The Case Study
The director of the Customer Services
Division of a bank asked for help. In the invoicing department of his middle
office he is facing several problems which he would like to get solved. The invoicing
manager of the area doesn’t see any fault in himself. Everything is always fine
when asked about problems or how the area is performing; in fact, his standard
message is: “We always manage our workload”. Upper Management heard that
customer satisfaction went down quite a lot recently and would want to get a
grip of it.
Invoices are produced monthly, always towards the end of the month. The manager says this is important so they can all focus, even though some invoices don’t need to be dealt with that way. Staff is highly specialised in their work streams of producing invoices. Their responsibilities reach from creating LANFs, printing and sending of invoices, customer services in regards to invoicing, dunning.
The team is scattered across various locations, which is the reason why the manager installed a monthly meeting. The meeting is scheduled for 2 hours and every participant reports what he or she did and what the issues were. The team consists of 15 people.
The director is only on site once a month
for 2 or 3 days. He has heard that there seems to be a problem with invoices,
but he can’t prove anything. The site director is there daily, but doesn’t have
a lot of time for the invoicing manager. He thinks the latter is long enough in
the company to be able to manage the workload without big interrogation.
When asking the employees, their main problem seems to be the impossibility to go on holidays as there is no one around to cover for them. Their sickness rate seems higher than usual, also staff turnover. Employees range across all ages and seniority. Their interfaces are usually customers, the operations team for whose services they produce the invoices, the sales department, IT, and other specialist areas.
When looking at their Explorer environment, it seems a total mess. Procedures are everywhere and nowhere, and various versions float around erratically, if there are procedures at all.
The director wants you to make his life easier and come up with a Six Sigma project.
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The DMAIC Cycle
Six Sigma Projects follow this cycle. The letters mean and show phases of the project: Define, Measure, Analyse, Improve/Implement, Control/Follow-up. Personally, I don't like the terms Improve and Control, so I came up with my own. I have run a similar project and changed the case study to a degree to keep matters confidential.
Define
In the definition phase I'd look what the key themes are, the headlines of work streams that would go on a project plan. In that phase the project structure would also be decided upon - project manager, team members, steering committee, meetings, risk analysis, ...; a project charter would be written.
The themes from this case study are pretty classical. The major one is Operations Excellence and particular work areas seem to be invoice cycles and planning, flexibility of staff, processes and interfaces, meeting structures, KPIs. Other themes are management coaching, the organisation (locations and team structures), and Customer Service Satisfaction. All in all, it is mainly an Operations Excellence project.
Measure
2 things need to be measured - project success and operational performance. They don't necessarily mutually exclude one another, but in theory it can be said that the latter measurements are for and will continue after the project.
What would be interesting to know and have measures about may be the following:
- Amount of invoices per invoice cycle
- How many kind of different invoice types there are (and whether they are comparable in terms of effort to produce)
- Customer service satisfaction data and how it is compiled
- Worked hours of the invoicing team, with over-time.
- Outstanding dunning items (receivables)
- Customer queries: the amount per day, worked hours, also query types
- Staff sickness rates
- Error rates of invoices (pre- and post-sending to customers)
- current KPIs to see what is already regularly measured
- etc.
Analyse
In the analysis phase it would be good to get some thorough data analysis from the measurement phase (above). It helps to understand the nature of the business and also hopefully shows patterns of seasonality, peaks and troughs, etc.
Further or analysis would be:
- Processes. It would be good to understand the invoicing process(-es), how those LANFs are created, till they are sent to the customer. This includes interfaces to other departments.
- Management training records. It is important to see what the managers and directors already know and whether they apply their knowledge. There might be a confidentiality problem with HR, but management can be asked directly what kind of training they have received.
- Staff training records. There seem to be flexibility problems with staff filling in for one another.
- Meetings. Joining operational meetings and see how they are conducted and whether they are any effective and efficient.
- Customer Satisfaction. Root cause analysis on customer queries. Maybe customer interviews.
- Organisational effectiveness. Analyse locations and communication between teams of the current organisation
- Work procedures. How are they written, if at all.
- IT infrastructure. What IT systems and how well they are installed.
Improve/Implement
It is difficult to predict what exactly will be implemented. But the following can be said:
- Balanced Scorecard to include measurements of customer service, staff flexibility and satisfaction, financials and processes. This is especially interesting because the department seems to have problems in the first 2 areas. The other 2 are pretty standard.
- Flexibility Matrix of staff. Cross-training of staff and making the more flexible to cover themselves.
- Standardised and efficient invoicing processes, including all interfaces. Also dunning processes. This has the potential for big change requests in the IT infrastructure, which needs extra time to implement usually.
- Writing procedures for those processes that can be used as training manuals for new or existing staff.
- Management coaching.
- Create smaller teams, maybe manage to move teams together into one location.
- Implement efficient and effective daily or weekly planning and review meetings with action plan and KPIs.
Control/Follow-up
The follow-up phase is very essential, as in this one all implemented improvements will be fine-tuned and more important, behaviours aligned. This phase is one of intensive coaching. It must be ensured that staff and management are not falling back into old behaviours. Audits will be undertaken, not only by consultants but also by staff and management; these are so-called compliance tours.
