Six Sigma in the Contact Center Northwest Call

Six Sigma in the Contact Center Northwest Call Center Professionals Help Desk Northwest May 17, 2006 Mike Stone

Agenda • Introduction to Six Sigma • Full Life-Cycle Case Study Prepared by Mike Stone

Introduction Six Sigma was invented by Motorola, Inc. in 1986 as a metric for measuring defects and improving quality. Since then, it has evolved to a robust business improvement methodology that focuses an organization on customer requirements, process alignment, analytical rigor and timely execution. http: //www. motorola. com/content/0, , 3074 -5804, 00. html Prepared by Mike Stone

Six Sigma, the GE Way • Six Sigma - A vision of quality which equates with only 3. 4 defects per million opportunities for each product or service transaction. Strives for perfection. • DFSS – (Design for Six Sigma) is a systematic methodology utilizing tools, training and measurements to enable us to design products and processes that meet customer expectations and can be produced at Six Sigma quality levels. (DMADV - Define, Measure, Analyze, Design, Verify) • DMAIC – (Define, Measure, Analyze, Improve and Control) is a process for continued improvement. It is systematic, scientific and fact based. This closed-loop process eliminates unproductive steps, often focuses on new measurements, and applies technology for improvement. Source: http: //www. ge. com/sixsigma/glossary. html Prepared by Mike Stone

Other Quality Systems • • • Total Quality Management (TQM) Toyota Production System (TPS) Kaizen Lean Theory of Constraints Agile PDCA – Plan, Do, Check, Act Good Manufacturing Process – Pharma ISO 9000 Prepared by Mike Stone

Key Concepts • A process is all the activities involved in producing a product or service for a customer. It is cross-functional in nature • Quality is defined by customer requirements for the chosen process • Defects are defined and counted • Inconsistencies in the process, known as variation, are studied • Causes of variation are identified and addressed Prepared by Mike Stone

Key Terminology Critical to Quality Attributes most important to the customer Defect Failing to deliver what the customer wants Opportunity Event where success or failure can be determined Process Capability Level of quality your process can deliver X Underlying factors that affect Ys Y Measures being addressed by the project Prepared by Mike Stone

Key Terminology Variation What the customer sees and feels Stable Operations Ensuring consistent, predictable processes to improve what the customer sees and feels Common Cause of Variation A source of failure that is always present as part of the random variation inherent in the process Special Cause of A source of failure that lies outside the Process, Variation and so is intermittent, unpredictable, unstable Prepared by Mike Stone

DMAIC Define Measure Analyze Improve Control Team Chartering Customer Focus Process Mapping Measurement Variation Data Collection Data Analysis Process Analysis and Focus Root Cause Analysis Quantify Opportunity Generate Solutions Select Solutions Implementation Planning Monitor the Process Documentation Institutionalize Prepared by Mike Stone

Case Study IT services business Customer service call center Prepared by Mike Stone

Project Selection • Business strategy – How important is customer satisfaction? – How important is it to attract new customers? • Competitive position – How do we compare to our competitors? – Benchmarking • Best projects – Issue is well-defined with supporting data – Scope is well-defined – Objectives are stated in business terms and are measurable Prepared by Mike Stone

Project Selection • Customer satisfaction – Average – Lower than best-in-class in industry • Positive correlation with account growth – Customer satisfaction and new accounts are statistically related to one another – Business judgment • No correlation with customer service spending – Per call costs were not higher at strong competitors • Goals: Reduce support costs while improving new account growth Prepared by Mike Stone

Define • Team Chartering – Goal statement: "Increase the call center's industrymeasured customer satisfaction rating from its current -level (90 th percentile = 75 percent) to the target level (90 th percentile = 85 percent) by end of the fourthquarter without increasing support costs. “ – Milestones, tasks, responsibilities, schedule and communication plan. Prepared by Mike Stone

Define • Customer Focus – SIPOC diagram – identify customers (stakeholders) • Customers • Staff • Business – Voice of the Customer interviews • "What influences your level of satisfaction with our services? " – Summarize customer requirements • Identify measures for each requirement • Next slide Prepared by Mike Stone

Define Requirement Measure (CTQ) Quickly connect with a helpful person Wait Time Get the information I need Transfers; Service Time Apply the information, with help if needed Customer Satisfaction, Support Cost Understand how to avoid problems recurring Days to Close Prepared by Mike Stone

Define • Process mapping – Helpful during the Measure phase, as the project team considers how and where to gather data that will shed light on the root cause of the issues most pertinent to the project's goals. Prepared by Mike Stone

Measure • Define measures and how the data will be gathered • Example: – Customer Satisfaction • By industry standard monthly survey • The project will require additional, more frequent, case-bycase customer-satisfaction data. A measurement system that tracks with the industry survey will be devised and validated. Prepared by Mike Stone

Measure • Define performance standards • Example: – Customer Satisfaction • Current Baseline – 90 th Percentile / 70 -80% Satisfied • Performance Target – 90 th Percentile / 85% Satisfied Prepared by Mike Stone

Measure • Identify segmentation factors for data collection plan – Focus data collection effort – Use cause-and-effect tools – How is Y naturally segmented? • Call center, product type? – What factors may be driving the Ys? • Take a guess at what your important Xs might be • Call type, customer type? Prepared by Mike Stone

Measure • Assess measurement system – Accuracy • Does the measure agree with the “truth”? – Repeatability • Does the system always produce the same value? – Reproducibility • Will different people get the same results? – Stability • Is the system accurate over time? Prepared by Mike Stone

Measure • Collect the data – Automated – Manual – New metrics may be needed • Display the data – Look for clues into causes of variation – Simple charts and graphs Prepared by Mike Stone

Analyze • Measure process capability – Compare current performance to standards • Refine improvement goals – Adjust goals if data shows departure from expectations • Segment data – Slice and dice data to look for patterns to find causes of variation Prepared by Mike Stone

Analyze • Identify possible Xs – “Likely suspect” causes of variation • Identify and verify the critical Xs – Narrow down to most important causes of variation – Why do Problems and Changes cost more than other call types? – Why are calls processed on Mondays and Fridays more expensive? – Why do transfer rates differ by call type? (higher on Problems and Changes, lower on others) – Why are wait times higher on Mondays and Fridays and on Week 13 of each quarter? Prepared by Mike Stone

Analyze • Refine the benefit forecast – Update the forecast of how much improvement can be expected – Found that key support cost drivers (the delays and interruptions during call-servicing) were the same as those known to drive down customer satisfaction – so a win-win seemed to be possible. Prepared by Mike Stone

Improve • Identify Solution Alternatives Driving Xs Solution Alternatives Staffing • Add staff Mondays and Fridays, reduce staff on Sundays • Develop staffing model • Create on-call list to fill-in for absentees Web Service Percentage • Focus on services that can be done best on the Web • Define and communicate the value prop to customers • Evaluate incentives to move traffic to the Web Transfers and Callbacks • Improve call center processes to reduce transfers and callbacks without impacting customer satisfaction Prepared by Mike Stone

Improve • Verify the Relationships Between Xs and Ys – Solution Selection Matrix • Solution Alternatives • Customer Requirements (CTQs) – Regression Analysis • Determine the strength of each solution against the CTQs Prepared by Mike Stone

Improve • Select and Tune the Solution • Details of the plan for the Monday staffing pilot program: – Xs to adjust: Staffing level (add five for pilot, full increment to wait for evidence plan works) – Ys to measure for impact and unintended side effects: • Wait time, v/s ratio, customer satisfaction, transfers, callbacks, service time. • Compare "new staff" versus "old staff" (hypothesis test). • Measure monthly to observe learning curve effect, if any (continued on next page) Prepared by Mike Stone

Improve • Details of the plan for the Monday staffing pilot program: – Measurement system issues: Revise existing sampling plan and data collection process to distinguish new staff from old staff. – Because the current customer satisfaction sampling gives only 1 data point per month (not enough to see a change), arrange a special sample – five per day for the first 60 days of the pilot (80 percent from existing staff, 20 percent from new staff). – People and logistics issues: Communicate what is happening and why. Emphasize evaluation is not of individuals, only overall impact. Prepared by Mike Stone

Improve • Implement Solution – Pilot, if possible • Collect data during pilot – Xs and Ys – Watch for unintended impacts • Report out and obtain approval for full implementation Prepared by Mike Stone

Control • Develop Control Plan – Management control dashboards – Ys – Operational control indicators – Xs • Determine Improved Process Capability – – – – Business Growth Customer Satisfaction Support Cost per Call Days to Close Wait Time Transfers Service Time Prepared by Mike Stone

Control • Implement Process Control – Ongoing data collection and presentation • Close Project – Roll out process changes • • Training Transition control to management Validate results Refinements – Project post mortem Prepared by Mike Stone

Tools Prepared by Mike Stone

Tools • ANOVA ANalysis Of VAriance (ANOVA), a calculation procedure to allocate the amount of variation in a process and determine if it is significant or is caused by random noise. • Cause and Effect Diagram A cause and effect diagram is a visual tool used to logically organize possible causes for a specific problem or effect by graphically displaying them in increasing detail. It helps to identify root causes and ensures common understanding of the causes. It is also called an Ishikawa diagram. Prepared by Mike Stone

Tools • Control Chart A graphical tool for monitoring changes that occur within a process, by distinguishing variation that is inherent in the process (common cause) from variation that yield a change to the process (special cause). • Kano Analysis Kano analysis is a quality measurement tool used to prioritize customer requirements based on their impact to customer satisfaction. Prepared by Mike Stone

Tools • Pareto The Pareto principle states that 80% of the impact of the problem will show up in 20% of the causes. A bar chart that displays by frequency, in descending order, the most important defects. • Run Chart A performance measure of a process over a specified period of time used to identify trends or patterns. Prepared by Mike Stone

Tools • X-Bar and R Charts This set of two charts is the most commonly used statistical process control procedure. Used to monitor process behavior and outcome overtime. Prepared by Mike Stone

Resources • • http: //www. isixsigma. com/ http: //www. sixsigmainstitute. com/ http: //www. motorola. com/motorolauniversity http: //www. ge. com/sixsigma/ • The Six Sigma Way: How GE, Motorola, and Other Top Companies are Honing Their Performance by Peter S. Pande, Robert P. Neuman, Roland R. Cavanagh • Fourth Generation Management by Brian L. Joiner • Leading Six Sigma by Ronald D. Snee and Roger W. Hoerl • The Pocket Idiot’s Guide to Six Sigma by Marsha Shapiro and Anthony Weeks

Six Sigma in the Contact Center Mike Stone Mobile: (206) 779 -3105 mgstone 2020@yahoo. com