1. The DMAIC Process Detail The Define Phase
© Max Zornada (2005)

2. The Define Stage Define The Voice of the Customer
The Voice of the Business
The Voice of the Customer
The Voice of the Process
Business Case and Project Team Charter
Define the Customer and the Customer Requirements
Define and map the process
© Max Zornada (2005)

3. The Define Phase Identify and confirm the improvement opportunity;
Develop a Project Team Charter
Build an Effective Team;
Define the Customer and Customer Requirement;
Define and Map the Process.
© Max Zornada (2005)

4. DMAIC Process Storyboard
TEAM FORMATION
DEFINE
MEASURE
Objective: Identify and implement the measures required to establish baseline performance and quantify the opportunity.
Objective: Select problem/ opportunity theme, select team members
Objective: Define the Problem/Opportunity, Customers, Customer Requirements, and Process.
Team charter
Key Steps:-
Key Steps:-
Cause and Effect Diagram
Run chart or control chart
Flowchart
Determine what to measure
Understand the measures
Understand Variation
Assess measurement system
Assess process performance
Develop business case
Develop project team charter
Understand Customer Requirements
Understand the Process.
Output: Problem/Opportunity selected, Team members selected.
Output: Team Project Charter, Work Plan, Measurable Customer Requirements, Process Map/Process Analysis
Output: A quantified picture of the current process performance, problem impact. The process sigma rating.
ANALYSE
IMPROVE - I : Generate Potential Solutions
Objective: Identify and verify the root cause(s) of the problem.
Objective: Determine possible solutions that will address the identified root cause(s) of the problem.
Key Steps:-
Cause and Effect Diagram
(Fishbone)
Pareto Chart
Checksheet
Key Steps:-
Analyse data
Analyse process
Determine potential root causes
Hypothesis Testing
Verify root causes
Potential Solutions
Action Plan
Generate potential solutions
Assess potential solutions
Select preferred solution
Test/Pilot preferred solution
Develop implementation plan
Step 1
Step 3
Step 2
Step 4
Step 5
Step 6
Output: Root cause(s) identified.
Output: Preferred solution or countermeasures
IMPROVE - II: Implement and Check
CONTROL - Standardise
FUTURE PLANS
Objective: Implement the preferred solution. Confirm that the problem and its root cause(s) have been reduced or eliminated.
Objective: Prevent the problem and its root cause from recurring.
Objectives: Review team effectiveness, plan to address remaining issues and institutionalise the learning.
Key steps:-
Key steps:-
Flowchart
Standard
procedure D M A C I
Before
After
Key Steps:-
Implement preferred solution
Verify effectiveness
Apply comparative methods if necessary.
Standardise the solution (standards & procedures)
Document project
Implement scorecard
Implement controls
Define, Measure, Analyse, Improve, Control
Review remaining project opportunities
Review other applications
Review learnings
Output: Recommendations for future projects and improvements to team processes. Project documentation and learnings “pack”
Output: Confirmation that the best solution to eliminate the problem & its root cause(s) has been implemented.
Output: Solution embedded and “routinised” in relevant process, procedures and standards.
© Max Zornada (2005)

5. Team Formation
© Max Zornada (2005)

6. Team – A Definition
Common people, working together to attain uncommon results;
A team is a small number of people with complementary skills, who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.
Katzenback, Jon R. and Smith, Douglas K. The Wisdom of Teams, 1995
© Max Zornada (2005)

7. The Components of Teamwork
What we do
How we do it
Content
Process
Technical inputs required to progress the problem solving process through to a solution. eg.
Technical skills;
Technical knowledge;
Knowledge of the process and of the business;
Data and information;
Other specific inputs.
Task
Relationship
How to do it
How we feel
Facilitating group processes;
Making the team fun to be a part of;
Recognising/appreciating contributions
The DMIAC process
Six Sigma Process Improvement and Problem solving tools and techniques,
Statistical techniques.
© Max Zornada (2005)

8. Characteristics of an Effective Team
The atmosphere tends to be informal, comfortable, relaxed. There are no obvious tensions;
There is a lot of discussion in which virtually everyone participates, but it remains pertinent to the task of the group;
The task or objective of the group is well understood and accepted by the members;
The members listen to each other;
There is disagreement;
Most decisions are reached by a kind of consensus, in which it is clear that everybody is in general agreement and willing to go along;
Criticism is frequent, frank and relatively comfortable;
People are free in expressing their feelings as well as their ideas, both on the problem and on the group's operation;
When action is taken, clear assignments are made and accepted;
The team leader does not dominate it, nor does the team defer unduly to him/her;
The team is self-conscious about its own operations.
© Max Zornada (2005)

9. Stages of Team Development
Performing
Adjourning
Performance
Norming
Forming
Storming
Time
© Max Zornada (2005)

10. Stages of Team Development
Forming
Storming
Norming
Performing
Adjourning
Who are we? Getting to know each other?
We do not agree
Cooperating and getting involved
This is as good as it gets!
Job done!
Clarify the mission/ purpose of the team;
Establish specific objectives and tasks;
Identify roles and responsibilities of team members.
Reestablish roles &/or ground rules;
Acknowledge & confront conflict by focusing on the facts;
Clarify & understand the team's purpose
Develop decision making process;
Be prepared to offer ideas & suggestions;
Utilise all resources to support team effort.
Actively contribute ideas;
Achieve desired objectives;
Establish milestones for success.
Evaluate efforts;
Tie up loose ends, discuss future plans;
Recognise and reward team efforts.
Task
Get acquainted with one another;
Establish a set of ground rules;
Recognising that people are checking each other out.
Actively listen to all options;
Respond to feelings that emerge or are hidden;
Create focus to direct team efforts.
Support the team's decisions in and outside the team;
Give and receive feedback comfortably;
Respect individual differences.
Feel a sense of satisfaction;
Develop personal & professional relationships;
Find ways to sustain momentum and enthusiasm.
Express thanks and appreciation;
Discuss feelings, many may feel sad, depressed;
Create a sense of closure, reduce dependency on team
Relationship
© Max Zornada (2005)

11. Launching the Team Team/ Project Charter Form the team;
Establish ground rules;
Develop a team mission/purpose;
Develop a shared team vision;
Develop specific team goals, objectives and performance targets.
Team/ Project Charter
From Katzenback, Jon R. and Smith, Douglas K. The Wisdom of Teams, 1995
© Max Zornada (2005)

12. Skills and Knowledge Required by the Team
Team Leadership Skills
Group process facilitation and interpersonal skills
Six Sigma Process Improvement/ Problem Solving Skills
Technical job skills and knowledge of the business.
© Max Zornada (2005)

13. Successful Team Functioning
Clarity in team goals;
A plan to work to;
Clearly defined roles;
Clear communication;
Beneficial team behaviours;
Well-defined decision procedures;
Balanced participation;
Established group rules;
Awareness of the group process;
Use of the scientific approach (in Six Sigma DMAIC).
In Six Sigma, provided by the project/ team charter
From Peter Scholtes: The Team Handbook.
© Max Zornada (2005)

14. Where teams and team based efforts have failed, they typically:
Lacked management support and resources;
Lacked the training or the disciplines to apply "team basics" to their work i.e. no formal process like PDCA or DMAIC;
Worked on projects that were considered unimportant and not connected to core business;
Were not considered or integrated into long-term organisational plans;
Were led by leaders that lacked leadership "know how" and/or had minimal training as team leaders.
Adapted from Katzenback, Jon R. and Smith, Douglas K. The Wisdom of Teams, 1995
© Max Zornada (2005)

15. Problem/Opportunity Selection
© Max Zornada (2005)

16. Six Sigma Project Selection Establishing the Business Case
The business case establishes the importance of the project to the business in terms of meeting business objectives;
Components of a business case:
The output unit for the customer of the process, usually the external customer;
The primary business measure of the output unit;
The baseline of the primary business measure;
The gap in the baseline performance with the business objective.
The purpose is to establish the need in terms of business objectives - usually expressed in financial terms.
© Max Zornada (2005)

17. Example: Business Case SEFP
Output unit for the External Customer
Boxes food product delivered to their customers;
Primary Business Measure of the output unit:
Unit cost of Packaging in $/Box
Baseline of the primary business measure:
$23.94 per box
Business Objective:
$22.50 per box
Gap = $1.44 per box
© Max Zornada (2005)

18. Develop a Problem/Opportunity Theme Statement
The problem/opportunity theme statement provides the initial definition of the problem/opportunity area to be pursued;
It is on the basis of the problem/opportunity theme statement that management decide to allocate resources (the problem solving team) and time to develop a project team charter and determine whether the problem/opportunity is worth pursuing.
© Max Zornada (2005)

19. Problem/Opportunity Theme Statement
Project Title:
What is the area of concern? What first brought this problem or opportunity to the attention of your business?
What impact has this problem already had? What evidence is there that it is a problem worthy of attention?
What will happen if the business does not address this problem?
Summary problem statement (summarise the above in a concise statement).
© Max Zornada (2005)

20. Problem Statements
Problem Statements should ideally describe the following:-
What is wrong?
Where is the problem appearing?
How big is the problem? (Quantify)
What is the impact of the problem on the business.
What problem statement should not do:-
State and opinion of what is wrong;
Describe the cause of the problem;
Assignment blame or responsibility for the problem;
Describe a solution;
Combine several problems into one.
© Max Zornada (2005)

21. Identifying the problem
Developing a problem statement:
What is the deviation - should vs actual?
What is the symptom?
Be specific in what it is and what it is not;
What is it? vs. what is it not?
Where is it? vs. where could it also be but is not?
When does it occur vs. when does it not occur?
How many?
How big?
© Max Zornada (2005)

22. Problems as deviations
What should be happening
What is happening different to What should be happening
= Problem!
What is happening
= What should be happening
No Problem!
What is happening
© Max Zornada (2005)

23. Problems with Problem Statements Disguised Solutions!
We’re experiencing delays in putting sales data in an understandable form.
We have to purchase or otherwise obtain the necessary additional equipment.
Turnover in the department is 20% higher than company average.
Marketing reported a sudden increase in customer complaints about our product.
We need to redesign our main product to make it more modern?
We must identify the specific training required to correct this performance.
Error rates in the past two months are unacceptably high.
We need to stream line the ordering process.
© Max Zornada (2005)

24. DMAIC Process Storyboard
TEAM FORMATION
DEFINE
MEASURE
Objective: Identify and implement the measures required to establish baseline performance and quantify the opportunity.
Objective: Select problem/ opportunity theme, select team members
Objective: Define the Problem/Opportunity, Customers, Customer Requirements, and Process.
Team charter
Key Steps:-
Key Steps:-
Cause and Effect Diagram
Run chart or control chart
Flowchart
Determine what to measure
Understand the measures
Understand Variation
Assess measurement system
Assess process performance
Develop business case
Develop project team charter
Understand Customer Requirements
Understand the Process.
Output: Problem/Opportunity selected, Team members selected.
Output: Team Project Charter, Work Plan, Measurable Customer Requirements, Process Map/Process Analysis
Output: A quantified picture of the current process performance, problem impact. The process sigma rating.
ANALYSE
IMPROVE - I : Generate Potential Solutions
Objective: Identify and verify the root cause(s) of the problem.
Objective: Determine possible solutions that will address the identified root cause(s) of the problem.
Key Steps:-
Cause and Effect Diagram
(Fishbone)
Pareto Chart
Checksheet
Key Steps:-
Analyse data
Analyse process
Determine potential root causes
Hypothesis Testing
Verify root causes
Potential Solutions
Action Plan
Generate potential solutions
Assess potential solutions
Select preferred solution
Test/Pilot preferred solution
Develop implementation plan
Step 1
Step 3
Step 2
Step 4
Step 5
Step 6
Output: Root cause(s) identified.
Output: Preferred solution or countermeasures
IMPROVE - II: Implement and Check
CONTROL - Standardise
FUTURE PLANS
Objective: Implement the preferred solution. Confirm that the problem and its root cause(s) have been reduced or eliminated.
Objective: Prevent the problem and its root cause from recurring.
Objectives: Review team effectiveness, plan to address remaining issues and institutionalise the learning.
Key steps:-
Key steps:-
Flowchart
Standard
procedure D M A C I
Before
After
Key Steps:-
Implement preferred solution
Verify effectiveness
Apply comparative methods if necessary.
Standardise the solution (standards & procedures)
Document project
Implement scorecard
Implement controls
Define, Measure, Analyse, Improve, Control
Review remaining project opportunities
Review other applications
Review learnings
Output: Recommendations for future projects and improvements to team processes. Project documentation and learnings “pack”
Output: Confirmation that the best solution to eliminate the problem & its root cause(s) has been implemented.
Output: Solution embedded and “routinised” in relevant process, procedures and standards.
© Max Zornada (2005)

25. The Define Stage During the Define Stage, we:
Define our problem or opportunity and improvement objectives;
Define the customers and their requirements - the Critical-to-Quality issues (CTQ);
Define the process that will be affected;
Develop a plan for completing the project;
Key outputs of the Define Stage:
Team Project Charter and Work Plan
Measurable Customer Requirements - Customer Requirements Statement
Process Map/Process Analysis.
© Max Zornada (2005)

26. Six Sigma Project Team Charter
Cost of Waste Reduction Project
Project Title
Process
Box Packaging
Expected Financial Impact
$253,000
Green Belt
Jane Verde
Telephone Number
John Briggs
Champion
Organization/Function
Packaging Operations
1- October
Start Date
1-April
Target Completion Date
Problem/Opportunity Definition
The cost of waste in box packaging is excessive and causes box packaging operations to run at a loss. The cost of waste needs to be reduced to achieve target cost levels.
What is the Problem to be solved or the opportunity this project will exploit.
Objective
Improvement target, impact on Sigma, COQ/COPQ and Customer Satisfaction
Reduce net spoilage rate by 50% from 6% to 3%. Estimated Sigma level improvement from 3 to 3.4
Business Case
What improvement in business performance is expected. $ impact and by when.
Reduction in cost of waste of $253,000 p.a. from a baseline of $506,000. Will result in target processing cost/box being achieved.
Team Members
Who are the team members and key experts to be consulted.
Jane Verde (Team Leader), Paul Black, Rachel Cintura, Roland Thompson, Sdravo Krysevic, Giovanni Nero (Black Belt)
Project Scope
Which part of the process will be investigated
Box packaging from start of box filling through to placement of product on buyer shelves.
Customer Benefit
Who are the final customers. What benefits will they see and what are their most critical requirements.
The packaging customers for whom we package and deliver product to buyers such as supermarkets and wholesalers. Benefits: competitive costs and more accurate schedule compliance.
Define completion
Measure completion
Analyse completion
Improve completion
Control completion
Project Completion
What are key milestone dates for completion of each stage.
20-April
Schedule
1-June
1-August
1-September
15-September
1-October
© Max Zornada (2005)

27. Key Elements of the Project Team Charter
Problem/Opportunity Definition – see previous problem/opportunity theme statement;
Objective – quantified objective to be achieved with a specified timeframe – usually expressed in physical units;
Business Case – business impact expected from the project, usually expressed in financial terms;
Team Members – who will be on the team;
Project Scope – what is the project about, what is it not about. Provides focus.
Customer Benefits – what impact will it have on the customer.
Work Plan/Schedule with Key Milestones defined e.g. approximate time frame for each stage of the DMAIC Process
© Max Zornada (2005)

28. Setting Objectives The SMART Principle
S for Specific - Objectives have to be specific and describe exactly what you want to achieve. Need to be able to answer the question “How will I know I have achieved my objective?”
M for Measurable - if you cannot measure, you cannot manage. Objectives must be expressed in quantified (numbers) terms.
A for Achievable - Objectives need to challenge enough to provide incentive, but not be unattainable.
R for Relevant - Objectives must produce something of benefit. Phrase the objectives in results term - what you want to achieve, not how you will achieve it.
T for Time Targeted - Objective must always specific a time frame by when they need to be achieved. If you do not know when you want to achieve you objectives by, you will always be on track.
© Max Zornada (2005)

29. Breaking Down “Big” Objectives Example: Transaction Processing Operation
Reduce costs/transaction
by 10%
Improve Labour
Reduce Rework
Ask why?
to go up
Productivity
Improve allocation
Simplify work
of work to people
processes
Ask how?
to go down
Develop daily
schedules for allocating
work to people
© Max Zornada (2005)

30. Gantt Chart Working Plan Development Layout project tasks on planning proforma
Weeks
People
Task 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Finalise project charter
Develop CR statement
Validate CR Statement
Develop process map
Mile stone – end of define phase
Determine measures
Collect measures
Analyse measures
Assess process stability
Assess process capability/ sigma
Mile stone – end of measure phase
Etc.
© Max Zornada (2005)

31. Gantt Chart Working Plan Development Estimate durations and time phase to indicate work sequence
Weeks
People
Task 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Finalise project charter
Develop CR statement
Validate CR Statement
Develop process map
Mile stone – end of define phase
Determine measures
Collect measures
Analyse measures
Assess process stability
Assess process capability/ sigma
Mile stone – end of measure phase
Etc. …
Key Milestones
© Max Zornada (2005)

32. Gantt Chart Working Plan Development Allocate People to Tasks
Weeks
People
Task 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Finalise project charter
Develop CR statement
Validate CR Statement
Develop process map
Mile stone – end of define phase
Determine measures
Collect measures
Analyse measures
Assess process stability
Assess process capability/ sigma
Mile stone – end of measure phase
Etc. … 2 2 1 1 1 1 1 1 1 1 2 2 2 3
© Max Zornada (2005)

33. Example:Project Gantt Chart & Resource Histogram on Excel
Schedule bars are drawn using the cell pattern function
Float drawn using the cell borders function.
© Max Zornada (2005)

34. Gantt Chart Working Plan Implementation Updating Progress
Weeks
People
Task 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Finalise project charter
Develop CR statement
Validate CR Statement
Develop process map
Mile stone – end of define phase
Determine measures
Collect measures
Analyse measures
Assess process stability
Assess process capability/ sigma
Mile stone – end of measure phase
Etc. … 2 2 1 1 1 1 1 1 1 1 2 2 2 3
© Max Zornada (2005)

35. Define the Customer and the Customer Requirements
© Max Zornada (2005)

36. Who are our customers ? A customer is anyone who comes into contact with our work
Supplier
External Customer
Internal Customers
External Customers
Those outside the organisation who use, buy or are affected by our work.
Internal Customers
Those within the organisation, who will be affected by our work. The next person in the process, those who may need to add to, respond to or adapt to our work.
© Max Zornada (2005)

37. What is quality ? Toyota or Rolls ?
Which is higher quality?
Both the Rolls Royce and the Toyota are consistently suited to their customers' purposes.
© Max Zornada (2005)

38. Customer Segmentation
Different customers have different requirements;
Different customers have different priorities;
What Drives Customer Satisfaction
Perceived Value +
Perceived Quality =
Customer Satisfaction
© Max Zornada (2005)

39. How Customers See Quality Quality = Perceptions - Expectations
Perceived Quality
Content
Process
What the customer gets, the actual service or product. The "technical dimension“ or output.
How they get it, the process by which the service or product is delivered. The service or “experience”.
© Max Zornada (2005)
Parasuraman, Zeithaml and Berry (1988)

40. Dimensions of Quality Content Process Performance; Tangibles;
Features;
Reliability;
Conformance;
Durability;
Serviceability;
Aesthetics.
Process
Tangibles;
Reliability;
Responsiveness;
Competence;
Courtesy;
Credibility/Trustworthiness;
Security;
Access;
Communication;
Understanding the Customer.
© Max Zornada (2005)

41. Content – Detailed Definitions
Performance. Does the product or service's primary operating characteristic measure up to the customer's expectation. eg. Is service prompt in a fast food restaurant, does the TV have good picture and sound, does the high-interest account give high interest.
Features. Do the characteristics that supplement the basic function measure up to the customer's expectations. eg. Extra "bells and whistles", ability to customise your purchase.
Reliability. Once you've bought it will it work for you.
Conformance. Does the design conform to established standards and does your purchase conform to the design.
Durability. Will it work for you on an on-going basis.
Serviceability. Speed, courtesy, competence, ease of repair or ease with which problems are addressed.
Aesthetics. Look, feel, sound, taste, smell. Personal judgement a significant factor.
© Max Zornada (2005)

42. Process – Detailed Definitions
Tangibles. The physical evidence of service. eg. facilities, appearance of personnel, tools/equipment used to provide the service, physical representations, other customers in the service facility.
Reliability. Consistency of performance, the organisation honours its promise and gets it right first time. eg. accuracy of billing, record kept correctly, no time delays.
Responsiveness. Willingness and readiness of employees to provide service. Promptness, timely follow-up, calling back quickly.
Competence. Skills and knowledge required to perform the service for contact and support personnel.
Courtesy. Involves politeness, respect, consideration and friendliness of contact personnel.
Credibility. Trustworthiness, believability, honesty, having the customers best interest at heart. Contributing to credibility are company name, reputation, personal characteristics of contact personnel, "degree of hard sell".
Security. Freedom from physical danger, financial risk, or doubt about confidentiality.
Access. Service is easily accessible, waiting time not excessive, convenient hours of operation, convenient locations.
Communication. Keeping the customer informed and listening to them. eg. explaining the service, costs, trade-offs, how problems will be handled.
Understanding the Customer. Understanding the customer's needs. eg. learning the customer's specific requirements, providing individualised attention, recognising the regular customer.
© Max Zornada (2005)

43. How Customers form Expectations
Controllable Expectation Creators
Past Experience
External Communications
Marketing Strategies
Quality
Dimensions
Process & Content
Expectations
of product or service
Personal Needs and Preferences
Word of Mouth
Competitors
Un-controllable Expectation Creators
© Max Zornada (2005)

44. Managing the Customer Interface
Delighted
Perception
Service Delivery
Customer
Satisfied
Percep
-tions
Expect
-ations
Quality
Customer interface
Internal Processes
Disatisfaction
© Max Zornada (2005)

45. Focus on the Process Customers often assume content;
Provided the content is in the right “ball park”
Customers often cannot tell the difference between good and bad content;
Most of what they judge is process;
Process is important!
© Max Zornada (2005)

46. The RATER Framework A framework for understanding customer process
The RATER framework consolidates the dimensions of service or customer process quality into 5 key themes.
Reliability - ability to perform promised service, dependably and accurately;
Assurance - Knowledge and courtesy of employees and their ability to inspire trust and confidence;
Tangibles - physical facilities, appearance of personnel etc.;
Empathy - Providing personal understanding and customer support;
Responsiveness - Willingness to help and provide prompt service.
Parasuraman, Zeithaml and Berry (1988)
© Max Zornada (2005)

47. The RATER Framework
The RATER framework provides us with a tool for understanding and specifying the “service” or “process” dimension of the customer requirements;
Used for determining what we need to establish service standards for and what these standards should be in managing interactions with customers;
Can be used for designing the “operational infrastructure” required to deliver customer service to the required service standards.
That is:- Processes, Organisation and Technology
© Max Zornada (2005)

48. Applying the RATER Framework Example: The Room Service Process Guest Calls Room Service, Service Cycle.
Quality Dimension
Quality Service Standards – Customer Requirements
Reliability
Phone answered within five rings, 24 hours a day
Assurance
Phone operator has thorough knowledge of menu and prices
Tangibles
There is a menu in the room giving full description of what is available. Specific delivery time stated
Customer name used. Prescribed guest treatment procedure carried out with sincerity. Order taken in a courteous manner.
Empathy
Responsiveness
Effort to comply with any special requests. Prompt service.
© Max Zornada (2005)

49. Using RATER to Design Service Processes
What does it mean?
How do we do it?
Quality Dimension
Quality Service Standards
Supporting Infrastructure - Processes/People/Technology
Reliability
Assurance
Tangibles
Empathy
Responsiveness
© Max Zornada (2005)

50. Managing Perceptions of Quality
Think of a customer contact point associated with a service you currently provide to a customer(s), how are he following dimensions managed? What could you do?
Service : .
Quality Dimension
Quality Service Standards – Customer Requirements
Reliability
Assurance
Tangibles
Empathy
Responsiveness
© Max Zornada (2005)

51. Moments of Truth
A moment of truth is any episode in which a customer comes into contact with any aspect of the organisation, however remote, and gets an impression of the quality of its service.
When the moments of truth go unmanaged, service quality regresses to mediocrity and the customer experience of the service is poor.
© Max Zornada (2005)

52. Typical Moments of Truth
Customer walks in the door;
Customer telephones us;
Customer receives a bill;
Customer makes a special request;
Customer discovers a slip-up;
etc., etc.;
© Max Zornada (2005)

53. Identifying the “Moments of Truth”
Review service critical incident reports to identify the types of things that go wrong;
Review compensation/warranty claims etc. to see what the cause was;
Understand the service cycle through "service blue printing" (process mapping);
Anticipate the likely moments of truth;
© Max Zornada (2005)

54. A Service System Map Understanding the Customer’s View
Front Line
Manager
Valuation
Assessm't
Document'n
Stamp
Settlem't
Broker
© Max Zornada (2005)

55. The Service Cycle © Max Zornada (2005) Customer Front Line Manager
Valuation
Assessm't
Document'n
Stamp
Settlem't
Broker
© Max Zornada (2005)

56. Identifying the Critical Moments of Truth
Customer
Front Line
Manager
Valuation
Assessm't
Document'n
Stamp
Settlem't
Broker
© Max Zornada (2005)

57. Listening to the Voice of the Customer
© Max Zornada (2005)

58. Listening to The Voice of the Customer Tools and Techniques
Methods for obtaining feedback on customer expectations, perceptions and satisfaction.
Focus groups;
Face-to-face interviews;
Periodic/regular formal surveys/questionnaires;
Customer comment and complaint analysis;
Follow-up telephone calls;
Critical incident reports produced by front-line staff;
Visits to major customers by management and employees;
Toll-free telephone number;
Follow-up customers who have discontinued dealing with us;
Involve customers formally in product development;
Mystery shopping.
© Max Zornada (2005)

59. Customer Surveys
© Max Zornada (2005)

60. Adapted Questionnaires
Adapted questionnaires aim to measure those dimensions relevant to a specific organisation and/or important to a specific customer group(s);
They can be designed to have a small number of questions (eg. 10), results in an increased rate of return;
Can be flexible in mode of application. eg. Customer can fill out, staff can use in face-to-face or telephone interview;
Can be completed by staff and management. Comparison with customer returns can identify improvement priorities, "blind spots" and hidden strengths;
Questions need to test the perceptions/expectation “gap”.
© Max Zornada (2005)

61. Using Adapted Questionnaires
Questionnaires should also allow customers to give free format feedback, and not restrict them to pre-structured questions;
Unstructured customer feedback can provide the spark for service and product extensions, cross-selling and innovation;
Use as an ongoing monitoring tool, job-by-job, weekly, monthly - not the “big” annual customer survey.
© Max Zornada (2005)

62. Adapted Questionnaires - Scoring System
No need for paired expectation-perception questions;
Use - to + scale corresponding to expectations not met/met;
Reduces the number of questions required to extract the same information. -2 -1 1 2
"Much less than expected"
"Very disappointed"
Expectations not met
Unacceptable quality
"As I expected"
"Satisfied"
Expectations met
Satisfactory quality
Expectations exceeded
"Much more than I expected" Very impressed"
Ideal quality
© Max Zornada (2005)

63. Example: Hotel Customer Satisfaction Questionnaire
Assume a typical 10 question questionnaire
© Max Zornada (2005)

64. Assessing Questionnaire Results Hotel Example
Item
Guest Ave.
Staff Ave.
Gap
Action 1 2 3 4 5 6 7 8 9 10
0.9
1.0
0.5
0.3
0.8
0.4
1.2
1.1
1.2
1.3
0.9
1.9
0.8
0.6
1.0
1.1
-0.3
-0.4
-1.6
-0.5
+0.6
-0.1
0.0 M C ! D
! : immediate corrective action required, C : check out for any obvious quick fix
M : maintain standard, D : apparently delighting, find out why
© Max Zornada (2005)

65. Customer Monitoring: A Strategy Overview
Identify Customer Priorities
Major Customer Survey
“Not very often”
Adapted Questionnaires
Weekly, by job, etc.
Redo Major Survey when questions no longer reflect customer priorities.
Weekly Customer Performance Monitors
Monitor Questionnaires for relevance, general feedback and innovation opportunities.
© Max Zornada (2005)

66. Customer Satisfaction and Loyalty
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67. Impact of Customer Satisfaction on Loyalty
Would Repurchase
Would Recommend
Rating Category
Completely Satisfied
90%
96%
Somewhat Satisfied
56%
71%
Neither Satisfied Nor Dissatisfied
12%
19%
Somewhat Dissatisfied 3% 0%
Very Dissatisfied 7% 7%
Using a 5 point customer satisfaction rating. From Heil, G., Service Quality Improvement Seminar, Sydney (1992)
© Max Zornada (2005)

68. Managing Customer Perceptions of Quality
Identify the elements of customer expectations you can control;
Expectation levels should be set high enough to attract business, but accurately enough to reflect the reality of what is likely to be delivered 99.9% of the time;
Focus on improving areas where expectations are low and importance to the customer is high;
Strategic gaps in the market that provide viable footholds.
Customer expectations will increase with time - so should your ability to meet them. Plan for it!;
Surprise is one way to exceed customer expectations. Promise what to expect, deliver more, sometimes surprise customers.
E.g. “going the extra mile when it matters.
© Max Zornada (2005)

69. Kano Analysis Delighters Breakthrough Customer Needs/Features
High Customer Satisfaction
Delighters
Breakthrough Customer Needs/Features
Satisfiers
Core Competitive Requirements
Not Done or Done Poorly
Done Very Well
Dis-satisfiers
Basic Requirements
Low Customer Satisfaction
© Max Zornada (2005)

70. Kano Analysis Delighters Satisfiers
High Customer Satisfaction
Delighters
Breakthrough Customer Needs/Features
Satisfiers
Core Competitive Requirements
Not Done of Done Poorly
Dis-satisfiers
Basic Requirements
Done Very Well
Low Customer Satisfaction
© Max Zornada (2005)

71. Defining the Customer Requirements and Critical-to-Quality Requirements
Optional KANO Analysis
Process/ Service/ Experience
RATER Analysis
Customer Requirements Statement & Ranking
Customer Value
Content
Critical Customer Requirements
CTQ Requirements
Validate with Customers
Interviews, focus groups, questionnaires, complaints & feedback analysis
© Max Zornada (2005)

72. Simple Customer Requirements Statement
Customers need to have their food products packaged at a competitive price ($23.50) and delivered to their customers as per their schedule and order quantity manifest (100% compliance).
© Max Zornada (2005)

73. Example: SEFP’s Customer Requirements Statement
What is this customer’s major complaint? What issue would they want us to work on?
Outputs:
Customer:
Customer Requirements
Measure
Importance to Customer
Customer Satisfaction
Priority
Rating
1. Cost competitiveness
Boxed product delivered to buyers according to customer manifest.
Contract Box Packaging Customers
(Importance x Satisfaction)
Target
2. Schedule compliance
2.1. On-time delivery/right day/right time.
2.2. Right product delivered
2.3. Product quality to specification
2.4. Right amount/ amount as per manifest.
Processing cost $/Box
% On time
Returns: wrong product %
Returns: off-spec product %
Order shortfall %
Ranking Scheme
Importance to customer: 1 = Nice to Have, 2 = Important, 3 = Critical, Must Have
Customer Satisfaction: 1 = Very Satisfied, 2 = OK. Could be better, 3 = Unhappy, Must be improved
$22.50
97%
95%
99% 3 3* 9* 2 1 6 9
*Note: customer has not complained about price because we are absorbing difference between market price and actual costs. If customer were charged actual cost we would lose the business.
In addition to price, getting the delivery amount right is a Critical-to-Quality issue for the customer.
© Max Zornada (2005)

74. Define the Process
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75. Define the Process What process? Identifying the process;
Tools for documenting and analysing our processes:
SIPOC
Process Blocking
Top-Down Process Map
Process Mapping
Process Deployment Chart
Process Flow Analysis
© Max Zornada (2005)

76. Identifying Processes
Ask the following questions:
What are we doing for a customer?
What is the first step in the chain of events that lead to meeting the customer need ?
What are all the steps in between including the decisions and choices that need to be made?
What order or sequence do the steps flow in from start to finish ?
© Max Zornada (2005)

77. Identifying the Customer and what it is we do for them ……
Outcome
Satisfaction
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78. Identifying what it is that tells us we have to do this for them … the “triggering event” which kicks off an operation of the process.
Customer
Triggering
Event
Outcome
Satisfaction
© Max Zornada (2005)

79. Identify all of the tasks, operations, activities, judgements, decisions, inspections and checks which must be done along the way in order to deliver the required outcome to the customer.
Customer
Triggering
Event
Outcome
Satisfaction
Task or activity required to progress the process
Decision, judgement, inspection, check point or choice.
Yes/No, OK/Not OK outcome.
© Max Zornada (2005)

80. Link them all up to to show the order in which the process flows.
Customer
Triggering
Event
Outcome
Satisfaction
Task or activity required to progress the process
Decision, judgement, inspection or check point.
Yes/No, OK/Not OK outcome.
© Max Zornada (2005)

81. This is a process map! Customer Outcome Satisfaction Triggering Event
Task or activity required to progress the process
Decision, judgement, inspection or check point.
Yes/No, OK/Not OK outcome.
© Max Zornada (2005)

82. Process Definition Worksheet Objective : To specifically define the scope of the process being studied
Process Name:
The Process Starts with:
The Process Ends with:
The Process includes:
The Process excludes:
Connecting Process:
© Max Zornada (2005)

83. The SIPOC Model Suppliers - Inputs - Process - Outputs - Customers
Business or Work Process
Suppliers
© Max Zornada (2005)

84. SIPOC Analysis Worksheet
Date
Process Name
Page of
Suppliers
Inputs
Process Steps
Outputs
Customers
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85. SIPOC Analysis Worksheet Procurement Process
Date
Process Name
Procurement Process
Page of
Suppliers
Inputs
Process Steps
Outputs
Customers
Customer Dept.
Purchase Requisition
Receives purchase req.
Complete Purchase
Buyer
Reviews for completeness
Requisition
Time stamps
Assigns to buyer
© Max Zornada (2005)

86. Process Block Diagramming (Process Blocking)
Block diagramming a process provides an easy way to construct a "rough cut" view of the process;
Block diagramming identifies the major "chunks" in the process and which functions are involved;
Block diagramming may provide a suitable level of detail for a high level analysis of the process in many cases.
© Max Zornada (2005)

87. Example of Process Block Diagram
Start
Receive
Purchasing
Order
Process
Raise
Warehouse
Data
Credit
Dispatch
Official
Processing
Check
picking
& Delivery
Order
process
Account
Install &
Rejection
Payable
Commission
process
Finish
© Max Zornada (2005)

88. Technician Allocation
Top-Down Process Map
Etc.
Order Receival
Credit Check
Product Sourcing
Technician Allocation
Receive fax
Raise formal order documentation
Data process into system
Send to Credit section
Preliminary customer checks
Obtain credit details from Bank
Make credit decision.
Receive order details
Determine stock availability
Issue to stock picker
Pick stock
Take to Despatch dock
Pass order onto Technical
Receive order details
Identify schedule date
Book into scheduling system
Allocate technician
© Max Zornada (2005)

89. Process Mapping Symbols
Name
Brief Definition
Operation or
process step
Depending on the level of detail being developed, can be used to denote anything from a simple task, major activity or a whole sub-processes.
Decision Point
Point where a decision must be made before any further action can be taken.
Document
Generated
Point at which a form or report is generated by the process.
Continuation
Point
Used to indicate the process is continued elsewhere on the flow diagram or on another sheet.
Input/Output
Block
Optionally used to describe an input or output from a processing block.
Flow lines
Use to connect all blocks to display the sequence in which operations are performed.
Termination point
Used to indicate the start and end of a process.
© Max Zornada (2005)

90. Sample Process Map: Taking a Customer Order
Note:
Some computer based flow charting packages use
to indicate a continuation point on another page, and
to indicate a continuation
point on the same page.
Start
An extended oval shape is used to indicate the start or finish of a process. 1
Greet customer
Take customer's order
A rectangle represents a processing step 1
A line with an arrowhead indicates flow and direction of the process
Repeat order to customer No
Customer confirms
Change order
A diamond shape represents a
decision point
Yes
Confirm order on terminal
Verbally announce
to kitchen
Continues onto the Cook’s part of the process. 1 1
A numbered circle represents a continuation point.
Cook's part of process continued page 2.
© Max Zornada (2005)

91. Process Deployment Chart
Re-draw the Process Map laying out each of the process segments in "bands" or "streams" which correspond to the part of the process performed by each functional position in the process;
Identifies how the process is deployed through the functional organisational structure – add functions in the order that they are first “touched” by the process;
Can highlight process steps performed within functions that may not be apparent from initial process map. Good at highlighting parallel processes;
Identifies hand-overs and inefficient "zig-zagging" in the process;
Rule of Thumb: Changes that reduce the amount of zig-zagging usually result in improved performance.
© Max Zornada (2005)

92. Process Deployment Chart
Customer
Sales
Clerk
Data Proc.
Credit
Technical
Dispatch
Service
Bank
© Max Zornada (2005)

93. Process Deployment Chart Variation: Service System Map The Line of Visibility Approach
Customer Interface
Direct Front Line support
In-Direct Front Line support
Front Line
Customer
Manager
Valuation
Assessm't
Document'n
Stamp
Settlem't
Broker
© Max Zornada (2005)

94. A Service System Map The Line of Visibility Approach
Front office
Could be moved to a back office operation
Front Line
Customer
Manager
Valuation
Assessm't
Document'n
Stamp
Settlem't
Broker
© Max Zornada (2005)

95. Process Complexity Analysis
© Max Zornada (2005)

96. Complexity Concept first put forward by the Hewlett-Packard Company;
Complexity is defined as being those extra process steps that are required to deal with external errors (errors generated by factors outside the process) and to recover from internal errors (errors generated by the process).
Classified all work into two categories:
Real Work
Complexity
© Max Zornada (2005)

97. Identifying Complexity
To identify complexity, ask the question:
"If the process were running perfectly, would this activity be performed ?"
YES = Real Work
NO = Complexity
© Max Zornada (2005)

98. Two Views of Work Time Conventional View Complexity View
Time Available
for Real Work
Time Unavailable
for Work
Complexity View
Complexity -
Internal Errors
Time Unavailable
for Work
Time Available
for Real Work
Complexity -
External Errors
© Max Zornada (2005)

99. Indicators of High Complexity
Lots of work-in-progress materials. Many shelves and interim storage facilities to hold materials.
Many people walking from place to place, standing in line waiting for something, standing idle.
Work areas that are in disarray. Dusty boxes on floors, bookcases full of dusty binders, desks and walls covered in little scraps of paper serving as reminder notes.
People who can give only brief and vague explanations of what they are working on and why it is important.
Humorous signs taped to the walls that say things like "You want it when ? Ha ! Ha !" or " A clean desk is a sign of a sick mind"
In office areas, piles of processed and unprocessed documents, stored in the work area.
Supervisors and managers pacing around the area trying to find out what's going on, ascertain who made a critical mistake and expediting late orders.
© Max Zornada (2005)

100. Indicators of Low Complexity
Small amount of work-in-progress. Few shelves and temporary storage areas to hold work.
Few people walking around. Most people working at a steady, relaxed pace. No one waiting in line at copy machines, office supplies stores etc.
Work areas that are neat. Everything in a department has a place and a use. People using time management systems instead of scraps of paper. Desk tops containing only what the person is working on at the time.
People on shop floor or office areas can give complete descriptions of what they do, why they do it, who their customers are, and what's important to those customers.
The most common item displayed on department walls are monthly performance graphs, daily control charts, pareto charts of problems.
In office areas all documents are received, processed and filed. In-baskets are clean.
Supervisors and managers who are relaxed, walking around the area talking with employees, asking them what they are working on, and looking for ways to make their employees' jobs easier and more satisfying.
© Max Zornada (2005)

101. A Simple Retail Purchasing Process The Manager's View
Customer
Clerk
Select goods
from shelf
Read price tag
Enter data in register
Offer to Pay
Announce Total
Make change
Leave
Wrap Goods
© Max Zornada (2005)

102. The Reality of Complexity caused by Error !
Customer
Clerk
Supervisor
Store person
Pick Goods from shelf Is
Price Tag OK ? No
Yes
Look up Printed list
Explain Difference
Yes
Accept ? No
Goods
Damaged ?
Yes
Exit Angry ! No
Discuss with supervisor ?
Wrap etc.
Inquire if available from storeroom No
Explain to Customer
Discuss situation
Available ?
Yes
Apologise to Customer
Fetch and
Notify Supervisor
Bring to Clerk
Etc., Etc. ...
© Max Zornada (2005)

103. A “generic” process map
Show the task structure and underlying logic;
Would be useful to link a process to resources and costs;
Process Flow Analysis (PFA) is a technique that allows us to do this. (note: PFA is also referred to as Value Stream Analysis by some).
Customer
© Max Zornada (2005)

104. Process Flow Analysis (Also referred to as Value Stream Analysis)
Symbol
Name
Brief Definition
A task or activity which results in intentional changes to one or more characteristics.
Operation
Temporary storage between operations or waiting for some event which will allow work to continue.
Delay
Moving of an object or document from one physical location or work station to another.
Transportation
Storing materials or documents in a protected storage area, requiring authorisation for removal.
Storage
An examination to determine quality or quantity.
Inspection
Combining two symbols indicates simultaneous activities eg. inspection is conducted at the same time as the operation.
Combined
© Max Zornada (2005)

105. Process Flow Analysis Chart
Date
Process Name
Page of
Estimated Time
Description
Operation
Inspection
Transport
Quantity
Distance
Notes
Delay
Store D D D D D D D D D D D D D D D D D D D
© Max Zornada (2005) D D

106. Process Flow Analysis Chart Internal Mail Distribution Process
Date
Process Name
Internal Mail Distribution Process
Page of
Operation
Inspection
Transport
Estimated Time
Quantity
Distance
Description
Delay
Store
Notes
1. Mail sitting in mail room D
1 hr
300
Delivered 8:00am
2. Date Stamp all envelopes D
30 min
300
3. Determine addressee D
30 min
300
4. Sort in bundles by department D
10 min 15
One bundle /Dept.
5. Place in out-trays and wait for pick-up D
2 hrs 15
6. Internal Mail pick-up and delivery D
15 min 15
100m
Average distance of all depts.
7. Placed in department secretary in tray D
15 min 1
8. etc., etc. .... D D D D D D D D D D D D
© Max Zornada (2005) D D

107. Using PFA with a Process Map
Stream A: Dominant flow through the process
Stream B: Secondary flow
Secondary flows are caused by:
Variations required to the dominant process to handle different products or variants of the main product through the process;
Extra steps required to deal with errors and mistakes in the dominant flow e.g. rework and correction activities.
Stream C: Secondary flow
© Max Zornada (2005)

108. Quantifying the process by using PFA
Stream A: Dominant flow through the process
Stream B: Secondary flow
Volume X Time through B % %
Volume X Time through C
Volume of product or transactions going through stream A (Total Volume)
X Time
= Hours of Work Generated by the work flow.
Stream C: Secondary flow
© Max Zornada (2005)

109. Quantifying the process by using PFA
Apply a volume to the dominant flow and weighted volumes to the secondary flows and calculate the workload generated;
From the workload generated, calculate the number of Full Time Equivalents required (FTE);
Apply accepted conversion factors from work standards;
Convert to number of people required to resource the process by taking into account hours worked and rostering arrangements.
© Max Zornada (2005)

110. Using PFA
The full PFA for a process can be set up as a spreadsheet model;
This can then be used to test the viability of various opportunities for improvement when selecting what to focus on;
Can be used to model proposed changes and simulate the impact on the organisation.
Review Spreadsheet PFA Model
© Max Zornada (2005)

111. Value-Added and Non-Value Added Analysis
Process steps can be categorised as being value added or non-value added;
Value-added steps are steps considered essential to the process;
Value-added process steps pass the following three tests:
Is the step related to doing it right the first time ?
Does the step get you one step closer to delivering the product or service to the customer ?
Would the customer be willing to pay for the step ?
© Max Zornada (2005)

112. Non-Value Added Work
Internal failure: steps related to correcting in-process failures due to errors in prior activities in the process;
External failure: steps related to fixing errors in the product or service the customer has found and re-addressed to you;
Set-up: Steps that prepare work for subsequent activity;
Control/Accuracy: Steps that relate to internal process review and monitoring, appraisal steps in COQ terminology;
Moves and transport: Steps related to the physical transports that occur between activities in a process;
Delay or wait: Time spent waiting for the next processing step
© Max Zornada (2005)

113. Using PFA for Value Analysis
First pass through the process
Value Added
Non - Value Added
If done as rework, internal or external failure
All Non - Value Added
© Max Zornada (2005)

114. Tollgate Review: Define Phase
© Max Zornada (2005)

115. Toll Gate Review: Define
Project has been confirmed as a valid improvement priority and is supported by management.
A business case has been prepared, showing the potential business impact of this project in financial terms.
A problem statement has been prepared and agreed.
Objectives defining the results we are expecting from this project have been stated in the form of measurable targets.
A full Project Team Charter has been prepared including a preliminary plan/schedule.
The charter has been reviewed with the project sponsor and their support has been confirmed.
The primary customer and their key requirements have been identified.
The process concerned has been documented in the form of a process map.
© Max Zornada (2005)

116. Conclusion of Define Stage Module
© Max Zornada (2005)