Business Tips Guides

Many outsourcing companies have created beneficial outsourcing relationships with vendors. Unfortunately, there are the occasional projects that fail to meet deadlines or criteria set forth by the outsourcers. When a project does fail, there are usually numerous reasons and not just one underlying cause.

Lack of outsourcing strategy
The outsourcing company must take the time to formulate a strategy for handling outsourced projects. Working with vendors in other countries can create even more complications, which just shows the importance of having a plan. Managers must consider how the process will be managed and must set expectations for the projects. Sometimes outsourcing companies do not adequately prepare for the administration of projects. Management should clarify how global sourcing will be implemented and effectively communicate the strategy to the internal IT department and the vendor.

Miscalculated time involved
Outsourcing companies often do not realize the amount of time it will take to get a project in operation with a vendor. Some outsourcers take a “hands off” approach, meaning they do not feel that they have to be involved once the project is sent to the vendor. That thought process can be damaging to the project. It takes time and effort to transfer technical and business knowledge to the vendor. Once the transfer is made, hours will be spent maintaining the business relationship. The outsourcing company and the vendor will also have to coordinate between the team members to ensure that everyone understands project specifications and deadlines.

Cost-reduction expectation was not realistic
One of the most common reasons that companies look to outsourcing is to reduce costs. Although outsourcing does provide cost reduction, outsourcing companies frequently have unrealistic expectations regarding the initial savings. Even though labor costs may be lower, there are other hidden costs that can cause a project to go over budget. The longer the outsourcing relationship continues, the higher the savings. However, most outsourcers do not realize this fact. Consequently, a project can be unsuccessful if an accurate budget was not put in place.

Communication barriers
Communication is more than just language. Global sourcing can be complex as outsourcers and vendors face issues of time zones and locations. These challenges can make it very difficult to communicate crucial information in a timely manner. Communication barriers are frequently to blame when it comes to a project’s failure. If team members can not effectively communicate the project status, concerns or ask questions, it can negatively impact an IT project. A communication plan can overcome this obstacle.

The vendor was incompetent
Various criteria should be considered when choosing a vendor. If price is the main motivating factor, there is a risk of choosing the wrong one. A low-cost vendor most likely will not provide the same quality of work as another vendor who may charge more. That is why cost should not be the only consideration when choosing a service provider. A vendor should be evaluated on multiple areas, such as trained personnel, technology and processes. A thorough analysis of the vendor will allow the outsourcer to have a good sense of what to expect.

Differences in culture
Cultural differences can impact a project. If the outsourcer is unfamiliar with the culture of the vendor, potential problems and miscommunication can occur. Cultural differences include religion, mode of dress, social activities and work ethic. Even the way a question is answered can differ depending on the culture. Cultural obstacles can be overcome by taking measures to clearly outline project specifications and encourage feedback from the vendor.

A project can fail for a combination of reasons. However, by understanding why projects fail, outsourcers can plan ahead to avoid potential problems.

A&E Consulting is a full service consulting firm that has been successfully helping clients with their global needs. Visit http://www.globalsourceyourit.com or call 818-572-8399 for more information.

Ancillary call center processes have been perfect opportunities to implement Lean Six Sigma. However, some additional effort is needed on the main process of the call center - the call handling process.

With some software systems it is possible to bring about Lean culture and the elimination of waste.

Waste in Call Center Scenario

The agents in call centers will have to be considered as the processes, as they are ones who deal with customer calls. There will typically be a few types of calls received at the call center, but they may be responded to differently each time, as the person on the other end may react differently.

If an agent handles 50 calls a day, they may be responding in 50 different ways. Some help can be taken from (CRM) customer relationship management software to reduce the number of variations. To reduce these variations, a standard process is required. The agent should follow this process closely and management should make an effort to monitor the calls and the agents.

Wastes in call center includes wait times, unnecessary steps and so on. These wastes need to be addressed with due care. Improvements can bring about high levels of customer satisfaction, which is very relevant and important for successful call resolution.

Standardization of Processes

The most important need for call center operations is the standardization of the call handling process, which in itself is very difficult.

Though every customer reacts differently, there are places in the entire conversation where a standardized system can be more effective. For example, take the activation of a cell phone. The initial steps to be undertaken will be the same for all customers, so this process can be automated.

By playing a pre-recorded file on the steps involved, the variation in handling by the agents is eliminated.

Optimize Processes and Eliminate Waste

A standardized process may not be an optimized one. There may be certain activities which may be wastes. In this scenario, management can apply Kaizen or continuous improvement to eliminate waste.

-Wait times in the calls are major sources of waste. In the time when there is silence in a call, resources are tied up in the process but there is no output.

-Sometimes there are certain steps in a call that become necessary, such as asking questions for verification purposes. However, there are some questions which may not serve any purpose, yet data is being collected.

Eliminating such steps can be useful in eliminating waste.

-By mistake proofing, waste can be eliminated. If there are disclosures required by law, they can be pre-recorded and put in at such a stage that they are not left out of the process.

-By monitoring calls of different agents, agents who have higher error levels can be targeted for improvement training.

This would help in improving the productivity of the agents and eliminating waste due to errors and rework, as well customer dissatisfaction.

These steps can prove to be helpful in elimination of waste in the call center and bring about higher customer satisfaction level with the services provided. Additionally, it would mean happier employees and management.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.

Value provision is the starting point which leads towards providing the product according to the customer’s requirements. The value definition is based on the customer needs and not the non-value added activities.

The customer pays for a product that matches their requirements - they won’t and pay for waste.

Value

Value includes the qualities as seen by the customer, who wants to buy the right product and at the right price. Each step, from designing and manufacturing to delivery has to be error free.

Lean efforts strive to make the processes leaner by eliminating waste. Review points are the problems that affect the customer, the importance of the project, acceptance by the stakeholders and whether or not the customer’s needs are correctly identified.

Value Stream Mapping

Value stream Mapping is aimed at identifying the right process that adds value to the product without waste. Activities that are to be considered include the process that brings about the transformation, any changes that need to be present in a system though they may not be of value, and those activities that do not fit under the two categories.

In the last category, processes should be eliminated and a detailed flow diagram developed for the others. The review points in this stage include the team’s level of understanding of the process, identified waste in the process and whether or not kaikeku was followed for radical improvement.

Flow

This step emphasizes rapid product flow. The aim is to eliminate the waste identified at each stage. The team understands the process thoroughly and identifies the non-value added process. The five steps or 5S’ are sort, straighten, shine, standardize and sustain - and all are applied in this step.

The review points include the impact of customer demand, the team’s identification of non-value added distances, whether or not the team has taken the right step to successfully apply 5S steps, and so on.

Pull

The benefits of the previous stages allow the organization to achieve higher production, as well as value addition. This step is aimed at eliminating “excess” inventory; or in other words, increasing the rate of pull. In the pull system, the products are manufactured at the same rate at which they are sold, and this results in waste elimination.

The review point here would be to define the sequence of operation - whether or not the team managed to balance operations.

Perfection

This is one of the most relevant steps, emphasizing the need for continuous improvement to achieve a state of perfection.

The review point would be acceptance of stakeholders, the process to be put in place for improvement and the risks involved.

Replicate

This is the last, important step, which aims at determining if the system has been put in place and if it can be replicated anywhere else. Such a review would take a very short time.

The review points in this step are highly relevant, including how the team members ensure that they learn from experiences, if the process improvement can be replicated and whether or not the control is set for other similar operations.

The organization that employs lean can do so in the six-step process and keep the initiative moving towards improvement, considering the review points at different stages.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.

There are times when Six Sigma proves an excellent methodology for the elimination of defects. Sometimes defects are understood from VOC or VOS. These may be relevant from the point of view of the business, but there may be some defects that may not be noticed.

For example, if there are delays within a process, then by speeding up the process, the defect may be eliminated. However, this may be at the cost of quality if it is not given consideration. Here is where Lean can be useful by using the seven wastes theory. Additionally, defects will be reduced when the problem is solved.

The Six Sigma DMAIC method relies on the analysis of the problem and may not be able to provide solutions to real life problems. Thus, if you combine the two, Lean and Six Sigma you may have good solutions to rely on.

Lean Tools in Six Sigma Projects

Defects based on Lean wastes are rejects, movement, inventory, over processing, over production, transportation and waiting for the next step. In addition, it provides 5S, value stream mapping and error proofing, which in conjunction with Six Sigma can help sort out real life issues easily.

Let us take the example of the assembly of printed wiring board components (PWB). The process of assembling these components is a very complicated one and faces the critical problem of failure at the final product test.

The assembly, being complicated, is prone to defects and errors that could have caused further delays in shipping and rework. The Lean Six Sigma team in this case should focus on understanding the PWB components assembly area. If this is done, they will find three areas of errors, Manual insertion, automated insertion as well as semi-automated insertion.

Kitting errors, wherein all components are not provided as a common kit, can be identified. Other errors may also occur, such as layout of the manual insertion workstation and positioning the axial lead parts on the automatic insertion machine. The problems can be prioritized and further action taken.

The Lean way to problem solving can help overcome this situation so that improvements can be realized for a longer period. To achieve great results, Lean methodologies and Six Sigma phases can be combined.

By considering and implementing brainstorming sessions and the seven wastes in the Define phase of DMAIC, teams find it easier to define the problem area and develop creative solutions to the problem. In the Measure phase, teams can use Lean tools such as value-added to non-value added ratios, CT over Takt time and so on - and collect and measure the data related to the problem area.

In the Analyze phase, value stream mapping and the reframing matrix can be effectively used to look at the problem from different view points and prioritize those which need immediate attention.

In the Improve phase, the usage of 5S and other tools like the visual factory concept can help in sorting out problem areas and finding a different approach, if other approaches have been rejected. In the Control phase, error proofing is extremely useful to put controls in place to avoid errors in the first place.

Lean and Six Sigma provide creative solutions to solving real-life issues by precisely pointing out the errors and providing different ways to eliminate them. The data- driven approach of Six Sigma and the Lean way can work wonders for businesses.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.

Hoshin strategic planning was used at Hewlett Packard Co. for the first time in 1976 for achieving these objectives.

What Is Hoshin Planning?

Hoshin planning comes from the original term Hoshin Kanri. It is a systematic planning methodology to define long range and key entity objectives. Without losing sight of the daily measures needed to make the business succeed, it aims at achieving breakthrough objectives over a period of two to five years.

Hoshin ensures that everyone in the organization works toward achieving the same objectives. The plan moves from key top levels to key business players. Ownership is clearly identified at the appropriate levels. Top management identifies the needs or opportunities, a strategically important annual objective, and plans are made to achieve the objectives.

Also, the processes to monitor the actions, metrics to asses the progress and previous experiences are used to improve the planning process of Hoshin.

Relevance of Hoshin planning

The plans are based on the annual state of business reviews and Hoshin objectives. The most senior leaders of the organization conduct a review of the internal and external factors that affect long-term plans.

The output, or business situation, is a smaller version of the major business issues that the management has to deal with in the upcoming years. It serves as the reference point for the many plans and strategies of the business. The Hoshin objective is the annual stretch goal, once achieved, can have significant impact on the annual review.

It expresses the outcome with reference to the metrics to measure progress. It also includes a timetable for completion and the person responsible for its completion.

-The Hoshin plan consists of series of hierarchical objectives derived from various analysis. Typically, there would be a base objective followed by multiple 3 or 4 sub-objectives that have to be achieved in order to achieve the basic one.

Each sub-objective will have its own set of metrics and timetable for completion.

-The ‘catchball’ process is the next stage wherein information-sharing occurs among the parties involved. The purpose of this exchange is to build a consensus among everyone to arrive at the best approach.

The catchball is based on the notion that the best approach will be arrived at by exchange of ideas between those involved. Another belief is that this will also ensure commitment towards achieving the objectives.

-Communicate: The next important step is to communicate the plan to all members involved in achieving the objectives. This helps ensure that all team members are aware of the objectives and the tactics to achieve them.

This is useful to keep everyone on their toes towards achieving continuous improvement.

-Regular Monitoring: It is necessary for the plan to be monitored regularly. Some plans require monitoring to be done during reviews, which can be on an early, quarterly or monthly basis.

There are some plans that may even require daily monitoring.

-Review Meetings: Reviews with the senior leaders of the organization are also very important, so that if there are any issues, they are resolved on a timely basis. If any intervention of the leaders is necessary, it can be done to keep the plan on track.

All these factors are pretty obvious, but may be overlooked. Hoshin planning provides a long term direction for organizations to undertake plans to successfully carry out projects.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.

Wastage could be loss of time, loss of interest, loss of materials required and so on. A good solution to this can be achieved from the practical approach that 5S provides.

Lean Six Sigma practitioners have faith in it as a culture that aims at continuous improvement of the working environment and the work conditions. The philosophy is applicable to any aspect of life. 5S refers to the five structured principles of seire, seiton, seison, seiketsu and shitsuke.

Translated, they mean sort, systematize, sweep (shine), standardize and self-discipline. All these terms are self-explanatory. Even if you take them in a daily simple scenario of tidying up your home, you will find that you are doing the same thing.

The first thing that is done is a sorting out of all items. They should be arranged systematically or categorized. Then the entire area needs to be cleaned.

The last step is to apply self discipline to maintain it.

Sort

The first S stands for Seiri, or Sort, where you sort out the contents of the work area. You look around and differentiate from needed, not needed and not frequently needed items. You need to find who is responsible for the item, and classify them by frequency of use.

In this phase, the red tagging of items is important. Unnecessary items should be either sent for disposal if no further use is found. If they are items that are required only sporadically, they can be put into a place marked for storage.

All items with no value ought to be discarded.

Systematize

This is the most important phase, where items are arranged systematically. With due consideration to workflow, decide which item is to be placed at which location. They should be placed in such a manner that they can be retrieved in 30 seconds.

A clear list of items and their locations should be in a visible area, such as a cabinet, and each cabinet labeled that indicates what is stored.

Sweep

In this stage, the cleaning activity is made a habit. When the workplace is cleaned daily, all items are inspected, and those that may be contaminated or need preventive action are determined.

A log should be maintained to describe the problem area. In addition to this, there should be a weekly review of the levels of implementation.

Standardize

In this stage, the standardization of the processes is done. Visual controls and guidelines are maintained to achieve a high standard of housekeeping.

Standardization of cleaning procedures and schedules from a check sheet prepared in the previous stage is done.

An evaluation of the progress and the level of implementation is also necessary.

Self-Discipline, or Sustain

Training and discipline are important. Periodical checks by management and the involvement and dedication of all employees will ensure that the 5S culture is sustained. Owners should be responsible for the maintenance of their work areas.

The application of 5S increases the morale of the employees and helps increase their efficiency. Waste is reduced and better quality is achieved. 5S is a culture which should be embraced by everyone in the organization.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.