Lean Six Sigma

Lean Sigma
Methods and
Tools for Service
Organizations
The Story of a Cruise
Line Transformation
Jaideep Motwani
Rob Ptacek
Richard Fleming
The Service Systems and Innovations
in Business and Society Collection
Jim Spohrer and Haluk Demirkan, Editors
www.businessexpertpress.com
Lean Sigma Methods
and Tools for Service
Organizations
Lean Sigma Methods
and Tools for Service
Organizations
The Story of a Cruise Line
Transformation
Jaideep Motwani, Rob Ptacek,
and Richard Fleming
Lean Sigma Methods and Tools for Service Organizations: The Story of a
Cruise Line Transformation
Copyright Business Expert Press, 2012.
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any
meanselectronic, mechanical, photocopy, recording, or any other
except for brief quotations, not to exceed 400 words, without the prior
permission of the publisher.
First published in 2012 by
Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
ISBN-13: 978-1-60649-407-3 (paperback)
ISBN-13: 978-1-60649-408-0 (e-book)
DOI 10.4128/9781606494080
Business Expert Press Service Systems and Innovations in Business and
Society collection
Collection ISSN: forthcoming (print)
Collection ISSN: forthcoming (electronic)
Cover design by Jonathan Pennell
Interior design by Exeter Premedia Services Private Ltd.,
Chennai, India
First edition: 2012
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.
Abstract
Every business aspires to be competitive and proftable in their markets.
To do this, an organization needs to ofer customers value propositions,
whether it is manifest in the product they produce or in the service they
provide. Tis in turn will create customer loyalty and growth. Tere are
a number of organizational philosophies and strategies used by busi-
nesses to help accomplish this goal, among which are the concepts of
Six-Sigma and Lean. Both are widely recognized and implemented, and
both have been successful in improving value propositions of a variety
of organizations, mostly in manufacturing concerns. Lean Sigma Meth-
ods and Tools for Service Organizations proposes to integrate the best
practices from each of these philosophies and apply them to a customer-
focused organizationa cruise shipwhose overriding mission is to
deliver superior service to its customers. Te authors demonstrate in
this book how key components of both Six-Sigma and Lean, such as
identifying and removing defects, elimination of waste, metrics, speed
of delivery, and the seamless integration of these concepts and practices
throughout the operation, serve to enhance the kind of value proposi-
tions that customers recognize and which allows the organization to be
successful.
Tis book illustrates Lean Sigma on a full range of service oferings:
a cruise ship ofers whole service to their guests including gaming,
entertainment, food and medical services, retail sales, security, events
and adventure planning, operations and maintenance, purchasing and
logistics, human resources and training, and administration of payroll
and accounting. By covering Lean Sigma applications in each of these
areas in a story book format, service providers can begin to understand
how Lean Sigma methods and tools can be applied in their service
organizations. Trough a unique and captivating story of two competi-
tive brothers, one (Joe) who has had phenomenal success with Lean
Sigma methods and tools in a manufacturing business, and the other
(Larry), the manager of a cruise line desperately in need of improvement
in all performance areas, this story illustrates the discovery, application,
and transformation of a variety of service organizations supporting the
cruise line operations.
Keywords
lean, lean sigma, service, waste elimination, continuous improvement,
service excellence
Contents
Chapter 1 Te Lean Sigma for Service Challenge ..............................1
Chapter 2 Identifcation and Understanding of Lean Sigma
Implementation ................................................................5
Chapter 3 Lean Sigma Methods and ToolsBasic Concepts ............13
Chapter 4 Comparing Manufacturing and Service
Environments ..................................................................37
Chapter 5 Key EnablersPolicy Deployment,
Accountability Sessions, Employee Training and
Involvement, and Lean Sigma Tool Selection and
Application ......................................................................45
Chapter 6 Analysis of the Current State ............................................53
Chapter 7 Application of Lean Sigma Tools and Results ...................73
Chapter 8 Making Cultural Transitions ..........................................107
Chapter 9 Achieving, Sustaining, and Celebrating Success .............115
References ..........................................................................................121
Index .................................................................................................123
CHAPTER 1
The Lean Sigma for Service
Challenge
Shut up Joe! Everyones tired of your bragging, Larry said as he
slammed his chicken bone down on his plate and stood up from the
picnic table.
Joe shouted back, Its not bragging, its just the truth, and youre the
only one tired of it cause youre such a miserable loser and your so-called
cruise line is about to sink!
Joe and Larry have been fghting in some way since the day Larry was
born. Teir ferce sibling rivalry had overshadowed other family outings
in the past. Tere was the time Larry challenged Joe to a foot race around
the house, which ended up in a wrestling match, and the time Joe beat
Larry at darts, and Larry tore the dart board of the wall. Teir competitive
nature seemed to know no end. Tis time things seemed diferent though.
Joe was right that Larrys cruise line was in terrible trouble. While other
cruise lines were enjoying banner years, Larrys was barely breaking even,
and the booking rate was declining. Larry had already cut many expenses
but this only seemed to make things worse. Joe always said You cant cut
your way to prosperity.
Joe, on the other hand, was enjoying great success in his manufacturing
company. He was leading his organizations continuous improvement
(CI) program and had received several promotions over the past few years
as a result of the improvements. Te local newspaper had even written a
nice article about Joe and his companys improvement eforts. Te article
titled DR Products (DRP) Wins Prestigious Continuous Improvement
Award, had several quotes from Joe regarding his role in the efort.
Joe was telling his cousins about the article when Larry blew up at the
picnictable.
2 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Larry had always thought CI was easier for a manufacturer as
compared to a service organization and that Joe had practically had
the CI process given to him by his companys leadership. Most of the
CI books and methods were for manufacturers, not cruise lines. All Joe
did was to follow the plan in the books to get the CI award. For the
past 3 years DRP had been credited with establishing best practices
in CI. Many of the best practices were credited to Joe and his produc-
tion teams.
Larry, on the other hand, was in trouble. Not only was his cruise
line barely breaking even and losing customers, the employees werent
happy either. Just last week two more key people had quit. Larry was
spending so much time trying to replace these people that he didnt
have time for CI.
It was time for Larry to swallow his pride and talk to Joe about
business. As Joe came into the kitchen, Larry mustered up a meek
apology. Sorry I blew up out there Joe, Ive been under a lot of stress
lately.
Nothing you didnt bring on yourself. Joe shot back.
Seriously Joe, how do you do it at DRP? asked Larry.
Do what? replied Joe.
You know, that CI thing. What do you call itLean Sigma? said
Larry.
Yeah thats the name. Im surprised you remembered.
Yeah, I remembered. But it seems like a manufacturing thing. Would
it work for a cruise line? asked Larry.
Im certain it would. Its just a systematic approach to seeing and
reducing the waste in a process. Your cruise line operation is just a
bunch of processes. Sure the customers may want and expect diferent
things, but the delivery of the services is simply a series of processes.
Joe replied.
But we are so diferent than a manufacturer. said Larry.
Tats what they all say. commented Joe.
Tey do? Who? And what else do they say? Larry quickly replied.
Tey say Were diferent. Lean Sigma wont work here. Even
manufacturers say that, but theyre all wrong. Lean Sigma CI methods
THE LEAN SIGMA FOR SERVICE CHALLENGE 3
are just a scientifc or data-driven way to systematically and continually
improve a process. Everything an organization does, whether theyre a
service organization or manufacturer, can be defned as a process. Lean
Sigma methods and tools describe a standardized way to address waste
reduction in a process. Im certain it will work for you, but Im not sure
youre bright enough to lead it!
Yeah right! responded Larry. If you can do it, anybody can do it!
Anything you can do, I can do better. boasted Larry.
Care to make a wager on that? asked Joe.
Sure, what are you thinking? added Larry.
Well, if it works, you give my family and me a free 7-day cruise. If
it doesnt work, Ill give you a job at DRP when you go bankrupt! Tey
both laughed, and then Larry groaned.
Im even willing to help you, added Joe. One concept of Lean
Sigma is to share the knowledge freely. Why dont you come to the factory
tomorrow and Ill give you a tour and show you some of the Lean Sigma
activities were doing. I could even have you attend a current Lean Sigma
work session, and maybe a team huddle. ofered Joe.
Without hesitation, Larry said What time?, and the plan was set.
Tomorrow, Larry would arrive bright and early at DRP for a full day of
Lean Sigma learning.
Larrys perspective that his organization is diferent and Lean Sigma may
not apply is very common. In fact, no two organizations are exactly alike;
therefore, Lean Sigma methods and tools may work diferently for diferent
organizations. Yet, Lean Sigma philosophy, principles, and concepts of
waste elimination (conservation of resources) and improving fow are
universal. Lean Sigma is a never-ending, systematic/scientifc approach to
identify and eliminate or reduce waste for any organization that delivers
any product or service. By viewing a business as a series of processes with
Suppliers, Inputs, a Process, Outputs, and Customers (the Six-Sigma
acronym is SIPOC), any organization can employ Lean Sigma methods
and tools to improve their quality, productivity, customer satisfaction, and
fnancial performance.
Chapter 1Discussion Questions
1. Why did Larry seek help from Joe? Do you think the two bitter
rival siblings could work together?
2. Do you think it is a good idea for Larry to benchmark Joes
organization? What are some of the challenges that Larry may
encounter?
3. Discuss Joes success with continuous improvement and Lean
Sigma initiatives in his organization. What lessons can Larry learn
from DRPs approach?
4. Do you think Lean Sigma can be successfully implemented in
Larrys company? How would you address Larrys skepticism that
But we are so diferent from a manufacturer.
5. What is Lean Sigma? Do you think Lean Sigma can be applied to
any business? Why or why not?
6. Why do you think Joe is willing to help Larry?
7. Larry has been spending a lot of time replacing people. Do you
think he has the time to devote to continuous improvement and
Lean Sigma initiatives?
CHAPTER 2
Identication and
Understanding of Lean
Sigma Implementation
Larry arrived at DR Products (DRP) before dawn the next morning. Joe
met Larry at the gate, had him sign in and get a visitors badge. Larry had
to read a brief statement of DRPs values, vision, mission, and safety rules
in order to enter the plant.
Joe said, Come on, we have to get going. I dont want to be late for
my walk. Before Larry even got a cup of cofee, Joe had them walking
around on the factory foor.
Joe walked at a brisk pace. Te frst stop was in shipping and
receiving. Larry had a shipping and receiving area on the cruise ship as
well. It didnt look this organized. Joe went right to the 4 8 shipping
scoreboard which showed the planned inbound and outbound materi-
als, supplies, and products due for the day. Te area was neat and tidy.
Larry could almost see how the organization on the foor matched the
details on the board. Everythings to plan here, lets get to the next
operation, Joe said.
DRPs primary products are metal cabinets and work surfaces.
Upstream from shipping was the assembly area. In the assembly area,
they had three U-shaped cells. Joe explained to Larry that each cell pro-
duced several similar models of cabinets or work surfaces. Specials were
produced in the cell where they had the most commonalities as deter-
mined by engineering. Te cabinets were coming out of the cells like
clock-work. Each worker in the cell seemed to work in unison with the
others, moving parts to the next station in the cell at about the same time.
Larry thought to himself that it looked like an orchestrated dance. As soon
as one cabinet was completed and on the skid, a forklift would magically
appear to take it to the shipping area where fnal shipping paperwork was
prepared. Everything seemed to be in sync, like the interlocking teeth of
gears that always match up exactly to the timing or fow. At the assembly
area, Joe studied each cells scoreboard. Larry noticed that the scoreboards
had red and green coloring in certain areas. Larry assumed that green
meant good and red meant bad, and he was right.
Joe made some notes, and said Lets go, and of to the paint line
they went. Larry thought the cells were very similar to the laundry area
on the ship, except they werent quite as structured. Any laundry basically
just went into any available machine. Larry made the following sketches
of the cells and scoreboards.
Te paint line was manually operated. People hung cabinet parts and
panels on hooks or racks and placed them on an overhead conveyor. Te
conveyor system carried the parts through several cleaning steps and then
through a paint booth where two painters manually sprayed each part
with the desired color. Te parts would then be conveyed through an
oven to dry or cure the paint. After drying, the parts would be inspected
and set on roller carts to move to the assembly area. Just like in assembly,
when a painted parts cart was full, someone would magically appear to
IDENTIFICATION AND UNDERSTANDING 7
take the cart away to the assembly area. Joe studied the paint line score-
board for several minutes. Te board was very colorful: red, green, and
yellow highlights covered the board. Joe made some notes and moved on
to the metal fabrication area. Larry made the following sketch of the paint
line scoreboard showing the red and green coloring.
Joe went right to the metal fabrication scoreboard, made some notes,
and stopped at the quality hold area to look at some parts. Larry watched
as Joe picked up the parts tagged with red tags and examined them closely.
Larry couldnt help but think how this looked like his chef inspecting the
shipments of fruit coming on the ship. Joe made some notes about the
quality hold area and moved on. Larry sketched the red tag below.
Trying to keep up with Joes pace, Larry said When do we get some
cofee? You do have cofee dont you?
Joe chuckled, Yes, we have cofee. Well get some at our daily huddle,
he replied.
Huddle? Are we playing football now? Larry said with a smile.
Joe replied, No. Our daily huddle is similar to a football huddle in
that we review the current situation, and set the plan for the day. Like
a quarterback calls a play, we cover the plan for the day and then get to
working the plan. Its part of our PlanDoCheckAct (PDCA) Lean
Sigma process for CI. Te walk we just completed, we call a Gemba
Walk. Gemba means where the work is done and we do a Gemba Walk
to check on the progress to plan and then huddle to adapt, adjust, and
act with countermeasures as needed. Te huddle aligns everyone on the
action plan.
Do you do the Gemba Walk every day? asked Larry.
At least once in the morning as part of my standard leader work, but
I sometimes take the walk several times a day to stay on top of things. Te
walk makes it easier for me to spot waste and abnormalities to the plan,
and for me to ofer help to the teams to make the proper adjustments
quicker, replied Joe.
I thought standard work was only for the workers, Larry replied.
Absolutely not! Standard work is for everyone in the organization.
Each person in the organization has standard work to complete. Its part
of our Lean Sigma CI initiatives, Joe replied. Larry sketched the follow-
ing standard work form.
Joe explained, Te process is pretty simple. Everyone has standard
work thats kept track of on a scorecard. We measure our actual perfor-
mance and post this on our scoreboards several times during the day so
we can compare our actual performance to the standards. Tis method
of Scoreboarding allows us to quickly identify abnormalities and non-
standard performance throughout the day. Ten we can make appropriate
adjustments or counter measures. Were PDCAing continually through-
out the day. Tis increases the likelihood that well meet our schedule
consistently every day.
It sounds confusing, said Larry.
Its not. Its really easy once you get used to it. As I said, I do the
Gemba walk two or three times a day to stay connected with the work
fow. With a 15-minute Gemba walk I can get critical information such as:
How many parts have been produced?
How many parts should have been produced?
Are we to schedule?
What issues are preventing us from meeting schedule?
What job is next?
Do we have all the materials we need to continue?
Are there any quality problems?
Te who, what, when, where, and why for the current
situations.
Every leader in the organization can get this information just by going
to Gemba, Joe said with a grin.
Im not sure this would work for me, said Larry.
Well, when you lose your cruise line you can do it for me,
quippedJoe.
Joe had a series of activities lined up for Larry. Trough the day, Larry
would visit with several leaders and workers and near the end of the day,
Joe had arranged for Larry to sit in on a Lean Sigma overview session for
a small group of new employees. Every employee at DRP received basic
Lean Sigma CI training within the frst few weeks of employment.
In each of the work sessions with the leaders, Larry reviewed depart-
ment, team, or area scorecards and standard work for the leaders. Every-
one seemed to tell the same story regarding how they worked, how they
communicated, and how they made improvements.
By the end of the day Larry was exhausted. He couldnt wait to get
home, have a beer, and relax. Joe arrived at the training room and asked,
Are you ready for another Gemba walk?
Again? questioned Larry.
Come on Larry, its only 15 minutes and its needed to set up second
and third shift plans. We run three shifts here you know prodded Joe,
and of they went to the Gemba walk.
On the drive home, Larry couldnt help but think of all the reasons
Lean Sigma would not work for his cruise line.
A cruise line is completely diferent from a manufacturing
company.
We work with people, not parts.
No two customers are the sameours is not a consistent
process.
Our products and deliverables are diferent.
Our customers expect diferent things.
We dont measure things like a factory does.
We deliver service to customers, not products.
Ten Larry remembered what hed said to Joe at the picnic, Anything
you can do, I can do better! Hed taken some great notes throughout
the day and at the Lean Sigma overview session. Intrigued, he made a
commitment to himself to go through the notes, and to determine what
might work versus what wouldnt. It was a good thing he had some time
the next day to review his notes and make a plan.
1. Critically evaluate Larrys visit to Joes organization. What lessons
can organizations learn from this visit?
2. Discuss the manufacturing process at DRP. What lessons can
Larry learn from this process?
3. According to Joe, why is it necessary for every organization to
have a daily huddle? If you were in charge of the daily huddle
in your organization, how would you go about doing it?
4. Why is score boarding so critical to Lean Sigma and CI success?
Compare your organizations approach to score boarding with
DRPs?
5. What do you mean by a Gemba walk? Why do you think Joe
put so much emphasis on it?
6. Why is it necessary for all organizations to conduct a Lean Sigma
overview session for their employees? If you were organizing one,
what would you cover in this session?
7. On the drive home from DRP, Larry identifed several reasons why
Lean Sigma would not work in a cruise line? Do you think these
concerns are valid? What made Larry motivated to pursue it?
CHAPTER 3
Lean Sigma Methods
and ToolsBasic Concepts
Te next day Larry went over his notes and the training content provided
at the Lean Sigma overview. He started to organize the fles and notes in
a logical format. Te following are Larrys notes from the frst day at Joes
factory:
1. Lean Sigma is the most successful continuous improvement (CI)
method in the history of the world.
2. It combines the simple and versatile methods and tools of Lean with
the powerful analytical approach of Six-Sigma methods to provide
continuous incremental improvement with Lean and signifcant
increases in productivity and quality with Six-Sigma techniques.
3. Lean Sigma is the combination of these powerful tools.
4. Te origin of these methods goes back to the industrial revolution
and the concept of time and motion studies with Fredrick Taylor and
Henry Fords production lines. Lean Sigma represents the philoso-
phy of total conservation of resources.
5. Edwards Deming brought this to Japan after World War II and is
credited with Lean Sigmas predecessor, Total Quality Management
(TQM), which focuses on the customers needs, CI, and employee
involvement.
6. Dr. Deming worked with the Toyota Motor Company, Motorola,
and others to implement his TQM systems and develop the methods
and tools we now know as Lean Sigma. Often, the Toyota Produc-
tion System (TPS), waste elimination, and process or continuous
improvement are used synonymously with Lean Sigma methods
throughout the world.
Larry thought to himself how smoothly things worked at DR Prod-
ucts (DRP), and wondered how his observations ft with the training
materials hed received at the session. Larry continued to review his
notes.
What is Lean, Six-Sigma, and Lean Sigma?
Lean is a way of thinking and can be applied to every type of organi-
zation, whether it manufactures a product or delivers a service. Lean
methods and tools are simple to learn and apply and have broad appli-
cations. Lean methods even work in peoples personal life! People can
apply Lean tools to their hobbies, chores, and households to make things
simpler, easier, more enjoyable, and cost-efective. Te goal of lean is to
strive for perfection by minimizing and ultimately eliminating waste
which causes variation throughout the value stream. Te entire focus of
lean is customer-driven and its the customer who determines the value and
the amount theyre willing to pay for the product or service. Te customer
enjoys the fruits of the information and material fow. Information and
material fows are often documented in Value Stream Maps as shown
below.
LEAN SIGMA METHODS AND TOOLSBASIC CONCEPTS 15
or
The 30-year fixed mortgage application current state value stream map
Client
Pitch
Order appraisal
& title = 20 m
Notify parties &
confirm = 120 m
Schedule
location = 5 m
Print docs
= 120 m
File paperwork
pending = 5 m
Pre-application
Gather financial
data = 15 m
Run credit
report = 15 m
Determine
prgm = 120 m
Verify emply &
assets = 60 m
Underwriting
= 120 m
Application Approval/title Closing prep
5S
Butter/
safety
150 m 180 m 25 m 245 m
4 hrs
4 hrs
40 hrs
40 hrs
40 hrs
40 hrs 40 hrs
40 hrs
S
S
B
B
Q Q Q Q
Source: Ptacek and Motwani (2011a).
Like Lean, Six-Sigma (or 6s) is another approach that an organiza-
tion can implement to achieve excellence. Six-Sigma is a statistical term.
Sigma (s) defnes the variation or spread of a process. Six-Sigma defnes
how much of the total process falls within the normal process variation.
Te term Six-Sigma refers to the number of standard deviations
away from the mean in a bell-shaped normal distribution curve (see
below). Why?
Mean or average
6s5s 4s3s2s1s 1s 2s 3s 4s 5s 6s 0
Sigma
(Deviation from the mean)
Te goal of Six-Sigma is to eliminate defects and minimize variability. In
statistical terms, if an organization achieves Six-Sigma level of performance,
99.99966% of its customers are satisfed as they are receiving services that
are defect-free and meet their expectations. In other words, an organization
that has achieved Six-Sigma status will have no more than 3.4 complaints,
defects, or errors per million opportunities. Te table below summarizes
sigma or variation level and error rate per million opportunities.
Process capability
or sigma level
Defects (or errors) per
million opportunities
(DPMO)
Percentage
acceptable (%)
6s 3.4 99.99966
5s 233 99.9767
4s 6,210 99.379
3s 66,807 93.32
2s 308,538 69.15
1s 691,462 30.9
Six-Sigma forces organizations to pursue perfection by asking if 99%
acceptability is good enough? If 99% acceptability is good enough, con-
sider the following:
99% Good (3.8s) 99.99966% Good (6s)
20,000 lost articles of mail per hour
(based on 2,000,000 per hour)
7 lost articles per hour
Unsafe drinking water for almost
15 minutes each day
One unsafe minute every 7 months
5,000 incorrect surgical operations
per week
1.7 incorrect operations per week
Two short or long landings daily at an
airport with 200 ights per day
One short or long landing every 5 years
2,000,000 wrong drug prescriptions
each year
680 wrong prescriptions per year
No electricity for almost 7 hours each
month
One hour without electricity every
34 years
Lean Sigma is the most powerful improvement technique as it
systematically blends the best of the two approaches above to elimi-
nate all waste or non-value-added activities from processes. Tis, in
turn, lowers the cost and improves the quality of the process. Te con-
tinued focus on the elimination of waste should be a daily, hourly, or
minute-by-minute concern. Lean Sigma is designed to use people and
materials wisely to satisfy customer needs. With that thought in mind,
work elements or job duties may need to be modifed to accommo-
date a waste-free Lean Sigma environment. Tis will allow companies
to remain globally competitive, develop a cross-trained workforce, and
establish a safe workplace.
Lean Sigma tools are used to
improve customer satisfaction and total customer experience;
identify and eliminate waste quickly and ef ciently;
increase communication and speed at all levels of the
organization;
reduce costs, improve quality, and meet delivery obligations of
a product or service in a safe environment;
initiate improvement activities and empower employees to
make improvements themselves;
track and monitor improvements to ensure sustainability.
Lean Sigma is truly a compilation of world-class CI practices.
To understand Lean Sigma, one must understand that Lean
Sigma is, in its broadest sense, a philosophy of conservation of resources
and waste elimination. Building on the Lean Sigma philosophy are
Lean Sigma principles, concepts, methods, and tools. Tese ideas are
building blocks of a structured and supported approach to a total Lean
Sigma transformation. Lean Sigma principles must be built on a basic
understanding of Lean Sigma philosophy. Many organizations have
forgone a basic understanding of Lean Sigma philosophy and tried
to build a Lean Sigma organization on a weak foundation, only to be
disappointed with their results. It truly pays to start with and build on a
strong foundation of Lean Sigma understanding.
Conceptually, these building blocks are illustrated in the follow-
ing diagram. Starting with a strong foundation of Lean Sigma philoso-
phy, Lean Sigma principles can be used to support an organization in
utilizing Lean Sigma concepts, methods, and tools to become a superior
organization.
Larry was starting to understand his role as a leader and continued to
review the training materials from the class at DRP. He took a closer look
at each of the Lean Sigma building block levels.
Delighted customers and profitable growth
Best quality, lowest costs, fastest delivery, and innovation
Lean
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Continuous flow
Data collection and presentation
Employee balance chart
Just-in-time (JIT)
Layout
Leveling (heijunka)
Mistake (or error) proofing
Performance dashboards
Plan-Do-Check-Act
Problem solving
Pull systems and kanbans
Quick changeovers
Standard work
Statistical process control
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Total productive maintenance (TPM)
Valve stream mapping
Visual controls
Voice of the customer (VOC)
* Not all inclusive of Lean Sigma tools
Lean Sigma philosophies
Conservation of resources (sustainability or becoming green)
Relentless pursuit of waste elimination
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Continuous improvement in processes and results
Focus on customers and value streams
Total employee involvement
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Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect ServiceUsing a Practical Approach to
Lean Six Sigma to Improve the Customer Experience and Reduce Costs in Service Industries. Chelsea,
MI: MCS Media, Inc.
Larrys notes on the building blocks are shown on the following pages.
Lean Sigma Philosophies and Principles
Te overriding philosophy of Lean Sigma is defned by the continuous
elimination of waste and non-value-added activities in everything we do,
the conservation of all resources at every level of operation. Additionally,
Lean Sigma philosophies include continuous learning and improvement
in everything thats done. Lean Sigma philosophy calls for the simplifca-
tion of all tasks and eforts to eliminate waste and improve fow. Absolute
perfection is seen as the goal. Very few organizations embrace Lean Sigma
philosophies at this level. Toyota Motor Company has been practicing
Lean Sigma for over 60 years, and they still believe they need to improve!
Lean Sigma principles are the bedrock for Lean Sigma transfor-
mations. Tey provide the unchanging, solid foundation to build and
improve upon. Te three key Lean Sigma principles, supported by Lean
Sigma philosophies, are as follows:
Continuous improvement in processes and resultsDo not
be results or bottom-line only focused. Instead, focus on
processes that deliver consistent, waste-free results.
Focus on customers and value streamsFocus on the entire
process, from the customer pull or demand to demand
fulfllment and customer satisfaction. Focus on how materials
and information fow through a process.
Employee participation in a non-blaming, fear free environment
Organization leaders must make it safe for people to suggest
possible improvements in the way things are done.
Lean Sigma Concepts
Lean Sigma concepts drive Lean Sigma transformations. It is essential
that people at all levels be trained in and understand Lean Sigma concepts
to facilitate a smooth and efective Lean Sigma transformation. Do not
underestimate the power of these concepts.
Larry knew he had a lot of training and communicating to do if
he wanted his cruise line to apply Lean Sigma methods and tools, and
continued to review his notes shown on the following page.
Te Lean Sigma concepts are as follows:
Add value and remove waste
Value Adding
Organizations add value when they change the weight,
shape, confguration, properties, or attributes of materials or
information. Tese are the things the customer is willing to
pay for.
Waste (Non-Value-Adding)
Waste is anything that does not add value. Non-value- adding
activities fall into the 12 categories of waste. Tings that
consume time, resources, space, or both, but do not contribute
to satisfying customer need.
Te 12 categories of waste are as follows:
1. OverproductionMaking more than is needed.
2. ExpertiseNot using peoples knowledge.
3. Transportation.
4. Inventory and Work in process (WIP).
5. Motion.
6. Rework or Corrections.
7. OverprocessingProcessing more than is needed.
8. Waiting or delays.
9. Overload or straining a systemOverloading systems
capabilities usually leads to other forms of waste.
10. UnevennessUnevenness in work fow usually leads to other
wastes.
11. Environmental wastePollution, excess consumption.
12. Social wasteSocial networking while at work. Literacy, hun-
ger, or cultural oppression.
Larry wondered why Time was not a waste. He concluded that each of
the 12 wastes wastes time as well! He continued to review his notes on the
following Lean concepts:
PDCA process for implementing improvements. Tis is
process mirrors the scientifc method and drives improvement
activities.
Next process or operation is the customerServe them.
Upstream qualityBuild quality in; do not pass along poor
quality.
Customer needs frstAlways focus on the customer and
their requirements
Decisions at the lowest appropriate levelGo to where
the work is done or the value is added. Sometimes called
Gemba.
Speak with dataUse objective information to evaluate
process performance. Use other statistical tools to turn
subjective information into objective data.
Variation reduction and control through statistical process
control (SPC).
Defne and seek PERFECTION.
Adding value through waste identifcation and elimination is a funda-
mental concept of Lean Sigma. Te customer is paying for value; waste is
anything that your organization does to a product or service for which the
customer may be paying, and probably should not be. Waste is anything
that adds time, resources, or cost without adding value to the fnished
product or service. When waste is removed value increases. Waste can
occur in customer processes as well.
Twelve Forms of WasteThe Dirty Dozen
Lean Sigma tools and concepts assist employees (and customers in service
processes) in identifying and eliminating all types of waste. It is critical that
employees have a fundamental knowledge and understanding of waste
in order to identify and eliminate it. Te purpose of Lean Sigma practices
is to identify, analyze, and eliminate all sources of process inef ciency.
Te following table was a handout Larry had from the training ses-
sion. Te table summarizes the 12 wastes with examples.
The Dirty Dozen: 12 Forms of Waste
Form Description Examples
Ways to
eliminate
Overproduction More than required
is made or served
E-mailing,
faxing the
same document
multiple times
Ineffective
meetings
Task time
Proof of need
survey
Make to order
Expertise Under-utilization
due to placement
of people into
positions where their
knowledge, skills,
and abilities arent
used to the fullest
Workloads not
being completed
due to lack of
cross-training
Assigning
employees two
jobs due to
understafng
Standard work
Lean Sigma File
System
Business case for
Lean Sigma
Ofce quick-starts
Transport Any transport of
les, information, or
materials
Delivering
unneeded
documents
Updating
customer records
in different
systems
5S
Value stream
mapping
Standard work
Lean Sigma File
System
Visual controls
Colocation of
workers
Inventory Excessive piles of
paperwork, computer
les, supplies, and
time spent searching
for documents
Files awaiting
signatures or
approvals
Keeping multiple
copies of reports
5S
Value stream
mapping
Standard work
Lean Sigma File
System
Kanbans for ofce
supplies
Level
loading-heijunka
Motion Any movement
of people, paper
or electronic
exchanges, or both,
that does not add
value
Hand carrying
paper to another
process
Using an
excessive number
of transaction
screens to support
decision making
Standard work
New ofce layout
Kanbans for ofce
supplies
Pull systems and
supermarkets
(Continued)
Ways to
eliminate
Corrections All processing
required in creating
a defect and the
additional work
required to correct it
Data entry errors
Not having
integrated IT
systems
Standard work
Lean Sigma File
System
Visual controls
Mistake proong
Overprocessing Putting more work
or effort than
required into the
work requested by
internal or external
customers
Duplicate reports
or information
Constantly
revising
documents
Excessive
approvals
Standard work
Lean Sigma File
System
Data collection
techniques
Document tagging
Waiting Waiting for anything
(people, signatures,
information, etc.)
Excessive
signatures or
approvals
Delay in feedback
from high-level
management
Waiting for a
meeting to make a
decision
Value stream
mapping
5S
Lean Sigma File
System
Runners
Pitch
Standard work
Scoreboards
Overload Overburdening or
overloading a work
system, machine, or
process
An 18-person bus
carrying 25 people
A new contract
requiring 80
additional hours
of work and not
enough staff to
complete the work
Standard work
One piece ow
Statistical analysis
Workload
balancing
Unevenness Lack of consistent
ow of inputs/
information/
scheduled work from
upstream processes
causing many of
the other types of
waste previously
mentioned
Scheduling
all work to be
completed at the
end of the month
and not during
the month at even
intervals
Poor ofce
processes
for locating
documents when
a staff member is
on leave
5S
Value stream
mapping
Standard work
Workload
balancing
(Continued)
Ways to
eliminate
Environmental Any waste that
is generated by a
service organization
that impacts the
environment,
whether it is heat,
solid, liquid, or gas
Paper or plastic
used in a cafeteria
that isnt recycled
Unnecessary use
of power when
machines and
equipment arent
in use
Reduce, reuse,
recycle
Sustainability or
Green metrics
Social Waste from the other
areas of society,
such as poverty,
discrimination,
malpractice, health
and injuries,
nutrition, literacy
and education,
and also waste on
account of social
media networking
Time spent by
employees at work
socializing
Advertising
products on social
networking sites
that are not read
by target audience
PlanDoCheck
Act
Sustainability
metrics
Performance/gap
analysis
Larry thought about where these wastes could be present at his cruise line
and made the following notes.
1 of 12: The Waste of Overproduction
Producing some type of work prior to it being required is waste of over-
production. Providing a service above and beyond what is needed is also
considered overproduction. Overproduction is when too much of some-
thing is made or served. Tis is the greatest of all the wastes. Overproduc-
tion of work or services can cause other wastes. For example, by preparing
extra copies of a report, you are using extra paper, extra time to handle
the reports, and extra motion and transportation to dispose of the reports,
and so on. Activities without direct immediate purpose should be elimi-
nated or reconfgured unless they are already understood as essential to a
perfect process.
(Continued)
2 of 12: The Waste of Expertise
Te under-utilization of peoples expertise is a result of not placing people
where they can (and will) use their knowledge, skills, and abilities to the
fullest providing value-added work and services. An efective performance
management system will reduce this waste signifcantly. Use company
policies and procedures to efectively place people where they will most
beneft the organization.
3 of 12: The Waste of Transport
Excess transport afects the time of delivery of any work within an of ce.
Even with the Internet and e-mail readily available, too often, or not often
enough, documents (i.e., fles) that provide little or no value are moved
downstream regardless of need. Reducing or eliminating excess transport
waste is important. Locating all work in sequential process operations and
as physically close together as possible will help eliminate or reduce this
waste. Transport between processes that cannot be eliminated should be
automated as much as possible. Ask questions such as, Is the of ce layout
optimal?, Is the release and request for work automated? and Is IT
aware of the problem and can they help?
4 of 12: The Waste of Inventory
Excessive piles of paperwork, computer fles, supplies, and time spent
searching for a document is waste. Tey all take up space or require
someones time. If a document is waiting for additional information (i.e.,
signature, review, approval, etc.) and there is a change, then the time
the document has been waiting is waste. Tere are basically two types
of inventory waste related to administrative areas: (1) of ce supplies and
(2)information.
5 of 12: The Waste of Motion
Any movement of people that does not add value is waste. Tis waste
is created by poor of ce layout or design, faulty or outdated of ce
equipment, supply inaccessibility, and movement of information or
data that does not add value. Te waste of motion is insidious and
is hidden in service procedures that have not been reviewed for CI
initiatives. Regardless of the industry, motion waste may appear as
someone who is looking busy but not adding value to the work or
service. Lean Sigma tools will assist to identify, reduce, and eliminate
this waste.
6 of 12: The Waste of Corrections
Correction waste refers to all processing required in creating a defect, or
mistake, and the additional work required to correct a defect. And defects
(either internal or external) result in additional administrative processing
that will add no value to the product or service. It takes less time to do
work correctly the frst time than the time it would take to do it over.
Rework and corrections are wastes and add more costs to any product or
service for which the customer will not pay. Tis waste can reduce profts
signifcantly.
7 of 12: The Waste of Overprocessing
Putting more work or efort into the work required by internal or exter-
nal customers is waste. Excessive processing does not add value for the
customer and the customer will not pay for it. Tis is one of the most
dif cult administrative wastes to uncover. Some questions to ask to assist
in the identifcation of this waste are, What are the most basic processes
required to meet the customer needs? or Is there a clear understanding
of the customers needs?
8 of 12: The Waste of Waiting
Waiting for anything (people, signatures, information, etc.) is waste. Tis
waste of waiting is low hanging fruit which is easy to reach and ripe for
the taking. We often do not think of paper sitting in an In basket or an
unread e-mail as waste. However, when looking for the item (document
or e-mail), how many times do we mull through that In basket or the
Inbox folder and try to fnd it? How many times do you actually touch
something before it is completed? It is the fnish it, fle it, or throw it
away system that can help eliminate this waste. Tis waste closely related
to wasting time.
9 of 12: The Waste of Overload
Te overburdening or overloading of a work system or process typically
causes other wastes to occur. Overload must be handled as a separate
waste as it can be identifed easily during the value mapping process, and
is often expressed in terms of capacities of equipment or people. Usually
this waste causes a great sense of frustration and aggravation, for custom-
ers and employees, and often leads to other wastes and loss sales.
10 of 12: The Waste of Unevenness
Lack of a consistent fow of inputs/information/scheduled work from
upstream processes causes many of the other types of waste previously
mentioned. Unevenness such as traf c jams, loading and unloading ten-
der boats, lunch hour rushes, and the like create special needs for service
organizations wanting to provide the highest level of service.
11 of 12: Environmental Waste
As service organizations become more sustainable or Green, they have
to make extra eforts to protect the environmental resources as they are
becoming very scarce. Any waste that is generated by a service organiza-
tion that impacts the environment, whether it is heat, solid, liquid, or gas,
is classifed as environmental waste. Tese items can be observed in an
organizations trash containers and dumpsters. Tis is a huge opportunity
for Larrys cruise lineLarry double starred this item!
12 of 12: Social Waste
Social waste is another category of waste that service organizations need to
focus on if they wish to become more sustainable. Te term social waste
is broad and includes areas such as poverty, discrimination, malpractices,
health and injuries, nutrition, literacy and education, and also waste on
account of social media networking. When people who are suppose to
be working are using their social media when not allowed, or when an
organization is not capitalizing on the use of social media applications
where appropriate. Larry triple starred this waste!
Larry knew that each of the 12 wastes existed for his cruise line and
reviewed the leading waste questions identifed in class.
Leading Waste Questions
1. Where is waste causing us to spend excess time, resources, and
money?
2. How can I communicate these wastes throughout the organization?
3. What are some of the obvious wastes (low hanging fruit)?
4. What can be done to immediately improve customer satisfaction?
Larry thought hed use these questions to stimulate people and promote
more open communication regarding waste and continuous improve-
ments.
Larry reviewed the following Lean Sigma Service Excellence Waste
Walk form. Te form can be used by teams or individuals to identify
waste in their work environments. Simply take the form into the work
environment and look for a waste or two in each of the Dirty Dozen
waste categories. Tis exercise develops a deeper understanding for waste
and may provide a starting point for an initial project. At a minimum, the
results will stimulate discussion, learning, and waste observation. Larry
thought about how he could use this form to help teach his team about
wastes and CI opportunities.
Larry continued to review his notes from the training session at DRP.
Lean Sigma Methods
Te Lean Sigma methods used for Lean Sigma transformations include a
systematic approach or steps to initiate improvement in an organization.
Lean Sigma Service Excellence
Waste Walk Check List
Types of waste Waste observations
Overproduction
Producing more material or information
than is needed or used.

Expertise
Not using peoples minds and getting them
involved.

Transport
Moving tools and materials to the point
of use.

Inventory
Materials or information. This includes all
work in process and nished goods.

Motion
Movement of people. This includes
walking or riding, as well as smaller
movements.

Corrections
This includes rework or xing of products
or information that is wrong the rst time.

Overprocessing
This includes work above and beyond the
minimum requirements or needs.

Waiting
This includes any time delayed or waiting
for materials, information, or people.

Overload
This is when workload is too much and
machines break and people burnout.

Unevenness
This is when workload varies from slow to
fast uncontrollably.

Environmental
This includes pollution and other wastes
of the environment.

Social
This is waste that impacts social issues.

Te systematic approach is defned at three levels of engagement. Each
level must use the PDCA improvement process. Larry recalled the various
levels of engagement from his day at DRP.
Leadership Level
Develop Lean Sigma understanding and commitment for
organization leaders.
Develop and communicate Lean Sigma strategy to the
organization.
Develop and deploy a tactical plan to transform the
organization into a Lean Sigma enterprise.
Set, align, and communicate measureable goals and rewards to
sustain and support the Lean Sigma enterprise and thinking.
Conduct regular organizational performance reviews.
Project, Systems, or Team Level
1. Use the DefneMeasureAnalyzeImproveControl (DMAIC)
improvement process. Te DMAIC improvement process phases are
defned as follows:
Defne the project scope, resources, and objectives.
Measure the current state process key performance
measures, drivers, capabilities, fows, and outcomes.
Analyze the current state process data to identify and
prioritize improvement opportunities.
Improve the process by applying Lean Sigma improvement
tools and techniques.
Control the process so that the improvements are
sustainable.
Worker Level
1. Implement a housekeeping and visual control efort at all worksites.
2. Conduct hourly or daily mini-experiments to improve processes.
By engaging at these three levels, an organization can truly begin to trans-
form their culture to a CI-driven environment. Further, discussion and
cases are analyzed elsewhere to further illustrate how these levels work
together to transform an organization.
Lean Sigma Tools
Larry reviewed the following Lean Sigma Tool Application Chart and his
notes on Lean Sigma tool applications.
Te Lean Sigma Tool Application Chart presented here is not all
inclusive. It covers the Lean Sigma tools identifed in the applications
chart. Tese tools are found to be the most applicable for organizations.
Not all Lean Sigma tools will work the same in every environment. Lean
Sigma tools that apply directly in a mass production manufacturing envi-
ronment apply to a service environment, but might not be a direct ft. Just
as one would not use a screw driver to loosen a hex-head bolt, not every
Lean Sigma tool will apply to every environment and culture. Te savvy
Lean Sigma practitioner will identify the key applicable Lean Sigma tools
and apply them as needed.
DMAIC Alphabetical Tool Application Chart
Lean Sigma tools
Lean Sigma improvement phases
Dene Measure Analyze Improve Control
1 5Ss X X
2 5-Whys X X
4 Cause and effect
diagrams
X X X
5 Check sheets X X
6 Constraint or
Bottleneck analysis
X X
7 Cross-training to
develop worker
exibility
X X
8 Flow, process,
Swim lane, or
value stream maps
X X X X
(Continued)
Lean Sigma tools
10 Frequency charts X X
11 Future state ow
maps
X
12 Histograms X X X X
15 Key metric data
proles
X X X
16 Leveling service
ow, pull signals
(kanbans), and
paced work ow
(Heijunka)
X X
17 Mass customization X
18 Mistake proong
(Poka yoke)
X X
20 Pareto and pie
charts
X X X
21 Performance
management and
improvement
X X
22 PlanDoCheck
Act process
X X X X
23 Problem solving
Corrective and
preventative
actions
X X X X
25 Project
management
X X X X
26 Quality function
deployment (QFD)
X X
27 Queue time X X X X
28 Radar chart X X X
29 Rapid improvement
events
X
30 Run and control
charts
X X X
31 Scatter plots X
(Continued)
(Continued)
Lean Sigma tools
32 Spreadsheets and
pivot tables
X X X
33 Standard work for
leaders
X X X
34 Standardized work X X X
35 Statistical process
controls
X X X
37 Supplier/Input >
Process > Output/
Customer (SIPOC)
X X X
38 Talk time,
predictive selling
or service rate
analysis
X X X
39 Value-added versus
non-value-added
analysis
X X X
40 Visual controls X X
41 Visual management
and performance
scoreboards
X X X X
42 Voice of the
customer (VOC)
X X X
Larry knew he had to do something diferent with his cruise line but he
was beginning to feel a bit tired until he got to his notes on the Lean
Sigma outcomes listed below. His notes on these potential results gave
him a bit of inspiration.
Lean Sigma Outcomes
Successful Lean Sigma transformations have been documented for hun-
dreds of enterprises in nearly all sectors of the economy. In planning your
Lean Sigma transformation, be careful not to set your expectations too
low. Organizations implementing Lean Sigma transformations can expect
to realize some or all of the following:
1. In his notes from his visit to Joes factory, Larry stated Lean Sigma
is the most successful continuous improvement (CI) method in
the history of the world. Do you agree with this statement? Why
or why not?
2. Discuss the similarities and diferences between Lean, Six-Sigma,
and Lean Sigma? Which of these is the most powerful and why?
High organization morale, teamwork and efort through
alignment of goals and measures, and improved leadership
Clear communication of priorities, expectations, and results
through visual and statistical controls. Te Right things get
done Right
Clean, organized, and ef cient worksiteminimal waste or
errors
High quality outputs and results
Smooth fow of work or services
No unscheduled downtime or surprises
PerfectionZero defects or errors
Less inventory, delays, transportation, motion, and rework
Less costs and more proft and returns on investment (ROIs)
Increased capacity and sales growth potential
All of this information was a bit overwhelming for Larry. He still wasnt
convinced that Lean Sigma would work for his cruise line but he didnt
have many alternatives. He knew that doing the same thing and expect-
ing diferent results would just not work! Larry wanted to ask Joe some
more questions about the process so he gave Joe a call and invited him for
a tour of the cruise ship. Larry thought hed have some time to pick Joes
brain about how to begin. Larry just needed to know what the next step
was and how to get started.
Joe agreed to the tour if his family could spend the day on-board with
a full pass to the amenities. Larry agreed and the tour date was set.
(Continued )
3. Why do the authors recommend understanding the building
blocks in order to understand what Lean Sigma is? Discuss the
building blocks and how can it help an organization prepare for
its Lean Sigma journey?
4. What are the three key Lean Sigma principles? Does your organi-
zation address these principles efectively? If not, how would you
go about doing it?
5. Discuss briefy the fundamental Lean Sigma concepts. Can they
be easily applied by Larry in his organization?
6. By means of examples, briefy explain the 12 categories of waste?
Why is it important for an organization to be aware of and to
address these wastes using the waste walk checklist?
7. Why is it important that a Lean transformation be conducted
at three levels? If you were Larry, what steps would you take to
ensure a smooth transformation at all three levels? What outcomes
would you expect to achieve?
CHAPTER 4
Comparing Manufacturing
and Service Environments
Joe and his family were up early on the morning of the ship tour. Joes
wife had cooked a pancake breakfast and the sugar high was just kick-
ing in for the kids as they arrived at the port. Joe spotted Larry talking
with a crew member outside the ship boarding area. Larry! yelled
Joe with a wave. Larry wrapped up his conversation and walked over
to Joe.
Boy, we are sure ready for this. Whats the day-plan? asked Joe.
Larry explained that he thought hed drop Joes wife and children
of at the family pool and set everyone up with a day pass for the ships
amenities. Te ship was at port today preparing for the next voyage.
Many of the restaurants were in a changeover mode, yet there were plenty
of things to do and places for Joe and his family to eat. Once Joes family
settled in, Joe and Larry would take a walk around the ship.
Te walk with Larry started in his of ce. Larry liked his of ce and
thought it would impress Joe. As they walked into the of ce, Joe said,
Pretty fancy! At least it looks like youre doing well! Yeah Joe, this is
one of the ways service is diferent from manufacturing. If you had an
of ce this nice your customers would assume you were making too much
money. When they see my of ce they assume the entire ship has such nice
features, Larry replied with a smile.
Yeah this is nice, but you probably shouldnt spend too much time
in here, said Joe.
Well I wanted to start here to show you how we are organized and
how diferent we are when compared to a manufacturer. Larry showed
Joe the list (see next page) of the key areas he was responsible for in the
cruiseline.
Cruise Line Departments
1. NavigationCaptain and crew
2. Guest servicesBookings and onboard guest services
3. Entertainment
4. GamingOnboard casino
5. HousekeepingMaid services and laundry
6. MedicalOnboard medical center
7. Food servicesMultiple onboard restaurants
8. Retail salesMultiple onboard stores
9. SecurityOnboard police
10. Adventures and event planning
11. Operations and maintenance
12. Purchasing and logistics (supply chain)
13. Human resources and training
14. AdministrationPayroll and accounting
Joe was impressed. Tere are a lot of areas on this ship, its like a small
city! Joe said.
Its not all about speed and ef ciency on a cruise ship, said Larry.
Sometimes our customers want slow, relaxing services. Tey want to be
pampered, they want opulence! explained Larry. He continued, For
example, if we charge $150 for a foot massage, we dont want to rush
through in 10 minutes.
Joe smiled a knowing smile, Tat may be true, but they might not
want to wait 45 minutes in the lobby before getting their massage either.
Are guests ever put on hold when trying to schedule an appointment?
I get what you are saying, but there are a lot of other areas on the ship
where you do need improved speed and ef ciency. You might want to
focus on those areas before its too late! Lets take a walkI cant stand
sitting still, said Joe, and of they went.
How do you know what your customers want? asked Joe.
What do you mean? asked Larry, seeming a bit confused by the
question.
Well, how do you know if the customer wants a $150, 2-hour foot
massage experience, or only a simple foot rub for a couple

minutes?
clarifed Joe.
COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS 39
Well, we set up standard services and let our customers select the service
or option they want. Its like our food services, in that we provide a full all
you can eat bufet where the customers can select what food items they want,
or we ofer other locations where customers can experience full service, a la
carte menu items. Teir choice is how we know what they want, said Larry.
Joe elaborated, Tats great! We call that Mass Customization, which
is a Lean Sigma tool that allows customers a unique selection of exactly
what they want. You see it a lot in food services, but what about the other
services you provide? I studied a little about cruise lines before coming
today. Your brochure does a great job of explaining the diferent areas on
the ship where you provide multiple types of services. Some of them can
be easily customized and ofered to the customers, some cant. For exam-
ple, security, maintenance, and housekeeping are all services. Some have
direct ties to customers, some dont. Some have tangible or measurable
outcomes, some dont. In fact, services can fall into three categories:
Service Delivered to an External Customer which is characterized by a
high level of customer interaction and total number of transactions
completed by an organization. Organizations providing services
to external customers may have to face extreme competitive pres-
sures and may be engaged in marketing campaigns in an efort to
gain additional clients. In this category, a service provider or person
interacts with the customer directly and typically performs a task or
physical deliverable. Delivered services usually have more tangible
outcomes than service process completions. Organizations compete
on quality of outcomes. Examples include fast food restaurants, bank
tellers, lawn maintenance services, laundry services, and the like.
Service Process Used by an External Customer is similar in that they
typically face extreme competition, yet are diferent in that the
service provider may also have to educate their potential clients
on how to use the service process. Many of these organizations are
using the power of the Internet to improve their process delivery
and options, by having customers complete the ordering pro-
cess, or data entry rather than direct interaction between a ser-
vice worker and a customer. Service processes typically have less
tangible outcomes than delivered services. Organizations compete
on speed and simplicity of the process. Examples include auto-
mated teller machines (ATMs), self check-in monitors for air-
lines, self check-outs at retail stores, vending machines, and all
other service types where customers use a process directly without
direct person-to-person interaction.
Service Process Internal to an Organization typically faces less
competitive pressures because they have been established by the
organization to serve the organization. However, they too must
educate their users regarding the features and use of their internal
service processes. Examples include human resources, Information
Technology (IT), counseling, internal supply rooms, or janitorial
services within an organization.
(Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect ServiceUsing
a Practical Approach to Lean Six Sigma to Improve the Customer Experience
and Reduce Costs in Service Industries. Chelsea, MI: MCS Media, Inc.)
Each of these services has either objective and measurable, or subjective
and more dif cult to measure outcomes. For example, subjective out-
comes might be the feeling of relaxation, enjoyment from a concert or
show, and similar things. Objective outcomes are things like the drinks
being served on time, rooms being cleaned to standard, the ship sailing to
the next port on schedule, and the like.
Wow! You sound like a service expert Joe! said Larry.
Well, we learned about processes in our Lean Sigma training and
each of these types of service is a process with a Supplier, Inputs, a Process,
Outputs, and Customers. We learned this analysis as the SIPOC process
defnition. Get it? SupplierInputProcessOutputCustomer = SIPOC.
Tis defnes and measures a process so we can make improvements.
Defning and Measuring are the frst two steps in the DMAIC improve-
ment process, said Joe. Joe continued, Lets get on to the tour! Ive talked
enough and Im tired of this of ce already!
Larry provided Joe with an extensive tour of each of the main areas.
Joe made notes about his observations regarding the 12 wastes as they
visited each area. When they returned to Larrys of ce, Joe wrote his
observations on the white board. Joes notes are summarized in the
following table.
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1. Why was Joe critical of Larrys of ce? Do you think the criticism
was justifable?
2. What are some of the thoughts that come to your mind when you
see the list of the diferent departments in the cruise line? Do you
think that Lean Sigma can be applied to all these departments?
Why or why not?
3. Discuss the concept of mass customization. Why was Joe eager
that Larry apply this concept in his cruise line?
4. Briefy discuss the three diferent categories of service. Under
which category does the cruise line fall under and why?
5. Why is it critical to have both subjective and objective outcomes
and measurements in a service business? If you were Larry, pro-
vide examples of subjective and objective outcomes and measure-
ments that you would use.
6. Critically evaluate the table that summarizes the notes Joe made
when he toured the cruise line with Larry. What lessons can your
organization learn from this table and the process Joe used?
7. If you were Larry, what would you do with the list that was
provided to you? What lessons can we all learn from this?
Tere are a lot of opportunities for Lean-Sigma methods and tools here.
I think you should start a couple of improvement projects, commented Joe.
Great! How do I do that? We sail tomorrow! asked Larry.
First, you need to build a foundation to support Lean Sigma improve-
ments, so you have plenty of time. Te frst step starts with you, Joe said.
Me? Why me? Tell me more Joe, tell me more! replied Larry a bit
sarcastically, but with real surprise.
Not today. Ive done enough work for you today! I need to fnd my
wife and kids and enjoy your sinking ship! Joe said.
Quiet, Joe, Larry said while looking around to see who was near. I
dont want anything like that getting around. Ill set something up for us
next week.
Great, wheres the pool? Joe said with a sigh and a stretch. Larry
took Joe to the pool and went back to his of ce to stew.
CHAPTER 5
Key EnablersPolicy
Deployment, Accountability
Sessions, Employee Training
and Involvement, and Lean
Sigma Tool Selection and
Application
Larry left Joes waste walk notes on his white board during the cruise and
through the next week. He studied the notes and at frst was a little upset
about Joes comments. However, as time went by, he began to realize
Joe had some good points. Larry became excited about Lean Sigma and
invited Joe back to his of ce for the next session. Joe got to Larrys of ce
right on time. Youre going to have to put me on your payroll pretty soon
Larry, boasted Joe as he arrived at Larrys of ce. Joe handed Larry a single
piece of paper. On the paper was the following.
Key Enablers for Lean Sigma Success
1. Leadership establishing, communicating, and living up to the vision,
mission, and valuesDirection setting or setting the course
2. Resource commitment
3. Training and education
4. Process- and results-focused
5. Policy deployment and goal alignment
6. Total system or value stream focus
7. Employee involvement
8. Perseverance and commitment
(Source: Womack, J.P. & Jones, D.T. (1996). Lean Tinking: Banish Waste
and Create Wealth in Your Organization. New York: Simon and Schuster;
Ptacek, R. & Motwani, J. (2011). Pursuing Perfect ServiceUsing a Practical
Approach to Lean Six Sigma to Improve the Customer Experience and Reduce
Costs in Service Industries. Chelsea, MI: MCS Media, Inc.)
Joe explained where the document came from and each key to Larry.
Recently we visited several highly successful Lean Sigma organizations
in a variety of industries to learn what had made each of them so suc-
cessful. What we found was amazing; each company we visited generally
concluded the same eight keys to success. We found that this was an
enhancement to the current literature on Lean Sigma transformations,
explained Joe. Joe further explained each key enabler.
1. Leadership establishing, communicating, and living up to the
vision, mission, and valuesSetting the course. Lean Sigma trans-
formations do not happen by accident. It takes leadership to identify
and communicate the need to change, defne what to change to, and
to defne a process to use to continually improve. Too often leaders
will have good intentions in mind for their organizations, but do not
provide the key elements for continuous improvement. Te vision,
mission, and values are too often either absent entirely, or placed in
plaques on the lobby wall, and never really used to drive improve-
ment and excellence. One of leaderships chief responsibilities is to
create an environment where the need for continual improvement
and excellence can be understood by all and people can motivate
themselves to excellence. Leaders need to communicate the current
business realities and priorities to the workforce, and challenge them
with delivering continuous improvement. Tis can be done very
efectively through the vision, mission, and value documents, and
proper strategic planning. Tis starts with you Larry.
2. Resource commitmentTransforming an organization to Lean
Sigma takes energy. Resources such as time for team work sessions,
training materials and instructors, and materials for improvement
projects and PDCA experiments all will be required during a Lean
Sigma transformation. If the proper resources are not provided,
KEY ENABLERS 47
progress will slow or stop. People will perceive a lack of com-
mitment from leadership and go back to less efective ways of
doing business. Te continued commitment of key resources at
key times is one way leaders show their resolve to transform the
organization. Remember, Larry, a leaders actions speak louder
than their words. It helps if leaders actually participate in early
events and hold themselves accountable to use the tools for their
own worktoo.
3. Training and educationTis is an enabler for Lean Sigma transfor-
mations. If people dont have the proper instruction and a system-
atic approach to improvement, random and sometimes detrimental
results may occur. Some level of expertise needs to be developed by
the leaders and key workers within an organization to fully transform
an organization to a Lean Sigma environment. Not only the right
materials, but the right counseling and mentors providing guidance
at the right times will also support a Lean Sigma transformation. It
should be expected that key leaders show their leadership by aggres-
sively learning about Lean Sigma methods and tools. Tey lead the
organization in Lean Sigma learning. Im your master grasshopper,
injected Joe with a smile.
Joe continued.
4. Process- and results-focusedProcess and results mean not only
focusing on the results or the bottom line, but also to be concerned
for how the gains are being achieved. During the initial stages of a
Lean Sigma transformation its normal for several early successes to
be realized. Tese are commonly referred to as low hanging fruit
or quick hit items. While these successes should be celebrated, its
equally important for leaders to recognize and speak of the process,
methods, and tools being applied. Tis dual focus will reinforce the
workforces commitment to follow the process to achieve results.
It is also important to note that there is not always low-hanging
fruit. Teams diligently following the Lean Sigma improvement
process methods should be celebrated regardless of the outcome. By
rewarding or celebrating the process, leaders will encourage more
people to follow the process, and as they do, more improvements
and results will be realized eventually. Remember, process frst, then
results.
5. Policy deployment and goal alignment. Policy deployment is the
process of establishing, aligning, and communicating the measures,
goals, and objectives throughout the organization. Tis provides a
total connectedness or alignment of the entire organization. It is
the report card, or score, for how things are going. If properly done,
policy deployment encourages and excites people into high levels of
personal and team performance. Remember our scoreboards on the
Gemba walks? Joe continued.
6. Total system or value stream focus. Total system focus forces organi-
zations to consider fow of products, services, and people in the
delivery process. Too often businesses are organized into islands or
silos through the organizational chart, and communicating across
islands or silos is dif cult, if not impossible, for the well-meaning
worker. If nothing is done to break down departmental barriers, peo-
ple will become discouraged and only do enough to get by. Tey will
conclude that leadership really doesnt care, and ask, If leadership
doesnt care, why should I? Te concept of total systems focus recog-
nizes that work and value fows horizontally through organizations
to service their clients.
7. Employee involvementEmployee involvement and participation
is how any Lean Sigma transformation actually gets done. Man-
agement cannot simply install a Lean Sigma culture. People of an
organization are key stakeholders in transforming the organization.
When they understand why the change is needed, what to change
to, and what processes to use to change, they can fully deploy their
energy and eforts. It is through their eforts and actions that a Lean
Sigma transformation occurs. In general, people want to be on a
winning team and when an environment exists where people can
strive for improvement, where the question of Whats in it for me?
is clear and inspirational, employees will motivate themselves and
strive for excellence.
8. Perseverance and commitmentLean Sigma transformations do not
happen overnight. Nor are they easy. Organizational leaders must
KEY ENABLERS 49
display long term perseverance and commitment for a full trans-
formation to occur. Patience is needed to allow teams to progress
through the DMAIC process and learn though PDCA improvement
cycles. Remember, not everything a continuous improvement (CI)
team tries will yield positive results. Consider celebrating the failures
as learning opportunities. Leaders will also need to navigate issues
and concerns along the way. Its not enough to pursue Lean Sigma
methods when times are good. Rather, it must be a deep rooted
philosophy of applying the tools and techniques in good times and
bad. Lean Sigma techniques are a way of working and behaving all the
time. Once leaders shift their behaviors to Lean Sigma philosophy,
the organization will begin to shift as well. Leading by example is
my best advice, added Joe, as he went right on to the next steps for
Larry.
Your next step, Larry, should be to develop a strategy for improvement
and then share this with your leadership team. From there, the team can
develop high level goals to help achieve the strategy and then begin the
process of cascading these goals to all areas of the organization. Tis pro-
cess is called Policy Deployment and is a Key Enabler and is sorely
missing here, Joe explained.
Larry organized his thoughts and developed the improvement strat-
egy and began the policy deployment process with the leadership team, as
Joe described it. Te basic strategy is to participatively establish key meas-
ures and goals for each area, and then measure and post, in a scoreboard
fashion, the actual performance to goals for each area. Once this is done,
the teams will need a method to regularly review and respond to achieve
continuous improvement.
Tings went well at frst, but then Larry met with some resistance
in the ranks of his leadership team. A mutiny if you will, Captain
Bob burst out at a leadership work session, We dont need this for the
crew, we are doing just fne, thank you! Go blow your stack somewhere
else, Larry. Te captain had been known for his arrogance and blunt
approach. After all, on the ship he was the captain and he was used
to people following his orders, not taking improvement lessons from a
land-lover like Larry!
Larry pushed back. Captain Bob, I think your behavior is inappropri-
ate and as long as you are an employee of this cruise line youll follow our
rules and policies and we are going to involve everyone in this improvement
initiative. Te life of the cruise line depends on it! Captain Bob clearly was
not happy and he kept to himself the rest of the session. Larry caught up
to him later that day and explained that his crew and operations may be
top notch, but Larry still needed him to participate as he was a respected
leader in the organization. Tere was still some tension between Larry and
Captain Bob, but Larry remembered the discussion on resistance to change
he had learned about during the Lean Sigma session at Joes factory.
Te instructor at the session explained that resistance to change is a
natural human reaction to change, and should be expected. Often peo-
ple are afraid of the unknowns that change can bring. People may not
express their fear, but it will manifest itself in resistance. Deep down, even
subconsciously, they may fear not being the expert, not being able to learn
the new skill or method, having to learn something new, or the sense of
loss of security due to not knowing the system. Resistance was actually a
sign that real progress is being made!
Larry reviewed the managing change graph (shown below) he
received at the training session regarding managing change, and thought
to himself, I must be doing something right, hitting a nerve somewhere,
if people are starting to resist.
Managing change time plot.
Source: Ptacek, Coats, and Ptacek (2012).
(2) Denial
and refusal
(5) Learning
(6) Realization
(7) Integration
(1) Shock
and surprise
Current state
Time
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Future state
(4) Emotional
acceptance
(3) Rational
understanding
KEY ENABLERS 51
Te lack of resistance may mean that leaders are not pushing fast or
hard enough. Larry then decided to stay the course. His strategy to deal
with the resistance was to focus on the people who were showing interest
and nurture and cultivate their interest, rather than those who were resist-
ing. He was hopeful that this approach would convince people to try to
engage in the improvement efort. Other strategies to deal with resistance
are as follows:
Recognize that the root of resistance is based in a fear of
something and is a natural human response.
Answer the leading change questions: why do we need
to change, what to change to, and how to do it together.
Communicate this message often and consistently.
Be honest and truthful. Do not guarantee anything except
more need for change and improvement.
Look for subtle change resistant behaviors and address them
quickly.
Help people understand why change is needed and to settle
their fears.
(Source: Ptacek, R. & Motwani, J. (2011). Te Lean Six Sigma Pocket
Guide XLCombining the Best of Both Worlds Together to Eliminate Waste!
Chelsea, MI: MCS Media, Inc.)
With the managing change plan set, Larry led a series of sessions with
his leadership team. Tey established their mission, vision, and goals.
Tey reviewed the company value statement, and recommitted to holding
each other accountable to these standards. Te leadership team discussed
a plan for daily work team sessions or huddles in each area to discuss the
days activities and key issues. Te leadership team prepared to meet with
their respective teams to roll out the strategic goals, and defne Key Per-
formance Indicators (KPIs) and develop a system to monitor and improve
their results. Te mandate was clear: we must improve or cease to exist
as an organization. Staying the current course would not lead to success.
Change for the better was needed and expected from everyone. Full speed
ahead with Lean Sigma was needed!
Larry felt good that his work with the leadership team had addressed
the key enablers. He was disappointed that it had taken 6 weeks to get
this done, but Joe told him to Steady the ship, plan the work, and work
the plan. Te next step was for Larry to share with the area teams the
results and notes from Joes waste walk that was still etched on his white
board. Tis represented the current state, which was flled with waste.
Larry thought hed ask Joe to attend these sessions as he thought there
could be some rough sailing and resistance!
1. Discuss briefy the key enablers for Lean Sigma success. Why is it
important for every organization to know these enablers prior to
Lean Sigma implementation?
2. What role do top leaders play in the success of Lean Sigma imple-
mentation? If you were Larry, what steps would you take to ensure
success?
3. Why is it important not only to focus on the bottom line results
but also on how the gains are being achieved? Does your organi-
zation have the same focus? Why or why not?
4. Why is it critical to have a total system or value stream focus?
What are the typical mistakes organizations make when they
dont have this focus?
5. What do you mean by the term policy deployment? Why did
Joe tell Larry that this enabler was solely missing in his organiza-
tion? How did Larry go about fxing it?
6. Discuss some of the strategies to overcome resistance to change.
What strategies does your organization incorporate to combat
resistance?
7. Critically evaluate the process used by Larry to get his leadership
team on board.
CHAPTER 6
Analysis of the
Current State
Joe arrived early as usual to the current state work sessions scheduled by
Larry. As he greeted Larry, Joe asked, So Larry, if you start your Lean
Sigma journey, how will you know youre getting better?
Larry looked puzzled. Well I thought itd be obvious. Wont our
KPIs tell us? Larry replied.
Tey should, but having the base-line or current state or base-line
Key Performance Indicators documented is critical to show the long term
success. So what are your high level KPIs and how will you show improve-
ment? Joe asked.
Joe and Larry continued their dialog. Larry indicated that the primary
key measures are sales revenue, and Earnings Before Income Taxes and
Adjustments (EBITA). If sales and EBITA do not improve there may be
no cruise line to worry about.
Joe asked Larry, Okay, so what leads to increasing sales revenue and
proft?
Larry replied, Well, for proft to go up our operating costs need to go
down, for sales to increase we need more customers.
What leads to more customers? Joe asked. Larry wrote the following
on the white board:
To increase customer bookings we need the following:
Advertising and promotions that attract customers
Satisfed and repeat customers/passengers
Referrals from past customers/passengers
Okay, so how do you get any of these to happen? asked Joe. Larry
had that puzzled look again. Joe spoke up again, Well take a look at what
we call a Critical To Quality (CTQ) diagram. He sketched the follow-
ing diagram on the white board.
Reduce
labor costs
Reduce
materials costs
Eliminate and
reduce the 12
wastes
Continuous
improvement
in speed and
efficiency
Provide the
same level of
service with
fewer people
Provide
improved
service and
customer
experience with
the same
people
Provide
improved
service and
customer
experience
with the
same materials
Eliminate and
reduce the 12
wastes
Consume less
for the same
service levels
Reduce
materials costs
through
negotiations
Provide the
same level of
service with
fewer materials
Reduce
operating costs
Eliminate and
reduce the 12
wastes
Continuous
improvement
in speed and
efficiency
Provide the
same level of
service with
fewer operating
expenses
Provide
improved
service and
customer
experience with
the same
operating
expenses
Sales
promotions and
advertising
Increase repeat
customers
Increase
referrals by past
customers
Pleasant people
Ship amenities
and options
Problems
resolved quickly
and to the
customers
expectation
and delight
Enjoyable
experience in
all areas
Superior value
for experiences
Easy of booking
No hassles or
problems
Problems
resolved quickly
and to the
customers
expectation
and delight
Pleasant people
Ship amenities
and options
Incentive for
referral
Incentive to
return
Enjoyable
experience in
all areas
Superior value
for experiences
Easy of booking
No hassles or
problems
Increase sales Reduce costs
Increase EBITA and ROI (Organization Survival)
Joe further explained that certain lower level activities and work lead
to improving the KPIs results at higher levels, and that this connection
defnes a process of Policy Deployment that puts action to the plan. Tis
is the linkage between action items and worker level measures, and higher
level organizational results.
Okay, so how do you measure any of those, and how can my team
leaders drive this improvement? asked Larry.
ANALYSIS OF THE CURRENT STATE 55
Lets get to the current state work session and ask the team leaders,
said Joe.
To start the current state sessions, Joe and Larry agreed to cover the
CTQ diagram and concept, as well as the high-level objectives and KPIs.
Tey also decided to ask the area leaders to solidify KPIs in their areas that
will support the CTQ concepts as well as the high-level KPIs that Larry
and Joe had developed.
Joe encouraged Larry to be on the lookout for a team leader who
was energetic about the new approach. Te goal was to establish a pilot
area for fast track improvement and to provide guidance to the rest of
thegroup.
Joe said, Initially, we want to spend our time and positive energy on
someone who wants to move forward.
Larry was skeptical about this. Dont we want to get them all on
board and moving forward at the same time? We have to make sure the
stubborn team leaders are bought in before taking the next steps. We
want them all to make progress as a team!
Joe smiled and said, Lets not waste energy trying to convince those
who are skeptical. When you spend time with the people who demon-
strate the behavior you want, others will take notice. Everyone will see
that the nay-sayers and complainers dont get all the attention anymore.
Te fence sitters will then jump on-board and the momentum will drive
the improvement process forward. Te nay-sayers will realize theyre
being left behind.
Larry slowly smiled an understanding smile. Larry quipped, Ah! I
need to change my people approach as well. Reinforce the behaviors I
want. Te squeaky wheel shouldnt always get the grease!
At the current state work sessions Larry explained the current business
environment to the team. Larry didnt pull any punches. He told them
the brutal truth; if they didnt improve, they may have to close or sell the
cruise line. Everyone understood the seriousness of the situation but they
had no clue as to what to do about it. Tey all felt they were doing their
best. Larry mentioned that he was not dissatisfed with any of the teams
performance, but that the organization as a whole just wasnt getting
the job done. Basically, Larry felt that they were underachieving, and he
wanted to do something about it.
Larry provided a brief description of how the leadership team got
to this point. He described the walk through with Joe, and provided
a summary of Lean Sigma methods and tools, and the enablers.
When Larry shared the wastes summary table, there was a great deal
of resistance in the form of explanations and reasoning for doing
things the way Joe had observed. Te leadership team heard comments
suchas:
Tats not fair! How else are we to do it?
We dont have the time to do it diferently.
Do you know a better way?
Joe doesnt understand our businessHes in manufacturing!
Tings have to be done this way.
Tats the way weve always done it, whats wrong with that?
Larry explained that the idea isnt to blame or point fngers, but to be able
to see the waste so improvements can be made. After the group calmed
down, a good discussion started to take place. During one of the breaks,
Sue, the food service team leader, pulled Larry aside. Larry, I have an idea
for an improvement that needs to happen in one of my restaurants, the
Good Time Diner. Id like to move ahead with an improvement project
with your help and Joes if thats okay.
Larry considered her idea for a minute or two, remembering
Joes pilot idea, and then said, Sounds good. Well support you any
way we can. Im sure Joe will help out when he can. What are you
thinking?
Sue responded, I want to do a customer survey and fnd out what
the customers think we need to do to get better. Satisfed customers equal
happy customers, dont you think?
Absolutely! Larry said excitedly. Conduct your survey and
let me know how I can help. Lets get back to our discussion on
improvements.
Area Increase sales Reduce costs
Navigation Smooth seas, safe passage,
on time to ports, connection
with passengers
Reduced overtime, less fuel, less
breakdowns
Guest services Expectations met, room
acceptable and as described or
better, activities as described or
better, reasonable on-board costs
Reduced overtime, less materials
costs
Entertainment Exciting and fun, reasonable costs,
connection between performers
and passengers, fresh acts
Reduced costs for acts and
materials
Gaming Exciting and fun, easy/no hassles,
increase passenger success
Reduced overtime, increased
stake, reduced passenger winnings
Housekeeping Clean rooms, relationships with
passengers, all needs meet, quick
response to inquiries and needs
Reduced overtime, reduced
materials and supplies
Medical Help everyone fast, no sea
sicknesssmooth seas!
materials and supplies
Food services Offerings, friendliness,
entertainment during service
materials and supplies, reduced
wastes
Retail sales No stock outs, reasonable prices Reduced overtime, reduced
wastes
Security No problems, safe voyage Reduced overtime, reduced
wastes
Adventures and
event planning
Exciting options, fair prices, no
delays on popular items
Reduced over time, reduced
wastes
Operations and
maintenance
No problems or breakdowns, fast
responses to passenger needs and
requests
wastes
Purchasing and
logistics (supply
chain)
No stock outs, reasonable prices Reduced overtime, reduced
wastes
Human resources
and training
Support all employees,
knowledgeable of staff, passenger
questions answered quickly and
accurately, customer service
orientation classes
wastes
Administration
Accounting
No billing problems, smooth,
accurate, and hassle-free
currency exchanges, no credit
defaults, pay checks on time and
accurately, protable
wastes
When the session reconvened, Larry asked the area leaders how
they could afect the CTQ factors illustrated in the CTQ diagram. Te
following table summarizes the discussion on how each area could afect
the overall high-level objectives.
Te next activity for the team leaders was to defne their KPIs and
processes. Each area needed a base-line data set for the KPIs so they could
determine if experiments and trials were actually improving things. Joe
helped Larry explain that the KPIs should align with the strategic goals
and high-level KPIs identifed for the organization. Tis would ensure
that their policy deployment eforts would be consistent and aligned to
the strategic plan and goals.
Te process to establish and align KPIs and goals took several
work sessions. Larry led these work sessions without Joe, but kept
in contact with Joe as his team progressed. Te results of the work
sessions are defned in the following table that Larry published after
the sessions.
In the meantime, during the weeks that area KPI discussions took
place, Sue began working on her idea. She developed and distributed a
survey to customers over several weeks. Te responses she received were
eye-opening and proved to be quite useful.
A Te room is cold and drafty 28
B A lot of tables not clearedLooks bad 48
C No sweetener at the table 15
D Waited too long to be seated 78
E Bufet table is poorly organized 68
F Place settings are missing items 15
G Not enough window seats 11
H Drink reflls took a long time 18
Total: 281
Sue took this data and put together a Pareto chart, as Larry had shown in
one of their work sessions. Tis visually showed the results of the survey
and highlighted which responses represented 80% of the problems.
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Te Pareto chart indicated the biggest issue was that customers
waited too long to be seated. Sue was excited at the prospect of kicking
of a team in the restaurant to begin attacking this issue. She felt this
was right in line with her KPIs and the work that had taken place during
the sessions with Larry so far. Sue decided to share this information
with Larry and get some ideas for the next steps during the next work
session.
Larry smiled broadly as Sue explained what she had done so far and
what the survey responses revealed. Great job Sue! Te Pareto chart
is perfect. Now we need to plan out some next steps to take following
the DefneMeasureAnalyzeImproveControl (DMAIC) approach.
We just so happen to be covering that information today. After the
meetinglets talk some more to make sure youre comfortable with all
the steps.
With the KPIs in place, the next step was for Larry to ask that each
area leader initiate an improvement project in their area that would
have a signifcant positive impact for the areas KPIs and the strategic
goals. Larry would lead sessions twice a month with the leadership
team to review project progress and monitor area KPIs and action
0
D E B A H F C G
78 Series1 68 48 28 18 15 15 11
10
20
30
40
50
60
70
80
32%
60%
78%
88%
92%
95%
99% 100%
plans or countermeasures. Larry summarized his approach with the
following chart:
High-level Lean Sigma service journey steps
Lean Sigma service project launch(es)
Project selection based on current state and KPI analysis
Project team(s) learn and use the DMAIC
improvement process to implement improvements.
One or multiple teams and projects depending on resources
1. Project teams define the project parameters
2. Project teams measure process variables
3. Project teams analyze process variable data
4. Project teams implement improvements using the
Plan-Do-Check-Act (PDCA) improvement tool.
1. PDCA 1
2. PDCA 2
3.
4.
5.
6. PDCA (n)
5. Project teams establish control processes to ensure the
improvements are maintained.
Establish and monitor key
organizational performance
measures. Take corrective,
preventative, and
improvement actions as
needed by assigning DMAIC
project teams.
Conduct current state and key performance indicator (KPI) analysis
Source: Modied from Ptacek, R. & Motwani, J. (2011). The Lean Six Sigma Pocket Guide XL
Combining the Best of Both Worlds Together to Eliminate Waste! Chelsea, MI: MCS Media, Inc.
Te Lean Sigma fow diagram indicated that an initial Lean Sigma KPI
analysis would be required to document their current state situation. Te
team felt this was a good idea and agreed to get moving on this efort.
Tree weeks later while at port, Larry met with Joe. Larry shared what
was going on with Sue and how he had provided some coaching. Joe was
surprised at how well Larry had done. Youre a natural Larry, or did you
just get lucky? Joe teased.
Tis old dog can learn new tricks just as well as you, only quicker.
How long did you say you spent trying to understand this Lean Sigma
stuf? Larry countered.
You have a great teacher thats all, laughed Joe. Over the next few
hours Joe and Larry discussed next steps and went to visit Sue to answer
any questions she might have.
Sue told Larry and Joe her story so far..
She had already formed a team and they had worked on problem
and target statements. Te problem they identifed was customers waited
too long to be seated. Te current situation is 78 of 281 customer survey
responses, that is 32%, indicate waiting to be seated is an issue. Te team
thought the expectation might be customers should not have to wait at
all. Tey developed their target statement to read:
Reduce customer waited too long to be seated survey results
from 78 to 39 by March 1, this year and then to zero by April 30.
Tis seemed unreasonable to a few on the team. What about busy
times? Teres no way we can make sure customers dont wait at all!
We can never reduce survey results to zero. Te team fnally realized,
with Sues help, they needed to put some parameters on a measure
for waited too long to be seated. After some lively discussion, the
team decided progress would be measured by reducing the percentage
of customers each day who have to wait in excess of 30 seconds to
beseated.
Someone on the team wondered how they could possibly time this
and do it consistently. A team member asked, When does the wait time
start? When they get to the hostess stand? When they walk through the
door? When?
Another person chimed in When does it end? Do we stop the watch
when they are actually seated? Or should it be when the hostess asks the
customer to follow her to the table?
Another member of the team asked How will we actually time this?
With a stopwatch? Give the customer one of those lighted things like you
get at fancy restaurants?
Te team worked on answering these questions and fnally came up
with an operational defnition for waiting too long to be seated, and a
simple way to collect data. Te data collection began the next day.
After 3 weeks of data collection, the team put the results into a table
and generated a run graph, again with some direction from Sue. Of
course Sue learned this from Larry after one of their work sessions. Te
run graph for percentage of customers waiting in excess of 30 seconds by
day looked like this:
Week 1
9
10
8
8
7
5
4
9
8
7
8
6
5
4
8
9
7
7
6
4
3
Monday
Tuesday
Wed.
Thurs.
Friday
Sat.
Sun.
Week 2 Week 3
0%
M T WTHF S S M T WTHF S S M T WTHF S S
2%
4%
6%
8%
10%
12%
Te team also collected data on other variables they thought might pro-
vide insight as to why and when waiting was occurring. Tey looked at
the times during lunch when waiting occurred, the number of customers
waiting and the reason customers were waiting.
Time of afternoon and no. of customers waiting for a table:
10:30 = 14 11:00 = 52
11:30 = 139 12:00 = 185
12:30 = 118 1:00 = 83
1:30 = 27 2:00 = 17
Of course the team had learned to put the information in graphical
format to allow them to see what it was telling them. Not surprisingly,
most of the waiting took place during the busiest hour of the day. Te top
reasons for waiting seem to be either most people had a seating preference
near a window, or a table was not available, or both.
0
10:30 11:00 11:30 12:00 12:30 1:00 1:30 2:00
20
40
60
80
100
120
140
160
180
200
No. of customers waiting by time of day
Te team had a discussion about tables not being available. One team
member blurted out during the discussion I know why! Customers are
lingering around after eating and not leaving to free up tables for others.
Teyre just rude.
Sue quickly asked Do you have data to support that?
No. I just know. Its obvious, retorted the team member.
Sue reminded the team to collect data to verify their hypothesis. Te
team investigated further and determined that 83% of the time a table was
not available because the tables had not been cleaned and prepped quickly
enough for new seatings and not due to customers just lingering around.
Te team asked the obvious question. So, why are tables not being
cleaned fast enough? Everyone was quiet for a moment and then a bus
boy complained Im working as fast as I can during the lunch rush. I
think all the bus boys are working really hard! Its not our fault.
Sue said Tis is not about blame. We need to look at the process.
Whats taking so much time to clean and prep dirty tables? Perhaps we
should draw up a layout of the restaurant and see what the work fow is all
about. An analysis using a Cause-and-Efect diagram would be useful as
well. What do you think? Te team all agreed these were good next steps.
Te team constructed the cause-and-efect diagram to determine if
any root causes popped out.
People
We dont work
as a team
Not enough bus boys
at busy times
Dont clear dishes until
people leave table
Hostess cant clear
tables when
free
Best way not documented
Staff not trained in
best approach
Lack of training
Not enough bus
carts
Tables are too
close together
Takes too long to
take dishes to kitchen
Wait staff dont help
clear tables
High turnover
Policy
Dirty tables take too
long to be cleaned
and prepped
Procedures
Physical
environment
After looking at the fow of work on the foor layout and brainstorming
using the fshbone diagram, the team concluded that the most likely cause
of tables not being cleaned and prepped quickly enough is the time spent
taking dirty dishes to the kitchen, particularly from the west side of the
restaurant. Te group also felt they were not working as well as they could
as a team.
Te team then brainstormed some improvement ideas. Te list of
possible countermeasures included the following:
Schedule more people during busy times to clear tables
Buy more bus carts that are bigger
Build a dirty dish holding station near the center of the
seating area
Have hostess clear tables when possible
Have waitress help to clear tables
Have bus person move quickly between kitchen and tables
Fill the section closest to the kitchen as much as possible
Out of this list, the team decided to conduct PDCA experiments with
two ideas frst. Te goal was to try out an idea quickly and cheaply to get
some data to verify if they were on the right track. Te team decided to
experiment with having a temporary holding station located at the center
of the seating area, which could not be seen by customers, for placing
dirty dishes. Tey quickly put together and set up a temporary station.
Te group also decided they would work as a team more and waitresses
would help clear tables whenever possible, even if it was only a few dishes
per table. Tis would be easier to accomplish with the temporary station
close by.
Within a day the team constructed a holding station and placed it
in position. Tey continued to collect data to see what the results would
be. After 3 weeks the team analyzed the new data and the results were
dramatic.
Sue decided it was time to conduct another survey to see if they had
met their frst goal. Te results excited everyone on the team.
Sue asked the team What did you learn following this process? She
wrote their responses on the team fip chart:
Did not expect such a simple solution to have such a dramatic
impact
Exploring all ideas and agreeing on what to do helped us
work more as a team
Te storyboard helped to guide us through the process and
identify true root cause
It is fun to measure and see success
Our tips seem to have gone up due to better service and
turning tables more often
Maybe we should track this in the future to link
improvements to earnings
0%
M T WTH F S S M T WTH F S S M T WTH F S S
2%
4%
6%
8%
10%
12%
% of customers waiting more than 30 seconds
0
78 68 48 28 18 15 15 11
11 42 5 24 9 5 8 6
D E B A H F C G
10
20
30
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50
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So whats next? asked Sue. Te team quickly responded:
We need to replace the temporary holding station with
a permanent one. We will use labeling and other visual
techniques to organize the station. Make it look nice so
customers dont view it as an eye sore.
We need to have daily huddles to review progress and look
for additional improvement opportunities. Tis way we can
accomplish our ultimate goal of zero complaints.
Wow! Tat is a great success story Sue! exclaimed Joe.
Well done, Larry also recognized her success. Sue, you did a fan-
tastic job. You have got to share this with the other team leaders so they
can see whats possible.
Sue was a little unsure about standing in front of her peers to tell the
story. She said How about I have the team share what they did using the
storyboard we created?
Even better yet, said Larry.
Joe whole-heartedly agreed.
1. Larry seemed very puzzled when Joe asked him about the KPIs.
Do you think the cruise line had the right measurement system
in place? If you were Larry, what else would you have measured?
2. What is a Critical to Quality (CTQ) diagram? How can Larry
beneft from this diagram? Why did Joe insist that Larry fnd a
team leader who was energetic about the new approach?
3. Critically evaluate the stance/approach that Larry took at the cur-
rent state work sessions.
4. Do you think Larry and his team have identifed the right
approach and process on how each area in the cruise line could
achieve the overall high level objectives? Explain.
5. Do you think Larry and the team have done a good job in
identifying and aligning KPIs and the goals? What would you
(Continued )
have done diferently, if you were Larry? Do you think it is feasi-
ble for Larry and the team to implement these measures?
6. Critically evaluate Sue and her teams eforts in implementing
Lean Sigma in her area. What can other area leaders learn from
her?
7. Why is it important to identify and focus on the right KPIs?
What lessons can your organization learn from the approach used
in this chapter?
CHAPTER 7
Application of Lean Sigma
Tools and Results
Standardized objectives and agendas were set by Larry and Joe to facilitate
the frst Lean Sigma work sessions in each area. Sues progress continually
showed the way for the other teams. Te objective of the frst area team
work session is to provide a brief update on the business conditions and
competitive realities, to provide a brief overview of Lean Sigma for service
industries, and to review the project objectives initiated by Larry.
Initial Area Team Work Session Objective Standard Agenda
1. Provide a brief review of the business conditions and competitive
realities
2. Provide a brief overview of Lean Sigma for service organizations
3. Review the project objectives initiated by the area leader and Larry
4. Begin developing the team objectives to support Larrys initiatives
5. Establish the path forward, expectations, and the next steps for the
area teams
Te Lean Sigma overview is to be provided by the area leaders. By
doing this, the area leaders will have to study the Lean Sigma material a
bit more and be prepared to teach their teams about Lean Sigma methods
and tools. A brief written statement from Larry regarding the business
update and competitive realities will be provided to the area leaders to
be used as a training aid. Tis training efort supported the employee
training and engagement enabler as well.
Te work sessions went well and, for the most part, the teams under-
stood the common objectives of the Lean Sigma projects and journey.
Some of the area leaders struggled a bit with the training portion of the
session, so Larry helped where he needed to. Most employees could see
what was happening to the cruise line in the market place and wanted to
make improvements. Some people were skeptical that this new approach
would be any better than the last new approach. Regardless, the leaders
pressed forward. Since Larry had standardized the approach, the teams
had many things in common when developing their Team Charters and
KPIs. Te Team Charter elements listed below were thought to be com-
mon for all teams. Tey used Sues teams initial success as a guide.
Area Team Charter Commonalities
1. Mission or Purpose of the Project: Since this is the initial or launch
project for each area, the primary purpose is to establish key measures
and implement some key improvements using the Lean Sigma tools. A
secondary purpose is to learn and use Lean Sigma methods and tools.
2. Deliverables or Expected Outcomes: Expected outcomes are
(a)measurable improvements in every area and (b) practice and learn
using Lean Sigma methods and tools.
3. Benefts of Expected Outcomes: Benefts are as follows: (a) We will
begin the Lean Sigma Transformation Journey, which can revitalize
our business. (b) Our work should become easier to perform.
(c)Our guests and customers will have an improved and pleasurable
experience which can lead to repeat business.
4. Expected Approach and Activities: Each area team will use the
Lean Sigma DMAIC process to initiate and manage their projects,
as Sues pilot team had.
5. Time Frame(Start date, end date, and major milestone target
dates): Project will be ongoing for the next 6 months, with monthly
report-out sessions with Larry.
Te area teams spent additional time discussing specifc wastes iden-
tifed in their area, the area KPIs, how they would collect and display
the KPIs, and how they could use Lean Sigma tools to make measur-
able improvements. Each team was asked to select the vital few KPIs to
improve. Te idea being that if each group focused on improving one or
two vital KPIs rather than trying to impact every KPI, the teams would
make better progress and be able to make key improvements to high
impact areas. Larry asked that every area include customer complaints as
one of their vital few KPIs to measure and improve.
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APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 79
Larry then asked Sues team to present what they had accom-
plished using a storyboard laid out in the DMAIC format. After a brief
presentation by the whole team, all the area leaders went on a tour of
the Good Time Diner and discussed their success. Everyone was excited
and energized. Te following table outlines the critical few KPIs selected
Monthly Highlights Report
Section 1
What are 35 key accomplishments or problems solved in the last 4 weeks?
Section 2
What improvement PDCA experiments were completed in the past 4 weeks, and what
were the results and outcomes?
Section 3
Was there any individual outstanding performances or successes that should be
recognized? List the person, what they did, and how it helped the team or organization.
Be specic.
Section 4
What are 35 key issues, improvement targets, and or problems to resolve in the
upcoming 4 weeks?
Section 5
What resources or training might be required to achieve performance objectives in the
next 4 weeks?
Source: Ptacek, Coats, and Ptacek (2012).
(highlighted light gray), and some secondary KPIs (highlighted dark gray)
as identifed by the area leaders.
Te next steps were for each of the area leaders to establish a meeting
or work session schedule and meet regularly with their teams to begin the
improvement initiatives. Larry also asked that each of the area leaders pro-
vide a monthly progress report. Each month Larry asked the area leaders
to complete the following Monthly Highlights Report.
Since leading meetings or work sessions was a new requirement for
many of the area leaders, Larry provided the teams with some basic train-
ing on how best to lead a meeting and how to efectively document what
was discussed during the meeting.
Meeting or Work Session Leading is the process of presiding over,
running, or facilitating a meeting to maintain focus and efectiveness.
It involves establishing an agenda, identifying the necessary people to
attend, scheduling a time and location, facilitating the meeting, and
communicating the meeting action items and minutes.
It is wise to use a standard meeting agenda format to help you plan
and stay on track during a meeting. Te Work Session Record should
be initiated prior to the meeting and include updates and status of
actions items, if appropriate. Te teams used the Work Session Record
below as a standardized guide to follow as a work session is scheduled
and conducted.
Te following checklists will assist the work session leaders to pre-
pare and lead efective meetings.
Work Session (Meeting) Prep Checklist
1. Make sure the meeting is needed.
2. Specify and limit who should attend.
3. Distribute an agenda before the meeting, unless its not

appropriate.
4. Tell participants what preparation is expected.
5. Set an appropriate time.
6. Get started on time and keep to the schedule.
(Continued)
Work Session Record
Instructions: Use this page and the back to record work session occurrence. Make copies of this form
and have the scribe take notes on each topic discussed. Copy the completed page(s) and distribute
the completed form at the end of the work session.
Session Number: Date: Location:
Project Name: Session Time:
Attendance Agenda
1.
2.
3.
4.
5.
6.
7.
Action and Agreement Register*
*Provide a brief summary of topics, discussions, agreements, or conclusions on back side if more
space is needed.
Description Who When
1.
2.
3.
4.
5.
6.
Future File/Parking Lot Meeting Review
1. +
2.
3.
4.
5.
Next Work Session:
Date: Time: Location:
Recorder/Scribe:
(Continued)
7. Try not to allow interruptions.
8. Avoid hidden agendas.
Work Session (Meeting) Leading and Facilitation Checklist
1. Be prepared with information, copies, and so forth.
2. Welcome participants and call the session to order.
3. Restate the objective of the work session.
4. Ask for questions.
5. Explain how the session outcomes will be recorded and tracked.
6. Keep to the schedule. Ask permission to go over your scheduled
ending time.
7. Invite those who havent spoken to contribute.
8. Gain closure on each issue as you sense a consensus.
9. Document decisions, deadlines, action items, and responsibilities.
10. Summarize the outcomes.
11. Communicate next steps.
12. Distribute the minutes within one business day after the meeting.
Key Points for Work Session (Meeting) Leading
Make sure a work session is needed to accomplish the task
or objective.
Establish clear and objective outcomes for the work session.
Set the agenda, start and stop times, and attendee list.
Start and stop the work session on time. Facilitate
the agenda to stay on track and allow everyone to
participate. If the session is going to run long, ask for
permission from the attendees to continue after the
proposed end time.
When the objectives have been met, or the session time
is up, summarize the agreements, action items, the next
steps, and then adjourn the session on time. If appropriate,
document and distribute work session minutes.
Source: Fleming and Ptacek.
(Continued)
Sue was full of energy and excitement. She was eager to start moving
forward quickly. She took the initiative several weeks prior to other area
leaders jumping into action. She shared her story with Larry and he asked
her to present to the others what had been done. Sues story was inspiring
and each team kicked into high gear and started their work. Tey used
Sue and her team as a resource when they got stuck.
Over the next several months each of the area teams conducted
numerous CI work sessions and improvement PlanDoCheckAct
(PDCA) experiments. Each experiment was documented and veri-
fed with data to determine if it was an actual improvement or not. As
improvements were made, the teams documented their new methods
with standard work documents. Some were more formal than others,
but progress was seen everywhere and a new excitement had taken over
the ship.
Te following reports summarize the activities, actions, and accom-
plishments from each area over a several-month period. Larry would
review the reports monthly with the group of area leaders, along with Joe,
when Joe had time.
NavigationCaptain and Crew
Te vital few KPIs for the Captain and Crew were customer complaints,
and on time to ports. In their analysis, the team found that many of the
customer complaints were due to rough seas, something the crew had
little infuence over. Tey also found that their on time to port perfor-
mance was related to weather conditions as well. Te team discussed what
they could do to improve these situations in spite of their lack of control
over the weather. Improvement ideas that were identifed centered around
improving communications and reaction to the weather conditions. Te
team also agreed with waste walk observations that the helm looked a bit
disorganized, which caused a waste of motion and delay while crew mem-
bers searched for key items and information. Tis was made even worse
when bad weather quickly approached.
Te team brainstormed for ideas to reduce these wastes and improve
the speed and accuracy of communicating information. Although the
captain was not sure his team needed this approach, he remembered his
time in the Navy when things were required to be better organized. Te
team agreed to implement the 5Ss in their areas. Tey sorted (S1) items
out and only kept what was needed. Tey found many old, worn, and tat-
tered maps that were no longer in use. Te captain had his crew sign these
and gave these to the sales team who would frame them and ofer them for
sale as cruise mementos in the ships gift shops. Te maps almost looked
like old treasure mapsa great new ofering for the retail sales team! Te
captains team then established an exact location to set things in order (S2),
they scrubbed (S3) things clean, and developed and standardized (S4) the
new rules to keep things clean and in the right place. Te fnal step for
the teams 5S was to determine a way to sustain (S5) the gains. Te captain
ofered to perform an audit of sorts on his daily walk through.
Twice a day the captain walked the ship to observe all areas of opera-
tion. During his walks he would interact with the crew and passengers.
Te purpose of this walk through was to connect with the passengers
and crew to communicate critical information about the voyage. Te
crew later developed visual control boards in each area to streamline the
communication of information. Tis move alone allowed the captain
to complete his walk through in less time, usually in about an hour.
Before the visual control and communications boards were started, the
captains walk through took an hour-and-a-half to two to complete,
depending on how long he would chat with the crew. Te visual con-
trol and communication boards helped him to gain more time to con-
nect with the passengers or to address adverse weather conditions with
thecrew.
Te 5S efort by the captain and crew spread over into other areas as
well. As the captain observed untidy areas during his walk, he would radio
housekeeping or maintenance to quickly get the area cleaned up. It didnt
take long for others to follow the captains lead. Te captain felt better
about being in control of the ship, and keeping it in ship shape!
At the next group report out, the Captain was proud to share the
following results.
Before Improvements After Improvements
>4 complaints per voyage <2 complaints per voyage
90% on time to port 95% on time to port
Plus, 12 hour captain walk through ~1 hour captain
walk through
Reduction in engine and equipment breakdowns
Guest ServicesBookings and Onboard Guest Services
Te vital few KPIs for the Guest Services group were customer complaints
and survey response rates. For their analysis, the team collected data
on a check sheet to document the reasons for the complaints and then
constructed a Pareto chart for further analysis. Te team found that the
top passenger complaints were waiting for services, not having a service
completed to their expectation/satisfaction, rough seas, being rushed, and
having to be on a specifc schedule for activities. Tis was great informa-
tion and it had never been broken down like this. Te team decided to
develop standard work practices for the regular breakdown, analysis, and
improvement planning/implementation for each complaint. Part of the
standard work would be to close the loop with the passenger and let them
know how their feedback has helped the cruise line improve. Tis stand-
ard process would be shared with each area of the organization, and area
teams would be accountable for closure.
Regarding the customer survey response rate, the team analyzed
and measured the current state process with a simple process map.
Tey found that the current process was too passive in that the survey
was left in the guest rooms near the end of each voyage. It was left up to
the guest to complete the survey or not and it was typical that only the
most upset customers would complete the survey to complain. Te sat-
isfed customer might not fll out the survey, or say anything at all. Te
data suggested that only the most pleased or delighted customers and
the most upset customers completed the survey response forms. Worse
yet, the upset people completed the form at three times the rate of
the most pleased customers! Either there were three times more upset
customers or the survey method was not working. Te team hoped for
the latter.
Te improvement ideas were ways to make the survey data collec-
tion more active. Te team brainstormed several ways to do this and
completed several diferent PDCA cycles to test which improved method
worked the best. From the PDCA experiments, a new survey method
was implemented which involved a roving interviewer who would ask
as many passengers as possible several standardized questions each day.
Te daily surveys eliminated the likelihood of negative responses from a
customer who angrily completed the survey on the last day of the cruise
while they were in a bad mood, possibly because the cruise was about to
end or because of some last minute unpleasant event that had happened.
Te new method seemed to capture the information from the upset cus-
tomers in time for the team to take corrective actions as well as capture a
better cross section of happy passengers. Not only did the survey response
rate improve, but the overall scores did as well, because the data was more
representative of all the passengers.
Another improvement activity the team conducted was a simple
5S of the Guest Services of ce. Te improvement from the 5S process
allowed the team to better serve the customers quickly and ef ciently.
Some visual signals, including color coded signal cards for special die-
tary needs and requirements, were used to communicate the answers
to the most frequently requested services and adventure needs. Tis
further sped the process of helping the guests, by allowing them to
fnd the answers to their questions through visual communications.
Tis also served to reduce the amount of printing the group did in the
of ce.
At the next report-out session, the Guest Services team reported the
following results.
43% VOC response rate 80% VOC response rate
Plus, 4 minutes average wait time <2 minutes average wait time
Entertainment
Te vital few KPIs for the Entertainment team were customer
complaints and passenger contact hours. Tere were few complaints
for this team so the team focused on developing means to increase
their customer contact time. It had been previously identifed that the
passengers like to meet and greet the performers of the many acts on
the cruise. Te entertainers already provided some back stage passes so
they needed to come up with something fresh and exciting. Te team
brainstormed ways to increase their passenger contact time and meet
the current schedules for performances and personal time. Te per-
formers chief complaint was that to increase passenger contact time
would just increase the hours they needed to work. Tey needed to get
creative. Te idea is to contact more passengers with the same amount
of time committed.
Te team decided to address this improvement opportunity in
a couple ways. Some of the acts were able to take their performances
out onto the diferent decks of the ship to provide mini-impromptu
performances. Tese performers were excused from the standard back
stage meet and greet sessions to compensate them for their time. With
this new work method, the performers were able to connect with more
passengers than just those with back stage passes. When measured in
terms of total passenger contact time the team was able to show a sig-
nifcant increase in the number of passengers contacted for the same
time spent by the performers. Not only did the customer contact hour
KPI improve, the team also realized an increase in show attendance and
sales revenue as more people wanted to see the performers acts on stage
after seeing one of the mini-performances. It was truly a winwin for
everyone.
Additionally, the team also performed a 5S event backstage in efort
to keep things better organized. Tey included some simple visual con-
trols to indicate the location of the costumes for each act and scene. Tis
helped the team improve the fow between acts and scenes.
At the next report-out session, the Entertainment team reported the
following results.
~30 customer contact ~50 customer contact
hours per day hours per day
Plus, Improved costume/scene change fow
Increased show attendance and sales!
GamingOnboard casino
Te vital few KPIs for the Gaming team were customer complaints and
survey scores. Everyone knew that they could achieve higher survey
scores if they let the guests win more money but that was not the desired
approach as they also were monitoring the revenue from gaming. Te
team conducted an analysis of the customer complaints and available sur-
vey data/measures. Tey developed check sheets to organize the data and
then created Pareto charts to determine the most critical areas to address.
Tey found that one of the primary complaints was having to wait in
line for money exchange or a table. Te team felt that they had more
than enough staf to handle the volume of passengers on the ship so they
wondered why the passengers felt they had to wait. Te team decided to
conduct additional studies to determine when the waiting occurred and
how long people had to wait.
Te team collected a participation count every hour for several cruises
of diferent lengths. Te data showed a pattern for certain days and times
of day, on diferent cruise lengths, and destinations. From these patterns,
the team developed a better schedule for staf ng based on projected
customer demand. Tis proactive scheduling made it easier to manage
this area.
Additionally, to reduce wait times for money exchange the team
tried a few PDCA experiments to make this process fow smoother.
Tey separated the lines by transaction size, which was found to cor-
relate with transaction time. Tey also implemented a roving cashier
to handle smaller cash exchanges. Tis new standard process and
scheduling technique signifcantly reduced the wait times for the
gaming team.
At the next report-out session, the Gaming team reported the follow-
ing results.
Meets Expectations survey Exceeds Expectations survey
scores scores
Plus, Increasing overall customer spend and revenue!
HousekeepingMaid Services and Laundry
Te vital few KPIs for the Housekeeping team were customer complaints
and percentage of guest rooms serviced by 12 noon. Te teams analysis of
the measurements showed that the primary passenger complaint was due
to the rooms not being cleaned soon enough in the day. Te team worked
on a planned schedule or route, but often was thrown of course as some
of the guests would be in their rooms until various times of the day. Te
schedule was very hard to stick to. Additionally, the laundry area was slow
and sometimes the cleaning crew had to wait for clean linens and towels.
Te team had to make improvements in a couple key areas. First, the team
brainstormed for a better way to plan the schedule around guest preferences
and behaviors. Te team developed a signaling system or kanban so that
guests could signal when their rooms were available for cleaning. Tis was
not just a simple do not disturb sign, but a color coded tag which the
guest could signal when they would like their room cleaned. Tis simple
visual control kanban helped both the customer and the staf.
To address the laundry area, the team had to complete a more
detailed study to determine why there was a backlog occurring. Te team
used check sheets and a standard work breakdown chart to document
and analyze the laundry area. Te teams investigation, data collection,
and analysis indicated that the laundry area was trying to serve the food
services group at precisely the same time when the housekeeping teams
demand was highest. Both the food service group and the housekeeping
group had signifcant laundry demands. Te improvement team devel-
oped and implemented a heijunka, or paced laundry processing plan,
which enabled both the food services and the housekeeping groups to be
serviced simultaneously. Te heijunka included visual control signals, or
kanbans, to pace the work through the area. Te laundry area workers had
to produce to the visual signals and pace the work through for each group
needing services. Tis helped the housekeeping group reduce the waiting
time to service the guest rooms.
Te laundry area was also able to reduce the total amount of water
used as they began to process more full loads, and fewer partial/rush order
loads. Tis reduced the overall operating costs and environmental wastes.
At the next report-out session, the Housekeeping team reported the
following results.
76% of rooms cleaned by 97% of rooms cleaned by
12 noon 12noon
Plus, Reduction in water usage in the laundry
Reduction in rush orders and crisis management
MedicalOnboard Medical Center
Te vital few KPIs for the Medical team were customer complaints and
total hours of operation. Te primary complaints were illnesses due to
sea sickness, something the team felt they had little infuence over, and
their services not being available when needed. Te team thought they
noticed a correlation between the number of complaints and the clinics
daily operating hours. Tey constructed a scatter diagram to analyze the
improvement opportunities and issues. Te two KPIs did show a positive
correlation: the more hours of operation, the fewer complaints there were
regarding service.
Te teams brainstormed for ideas on how to provide improved hours
of operation. Tey struggled with the ability to predict when people would
need them. Tey already had an on call procedure in place but they still
saw the need to make improvements. Te team looked at their current
scheduled hours of operation and concluded that there was too much of a
gap in services in the overnight hours. Trough data collection and analy-
sis, the team found a pattern evident when guests needed services. Tey
built their operating hours around the times and days when the demand
showed they were needed most. In of hours, the team used a heijunka
schedule which put someone in the medical center every hour at the top
of the hour. With this schedule, a guest would know exactly how long they
would have to wait or when they could expect to be seen immediately.
Te new scheduling technique not only helped the guests, it also
helped the team as they modifed their work schedules to better ft their
needs. Trough the brainstorming, the team also addressed something
that, on the surface, they thought they had little control ofsea sickness.
Te team ran some PDCA experiments regarding the proactive use and
availability of sea sickness medication and the most efective techniques
for administering the medication. Tey established a mini-training ses-
sion and note card for each guest and made it clear how to get the help
they needed. Tey found that through this proactive training approach
the overall emergency calls due to sea sickness were reduced. Even the
captain was happy to hear this!
At the next report-out session, the Medical Services team reported the
following results.
>6 complaints per voyage <1 complaint per voyage
16 available hours per day 24 available hours per day
14 minutes average wait time <6 minutes average wait time
Plus, Proactive reduction in sea sickness incidents
Reduced use of the medical center
Reduced environmental impact and costs
Reduced inventory
Reduction in inappropriate social networking time
Food Services and CateringMultiple
Onboard Restaurants
Te vital few KPIs for the Food Services team were customer com-
plaints and food costs to budget. Te team compiled the complaint
data with a check sheet and developed a Pareto chart for analysis of
the guest complaints. Tey found that the primary complaints for
food services were (a) having to wait for item and (b) running out
of an itemshortages. Te team knew that in order to not run out
of an item they would have to carry more food item inventory on
board, but they understood that their other key objective was to keep
to budget. Te team also knew about the tremendous waste of food
items on a cruise ship. Te lavish and extravagant food displays were
something nearly everyone remembered and spoke about after their
cruise experience. Te challenge for the team was to meet the guests
high expectations but also to minimize wastes. Tey did their best to
manage this every day.
Te team decided to do some data collection and monitoring. Tey
knew certain food items were more popular than the others, and they
knew that some food items were discarded more than others. Tey won-
dered if there was any correlation that they could use to identify a means
of reducing food item wastes. After collecting data on several passages the
data showed where there was consistently too much of one item and too
little of another. Tey made the appropriate adjustments to their requisi-
tions and order quantities. Te team developed a standard practice to
complete this analysis every 3 months to better understand the shifting
tastes of their passengers.
Regarding the waiting issues, the team decided to establish a kanban
trigger system to help reduce or eliminate guest waiting. For the bufets,
the team was using a simple verbal communication system where the
servers would tell the chefs what items were running low. Tis method
was good but it did not consider the diferent food preparation times in
the kitchens. Te new kanban trigger system identifed three diferent
levels of items based on preparation time. Te longer the item took to
prepare, the more advanced notice the chiefs needed to ensure that no
one had to wait. Te more experienced servers were already doing this,
but now the new servers were able to do the right thing sooner due to this
improvement.
Tis method of demand or consumption-based service helped
the Food Services team to reduce the waiting. Since the waiting did
not go away all at once, some of the servers learned magic tricks to
perform for guests as they waited. Tis seemed to turn the wait into
somethingmore interesting and enjoyable, and the complaints further
declined.
At the next report-out session, the Food Services team reported the
following results.
1520% over budget On or below budget for each voyage
Plus, Reductions in guest wait time
Reductions in guest wait time frustration
Reduction in crisis management in the kitchensreduced stress
Retail SalesMultiple Onboard Stores
Te vital few KPIs for the Retail Sales team were customer complaints
and new oferings provided. Te team compiled the complaint data with
a check sheet and constructed a Pareto chart to highlight the most signif-
cant reasons for complaints. Tey found that running out of hot selling
items was the primary complaint. Te team was never sure how many
items would sell on any particular voyage, or what the hot item would
be. Te team conducted a deeper analysis of the historical sales data by
voyage length and ports visited. Te team also began to keep a log record-
ing each time they ran out of an item, what the item was, and how many
sales dollars were lost due to the shortage. Tis data was eye-opening and
the team began to submit purchase requisitions based on this data.
One of the most frequent shortages was determined to be in printed
tee shirts. Since the data was not conclusive on the exact printing of the
tee shirts, the team was uncertain what to do. After a brief brainstorming
session, they decided to develop a custom tee shirt printing capability.
With this mass customization concept, they could purchase blank tee
shirts and print to demand. Tis capability enabled the team to reduce
inventories and the waste of throwing outdated shirts away. Tis concept
allowed the team to ofer an entirely new lineup of tee shirts and to cus-
tomize them to the customers requests. Tis was a hit with the customers
and tee shirt sales increased over 20 percent!
Te team began tracking sales by item and posting the data to a real-
time online scorecard/spreadsheet. Now anyone who was interested in
how the days sales were going could simply look at the online scorecard.
In addition to the tee shirt breakthrough, the captains old maps were
selling well and this also showed on the scorecard. Te area leader had an
idea to ofer a reproduction of the old maps at a lower price point. Te
original maps, considered higher value items, could then be ofered in
higher end boutiques on the deck of the ship. Tis move served to create
sales of the reproduced maps that were signed by the captain and crew,
just as the originals were.
To sustain the new products offered KPI, the team established
a standard practice to add three new items each month. It was a
challenge some months to come up with three new items, but the
team kept this as a goal and held themselves accountable for results.
The new process at least caused the team to review the product
offerings on a regular basis and to make appropriate corrective and
improvement actions.
At the next report-out session, the Sales team reported the following
results.
3 items stock outs per voyage 0 item stock outs per voyage
Plus, Increasing sales revenue due to new products ofered
Reduced obsolete inventory and associated costs
SecurityOnboard Police
Te vital few KPIs for the Security team were customer complaints and
reportable onboard crimes. Te security teams Pareto chart of complaints
showed that the leading complaint is that there is never a security person
around when you need one. Te team initially pushed back on this com-
plaint saying that there are security phones at many locations throughout
the ship. Regardless, the customers perception was that security was not
around when needed.
Regarding the onboard reportable crimes, the team analyzed the data
from the past 20 voyages by plotting a run chart of the data and found
a disturbing trend. Te run chart trend data indicated that they had
been experiencing a higher incidence of crime on certain theme cruises
and that the trend for reportable onboard crimes was increasing overall.
Te datashowed this clearly and was compelling. Te team had to stop
thistrend.
From the demand analysis of when onboard reportable crimes were
occurring, it was determined that embarkation and debarkation points
and times were especially a concern. Te team brainstormed and identi-
fed two primary improvement items. First, while at embarkation and
ports of call, additional security would be assigned to entry and exit
points. Second, for the theme cruises with the higher incidence rates a
greater visible presence of security personnel would be provided at embar-
kation and at all times during the passage. Tis is a simple demand-based
scheduling plan.
For all voyages, the team decided to implement a visual management
method and a paced or heijunka travel route to follow. Tis would inform
and assure guests that a security person was nearby and scheduled to be
present at specifc times. It was brought up that this may also inform the
bad guys of where the security forces were, so the team developed a
contingency plan for this also. Standard work and routes were developed
for security personnel to follow. Te customer visible standard routes and
times were displayed visually. Overlapping with the customer viewable
standard work, a security-facing standard work route and timing was also
established and run concurrently. Te customer-facing standard work
helped the passengers to feel a sense of safety and the security-facing
standard work helped the team catch the bad guys before they committed
the crime. Te implementation of these two sets of standard work served
to reduce the reportable onboard crime rates and reduce the customer
complaints.
At the next report-out session, the Security team reported the follow-
ing results.
5 reportable crimes per voyage <3 reportable crimes per voyage
Plus, Greater visibility of security personnel
Improved ef ciency of security personnel
Fewer errors and false calls
Adventures and Event Planning
Te vital few KPIs for the Adventures and Event Planning team were
customer complaints and participation rates. Te team completed a
check sheet and Pareto chart of the historical customer complaint data
and determined that the primary complaints were adventure availability,
wait times to get to adventures, and the lack of understanding regarding
how to sign up for adventures. Te team thought that this may be the
reasons for the poor participation rates as well. When the team analyzed
the participation rates in adventures they found a disturbing trend. Over
the past 3 years the participation rates in the adventures had been declin-
ing steadily.
To better understand the situation, the team mapped out the process
for each adventure, noting the wait times and points on the map. Te
team also conducted extensive data gathering directly from adventure
participants in interviews conducted on adventure days. Te team was
a bit surprised to fnd that it was not hard to fnd time for an interview
as the adventures were usually found in a hot hallway waiting to board a
small tender craft to get to the adventure.
Clearly, they were making their customers wait. It seems the ten-
der vessel service was not adequately stafed or equipped to handle the
volume of adventurers all ready to go at about the same time. Te team
worked out a scheduled signaling system or visual signal to indicate to
adventurers when the next tender vessel was to arrive. By giving the
adventurers a color coded signal, or kanban card, the adventurer could
simply monitor the color posted over the boarding area to determine if
they were to board now or not. Instead of waiting in the hot hallway,
participants could wait on the rear deck in clear view of the boarding
area signal. Te scheduled boarding fow and signaling system elimi-
nated the line of people in the hallway and made the experience go more
smoothly for everyone. Tey even established a VIP area for special
guests who were willing to pay for an advanced seating arrangement.
Tis is a form of mass customization to meet the needs of customers with
varying expectations.
Te team went a step further and constructed an adventure demand
Pareto chart which detailed the demand for each adventure ofered
at each port of call. With this information the team developed an
improved plan with their tender service team to better service the
adventure passengers.
Additionally, to increase participation, the adventures planning
team took to the passenger decks to seek sign ups and explain the
adventures better. In the past, the adventures team just sat in their
of ces waiting for people to come to them to sign up. By taking
the adventures sign up to the passengers and improving the fow of
information the adventures team was able to increase overall participa-
tion levels and revenue.
At the next report-out session, the Adventures team reported the
following results.
54% passenger participation 79% passenger participation
rates rates
Plus, Increased sales revenue due to increased passenger participation
Improved services from supporting vendors as participation rates
increased
Operations and Maintenance
Te vital few KPIs for the Operation and Maintenance team were
customer complaints and unplanned breakdowns. Te Operations and
Maintenance team had an idea what the biggest customer complaint was
before they did the Pareto chart. Tey knew that customers did not like
it when certain parts of the ship were not available due to breakdown.
Breakdown in guest areas always got top priority. Even so, customers still
complained. Te guests expected everything to be working all the time.
Imagine that! Te team knew too well that customers did not like to wait
while regular cleanings and maintenance took place. After all, the passen-
gers were all on holiday, they didnt want to be bothered with breakdowns
and faulty equipment.
Te Pareto chart showed that the areas of biggest concern were the
operation of public rest rooms and inef cient air conditioning units in
guest quarters. Unplanned breakdowns and service calls caused chaos
in the operations and maintenance area. Some days they felt like they
accomplished nothing except urgent service calls. Tey needed to do
something to prevent the service calls from occurring, but they had very
little time to work in advance, in a preventative mode, as they were so
busy with the crisis of the day.
Te team decided to use the Total Productive Maintenance Lean Sigma
tools to try to make improvements. First, they performed a basic 5S on all
the key pieces of equipment and facilities. Tese were prioritized, with the
aid of data from the Pareto charts on customer complaints and unplanned
breakdown. Te team developed a regular schedule for preventative mainte-
nance on the critical equipment and facilities. Tey also developed a critical
spares list and key tools to have on hand. Tey developed a key tool roller
cart for emergency calls. No longer would the person on call have to go to
the area needing assistance without the proper tools. Te key tool cart had
everything they could possibly need on it, and it was 5Sed so it was always
ready to go at a moments notice. Tis helped the team to be more respon-
sive but they still needed to prevent the breakdowns from occurring.
After further analysis of the breakdown data, the team made some
improvements and minor changes to some of the equipment and their
planned maintenance schedule. Te planned maintenance schedule,
which used to be driven by a computer schedule, now would be managed
with a simple fowkanban and paced work standard work plan. Te
team divided up the work using an employee balance chart and developed
a paced preventative maintenance route to follow based on frequency of
historical breakdowns.
Another novel idea the team discovered through brainstorming
was the quick change plan for room air conditioners. Rather than
making the guest wait while the service person repaired a faulty air
conditioner, the team decided it was better to have a spare air condi-
tioning unit available at all times and simply do a quick change over of
the good air conditioner for the faulty one if the repair was going to take
longer than the quick change. Tis made the guests quite a bit happier,
and the more extensive repairs were done in the maintenance area, out
of sight of the guests.
At the next report-out session, the Operations team reported the
following results.
5 unplanned breakdowns <1 unplanned breakdown
per voyage per voyage
Plus, Reduction in inventory of spare parts and supplies
Reduction in consumption of supplies leading to
operating cost reductions and environmental wastes
Less crisis management
Purchasing and Logistics (Supply Chain)
Te vital few KPIs for the Purchasing and Logistics (Supply Chain) team
were customer complaints and stock outs in all areas. Te team used a
Pareto chart analysis to better understand where the biggest stock-out
problems were coming from. Tey developed a Pareto chart, frst by area
and then by the item they ran out of. Tey discovered that the retail, food
services, and Operations and Maintenance areas had the most trouble
with stock outs. Almost all of the customer complaints assigned to
purchasing and logistics were either baggage handling issues or stock outs.
Te team worked with each of the troubled areas to study the
demand cycles with Demand Analysis tools. Tey then established and
implemented a fow kanban replenishment plan. Te teams worked
jointly through several PDCA improvement cycles to determine the
proper signal size for each of the critical items.
Te Purchasing and Logistics team also worked with the suppliers
to develop and support their own fowkanban replenishment systems
to support the cruise line. Tis development of the upstream and down-
stream supply chain helped to reduce costs for everyone on the value
stream. It also reduced overall inventory by connecting replenishment to
actual consumption and sales. It took a while to work the bugs out but it
was well worth the efort.
Te team also developed a new means of communicating the needs
to the supply base which used less printed materials and correspondence.
Tis reduced the overall use of supplies for the cruise line and the suppliers.
At the next report-out session, the Purchasing and Logistics team
reported the following results.
>6 complaints per voyage <1 complaint per voyage
32 stock outs per voyage 5 stock outs per voyage
Plus, Improved on-time delivery from suppliers and vendors
Reduced inventories and associated costs
Reduced environmental impact due to better management of
deliveries
Human Resources and Training
Te vital few KPIs for the Human Resources (HR) and Training team
are employee turnover, customer complaints, and employee training
hours. In previous analyses, it had been found that employee training
hours correlated to greater customer satisfaction. But the team decided
to verify this through data collection and a scatter diagram. Again, the
team found a positive correlation between training hours and customer
satisfaction. Te Pareto chart of the customer complaints assigned
to HR was primarily due to how an employee handled a situation.
Not only was the customer disappointed in some feature or situation
on the voyage, but the person helping them further aggravated the
dissatisfaction.
Te team developed a training curriculum that would address the
primary areas of customer complaints. Te team found that not only
the hours of training mattered, but also what the training was on, and
how well it was put into application. With this data in hand, the team
designed several ways for employees to get the training they needed and to
be accountable to use it. Some of the training delivery methods explored
were (a) online sessions, (b) facilitated, (c) self-paced, (d) supervisor-lead
mini-training sessions at the start of a shift, (e) lunch and learn sessions
facilitated by content experts, and (f ) other more formal training classes
as peoples schedules allowed.
Te HR team also developed a comprehensive training matrix to keep
track of the number of training hours people participated in. Tis helped
leaders to better understand where they were falling behind and what ses-
sions might be of greatest value. To display this data, the HR team devel-
oped an employee kiosk system where this information could be accessed
by all. At frst the information on the kiosk was overwhelming, but after
the team performed a 5S on the computer fling system the key training
documents were easier to fnd.
At the next report-out session, the Human Resources team reported
the following results.
~2% training time per person >9% training per person
Plus, Training efectiveness as determined
through customer surveys
Reduced spending for training
Administration and AccountingPayroll
and Accounting
Te vital few KPIs for the Administration and Accounting team were cus-
tomer complaints and on-time payments. On-time payments related to
both employees and to external suppliers. Both groups had recently been
complaining of delays in payments. When the team completed a Pareto
analysis of the reasons for late payments, they found that their accounts
payable fow could not keep up with the increasing transactions due to
some of the supplier replenishment systems that had been put into place
by the purchasing group. For these instances, the team asked the purchas-
ing group to help negotiate diferent terms of payment on kanban items.
Te team also looked internally at why the accounts payable system took
too long.
Tey mapped out the process fow and found a great deal of redun-
dancy and waste. Tey were able to make some streamlining improve-
ments to improve overall fow of information through their area. Te
biggest improvement was to establish standard work and a paced fow
process in the of ce. Tis ensured that something hitting an accountants
in-basket today got dealt with in a standard or specifed period of time.
Nothing could slip through the cracks of the new paced fow kanban
system.
Other issues discovered by the team were those due to their slow pay-
ments: they were not taking advantage of supplier discounts. Tis was
fxed quickly by the new fow methods and within a couple of weeks they
were taking advantage of the key discounts. Te new organization of their
work area, a 5S event in the physical space as well as the computer system,
also seemed to streamline processing. It seems the computer system fles
were so cluttered and stored in so many ways that by simply standardi-
zing the rules for the team they could now fnd things easier online, and
process payments quicker.
Many of the customer complaints were due to errors. Te team
began to track their errors and plotted them on a Pareto chart. Here
again, many of the errors were eliminated by streamlining the system
and cleaning up the fling system. Peoples work got easier and they
were less prone to errors. Tey also found the time to develop and
implement some mistake-proofng improvements for the most critical
errors. Te new methods also required quite a bit less of paperwork
and printing so the team was also able to reduce their environmental
impact.
At the next report-out session, the Administration and Accounting
team reported the following results.
>12 complaints per month <2 complaints per month
89% on-time payments 99% on-time payments
Plus, Better, more sustainable standard work practices
Ability to take advantage of supplier discounts for
prompt payment
Reduced environmental impact and cost due to
less printing and supplies
Te above results for all the teams took nearly a year to complete. Over
that time the teams had completed over 90 individual PDCA improve-
ment trials and had many of them work very well and become the new
standard. Customer complaints were defnitely on the decline and the
teams were starting to understand how to make improvements on their
own. Tings were looking up. Due to the teams many sales-generating
and cost-saving ideas, the fnancials were starting to turn around as well.
At least revenues were not shrinking, and along with that proftability was
increasing! Te following table shows a summary of some of the team and
overall key measures.
Year One Results Summary Table
Before After
~200 complaints per voyage <80 complaints per voyage and
declining
90% on time to port 95% on time to port and
improving
43% VOC response rate 80% VOC response rate and
growing
Meets Expectations survey score Exceeds Expectations survey
scores
76% of rooms cleaned by 12 noon 97% of rooms cleaned by
12noon
1520% over budget each voyage On or below budget for each
voyage
35 items stock outs per voyage 5 item stock outs per voyage
5 reportable crimes per voyage <3 reportable crimes per
voyage
54% passenger participation rates 79% passenger participation
rates
5 unplanned breakdowns per voyage <1 unplanned breakdown per
voyage
89% on-time payments 99% on-time payments
Unacceptable passenger wait times Reduced passenger wait times
in all areas
Few referrals Some enthusiastic referrals
Unpleasant work environment Dynamic, exciting, and fun
work environment
Declining sales revenue Increasing sales revenue
Not proftable Proftable
Shrinking Growing
Larry had consulted with Joe many times through the improvement
process, especially when he reached critical sticking points with the teams.
Joe was very helpfulfor the most part.
So what are you going to do next, Larry? asked Joe.
Next? Larry said quizzically, Next were going to stay the course.
Tats whats next.
Joe replied, Tats good, but as the leader you must always stay ahead
of the group; you know, to lead them somewhere. Where are you leading
the teams to next?
Weve done a great job so far, whats next? asked Larry.
Ive seen many companies get complacent and back-slide after they
make some really good progress. To prevent a back-slide, keep moving
forward. Tere is always a weakest link in a process, always more waste to
remove. Id recommend you start over again once you think youre done,
Joe injected.
Kind of like my cruise ships returning to port and doing the whole
thing over again, we could start back at the beginning and do it again?
said Larry.
Tats the idea. Tats what we do. Te Lean Sigma CI process is
never ending, said Joe.
1. Do you think it is a good idea to standardize the approach to
implementing Lean Sigma in the cruise line? Critically evaluate
the Area Team Charter Elements that were developed.
2. What do you think of the critical few KPIs selected and the sec-
ondary KPIs identifed by the area leaders? Do these KPIs address
all the critical areas? Do you think it is feasible to monitor all
these measures?
3. Compare and contrast the updates and accomplishments reported
by each of the areas. Do you think all the areas are on the right
track?
(Continued)
4. Evaluate the critical KPIs that each area has achieved after Lean
Sigma was implemented. Do you think it is important to com-
pare and benchmark the results across each area? What can each
of the area leaders learn from one another?
5. If you were Larry, what would you do with these improvements
and results? How would you communicate the improvements
within and outside your organization?
6. Identify the three most creative initiatives made by the area lead-
ers in the Lean Sigma journey. If you were a regular customer of
the cruise line, what obvious changes would you be able to see or
experience.
7. Te cruise line has made signifcant improvements over the past
year of Lean Sigma implementation. How can Larry use these
results to motivate top management, area leaders, and employees
to get more excited about the Lean Sigma journey and to take
the organization to the next level? What can other service
organizations learn from the cruise line?
CHAPTER 8
Making Cultural Transitions
Larry and his teams had made great progress. Tere had been many ups
and downs during the improvement initiatives, but overall the teams
were really making a positive impact. Te teams were getting good
at identifying current state data, developing process fow and value
stream maps, and then creating future state PDCA experiments to
try to make improvements. However, there were still some areas that
Larry was wondering about. Namely, Larry was concerned about the
people side of the improvement initiatives. Some of the people side
issues Larry was concerned about were training to sustain the gains
and momentum, the discipline to stick to the standard work, and the
accountability.
In the early days of the transformation Joe had Larry work with his
area leaders to develop a current state culture assessment. To do this
Larry led a brainstorming session with his area leaders, and developed the
following current state culture diagram.
Tis map is in a cause and efect format and shows clearly the
problems and potential target improvement areas. Teams can use this
or similar methods to document their current culture and target areas
for improvement. With this completed, Larry thought it would be a
good idea to lead the team of area leaders through the future state
development to show what they wanted to become. Tey called this the
Future State Culture and used it as a vision for them to achieve through
the continuous improvement (CI) eforts. Te following future state
culture map was developed by Larrys area leads. Tey all agreed to
try to live up to the vision. Te implementation of the improvement
teams went a long way toward helping the teams achieve the future
state culture.
Future state
culture
Methods
Machines
Mother nature
Manpower
Hard workers Robust improvement methods being applied
Innovative new ways of thinking encouraged
Exciting new methods
Customer focused methods
Old and outdated ship amenities
Everyone cleans up after themselves
Messy areas of the ship get cleaned up fast
All messy areas get cleaned up fast
The weather makes things messy all the time
Frequent breakdowns
Poor maintenance
Not enough equipment for all customers
Updated materials
Proactively get what we need
Cost reductions through
continuous improvements
Rarely stock out
Not wasteful
Green
Key measure clearly posted and fair
Get positive and negative feedback from customers
Hear about problems and successes
Low turnover
High morale
Perception that leaders care
Team work
Fun!
Materials
Measures
Joe had assisted Larry with this current state to future state culture
mapping process to help Larrys area leaders understand where they
Current state
culture
Methods
Machines
Mother nature
Manpower
Hard workers
No improvements accepted
No innovation
Going through the motions
Employee or cruise line focused methods
Old and outdated ship amenities
No one cleans up after themselves
Messy areas of the ship take a while to clean up
Some messy areas never get cleaned up
The weather makes things messy all the time
Frequent breakdowns
Poor maintenance
Not enough equipment for all customers
Old materials
Making due with what we have
Cost cutting leads to poor service
Wasteful
Frequent stock outs leads to poor
service
No measures
Only negative feedback from customers
Only hear about problems
High turnover
Low morale
Perception that leadership does
not care
Frustrated
No team work
No fun
Materials
Measures
MAKING CULTURAL TRANSITIONS 109
were going and what they were trying to become with the Lean Sigma
improvement methods.
Joe was most impressed with some of the customer service training
that Larry had developed and thought he might be able to use it in his
factory. So Larry, tell me about your customer service training program.
Your people are clearly doing something diferent than my folks at the
factory. Your people are constantly interacting with customers and I can
tell theyve had some specifc training regarding how to talk to customers,
so what is it? Joe asked Larry.
Larry said, Lets go talk with our HR manager, Mary, shes the one
who developed the program. Te two brothers took a walk to the HR
of ces to meet with Mary.
At the HR of ces Mary outlined their customer service train-
ing program. Mary explained, Ive studied the Disney training pro-
grams and had the opportunity to attend several courses at the highly
regarded Disney Institute. Te Disney Institute is widely recognized
as a world leader in service training and development. Im taking
a page from the Walt Disney Company where they call all of their
employees cast members. A cast member has a diferent meaning than
an employee. A cast member has to be able to play a role. Te cast
members role may be a singer or magician, or it might be a janitor or
maintenance person. In any case, a cast member is expected to act in
an appropriate way, to play their role as though they are at the happiest
place on earth!
Mary continued, We are trying to instill this philosophy at the
cruise line. To do this, I use fve key training classes. Every new employee
receives the following courses over their frst 6 weeks of being hired or
cast. Our programs are:
Basic Training Programs
Orientation
Lean Sigma BasicsPtacek & Motwani
Te 7 Habits of Highly Efective PeopleSteven Covey
Developing Customer LoyaltyJefrey Gitomer
FISH! PhilosophyStephen C. Lundin, PhD, Harry Paul,
John Christensen
Te orientation was not unlike any organizations orientation train-
ing. Tis course introduced the new cast member to the organization and
covered the following topics:
General orientation and facts about the cruise line
Vision, mission, values
Organization structure
Key Performance Indicators (KPIs)
Performance expectations
SafetyCrew and passengers
Since the organization was making so much progress with the Lean
Sigma methods and tools, we recently updated the key training programs
to include the basics of Lean Sigma. Now, the new employees know what
is expected of them regarding CI and how they can participate. I recruit
various area leaders to facilitate this training, continued Mary.
Te 7 habits training covered the following seven habits from the
popular book by Steven Covey.
1. Be Proactive
2. Begin with the End in Mind
3. Put First Tings First
4. Tink Win/Win
5. Seek First to Understand, Ten to Be Understood
6. Synergize
7. Sharpen the Saw (Continue learning and teaching)
Te objective of this training is to help people develop a success
habit for their personal and professional lives. Tese habits are described
as expected behaviors of cast members and are reviewed during their
performance appraisals.
Te Developing Customer Loyalty training is used to help cast
members to help customers more efectively, no matter what the need.
Tis training teaches specifc skills, tools, and techniques. Practice time
is provided in class so people can develop their skills. One of the key
concepts taught is that we want loyal customers who come back time
and time again, and refer our cruise line to other people. One critical
technique taught in class is the 3Rs + 1. Tis technique teaches cast
members how to respond to customers who need help. When a customer
asks for assistance cast members are expected to:
react to the situation and customer emotion with certain
phrases in a sincere manner;
respond to the need in an appropriate manner to develop
customer loyaltyAs they would want it responded to;
resolve the issue to the customers satisfactionHow they
would want the situation resolved it they were the customer;
+1 Do one extra thing for the customer that is not expected,
but welcomed.
Tis is a simple and powerful technique if done properly, Mary
continued.
We use the FISH! Philosophy video, which highlights the operations
and philosophy of the Pikes Fish Market in Seattle, WA, to instill a sense
of service and fun in each cast member. Te video illustrates the power of
four simple principles of customer service and dealing with people. Te
FISH philosophies are as follows:
1. Play
2. Be Tere
3. Make Teir Day
4. Choose Your Attitude
Te Play principle shows people how to make work fun for the customer
and the worker. Several specifc methods are developed during the train-
ing. Te Be Tere principle helps employees connect with customers
and people in a more meaningful way. It helps people be more sincere
in their eforts to help people. Make Teir Day helps cast members to
understand what it takes to develop customer loyalty and is complemen-
tary to the Customer Loyalty training. It gives cast members additional
ideas on how to develop customer loyalty and future referrals. Finally,
the Choose Your Attitude training delivers the message that we expect
every cast member to be the best every day and only they can choose their
attitude. Tis fts well with the 7 Habits training on being proactive, as
well as many other habits.
In the Choose Your Attitude session, I like to ask the trainees how
many holidays are there in a year. As the participants begin the mental
counting of holidays, I interrupt them and say: Every day is a holiday
for our guests! Our guests may be on the vacation of a lifetime. Many
have been saving their money and anticipating this very special trip for
years. Its our job to show up every day with a positive attitude of service
andenthusiasm, even when we may not feel it inside. Your job is to be
the best, happiest, most service-oriented person you can imagine. Some
days your acting may be more dif cult than others, but thats what
weexpect.
Te training doesnt stop there, Mary explained. Every employee
continues to receive refresher training on these topics on a regular basis.
Tis supports the future state culture targets. It all fts together, and were
making such huge improvements in retention and customer feedback.
After listening to Marys passion about this training, Joe asked Larry
and Mary if they would consider delivering some of this training at Joes
factory. After the help Joe had provided to Larry and the struggling cruise
line, Larry quickly agreed to help Joe and the two began developing the
cross-organizational training plan.
1. Critically evaluate the current state cultural assessment diagram
prepared by Larry and his team. Why do you think Larry has
undergone this exercise and what do you think he would like to
achieve from this process?
2. Critically evaluate the future state cultural assessment to indicate
what the cruise line would like to become. Assume you are an
area leader, why do you think it is important to know what the
future state should be? What steps would you take to achieve the
future state?
(Continued )
3. What does Larry and his team do special that got Joe excited? Do
you think it is a good idea for Joe to benchmark Larrys cruise line
customer service training program?
4. What are the salient features of the customer service training
program implemented in the cruise line? What can all organiza-
tions learn from it?
5. Defne the 3R + 1 strategy. Dont you think every service organi-
zation needs to instill this simple strategy? What do you think are
potential challenges that an organization would encounter when
implementing this strategy?
6. Critically evaluate the following quote made by Mary, Every day
is a holiday for our guests! Some days your acting maybe
more dif cult than others, but thats what we expect. What can
service leaders learn from this quote?
7. Te people side of Lean Sigma implementation is extremely
critical and frequently neglected. Why is it so important for an
organization to focus on the people side? What are some special
things that your organization does that Larry and his team can
learn from?
CHAPTER 9
Achieving, Sustaining, and
Celebrating Success
Larry had been working on the Lean Sigma improvements for nearly
2 years, and at their annual family picnic cornered Joe again. Joe, weve
been doing this Lean Sigma thing for nearly 2 years now and have made
some great progress. We are actually growing now and becoming quite
proftable. But the teams are losing their enthusiasm and the whole thing
is starting to seem stale. Any hints on how to re-energize the teams?
asked Larry.
We always go back to the basics to recharge our teams. Its important
to show your commitment. Remember the key enablers? Ask yourself
what, if anything, is missing? Joe replied.
Key Enablers for Lean Sigma Success
1. Leadership establishing, communicating, and living up to the vision,
mission, and values
2. Resource commitment
3. Training and education
4. Process- and results-focused
5. Policy deployment and goal alignment
6. Total system or value stream focus
7. Employee involvement
8. Perseverance and commitment
(Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect ServiceUsing
a Practical Approach to Lean Six Sigma to Improve the Customer Experience
and Reduce Costs in Service Industries. Chelsea, MI: MCS Media, Inc.;
Ptacek, R. & Motwani, J. (2011). Te Lean Six Sigma Pocket Guide XL
Combining the Best of Both Worlds Together to Eliminate Waste! Chelsea, MI:
MCS Media, Inc.)
Joe continued, We also try to come up with some new challenges or
themes to keep things fresh. One time when we set new goals for house-
keeping and cleanliness, everyone cried, We work on these foors, not eat
from them! So we told the teams that when we meet the new goals, we
would celebrate by having the management team eat breakfast and lunch
of the foor. Tis really got the teams fred-up and we had a lot of fun
with the challenge. In fact when the managers were eating of the foor,
a local newspaper reported on it and everyone enjoyed seeing an article
about how clean our company was. Tat was quite a celebration. We
served cake, on plates, to the rest of the company to celebrate the goal
achievement.
Source: Holland Sentinel, 12-23-95, used with permission.
We then created another theme to push accomplishment even far-
ther. We created a competition within the organization and the win-
ning team with the most improvements would get their car washed
by the management team. Again we had a lot of fun with this. It took
about a year to achieve the goal, but we succeeded in raising the bar
of achievement. You might try a theme or a challenge or internal com-
petition to get some excitement back into the improvement efort,
explained Joe.
When youre managing change in an organization, things can get
dif cult, continued Joe. Joe sketched the following illustration on a
napkin and explained, You see, at frst, once everyone sees that youre
serious about improving, and gets over the shock and denial, people
begin to see how the Lean Sigma improvements can help them. Tey
start to see some quick hitting improvements and are optimistic. Ten,
when the low hanging fruit or easy projects have been implemented,
things get tougher, and improvements are harder to fnd. When this
happens things start to plateau or level out. If left alone, this plateau
ACHIEVING, SUSTAINING, AND CELEBRATING SUCCESS 117
will turn into pessimism and doubt. At this point people need to see
managements commitment to Lean Sigma methods and tools. Too
many leaders throw in the towel at this point and say Lean Sigma
doesnt work.
Performance
curve
Plateau
S
l
i
d
e
C
l
i
m
b
Optimistic
concerned
skeptical
Pit
Fearful
confused
withdrawn
Employees need to
see management
commitment
The key is to strive for a short duration in the high stress zone.
Pessimism
doubtful
anxious
Management must
provide systems and
training
Helpful
determined
probing
Focus
energy
determination
Pride
ownership
confidence
Extension
Organizational stress
Managing
change
C
r
e
s
t
Quick hit
performance
improvements
If managers and leaders redouble their eforts and commitments at this
point, things will start to turn around and many more signifcant gains
will occur. Te key is to push through the trough or organizational stress
as quickly as possible by sticking to key projects and the Lean Sigma
methods and tools.
Larry said, Tats interesting, but I think we are beyond that
now, and I just want to get some more excitement around the ship.
Ithink a challenge, something big, will be a good way to get the excite-
mentback.
In Jim Collins book Good to Great he called them Big Hairy
Audacious Goals or BHAGs, and many organizations have them. Tey
provide long term focus and can be fun, Joe added.
Another key is to continue to hold people accountable to use the
Lean Sigma methods and tools. Tis should be built right into your
performance management system. Keep to the accountability sessions
or Meeting Rhythms as Harnish called them in his book Mastering the
Rockefeller Habits. In the book, Harnish describes a meeting rhythm
with daily huddles, weekly, monthly, and quarterly work sessions to
review progress to goals, ensure resources are provided, and to hold
people and teams accountable for results. Tis is key to sustaining the
efort. Remember our Gemba walks? Make these work sessions standard
work for you and your area leaders. Perform layered process audits to
make sure they are doing them, and doing them correctly. Tis will let
the teams see that these are important to you and to their success, Joe
added.
Boy! sustaining the efort is hard work! replied Larry.
Remember what Dad always says, Anything worth doing is worth
doing right, and Do whats right, not whats easiest! replied Joe.
Yeah, said Larry, and Te harder you work, the luckier youll be!
and they both laughed.
Now, lets get back to the party where you can tell everyone how
Ibailed your sinking cruise line out of troubled waters! said Joe.
1. Do you agree with Joes statement that We always go back to the
basics to recharge our team? Why do you think it is important to
go back to the basics? Do you think that the key enablers identi-
fed earlier in this book were the right ones? Why or why not?
2. What do you think of Joes new goal for housekeeping and clean-
liness? Dont you think all organizations should instill it?
3. Is it a good idea to create a competition within the organization
on which functional area comes up with the most improvements?
Will such a competition raise the bar or will it create more con-
ficts? What do you think of Joes reward to the team that won
this competition?
4. Discuss the change cycle presented by Joe. Why is it dif cult to
implement change in any organization?
5. What do you think of Larrys statement on how to get more
excitement on the ship? What lessons can Larry learn from Jim
Collins book?
(Continued)
ACHIEVING, SUSTAINING, AND CELEBRATING SUCCESS 119
6. Why is it critical for an organization to hold people accountable
for the use of Lean Sigma methods and tools?
7. If you were Larry, what are the fve things that you would empha-
size in order to sustain the success and momentum achieved from
implementing Lean Sigma?
References
Collins, J.C. (2001). Good to Great: Why Some Companies Make the Leap and
Others Dont. New York, NY: Harper Business.
Covey, S. (1997). Te Seven Habits of Highly Efective People: Restoring the
Character Ethic. Torndike, ME, G K Hall & Co.
Gitomer, J. (1998). Customer Satisfaction Is Worthless, Customer Loyalty Is Priceless.
Austin, TX, Bard Press.
Harnish, V. (2002). Mastering the Rockefeller Habits: What You Must Do to Increase
the Value of Your Growing Firm. New York, NY, Gazelles, Inc.
Liker, J.K. (2004). Te Toyota Way: 14 Management Principles from the Worlds
Greatest Manufacturer. New York, NY: McGraw-Hill.
Liker, J.K. (2008). Toyota Culture: Te Heart and Soul of the Toyota Way. NewYork,
NY: McGraw-Hill.
Lundin, S., Paul, H., & Christensen, J. (2000). Fish! A Proven Way to Boost Morale
and Improve Results. New York, NY, Hyperion.
Ptacek, R., Coats, M., & Ptacek, T. (2012). Todays Lean Leader! A Practical
Guide to Applying Lean Six Sigma and Emerging Technologies to Leadership and
Supervision! Chelsea, MI: MCS Media, Inc.
Ptacek, R. & Motwani, J. (2011a). Pursuing Perfect ServiceUsing a Practical
Approach to Lean Six Sigma to Improve the Customer Experience and Reduce
Costs in Service Industries. Chelsea, MI: MCS Media, Inc.
Ptacek, R. & Motwani, J. (2011b). Te Lean Six Sigma Pocket Guide XL
Combining the Best of Both Worlds Together to Eliminate Waste! Chelsea, MI:
MCS Media, Inc.
Spear, S. (1999, May). Learning to Lead at Toyota. Harvard Business Review, 19.
Spear, S. & Bowen, H.K. (1999, September). Decoding the DNA of the Toyota
Production System. Harvard Business Review, 97106.
Womack, J.P. & Jones, D.T. (1996). Lean Tinking: Banish Waste and Create
Wealth in Your Organization. New York: Simon and Schuster.
Womack, J.P. & Jones, D.T. (2005). Lean Solutions: How Companies And
Customers Can Create Value And Wealth Together. Free Press, New York, NY.
A
Administration and Accounting team,
101102
Adventures and Event Planning team,
9597
Analyze phase, 30
Area team charter commonalities, 74
Area team work session objective, 73
C
Cause-and-Efect diagram, 6768
Continuous improvement (CI)
method. See Lean Six Sigma
Control phase, 30
Correction waste, 23, 26
Critical To Quality (CTQ)
diagram,54
Cruise line departments, 38, 4143
Cultural assessment, 107108
Current state cultural assessment
diagram, 107108
D
Daily huddle, organization, 8
Defne phase, 30
Developing Customer Loyalty
training, 110111
Dirty Dozen. See Twelve forms
ofwaste
DMAIC alphabetical tool application
chart, 3133
DMAIC process, 30
E
Employee involvement, 48
Entertainment team, 8687
Environmental waste, 24, 27
Expertise waste, 22, 25
F
FISH philosophies, 111112
Flip chart, 6870
Food Services team, 9193
Future state cultural assessment
diagram, 107108
G
Gaming team, 88
Gemba Walk, 810
Guest Services group, 8586
H
7 habits training, 110
Housekeeping team, 8990
Human Resources (HR) and Training
team, 100101
I
Improve phase, 30
Inventory waste, 22, 25
K
Key enablers, Lean Sigma
employee involvement, 48
leadership, 46
perseverance and commitment,
4849
policy deployment and goal
alignment, 48
process-and results-focused, 4748
resource commitment, 4647
total system/value stream focus, 48
training and education, 47
Key performance indicators (KPIs)
Administration and Accounting
team, 101102
Adventures and Event Planning
team, 9597
Entertainment team, 8687
Food Services team, 9193
Gaming team, 88
Guest Services group, 8586
high-level key measures, 5862
Housekeeping team, 8990
Index
124 INDEX
Human Resources and Training
team, 100101
Medical Services team, 9091
Navigation-Captain and Crew
team, 8385
Operation and Maintenance team,
9799
Purchasing and Logistics team,
99100
Retail Sales team, 9394
Security team, 9495
KPIs. See Key performance indicators
(KPIs)
L
Leadership Lean Sigma, 46
Leadership team
cause-and-efect diagram, 6768
comments, 56
CTQ diagram, 55
fip chart, 6870
high-level objectives, 57
key performance indicators, 5862
Lean Sigma fow diagram, 6366
Pareto chart, 63
strategies, 51
Lean
goal, 14
value stream maps, 14
Lean Sigma
building blocks, 18
concepts
non-value adding, 2021
value adding, 20
cruise line departments, 38, 4143
cruise line issues, 10
key enablers
employee involvement, 48
leadership, 46
perseverance and commitment,
4849
policy deployment and goal
alignment, 48
process-and results-focused,
4748
resource commitment, 4647
total system/value stream
focus,48
training and education, 47
methods
leadership level, 30
project/systems/team level, 30
worker level, 3031
organization perspectives-case
study, 13
outcomes, 3334
overview session in organization, 10
philosophy, 19
principles, 19
scoreboarding issues, 58
tools
alphabetical application chart,
3133
mass customization, 30
uses of, 17
Lean transformation
leadership level, 30
project/systems/team level, 30
worker level, 3031
M
Mass customization, 39
Measurable outcomes, 40
Measure phase, 30
Medical Services team, 9091
Motion waste, 22, 2526
N
Navigation-Captain and Crew, 8385
Non-value-adding concept, 2021.
See also Twelve forms of waste
O
Objective outcomes, 40
Onboard Medical Center, 9091
Operation and Maintenance team,
9799
Organization
daily huddle, 8
Lean Sigma overview session, 10
Six-Sigma status, 16
Organizations orientation training,
110
Overloading waste, 23, 27
Overprocessing waste, 23, 26
Overproduction waste, 22, 24
INDEX 125
P
Pareto chart, 63
Perseverance and commitment Lean
Sigma, 4849
PlanDoCheckAct (PDCA)
experiments, 8, 21, 68, 83,
86, 88, 91, 107
Policy deployment, 48
Process-and results-focused Lean
Sigma, 4748
Purchasing and Logistics team,
99100
R
Resource commitment, 4647
Retail Sales team, 9394
S
Scoreboarding, 58
Security team, 9495
Service business
categories
service delivered to external
customer, 39
service process internal to
organization, 40
service process used by external
customer, 3940
objective outcomes, 40
subjective outcomes, 40
SIPOC. See SupplerInputProcess
OutputCustomer
Six-Sigma (6)
defnition, 15
goal of, 16
in organization, 16
Social waste, 24, 2728
Subjective outcomes, 40
SupplerInputProcessOutput
Customer (SIPOC), 40
T
Total Quality Management
(TQM),13
Total system focus, 48
TQM. See Total Quality
Management
Training and education Lean
Sigma,47
Transport waste, 22, 25
Twelve forms of waste
correction, 23, 26
environmental, 24, 27
expertise, 22, 25
inventory, 22, 25
motion, 22, 2526
overloading/overburdening,
23, 27
overprocessing, 23, 26
overproduction, 22, 24
social, 24, 2728
transport, 22, 25
unevenness, 23, 27
waiting, 23, 2627
U
Unevenness waste, 23, 27
V
Value adding concept, 20
Value stream focus, 48
Value stream maps, 14
W
Waste of waiting, 23, 2627
Work session meeting, 80, 82
Work session leading and facilitation
checklist, 82
Work session prep checklist, 80, 82
Work session record, 81
OTHER TITLES IN OUR SERVICE SYSTEMS AND
INNOVATIONS IN BUSINESS AND SOCIETY COLLECTION
Jim Spohrer, IBM and Haluk Demirkan, Arizona State University, Collection Editors
Service Process Design for Value Co-Creation by Joey Field, due out in December 2012
TITLES IN OUR INDUSTRY PROFILES COLLECTION
Donald N. Stengel, California State University, Editor
A Prole of the Electric Power Industry: Facing the Challenges of the 21st Century
by Charles E. Clark, Jr., due out in October 2012
A Prole of the Steel Industry: Global Reinvention for a New Economy by Peter Warrian,
due out in November 2012
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Lean Sigma Methods and Tools for
Service Organizations
The Story of a Cruise Line Transformation
Jaideep Motwani, Rob Ptacek, and Richard Fleming
Every business aspires to be competitive and proftable in its market. To do
this, an organization needs to offer customers value propositions, which
may be manifest in the product it produces or the service it provides. This
in turn will create customer loyalty and growth.
There are a number of organizational philosophies and strategies used
by businesses to help accomplish this goal, among which are the concepts
of Six Sigma and Lean. This book proposes to integrate the best practices
from each of these philosophies and apply them to a customer-focused
organizationa cruise shipwhose overriding mission is to deliver supe-
rior service to its customers. The authors demonstrate in this book how
key components of both Six Sigma and Leansuch as identifying and
removing defects, elimination of waste, metrics, speed of delivery, and
the seamless integration of these concepts and practices throughout the
operationserve to enhance the kind of value propositions that customers
recognize and that allow an organization to be successful.
Jaideep Motwani, PhD, is chairperson and professor of management at
Seidman College of Business, Grand Valley State University, since 2000. He
received his PhD in Operations Management from the University of North
Texas. Dr. Motwani serves as editor for two international journals and is on
the editorial board of 12 prestigious national and international journals.
Rob Ptacek is president and CEO of Competitive Edge Training & Consult-
ing & Partner, Global Lean Institute, LLC. He holds a BS in Metallurgical
Engineering from Michigan Technological University, Houghton, MI, and a
Masters of Management from Aquinas College, Grand Rapids, MI. Mr. Ptacek
currently instructs in the LEAN Champion certifcation program at Grand
Rapids Community College.
Richard Fleming is president and CEO of Continuous Improvement (CI)
Associates and, for more than 20 years, has provided hundreds of manu-
facturing companies and service frms with lean enterprise transformation
consulting, lean culture development training, and opportunity assess-
ments. Mr. Fleming holds a masters in Mechanical Engineering from the
University of Michigan and has served as lean manufacturing engineering
manager for the Industrial Technology Institute.
ISBN: 978-1-60649-407-3
9 781606 494073
90000
Service Systems and Innovations
in Business and Society Collection
Jim Spohrer and Haluk Demirkan, Editors

Lean Six Sigma

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