achieving a six sigma level of meeting customers’ expectations in a services business
TRANSCRIPT
I nnovation &
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Achieving a Six Sigma Level Achieving a Six Sigma Level of Meeting Customers’ of Meeting Customers’
ExpectationsExpectationsin a Services Businessin a Services Business
Engage the Entire Company to Systematically Engage the Entire Company to Systematically
Deliver Deliver Customer Focused Innovation & QualityCustomer Focused Innovation & Quality
1
Bill Robinson
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Keep a laser-focus on the Customer Quality = meeting Customers’ expectations
Make meeting Customers’ expectations everyone’s job!
• Set improvement goals and cascade to everyone in the business
•Get everyone engaged, not just the Green/Black Belts
Become the best ... and prove it!• Be highly results-focused• Monitor and manage performance & Post results for all
to see
Use Six Sigma as a tool to continuously get better!
• The real value of Six Sigma isn’t just about reducing costs
• Never stop improving
Achieving a Six Sigma Level of Meeting Achieving a Six Sigma Level of Meeting Customers’ Expectations in a Services Customers’ Expectations in a Services
BusinessBusiness
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Delivering Delivering Customer Customer
ValueValueis a is a
Team SportTeam Sport
You know it when you feel it.
six sigmasix sigma
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Our new headquarters in Piscataway, NJ
Leading provider of B2B Transaction Delivery Services
powering the exchange of information among enterprises and their trading communities and customers
Over 1 Million transactions every business day
purchase orders, insurance claims, wire transfers, trade and travel confirmations
20,000 customers in 65 countries400+ of the Fortune 500
About EasyLink ServicesAbout EasyLink Services
500 Employees in 14 countries
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Enable Businesses to Transact Electronically Enable Businesses to Transact Electronically – Any-to-Any Network – Any-to-Any Network
Internet
GlobalTelex
NetworkFunds
Transfers
E-mail Applications
Buyer Trading Communities
Web Based EDI
Interconnects to over 25 EDI VANs
GlobalTelephony Network
Paper & Forms
Travel Insurance Freight
BankingShipping
Baltimore
VerisignEntrust
PKI Libraries
ERP CRM DBMS
Small Suppliers
E-commerce Applications
Baan, SAP, PeopleSoft,
Oracle, Yahoo
EasyLinkTransaction Delivery Network
$200 billion transaction value/yr
Infrastructure
Supplier Trading
Communities
• 20,000 Customers
• Stringent Quality, Reliability and Security Requirements
• Very Dynamic Environment
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We are very serious about QualityWe are very serious about Quality
Quality = Meeting Customers’ expectations Quality = Meeting Customers’ expectations
… and that is … and that is everyone’s job!everyone’s job!
We are the bestWe are the best … and we can prove it!… and we can prove it!
Six Sigma is the tool we use Six Sigma is the tool we use … to continuously get … to continuously get even better!even better!
Better Quality = Better CompanyBetter Quality = Better Company
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Our Quality Approach
Customer-centric Customer-centric Six Sigma Quality goalSix Sigma Quality goal
Clear/measurable Clear/measurable targets for each yeartargets for each year
Regular Leadership Team review of resultsRegular Leadership Team review of resultsRegular Customer review of resultsRegular Customer review of results
Mission & ValuesMission & ValuesMission & Mission &
ValuesValues
Deploy Deploy ObjectivesObjectives
FinalizeFinalizeObjectives & Objectives &
PlansPlans
Implement Plans
UURRNN
LL Cascade Cascade goals & metricsgoals & metricsto all organizationsto all organizations
AssessmentAssessmentCustomer Customer SatisfactionSatisfaction
Reset Measures Reset Measures
Regular Review & Diagnosis
D
M
A
I
C
Long-term Long-term Quality goalQuality goal
Annual Annual ObjectivesObjectives
Results
Annual Annual Review & Review & DiagnosisDiagnosis
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Our Long Term GoalOur Long Term Goal
8
Our long term goal is to achieve a Our long term goal is to achieve a Six Sigma level Six Sigma level
of meeting of meeting our Customers’ expectations. our Customers’ expectations.
For all areas of Customer expectations, For all areas of Customer expectations, we will improve by at least 50% each year.we will improve by at least 50% each year.
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• Accuracy level of 3.4 defects per million opportunities
• Measure of quality in terms of product non-conformances
• Consensus industry benchmark
Defective/Million Accuracy
3 Sigma 66,807 93.32%4 Sigma 6,210 99.38%5 Sigma 233 99.9767%6 Sigma 3.4 99.99966%
Most companies operate at 35,000 - 50,000 defects per million, Most companies operate at 35,000 - 50,000 defects per million, or about “3+ Sigma”or about “3+ Sigma”
1040 Submissions
Payroll Processing
Best-in-class Software
““We will achieve a Six Sigma level We will achieve a Six Sigma level of meeting our Customers’ expectations” of meeting our Customers’ expectations”
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Customer-Impacting Level 1 MetricsCustomer-Impacting Level 1 Metrics
Service Reliability
Implementation Quality
On-time Delivery
On-time Problem Resolution– Critical– Major– Minor
Billing QualityCustomer Satisfaction
Customer Radar Screen
Focus Customer-Impacting Metric
Cus
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Customer Success is Our Success
Listen Understand Respond NurtureListen Understand Respond Nurture
Customer Satisfaction SurveyCustomer Radar Screen
Customer Satisfaction SurveyCustomer Satisfaction SurveyCustomer Radar ScreenCustomer Radar Screen
Six Sigma GoalCustomer-impacting MetricsService Level Agreements
End-to-end Process ManagementIssue Management
Six Sigma Improvement TeamsMarketing ProgramsService Innovation
Six Sigma GoalSix Sigma GoalCustomer-impacting MetricsCustomer-impacting MetricsService Level AgreementsService Level Agreements
End-to-end Process ManagementEnd-to-end Process ManagementIssue ManagementIssue Management
Six Sigma Improvement TeamsSix Sigma Improvement TeamsMarketing ProgramsMarketing ProgramsService InnovationService Innovation
Customer Service & Platinum/Gold ProgramAccount Management
Executive Sponsor Program
Customer Service & Platinum/Gold ProgramCustomer Service & Platinum/Gold ProgramAccount ManagementAccount Management
Executive Sponsor ProgramExecutive Sponsor Program
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Service Reliability/QualityService Reliability/Quality
Results !!
98.00
98.20
98.40
98.60
98.80
99.00
99.20
99.40
99.60
99.80
100.00
May
-02
Aug-
02
Nov
-02
Feb-
03
May
-03
Aug-
03
Nov
-03
Feb-
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May
-04
Aug-
04
Nov
-04
Feb-
05
May
-05
Aug-
05
Nov
-05
Feb-
06
May
-06
Actual
Target60% Imp
60% Imp
75% Imp
41% Imp
Yr-Yr Target Improvement
Total Imp by Target = 96%, Total Actual Imp = 88%
GoodGood0
20
40
60
80
100
120
140
160
ActualTarget
50% Imp
Yr-Yr Target Improvement
50% Imp
25% Imp
50% Imp
Total Imp by Target = 82%, Total Actual Imp = 93%
GoodGood
0:00:00
4:48:00
9:36:00
14:24:00
19:12:00
24:00:00
28:48:00
33:36:00
38:24:00
43:12:00
48:00:00
Jan-
02
Apr-
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Jul-0
2
Oct
-02
Jan-
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Apr-
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Jul-0
3
Oct
-03
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Apr-
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Jul-0
4
Oct
-04
Jan-
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Apr-
05
Jul-0
5
Oct
-05
Jan-
06
Apr-
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Actual
Target
Total Imp by Target = 96%, Total Actual Imp = 100%
50% Imp
Yr-Yr Target Improvement
50% Imp
25% Imp
77% Imp
0:00:00
12:00:00
24:00:00
36:00:00
48:00:00
60:00:00
72:00:00
Jan-
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Apr-
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Jul-0
2
Oct
-02
Jan-
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Apr-
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Jul-0
3
Oct
-03
Jan-
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Jul-0
4
Oct
-04
Jan-
05
Apr-
05
Jul-0
5
Oct
-05
Jan-
06
Apr-
06
Actual
Target
Total Imp by Target = 96%, Total Actual Imp = 97%
50% Imp
Yr-Yr Target Improvement
20% Imp
91% Imp
0% Imp
0:00:00
12:00:00
24:00:00
36:00:00
48:00:00
60:00:00
72:00:00
Jan-
02
Apr-
02
Jul-0
2
Oct
-02
Jan-
03
Apr-
03
Jul-0
3
Oct
-03
Jan-
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Apr-
04
Jul-0
4
Oct
-04
Jan-
05
Apr-
05
Jul-0
5
Oct
-05
Jan-
06
Apr-
06
Actual
Target
Total Imp by Target = 88%, Total Actual Imp = 96%
50% Imp
Yr-Yr Target Improvement
0% Imp
76% Imp
0% Imp
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
Feb-0
2
May-02
Aug-02
Nov-02
Feb-03
May-03
Aug-03
Nov-03
Feb-04
May-04
Aug-04
Nov-04
Feb-05
May-05
Aug-05
Nov-05
Feb-06
Actual
Target
50% Imp
Yr-Yr Target Improvement
88% Imp
24% Imp
50% Imp
Total Imp by Target = 98%, Total Actual Imp = 100%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Actual
Target
Total Imp by Target = 82%, Total Actual Imp = 70%
50% Imp
Yr-Yr Target Improvement
-238% Imp
25% Imp
80% Imp
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
2.00%
Actual
Target
Total Imp by Target = 60%, Total Actual Imp = 63%
50% Imp
Yr-Yr Target Improvement
-18% Imp
-36% Imp
50% Imp
GoodGood
GoodGoodGoodGood
GoodGood
GoodGoodGoodGood
Issue ResolutionIssue Resolution
OnOn--Time PerformanceTime Performance
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0:00
:00
9:36
:00
19:1
2:00
28:4
8:00
38:2
4:00
48:0
0:00
57:3
6:00
67:1
2:00
76:4
8:00
86:2
4:00
96:0
0:00
8/1/
2004
7/1/
2004
6/1/
2004
2/1/
2004
1/1/
2004
12/1
/200
39/
30/2
003
7/30
/200
36/
1/20
031/
1/20
038/
1/20
020
100
200
300
400
500
600
Customers Feel the Variation !
GoodGood
6X5X
4X3X
2X1X
Num
ber
of M
ajor
issu
es p
er m
onth
Time to resolve 24 Months of Results
1. Minimize the number of Major Issues2. Minimize the average resolution time3. Minimize the distribution (variation)
0 Hours0 Hours
to to ResolveResolve
Way Too LongWay Too Longto to
ResolveResolve
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0:00
:00
9:36
:00
19:1
2:00
28:4
8:00
38:2
4:00
48:0
0:00
57:3
6:00
67:1
2:00
76:4
8:00
86:2
4:00
96:0
0:00
8/1/
2004
7/1/
2004
6/1/
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2/1/
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1/1/
2004
12/1
/200
39/
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/200
36/
1/20
031/
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1/20
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Customers Feel the Variation !
GoodGood
6X5X
4X3X
2X1X
Num
ber
of M
ajor
issu
es p
er m
onth
Time to resolve 24 Months of Results
6X re
ducti
on in
2 ye
ars
6X re
ductio
n in 2
year
s
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0:00
:00
9:36
:00
19:1
2:00
28:4
8:00
38:2
4:00
48:0
0:00
57:3
6:00
67:1
2:00
76:4
8:00
86:2
4:00
96:0
0:00
8/1/
047/
1/04
6/1/
042/
1/04
1/1/
0412
/1/0
39/
30/0
37/
30/0
36/
1/03
1/1/
038/
1/020
100
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500
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Customers Feel the Variation !
GoodGood
6X5X
4X3X
2X1X
Num
ber
of M
ajor
issu
es p
er m
onth
Time to resolve 24 Months of Results
6X re
ducti
on in
2 ye
ars
6X re
ductio
n in 2
year
s
??
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0:00
:00
9:36
:00
19:1
2:00
28:4
8:00
38:2
4:00
48:0
0:00
57:3
6:00
67:1
2:00
76:4
8:00
86:2
4:00
96:0
0:00
8/1/
047/
1/04
6/1/
042/
1/04
1/1/
0412
/1/0
39/
30/0
37/
30/0
36/
1/03
5/29
/03
1/1/
038/
1/020
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Customers Feel the Variation !
1X
Num
ber
of M
ajor
issu
es p
er m
onth
Time to resolve 24 Months of Results
GoodGood
1. Minimize the number of Major Issues2. Minimize the average resolution time3. Minimize the distribution (variation)
Zoom In
0 Hours0 Hours
to to ResolveResolve
ReallyReallyUnhappyUnhappy
Customers !Customers !
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0:00
:00
9:36
:00
19:1
2:00
28:4
8:00
38:2
4:00
48:0
0:00
57:3
6:00
67:1
2:00
76:4
8:00
86:2
4:00
96:0
0:00
8/1/
047/
1/04
6/1/
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1/04
1/1/
0412
/1/0
39/
30/0
37/
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5/29
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1/1/
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Customers Feel the Variation !
1X
Num
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of M
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issu
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er m
onth
Time to resolve 24 Months of Results
GoodGood
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1Q06 CurrentTarget Value
Service Reliability % Available / mo. x y G G
Implementation Quality % defective / mo. x y Y G
On-time Delivery % late / mo. x y G G
On-time Problem Resolution– Critical avg. resolution time x y G G
– Major avg. resolution time x y G G
– Minor avg. resolution time x y R Y
Billing Quality # Defects x y G G
Customer Satisfaction % Sat x y G G
Customer Radar Screen # Red x y G G
StatusFocus Customer-Impacting Metric Units
Cus
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Trend
Customer-Impacting ScorecardCustomer-Impacting Scorecard
EXAMPLE
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““we facilitate over 800,000 transactions every business day …”we facilitate over 800,000 transactions every business day …”
What this means to our CustomersWhat this means to our Customers
19
53,440
4,960192 3
-
10,000
20,000
30,000
40,000
50,000
60,000
3 Sigma 4 Sigma 5 Sigma 6 Sigma
Defective transactions per day
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Front Line
Customers
LT
First LineSupervisors
Directors
Customer-Impacting Customer-Impacting Innovation & QualityInnovation & Quality
Goals & MetricsGoals & Metrics
Process M&I TeamsSS QITs…
QC
LT
It is a Team SportIt is a Team Sport
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FunctionA
FunctionB
FunctionC
FunctionD
FunctionE
activity
activity
activity activity activity
activity
activity
activity
Mapping the Process‘Cards-on-the-wall’
Decision Data
ManualInp ut
Document
Input
MM
DD
Output
Gate
30% inputs 30% inputs tightly connected tightly connected end-to-end end-to-end
26% outputs 26% outputs tightly connectedtightly connectedend-to-endend-to-end
Functionally Functionally optimizedoptimized
100% inputs tightly 100% inputs tightly connected end-to-end connected end-to-end
100% outputs tightly 100% outputs tightly connected end-to-endconnected end-to-end
End-to-end optimized
Improving the Improving the Full-Stream ProcessFull-Stream Process
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Un-cage the Tigers - SORTUn-cage the Tigers - SORT
0
20
40
60
80
100
120
140
160
Date
Apr-02
Aug-0
2
Dec-0
2
Apr-03
Aug-0
3
Dec-0
3
Apr-04
Aug-0
4
Dec-0
4
Apr-05
Aug-0
5
Dec-0
5
Apr-06
ActualTarget
50% Imp
Yr-Yr Target Improvement
50% Imp
25% Imp
50% Imp
Total Imp by Target = 91%, Total Actual Imp = 98%
DefineDefine
MeasureMeasure
AnalyzeAnalyze
Improve Improve
CCoonnttrrooll
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0
100
200
300
400
500
600
700
Jul-0
2
Oct-02
Jan-0
3
Apr-0
3Ju
l-03
Oct-03
Jan-0
4
Apr-0
4Ju
l-04
Oct-04
Jan-0
5
Apr-0
5Ju
l-05
Oct-05
Jan-0
6
Apr-0
6
Actual
Target
Total Imp by Target = 91%, Total Actual Imp =96%
DefineDefine
MeasureMeasure
AnalyzeAnalyze
Improve Improve
CCoonnttrrooll
Billing Quality Billing Quality Improvement TeamImprovement Team
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Tool/MethodTool/Method
Six Sigma as Six Sigma as a Team Sporta Team Sport
Engage the Engage the Entire Company Entire Company
to Surpass to Surpass Customer Customer
ExpectationsExpectations
Un-Cage the Tigers Expert
Define
CTQs Pareto charts Histograms process map, SIPOC MetricsMetrics Problem statement
Measure Basic probability conceptsBasic probability concepts check sheetscheck sheets histogramshistograms
ANOVAANOVA Process capabilityProcess capability
Analyze Hypothesis testingHypothesis testing Root-cause analysisRoot-cause analysis
Mutli-vari ANOVAMutli-vari ANOVA
Improve
Problem-solving Problem-solving SPC, control charts SPC, control charts QFDQFD DFXDFX FMEA/FMECAFMEA/FMECA Countermeasure MatrixCountermeasure Matrix
DOE DOE LeanLean Theory of ConstraintsTheory of Constraints DFSSDFSS TRIZTRIZ
Control
Monitoring, Control System Standards, Procedures Implement SPC new Process Capability Transfer Plan Verify Benefits Document Communicate, Celebrate
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Service Reliability/QualityService Reliability/Quality
98.00
98.20
98.40
98.60
98.80
99.00
99.20
99.40
99.60
99.80
100.00
May
-02
Aug-
02
Nov
-02
Feb-
03
May
-03
Aug-
03
Nov
-03
Feb-
04
May
-04
Aug-
04
Nov
-04
Feb-
05
May
-05
Aug-
05
Nov
-05
Feb-
06
May
-06
Actual
Target60% Imp
60% Imp
75% Imp
41% Imp
Yr-Yr Target Improvement
Total Imp by Target = 96%, Total Actual Imp = 88%
GoodGood0
20
40
60
80
100
120
140
160
ActualTarget
50% Imp
Yr-Yr Target Improvement
50% Imp
25% Imp
50% Imp
Total Imp by Target = 82%, Total Actual Imp = 93%
GoodGood
0:00:00
4:48:00
9:36:00
14:24:00
19:12:00
24:00:00
28:48:00
33:36:00
38:24:00
43:12:00
48:00:00
Jan-
02
Apr-
02
Jul-0
2
Oct
-02
Jan-
03
Apr-
03
Jul-0
3
Oct
-03
Jan-
04
Apr-
04
Jul-0
4
Oct
-04
Jan-
05
Apr-
05
Jul-0
5
Oct
-05
Jan-
06
Apr-
06
Actual
Target
Total Imp by Target = 96%, Total Actual Imp = 100%
50% Imp
Yr-Yr Target Improvement
50% Imp
25% Imp
77% Imp
0:00:00
12:00:00
24:00:00
36:00:00
48:00:00
60:00:00
72:00:00
Jan-
02
Apr-
02
Jul-0
2
Oct
-02
Jan-
03
Apr-
03
Jul-0
3
Oct
-03
Jan-
04
Apr-
04
Jul-0
4
Oct
-04
Jan-
05
Apr-
05
Jul-0
5
Oct
-05
Jan-
06
Apr-
06
Actual
Target
Total Imp by Target = 96%, Total Actual Imp = 97%
50% Imp
Yr-Yr Target Improvement
20% Imp
91% Imp
0% Imp
0:00:00
12:00:00
24:00:00
36:00:00
48:00:00
60:00:00
72:00:00
Jan-
02
Apr-
02
Jul-0
2
Oct
-02
Jan-
03
Apr-
03
Jul-0
3
Oct
-03
Jan-
04
Apr-
04
Jul-0
4
Oct
-04
Jan-
05
Apr-
05
Jul-0
5
Oct
-05
Jan-
06
Apr-
06
Actual
Target
Total Imp by Target = 88%, Total Actual Imp = 96%
50% Imp
Yr-Yr Target Improvement
0% Imp
76% Imp
0% Imp
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
Feb-0
2
May-02
Aug-02
Nov-02
Feb-03
May-03
Aug-03
Nov-03
Feb-04
May-04
Aug-04
Nov-04
Feb-05
May-05
Aug-05
Nov-05
Feb-06
Actual
Target
50% Imp
Yr-Yr Target Improvement
88% Imp
24% Imp
50% Imp
Total Imp by Target = 98%, Total Actual Imp = 100%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Actual
Target
Total Imp by Target = 82%, Total Actual Imp = 70%
50% Imp
Yr-Yr Target Improvement
-238% Imp
25% Imp
80% Imp
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
2.00%
Actual
Target
Total Imp by Target = 60%, Total Actual Imp = 63%
50% Imp
Yr-Yr Target Improvement
-18% Imp
-36% Imp
50% Imp
GoodGood
GoodGoodGoodGood
GoodGood
GoodGoodGoodGood
Issue ResolutionIssue Resolution
OnOn--Time PerformanceTime Performance
Results !!
•Improved Customer Satisfaction Improved Customer Satisfaction (>90% Satisfied)
•Reduced costs due to ‘failure’, i.e., defects, by more than 50%
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"EasyLink enables fast, reliable worldwide communications with
our customers regardless of what technology they use. The vendor is
also reducing our costs while minimizing variance in each
transaction. Our communications are time-sensitive, making rapid
and reliable delivery essential. EasyLink as met these important requirements largely due to their
Six Sigma Program.“
A global transportation companyA global transportation company
"The business case for EasyLink was an easy one. Beyond the
economic factor of lowering the costs of our operation and
strengthening the balance sheet, there is the ‘peace of mind’ that comes with knowing our vendor
has implemented acustomer-centric Six Sigma
Program. As one of the country's largest suppliers of energy, we
value consistent, predictable business processes that deliver
world-class levels of quality.“
A leading U.S. energy companyA leading U.S. energy company"We’re lowering our messaging costs and driving new efficiencies by outsourcing to EasyLink. Since the company follows a rigorous Six Sigma Program, our global messages
to our customers are protected by the latest advances in security and compliance as well as specific metrics around
network uptime. This gives us the ability to sleep at night.“
A Fortune 100 global bankA Fortune 100 global bank
What Customers are SayingWhat Customers are Saying
I nnovation &
Q uality Solutions
Copyright – Innovation and Quality Solutions
Simplified Business CaseSimplified Business Case
Continuous ProfitabilityContinuous Profitability
Profit
Revenue Cost
‘Failure’ Cost
Other
The Ironic Outcome
>5% increase in >5% increase in SatisfactionSatisfaction
>5% increase in >5% increase in Worth-what-paid-forWorth-what-paid-for
50% decrease 50% decrease
Operating ExpenseCustomerExpectatio
ns
Customer-FocusedQualityPrice Customer-Valued
Innovation
Value
50% improvement 50% improvement
I nnovation &
Q uality Solutions
Copyright – Innovation and Quality Solutions
Keep a laser-focus on the Customer Quality = meeting Customers’ expectations
Make meeting Customers’ expectations everyone’s job!
• Set improvement goals and cascade to everyone in the business
•Get everyone engaged, not just the Green/Black Belts
Become the best ... and prove it!• Be highly results-focused• Monitor and manage performance & Post results for all
to see
Use Six Sigma as a tool to continuously get better!
• The real value of Six Sigma isn’t just about reducing costs
• Never stop improving
Some Some Parting
Parting Thoughts
Thoughts
Achieving a Six Sigma Level of Meeting Achieving a Six Sigma Level of Meeting Customers’ Expectations in a Services Customers’ Expectations in a Services
BusinessBusiness
I nnovation &
Q uality Solutions
Copyright – Innovation and Quality Solutions
To learn more:To learn more:
www.easylink.com/about/six_sigma.cfm
InnovationAndQualitySolutions.com
OR
Bill Robinson
Innovation and Quality Solutions