea sickness were reduced. Even the
captain was happy to hear this!
At the next report-out session, the Medical Services team reported the
following results.
high expectations but also to minimize wastes. They did their best to
manage this every day.
The team decided to do some data collection and monitoring. They
knew certain food items were more popular than the others, and they
knew that some food items were discarded more than others. They won-
dered if there was any correlation that they could use to identify a means
of reducing food item wastes. After collecting data on several passages the
data showed where there was consistently too much of one item and too
little of another. They made the appropriate adjustments to their requisi-
tions and order quantities. The team developed a standard practice to
complete this analysis every 3 months to better understand the shifting
tastes of their passengers.
Regarding the waiting issues, the team decided to establish a kanban
trigger system to help reduce or eliminate guest waiting. For the buffets,
the team was using a simple verbal communication system where the
servers would tell the chefs what items were running low. This method
was good but it did not consider the different food preparation times in
the kitchens. The new kanban trigger system identified three different
levels of items based on preparation time. The longer the item took to
prepare, the more advanced notice the chiefs needed to ensure that no
one had to wait. The more experienced servers were already doing this,
but now the new servers were able to do the right thing sooner due to this
improvement.
This method of demand or consumption-based service helped
the Food Services team to reduce the waiting. Since the waiting did
not go away all at once, some of the servers learned magic tricks to
perform for guests as they waited. This seemed to turn the wait into
somethingmore interesting and enjoyable, and the complaints further
declined.
At the next report-out session, the Food Services team reported the
following results.
SecurityOnboard Police
The vital few KPIs for the Security team were customer complaints and
reportable onboard crimes. The security teams Pareto chart of complaints
showed that the leading complaint is that there is never a security person
around when you need one. The team initially pushed back on this com-
plaint saying that there are security phones at many locations throughout
the ship. Regardless, the customers perception was that security was not
around when needed.
Regarding the onboard reportable crimes, the team analyzed the data
from the past 20 voyages by plotting a run chart of the data and found
a disturbing trend. The run chart trend data indicated that they had
been experiencing a higher incidence of crime on certain theme cruises
and that the trend for reportable onboard crimes was increasing overall.
The datashowed this clearly and was compelling. The team had to stop
thistrend.
From the demand analysis of when onboard reportable crimes were
occurring, it was determined that embarkation and debarkation points
and times were especially a concern. The team brainstormed and identi-
fied two primary improvement items. First, while at embarkation and
ports of call, additional security would be assigned to entry and exit
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 95
points. Second, for the theme cruises with the higher incidence rates a
greater visible presence of security personnel would be provided at embar-
kation and at all times during the passage. This is a simple demand-based
scheduling plan.
For all voyages, the team decided to implement a visual management
method and a paced or heijunka travel route to follow. This would inform
and assure guests that a security person was nearby and scheduled to be
present at specific times. It was brought up that this may also inform the
bad guys of where the security forces were, so the team developed a
contingency plan for this also. Standard work and routes were developed
for security personnel to follow. The customer visible standard routes and
times were displayed visually. Overlapping with the customer viewable
standard work, a security-facing standard work route and timing was also
established and run concurrently. The customer-facing standard work
helped the passengers to feel a sense of safety and the security-facing
standard work helped the team catch the bad guys before they committed
the crime. The implementation of these two sets of standard work served
to reduce the reportable onboard crime rates and reduce the customer
complaints.
At the next report-out session, the Security team reported the follow-
ing results.
how to sign up for adventures. The team thought that this may be the
reasons for the poor participation rates as well. When the team analyzed
the participation rates in adventures they found a disturbing trend. Over
the past 3 years the participation rates in the adventures had been declin-
ing steadily.
To better understand the situation, the team mapped out the process
for each adventure, noting the wait times and points on the map. The
team also conducted extensive data gathering directly from adventure
participants in interviews conducted on adventure days. The team was
a bit surprised to find that it was not hard to find time for an interview
as the adventures were usually found in a hot hallway waiting to board a
small tender craft to get to the adventure.
Clearly, they were making their customers wait. It seems the ten-
der vessel service was not adequately staffed or equipped to handle the
volume of adventurers all ready to go at about the same time. The team
worked out a scheduled signaling system or visual signal to indicate to
adventurers when the next tender vessel was to arrive. By giving the
adventurers a color coded signal, or kanban card, the adventurer could
simply monitor the color posted over the boarding area to determine if
they were to board now or not. Instead of waiting in the hot hallway,
participants could wait on the rear deck in clear view of the boarding
area signal. The scheduled boarding flow and signaling system elimi-
nated the line of people in the hallway and made the experience go more
smoothly for everyone. They even established a VIP area for special
guests who were willing to pay for an advanced seating arrangement.
This is a form of mass customization to meet the needs of customers with
varying expectations.
The team went a step further and constructed an adventure demand
Pareto chart which detailed the demand for each adventure offered
at each port of call. With this information the team developed an
improved plan with their tender service team to better service the
adventure passengers.
Additionally, to increase participation, the adventures planning
team took to the passenger decks to seek sign ups and explain the
adventures better. In the past, the adventures team just sat in their
offices waiting for people to come to them to sign up. By taking
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 97
The team decided to use the Total Productive Maintenance Lean Sigma
tools to try to make improvements. First, they performed a basic 5S on all
the key pieces of equipment and facilities. These were prioritized, with the
aid of data from the Pareto charts on customer complaints and unplanned
breakdown. The team developed a regular schedule for preventative mainte-
nance on the critical equipment and facilities. They also developed a critical
spares list and key tools to have on hand. They developed a key tool roller
cart for emergency calls. No longer would the person on call have to go to
the area needing assistance without the proper tools. The key tool cart had
everything they could possibly need on it, and it was 5Sed so it was always
ready to go at a moments notice. This helped the team to be more respon-
sive but they still needed to prevent the breakdowns from occurring.
After further analysis of the breakdown data, the team made some
improvements and minor changes to some of the equipment and their
planned maintenance schedule. The planned maintenance schedule,
which used to be driven by a computer schedule, now would be managed
with a simple flowkanban and paced work standard work plan. The
team divided up the work using an employee balance chart and developed
a paced preventative maintenance route to follow based on frequency of
historical breakdowns.
Another novel idea the team discovered through brainstorming
was the quick change plan for room air conditioners. Rather than
making the guest wait while the service person repaired a faulty air
conditioner, the team decided it was better to have a spare air condi-
tioning unit available at all times and simply do a quick change over of
the good air conditioner for the faulty one if the repair was going to take
longer than the quick change. This made the guests quite a bit happier,
and the more extensive repairs were done in the maintenance area, out
of sight of the guests.
At the next report-out session, the Operations team reported the
following results.
were taking advantage of the key discounts. The new organization of their
work area, a 5S event in the physical space as well as the computer system,
also seemed to streamline processing. It seems the computer system files
were so cluttered and stored in so many ways that by simply standardi-
zing the rules for the team they could now find things easier online, and
process payments quicker.
Many of the customer complaints were due to errors. The team
began to track their errors and plotted them on a Pareto chart. Here
again, many of the errors were eliminated by streamlining the system
and cleaning up the filing system. Peoples work got easier and they
were less prone to errors. They also found the time to develop and
implement some mistake-proofing improvements for the most critical
errors. The new methods also required quite a bit less of paperwork
and printing so the team was also able to reduce their environmental
impact.
At the next report-out session, the Administration and Accounting
team reported the following results.
The above results for all the teams took nearly a year to complete. Over
that time the teams had completed over 90 individual PDCA improve-
ment trials and had many of them work very well and become the new
standard. Customer complaints were definitely on the decline and the
teams were starting to understand how to make improvements on their
own. Things were looking up. Due to the teams many sales-generating
and cost-saving ideas, the financials were starting to turn around as well.
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 103
At least revenues were not shrinking, and along with that profitability was
increasing! The following table shows a summary of some of the team and
overall key measures.
Year One Results Summary Table
Before After
~200 complaints per voyage <80 complaints per voyage and
declining
90% on time to port 95% on time to port and
improving
43% VOC response rate 80% VOC response rate and
growing
Meets Expectations survey score Exceeds Expectations survey
scores
76% of rooms cleaned by 12 noon 97% of rooms cleaned by
12noon
1520% over budget each voyage On or below budget for each
voyage
35 items stock outs per voyage 5 item stock outs per voyage
5 reportable crimes per voyage <3 reportable crimes per
voyage
54% passenger participation rates 79% passenger participation
rates
5 unplanned breakdowns per voyage <1 unplanned breakdown per
voyage
89% on-time payments 99% on-time payments
Unacceptable passenger wait times Reduced passenger wait times
in all areas
Few referrals Some enthusiastic referrals
Unpleasant work environment Dynamic, exciting, and fun
work environment
Declining sales revenue Increasing sales revenue
Not profitable Profitable
Shrinking Growing
104 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Larry had consulted with Joe many times through the improvement
process, especially when he reached critical sticking points with the teams.
Joe was very helpfulfor the most part.
So what are you going to do next, Larry? asked Joe.
Next? Larry said quizzically, Next were going to stay the course.
Thats whats next.
Joe replied, Thats good, but as the leader you must always stay ahead
of the group; you know, to lead them somewhere. Where are you leading
the teams to next?
Weve done a great job so far, whats next? asked Larry.
Ive seen many companies get complacent and back-slide after they
make some really good progress. To prevent a back-slide, keep moving
forward. There is always a weakest link in a process, always more waste to
remove. Id recommend you start over again once you think youre done,
Joe injected.
Kind of like my cruise ships returning to port and doing the whole
thing over again, we could start back at the beginning and do it again?
said Larry.
Thats the idea. Thats what we do. The Lean Sigma CI process is
never ending, said Joe.
4. Evaluate the critical KPIs that each area has achieved after Lean
Sigma was implemented. Do you think it is important to com-
pare and benchmark the results across each area? What can each
of the area leaders learn from one another?
5. If you were Larry, what would you do with these improvements
and results? How would you communicate the improvements
within and outside your organization?
6. Identify the three most creative initiatives made by the area lead-
ers in the Lean Sigma journey. If you were a regular customer of
the cruise line, what obvious changes would you be able to see or
experience.
7. The cruise line has made significant improvements over the past
year of Lean Sigma implementation. How can Larry use these
results to motivate top management, area leaders, and employees
to get more excited about the Lean Sigma journey and to take
the organization to the next level? What can other service
organizations learn from the cruise line?
CHAPTER 8
Current state
culture
Manpower Methods
Hard workers No improvements accepted
High turnover No innovation
Low morale Going through the motions
Perception that leadership does Employee or cruise line focused methods
not care
Frustrated
No team work
No fun
Materials Machines
Old materials Old and outdated ship amenities
Making due with what we have Frequent breakdowns
Cost cutting leads to poor service Poor maintenance
Wasteful Not enough equipment for all customers
Frequent stock outs leads to poor
service
Future state
culture
Manpower Methods
Hard workers Robust improvement methods being applied
Low turnover Innovative new ways of thinking encouraged
High morale Exciting new methods
Perception that leaders care Customer focused methods
Team work
Fun!
Materials Machines
Updated materials Old and outdated ship amenities
Proactively get what we need Frequent breakdowns
Cost reductions through Poor maintenance
continuous improvements
Rarely stock out Not enough equipment for all customers
Not wasteful
Green
Measures Mother nature
Key measure clearly posted and fair Everyone cleans up after themselves
Get positive and negative feedback from customers Messy areas of the ship get cleaned up fast
Hear about problems and successes All messy areas get cleaned up fast
The weather makes things messy all the time
Joe had assisted Larry with this current state to future state culture
mapping process to help Larrys area leaders understand where they
MAKING CULTURAL TRANSITIONS 109
were going and what they were trying to become with the Lean Sigma
improvement methods.
Joe was most impressed with some of the customer service training
that Larry had developed and thought he might be able to use it in his
factory. So Larry, tell me about your customer service training program.
Your people are clearly doing something different than my folks at the
factory. Your people are constantly interacting with customers and I can
tell theyve had some specific training regarding how to talk to customers,
so what is it? Joe asked Larry.
Larry said, Lets go talk with our HR manager, Mary, shes the one
who developed the program. The two brothers took a walk to the HR
offices to meet with Mary.
At the HR offices Mary outlined their customer service train-
ing program. Mary explained, Ive studied the Disney training pro-
grams and had the opportunity to attend several courses at the highly
regarded Disney Institute. The Disney Institute is widely recognized
as a world leader in service training and development. Im taking
a page from the Walt Disney Company where they call all of their
employees cast members. A cast member has a different meaning than
an employee. A cast member has to be able to play a role. The cast
members role may be a singer or magician, or it might be a janitor or
maintenance person. In any case, a cast member is expected to act in
an appropriate way, to play their role as though they are at the happiest
place on earth!
Mary continued, We are trying to instill this philosophy at the
cruise line. To do this, I use five key training classes. Every new employee
receives the following courses over their first 6 weeks of being hired or
cast. Our programs are:
Since the organization was making so much progress with the Lean
Sigma methods and tools, we recently updated the key training programs
to include the basics of Lean Sigma. Now, the new employees know what
is expected of them regarding CI and how they can participate. I recruit
various area leaders to facilitate this training, continued Mary.
The 7 habits training covered the following seven habits from the
popular book by Steven Covey.
1. Be Proactive
2. Begin with the End in Mind
3. Put First Things First
4. Think Win/Win
5. Seek First to Understand, Then to Be Understood
6. Synergize
7. Sharpen the Saw (Continue learning and teaching)
and time again, and refer our cruise line to other people. One critical
technique taught in class is the 3Rs + 1. This technique teaches cast
members how to respond to customers who need help. When a customer
asks for assistance cast members are expected to:
1. Play
2. Be There
3. Make Their Day
4. Choose Your Attitude
The Play principle shows people how to make work fun for the customer
and the worker. Several specific methods are developed during the train-
ing. The Be There principle helps employees connect with customers
and people in a more meaningful way. It helps people be more sincere
in their efforts to help people. Make Their Day helps cast members to
understand what it takes to develop customer loyalty and is complemen-
tary to the Customer Loyalty training. It gives cast members additional
ideas on how to develop customer loyalty and future referrals. Finally,
the Choose Your Attitude training delivers the message that we expect
112 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
every cast member to be the best every day and only they can choose their
attitude. This fits well with the 7 Habits training on being proactive, as
well as many other habits.
In the Choose Your Attitude session, I like to ask the trainees how
many holidays are there in a year. As the participants begin the mental
counting of holidays, I interrupt them and say: Every day is a holiday
for our guests! Our guests may be on the vacation of a lifetime. Many
have been saving their money and anticipating this very special trip for
years. Its our job to show up every day with a positive attitude of service
andenthusiasm, even when we may not feel it inside. Your job is to be
the best, happiest, most service-oriented person you can imagine. Some
days your acting may be more difficult than others, but thats what
weexpect.
The training doesnt stop there, Mary explained. Every employee
continues to receive refresher training on these topics on a regular basis.
This supports the future state culture targets. It all fits together, and were
making such huge improvements in retention and customer feedback.
After listening to Marys passion about this training, Joe asked Larry
and Mary if they would consider delivering some of this training at Joes
factory. After the help Joe had provided to Larry and the struggling cruise
line, Larry quickly agreed to help Joe and the two began developing the
cross-organizational training plan.
3. What does Larry and his team do special that got Joe excited? Do
you think it is a good idea for Joe to benchmark Larrys cruise line
customer service training program?
4. What are the salient features of the customer service training
program implemented in the cruise line? What can all organiza-
tions learn from it?
5. Define the 3R + 1 strategy. Dont you think every service organi-
zation needs to instill this simple strategy? What do you think are
potential challenges that an organization would encounter when
implementing this strategy?
6. Critically evaluate the following quote made by Mary, Every day
is a holiday for our guests! Some days your acting maybe
more difficult than others, but thats what we expect. What can
service leaders learn from this quote?
7. The people side of Lean Sigma implementation is extremely
critical and frequently neglected. Why is it so important for an
organization to focus on the people side? What are some special
things that your organization does that Larry and his team can
learn from?
CHAPTER 9
will turn into pessimism and doubt. At this point people need to see
managements commitment to Lean Sigma methods and tools. Too
many leaders throw in the towel at this point and say Lean Sigma
doesnt work.
Managing
change Organizational stress
Extension
st
Performance Cre
Pride
curve Focus ownership
Plateau energy confidence
determination
Optimistic
concerned
Slid
Climb
skeptical
Quick hit
e
Pessimism
performance doubtful Helpful
improvements anxious determined
probing
Pit
The key is to strive for a short duration in the high stress zone.
C H
Cause-and-Effect diagram, 6768 7 habits training, 110
Continuous improvement (CI) Housekeeping team, 8990
method. See Lean Six Sigma Human Resources (HR) and Training
Control phase, 30 team, 100101
Correction waste, 23, 26
Critical To Quality (CTQ) I
diagram,54 Improve phase, 30
Cruise line departments, 38, 4143 Inventory waste, 22, 25
Cultural assessment, 107108
Current state cultural assessment K
diagram, 107108 Key enablers, Lean Sigma
employee involvement, 48
D leadership, 46
Daily huddle, organization, 8 perseverance and commitment,
Define phase, 30 4849
Developing Customer Loyalty policy deployment and goal
training, 110111 alignment, 48
Dirty Dozen. See Twelve forms process-and results-focused, 4748
ofwaste resource commitment, 4647
DMAIC alphabetical tool application total system/value stream focus, 48
chart, 3133 training and education, 47
DMAIC process, 30 Key performance indicators (KPIs)
Administration and Accounting
E team, 101102
Employee involvement, 48 Adventures and Event Planning
Entertainment team, 8687 team, 9597
Environmental waste, 24, 27 Entertainment team, 8687
Expertise waste, 22, 25 Food Services team, 9193
Gaming team, 88
F Guest Services group, 8586
FISH philosophies, 111112 high-level key measures, 5862
Flip chart, 6870 Housekeeping team, 8990
124 INDEX
P T
Pareto chart, 63 Total Quality Management
Perseverance and commitment Lean (TQM),13
Sigma, 4849 Total system focus, 48
PlanDoCheckAct (PDCA) TQM. See Total Quality
experiments, 8, 21, 68, 83, Management
86, 88, 91, 107 Training and education Lean
Policy deployment, 48 Sigma,47
Process-and results-focused Lean Transport waste, 22, 25
Sigma, 4748 Twelve forms of waste
Purchasing and Logistics team, correction, 23, 26
99100 environmental, 24, 27
expertise, 22, 25
R inventory, 22, 25
Resource commitment, 4647 motion, 22, 2526
Retail Sales team, 9394 overloading/overburdening,
23, 27
S overprocessing, 23, 26
Scoreboarding, 58 overproduction, 22, 24
Security team, 9495 social, 24, 2728
Service business transport, 22, 25
categories unevenness, 23, 27
service delivered to external waiting, 23, 2627
customer, 39
service process internal to
U
organization, 40
Unevenness waste, 23, 27
service process used by external
customer, 3940
objective outcomes, 40 V
subjective outcomes, 40 Value adding concept, 20
SIPOC. See SupplerInputProcess Value stream focus, 48
OutputCustomer Value stream maps, 14
Six-Sigma (6)
definition, 15 W
goal of, 16 Waste of waiting, 23, 2627
in organization, 16 Work session meeting, 80, 82
Social waste, 24, 2728 Work session leading and facilitation
Subjective outcomes, 40 checklist, 82
SupplerInputProcessOutput Work session prep checklist, 80, 82
Customer (SIPOC), 40 Work session record, 81
OTHER TITLES IN OUR SERVICE SYSTEMS AND
INNOVATIONS IN BUSINESS AND SOCIETYCOLLECTION
Jim Spohrer, IBM and Haluk Demirkan, Arizona State University, Collection Editors
Service Process Design for Value Co-Creation by Joey Field, due out in December 2012
A Prole of the Electric Power Industry: Facing the Challenges of the 21st Century
by Charles E. Clark, Jr., due out in October 2012
A Prole of the Steel Industry: Global Reinvention for a New Economy by Peter Warrian,
due out in November 2012
Rob Ptacek is president and CEO of Competitive Edge Training & Consult-
ing & Partner, Global Lean Institute, LLC. He holds a BS in Metallurgical
Engineering from Michigan Technological University, Houghton, MI, and a
Masters of Management from Aquinas College, Grand Rapids, MI. Mr. Ptacek
currently instructs in the LEAN Champion certification program at Grand
Rapids Community College.
ISBN: 978-1-60649-407-3
90000