Lean Six Sigma Will you lead,follow, or get run over

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Lean Six SigmaWill you lead,follow, or get run
over?

• Tyrone Parker
• Vice President
• Lean Six Sigma
• Xerox Corporation

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Topics

• How Lean Six Sigma changes a field Service
  Culture
• How Lean Six Sigma changes Customer Loyalty
• How Lean Six Sigma develops Future Leaders in
  your organization

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Xerox and Lean Six Sigma

• Understanding what customers truly value and need
• Transforming our culture
• Positioning us for growth
• Improving processes through fact-based,
  disciplined decision-making and measurable
  outcomes

Its becoming the way we work
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Lean Six Sigma Xeroxs Primary Objectives

• Profitability
• Growth
• New opportunities

• Economic Results

• Future leaders
• Shared business discipline
• Continuous learning

• Leadership Development

• Customer In vs. Company Out market view
• Facts/data driven decisions
• Busting bureaucracy
• Collaborative, enhanced teamwork

• Culture Change

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Commitment starts at the top

• Im convinced that Xerox Lean Six Sigma is a way
  to rebuild value in our company because it is
  about substance, not form its about discipline
  and infrastructure so projects can produce
  business results.
• Anne Mulcahy Chairman CEO

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Combining two powerful approaches
Six Sigma QUALITY enables Lean Speed (fewer
defects means less time spent on rework)
Lean SPEED enables Six Sigma Quality (faster
cycles of experimentation/learning)
LeanSpeed Low Cost
Six SigmaCulture Quality

• Goal Reduce waste and increase process speed
• Focus Identify non-value add steps and causes
  of delay
• Method Value Stream Tools, Kaizen events

• Goal Improve performance on customer CTQs
  (Critical To Quality)
• Focus Use DMAIC process with tools to eliminate
  variation
• Method 1 - 3 dedicated as Deployment
  Champions and Black Belts

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Enterprise-wide deployment
Finance
Facilities
Human Resources
Sales and Marketing
Xerox
Customer Communications
Administration
Information Technologies
Operations
Engineering
Manufacturing
Our view Not just a tool for operational
efficiency, but an enterprise-wide business
strategy for creating real value
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Leadership Makes All the Difference
A Burning Platform Clear business need or
evidence it can be better
Willingness to commit time and deploy required
resources

Belief in the Solution Is Lean Six Sigma the
right strategy to help?
Customer Value and Business Results
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Wheres your Business Unit?
How you operate
How you operate
How you operate
Lean Six Sigma methods tools
Lean Six Sigma methods tools
Lean Six Sigma methods tools
Desired State
Or is it how you close your gaps and achieve your
results integrated into how you operate?
Leadership
Is Lean Six Sigma a special initiative on the
side?
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Identify Value Levers- Financial
Economic Profit the income generated relative to
all resources required (including capital costs
from Balance Sheet)
Revenue
COGS
Operating Profit
RD
NOPAT
SAG
Operating Profit
Economic Profit
Income Tax
X
Tax Rate
Total Assets
Invested Capital
Cash
Capital Charge
X
WACC
Current Liabilities
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Selection Criteria for Initial Projects
Highly Desirable Opportunities Potentially
Desirable Opportunities Less/ Not Desirable
Opportunities Least Desirable Opportunities
Benefit
High
5M
Medium
1M
Low
Medium
High
Low
Effort
Source George Group
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Customer Experience
Trade-Win Rate
Big Y
Behavior

• CBS Likelihood to Recommend
• IES Overall Satisfaction
• Post Service Call (PSC) Overall Satisfaction
• MS CSMS Likelihood to Renew

VOC on
Ys
Overall Sat Loyalty

• CBS Problem Resolution
• Post Service Call (PSC)
• CBS Question 16k INVOICING
• IES Question 2 DELIVERY TIMEFRAME SAT.
• MS CSMS Questions

Little Ys
VOC on Performance
Xs

• Service Response Time ( calls over Max)
• Service Response Time ( of Target)
• Ongoing Maintenance Calls of Plan
• Product Quality / Performance
• Sales Frequency of Contact
• Problem Resolution Cycle Time
• Others

Operational Performance
Customer Experience Projects
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Measuring the Impact Problem Resolution
Customers Likely to Recommend Xerox 21/2 times
more Likely to Trade than those not Likely to
Recommend
Big Y
Fulfillment

• CBS Likelihood to Recommend
• IES Overall Satisfaction
• Post Service Call (PSC) Overall Satisfaction
• MS CSMS Likelihood to Renew

Ys
Customers satisfied with Problem Resolution 8
times more likely to recommend Xerox than those
dissatisfied

• CBS Problem Resolution
• Post Service Call (PSC)
• CBS Question 16k INVOICING
• IES Question 2 DELIVERY TIMEFRAME SAT.
• MS CSMS Questions

Little Ys

• Service Response Time ( calls over Max)
• Service Response Time ( of Target)
• Ongoing Maintenance Calls of Plan
• Product Quality / Performance
• Sales Frequency of Contact
• Problem Resolution Cycle Time
• Billing Quality Adjustments
• OTI Cycle Time
• Predictability of Delivery

Customers 14 times more likely to be Satisfied
with Problem Resolution when their Resolution
Cycle Time expectations are met
Xs
Operational Performance
QTC Customer Experience Projects
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Lean Six Sigma DMAIC Project Approach

• Focus
• Improve performance / Increase value at customer
  account sites through use of DMAIC, Lean Document
  Production, and Rapid Response Team tools/
  methodology
• Obj
• Retain/ Grow/ Gain Account Revenue

• Focus
• Reduce Internal Xerox variability between XSOs/
  CFS while Leaning National Processes.
• Reduce variation, move the mean.
• Obj
• Improve utilization of Xerox resource
• Enable Strategy,
• Enable Internal Control Initiatives.

3- to 6- month projects
National Process Improvements
At The Customer
Operations Gap Closure
45 Day
Focus Close performance gaps at the local
Operation level Obj Drive increased Operation
business results
1- to 3- month projects
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Break Down High Level Processes
Opportunity Area (Key Results drivers)
Value Driver
Potential Project Ideas
Service Call Optimization
Labor Productivity
Improved Reliability
Reduce parts expense variability by employee
Parts Expense
Increase parts rebuilds
Financial Results
Improve inventory effectiveness
Asset Management
Increase inventory turn
Increase employee leads
Increase employee knowledge of solutions
Revenue
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Project ExampleImprove Complaint Cycle Time
Tollgate Passed November 16, 2004
BUSINESS IMPACT EP XX Cost Reduction of XX
through Productivity Improvements (Type 2) for
both CRRs and Field Resolvers by reducing the
cycle time in the complaint management process.
PROBLEM STATEMENTS ? Complaint cycle times
are not meeting customers expectations. 40 of
CRRs time handling complaints is administrative
and non-value add. There are multiple hand offs
with field Resolvers increasing cycle time. GOAL
STATEMENTS ? Reduce non-value add steps in the
CRR closed-loop problem resolution process and
identify a more streamlined complaint management
process. Reduce CRRs administrative and non-value
add steps to 10 Reduce Resolver time by 25
Increase Customer satisfaction with cycle time
to 96
Root Cause Analysis Identifying Contacting
Services Resolvers largest area of opportunity
(46)

• Resolver
• Cycle time
• National Avg. 66 in
• 1 day

Tollgate passed April 20, 2005
Top 3 Solutions Confirm fix change Simply CPRS
documentation Consistent communication method
10 solutions developed 3 phased implementation
approach 1 solution required a pilot
Baseline data on 3 pilot XSO only
CRR closed within 1 day Baseline - 24 Pilot - 51
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Ensuring Lean Six Sigma Successin the Services
Environment

• Visible commitment by leadership
• Identify right candidates
• Align Projects against business gaps
• Role of Project Sponsor is vital
• National projects vs. local
• Account resources required
• Aggressively manage Project Cycle time
• Allow for learning curve, expect improvement with
  Sponsor and BB experience
• Measure and track results
• Financial
• Customer
• Employee

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The Lean Six Sigma Success Recipe

• Select Projects based on value creation
• Adopt consistent financial results tracking
  approach in one, global repository
• Deploy/train resources (Full time BB and
  Deployment Mgr., Sponsors, Green Belts)
• MBBs and BBs receive Finance and EP overview
• Finance reps trained in Economic Profit
  calculation
• Assign demonstrated top performers to the roles
• Adopt the organizational structure as defined
• Engage Operations leaders to integrate Lean Six
  Sigma into daily business
• Commit 1 of unit population to BB by second year
• Re-enter BBs into key leadership assignments
• Establish Lean Six Sigma as a criteria for
  promotion and movement

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Lessons Learned
Hold people accountable for business results,
validated to the bottom line

• The most strategically important projects
• Projects with financial impact

Right Business Opportunities
Right Results
Right Tools Rigorously Applied
Right People Dedicated 100
VOC, marketing, DfLSS, data analysis, process
improvement, etc