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Lean Sigma Methods and Tools for Service OrganizationsThe Story of a Cruise Line Transformation
Jaideep Motwani Rob PtacekRichard Fleming
The Service Systems and Innovations in Business and Society CollectionJim Spohrer and Haluk Demirkan, Editors
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
Jaideep Motwani, Rob Ptacek, and Richard Fleming
Lean Sigma Methods and Tools for Service Organizations: The Story of a Cruise Line TransformationCopyright © Business Expert Press, 2012.All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording, or any other except for brief quotations, not to exceed 400 words, without the prior permission of the publisher.
First published in 2012 byBusiness Expert Press, LLC222 East 46th Street, New York, NY 10017www.businessexpertpress.com
ISBN-13: 978-1-60649-407-3 (paperback)
ISBN-13: 978-1-60649-408-0 (e-book)
DOI 10.4128/9781606494080
Business Expert Press Service Systems and Innovations in Business and Society collection
Collection ISSN: forthcoming (print)Collection ISSN: forthcoming (electronic)
Cover design by Jonathan PennellInterior design by Exeter Premedia Services Private Ltd., Chennai, India
First edition: 2012
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.
Abstract
Every business aspires to be competitive and profi table in their markets.
To do this, an organization needs to off er customers value propositions,
whether it is manifest in the product they produce or in the service they
provide. Th is in turn will create customer loyalty and growth. Th ere are
a number of organizational philosophies and strategies used by busi-
nesses to help accomplish this goal, among which are the concepts of
Six-Sigma and Lean. Both are widely recognized and implemented, and
both have been successful in improving value propositions of a variety
of organizations, mostly in manufacturing concerns. Lean Sigma Meth-
ods and Tools for Service Organizations proposes to integrate the best
practices from each of these philosophies and apply them to a customer-
focused organization—a cruise ship—whose overriding mission is to
deliver superior service to its customers. Th e authors demonstrate in
this book how key components of both Six-Sigma and Lean, such as
identifying and removing defects, elimination of waste, metrics, speed
of delivery, and the seamless integration of these concepts and practices
throughout the operation, serve to enhance the kind of value proposi-
tions that customers recognize and which allows the organization to be
successful.
Th is book illustrates Lean Sigma on a full range of service off erings:
a cruise ship off ers “whole service” to their guests including gaming,
entertainment, food and medical services, retail sales, security, events
and adventure planning, operations and maintenance, purchasing and
logistics, human resources and training, and administration of payroll
and accounting. By covering Lean Sigma applications in each of these
areas in a story book format, service providers can begin to understand
how Lean Sigma methods and tools can be applied in their service
organizations. Th rough a unique and captivating story of two competi-
tive brothers, one (Joe) who has had phenomenal success with Lean
Sigma methods and tools in a manufacturing business, and the other
(Larry), the manager of a cruise line desperately in need of improvement
in all performance areas, this story illustrates the discovery, application,
and transformation of a variety of service organizations supporting the
cruise line operations.
Keywords
lean, lean sigma, service, waste elimination, continuous improvement,
service excellence
Contents
Chapter 1 Th e Lean Sigma for Service Challenge ..............................1
Chapter 2 Identifi cation and Understanding of Lean Sigma
Implementation ................................................................5
Chapter 3 Lean Sigma Methods and Tools—Basic Concepts ............13
Chapter 4 Comparing Manufacturing and Service
Environments ..................................................................37
Chapter 5 Key Enablers—Policy Deployment,
Accountability Sessions, Employee Training and
Involvement, and Lean Sigma Tool Selection and
Application ......................................................................45
Chapter 6 Analysis of the Current State ............................................53
Chapter 7 Application of Lean Sigma Tools and Results ...................73
Chapter 8 Making Cultural Transitions ..........................................107
Chapter 9 Achieving, Sustaining, and Celebrating Success .............115
References ..........................................................................................121
Index .................................................................................................123
CHAPTER 1
The Lean Sigma for Service Challenge
“Shut up Joe! Everyone’s tired of your bragging,” Larry said as he
slammed his chicken bone down on his plate and stood up from the
picnic table.
Joe shouted back, “It’s not bragging, it’s just the truth, and you’re the
only one tired of it ‘cause you’re such a miserable loser and your so-called
cruise line is about to sink!”
Joe and Larry have been fi ghting in some way since the day Larry was
born. Th eir fi erce sibling rivalry had overshadowed other family outings
in the past. Th ere was the time Larry challenged Joe to a foot race around
the house, which ended up in a wrestling match, and the time Joe beat
Larry at darts, and Larry tore the dart board off the wall. Th eir competitive
nature seemed to know no end. Th is time things seemed diff erent though.
Joe was right that Larry’s cruise line was in terrible trouble. While other
cruise lines were enjoying banner years, Larry’s was barely breaking even,
and the booking rate was declining. Larry had already cut many expenses
but this only seemed to make things worse. Joe always said “You can’t cut
your way to prosperity.”
Joe, on the other hand, was enjoying great success in his manufacturing
company. He was leading his organization’s continuous improvement
(CI) program and had received several promotions over the past few years
as a result of the improvements. Th e local newspaper had even written a
nice article about Joe and his company’s improvement eff orts. Th e article
titled “DR Products (DRP) Wins Prestigious Continuous Improvement
Award,” had several quotes from Joe regarding his role in the eff ort.
Joe was telling his cousins about the article when Larry blew up at the
picnic table.
2 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Larry had always thought CI was easier for a manufacturer as
compared to a service organization and that Joe had practically had
the CI process given to him by his company’s leadership. Most of the
CI books and methods were for manufacturers, not cruise lines. All Joe
did was to follow the plan in the books to get the CI award. For the
past 3 years DRP had been credited with establishing “best practices”
in CI. Many of the best practices were credited to Joe and his produc-
tion teams.
Larry, on the other hand, was in trouble. Not only was his cruise
line barely breaking even and losing customers, the employees weren’t
happy either. Just last week two more key people had quit. Larry was
spending so much time trying to replace these people that he didn’t
have time for CI.
It was time for Larry to swallow his pride and talk to Joe about
business. As Joe came into the kitchen, Larry mustered up a meek
apology. “Sorry I blew up out there Joe, I’ve been under a lot of stress
lately.”
“Nothing you didn’t bring on yourself.” Joe shot back.
“Seriously Joe, how do you do it at DRP?” asked Larry.
“Do what?” replied Joe.
“You know, that CI thing. What do you call it—Lean Sigma?” said
Larry.
“Yeah that’s the name. I’m surprised you remembered.”
“Yeah, I remembered. But it seems like a manufacturing thing. Would
it work for a cruise line?” asked Larry.
“I’m certain it would. It’s just a systematic approach to seeing and
reducing the waste in a process. Your cruise line operation is just a
bunch of processes. Sure the customers may want and expect diff erent
things, but the delivery of the services is simply a series of processes.”
Joe replied.
“But we are so diff erent than a manufacturer.” said Larry.
“Th at’s what they all say.” commented Joe.
“Th ey do? Who? And what else do they say?” Larry quickly replied.
“Th ey say ‘We’re diff erent. Lean Sigma won’t work here.’ Even
manufacturers say that, but they’re all wrong. Lean Sigma CI methods
THE LEAN SIGMA FOR SERVICE CHALLENGE 3
are just a scientifi c or data-driven way to systematically and continually
improve a process. Everything an organization does, whether they’re a
service organization or manufacturer, can be defi ned as a process. Lean
Sigma methods and tools describe a standardized way to address waste
reduction in a process. I’m certain it will work for you, but I’m not sure
you’re bright enough to lead it!”
“Yeah right!” responded Larry. “If you can do it, anybody can do it!
Anything you can do, I can do better.” boasted Larry.
“Care to make a wager on that?” asked Joe.
“Sure, what are you thinking?” added Larry.
“Well, if it works, you give my family and me a free 7-day cruise. If
it doesn’t work, I’ll give you a job at DRP when you go bankrupt!” Th ey
both laughed, and then Larry groaned.
“I’m even willing to help you,” added Joe. “One concept of Lean
Sigma is to share the knowledge freely. Why don’t you come to the factory
tomorrow and I’ll give you a tour and show you some of the Lean Sigma
activities we’re doing. I could even have you attend a current Lean Sigma
work session, and maybe a team huddle.” off ered Joe.
Without hesitation, Larry said “What time?”, and the plan was set.
Tomorrow, Larry would arrive bright and early at DRP for a full day of
Lean Sigma learning.
Larry’s perspective that his organization is diff erent 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 diff erently for diff erent
organizations. Yet, Lean Sigma philosophy, principles, and concepts of
waste elimination (conservation of resources) and improving fl ow are
universal. Lean Sigma is a never-ending, systematic/scientifi c 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
fi nancial performance.
4 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Chapter 1—Discussion Questions
1. Why did Larry seek help from Joe? Do you think the two bitter
rival siblings could work together?
2. Do you think it is a good idea for Larry to benchmark Joe’s
organization? What are some of the challenges that Larry may
encounter?
3. Discuss Joe’s success with continuous improvement and Lean
Sigma initiatives in his organization. What lessons can Larry learn
from DRP’s approach?
4. Do you think Lean Sigma can be successfully implemented in
Larry’s company? How would you address Larry’s skepticism that
“But we are so diff erent from a manufacturer.”
5. What is Lean Sigma? Do you think Lean Sigma can be applied to
any business? Why or why not?
6. Why do you think Joe is willing to help Larry?
7. Larry has been spending a lot of time replacing people. Do you
think he has the time to devote to continuous improvement and
Lean Sigma initiatives?
CHAPTER 2
Identifi cation 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 visitor’s badge. Larry had
to read a brief statement of DRP’s values, vision, mission, and safety rules
in order to enter the plant.
Joe said, “Come on, we have to get going. I don’t want to be late for
my walk.” Before Larry even got a cup of coff ee, Joe had them walking
around on the factory fl oor.
Joe walked at a brisk pace. Th e fi rst stop was in shipping and
receiving. Larry had a shipping and receiving area on the cruise ship as
well. It didn’t 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. Th e area was neat and tidy.
Larry could almost see how the organization on the fl oor matched the
details on the board. “Everything’s to plan here, let’s get to the next
operation,” Joe said.
DRP’s 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. Th e 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 fi nal 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 fl ow. At the assembly
area, Joe studied each cell’s 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 “Let’s 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 weren’t quite as structured. Any laundry basically
just went into any available machine. Larry made the following sketches
of the cells and scoreboards.
Th e paint line was manually operated. People hung cabinet parts and
panels on hooks or racks and placed them on an overhead conveyor. Th e
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. Th e 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. Th e 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 couldn’t 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 Joe’s pace, Larry said “When do we get some
coff ee? You do have coff ee don’t you?”
Joe chuckled, “Yes, we have coff ee. We’ll 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. It’s part of our ‘Plan–Do–Check–Act’ (PDCA) Lean
Sigma process for CI. Th e 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. Th e 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. Th e
walk makes it easier for me to spot waste and abnormalities to the plan,
and for me to off er 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. It’s part
of our Lean Sigma CI initiatives,” Joe replied. Larry sketched the follow-
ing standard work form.
Joe explained, “Th e process is pretty simple. Everyone has standard
work that’s 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. Th is method
of ‘Scoreboarding’ allows us to quickly identify abnormalities and non-
standard performance throughout the day. Th en we can make appropriate
adjustments or counter measures. We’re ‘PDCAing’ continually through-
out the day. Th is increases the likelihood that we’ll meet our schedule
consistently every day.”
“It sounds confusing,” said Larry.
IDENTIFICATION AND UNDERSTANDING 9
“It’s not. It’s 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
fl ow. With a 15-minute Gemba walk I can get critical information such as:
• How many parts have been produced?
• How many parts should have been produced?
• Are we to schedule?
• What issues are preventing us from meeting schedule?
• What job is next?
• Do we have all the materials we need to continue?
• Are there any quality problems?
• Th e who, what, when, where, and why for the current
situations.
Every leader in the organization can get this information just by going
to Gemba,” Joe said with a grin.
“I’m 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,”
quipped Joe.
Joe had a series of activities lined up for Larry. Th rough 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 fi rst 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 couldn’t 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, it’s only 15 minutes and it’s 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 couldn’t help but think of all the reasons
Lean Sigma would not work for his cruise line.
• A cruise line is completely diff erent from a manufacturing
company.
• We work with people, not parts.
• No two customers are the same—ours is not a consistent
process.
• Our products and deliverables are diff erent.
• Our customers expect diff erent things.
• We don’t measure things like a factory does.
• We deliver service to customers, not products.
Th en Larry remembered what he’d said to Joe at the picnic, “Anything
you can do, I can do better!” He’d 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 wouldn’t. It was a good thing he had some time
the next day to review his notes and make a plan.
Chapter 2—Discussion Questions
1. Critically evaluate Larry’s visit to Joe’s organization. What lessons
can organizations learn from this visit?
2. Discuss the manufacturing process at DRP. What lessons can
Larry learn from this process?
3. According to Joe, why is it necessary for every organization to
have a “daily huddle”? If you were in charge of the “daily huddle”
in your organization, how would you go about doing it?
4. Why is “score boarding” so critical to Lean Sigma and CI success?
Compare your organization’s approach to “score boarding” with
DRP’s?
5. What do you mean by a “Gemba walk”? Why do you think Joe
put so much emphasis on it?
6. Why is it necessary for all organizations to conduct a Lean Sigma
overview session for their employees? If you were organizing one,
what would you cover in this session?
7. On the drive home from DRP, Larry identifi ed several reasons why
Lean Sigma would not work in a cruise line? Do you think these
concerns are valid? What made Larry motivated to pursue it?
CHAPTER 3
Lean Sigma Methods and Tools—Basic Concepts
Th e next day Larry went over his notes and the training content provided
at the Lean Sigma overview. He started to organize the fi les and notes in
a logical format. Th e following are Larry’s notes from the fi rst day at Joe’s
factory:
1. Lean Sigma is the most successful continuous improvement (CI)
method in the history of the world.
2. It combines the simple and versatile methods and tools of Lean with
the powerful analytical approach of Six-Sigma methods to provide
continuous incremental improvement with Lean and signifi cant
increases in productivity and quality with Six-Sigma techniques.
3. Lean Sigma is the combination of these powerful tools.
4. Th e origin of these methods goes back to the industrial revolution
and the concept of time and motion studies with Fredrick Taylor and
Henry Ford’s production lines. Lean Sigma represents the philoso-
phy of total conservation of resources.
5. Edwards Deming brought this to Japan after World War II and is
credited with Lean Sigma’s predecessor, Total Quality Management
(TQM), which focuses on the customers’ needs, CI, and employee
involvement.
6. Dr. Deming worked with the Toyota Motor Company, Motorola,
and others to implement his TQM systems and develop the methods
and tools we now know as Lean Sigma. Often, the Toyota Produc-
tion System (TPS), waste elimination, and process or continuous
improvement are used synonymously with Lean Sigma methods
throughout the world.
14 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Larry thought to himself how smoothly things worked at DR Prod-
ucts (DRP), and wondered how his observations fi t with the training
materials he’d received at the session. Larry continued to review his
notes.
What is Lean, Six-Sigma, and Lean Sigma?
Lean is a way of thinking and can be applied to every type of organi-
zation, whether it manufactures a product or delivers a service. Lean
methods and tools are simple to learn and apply and have broad appli-
cations. Lean methods even work in people’s personal life! People can
apply Lean tools to their hobbies, chores, and households to make things
simpler, easier, more enjoyable, and cost-eff ective. Th e goal of lean is to
strive for perfection by minimizing and ultimately eliminating waste
which causes variation throughout the value stream. Th e entire focus of
lean is customer-driven and it’s the customer who determines the value and
the amount they’re willing to pay for the product or service. Th e customer
enjoys the fruits of the information and material fl ow. Information and
material fl ows are often documented in Value Stream Maps as shown
below.
LEAN SIGMA METHODS AND TOOLS—BASIC CONCEPTS 15
or
The 30-year fixed mortgage application current state value stream map
Client
Pitch
Order appraisal& title = 20 m
Notify parties &confirm = 120 mSchedulelocation = 5 mPrint docs= 120 m
File paperworkpending = 5 m
Pre-application
Gather financialdata = 15 mRun creditreport = 15 mDetermineprgm = 120 m
Verify emply &assets = 60 mUnderwriting= 120 m
Application Approval/title Closing prep
5S
Butter/safety
150 m 180 m 25 m 245 m4 hrs
4 hrs
40 hrs
40 hrs
40 hrs
40 hrs 40 hrs
40 hrs
S
S
B
B
Q Q Q Q
Source: Ptacek and Motwani (2011a).
Like Lean, Six-Sigma (or 6s) is another approach that an organiza-
tion can implement to achieve excellence. Six-Sigma is a statistical term.
Sigma (s) defi nes the variation or “spread” of a process. Six-Sigma defi nes
how much of the total process falls within the normal process variation.
Th e term “Six-Sigma” refers to the number of standard deviations
away from the mean in a bell-shaped normal distribution curve (see
below). Why?
Mean or average
–6s–5s –4s–3s–2s –1s 1s 2s 3s 4s 5s 6s0Sigma
(Deviation from the mean)
16 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Th e goal of Six-Sigma is to eliminate defects and minimize variability. In
statistical terms, if an organization achieves Six-Sigma level of performance,
99.99966% of its customers are satisfi ed as they are receiving services that
are defect-free and meet their expectations. In other words, an organization
that has achieved Six-Sigma status will have no more than 3.4 complaints,
defects, or errors per million opportunities. Th e table below summarizes
sigma or variation level and error rate per million opportunities.
Process capability or sigma level
Defects (or errors) per million opportunities
(DPMO) Percentage
acceptable (%)6s 3.4 99.99966
5s 233 99.9767
4s 6,210 99.379
3s 66,807 93.32
2s 308,538 69.15
1s 691,462 30.9
Source: Ptacek and Motwani (2011a).
Six-Sigma forces organizations to pursue perfection by asking if 99%
acceptability is good enough? If 99% acceptability is good enough, con-
sider the following:
99% Good (3.8s) 99.99966% Good (6s)20,000 lost articles of mail per hour (based on 2,000,000 per hour)
7 lost articles per hour
Unsafe drinking water for almost 15 minutes each day
One unsafe minute every 7 months
5,000 incorrect surgical operations per week
1.7 incorrect operations per week
Two short or long landings daily at an airport with 200 fl ights per day
One short or long landing every 5 years
2,000,000 wrong drug prescriptions each year
680 wrong prescriptions per year
No electricity for almost 7 hours each month
One hour without electricity every 34 years
Source: Ptacek and Motwani (2011a).
LEAN SIGMA METHODS AND TOOLS—BASIC CONCEPTS 17
Lean Sigma is the most powerful improvement technique as it
systematically blends the best of the two approaches above to elimi-
nate all waste or non-value-added activities from processes. Th is, in
turn, lowers the cost and improves the quality of the process. Th e con-
tinued focus on the elimination of waste should be a daily, hourly, or
minute-by-minute concern. Lean Sigma is designed to use people and
materials wisely to satisfy customer needs. With that thought in mind,
work elements or job duties may need to be modifi ed to accommo-
date a waste-free Lean Sigma environment. Th is will allow companies
to remain globally competitive, develop a cross-trained workforce, and
establish a safe workplace.
Lean Sigma tools are used to
• improve customer satisfaction and total customer experience;
• identify and eliminate waste quickly and effi ciently;
• increase communication and speed at all levels of the
organization;
• reduce costs, improve quality, and meet delivery obligations of
a product or service in a safe environment;
• initiate improvement activities and empower employees to
make improvements themselves;
• track and monitor improvements to ensure sustainability.
Lean Sigma is truly a compilation of world-class CI practices.
To understand Lean Sigma, one must understand that Lean
Sigma is, in its broadest sense, a philosophy of conservation of resources
and waste elimination. Building on the Lean Sigma philosophy are
Lean Sigma principles, concepts, methods, and tools. Th ese ideas are
building blocks of a structured and supported approach to a total Lean
Sigma transformation. Lean Sigma principles must be built on a basic
understanding of Lean Sigma philosophy. Many organizations have
forgone a basic understanding of Lean Sigma philosophy and tried
to build a Lean Sigma organization on a weak foundation, only to be
disappointed with their results. It truly pays to start with and build on a
strong foundation of Lean Sigma understanding.
18 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Conceptually, these building blocks are illustrated in the follow-
ing diagram. Starting with a strong foundation of Lean Sigma philoso-
phy, Lean Sigma principles can be used to support an organization in
utilizing Lean Sigma concepts, methods, and tools to become a superior
organization.
Larry was starting to understand his role as a leader and continued to
review the training materials from the class at DRP. He took a closer look
at each of the Lean Sigma building block levels.
Delighted customers and profitable growth
Best quality, lowest costs, fastest delivery, and innovation
Lean
Val
ue a
nd w
aste
Flow
Plan
-Do-
Che
ck-A
ctQ
ualit
y fir
st
Spea
k w
ith d
ata
and
fact
s
Perf
orm
ance
mea
sure
sSe
ek p
erfe
ctio
n
Cus
tom
er fo
cus
Was
te e
limin
atio
n
ConceptsSix-SigmaConcepts
Lean Sigma tools*5S
Continuous flowData collection and presentation
Employee balance chartJust-in-time (JIT)
LayoutLeveling (heijunka)
Mistake (or error) proofingPerformance dashboards
Plan-Do-Check-ActProblem solving
Pull systems and kanbansQuick changeovers
Standard workStatistical process control
Stat
istic
al m
etho
ds
Takt time and demand analysis plotsTeamwork
Total productive maintenance (TPM)Valve stream mapping
Visual controlsVoice of the customer (VOC)
* Not all inclusive of Lean Sigma tools
Lean Sigma philosophiesConservation of resources (sustainability or becoming green)
Relentless pursuit of waste elimination
Tot
al e
mpl
oyee
invo
lvem
ent
Lean Sigma principlesContinuous improvement in processes and results
Focus on customers and value streamsTotal employee involvement
Com
mon
goa
l of S
ix-S
igm
aZe
ro d
efec
ts
Voi
ce o
f the
cus
tom
er
Look
for
hidd
en w
aste
s
Qua
ntita
tive
anal
ysis
DM
AIC
Prov
en m
etho
dolo
gy
Focu
s on
var
iatio
n
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ntifi
c m
etho
d
Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect Service—Using a Practical Approach to Lean Six Sigma to Improve the Customer Experience and Reduce Costs in Service Industries. Chelsea, MI: MCS Media, Inc.
Larry’s notes on the building blocks are shown on the following pages.
LEAN SIGMA METHODS AND TOOLS—BASIC CONCEPTS 19
Lean Sigma Philosophies and Principles
Th e overriding philosophy of Lean Sigma is defi ned by the continuous
elimination of waste and non-value-added activities in everything we do,
the conservation of all resources at every level of operation. Additionally,
Lean Sigma philosophies include continuous learning and improvement
in everything that’s done. Lean Sigma philosophy calls for the simplifi ca-
tion of all tasks and eff orts to eliminate waste and improve fl ow. Absolute
perfection is seen as the goal. Very few organizations embrace Lean Sigma
philosophies at this level. Toyota Motor Company has been practicing
Lean Sigma for over 60 years, and they still believe they need to improve!
Lean Sigma principles are the bedrock for Lean Sigma transfor-
mations. Th ey provide the unchanging, solid foundation to build and
improve upon. Th e three key Lean Sigma principles, supported by Lean
Sigma philosophies, are as follows:
• Continuous improvement in processes and results—Do not
be “results or bottom-line only” focused. Instead, focus on
processes that deliver consistent, waste-free results.
• Focus on customers and value streams—Focus on the entire
process, from the customer pull or demand to demand
fulfi llment and customer satisfaction. Focus on how materials
and information fl ow through a process.
• Employee participation in a non-blaming, fear free environment—
Organization leaders must make it safe for people to suggest
possible improvements in the way things are done.
Lean Sigma Concepts
Lean Sigma concepts drive Lean Sigma transformations. It is essential
that people at all levels be trained in and understand Lean Sigma concepts
to facilitate a smooth and eff ective Lean Sigma transformation. Do not
underestimate the power of these concepts.
Larry knew he had a lot of training and communicating to do if
he wanted his cruise line to apply Lean Sigma methods and tools, and
continued to review his notes shown on the following page.
20 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Th e Lean Sigma concepts are as follows:
• Add value and remove waste
Value Adding
Organizations add value when they change the weight,
shape, confi guration, properties, or attributes of materials or
information. Th ese are the things the customer is willing to
pay for.
Waste (Non-Value-Adding)
Waste is anything that does not add value. Non-value- adding
activities fall into the 12 categories of waste. Th ings that
consume time, resources, space, or both, but do not contribute
to satisfying customer need.
Th e 12 categories of waste are as follows:
1. Overproduction—Making more than is needed.
2. Expertise—Not using people’s knowledge.
3. Transportation.
4. Inventory and Work in process (WIP).
5. Motion.
6. Rework or Corrections.
7. Overprocessing—Processing more than is needed.
8. Waiting or delays.
9. Overload or straining a system—Overloading systems
capabilities usually leads to other forms of waste.
10. Unevenness—Unevenness in work fl ow usually leads to other
wastes.
11. Environmental waste—Pollution, excess consumption.
12. Social waste—Social networking while at work. Literacy, hun-
ger, or cultural oppression.
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 TOOLS—BASIC CONCEPTS 21
• PDCA process for implementing improvements. Th is is
process mirrors the scientifi c method and drives improvement
activities.
• Next process or operation is the customer—Serve them.
• Upstream quality—Build quality in; do not “pass along” poor
quality.
• Customer needs fi rst—Always focus on the customer and
their requirements
• Decisions at the lowest appropriate level—Go to where
the work is done or the value is added. Sometimes called
“Gemba.”
• Speak with data—Use objective information to evaluate
process performance. Use other statistical tools to turn
subjective information into objective data.
• Variation reduction and control through statistical process
control (SPC).
• Defi ne and seek PERFECTION.
Adding value through waste identifi cation and elimination is a funda-
mental concept of Lean Sigma. Th e customer is paying for value; waste is
anything that your organization does to a product or service for which the
customer may be paying, and probably should not be. Waste is anything
that adds time, resources, or cost without adding value to the fi nished
product or service. When waste is removed value increases. Waste can
occur in customer processes as well.
Twelve Forms of Waste—The Dirty Dozen
Lean Sigma tools and concepts assist employees (and customers in service
processes) in identifying and eliminating all types of waste. It is critical that
employees have a fundamental knowledge and understanding of “waste”
in order to identify and eliminate it. Th e purpose of Lean Sigma practices
is to identify, analyze, and eliminate all sources of process ineffi ciency.
Th e following table was a handout Larry had from the training ses-
sion. Th e table summarizes the 12 wastes with examples.
22 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
The Dirty Dozen: 12 Forms of Waste
Form Description ExamplesWays to eliminate
Overproduction More than required is made or served
• E-mailing, faxing the same document multiple times
• Ineffective meetings
• Task time • Proof of need
survey• Make to order
Expertise Under-utilization due to placement of people into positions where their knowledge, skills, and abilities aren’t used to the fullest
• Workloads not being completed due to lack of cross-training
• Assigning employees two jobs due to understaffi ng
• Standard work• Lean Sigma File
System• Business case for
Lean Sigma• Offi ce quick-starts
Transport Any transport of fi les, information, or materials
• Delivering unneeded documents
• Updating customer records in different systems
• 5S• Value stream
mapping• Standard work• Lean Sigma File
System• Visual controls• Colocation of
workers
Inventory Excessive piles of paperwork, computer fi les, supplies, and time spent searching for documents
• Files awaiting signatures or approvals
• Keeping multiple copies of reports
• 5S• Value stream
mapping• Standard work• Lean Sigma File
System• Kanbans for offi ce
supplies• Level
loading-heijunka
Motion Any movement of people, paper or electronic exchanges, or both, that does not add value
• Hand carrying paper to another process
• Using an excessive number of transaction screens to support decision making
• Standard work• New offi ce layout• Kanbans for offi ce
supplies• Pull systems and
supermarkets
(Continued)
LEAN SIGMA METHODS AND TOOLS—BASIC CONCEPTS 23
Form Description ExamplesWays to eliminate
Corrections All processing required in creating a defect and the additional work required to correct it
• Data entry errors• Not having
integrated IT systems
• Standard work• Lean Sigma File
System • Visual controls• Mistake proofi ng
Overprocessing Putting more work or effort than required into the work requested by internal or external customers
• Duplicate reports or information
• Constantly revising documents
• Excessive approvals
• Standard work• Lean Sigma File
System• Data collection
techniques• Document tagging
Waiting Waiting for anything (people, signatures, information, etc.)
• Excessive signatures or approvals
• Delay in feedback from high-level management
• Waiting for a meeting to make a decision
• Value stream mapping
• 5S• Lean Sigma File
System• Runners• Pitch• Standard work• Scoreboards
Overload Overburdening or overloading a work system, machine, or process
• An 18-person bus carrying 25 people
• A new contract requiring 80 additional hours of work and not enough staff to complete the work
• Standard work• One piece fl ow• Statistical analysis• Workload
balancing
Unevenness Lack of consistent fl ow of inputs/information/scheduled work from upstream processes causing many of the other types of waste previously mentioned
• Scheduling all work to be completed at the end of the month and not during the month at even intervals
• Poor offi ce processes for locating documents when a staff member is on leave
• 5S• Value stream
mapping• Standard work• Workload
balancing
(Continued)
24 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Form Description ExamplesWays to eliminate
Environmental Any waste that is generated by a service organization that impacts the environment, whether it is heat, solid, liquid, or gas
• Paper or plastic used in a cafeteria that isn’t recycled
• Unnecessary use of power when machines and equipment aren’t in use
• Reduce, reuse, recycle
• Sustainability or Green metrics
Social Waste from the other areas of society, such as poverty, discrimination, malpractice, health and injuries, nutrition, literacy and education, and also waste on account of social media networking
• Time spent by employees at work socializing
• Advertising products on social networking sites that are not read by target audience
• Plan–Do–Check–Act
• Sustainability metrics
• Performance/gap analysis
Larry thought about where these wastes could be present at his cruise line
and made the following notes.
1 of 12: The Waste of Overproduction
Producing some type of work prior to it being required is waste of over-
production. Providing a service above and beyond what is needed is also
considered overproduction. Overproduction is when too much of some-
thing is made or served. Th is is the greatest of all the wastes. Overproduc-
tion of work or services can cause other wastes. For example, by preparing
extra copies of a report, you are using extra paper, extra time to handle
the reports, and extra motion and transportation to dispose of the reports,
and so on. Activities without direct immediate purpose should be elimi-
nated or reconfi gured unless they are already understood as essential to a
perfect process.
(Continued)
LEAN SIGMA METHODS AND TOOLS—BASIC CONCEPTS 25
2 of 12: The Waste of Expertise
Th e under-utilization of people’s expertise is a result of not placing people
where they can (and will) use their knowledge, skills, and abilities to the
fullest providing value-added work and services. An eff ective performance
management system will reduce this waste signifi cantly. Use company
policies and procedures to eff ectively place people where they will most
benefi t the organization.
3 of 12: The Waste of Transport
Excess transport aff ects the time of delivery of any work within an offi ce.
Even with the Internet and e-mail readily available, too often, or not often
enough, documents (i.e., fi les) 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 offi ce layout
optimal?”, “Is the release and request for work automated?” and “Is IT
aware of the problem and can they help?”
4 of 12: The Waste of Inventory
Excessive piles of paperwork, computer fi les, supplies, and time spent
searching for a document is waste. Th ey all take up space or require
someone’s time. If a document is waiting for additional information (i.e.,
signature, review, approval, etc.) and there is a change, then the time
the document has been waiting is waste. Th ere are basically two types
of inventory waste related to administrative areas: (1) offi ce supplies and
(2) information.
5 of 12: The Waste of Motion
Any movement of people that does not add value is waste. Th is waste
is created by poor offi ce layout or design, faulty or outdated offi ce
26 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
equipment, supply inaccessibility, and movement of information or
data that does not add value. Th e waste of motion is insidious and
is hidden in service procedures that have not been reviewed for CI
initiatives. Regardless of the industry, motion waste may appear as
someone who is looking “busy” but not adding value to the work or
service. Lean Sigma tools will assist to identify, reduce, and eliminate
this waste.
6 of 12: The Waste of Corrections
Correction waste refers to all processing required in creating a defect, or
mistake, and the additional work required to correct a defect. And defects
(either internal or external) result in additional administrative processing
that will add no value to the product or service. It takes less time to do
work correctly the fi rst time than the time it would take to do it over.
Rework and corrections are wastes and add more costs to any product or
service for which the customer will not pay. Th is waste can reduce profi ts
signifi cantly.
7 of 12: The Waste of Overprocessing
Putting more work or eff ort 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. Th is is one of the most
diffi cult administrative wastes to uncover. Some questions to ask to assist
in the identifi cation of this waste are, “What are the most basic processes
required to meet the customer needs?” or “Is there a clear understanding
of the customer’s needs?”
8 of 12: The Waste of Waiting
Waiting for anything (people, signatures, information, etc.) is waste. Th is
waste of waiting is “low hanging fruit” which is easy to reach and ripe for
the taking. We often do not think of paper sitting in an “In” basket or an
unread e-mail as waste. However, when looking for the item (document
or e-mail), how many times do we mull through that “In” basket or the
LEAN SIGMA METHODS AND TOOLS—BASIC CONCEPTS 27
Inbox folder and try to fi nd it? How many times do you actually touch
something before it is completed? It is the fi nish it, fi le it, or throw it
away system that can help eliminate this waste. Th is waste closely related
to “wasting time.”
9 of 12: The Waste of Overload
Th e overburdening or overloading of a work system or process typically
causes other wastes to occur. Overload must be handled as a separate
waste as it can be identifi ed easily during the value mapping process, and
is often expressed in terms of capacities of equipment or people. Usually
this waste causes a great sense of frustration and aggravation, for custom-
ers and employees, and often leads to other wastes and loss sales.
10 of 12: The Waste of Unevenness
Lack of a consistent fl ow of inputs/information/scheduled work from
upstream processes causes many of the other types of waste previously
mentioned. Unevenness such as traffi c jams, loading and unloading ten-
der boats, lunch hour rushes, and the like create special needs for service
organizations wanting to provide the highest level of service.
11 of 12: Environmental Waste
As service organizations become more sustainable or “Green,” they have
to make extra eff orts to protect the environmental resources as they are
becoming very scarce. Any waste that is generated by a service organiza-
tion that impacts the environment, whether it is heat, solid, liquid, or gas,
is classifi ed as environmental waste. Th ese items can be observed in an
organization’s trash containers and dumpsters. Th is is a huge opportunity
for Larry’s cruise line—Larry double starred this item!
12 of 12: Social Waste
Social waste is another category of waste that service organizations need to
focus on if they wish to become more sustainable. Th e term social waste
28 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
is broad and includes areas such as poverty, discrimination, malpractices,
health and injuries, nutrition, literacy and education, and also waste on
account of social media networking. When people who are suppose to
be working are using their social media when not allowed, or when an
organization is not capitalizing on the use of social media applications
where appropriate. Larry triple starred this waste!
Larry knew that each of the 12 wastes existed for his cruise line and
reviewed the leading waste questions identifi ed in class.
Leading Waste Questions
1. Where is waste causing us to spend excess time, resources, and
money?
2. How can I communicate these wastes throughout the organization?
3. What are some of the obvious wastes (“low hanging fruit”)?
4. What can be done to immediately improve customer satisfaction?
Larry thought he’d 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. Th e 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. Th is 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.
Lean Sigma Methods
Th e Lean Sigma methods used for Lean Sigma transformations include a
systematic approach or steps to initiate improvement in an organization.
LEAN SIGMA METHODS AND TOOLS—BASIC CONCEPTS 29
Lean Sigma Service Excellence “Waste Walk” Check List
Types of waste Waste observations
Overproduction Producing more material or information than is needed or used.
Expertise Not using people’s minds and getting them involved.
TransportMoving tools and materials to the point of use.
InventoryMaterials or information. This includes all work in process and fi nished goods.
MotionMovement of people. This includes walking or riding, as well as smaller movements.
CorrectionsThis includes rework or fi xing of products or information that is wrong the fi rst time.
OverprocessingThis includes work above and beyond the minimum requirements or needs.
WaitingThis includes any time delayed or waiting for materials, information, or people.
OverloadThis is when workload is too much and machines break and people burnout.
UnevennessThis is when workload varies from slow to fast uncontrollably.
EnvironmentalThis 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
Th e systematic approach is defi ned at three levels of engagement. Each
level must use the PDCA improvement process. Larry recalled the various
levels of engagement from his day at DRP.
Leadership Level
• Develop Lean Sigma understanding and commitment for
organization leaders.
• Develop and communicate Lean Sigma strategy to the
organization.
• Develop and deploy a tactical plan to transform the
organization into a Lean Sigma enterprise.
• Set, align, and communicate measureable goals and rewards to
sustain and support the Lean Sigma enterprise and thinking.
• Conduct regular organizational performance reviews.
Project, Systems, or Team Level
1. Use the Defi ne–Measure–Analyze–Improve–Control (DMAIC)
improvement process. Th e DMAIC improvement process phases are
defi ned as follows:
• Defi ne the project scope, resources, and objectives.
• Measure the current state process key performance
measures, drivers, capabilities, fl ows, and outcomes.
• Analyze the current state process data to identify and
prioritize improvement opportunities.
• Improve the process by applying Lean Sigma improvement
tools and techniques.
• Control the process so that the improvements are
sustainable.
Worker Level
1. Implement a housekeeping and visual control eff ort at all worksites.
2. Conduct hourly or daily mini-experiments to improve processes.
LEAN SIGMA METHODS AND TOOLS—BASIC CONCEPTS 31
By engaging at these three levels, an organization can truly begin to trans-
form their culture to a CI-driven environment. Further, discussion and
cases are analyzed elsewhere to further illustrate how these levels work
together to transform an organization.
Lean Sigma Tools
Larry reviewed the following Lean Sigma Tool Application Chart and his
notes on Lean Sigma tool applications.
Th e Lean Sigma Tool Application Chart presented here is not all
inclusive. It covers the Lean Sigma tools identifi ed in the applications
chart. Th ese tools are found to be the most applicable for organizations.
Not all Lean Sigma tools will work the same in every environment. Lean
Sigma tools that apply directly in a mass production manufacturing envi-
ronment apply to a service environment, but might not be a direct fi t. Just
as one would not use a screw driver to loosen a hex-head bolt, not every
Lean Sigma tool will apply to every environment and culture. Th e savvy
Lean Sigma practitioner will identify the key applicable Lean Sigma tools
and apply them as needed.
DMAIC Alphabetical Tool Application Chart
Lean Sigma tools
Lean Sigma improvement phases
Defi ne Measure Analyze Improve Control1 5Ss X X
2 5-Whys X X
4 Cause and effect diagrams
X X X
5 Check sheets X X
6 Constraint or Bottleneck analysis
X X
7 Cross-training to develop worker fl exibility
X X
8 Flow, process, Swim lane, or value stream maps
X X X X
(Continued)
32 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Lean Sigma tools
Lean Sigma improvement phases
Defi ne Measure Analyze Improve Control10 Frequency charts X X
11 Future state fl ow maps
X
12 Histograms X X X X
15 Key metric data profi les
X X X
16 Leveling service fl ow, pull signals (kanbans), and paced work fl ow (Heijunka)
X X
17 Mass customization X
18 Mistake proofi ng (Poka yoke)
X X
20 Pareto and pie charts
X X X
21 Performance management and improvement
X X
22 Plan–Do–Check–Act process
X X X X
23 Problem solving—Corrective and preventative actions
X X X X
25 Project management
X X X X
26 Quality function deployment (QFD)
X X
27 Queue time X X X X
28 Radar chart X X X
29 Rapid improvement events
X
30 Run and control charts
X X X
31 Scatter plots X
(Continued)
(Continued)
LEAN SIGMA METHODS AND TOOLS—BASIC CONCEPTS 33
Lean Sigma tools
Lean Sigma improvement phases
Defi ne Measure Analyze Improve Control32 Spreadsheets and
pivot tablesX X X
33 Standard work for leaders
X X X
34 Standardized work X X X
35 Statistical process controls
X X X
37 Supplier/Input > Process > Output/Customer (SIPOC)
X X X
38 Talk time, predictive selling or service rate analysis
X X X
39 Value-added versus non-value-added analysis
X X X
40 Visual controls X X
41 Visual management and performance scoreboards
X X X X
42 Voice of the customer (VOC)
X X X
Source: Ptacek and Motwani (2011a).
Larry knew he had to do something diff erent 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.
Lean Sigma Outcomes
Successful Lean Sigma transformations have been documented for hun-
dreds of enterprises in nearly all sectors of the economy. In planning your
Lean Sigma transformation, be careful not to set your expectations too
low. Organizations implementing Lean Sigma transformations can expect
to realize some or all of the following:
34 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Chapter 3—Discussion Questions
1. In his notes from his visit to Joe’s factory, Larry stated “Lean Sigma
is the most successful continuous improvement (CI) method in
the history of the world.” Do you agree with this statement? Why
or why not?
2. Discuss the similarities and diff erences between Lean, Six-Sigma,
and Lean Sigma? Which of these is the most powerful and why?
• High organization morale, teamwork and eff ort through
alignment of goals and measures, and improved leadership
• Clear communication of priorities, expectations, and results
through visual and statistical controls. Th e “Right” things get
done “Right”
• Clean, organized, and effi cient worksite—minimal waste or
errors
• High quality outputs and results
• Smooth fl ow of work or services
• No unscheduled downtime or surprises
• Perfection—Zero defects or errors
• Less inventory, delays, transportation, motion, and rework
• Less costs and more profi t and returns on investment (ROIs)
• Increased capacity and sales growth potential
All of this information was a bit overwhelming for Larry. He still wasn’t
convinced that Lean Sigma would work for his cruise line but he didn’t
have many alternatives. He knew that doing the same thing and expect-
ing diff erent 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 he’d have some time to pick Joe’s
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 TOOLS—BASIC CONCEPTS 35
3. Why do the authors recommend understanding the building
blocks in order to understand what Lean Sigma is? Discuss the
building blocks and how can it help an organization prepare for
its Lean Sigma journey?
4. What are the three key Lean Sigma principles? Does your organi-
zation address these principles eff ectively? If not, how would you
go about doing it?
5. Discuss briefl y the fundamental Lean Sigma concepts. Can they
be easily applied by Larry in his organization?
6. By means of examples, briefl y explain the 12 categories of waste?
Why is it important for an organization to be aware of and to
address these wastes using the waste walk checklist?
7. Why is it important that a Lean transformation be conducted
at three levels? If you were Larry, what steps would you take to
ensure a smooth transformation at all three levels? What outcomes
would you expect to achieve?
CHAPTER 4
Comparing Manufacturing and Service Environments
Joe and his family were up early on the morning of the ship tour. Joe’s
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. What’s the day-plan?” asked Joe.
Larry explained that he thought he’d drop Joe’s wife and children
off at the family pool and set everyone up with a day pass for the ship’s
amenities. Th e 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 Joe’s family
settled in, Joe and Larry would take a walk around the ship.
Th e walk with Larry started in his offi ce. Larry liked his offi ce and
thought it would impress Joe. As they walked into the offi ce, Joe said,
“Pretty fancy! At least it looks like you’re doing well!” “Yeah Joe, this is
one of the ways service is diff erent from manufacturing. If you had an
offi ce this nice your customers would assume you were making too much
money. When they see my offi ce they assume the entire ship has such nice
features,” Larry replied with a smile.
“Yeah this is nice, but you probably shouldn’t spend too much time
in here,” said Joe.
“Well I wanted to start here to show you how we are organized and
how diff erent 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
cruise line.
38 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Cruise Line Departments
1. Navigation—Captain and crew
2. Guest services—Bookings and onboard guest services
3. Entertainment
4. Gaming—Onboard casino
5. Housekeeping—Maid services and laundry
6. Medical—Onboard medical center
7. Food services—Multiple onboard restaurants
8. Retail sales—Multiple onboard stores
9. Security—Onboard police
10. Adventures and event planning
11. Operations and maintenance
12. Purchasing and logistics (supply chain)
13. Human resources and training
14. Administration—Payroll and accounting
Joe was impressed. “Th ere are a lot of areas on this ship, it’s like a small
city!” Joe said.
“It’s not all about speed and effi ciency on a cruise ship,” said Larry.
“Sometimes our customers want slow, relaxing services. Th ey want to be
pampered, they want opulence!” explained Larry. He continued, “For
example, if we charge $150 for a foot massage, we don’t want to rush
through in 10 minutes.”
Joe smiled a knowing smile, “Th at 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 effi ciency. You might want to
focus on those areas before it’s too late! Let’s take a walk—I can’t 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?”
clarifi ed Joe.
COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS 39
“Well, we set up standard services and let our customers select the service
or option they want. It’s like our food services, in that we provide a full ‘all
you can eat’ buff et where the customers can select what food items they want,
or we off er other locations where customers can experience full service, ‘a la
carte’ menu items. Th eir choice is how we know what they want,” said Larry.
Joe elaborated, “Th at’s 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 diff erent areas on
the ship where you provide multiple types of services. Some of them can
be easily customized and off ered to the customers, some can’t. For exam-
ple, security, maintenance, and housekeeping are all services. Some have
direct ties to customers, some don’t. Some have tangible or measurable
outcomes, some don’t. In fact, services can fall into three categories:
Service Delivered to an External Customer which is characterized by a
high level of customer interaction and total number of transactions
completed by an organization. Organizations providing services
to external customers may have to face extreme competitive pres-
sures and may be engaged in marketing campaigns in an eff ort to
gain additional clients. In this category, a service provider or person
interacts with the customer directly and typically performs a task or
physical deliverable. Delivered services usually have more tangible
outcomes than service process completions. Organizations compete
on quality of outcomes. Examples include fast food restaurants, bank
tellers, lawn maintenance services, laundry services, and the like.
Service Process Used by an External Customer is similar in that they
typically face extreme competition, yet are diff erent in that the
service provider may also have to educate their potential clients
on how to use the service process. Many of these organizations are
using the power of the Internet to improve their process delivery
and options, by having customers complete the ordering pro-
cess, or data entry rather than direct interaction between a ser-
vice worker and a customer. Service processes typically have less
tangible outcomes than delivered services. Organizations compete
40 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
on speed and simplicity of the process. Examples include auto-
mated teller machines (ATMs), self check-in monitors for air-
lines, self check-outs at retail stores, vending machines, and all
other service types where customers use a process directly without
“direct” person-to-person interaction.
Service Process Internal to an Organization typically faces less
competitive pressures because they have been established by the
organization to serve the organization. However, they too must
educate their users regarding the features and use of their internal
service processes. Examples include human resources, Information
Technology (IT), counseling, internal supply rooms, or janitorial
services within an organization.
(Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect Service—Using
a Practical Approach to Lean Six Sigma to Improve the Customer Experience
and Reduce Costs in Service Industries. Chelsea, MI: MCS Media, Inc.)
Each of these services has either objective and measurable, or subjective
and more diffi cult to measure outcomes. For example, subjective out-
comes might be the feeling of relaxation, enjoyment from a concert or
show, and similar things. Objective outcomes are things like the drinks
being served on time, rooms being cleaned to standard, the ship sailing to
the next port on schedule, and the like.”
“Wow! You sound like a service expert Joe!” said Larry.
“Well, we learned about processes in our Lean Sigma training and
each of these types of service is a process with a Supplier, Inputs, a Process,
Outputs, and Customers. We learned this analysis as the ‘SIPOC’ process
defi nition. Get it? Supplier–Input–Process–Output–Customer = SIPOC.
Th is defi nes and measures a process so we can make improvements.
‘Defi ning’ and ‘Measuring’ are the fi rst two steps in the DMAIC improve-
ment process,” said Joe. Joe continued, “Let’s get on to the tour! I’ve talked
enough and I’m tired of this offi ce already!”
Larry provided Joe with an extensive tour of each of the main areas.
Joe made notes about his observations regarding the 12 wastes as they
visited each area. When they returned to Larry’s offi ce, Joe wrote his
observations on the white board. Joe’s notes are summarized in the
following table.
COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS 41
Are
aL
ean
Sigm
a id
eas
alre
ady
in u
seW
aste
s ob
serv
edIm
prov
emen
t id
eas
Nav
igat
ion—
Cap
tain
and
cre
wSo
me
good
vis
ual c
ontr
ols e
xist
in th
e he
lm fo
r man
euve
ring
the
ship
.T
he h
elm
look
ed a
bit
dis
orga
nize
d. T
his c
ause
d a
was
te
in m
otio
n an
d de
lay
whi
le c
rew
mem
bers
look
for k
ey
item
s and
info
rmat
ion.
5S th
e he
lm. P
erha
ps a
dd so
me
visu
al c
ontr
ols t
o id
enti
fy k
ey fi
les a
nd in
form
atio
n.
Gue
st se
rvic
es—
Boo
king
s and
on
boar
d gu
est
serv
ices
The
boa
rdin
g ha
d m
any
visu
al c
ontr
ols,
from
dir
ecti
onal
arr
ows t
o co
lor-
code
d al
phab
etic
al re
gist
rati
on si
gnag
e.
Thi
s onb
oard
are
as a
ll lo
oked
dis
orga
nize
d. T
his c
ause
d cu
stom
ers t
o w
ait w
hile
wor
kers
trie
d to
fi nd
cri
tica
l in
form
atio
n. M
akin
g th
e cu
stom
er w
ait i
s wor
se th
an
mak
ing
a co
wor
ker w
ait,
but b
oth
are
was
tefu
l.
Perf
orm
a 5
S in
the
onbo
ard
gues
t ser
vice
s are
as.
Ente
rtai
nmen
tM
any
of th
e ba
ckst
age
area
s wer
e w
ell
orga
nize
d. C
lear
ly th
e en
tert
aine
rs a
re
used
to q
uick
cos
tum
e an
d ac
t cha
nges
.
Som
e of
the
stor
age
area
s wer
e ov
erfl o
win
g w
ith p
rops
and
co
stum
es. T
his r
epre
sent
ed w
aste
in in
vent
ory
as so
me
of th
e pr
ops w
ere
no lo
nger
bei
ng u
sed.
Wor
king
aro
und
usel
ess p
rops
and
item
s cau
ses a
bit
of w
aste
of w
aitin
g.
A 5
S w
ould
ens
ure
the
exce
ss a
nd o
r old
item
s are
re
mov
ed th
ereb
y re
duci
ng in
vent
ory
and
dela
ys.
Gam
ing—
Onb
oard
cas
ino
Cas
inos
and
gam
ing
area
s use
a h
igh
leve
l of v
isua
l con
trol
s and
vis
ual
stim
ulat
ion
to a
ttra
ct a
nd d
irec
t the
cu
stom
ers.
The
cas
ino
area
was
a b
it o
utda
ted,
and
man
y m
anua
l m
etho
ds o
f mon
itor
ing
the
area
wer
e ob
serv
ed. T
his i
s a
was
te o
f ove
rloa
d an
d m
otio
n as
the
mon
itor
ing
grou
p di
d no
t hav
e th
e to
ols t
o do
the
rew
ork
wit
hout
und
ue w
aste
s. T
he c
asin
o ar
ea o
nly
had
one
cas
hier
; thi
s som
etim
es
caus
es c
usto
mer
s exc
essi
ve m
otio
n an
d w
aiti
ng.
Dev
elop
a lo
w-c
ost s
tand
ard
wor
k m
etho
d to
im
prov
e m
onit
orin
g an
d cr
eate
a m
obile
cas
hier
to
redu
ce w
ait t
imes
and
mot
ion
for c
usto
mer
s.
Hou
seke
epin
g—M
aid
serv
ices
and
la
undr
y
The
mai
d se
rvic
es w
ere
usin
g st
anda
rd
cart
s wit
h ev
eryt
hing
they
nee
ded
to
serv
ice
gues
t qua
rter
s. T
his p
reve
nted
w
aste
of m
otio
n an
d tr
ansp
orta
tion
as
item
s wer
e co
nsum
ed o
r nee
ded.
Dri
ers w
ere
runn
ing
wel
l aft
er th
e cl
othe
s wer
e dr
y.
Thi
s is a
was
te o
f ove
rpro
cess
ing.
The
re w
as a
lso
an
unev
enne
ss a
nd o
verl
oad
of la
undr
y pr
oces
sing
. Som
e da
ys w
ere
extr
emel
y bu
sy, a
nd so
me
days
wer
e ve
ry sl
ow.
To fu
rthe
r im
prov
e th
e m
aid
serv
ices
, a sc
hedu
led
runn
er c
ould
del
iver
new
line
ns a
nd su
pplie
s on
a sp
ecifi
c pi
tch.
Thi
s is
a pa
ced
fl ow
of H
eiju
nka
syst
em, w
ith th
e us
e of
a ru
nner
or w
ater
spid
er.
In th
e la
undr
y ar
ea a
nd K
anba
n sy
stem
mak
e su
re
was
hers
and
drie
rs p
roce
ss th
e ex
act t
ime,
and
no
less
or m
ore.
(Con
tinue
d)
42 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Are
aL
ean
Sigm
a id
eas
alre
ady
in u
seW
aste
s ob
serv
edIm
prov
emen
t id
eas
Med
ical
—O
nboa
rd m
edic
al
cent
er
Hea
lthc
are
area
s typ
ical
ly u
se v
isua
l co
ntro
ls a
nd si
gnag
e to
hel
p pe
ople
in
tera
ct w
ith
thei
r sys
tem
s.
Seve
ral p
eopl
e w
ere
surfi
ng th
e w
eb, w
hen
they
shou
ld
have
bee
n w
orki
ng. T
his i
s a so
cial
was
te. T
he e
xam
ro
oms s
eem
ed to
be
mis
sing
man
y it
ems.
Thi
s can
cau
se
the
was
te o
f wai
ting
or d
elay
as w
ell a
s mot
ion.
Esta
blis
h st
anda
rd w
ork
to a
ddre
ss so
cial
ne
twor
king
. Con
side
r kan
bans
for s
uppl
ies i
n th
e ex
am ro
oms.
Food
serv
ices
—M
ulti
ple
onbo
ard
rest
aura
nts
Seve
ral s
igna
ling
or k
anba
n sy
stem
s w
ere
bein
g us
ed to
info
rm c
hefs
of t
he
need
ed it
ems.
Cru
ise
ship
s are
wel
l kno
wn
for t
heir
lavi
sh fo
od
offe
ring
s, bu
t whe
re d
oes a
ll th
e ex
cess
food
go?
And
ho
w d
o th
ey k
now
how
muc
h fo
od to
pre
pare
? Exc
ess
food
was
te is
a w
aste
of s
ocia
l res
pons
ibili
ty a
nd th
e en
viro
nmen
t.
Con
side
r usi
ng st
atis
tica
l ana
lysi
s to
min
imiz
e fo
od w
aste
.
Ret
ail s
ales
—M
ulti
ple
onbo
ard
stor
es
Onb
oard
stor
es w
ere
alre
ady
usin
g vi
sual
co
ntro
ls to
att
ract
and
dir
ect c
usto
mer
s an
d w
orke
rs.
Even
wit
h th
e st
atis
tica
l too
ls in
pla
ce, e
xces
sive
and
ob
sole
te in
vent
orie
s wer
e ob
serv
ed.
Con
side
r usi
ng st
atis
tica
l too
ls to
det
erm
ine
mor
e pr
ecis
e pr
oduc
t nee
ds a
nd v
olum
es. T
his w
ill
redu
ce th
e w
aste
of i
nven
tori
es.
Secu
rity
—O
nboa
rd p
olic
eT
he se
curi
ty g
roup
is u
sing
a m
ista
ke-
proo
fi ng
met
hod
to e
nsur
e th
ey a
re
achi
evin
g pr
oper
cov
erag
e an
d su
ppor
t to
all
key
area
s of t
he sh
ip.
At t
imes
seve
ral s
ecur
ity
pers
onne
l wer
e ov
erla
ppin
g in
th
eir s
tand
ard
rout
es. T
his i
s a w
aste
of o
verp
roce
ssin
g.
Add
itio
nally
, the
secu
rity
gro
up w
as c
onti
nual
ly h
avin
g to
mod
ify th
eir r
epor
ts a
s the
y w
ere
ofte
n in
corr
ect.
Thi
s is
a w
aste
of c
orre
ctio
ns.
Con
side
r fl o
w m
aps a
nd p
itch
tim
es fo
r the
st
anda
rd se
curi
ty ro
utes
. Als
o, c
onsi
der p
rovi
ding
ad
diti
onal
trai
ning
to re
duce
err
ors a
nd
corr
ecti
ons.
Adv
entu
res
and
even
t pl
anni
ng
Sim
ilar t
o on
boar
d st
ores
, the
ad
vent
ures
and
eve
nt p
lann
ing
grou
p w
as u
sing
vis
ual c
ontr
ols t
o at
trac
t and
gu
ide
cust
omer
s.
Man
y co
rrec
tion
s are
nee
ded
as a
dven
ture
sign
-ups
ar
e of
ten
over
book
ed. T
hese
was
tes o
r cor
rect
ions
ov
erbu
rden
ed a
nd c
ause
d cu
stom
ers t
o w
ait.
Con
side
r a v
isua
l man
agem
ent s
yste
m to
pla
n an
d sc
hedu
le c
usto
mer
s ont
o ad
vent
ures
.
(Con
tinue
d)
COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS 43
Ope
rati
ons a
nd
mai
nten
ance
The
mai
nten
ance
cre
w w
as u
sing
a
stan
dard
pre
vent
ativ
e m
aint
enan
ce
prog
ram
to m
aint
ain
the
ship
and
eng
ine
room
mec
hani
cals
.
Cus
tom
er m
aint
enan
ce c
alls
som
etim
es to
ok se
vera
l ho
urs t
o re
solv
e. T
his i
s a w
aste
of w
aiti
ng. O
ften
the
mai
nten
ance
mem
ber w
ould
mak
e th
e in
itia
l vis
it to
the
area
requ
irin
g m
aint
enan
ce su
ppor
t, an
d th
en g
o to
get
th
e pr
oper
tool
ing.
Thi
s too
is w
aste
of w
aiti
ng, a
s wel
l as
was
te o
f tra
nspo
rtat
ion
and
mot
ion.
Con
side
r an
impr
oved
stan
dard
wor
k pr
acti
ce
to se
rve
cust
omer
s. A
lso,
est
ablis
h a
stan
dard
m
aint
enan
ce to
ol c
art t
o ta
ke o
n al
l cal
ls.
Thi
s is m
ass c
usto
miz
atio
n an
d st
anda
rdiz
ed
wor
k. D
evel
op th
is p
lan
thro
ugh
stat
isti
cal a
nd
hist
oric
al d
ata
anal
ysis
.
Purc
hasi
ng a
nd
logi
stic
s (su
pply
ch
ain)
The
pur
chas
ing
and
logi
stic
s gro
up
was
alr
eady
usi
ng st
atis
tica
l ana
lysi
s to
dete
rmin
e or
der q
uant
itie
s to
redu
ce
cost
s.
Seve
ral s
tock
-out
not
ices
wer
e fo
und
in th
e ar
ea. T
his
caus
es c
usto
mer
s and
wor
kers
to w
ait.
The
gro
up w
as
also
not
usi
ng th
e id
eas f
rom
the
vari
ous a
reas
of t
he
ship
. Thi
s is a
was
te o
f peo
ple
as re
sour
ces.
Con
side
r usi
ng k
anba
n m
etho
ds to
pre
vent
stoc
k ou
ts. A
lso,
dev
elop
a p
lan
to e
ngag
e pe
ople
’s th
ough
ts a
nd im
prov
emen
t ide
as.
Hum
an re
sour
ces
and
trai
ning
The
HR
dep
artm
ent u
sed
stan
dard
w
ork
rega
rdin
g th
e or
ient
atio
n tr
aini
ng
prog
ram
for a
ll ne
w m
embe
rs o
f the
staf
f.
The
HR
dep
artm
ent p
rint
ed e
very
e-m
ail t
hey
rece
ived
, an
d ha
d m
ulti
ple
peop
le re
ad th
em. T
his i
s a w
aste
of
envi
ronm
ent,
soci
al re
spon
sibi
lity,
and
ove
rpro
duct
ion
or o
verp
roce
ssin
g.
Con
side
r a re
vise
d m
etho
d of
han
dlin
g e-
mai
ls.
Use
an
offi c
e/so
ftw
are
5S. D
evel
op st
anda
rd w
ork
for p
roce
ssin
g e-
mai
ls th
at w
ill re
duce
pri
ntin
g.
Adm
inis
trat
ion—
Payr
oll a
nd
acco
unti
ng
Payr
oll w
as u
sing
stan
dard
wor
k to
pr
oces
s che
ck o
n a
wee
kly
basi
s for
al
l em
ploy
ees,
as w
ell a
s the
regu
lar
fi nan
cial
repo
rts.
The
y al
so u
sed
doub
le-
entr
y ac
coun
ting
tech
niqu
es w
hich
is a
fo
rm o
f mis
take
-pro
ofi n
g.
Qui
te o
ften
they
had
to m
ake
corr
ecti
ons i
n pa
yrol
l and
ch
ecks
due
to th
e ho
urs a
ccou
ntin
g sy
stem
. Thi
s is a
w
aste
on
corr
ecti
ons,
whi
ch c
ause
s was
te o
f wai
ting
by
the
staf
f.
Con
side
r mis
take
pro
ofi n
g m
etho
ds fo
r the
pay
roll
and
hour
s tra
ckin
g sy
stem
.
44 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Chapter 4—Discussion Questions
1. Why was Joe critical of Larry’s offi ce? Do you think the criticism
was justifi able?
2. What are some of the thoughts that come to your mind when you
see the list of the diff erent departments in the cruise line? Do you
think that Lean Sigma can be applied to all these departments?
Why or why not?
3. Discuss the concept of mass customization. Why was Joe eager
that Larry apply this concept in his cruise line?
4. Briefl y discuss the three diff erent categories of service. Under
which category does the cruise line fall under and why?
5. Why is it critical to have both subjective and objective outcomes
and measurements in a service business? If you were Larry, pro-
vide examples of subjective and objective outcomes and measure-
ments that you would use.
6. Critically evaluate the table that summarizes the notes Joe made
when he toured the cruise line with Larry. What lessons can your
organization learn from this table and the process Joe used?
7. If you were Larry, what would you do with the list that was
provided to you? What lessons can we all learn from this?
“Th ere 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. Th e fi rst 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. I’ve done enough work for you today! I need to fi nd my
wife and kids and enjoy your sinking ship!” Joe said.
“Quiet, Joe,” Larry said while looking around to see who was near. “I
don’t want anything like that getting around. I’ll set something up for us
next week.”
“Great, where’s the pool?” Joe said with a sigh and a stretch. Larry
took Joe to the pool and went back to his offi ce to stew.
CHAPTER 5
Key Enablers—Policy Deployment, Accountability Sessions, Employee Training and Involvement, and Lean Sigma Tool Selection and
Application
Larry left Joe’s waste walk notes on his white board during the cruise and
through the next week. He studied the notes and at fi rst was a little upset
about Joe’s 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 offi ce for the next session. Joe got to Larry’s offi ce
right on time. “You’re going to have to put me on your payroll pretty soon
Larry,” boasted Joe as he arrived at Larry’s offi ce. Joe handed Larry a single
piece of paper. On the paper was the following.
Key Enablers for Lean Sigma Success
1. Leadership establishing, communicating, and living up to the vision,
mission, and values—Direction setting or setting the course
2. Resource commitment
3. Training and education
4. Process- and results-focused
5. Policy deployment and goal alignment
6. Total system or value stream focus
7. Employee involvement
8. Perseverance and commitment
46 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
(Source: Womack, J.P. & Jones, D.T. (1996). Lean Th inking: Banish Waste
and Create Wealth in Your Organization. New York: Simon and Schuster;
Ptacek, R. & Motwani, J. (2011). Pursuing Perfect Service—Using 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.
1. “Leadership establishing, communicating, and living up to the
vision, mission, and values—Setting the course. Lean Sigma trans-
formations do not happen by accident. It takes leadership to identify
and communicate the need to change, defi ne what to change to, and
to defi ne a process to use to continually improve. Too often leaders
will have good intentions in mind for their organizations, but do not
provide the key elements for continuous improvement. Th e vision,
mission, and values are too often either absent entirely, or placed in
plaques on the lobby wall, and never really used to drive improve-
ment and excellence. One of leadership’s chief responsibilities is to
create an environment where the need for continual improvement
and excellence can be understood by all and people can motivate
themselves to excellence. Leaders need to communicate the current
business realities and priorities to the workforce, and challenge them
with delivering continuous improvement. Th is can be done very
eff ectively through the vision, mission, and value documents, and
proper strategic planning. Th is starts with you Larry.
2. Resource commitment—Transforming an organization to Lean
Sigma takes energy. Resources such as time for team work sessions,
training materials and instructors, and materials for improvement
projects and PDCA experiments all will be required during a Lean
Sigma transformation. If the proper resources are not provided,
KEY ENABLERS 47
progress will slow or stop. People will perceive a lack of com-
mitment from leadership and go back to less eff ective ways of
doing business. Th e continued commitment of key resources at
key times is one way leaders show their resolve to transform the
organization. Remember, Larry, a leader’s actions speak louder
than their words. It helps if leaders actually participate in early
events and hold themselves accountable to use the tools for their
own work too.
3. Training and education—Th is is an enabler for Lean Sigma transfor-
mations. If people don’t have the proper instruction and a system-
atic approach to improvement, random and sometimes detrimental
results may occur. Some level of expertise needs to be developed by
the leaders and key workers within an organization to fully transform
an organization to a Lean Sigma environment. Not only the right
materials, but the right counseling and mentors providing guidance
at the right times will also support a Lean Sigma transformation. It
should be expected that key leaders show their leadership by aggres-
sively learning about Lean Sigma methods and tools. Th ey lead the
organization in Lean Sigma learning. I’m your master grasshopper,”
injected Joe with a smile.
Joe continued.
4. “Process- and results-focused—Process and results mean not only
focusing on the results or the bottom line, but also to be concerned
for ‘how’ the gains are being achieved. During the initial stages of a
Lean Sigma transformation it’s normal for several early successes to
be realized. Th ese are commonly referred to as ‘low hanging fruit’
or ‘quick hit’ items. While these successes should be celebrated, it’s
equally important for leaders to recognize and speak of the process,
methods, and tools being applied. Th is dual focus will reinforce the
workforce’s commitment to follow the process to achieve results.
It is also important to note that there is not always low-hanging
fruit. Teams diligently following the Lean Sigma improvement
process methods should be celebrated regardless of the outcome. By
rewarding or celebrating the process, leaders will encourage more
48 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
people to follow the process, and as they do, more improvements
and results will be realized eventually. Remember, process fi rst, then
results.
5. Policy deployment and goal alignment. Policy deployment is the
process of establishing, aligning, and communicating the measures,
goals, and objectives throughout the organization. Th is provides a
total ‘connectedness’ or alignment of the entire organization. It is
the report card, or ‘score,’ for how things are going. If properly done,
policy deployment encourages and excites people into high levels of
personal and team performance. Remember our scoreboards on the
Gemba walks?” Joe continued.
6. “Total system or value stream focus. Total system focus forces organi-
zations to consider fl ow of products, services, and people in the
delivery process. Too often businesses are organized into islands or
silos through the organizational chart, and communicating across
islands or silos is diffi cult, if not impossible, for the well-meaning
worker. If nothing is done to break down departmental barriers, peo-
ple will become discouraged and only do enough to get by. Th ey will
conclude that leadership really doesn’t care, and ask, ‘If leadership
doesn’t care, why should I?’ Th e concept of total systems focus recog-
nizes that work and value fl ows horizontally through organizations
to service their clients.
7. Employee involvement—Employee involvement and participation
is how any Lean Sigma transformation actually gets done. Man-
agement cannot simply ‘install’ a Lean Sigma culture. People of an
organization are key stakeholders in transforming the organization.
When they understand why the change is needed, what to change
to, and what processes to use to change, they can fully deploy their
energy and eff orts. It is through their eff orts and actions that a Lean
Sigma transformation occurs. In general, people want to be on a
winning team and when an environment exists where people can
strive for improvement, where the question of ‘What’s in it for me?’
is clear and inspirational, employees will motivate themselves and
strive for excellence.
8. Perseverance and commitment—Lean Sigma transformations do not
happen overnight. Nor are they easy. Organizational leaders must
KEY ENABLERS 49
display long term perseverance and commitment for a full trans-
formation to occur. Patience is needed to allow teams to progress
through the DMAIC process and learn though PDCA improvement
cycles. Remember, not everything a continuous improvement (CI)
team tries will yield positive results. Consider celebrating the failures
as learning opportunities. Leaders will also need to navigate issues
and concerns along the way. It’s not enough to pursue Lean Sigma
methods when times are good. Rather, it must be a deep rooted
philosophy of applying the tools and techniques in good times and
bad. Lean Sigma techniques are a way of working and behaving all the
time. Once leaders shift their behaviors to Lean Sigma philosophy,
the organization will begin to shift as well. Leading by example is
my best advice,” added Joe, as he went right on to the next steps for
Larry.
“Your next step, Larry, should be to develop a strategy for improvement
and then share this with your leadership team. From there, the team can
develop high level goals to help achieve the strategy and then begin the
process of cascading these goals to all areas of the organization. Th is pro-
cess is called ‘Policy Deployment’ and is a ‘Key Enabler’ and is sorely
missing here,” Joe explained.
Larry organized his thoughts and developed the improvement strat-
egy and began the policy deployment process with the leadership team, as
Joe described it. Th e basic strategy is to participatively establish key meas-
ures and goals for each area, and then measure and post, in a scoreboard
fashion, the actual performance to goals for each area. Once this is done,
the teams will need a method to regularly review and respond to achieve
continuous improvement.
Th ings went well at fi rst, but then Larry met with some resistance
in the ranks of his leadership team. “A mutiny if you will,” Captain
Bob burst out at a leadership work session, “We don’t need this for the
crew, we are doing just fi ne, thank you! Go blow your stack somewhere
else, Larry.” Th e captain had been known for his arrogance and blunt
approach. After all, on the ship he was the captain and he was used
to people following his orders, not taking improvement lessons from a
land-lover like Larry!
50 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Larry pushed back. “Captain Bob, I think your behavior is inappropri-
ate and as long as you are an employee of this cruise line you’ll follow our
rules and policies and we are going to involve everyone in this improvement
initiative. Th e life of the cruise line depends on it!” Captain Bob clearly was
not happy and he kept to himself the rest of the session. Larry caught up
to him later that day and explained that his crew and operations may be
top notch, but Larry still needed him to participate as he was a respected
leader in the organization. Th ere was still some tension between Larry and
Captain Bob, but Larry remembered the discussion on resistance to change
he had learned about during the Lean Sigma session at Joe’s factory.
Th e instructor at the session explained that resistance to change is a
natural human reaction to change, and should be expected. Often peo-
ple are afraid of the “unknowns” that change can bring. People may not
express their fear, but it will manifest itself in resistance. Deep down, even
subconsciously, they may fear not being the expert, not being able to learn
the new skill or method, having to learn something new, or the sense of
loss of security due to not knowing the system. Resistance was actually a
sign that real progress is being made!
Larry reviewed the managing change graph (shown below) he
received at the training session regarding managing change, and thought
to himself, “I must be doing something right, hitting a nerve somewhere,
if people are starting to resist.”
Managing change time plot.Source: Ptacek, Coats, and Ptacek (2012).
(2) Denialand refusal
(5) Learning(6) Realization
(7) Integration
(1) Shockand surprise
Current state Time
Per
ceiv
ed c
ompe
tenc
e
Future state
(4) Emotional acceptance
(3) Rationalunderstanding
KEY ENABLERS 51
Th e 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 eff ort. Other strategies to deal with resistance
are as follows:
• Recognize that the root of resistance is based in a fear of
something and is a natural human response.
• Answer the leading change questions: why do we need
to change, what to change to, and how to do it together.
Communicate this message often and consistently.
• Be honest and truthful. Do not guarantee anything except
more need for change and improvement.
• Look for subtle change resistant behaviors and address them
quickly.
• Help people understand why change is needed and to settle
their fears.
(Source: Ptacek, R. & Motwani, J. (2011). Th e Lean Six Sigma Pocket
Guide XL—Combining the Best of Both Worlds Together to Eliminate Waste!
Chelsea, MI: MCS Media, Inc.)
With the managing change plan set, Larry led a series of sessions with
his leadership team. Th ey established their mission, vision, and goals.
Th ey reviewed the company value statement, and recommitted to holding
each other accountable to these standards. Th e leadership team discussed
a plan for daily work team sessions or “huddles” in each area to discuss the
day’s activities and key issues. Th e leadership team prepared to meet with
their respective teams to roll out the strategic goals, and defi ne Key Per-
formance Indicators (KPIs) and develop a system to monitor and improve
their results. Th e 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.” Th e next step was for Larry to share with the area teams the
results and notes from Joe’s waste walk that was still etched on his white
board. Th is represented the current state, which was fi lled with waste.
Larry thought he’d ask Joe to attend these sessions as he thought there
could be some rough sailing and resistance!
Chapter 5—Discussion Questions
1. Discuss briefl y the key enablers for Lean Sigma success. Why is it
important for every organization to know these enablers prior to
Lean Sigma implementation?
2. What role do top leaders play in the success of Lean Sigma imple-
mentation? If you were Larry, what steps would you take to ensure
success?
3. Why is it important not only to focus on the bottom line results
but also on “how” the gains are being achieved? Does your organi-
zation have the same focus? Why or why not?
4. Why is it critical to have a total system or value stream focus?
What are the typical mistakes organizations make when they
don’t have this focus?
5. What do you mean by the term “policy deployment?” Why did
Joe tell Larry that this enabler was solely missing in his organiza-
tion? How did Larry go about fi xing it?
6. Discuss some of the strategies to overcome resistance to change.
What strategies does your organization incorporate to combat
resistance?
7. Critically evaluate the process used by Larry to get his leadership
team on board.
CHAPTER 6
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 you’re getting better?”
Larry looked puzzled. “Well I thought it’d be obvious. Won’t our
KPIs tell us?” Larry replied.
“Th ey 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
profi t?”
Larry replied, “Well, for profi t 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:
• Advertising and promotions that attract customers
• Satisfi ed and repeat customers/passengers
• Referrals from past customers/passengers
“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
we call a ‘Critical To Quality’ (CTQ) diagram.” He sketched the follow-
ing diagram on the white board.
Reducelabor costs
Reducematerials costs
Eliminate andreduce the 12wastes
Continuousimprovementin speed andefficiency
Provide thesame level ofservice withfewer people
Provideimprovedservice andcustomerexperience withthe samepeople
Provideimprovedservice andcustomerexperiencewith thesame materials
Eliminate andreduce the 12wastes
Consume lessfor the sameservice levels
Reducematerials coststhroughnegotiations
Provide thesame level ofservice withfewer materials
Reduceoperating costs
Eliminate andreduce the 12wastes
Continuousimprovementin speed andefficiency
Provide thesame level ofservice withfewer operatingexpenses
Provideimprovedservice andcustomerexperience withthe sameoperatingexpenses
Salespromotions and
advertisingIncrease repeat
customersIncrease
referrals by pastcustomers
Pleasant people
Ship amenitiesand options
Problemsresolved quicklyand to thecustomersexpectationand delight
Enjoyableexperience inall areas
Superior valuefor experiences
Easy of booking
No hassles orproblems
Problemsresolved quicklyand to thecustomersexpectationand delight
Pleasant people
Ship amenitiesand options
Incentive forreferral
Incentive toreturn
Enjoyableexperience inall areas
Superior valuefor experiences
Easy of booking
No hassles orproblems
Increase sales Reduce costs
Increase EBITA and ROI (Organization Survival)
Joe further explained that certain lower level activities and work lead
to improving the KPI’s results at higher levels, and that this connection
defi nes a process of Policy Deployment that puts action to the plan. Th is
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
“Let’s 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.
Th ey 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. Th e goal was to establish a pilot
area for fast track improvement and to provide guidance to the rest of
the group.
Joe said, “Initially, we want to spend our time and positive energy on
someone who wants to move forward.”
Larry was skeptical about this. “Don’t 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, “Let’s 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’ don’t get all the attention anymore.
Th e ‘fence sitters’ will then jump on-board and the momentum will drive
the improvement process forward. Th e ‘nay-sayers’ will realize they’re
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. Th e squeaky wheel shouldn’t always get the grease!”
At the current state work sessions Larry explained the current business
environment to the team. Larry didn’t pull any punches. He told them
the brutal truth; if they didn’t 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. Th ey all felt they were doing their
best. Larry mentioned that he was not dissatisfi ed with any of the team’s
performance, but that the organization as a whole just wasn’t “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.
When Larry 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. Th e leadership team heard comments
such as:
• Th at’s not fair! How else are we to do it?
• We don’t have the time to do it diff erently.
• Do you know a better way?
• Joe doesn’t understand our business—He’s in manufacturing!
• Th ings have to be done this way.
• Th at’s the way we’ve always done it, what’s wrong with that?
Larry explained that the idea isn’t to blame or point fi ngers, 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.’ I’d like to move ahead with an improvement project
with your help and Joe’s if that’s okay.”
Larry considered her idea for a minute or two, remembering
Joe’s pilot idea, and then said, “Sounds good. We’ll support you any
way we can. I’m sure Joe will help out when he can. What are you
thinking?”
Sue responded, “I want to do a customer survey and fi nd out what
the customers think we need to do to get better. Satisfi ed customers equal
happy customers, don’t you think?”
“Absolutely!” Larry said excitedly. “Conduct your survey and
let me know how I can help. Let’s get back to our discussion on
improvements.”
ANALYSIS OF THE CURRENT STATE 57
Area Increase sales Reduce costsNavigation Smooth seas, safe passage,
on time to ports, connection with passengers
Reduced overtime, less fuel, less breakdowns
Guest services Expectations met, room acceptable and as described or better, activities as described or better, reasonable on-board costs
Reduced overtime, less materials costs
Entertainment Exciting and fun, reasonable costs, connection between performers and passengers, fresh acts
Reduced costs for acts and materials
Gaming Exciting and fun, easy/no hassles, increase passenger success
Reduced overtime, increased stake, reduced passenger winnings
Housekeeping Clean rooms, relationships with passengers, all needs meet, quick response to inquiries and needs
Reduced overtime, reduced materials and supplies
Medical Help everyone fast, no sea sickness—smooth seas!
Reduced overtime, reduced materials and supplies
Food services Offerings, friendliness, entertainment during service
Reduced overtime, reduced materials and supplies, reduced wastes
Retail sales No stock outs, reasonable prices Reduced overtime, reduced materials and supplies, reduced wastes
Security No problems, safe voyage Reduced overtime, reduced materials and supplies, reduced wastes
Adventures and event planning
Exciting options, fair prices, no delays on popular items
Reduced over time, reduced materials and supplies, reduced wastes
Operations and maintenance
No problems or breakdowns, fast responses to passenger needs and requests
Reduced overtime, reduced materials and supplies, reduced wastes
Purchasing and logistics (supply chain)
No stock outs, reasonable prices Reduced overtime, reduced materials and supplies, reduced wastes
Human resources and training
Support all employees, knowledgeable of staff, passenger questions answered quickly and accurately, customer service orientation classes
Reduced overtime, reduced materials and supplies, reduced wastes
Administration—Accounting
No billing problems, smooth, accurate, and hassle-free currency exchanges, no credit defaults, pay checks on time and accurately, profi table
Reduced overtime, reduced materials and supplies, reduced wastes
58 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
When the session reconvened, Larry asked the area leaders how
they could aff ect the CTQ factors illustrated in the CTQ diagram. Th e
following table summarizes the discussion on how each area could aff ect
the overall high-level objectives.
Th e next activity for the team leaders was to defi ne 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 identifi ed for the organization. Th is would ensure
that their policy deployment eff orts would be consistent and aligned to
the strategic plan and goals.
Th e 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. Th e results of the work
sessions are defi ned 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. Th e responses she received were
eye-opening and proved to be quite useful.
A Th e room is cold and drafty 28
B A lot of tables not cleared—Looks bad 48
C No sweetener at the table 15
D Waited too long to be seated 78
E Buff et table is poorly organized 68
F Place settings are missing items 15
G Not enough window seats 11
H Drink refi lls took a long time 18
Total: 281
Sue took this data and put together a Pareto chart, as Larry had shown in
one of their work sessions. Th is visually showed the results of the survey
and highlighted which responses represented 80% of the problems.
Oce
an T
reas
ure
Cru
ise
Lin
e H
igh-
Lev
el K
ey M
easu
res
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
Sale
s re
venu
e (i
ncre
ase
sale
s)
Sale
s fro
m
show
sR
even
ue
from
ga
min
g
Rev
enue
fr
om re
tail
sale
s
Rev
enue
fr
om
adve
n-tu
res a
nd
even
ts
Profi
t
Ret
urn
on
inve
st-
men
t
EBIT
A
Perf
or-
man
ce to
bu
dget
(r
educ
e co
sts)
Fuel
cos
ts
per
naut
ical
m
ile
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Food
cos
ts
to b
udge
tW
hole
sale
co
sts t
o bu
dget
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Tota
l sp
endi
ng
to b
udge
t
Supp
ly,
trai
ning
, an
d re
crui
ting
co
sts t
o bu
dget
Supp
ly
cost
s to
budg
et
(Con
tinue
d)
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 focus
Cus
tom
er
sati
sfac
-ti
on
surv
ey
resp
onse
ra
te
Res
pons
e ra
te
Cus
tom
er
sati
sfac
-ti
on
surv
ey
scor
es
Pass
enge
r co
ntac
t ho
urs
Surv
ey
scor
esPa
ssen
ger
cont
act
hour
s
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
es
New
of
feri
ngs
per
quar
ter
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
Secu
rity
vi
sibi
lity
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
(Con
tinue
d)
Productivity focus
Sale
s re
venu
e pe
r em
ploy
ee
Num
ber
of c
rew
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Sale
s re
venu
e pe
r op
erat
ing
cost
s
Nau
tica
l m
iles
saile
d
Pass
enge
rs
serv
edSh
ows
deliv
ered
Roo
ms
serv
edPa
tien
ts
serv
edM
eals
se
rved
Serv
ice
calls
mad
eB
ooki
ngs
mad
eU
n-pl
anne
d br
eak-
dow
ns
Tota
l sp
end
Empl
oyee
tr
aini
ng
hour
s
Wai
t ti
mes
for
serv
ice
Roo
ms
com
plet
e by
noo
n
Wai
t ti
mes
for
serv
ice
Wai
t ti
mes
for
serv
ice
Quality focus
Cus
tom
er
com
-pl
aint
s
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
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rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Rep
eat
visi
tsR
epor
t-ab
le
crim
es
Perc
ent
fi ll r
ate
Delivery focus
Com
mit
-m
ents
m
et p
er
sche
dule
or
pla
n
On
tim
e to
por
tsO
n ti
me
to sc
hed-
ule
Hou
rs o
f op
erat
ion
Hou
rs o
f op
erat
ion
Hou
rs o
f op
erat
ion
Hou
rs o
f op
erat
ion
Hou
rs o
f op
erat
ion
On
tim
e to
sche
d-ul
e
On
tim
e to
sche
d-ul
e
Stoc
k ou
ts
from
all
area
s
On-
tim
e pa
ymen
ts
Stoc
k ou
ts
(Con
tinue
d)
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
People focus
Abs
ente
e-is
m/
illne
sses
pe
r day
xx
xx
xx
xx
xx
xx
xx
Inju
ries
xx
xx
xx
xx
xx
xx
xx
Trai
ning
ho
urs
xx
xx
xx
xx
xx
xx
xx
Inte
rnal
pr
omo-
tion
s
(Con
tinue
d)
ANALYSIS OF THE CURRENT STATE 63
Th e 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! Th e Pareto chart
is perfect. Now we need to plan out some next steps to take following
the Defi ne–Measure–Analyze–Improve–Control (DMAIC) approach.
We just so happen to be covering that information today. After the
meeting let’s talk some more to make sure you’re 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 signifi cant positive impact for the area’s 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
0D E B A H F C G
78Series1 68 48 28 18 15 15 11
10
20
30
40
50
60
70
80
32%
60% 78%
88%92% 95% 99% 100%
64 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
plans or countermeasures. Larry summarized his approach with the
following chart:
High-level Lean Sigma service journey steps
Lean Sigma service project launch(es)
Project selection based on current state and KPI analysis
Project team(s) learn and use the DMAICimprovement process to implement improvements.
One or multiple teams and projects depending on resources
1. Project teams define the project parameters2. Project teams measure process variables3. Project teams analyze process variable data4. Project teams implement improvements using the Plan-Do-Check-Act (PDCA) improvement tool. 1. PDCA 1 2. PDCA 2 3. … 4. … 5. … 6. PDCA (n)5. Project teams establish control processes to ensure the improvements are maintained.
Establish and monitor keyorganizational performancemeasures. Take corrective,preventative, andimprovement actions asneeded by assigning DMAICproject teams.
Conduct current state and key performance indicator (KPI) analysis
Source: Modifi ed 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.
Th e Lean Sigma fl ow diagram indicated that an initial Lean Sigma KPI
analysis would be required to document their current state situation. Th e
team felt this was a good idea and agreed to get moving on this eff ort.
Th ree 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. “You’re a natural Larry, or did you
just get lucky?” Joe teased.
“Th is 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 that’s 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
Sue told Larry and Joe her story so far…..
She had already formed a team and they had worked on problem
and target statements. Th e problem they identifi ed was customers waited
too long to be seated. Th e current situation is 78 of 281 customer survey
responses, that is 32%, indicate waiting to be seated is an issue. Th e team
thought the expectation might be customers should not have to wait at
all. Th ey developed their target statement to read:
Reduce customer “waited too long to be seated” survey results
from 78 to 39 by March 1, this year and then to zero by April 30.
Th is seemed unreasonable to a few on the team. “What about busy
times? Th ere’s no way we can make sure customers don’t wait at all!
We can never reduce survey results to zero.” Th e team fi nally realized,
with Sue’s help, they needed to put some parameters on a measure
for “waited too long to be seated.” After some lively discussion, the
team decided progress would be measured by reducing the percentage
of customers each day who have to wait in excess of 30 seconds to
be seated.
Someone on the team wondered how they could possibly time this
and do it consistently. A team member asked, “When does the wait time
start? When they get to the hostess stand? When they walk through the
door? When?”
Another person chimed in “When does it end? Do we stop the watch
when they are actually seated? Or should it be when the hostess asks the
customer to follow her to the table?”
Another member of the team asked “How will we actually time this?
With a stopwatch? Give the customer one of those lighted things like you
get at fancy restaurants?”
Th e team worked on answering these questions and fi nally came up
with an operational defi nition for “waiting too long to be seated,” and a
simple way to collect data. Th e data collection began the next day.
After 3 weeks of data collection, the team put the results into a table
and generated a run graph, again with some direction from Sue. Of
course Sue learned this from Larry after one of their work sessions. Th e
run graph for percentage of customers waiting in excess of 30 seconds by
day looked like this:
66 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Week 1
9
10
8
8
7
5
4
9
8
7
8
6
5
4
8
9
7
7
6
4
3
Monday
Tuesday
Wed.
Thurs.
Friday
Sat.
Sun.
Week 2 Week 3
0%M T WTH F S S M T WTH F S S M T WTH F S S
2%
4%
6%
8%
10%
12%
Th e team also collected data on other variables they thought might pro-
vide insight as to why and when waiting was occurring. Th ey looked at
the times during lunch when waiting occurred, the number of customers
waiting and the reason customers were waiting.
Time of afternoon and no. of customers waiting for a table:
10:30 = 14 11:00 = 52
11:30 = 139 12:00 = 185
12:30 = 118 1:00 = 83
1:30 = 27 2:00 = 17
Of course the team had learned to put the information in graphical
format to allow them to “see” what it was telling them. Not surprisingly,
most of the waiting took place during the busiest hour of the day. Th e top
reasons for waiting seem to be either most people had a seating preference
near a window, or a table was not available, or both.
010:30 11:00 11:30 12:00 12:30 1:00 1:30 2:00
20
40
60
80
100
120
140
160
180
200
No. of customers waiting by time of day
ANALYSIS OF THE CURRENT STATE 67
Th e 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.
Th ey’re just rude.”
Sue quickly asked “Do you have data to support that?”
“No. I just know. It’s obvious,” retorted the team member.
Sue reminded the team to collect data to verify their hypothesis. Th e
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.
Th e 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 “I’m working as fast as I can during the lunch rush. I
think all the bus boys are working really hard! It’s not our fault.”
Sue said “Th is is not about blame. We need to look at the process.
What’s 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 fl ow is all
about. An analysis using a ‘Cause-and-Eff ect’ diagram would be useful as
well. What do you think?” Th e team all agreed these were good next steps.
Th e team constructed the cause-and-eff ect diagram to determine if
any root causes popped out.
People
We don’t workas a team
Not enough bus boysat busy times
Don’t clear dishes untilpeople leave tableHostess can’t clear
tables whenfree
Best way not documented
Staff not trained inbest approach
Lack of training
Not enough buscarts
Tables are tooclose together
Takes too long totake dishes to kitchen
Wait staff don’t helpclear tables High turnover
Policy
Dirty tables take toolong to be cleaned
and prepped
ProceduresPhysicalenvironment
After looking at the fl ow of work on the fl oor layout and brainstorming
using the fi shbone 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. Th e group also felt they were not working as well as they could
as a team.
Th e team then brainstormed some improvement ideas. Th e list of
possible countermeasures included the following:
• Schedule more people during busy times to clear tables
• Buy more bus carts that are bigger
• Build a dirty dish holding station near the center of the
seating area
• Have hostess clear tables when possible
• Have waitress help to clear tables
• Have bus person move quickly between kitchen and tables
• Fill the section closest to the kitchen as much as possible
Out of this list, the team decided to conduct PDCA experiments with
two ideas fi rst. Th e goal was to try out an idea quickly and cheaply to get
some data to verify if they were on the right track. Th e 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. Th ey quickly put together and set up a temporary station.
Th e 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. Th is 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. Th ey 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 fi rst goal. Th e results excited everyone on the team.
Sue asked the team “What did you learn following this process?” She
wrote their responses on the team fl ip chart:
ANALYSIS OF THE CURRENT STATE 69
• Did not expect such a simple solution to have such a dramatic
impact
• Exploring all ideas and agreeing on what to do helped us
work more as a team
• Th e storyboard helped to guide us through the process and
identify true root cause
• It is fun to measure and see success
• Our tips seem to have gone up due to better service and
turning tables more often
• Maybe we should track this in the future to link
improvements to earnings
0%M T WTH F S S M T WTH F S S M T WTH F S S
2%
4%
6%
8%
10%
12%
% of customers waiting more than 30 seconds
0
78 68 48 28 18 15 15 11
11 42 5 24 9 5 8 6
D E B A H F C G
10
20
30
40
50
60
70
80
90
No.
of c
usto
mer
vot
es o
n su
rvey
Series1
Series2
70 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
“So what’s next?” asked Sue. Th e team quickly responded:
• “We need to replace the temporary holding station with
a permanent one. We will use labeling and other visual
techniques to organize the station. Make it look nice so
customers don’t view it as an eye sore.”
• “We need to have daily huddles to review progress and look
for additional improvement opportunities. Th is way we can
accomplish our ultimate goal of zero complaints.”
“Wow! Th at is a great success story Sue!” exclaimed Joe.
“Well done,” Larry also recognized her success. “Sue, you did a fan-
tastic job. You have got to share this with the other team leaders so they
can see what’s possible.”
Sue was a little unsure about standing in front of her peers to tell the
story. She said “How about I have the team share what they did using the
storyboard we created?”
“Even better yet,” said Larry.
Joe whole-heartedly agreed.
Chapter 6—Discussion Questions
1. Larry seemed very puzzled when Joe asked him about the KPIs.
Do you think the cruise line had the right measurement system
in place? If you were Larry, what else would you have measured?
2. What is a “Critical to Quality” (CTQ) diagram? How can Larry
benefi t from this diagram? Why did Joe insist that Larry fi nd a
team leader who was energetic about the new approach?
3. Critically evaluate the stance/approach that Larry took at the cur-
rent state work sessions.
4. Do you think Larry and his team have identifi ed the right
approach and process on how each area in the cruise line could
achieve the overall high level objectives? Explain.
5. Do you think Larry and the team have done a good job in
identifying and aligning KPIs and the goals? What would you
(Continued )
ANALYSIS OF THE CURRENT STATE 71
have done diff erently, if you were Larry? Do you think it is feasi-
ble for Larry and the team to implement these measures?
6. Critically evaluate Sue and her team’s eff orts in implementing
Lean Sigma in her area. What can other area leaders learn from
her?
7. Why is it important to identify and focus on the right KPIs?
What lessons can your organization learn from the approach used
in this chapter?
CHAPTER 7
Application of Lean Sigma Tools and Results
Standardized objectives and agendas were set by Larry and Joe to facilitate
the fi rst Lean Sigma work sessions in each area. Sue’s progress continually
showed the way for the other teams. Th e objective of the fi rst area team
work session is to provide a brief update on the business conditions and
competitive realities, to provide a brief overview of Lean Sigma for service
industries, and to review the project objectives initiated by Larry.
Initial Area Team Work Session Objective Standard Agenda
1. Provide a brief review of the business conditions and competitive
realities
2. Provide a brief overview of Lean Sigma for service organizations
3. Review the project objectives initiated by the area leader and Larry
4. Begin developing the team objectives to support Larry’s initiatives
5. Establish the path forward, expectations, and the next steps for the
area teams
Th e Lean Sigma overview is to be provided by the area leaders. By
doing this, the area leaders will have to study the Lean Sigma material a
bit more and be prepared to teach their teams about Lean Sigma methods
and tools. A brief written statement from Larry regarding the business
update and competitive realities will be provided to the area leaders to
be used as a training aid. Th is training eff ort supported the employee
training and engagement enabler as well.
Th e work sessions went well and, for the most part, the teams under-
stood the common objectives of the Lean Sigma projects and journey.
Some of the area leaders struggled a bit with the training portion of the
session, so Larry helped where he needed to. Most employees could see
74 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
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. Th e Team Charter elements listed below were thought to be com-
mon for all teams. Th ey used Sue’s team’s initial success as a guide.
Area Team Charter Commonalities
1. Mission or Purpose of the Project: Since this is the initial or launch
project for each area, the primary purpose is to establish key measures
and implement some key improvements using the Lean Sigma tools. A
secondary purpose is to learn and use Lean Sigma methods and tools.
2. Deliverables or Expected Outcomes: Expected outcomes are
(a) measurable improvements in every area and (b) practice and learn
using Lean Sigma methods and tools.
3. Benefi ts of Expected Outcomes: Benefi ts are as follows: (a) We will
begin the Lean Sigma Transformation Journey, which can revitalize
our business. (b) Our work should become easier to perform.
(c) Our guests and customers will have an improved and pleasurable
experience which can lead to repeat business.
4. Expected Approach and Activities: Each area team will use the
Lean Sigma DMAIC process to initiate and manage their projects,
as Sue’s pilot team had.
5. Time Frame—(Start date, end date, and major milestone target
dates): Project will be ongoing for the next 6 months, with monthly
report-out sessions with Larry.
Th e area teams spent additional time discussing specifi c wastes iden-
tifi ed 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. Th e 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.
Oce
an T
reas
ure
Cru
ise
Lin
e H
igh-
Lev
el K
ey M
easu
res
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
Sale
s re
venu
e (i
ncre
ase
sale
s)
Sale
s fro
m
show
sR
even
ue
from
ga
min
g
Rev
enue
fr
om re
tail
sale
s
Rev
enue
fr
om
adve
n-tu
res a
nd
even
ts
Profi
t
Ret
urn
on
inve
st-
men
t
EBIT
A
Perf
or-
man
ce to
bu
dget
(r
educ
e co
sts)
Fuel
cos
ts
per
naut
ical
m
ile
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Food
cos
ts
to b
udge
tW
hole
sale
co
sts t
o bu
dget
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Supp
ly
cost
s to
budg
et
Tota
l sp
endi
ng
to b
udge
t
Supp
ly,
trai
ning
, an
d re
crui
ting
co
sts t
o bu
dget
Supp
ly
cost
s to
budg
et
(Con
tinue
d)
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 focus
Cus
tom
er
sati
sfac
-ti
on
surv
ey
resp
onse
ra
te
Res
pons
e ra
te
Cus
tom
er
sati
sfac
-ti
on
surv
ey
scor
es
Pass
enge
r co
ntac
t ho
urs
Surv
ey
scor
esPa
ssen
ger
cont
act
hour
s
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
esSu
rvey
sc
ores
Surv
ey
scor
es
New
of
feri
ngs
per
quar
ter
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
Secu
rity
vi
sibi
lity
New
of
feri
ngs
deve
lope
d an
d pa
r-ti
cipa
tion
ra
tes
(Con
tinue
d)
Productivity focus
Sale
s re
venu
e pe
r em
ploy
ee
Num
ber
of c
rew
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Num
ber
of te
am
mem
bers
Sale
s re
venu
e pe
r op
erat
ing
cost
s
Nau
tica
l m
iles
saile
d
Pass
enge
rs
serv
edSh
ows
deliv
ered
Roo
ms
serv
edPa
tien
ts
serv
edM
eals
se
rved
Serv
ice
calls
mad
eB
ooki
ngs
mad
eU
n-pl
anne
d br
eak-
dow
ns
Tota
l sp
end
Empl
oyee
tr
aini
ng
hour
s
Wai
t ti
mes
for
serv
ice
Roo
ms
com
plet
e by
noo
n
Wai
t ti
mes
for
serv
ice
Wai
t ti
mes
for
serv
ice
Quality focus
Cus
tom
er
com
-pl
aint
s
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
rea
Ass
igna
ble
com
plai
nts
to a
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Guest services
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APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 79
Larry then asked Sue’s 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. Th e following table outlines the critical few KPIs selected
Monthly Highlights ReportSection 1
What are 3–5 key accomplishments or problems solved in the last 4 weeks?
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 specifi c.
Section 4
What are 3–5 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?
Source: Ptacek, Coats, and Ptacek (2012).
80 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
(highlighted light gray), and some secondary KPIs (highlighted dark gray)
as identifi ed by the area leaders.
Th e 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 eff ectively document what
was discussed during the meeting.
Meeting or Work Session Leading is the process of presiding over,
running, or facilitating a meeting to maintain focus and eff ectiveness.
It involves establishing an agenda, identifying the necessary people to
attend, scheduling a time and location, facilitating the meeting, and
communicating the meeting action items and minutes.
It is wise to use a standard meeting agenda format to help you plan
and stay on track during a meeting. Th e Work Session Record should
be initiated prior to the meeting and include updates and status of
actions items, if appropriate. Th e teams used the Work Session Record
below as a standardized guide to follow as a work session is scheduled
and conducted.
Th e following checklists will assist the work session leaders to pre-
pare and lead eff ective meetings.
Work Session (Meeting) Prep Checklist
1. Make sure the meeting is needed.
2. Specify and limit who should attend.
3. Distribute an agenda before the meeting, unless it’s not appropriate.
4. Tell participants what preparation is expected.
5. Set an appropriate time.
6. Get started on time and keep to the schedule.
(Continued)
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 81
Work Session Record
Instructions: Use this page and the back to record work session occurrence. Make copies of this form and have the scribe take notes on each topic discussed. Copy the completed page(s) and distribute the completed form at the end of the work session.
Session Number: Date: Location: Project Name: Session Time:
Attendance Agenda
1.
2.
3.
4.
5.
6.
7.
Action and Agreement Register**Provide a brief summary of topics, discussions, agreements, or conclusions on back side if more space is needed.
Description Who When
1.
2.
3.
4.
5.
6.
Future File/Parking Lot Meeting Review
1. + −
2.
3.
4.
5.
Next Work Session:
Date: Time: Location:
Recorder/Scribe:
(Continued)
82 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
7. Try not to allow interruptions.
8. Avoid hidden agendas.
Work Session (Meeting) Leading and Facilitation Checklist
1. Be prepared with information, copies, and so forth.
2. Welcome participants and call the session to order.
3. Restate the objective of the work session.
4. Ask for questions.
5. Explain how the session outcomes will be recorded and tracked.
6. Keep to the schedule. Ask permission to go over your scheduled
ending time.
7. Invite those who haven’t spoken to contribute.
8. Gain closure on each issue as you sense a consensus.
9. Document decisions, deadlines, action items, and responsibilities.
10. Summarize the outcomes.
11. Communicate next steps.
12. Distribute the minutes within one business day after the meeting.
Key Points for Work Session (Meeting) Leading
• Make sure a work session is needed to accomplish the task
or objective.
• Establish clear and objective outcomes for the work session.
• Set the agenda, start and stop times, and attendee list.
• Start and stop the work session on time. Facilitate
the agenda to stay on track and allow everyone to
participate. If the session is going to run long, ask for
permission from the attendees to continue after the
proposed end time.
• When the objectives have been met, or the session time
is up, summarize the agreements, action items, the next
steps, and then adjourn the session on time. If appropriate,
document and distribute work session minutes.
Source: Fleming and Ptacek.
(Continued)
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 83
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. Sue’s story was inspiring
and each team kicked into high gear and started their work. Th ey 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 “Plan–Do–Check–Act”
(PDCA) experiments. Each experiment was documented and veri-
fi ed 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.
Th e 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.
Navigation—Captain and Crew
Th e vital few KPIs for the Captain and Crew were customer complaints,
and on time to ports. In their analysis, the team found that many of the
customer complaints were due to rough seas, something the crew had
little infl uence over. Th ey also found that their on time to port perfor-
mance was related to weather conditions as well. Th e team discussed what
they could do to improve these situations in spite of their lack of control
over the weather. Improvement ideas that were identifi ed centered around
improving communications and reaction to the weather conditions. Th e
team also agreed with waste walk observations that the helm looked a bit
disorganized, which caused a waste of motion and delay while crew mem-
bers searched for key items and information. Th is was made even worse
when bad weather quickly approached.
Th e team brainstormed for ideas to reduce these wastes and improve
the speed and accuracy of communicating information. Although the
captain was not sure his team needed this approach, he remembered his
84 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
time in the Navy when things were required to be better organized. Th e
team agreed to implement the 5Ss in their areas. Th ey sorted (S1) items
out and only kept what was needed. Th ey found many old, worn, and tat-
tered maps that were no longer in use. Th e captain had his crew sign these
and gave these to the sales team who would frame them and off er them for
sale as cruise mementos in the ship’s gift shops. Th e maps almost looked
like old treasure maps—a great new off ering for the retail sales team! Th e
captain’s 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. Th e fi nal step for
the team’s 5S was to determine a way to sustain (S5) the gains. Th e captain
off ered 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.
Th e purpose of this walk through was to connect with the passengers
and crew to communicate critical information about the voyage. Th e
crew later developed visual control boards in each area to streamline the
communication of information. Th is 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
captain’s walk through took an hour-and-a-half to two to complete,
depending on how long he would chat with the crew. Th e 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
the crew.
Th e 5S eff ort 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 didn’t
take long for others to follow the captain’s lead. Th e 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.
Before Improvements After Improvements
>4 complaints per voyage <2 complaints per voyage
90% on time to port 95% on time to port
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 85
Plus, 1½–2 hour captain walk through ~1 hour captain
walk through
Reduction in engine and equipment breakdowns
Guest Services—Bookings and Onboard Guest Services
Th e vital few KPIs for the Guest Services group were customer complaints
and survey response rates. For their analysis, the team collected data
on a check sheet to document the reasons for the complaints and then
constructed a Pareto chart for further analysis. Th e team found that the
top passenger complaints were waiting for services, not having a service
completed to their expectation/satisfaction, rough seas, being rushed, and
having to be on a specifi c schedule for activities. Th is was great informa-
tion and it had never been broken down like this. Th e team decided to
develop standard work practices for the regular breakdown, analysis, and
improvement planning/implementation for each complaint. Part of the
standard work would be to close the loop with the passenger and let them
know how their feedback has helped the cruise line improve. Th is stand-
ard process would be shared with each area of the organization, and area
teams would be accountable for closure.
Regarding the customer survey response rate, the team analyzed
and measured the current state process with a simple process map.
Th ey found that the current process was too passive in that the survey
was left in the guest rooms near the end of each voyage. It was left up to
the guest to complete the survey or not and it was typical that only the
most upset customers would complete the survey to complain. Th e sat-
isfi ed customer might not fi ll out the survey, or say anything at all. Th e
data suggested that only the most pleased or delighted customers and
the most upset customers completed the survey response forms. Worse
yet, the upset people completed the form at three times the rate of
the most pleased customers! Either there were three times more upset
customers or the survey method was not working. Th e team hoped for
the latter.
Th e improvement ideas were ways to make the survey data collec-
tion more active. Th e team brainstormed several ways to do this and
completed several diff erent PDCA cycles to test which improved method
86 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
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.
Th e 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.
Th e 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 offi ce. Th e improvement from the 5S process
allowed the team to better serve the customers quickly and effi ciently.
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. Th is
further sped the process of helping the guests, by allowing them to
fi nd the answers to their questions through visual communications.
Th is also served to reduce the amount of printing the group did in the
offi ce.
At the next report-out session, the Guest Services team reported the
following results.
Before Improvements After Improvements
>9 complaints per voyage <4 complaints per voyage
43% VOC response rate 80% VOC response rate
Plus, 4 minutes average wait time <2 minutes average wait time
Entertainment
Th e vital few KPIs for the Entertainment team were customer
complaints and passenger contact hours. Th ere were few complaints
for this team so the team focused on developing means to increase
their customer contact time. It had been previously identifi ed 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. Th e entertainers already provided some back stage passes so
they needed to come up with something fresh and exciting. Th e team
brainstormed ways to increase their passenger contact time and meet
the current schedules for performances and personal time. Th e per-
formers’ chief complaint was that to increase passenger contact time
would just increase the hours they needed to work. Th ey needed to get
creative. Th e idea is to contact more passengers with the same amount
of time committed.
Th e team decided to address this improvement opportunity in
a couple ways. Some of the acts were able to take their performances
out onto the diff erent decks of the ship to provide mini-impromptu
performances. Th ese 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-
nifi cant 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 win–win for
everyone.
Additionally, the team also performed a 5S event backstage in eff ort
to keep things better organized. Th ey included some simple visual con-
trols to indicate the location of the costumes for each act and scene. Th is
helped the team improve the fl ow between acts and scenes.
At the next report-out session, the Entertainment team reported the
following results.
Before Improvements After Improvements
>7 complaints per voyage <3 complaints per voyage
~30 customer contact ~50 customer contact
hours per day hours per day
Plus, Improved costume/scene change fl ow
Increased show attendance and sales!
88 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Gaming—Onboard casino
Th e 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. Th e
team conducted an analysis of the customer complaints and available sur-
vey data/measures. Th ey developed check sheets to organize the data and
then created Pareto charts to determine the most critical areas to address.
Th ey found that one of the primary complaints was having to wait in
line for money exchange or a table. Th e 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. Th e team decided to
conduct additional studies to determine when the waiting occurred and
how long people had to wait.
Th e team collected a participation count every hour for several cruises
of diff erent lengths. Th e data showed a pattern for certain days and times
of day, on diff erent cruise lengths, and destinations. From these patterns,
the team developed a better schedule for staffi ng based on projected
customer demand. Th is 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 fl ow smoother.
Th ey separated the lines by transaction size, which was found to cor-
relate with transaction time. Th ey also implemented a “roving cashier”
to handle smaller cash exchanges. Th is new standard process and
scheduling technique signifi cantly reduced the wait times for the
gaming team.
At the next report-out session, the Gaming team reported the follow-
ing results.
Before Improvements After Improvements
>9 complaints per voyage <3 complaints per voyage
“Meets Expectations” survey “Exceeds Expectations” survey
scores scores
Plus, Increasing overall customer spend and revenue!
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 89
Housekeeping—Maid Services and Laundry
Th e vital few KPIs for the Housekeeping team were customer complaints
and percentage of guest rooms serviced by 12 noon. Th e team’s analysis of
the measurements showed that the primary passenger complaint was due
to the rooms not being cleaned soon enough in the day. Th e team worked
on a planned schedule or route, but often was thrown of course as some
of the guests would be in their rooms until various times of the day. Th e
schedule was very hard to stick to. Additionally, the laundry area was slow
and sometimes the cleaning crew had to wait for clean linens and towels.
Th e team had to make improvements in a couple key areas. First, the team
brainstormed for a better way to plan the schedule around guest preferences
and behaviors. Th e team developed a signaling system or kanban so that
guests could signal when their rooms were available for cleaning. Th is was
not just a simple “do not disturb” sign, but a color coded tag which the
guest could signal when they would like their room cleaned. Th is simple
visual control kanban helped both the customer and the staff .
To address the laundry area, the team had to complete a more
detailed study to determine why there was a backlog occurring. Th e team
used check sheets and a standard work breakdown chart to document
and analyze the laundry area. Th e team’s investigation, data collection,
and analysis indicated that the laundry area was trying to serve the food
services group at precisely the same time when the housekeeping team’s
demand was highest. Both the food service group and the housekeeping
group had signifi cant laundry demands. Th e improvement team devel-
oped and implemented a heijunka, or paced laundry processing plan,
which enabled both the food services and the housekeeping groups to be
serviced simultaneously. Th e heijunka included visual control signals, or
kanbans, to pace the work through the area. Th e laundry area workers had
to produce to the visual signals and pace the work through for each group
needing services. Th is helped the housekeeping group reduce the waiting
time to service the guest rooms.
Th e laundry area was also able to reduce the total amount of water
used as they began to process more full loads, and fewer partial/rush order
loads. Th is reduced the overall operating costs and environmental wastes.
90 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
At the next report-out session, the Housekeeping team reported the
following results.
Before Improvements After Improvements
>37 complaints per voyage <14 complaints per voyage
76% of rooms cleaned by 97% of rooms cleaned by
12 noon 12 noon
Plus, Reduction in water usage in the laundry
Reduction in rush orders and crisis management
Medical—Onboard Medical Center
Th e vital few KPIs for the Medical team were customer complaints and
total hours of operation. Th e primary complaints were illnesses due to
sea sickness, something the team felt they had little infl uence over, and
their services not being available when needed. Th e team thought they
noticed a correlation between the number of complaints and the clinic’s
daily operating hours. Th ey constructed a scatter diagram to analyze the
improvement opportunities and issues. Th e two KPIs did show a positive
correlation: the more hours of operation, the fewer complaints there were
regarding service.
Th e teams brainstormed for ideas on how to provide improved hours
of operation. Th ey struggled with the ability to predict when people would
need them. Th ey already had an “on call” procedure in place but they still
saw the need to make improvements. Th e team looked at their current
scheduled hours of operation and concluded that there was too much of a
gap in services in the overnight hours. Th rough data collection and analy-
sis, the team found a pattern evident when guests needed services. Th ey
built their operating hours around the times and days when the demand
showed they were needed most. In off hours, the team used a heijunka
schedule which put someone in the medical center every hour at the top
of the hour. With this schedule, a guest would know exactly how long they
would have to wait or when they could expect to be seen immediately.
Th e new scheduling technique not only helped the guests, it also
helped the team as they modifi ed their work schedules to better fi t their
needs. Th rough the brainstorming, the team also addressed something
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 91
that, on the surface, they thought they had little control of—sea sickness.
Th e team ran some PDCA experiments regarding the proactive use and
availability of sea sickness medication and the most eff ective techniques
for administering the medication. Th ey established a mini-training ses-
sion and note card for each guest and made it clear how to get the help
they needed. Th ey 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.
Before Improvements After Improvements
>6 complaints per voyage <1 complaint per voyage
16 available hours per day 24 available hours per day
14 minutes average wait time <6 minutes average wait time
Plus, Proactive reduction in sea sickness incidents
Reduced use of the medical center
Reduced environmental impact and costs
Reduced inventory
Reduction in inappropriate social networking time
Food Services and Catering—Multiple Onboard Restaurants
Th e vital few KPIs for the Food Services team were customer com-
plaints and food costs to budget. Th e team compiled the complaint
data with a check sheet and developed a Pareto chart for analysis of
the guest complaints. Th ey found that the primary complaints for
food services were (a) having to wait for item and (b) running out
of an item—shortages. Th e team knew that in order to not run out
of an item they would have to carry more food item inventory on
board, but they understood that their other key objective was to keep
to budget. Th e team also knew about the tremendous waste of food
items on a cruise ship. Th e lavish and extravagant food displays were
something nearly everyone remembered and spoke about after their
cruise experience. Th e challenge for the team was to meet the guests’
92 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
high expectations but also to minimize wastes. Th ey did their best to
manage this every day.
Th e team decided to do some data collection and monitoring. Th ey
knew certain food items were more popular than the others, and they
knew that some food items were discarded more than others. Th ey 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. Th ey made the appropriate adjustments to their requisi-
tions and order quantities. Th e 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 buff ets,
the team was using a simple verbal communication system where the
servers would tell the chefs what items were running low. Th is method
was good but it did not consider the diff erent food preparation times in
the kitchens. Th e new kanban trigger system identifi ed three diff erent
levels of items based on preparation time. Th e longer the item took to
prepare, the more advanced notice the chiefs needed to ensure that no
one had to wait. Th e more experienced servers were already doing this,
but now the new servers were able to do the right thing sooner due to this
improvement.
Th is 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. Th is seemed to turn the wait into
something more interesting and enjoyable, and the complaints further
declined.
At the next report-out session, the Food Services team reported the
following results.
Before Improvements After Improvements
>22 complaints per voyage <9 complaints per voyage
15–20% over budget On or below budget for each voyage
Plus, Reductions in guest wait time
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 93
Reductions in guest wait time frustration
Reduction in crisis management in the kitchens—reduced stress
Retail Sales—Multiple Onboard Stores
Th e vital few KPIs for the Retail Sales team were customer complaints
and new off erings provided. Th e team compiled the complaint data with
a check sheet and constructed a Pareto chart to highlight the most signifi -
cant reasons for complaints. Th ey found that running out of hot selling
items was the primary complaint. Th e team was never sure how many
items would sell on any particular voyage, or what the “hot” item would
be. Th e team conducted a deeper analysis of the historical sales data by
voyage length and ports visited. Th e team also began to keep a log record-
ing each time they ran out of an item, what the item was, and how many
sales dollars were lost due to the shortage. Th is data was eye-opening and
the team began to submit purchase requisitions based on this data.
One of the most frequent shortages was determined to be in printed
tee shirts. Since the data was not conclusive on the exact printing of the
tee shirts, the team was uncertain what to do. After a brief brainstorming
session, they decided to develop a custom tee shirt printing capability.
With this mass customization concept, they could purchase blank tee
shirts and print to demand. Th is capability enabled the team to reduce
inventories and the waste of throwing outdated shirts away. Th is concept
allowed the team to off er an entirely new lineup of tee shirts and to cus-
tomize them to the customer’s requests. Th is was a hit with the customers
and tee shirt sales increased over 20 percent!
Th e team began tracking sales by item and posting the data to a “real-
time” online scorecard/spreadsheet. Now anyone who was interested in
how the day’s sales were going could simply look at the online scorecard.
In addition to the tee shirt breakthrough, the captain’s old maps were
selling well and this also showed on the scorecard. Th e area leader had an
idea to off er a reproduction of the old maps at a lower price point. Th e
original maps, considered higher value items, could then be off ered in
higher end boutiques on the deck of the ship. Th is move served to create
sales of the reproduced maps that were signed by the captain and crew,
just as the originals were.
94 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
To sustain the new products offered KPI, the team established
a standard practice to add three new items each month. It was a
challenge some months to come up with three new items, but the
team kept this as a goal and held themselves accountable for results.
The new process at least caused the team to review the product
offerings on a regular basis and to make appropriate corrective and
improvement actions.
At the next report-out session, the Sales team reported the following
results.
Before Improvements After Improvements
>17 complaints per voyage <6 complaints per voyage
3 items stock outs per voyage 0 item stock outs per voyage
Plus, Increasing sales revenue due to new products off ered
Reduced obsolete inventory and associated costs
Security—Onboard Police
Th e vital few KPIs for the Security team were customer complaints and
reportable onboard crimes. Th e security team’s Pareto chart of complaints
showed that the leading complaint is that there is never a security person
around when you need one. Th e team initially pushed back on this com-
plaint saying that there are security phones at many locations throughout
the ship. Regardless, the customer’s 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. Th e 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.
Th e data showed this clearly and was compelling. Th e team had to stop
this trend.
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. Th e team brainstormed and identi-
fi ed 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. Th is 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. Th is would inform
and assure guests that a security person was nearby and scheduled to be
present at specifi c 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. Th e 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. Th e 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. Th e 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.
Before Improvements After Improvements
>17 complaints per voyage <6 complaints per voyage
5 reportable crimes per voyage <3 reportable crimes per voyage
Plus, Greater visibility of security personnel
Improved effi ciency of security personnel
Fewer errors and false calls
Adventures and Event Planning
Th e vital few KPIs for the Adventures and Event Planning team were
customer complaints and participation rates. Th e team completed a
check sheet and Pareto chart of the historical customer complaint data
and determined that the primary complaints were adventure availability,
wait times to get to adventures, and the lack of understanding regarding
96 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
how to sign up for adventures. Th e 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. Th e
team also conducted extensive data gathering directly from adventure
participants in interviews conducted on adventure days. Th e team was
a bit surprised to fi nd that it was not hard to fi nd 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 staff ed or equipped to handle the
volume of adventurers all ready to go at about the same time. Th e 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. Th e scheduled boarding fl ow and signaling system elimi-
nated the line of people in the hallway and made the experience go more
smoothly for everyone. Th ey even established a VIP area for special
guests who were willing to pay for an advanced seating arrangement.
Th is is a form of mass customization to meet the needs of customers with
varying expectations.
Th e team went a step further and constructed an adventure demand
Pareto chart which detailed the demand for each adventure off ered
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
offi ces waiting for people to come to them to sign up. By taking
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 97
the adventures sign up to the passengers and improving the fl ow of
information the adventures team was able to increase overall participa-
tion levels and revenue.
At the next report-out session, the Adventures team reported the
following results.
Before Improvements After Improvements
>35 complaints per voyage <16 complaints per voyage
54% passenger participation 79% passenger participation
rates rates
Plus, Increased sales revenue due to increased passenger participation
Improved services from supporting vendors as participation rates
increased
Operations and Maintenance
Th e vital few KPIs for the Operation and Maintenance team were
customer complaints and unplanned breakdowns. Th e Operations and
Maintenance team had an idea what the biggest customer complaint was
before they did the Pareto chart. Th ey knew that customers did not like
it when certain parts of the ship were not available due to breakdown.
Breakdown in guest areas always got top priority. Even so, customers still
complained. Th e guests expected everything to be working all the time.
Imagine that! Th e team knew too well that customers did not like to wait
while regular cleanings and maintenance took place. After all, the passen-
gers were all on holiday, they didn’t want to be bothered with breakdowns
and faulty equipment.
Th e Pareto chart showed that the areas of biggest concern were the
operation of public rest rooms and ineffi cient air conditioning units in
guest quarters. Unplanned breakdowns and service calls caused chaos
in the operations and maintenance area. Some days they felt like they
accomplished nothing except urgent service calls. Th ey needed to do
something to prevent the service calls from occurring, but they had very
little time to work in advance, in a preventative mode, as they were so
busy with the crisis of the day.
98 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Th e 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. Th ese were prioritized, with the
aid of data from the Pareto charts on customer complaints and unplanned
breakdown. Th e team developed a regular schedule for preventative mainte-
nance on the critical equipment and facilities. Th ey also developed a critical
spares list and key tools to have on hand. Th ey 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. Th e key tool cart had
everything they could possibly need on it, and it was 5Sed so it was always
ready to go at a moment’s notice. Th is 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. Th e planned maintenance schedule,
which used to be driven by a computer schedule, now would be managed
with a simple fl ow—kanban and paced work standard work plan. Th e
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. Th is 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.
Before Improvements After Improvements
>4 complaints per voyage <2 complaints per voyage
5 unplanned breakdowns <1 unplanned breakdown
per voyage per voyage
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 99
Plus, Reduction in inventory of spare parts and supplies
Reduction in consumption of supplies leading to
operating cost reductions and environmental wastes
Less crisis management
Purchasing and Logistics (Supply Chain)
Th e vital few KPIs for the Purchasing and Logistics (Supply Chain) team
were customer complaints and stock outs in all areas. Th e team used a
Pareto chart analysis to better understand where the biggest stock-out
problems were coming from. Th ey developed a Pareto chart, fi rst by area
and then by the item they ran out of. Th ey discovered that the retail, food
services, and Operations and Maintenance areas had the most trouble
with stock outs. Almost all of the customer complaints assigned to
purchasing and logistics were either baggage handling issues or stock outs.
Th e team worked with each of the troubled areas to study the
demand cycles with Demand Analysis tools. Th ey then established and
implemented a fl ow kanban replenishment plan. Th e teams worked
jointly through several PDCA improvement cycles to determine the
proper signal size for each of the critical items.
Th e Purchasing and Logistics team also worked with the suppliers
to develop and support their own fl ow—kanban replenishment systems
to support the cruise line. Th is development of the upstream and down-
stream supply chain helped to reduce costs for everyone on the value
stream. It also reduced overall inventory by connecting replenishment to
actual consumption and sales. It took a while to work the bugs out but it
was well worth the eff ort.
Th e team also developed a new means of communicating the needs
to the supply base which used less printed materials and correspondence.
Th is reduced the overall use of supplies for the cruise line and the suppliers.
At the next report-out session, the Purchasing and Logistics team
reported the following results.
Before Improvements After Improvements
>6 complaints per voyage <1 complaint per voyage
32 stock outs per voyage 5 stock outs per voyage
100 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Plus, Improved on-time delivery from suppliers and vendors
Reduced inventories and associated costs
Reduced environmental impact due to better management of
deliveries
Human Resources and Training
Th e vital few KPIs for the Human Resources (HR) and Training team
are employee turnover, customer complaints, and employee training
hours. In previous analyses, it had been found that employee training
hours correlated to greater customer satisfaction. But the team decided
to verify this through data collection and a scatter diagram. Again, the
team found a positive correlation between training hours and customer
satisfaction. Th e Pareto chart of the customer complaints assigned
to HR was primarily due to how an employee handled a situation.
Not only was the customer disappointed in some feature or situation
on the voyage, but the person helping them further aggravated the
dissatisfaction.
Th e team developed a training curriculum that would address the
primary areas of customer complaints. Th e team found that not only
the hours of training mattered, but also what the training was on, and
how well it was put into application. With this data in hand, the team
designed several ways for employees to get the training they needed and to
be accountable to use it. Some of the training delivery methods explored
were (a) online sessions, (b) facilitated, (c) self-paced, (d) supervisor-lead
mini-training sessions at the start of a shift, (e) “lunch and learn” sessions
facilitated by content experts, and (f ) other more formal training classes
as people’s schedules allowed.
Th e HR team also developed a comprehensive training matrix to keep
track of the number of training hours people participated in. Th is helped
leaders to better understand where they were falling behind and what ses-
sions might be of greatest value. To display this data, the HR team devel-
oped an employee kiosk system where this information could be accessed
by all. At fi rst the information on the kiosk was overwhelming, but after
the team performed a 5S on the computer fi ling system the key training
documents were easier to fi nd.
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 101
At the next report-out session, the Human Resources team reported
the following results.
Before Improvements After Improvements
>9 complaints per voyage <4 complaints per voyage
~2% training time per person >9% training per person
Plus, Training eff ectiveness as determined
through customer surveys
Reduced spending for training
Administration and Accounting—Payroll and Accounting
Th e vital few KPIs for the Administration and Accounting team were cus-
tomer complaints and on-time payments. On-time payments related to
both employees and to external suppliers. Both groups had recently been
complaining of delays in payments. When the team completed a Pareto
analysis of the reasons for late payments, they found that their accounts
payable fl ow could not keep up with the increasing transactions due to
some of the supplier replenishment systems that had been put into place
by the purchasing group. For these instances, the team asked the purchas-
ing group to help negotiate diff erent terms of payment on kanban items.
Th e team also looked internally at why the accounts payable system took
too long.
Th ey mapped out the process fl ow and found a great deal of redun-
dancy and waste. Th ey were able to make some streamlining improve-
ments to improve overall fl ow of information through their area. Th e
biggest improvement was to establish standard work and a paced fl ow
process in the offi ce. Th is ensured that something hitting an accountant’s
in-basket today got dealt with in a standard or specifi ed period of time.
Nothing could slip through the cracks of the new paced fl ow kanban
system.
Other issues discovered by the team were those due to their slow pay-
ments: they were not taking advantage of supplier discounts. Th is was
fi xed quickly by the new fl ow methods and within a couple of weeks they
102 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
were taking advantage of the key discounts. Th e 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 fi les
were so cluttered and stored in so many ways that by simply standardi-
zing the rules for the team they could now fi nd things easier online, and
process payments quicker.
Many of the customer complaints were due to errors. Th e 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 fi ling system. People’s work got easier and they
were less prone to errors. Th ey also found the time to develop and
implement some mistake-proofi ng improvements for the most critical
errors. Th e 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.
Before Improvements After Improvements
>12 complaints per month <2 complaints per month
89% on-time payments 99% on-time payments
Plus, Better, more sustainable standard work practices
Ability to take advantage of supplier discounts for
prompt payment
Reduced environmental impact and cost due to
less printing and supplies
Th e 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 defi nitely on the decline and the
teams were starting to understand how to make improvements on their
own. Th ings were looking up. Due to the teams’ many sales-generating
and cost-saving ideas, the fi nancials 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 profi tability was
increasing! Th e 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
12 noon
15–20% 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 profi table Profi table
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 helpful—for the most part.
“So what are you going to do next, Larry?” asked Joe.
“Next?” Larry said quizzically, “Next we’re going to stay the course.
Th at’s what’s next.”
Joe replied, “Th at’s 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?”
“We’ve done a great job so far, what’s next?” asked Larry.
“I’ve seen many companies get complacent and back-slide after they
make some really good progress. To prevent a back-slide, keep moving
forward. Th ere is always a weakest link in a process, always more waste to
remove. I’d recommend you start over again once you think you’re 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.
“Th at’s the idea. Th at’s what we do. Th e Lean Sigma CI process is
never ending,” said Joe.
Chapter 7—Discussion Questions
1. Do you think it is a good idea to standardize the approach to
implementing Lean Sigma in the cruise line? Critically evaluate
the Area Team Charter Elements that were developed.
2. What do you think of the critical few KPIs selected and the sec-
ondary KPIs identifi ed by the area leaders? Do these KPIs address
all the critical areas? Do you think it is feasible to monitor all
these measures?
3. Compare and contrast the updates and accomplishments reported
by each of the areas. Do you think all the areas are on the right
track?
(Continued)
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 105
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. Th e cruise line has made signifi cant 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
Making Cultural Transitions
Larry and his teams had made great progress. Th ere had been many ups
and downs during the improvement initiatives, but overall the teams
were really making a positive impact. Th e teams were getting good
at identifying current state data, developing process fl ow and value
stream maps, and then creating future state PDCA experiments to
try to make improvements. However, there were still some areas that
Larry was wondering about. Namely, Larry was concerned about the
people side of the improvement initiatives. Some of the people side
issues Larry was concerned about were training to sustain the gains
and momentum, the discipline to stick to the standard work, and the
accountability.
In the early days of the transformation Joe had Larry work with his
area leaders to develop a current state culture assessment. To do this
Larry led a brainstorming session with his area leaders, and developed the
following current state culture diagram.
Th is map is in a cause and eff ect format and shows clearly the
problems and potential target improvement areas. Teams can use this
or similar methods to document their current culture and target areas
for improvement. With this completed, Larry thought it would be a
good idea to lead the team of area leaders through the future state
development to show what they wanted to become. Th ey called this the
Future State Culture and used it as a vision for them to achieve through
the continuous improvement (CI) eff orts. Th e following future state
culture map was developed by Larry’s area leads. Th ey all agreed to
try to live up to the vision. Th e implementation of the improvement
teams went a long way toward helping the teams achieve the future
state culture.
108 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Future stateculture
Methods
Machines
Mother nature
ManpowerHard workers Robust improvement methods being applied
Innovative new ways of thinking encouragedExciting new methodsCustomer focused methods
Old and outdated ship amenities
Everyone cleans up after themselvesMessy areas of the ship get cleaned up fastAll messy areas get cleaned up fastThe weather makes things messy all the time
Frequent breakdownsPoor maintenance
Not enough equipment for all customers
Updated materialsProactively get what we needCost reductions through continuous improvementsRarely stock outNot wasteful“Green”
Key measure clearly posted and fairGet positive and negative feedback from customersHear about problems and successes
Low turnoverHigh moralePerception that leaders careTeam workFun!
Materials
Measures
Joe had assisted Larry with this current state to future state culture
mapping process to help Larry’s area leaders understand where they
Current stateculture
Methods
Machines
Mother nature
ManpowerHard workers No improvements accepted
No innovationGoing through the motionsEmployee or cruise line focused methods
Old and outdated ship amenities
No one cleans up after themselvesMessy areas of the ship take a while to clean upSome messy areas never get cleaned upThe weather makes things messy all the time
Frequent breakdownsPoor maintenanceNot enough equipment for all customers
Old materialsMaking due with what we haveCost cutting leads to poor serviceWastefulFrequent stock outs leads to poor service
No measuresOnly negative feedback from customersOnly hear about problems
High turnoverLow moralePerception that leadership does not careFrustratedNo team workNo fun
Materials
Measures
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 diff erent than my folks at the
factory. Your people are constantly interacting with customers and I can
tell they’ve had some specifi c training regarding how to talk to customers,
so what is it?” Joe asked Larry.
Larry said, “Let’s go talk with our HR manager, Mary, she’s the one
who developed the program.” Th e two brothers took a walk to the HR
offi ces to meet with Mary.
At the HR offi ces Mary outlined their customer service train-
ing program. Mary explained, “I’ve studied the Disney training pro-
grams and had the opportunity to attend several courses at the highly
regarded Disney Institute. Th e Disney Institute is widely recognized
as a world leader in service training and development. I’m taking
a page from the Walt Disney Company where they call all of their
employees ‘cast members.’ A cast member has a diff erent meaning than
an employee. A cast member has to be able to play a role. Th e cast
member’s 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 fi ve key training classes. Every new employee
receives the following courses over their fi rst 6 weeks of being hired or
cast. Our programs are:
Basic Training Programs
• Orientation
• Lean Sigma Basics—Ptacek & Motwani
• Th e 7 Habits of Highly Eff ective People—Steven Covey
• Developing Customer Loyalty—Jeff rey Gitomer
• FISH! Philosophy—Stephen C. Lundin, PhD, Harry Paul,
John Christensen
110 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Th e orientation was not unlike any organization’s orientation train-
ing. Th is course introduced the new cast member to the organization and
covered the following topics:
• General orientation and facts about the cruise line
• Vision, mission, values
• Organization structure
• Key Performance Indicators (KPIs)
• Performance expectations
• Safety—Crew and passengers
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.
“Th e ‘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 Th ings First
4. Th ink Win/Win
5. Seek First to Understand, Th en to Be Understood
6. Synergize
7. Sharpen the Saw (Continue learning and teaching)
Th e objective of this training is to help people develop a success
habit for their personal and professional lives. Th ese habits are described
as ‘expected behaviors’ of cast members and are reviewed during their
performance appraisals.
Th e Developing Customer Loyalty training is used to help cast
members to help customers more eff ectively, no matter what the need.
Th is training teaches specifi c skills, tools, and techniques. Practice time
is provided in class so people can develop their skills. One of the key
concepts taught is that we want loyal customers who come back time
MAKING CULTURAL TRANSITIONS 111
and time again, and refer our cruise line to other people. One critical
technique taught in class is the 3Rs + 1. Th is technique teaches cast
members how to respond to customers who need help. When a customer
asks for assistance cast members are expected to:
• react to the situation and customer emotion with certain
phrases in a sincere manner;
• respond to the need in an appropriate manner to develop
customer loyalty—As they would want it responded to;
• resolve the issue to the customers satisfaction—How they
would want the situation resolved it they were the customer;
• +1 Do one extra thing for the customer that is not expected,
but welcomed.
Th is is a simple and powerful technique if done properly,” Mary
continued.
“We use the FISH! Philosophy video, which highlights the operations
and philosophy of the Pike’s Fish Market in Seattle, WA, to instill a sense
of service and fun in each cast member. Th e video illustrates the power of
four simple principles of customer service and dealing with people. Th e
FISH philosophies are as follows:
1. Play
2. Be Th ere
3. Make Th eir Day
4. Choose Your Attitude
Th e ‘Play’ principle shows people how to make work fun for the customer
and the worker. Several specifi c methods are developed during the train-
ing. Th e ‘Be Th ere’ principle helps employees connect with customers
and people in a more meaningful way. It helps people be more sincere
in their eff orts to help people. ‘Make Th eir 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. Th is fi ts 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. It’s our job to show up every day with a positive attitude of service
and enthusiasm, 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 diffi cult than others, but that’s what
we expect.’”
“Th e training doesn’t stop there,” Mary explained. “Every employee
continues to receive refresher training on these topics on a regular basis.
Th is supports the future state culture targets. It all fi ts together, and we’re
making such huge improvements in retention and customer feedback.”
After listening to Mary’s passion about this training, Joe asked Larry
and Mary if they would consider delivering some of this training at Joe’s
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.
Chapter 8—Discussion Questions
1. Critically evaluate the current state cultural assessment diagram
prepared by Larry and his team. Why do you think Larry has
undergone this exercise and what do you think he would like to
achieve from this process?
2. Critically evaluate the future state cultural assessment to indicate
what the cruise line would like to become. Assume you are an
area leader, why do you think it is important to know what the
future state should be? What steps would you take to achieve the
future state?
(Continued )
MAKING CULTURAL TRANSITIONS 113
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 Larry’s 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. Defi ne the 3R + 1 strategy. Don’t 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 diffi cult than others, but that’s what we expect.” What can
service leaders learn from this quote?
7. Th e 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
Achieving, Sustaining, and Celebrating Success
Larry had been working on the Lean Sigma improvements for nearly
2 years, and at their annual family picnic cornered Joe again. “Joe, we’ve
been doing this Lean Sigma thing for nearly 2 years now and have made
some great progress. We are actually growing now and becoming quite
profi table. But the teams are losing their enthusiasm and the whole thing
is starting to seem stale. Any hints on how to re-energize the teams?”
asked Larry.
“We always go back to the basics to recharge our teams. It’s important
to show your commitment. Remember the key enablers? Ask yourself
what, if anything, is missing?” Joe replied.
Key Enablers for Lean Sigma Success
1. Leadership establishing, communicating, and living up to the vision,
mission, and values
2. Resource commitment
3. Training and education
4. Process- and results-focused
5. Policy deployment and goal alignment
6. Total system or value stream focus
7. Employee involvement
8. Perseverance and commitment
(Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect Service—Using
a Practical Approach to Lean Six Sigma to Improve the Customer Experience
and Reduce Costs in Service Industries. Chelsea, MI: MCS Media, Inc.;
Ptacek, R. & Motwani, J. (2011). Th e Lean Six Sigma Pocket Guide XL—
Combining the Best of Both Worlds Together to Eliminate Waste! Chelsea, MI:
MCS Media, Inc.)
116 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Joe continued, “We also try to come up with some new challenges or
themes to keep things fresh. One time when we set new goals for house-
keeping and cleanliness, everyone cried, ‘We work on these fl oors, not eat
from them!’ So we told the teams that when we meet the new goals, we
would celebrate by having the management team eat breakfast and lunch
off the fl oor. Th is really got the teams fi red-up and we had a lot of fun
with the challenge. In fact when the managers were eating off the fl oor,
a local newspaper reported on it and everyone enjoyed seeing an article
about how clean our company was. Th at was quite a celebration. We
served cake, on plates, to the rest of the company to celebrate the goal
achievement.”
Source: Holland Sentinel, 12-23-95, used with permission.
“We then created another theme to push accomplishment even far-
ther. We created a competition within the organization and the win-
ning team with the most improvements would get their car washed
by the management team. Again we had a lot of fun with this. It took
about a year to achieve the goal, but we succeeded in raising the bar
of achievement. You might try a theme or a challenge or internal com-
petition to get some excitement back into the improvement eff ort,”
explained Joe.
“When you’re managing change in an organization, things can get
diffi cult,” continued Joe. Joe sketched the following illustration on a
napkin and explained, “You see, at fi rst, once everyone sees that you’re
serious about improving, and gets over the shock and denial, people
begin to see how the Lean Sigma improvements can help them. Th ey
start to see some quick hitting improvements and are optimistic. Th en,
when the ‘low hanging fruit’ or easy projects have been implemented,
things get tougher, and improvements are harder to fi nd. When this
happens things start to plateau or level out. If left alone, this plateau
ACHIEVING, SUSTAINING, AND CELEBRATING SUCCESS 117
will turn into pessimism and doubt. At this point people need to see
management’s commitment to Lean Sigma methods and tools. Too
many leaders throw in the towel at this point and say Lean Sigma
doesn’t work.
Performancecurve
Plateau
Slide
Clim
b
Optimisticconcernedskeptical
Pit
Fearfulconfused
withdrawnEmployees need tosee management
commitment
The key is to strive for a short duration in the high stress zone.
Pessimismdoubtfulanxious
Management mustprovide systems and
training
Helpfuldetermined
probing
Focusenergy
determination
Prideownershipconfidence
Extension
Organizational stressManagingchange
Crest
Quick hitperformanceimprovements
If managers and leaders redouble their eff orts and commitments at this
point, things will start to turn around and many more signifi cant gains
will occur. Th e key is to push through the trough or ‘organizational stress’
as quickly as possible by sticking to key projects and the Lean Sigma
methods and tools.”
Larry said, “Th at’s interesting, but I think we are beyond that
now, and I just want to get some more excitement around the ship.
I think a challenge, something big, will be a good way to get the excite-
ment back.”
“In Jim Collins’ book Good to Great he called them ‘Big Hairy
Audacious Goals’ or BHAGs, and many organizations have them. Th ey
provide long term focus and can be fun,” Joe added.
“Another key is to continue to hold people accountable to use the
Lean Sigma methods and tools. Th is should be built right into your
performance management system. Keep to the accountability sessions
or ‘Meeting Rhythms’ as Harnish called them in his book Mastering the
Rockefeller Habits. In the book, Harnish describes a meeting rhythm
118 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
with daily huddles, weekly, monthly, and quarterly work sessions to
review progress to goals, ensure resources are provided, and to hold
people and teams accountable for results. Th is is key to sustaining the
eff ort. Remember our Gemba walks? Make these work sessions standard
work for you and your area leaders. Perform layered process audits to
make sure they are doing them, and doing them correctly. Th is will let
the teams see that these are important to you and to their success,” Joe
added.
“Boy! sustaining the eff ort is hard work!” replied Larry.
“Remember what Dad always says, ‘Anything worth doing is worth
doing right,’ and ‘Do what’s right, not what’s easiest!’” replied Joe.
“Yeah,” said Larry, “and ‘Th e harder you work, the luckier you’ll be!’”
and they both laughed.
“Now, let’s get back to the party where you can tell everyone how
I bailed your sinking cruise line out of troubled waters!” said Joe.
Chapter 9—Discussion Questions
1. Do you agree with Joe’s statement that “We always go back to the
basics to recharge our team?” Why do you think it is important to
go back to the basics? Do you think that the key enablers identi-
fi ed earlier in this book were the right ones? Why or why not?
2. What do you think of Joe’s new goal for housekeeping and clean-
liness? Don’t you think all organizations should instill it?
3. Is it a good idea to create a competition within the organization
on which functional area comes up with the most improvements?
Will such a competition raise the bar or will it create more con-
fl icts? What do you think of Joe’s reward to the team that won
this competition?
4. Discuss the change cycle presented by Joe. Why is it diffi cult to
implement change in any organization?
5. What do you think of Larry’s statement on how to get more
excitement on the ship? What lessons can Larry learn from Jim
Collins’ book?
(Continued)
ACHIEVING, SUSTAINING, AND CELEBRATING SUCCESS 119
6. Why is it critical for an organization to hold people accountable
for the use of Lean Sigma methods and tools?
7. If you were Larry, what are the fi ve things that you would empha-
size in order to sustain the success and momentum achieved from
implementing Lean Sigma?
References
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Others Don’t. New York, NY: Harper Business.
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Character Ethic. Th orndike, ME, G K Hall & Co.
Gitomer, J. (1998). Customer Satisfaction Is Worthless, Customer Loyalty Is Priceless.
Austin, TX, Bard Press.
Harnish, V. (2002). Mastering the Rockefeller Habits: What You Must Do to Increase
the Value of Your Growing Firm. New York, NY, Gazelles, Inc.
Liker, J.K. (2004). Th e Toyota Way: 14 Management Principles from the World’s
Greatest Manufacturer. New York, NY: McGraw-Hill.
Liker, J.K. (2008). Toyota Culture: Th e Heart and Soul of the Toyota Way. New York,
NY: McGraw-Hill.
Lundin, S., Paul, H., & Christensen, J. (2000). Fish! A Proven Way to Boost Morale
and Improve Results. New York, NY, Hyperion.
Ptacek, R., Coats, M., & Ptacek, T. (2012). Today’s Lean Leader! A Practical
Guide to Applying Lean Six Sigma and Emerging Technologies to Leadership and
Supervision! Chelsea, MI: MCS Media, Inc.
Ptacek, R. & Motwani, J. (2011a). Pursuing Perfect Service—Using a Practical
Approach to Lean Six Sigma to Improve the Customer Experience and Reduce
Costs in Service Industries. Chelsea, MI: MCS Media, Inc.
Ptacek, R. & Motwani, J. (2011b). Th e Lean Six Sigma Pocket Guide XL—
Combining the Best of Both Worlds Together to Eliminate Waste! Chelsea, MI:
MCS Media, Inc.
Spear, S. (1999, May). Learning to Lead at Toyota. Harvard Business Review, 1–9.
Spear, S. & Bowen, H.K. (1999, September). Decoding the DNA of the Toyota
Production System. Harvard Business Review, 97–106.
Womack, J.P. & Jones, D.T. (1996). Lean Th inking: Banish Waste and Create
Wealth in Your Organization. New York: Simon and Schuster.
Womack, J.P. & Jones, D.T. (2005). Lean Solutions: How Companies And
Customers Can Create Value And Wealth Together. Free Press, New York, NY.
AAdministration and Accounting team,
101–102Adventures and Event Planning team,
95–97Analyze phase, 30Area team charter commonalities, 74Area team work session objective, 73
CCause-and-Eff ect diagram, 67–68Continuous improvement (CI)
method. See Lean Six SigmaControl phase, 30Correction waste, 23, 26Critical To Quality (CTQ)
diagram, 54Cruise line departments, 38, 41–43Cultural assessment, 107–108Current state cultural assessment
diagram, 107–108
DDaily huddle, organization, 8Defi ne phase, 30Developing Customer Loyalty
training, 110–111Dirty Dozen. See Twelve forms
of wasteDMAIC alphabetical tool application
chart, 31–33DMAIC process, 30
EEmployee involvement, 48Entertainment team, 86–87Environmental waste, 24, 27Expertise waste, 22, 25
FFISH philosophies, 111–112Flip chart, 68–70
Food Services team, 91–93Future state cultural assessment
diagram, 107–108
GGaming team, 88Gemba Walk, 8–10Guest Services group, 85–86
H‘7 habits’ training, 110Housekeeping team, 89–90Human Resources (HR) and Training
team, 100–101
IImprove phase, 30Inventory waste, 22, 25
KKey enablers, Lean Sigma
employee involvement, 48leadership, 46perseverance and commitment,
48–49policy deployment and goal
alignment, 48process-and results-focused, 47–48resource commitment, 46–47total system/value stream focus, 48training and education, 47
Key performance indicators (KPIs)Administration and Accounting
team, 101–102Adventures and Event Planning
team, 95–97Entertainment team, 86–87Food Services team, 91–93Gaming team, 88Guest Services group, 85–86high-level key measures, 58–62Housekeeping team, 89–90
Index
124 INDEX
Human Resources and Training team, 100–101
Medical Services team, 90–91Navigation-Captain and Crew
team, 83–85Operation and Maintenance team,
97–99Purchasing and Logistics team,
99–100Retail Sales team, 93–94Security team, 94–95
KPIs. See Key performance indicators (KPIs)
LLeadership Lean Sigma, 46Leadership team
cause-and-eff ect diagram, 67–68comments, 56CTQ diagram, 55fl ip chart, 68–70high-level objectives, 57key performance indicators, 58–62Lean Sigma fl ow diagram, 63–66Pareto chart, 63strategies, 51
Leangoal, 14value stream maps, 14
Lean Sigmabuilding blocks, 18concepts
non-value adding, 20–21value adding, 20
cruise line departments, 38, 41–43cruise line issues, 10key enablers
employee involvement, 48leadership, 46perseverance and commitment,
48–49policy deployment and goal
alignment, 48process-and results-focused,
47–48resource commitment, 46–47total system/value stream
focus, 48
training and education, 47methods
leadership level, 30project/systems/team level, 30worker level, 30–31
organization perspectives-case study, 1–3
outcomes, 33–34overview session in organization, 10philosophy, 19principles, 19scoreboarding issues, 5–8tools
alphabetical application chart, 31–33
mass customization, 30uses of, 17
Lean transformationleadership level, 30project/systems/team level, 30worker level, 30–31
MMass customization, 39Measurable outcomes, 40Measure phase, 30Medical Services team, 90–91Motion waste, 22, 25–26
NNavigation-Captain and Crew, 83–85Non-value-adding concept, 20–21.
See also Twelve forms of waste
OObjective outcomes, 40Onboard Medical Center, 90–91Operation and Maintenance team,
97–99Organization
daily huddle, 8Lean Sigma overview session, 10Six-Sigma status, 16
Organization’s orientation training, 110
Overloading waste, 23, 27Overprocessing waste, 23, 26Overproduction waste, 22, 24
INDEX 125
PPareto chart, 63Perseverance and commitment Lean
Sigma, 48–49Plan–Do–Check–Act (PDCA)
experiments, 8, 21, 68, 83, 86, 88, 91, 107
Policy deployment, 48Process-and results-focused Lean
Sigma, 47–48Purchasing and Logistics team,
99–100
RResource commitment, 46–47Retail Sales team, 93–94
SScoreboarding, 5–8Security team, 94–95Service business
categoriesservice delivered to external
customer, 39service process internal to
organization, 40service process used by external
customer, 39–40objective outcomes, 40subjective outcomes, 40
SIPOC. See Suppler–Input–Process–Output–Customer
Six-Sigma (6σ)defi nition, 15goal of, 16in organization, 16
Social waste, 24, 27–28Subjective outcomes, 40Suppler–Input–Process–Output–
Customer (SIPOC), 40
TTotal Quality Management
(TQM), 13Total system focus, 48TQM. See Total Quality
ManagementTraining and education Lean
Sigma, 47Transport waste, 22, 25Twelve forms of waste
correction, 23, 26environmental, 24, 27expertise, 22, 25inventory, 22, 25motion, 22, 25–26overloading/overburdening,
23, 27overprocessing, 23, 26overproduction, 22, 24social, 24, 27–28transport, 22, 25unevenness, 23, 27waiting, 23, 26–27
UUnevenness waste, 23, 27
VValue adding concept, 20Value stream focus, 48Value stream maps, 14
WWaste of waiting, 23, 26–27Work session meeting, 80, 82Work session leading and facilitation
checklist, 82Work session prep checklist, 80, 82Work session record, 81
OTHER TITLES IN OUR SERVICE SYSTEMS AND INNOVATIONS IN BUSINESS AND SOCIETY COLLECTION
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
TITLES IN OUR INDUSTRY PROFILES COLLECTION
Donald N. Stengel, California State University, Editor
• A Profi le of the Electric Power Industry: Facing the Challenges of the 21st Century
by Charles E. Clark, Jr., due out in October 2012
• A Profi le of the Steel Industry: Global Reinvention for a New Economy by Peter Warrian,
due out in November 2012
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Lean Sigma Methods and Tools for Service OrganizationsThe Story of a Cruise Line TransformationJaideep Motwani, Rob Ptacek, and Richard Fleming
Every business aspires to be competitive and profitable in its market. To do this, an organization needs to offer customers value propositions, which may be manifest in the product it produces or the service it provides. This in turn will create customer loyalty and growth.
There are a number of organizational philosophies and strategies used by businesses to help accomplish this goal, among which are the concepts of Six Sigma and Lean. This book proposes to integrate the best practices from each of these philosophies and apply them to a customer-focused organization—a cruise ship—whose overriding mission is to deliver supe-rior service to its customers. The authors demonstrate in this book how key components of both Six Sigma and Lean—such as identifying and removing defects, elimination of waste, metrics, speed of delivery, and the seamless integration of these concepts and practices throughout the operation—serve to enhance the kind of value propositions that customers recognize and that allow an organization to be successful.
Jaideep Motwani, PhD, is chairperson and professor of management at Seidman College of Business, Grand Valley State University, since 2000. He received his PhD in Operations Management from the University of North Texas. Dr. Motwani serves as editor for two international journals and is on the editorial board of 12 prestigious national and international journals.
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.
Richard Fleming is president and CEO of Continuous Improvement (CI) Associates and, for more than 20 years, has provided hundreds of manu-facturing companies and service firms with lean enterprise transformation consulting, lean culture development training, and opportunity assess-ments. Mr. Fleming holds a masters in Mechanical Engineering from the University of Michigan and has served as lean manufacturing engineering manager for the Industrial Technology Institute.
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Service Systems and Innovations in Business and Society CollectionJim Spohrer and Haluk Demirkan, Editors