Lean Six Sigma

Lean Sigma Methods and Tools for Service OrganizationsThe Story of a Cruise Line Transformation

Jaideep Motwani Rob PtacekRichard Fleming

The Service Systems and Innovations in Business and Society CollectionJim 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 TransformationCopyright © 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 means—electronic, 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 byBusiness Expert Press, LLC222 East 46th Street, New York, NY 10017www.businessexpertpress.com

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 PennellInterior 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 profi table in their markets.

To do this, an organization needs to off er customers value propositions,

whether it is manifest in the product they produce or in the service they

provide. Th is in turn will create customer loyalty and growth. Th ere 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 organization—a cruise ship—whose overriding mission is to

deliver superior service to its customers. Th e 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.

Th is book illustrates Lean Sigma on a full range of service off erings:

a cruise ship off ers “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. Th rough 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 Th e Lean Sigma for Service Challenge ..............................1

Chapter 2 Identifi cation and Understanding of Lean Sigma

Implementation ................................................................5

Chapter 3 Lean Sigma Methods and Tools—Basic Concepts ............13

Chapter 4 Comparing Manufacturing and Service

Environments ..................................................................37

Chapter 5 Key Enablers—Policy 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! Everyone’s 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, “It’s not bragging, it’s just the truth, and you’re the

only one tired of it ‘cause you’re such a miserable loser and your so-called

cruise line is about to sink!”

Joe and Larry have been fi ghting in some way since the day Larry was

born. Th eir fi erce sibling rivalry had overshadowed other family outings

in the past. Th ere 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 off the wall. Th eir competitive

nature seemed to know no end. Th is time things seemed diff erent though.

Joe was right that Larry’s cruise line was in terrible trouble. While other

cruise lines were enjoying banner years, Larry’s 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 can’t cut

your way to prosperity.”

Joe, on the other hand, was enjoying great success in his manufacturing

company. He was leading his organization’s continuous improvement

(CI) program and had received several promotions over the past few years

as a result of the improvements. Th e local newspaper had even written a

nice article about Joe and his company’s improvement eff orts. Th e article

titled “DR Products (DRP) Wins Prestigious Continuous Improvement

Award,” had several quotes from Joe regarding his role in the eff ort.

Joe was telling his cousins about the article when Larry blew up at the

picnic table.

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 company’s 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 weren’t

happy either. Just last week two more key people had quit. Larry was

spending so much time trying to replace these people that he didn’t

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, I’ve been under a lot of stress

lately.”

“Nothing you didn’t 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 it—Lean Sigma?” said

Larry.

“Yeah that’s the name. I’m surprised you remembered.”

“Yeah, I remembered. But it seems like a manufacturing thing. Would

it work for a cruise line?” asked Larry.

“I’m certain it would. It’s 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 diff erent

things, but the delivery of the services is simply a series of processes.”

Joe replied.

“But we are so diff erent than a manufacturer.” said Larry.

“Th at’s what they all say.” commented Joe.

“Th ey do? Who? And what else do they say?” Larry quickly replied.

“Th ey say ‘We’re diff erent. Lean Sigma won’t work here.’ Even

manufacturers say that, but they’re all wrong. Lean Sigma CI methods

THE LEAN SIGMA FOR SERVICE CHALLENGE 3

are just a scientifi c or data-driven way to systematically and continually

improve a process. Everything an organization does, whether they’re a

service organization or manufacturer, can be defi ned as a process. Lean

Sigma methods and tools describe a standardized way to address waste

reduction in a process. I’m certain it will work for you, but I’m not sure

you’re 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 doesn’t work, I’ll give you a job at DRP when you go bankrupt!” Th ey

both laughed, and then Larry groaned.

“I’m even willing to help you,” added Joe. “One concept of Lean

Sigma is to share the knowledge freely. Why don’t you come to the factory

tomorrow and I’ll give you a tour and show you some of the Lean Sigma

activities we’re doing. I could even have you attend a current Lean Sigma

work session, and maybe a team huddle.” off ered 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.

Larry’s perspective that his organization is diff erent 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 diff erently for diff erent

organizations. Yet, Lean Sigma philosophy, principles, and concepts of

waste elimination (conservation of resources) and improving fl ow are

universal. Lean Sigma is a never-ending, systematic/scientifi c 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

fi nancial performance.


Chapter 1—Discussion 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 Joe’s

organization? What are some of the challenges that Larry may

encounter?

3. Discuss Joe’s success with continuous improvement and Lean

Sigma initiatives in his organization. What lessons can Larry learn

from DRP’s approach?

4. Do you think Lean Sigma can be successfully implemented in

Larry’s company? How would you address Larry’s skepticism that

“But we are so diff erent 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

Identifi cation 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 visitor’s badge. Larry had

to read a brief statement of DRP’s values, vision, mission, and safety rules

in order to enter the plant.

Joe said, “Come on, we have to get going. I don’t want to be late for

my walk.” Before Larry even got a cup of coff ee, Joe had them walking

around on the factory fl oor.

Joe walked at a brisk pace. Th e fi rst stop was in shipping and

receiving. Larry had a shipping and receiving area on the cruise ship as

well. It didn’t 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. Th e area was neat and tidy.

Larry could almost see how the organization on the fl oor matched the

details on the board. “Everything’s to plan here, let’s get to the next

operation,” Joe said.

DRP’s 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. Th e 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 fi nal 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 fl ow. At the assembly

area, Joe studied each cell’s 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 “Let’s go,” and off to the paint line

they went. Larry thought the cells were very similar to the laundry area

on the ship, except they weren’t quite as structured. Any laundry basically

just went into any available machine. Larry made the following sketches

of the cells and scoreboards.

Th e paint line was manually operated. People hung cabinet parts and

panels on hooks or racks and placed them on an overhead conveyor. Th e

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. Th e 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. Th e 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 couldn’t 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 Joe’s pace, Larry said “When do we get some

coff ee? You do have coff ee don’t you?”

Joe chuckled, “Yes, we have coff ee. We’ll 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. It’s part of our ‘Plan–Do–Check–Act’ (PDCA) Lean

Sigma process for CI. Th e 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. Th e 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. Th e

walk makes it easier for me to spot waste and abnormalities to the plan,

and for me to off er 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. It’s part

of our Lean Sigma CI initiatives,” Joe replied. Larry sketched the follow-

ing standard work form.

Joe explained, “Th e process is pretty simple. Everyone has standard

work that’s 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. Th is method

of ‘Scoreboarding’ allows us to quickly identify abnormalities and non-

standard performance throughout the day. Th en we can make appropriate

adjustments or counter measures. We’re ‘PDCAing’ continually through-

out the day. Th is increases the likelihood that we’ll meet our schedule

consistently every day.”

“It sounds confusing,” said Larry.


“It’s not. It’s 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

fl ow. 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?

• Th e 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.

“I’m not sure this would work for me,” said Larry.


“Well, when you lose your cruise line you can do it for me,”

quipped Joe.

Joe had a series of activities lined up for Larry. Th rough 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 fi rst 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 couldn’t 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, it’s only 15 minutes and it’s needed to set up second

and third shift plans. We run three shifts here you know…” prodded Joe,

and off they went to the Gemba walk.

On the drive home, Larry couldn’t help but think of all the reasons

Lean Sigma would not work for his cruise line.

• A cruise line is completely diff erent from a manufacturing

company.

• We work with people, not parts.

• No two customers are the same—ours is not a consistent

process.

• Our products and deliverables are diff erent.

• Our customers expect diff erent things.

• We don’t measure things like a factory does.

• We deliver service to customers, not products.

Th en Larry remembered what he’d said to Joe at the picnic, “Anything

you can do, I can do better!” He’d 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 wouldn’t. It was a good thing he had some time

the next day to review his notes and make a plan.


1. Critically evaluate Larry’s visit to Joe’s 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 organization’s approach to “score boarding” with

DRP’s?

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 identifi ed 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 Tools—Basic Concepts

Th e next day Larry went over his notes and the training content provided

at the Lean Sigma overview. He started to organize the fi les and notes in

a logical format. Th e following are Larry’s notes from the fi rst day at Joe’s

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 signifi cant

increases in productivity and quality with Six-Sigma techniques.

3. Lean Sigma is the combination of these powerful tools.

4. Th e origin of these methods goes back to the industrial revolution

and the concept of time and motion studies with Fredrick Taylor and

Henry Ford’s 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 Sigma’s 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 fi t with the training

materials he’d 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 people’s personal life! People can

apply Lean tools to their hobbies, chores, and households to make things

simpler, easier, more enjoyable, and cost-eff ective. Th e goal of lean is to

strive for perfection by minimizing and ultimately eliminating waste

which causes variation throughout the value stream. Th e entire focus of

lean is customer-driven and it’s the customer who determines the value and

the amount they’re willing to pay for the product or service. Th e customer

enjoys the fruits of the information and material fl ow. Information and

material fl ows are often documented in Value Stream Maps as shown

below.

LEAN SIGMA METHODS AND TOOLS—BASIC 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 mSchedulelocation = 5 mPrint docs= 120 m

File paperworkpending = 5 m

Pre-application

Gather financialdata = 15 mRun creditreport = 15 mDetermineprgm = 120 m

Verify emply &assets = 60 mUnderwriting= 120 m

Application Approval/title Closing prep

5S

Butter/safety

150 m 180 m 25 m 245 m4 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) defi nes the variation or “spread” of a process. Six-Sigma defi nes

how much of the total process falls within the normal process variation.

Th e 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

–6s–5s –4s–3s–2s –1s 1s 2s 3s 4s 5s 6s0Sigma

(Deviation from the mean)


Th e 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 satisfi ed 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. Th e 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 fl 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. Th is, in

turn, lowers the cost and improves the quality of the process. Th e 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 modifi ed to accommo-

date a waste-free Lean Sigma environment. Th is 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 effi 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. Th ese 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

Val

ue a

nd w

aste

Flow

Plan

-Do-

Che

ck-A

ctQ

ualit

y fir

st

Spea

k w

ith d

ata

and

fact

s

Perf

orm

ance

mea

sure

sSe

ek p

erfe

ctio

n

Cus

tom

er fo

cus

Was

te e

limin

atio

n

ConceptsSix-SigmaConcepts

Lean Sigma tools*5S

Continuous flowData collection and presentation

Employee balance chartJust-in-time (JIT)

LayoutLeveling (heijunka)

Mistake (or error) proofingPerformance dashboards

Plan-Do-Check-ActProblem solving

Pull systems and kanbansQuick changeovers

Standard workStatistical process control

Stat

istic

al m

etho

ds

Takt time and demand analysis plotsTeamwork

Total productive maintenance (TPM)Valve stream mapping

Visual controlsVoice of the customer (VOC)

* Not all inclusive of Lean Sigma tools

Lean Sigma philosophiesConservation of resources (sustainability or becoming green)

Relentless pursuit of waste elimination

Tot

al e

mpl

oyee

invo

lvem

ent

Lean Sigma principlesContinuous improvement in processes and results

Focus on customers and value streamsTotal employee involvement

Com

mon

goa

l of S

ix-S

igm

aZe

ro d

efec

ts

Voi

ce o

f the

cus

tom

er

Look

for

hidd

en w

aste

s

Qua

ntita

tive

anal

ysis

DM

AIC

Prov

en m

etho

dolo

gy

Focu

s on

var

iatio

n

Scie

ntifi

c m

etho

d

Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect Service—Using a Practical Approach to Lean Six Sigma to Improve the Customer Experience and Reduce Costs in Service Industries. Chelsea, MI: MCS Media, Inc.

Larry’s notes on the building blocks are shown on the following pages.


Lean Sigma Philosophies and Principles

Th e overriding philosophy of Lean Sigma is defi ned 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 that’s done. Lean Sigma philosophy calls for the simplifi ca-

tion of all tasks and eff orts to eliminate waste and improve fl ow. 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. Th ey provide the unchanging, solid foundation to build and

improve upon. Th e three key Lean Sigma principles, supported by Lean

Sigma philosophies, are as follows:

• Continuous improvement in processes and results—Do not

be “results or bottom-line only” focused. Instead, focus on

processes that deliver consistent, waste-free results.

• Focus on customers and value streams—Focus on the entire

process, from the customer pull or demand to demand

fulfi llment and customer satisfaction. Focus on how materials

and information fl ow 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 eff ective 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.


Th e Lean Sigma concepts are as follows:

• Add value and remove waste

Value Adding

Organizations add value when they change the weight,

shape, confi guration, properties, or attributes of materials or

information. Th ese 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. Th ings that

consume time, resources, space, or both, but do not contribute

to satisfying customer need.

Th e 12 categories of waste are as follows:

1. Overproduction—Making more than is needed.

2. Expertise—Not using people’s knowledge.

3. Transportation.

4. Inventory and Work in process (WIP).

5. Motion.

6. Rework or Corrections.

7. Overprocessing—Processing more than is needed.

8. Waiting or delays.

9. Overload or straining a system—Overloading systems

capabilities usually leads to other forms of waste.

10. Unevenness—Unevenness in work fl ow usually leads to other

wastes.

11. Environmental waste—Pollution, excess consumption.

12. Social waste—Social 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. Th is is

process mirrors the scientifi c method and drives improvement

activities.

• Next process or operation is the customer—Serve them.

• Upstream quality—Build quality in; do not “pass along” poor

quality.

• Customer needs fi rst—Always focus on the customer and

their requirements

• Decisions at the lowest appropriate level—Go to where

the work is done or the value is added. Sometimes called

“Gemba.”

• Speak with data—Use 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).

• Defi ne and seek PERFECTION.

Adding value through waste identifi cation and elimination is a funda-

mental concept of Lean Sigma. Th e 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 fi nished

product or service. When waste is removed value increases. Waste can

occur in customer processes as well.

Twelve Forms of Waste—The 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. Th e purpose of Lean Sigma practices

is to identify, analyze, and eliminate all sources of process ineffi ciency.

Th e following table was a handout Larry had from the training ses-

sion. Th e table summarizes the 12 wastes with examples.


The Dirty Dozen: 12 Forms of Waste

Form Description ExamplesWays 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 aren’t used to the fullest

• Workloads not being completed due to lack of cross-training

• Assigning employees two jobs due to understaffi ng

• Standard work• Lean Sigma File

System• Business case for

Lean Sigma• Offi ce quick-starts

Transport Any transport of fi 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 fi les, supplies, and time spent searching for documents

• Files awaiting signatures or approvals

• Keeping multiple copies of reports


mapping• Standard work• Lean Sigma File

System• Kanbans for offi ce

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 offi ce layout• Kanbans for offi ce

supplies• Pull systems and

supermarkets

(Continued)



Corrections All processing required in creating a defect and the additional work required to correct it

• Data entry errors• Not having

integrated IT systems


System • Visual controls• Mistake proofi ng

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


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 fl ow• Statistical analysis• Workload

balancing

Unevenness Lack of consistent fl 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 offi ce processes for locating documents when a staff member is on leave


mapping• Standard work• Workload

balancing

(Continued)



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 isn’t recycled

• Unnecessary use of power when machines and equipment aren’t 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

• Plan–Do–Check–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. Th is 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 reconfi gured unless they are already understood as essential to a

perfect process.

(Continued)


2 of 12: The Waste of Expertise

Th e under-utilization of people’s 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 eff ective performance

management system will reduce this waste signifi cantly. Use company

policies and procedures to eff ectively place people where they will most

benefi t the organization.

3 of 12: The Waste of Transport

Excess transport aff ects the time of delivery of any work within an offi ce.

Even with the Internet and e-mail readily available, too often, or not often

enough, documents (i.e., fi les) 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 offi 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 fi les, supplies, and time spent

searching for a document is waste. Th ey all take up space or require

someone’s 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. Th ere are basically two types

of inventory waste related to administrative areas: (1) offi ce supplies and

(2) information.

5 of 12: The Waste of Motion

Any movement of people that does not add value is waste. Th is waste

is created by poor offi ce layout or design, faulty or outdated offi ce


equipment, supply inaccessibility, and movement of information or

data that does not add value. Th e 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 fi rst 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. Th is waste can reduce profi ts

signifi cantly.

7 of 12: The Waste of Overprocessing

Putting more work or eff ort 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. Th is is one of the most

diffi cult administrative wastes to uncover. Some questions to ask to assist

in the identifi cation of this waste are, “What are the most basic processes

required to meet the customer needs?” or “Is there a clear understanding

of the customer’s needs?”

8 of 12: The Waste of Waiting

Waiting for anything (people, signatures, information, etc.) is waste. Th is

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 fi nd it? How many times do you actually touch

something before it is completed? It is the fi nish it, fi le it, or throw it

away system that can help eliminate this waste. Th is waste closely related

to “wasting time.”

9 of 12: The Waste of Overload

Th e 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 identifi ed 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 fl ow of inputs/information/scheduled work from

upstream processes causes many of the other types of waste previously

mentioned. Unevenness such as traffi 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 eff orts 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 classifi ed as environmental waste. Th ese items can be observed in an

organization’s trash containers and dumpsters. Th is is a huge opportunity

for Larry’s cruise line—Larry 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. Th e 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 identifi ed 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 he’d 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. Th e 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. Th is 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

Th e 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 people’s minds and getting them involved.

TransportMoving tools and materials to the point of use.

InventoryMaterials or information. This includes all work in process and fi nished goods.

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

CorrectionsThis includes rework or fi xing of products or information that is wrong the fi rst time.

OverprocessingThis includes work above and beyond the minimum requirements or needs.

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

OverloadThis is when workload is too much and machines break and people burnout.

UnevennessThis is when workload varies from slow to fast uncontrollably.

EnvironmentalThis includes pollution and other wastes of the environment.

Social This is waste that impacts social issues.


Th e systematic approach is defi ned 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 Defi ne–Measure–Analyze–Improve–Control (DMAIC)

improvement process. Th e DMAIC improvement process phases are

defi ned as follows:

• Defi ne the project scope, resources, and objectives.

• Measure the current state process key performance

measures, drivers, capabilities, fl ows, 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 eff ort 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.

Th e Lean Sigma Tool Application Chart presented here is not all

inclusive. It covers the Lean Sigma tools identifi ed in the applications

chart. Th ese 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 fi t. 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. Th e 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

Defi ne Measure Analyze Improve Control1 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 fl exibility

X X

8 Flow, process, Swim lane, or value stream maps

X X X X

(Continued)


Lean Sigma tools


Defi ne Measure Analyze Improve Control10 Frequency charts X X

11 Future state fl ow maps

X

12 Histograms X X X X

15 Key metric data profi les

X X X

16 Leveling service fl ow, pull signals (kanbans), and paced work fl ow (Heijunka)

X X

17 Mass customization X

18 Mistake proofi ng (Poka yoke)

X X

20 Pareto and pie charts

X X X

21 Performance management and improvement

X X

22 Plan–Do–Check–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


Defi ne Measure Analyze Improve Control32 Spreadsheets and

pivot tablesX 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 diff erent 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 Joe’s 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 diff erences between Lean, Six-Sigma,

and Lean Sigma? Which of these is the most powerful and why?

• High organization morale, teamwork and eff ort through

alignment of goals and measures, and improved leadership

• Clear communication of priorities, expectations, and results

through visual and statistical controls. Th e “Right” things get

done “Right”

• Clean, organized, and effi cient worksite—minimal waste or

errors

• High quality outputs and results

• Smooth fl ow of work or services

• No unscheduled downtime or surprises

• Perfection—Zero defects or errors

• Less inventory, delays, transportation, motion, and rework

• Less costs and more profi t and returns on investment (ROIs)

• Increased capacity and sales growth potential

All of this information was a bit overwhelming for Larry. He still wasn’t

convinced that Lean Sigma would work for his cruise line but he didn’t

have many alternatives. He knew that doing the same thing and expect-

ing diff erent 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 he’d have some time to pick Joe’s

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 eff ectively? If not, how would you

go about doing it?

5. Discuss briefl y the fundamental Lean Sigma concepts. Can they

be easily applied by Larry in his organization?

6. By means of examples, briefl y 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. Joe’s

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. What’s the day-plan?” asked Joe.

Larry explained that he thought he’d drop Joe’s wife and children

off at the family pool and set everyone up with a day pass for the ship’s

amenities. Th e 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 Joe’s family

settled in, Joe and Larry would take a walk around the ship.

Th e walk with Larry started in his offi ce. Larry liked his offi ce and

thought it would impress Joe. As they walked into the offi ce, Joe said,

“Pretty fancy! At least it looks like you’re doing well!” “Yeah Joe, this is

one of the ways service is diff erent from manufacturing. If you had an

offi ce this nice your customers would assume you were making too much

money. When they see my offi ce they assume the entire ship has such nice

features,” Larry replied with a smile.

“Yeah this is nice, but you probably shouldn’t spend too much time

in here,” said Joe.

“Well I wanted to start here to show you how we are organized and

how diff erent 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

cruise line.


Cruise Line Departments

1. Navigation—Captain and crew

2. Guest services—Bookings and onboard guest services

3. Entertainment

4. Gaming—Onboard casino

5. Housekeeping—Maid services and laundry

6. Medical—Onboard medical center

7. Food services—Multiple onboard restaurants

8. Retail sales—Multiple onboard stores

9. Security—Onboard police

10. Adventures and event planning

11. Operations and maintenance

12. Purchasing and logistics (supply chain)

13. Human resources and training

14. Administration—Payroll and accounting

Joe was impressed. “Th ere are a lot of areas on this ship, it’s like a small

city!” Joe said.

“It’s not all about speed and effi ciency on a cruise ship,” said Larry.

“Sometimes our customers want slow, relaxing services. Th ey want to be

pampered, they want opulence!” explained Larry. He continued, “For

example, if we charge $150 for a foot massage, we don’t want to rush

through in 10 minutes.”

Joe smiled a knowing smile, “Th at 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 effi ciency. You might want to

focus on those areas before it’s too late! Let’s take a walk—I can’t stand

sitting still,” said Joe, and off 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?”

clarifi ed Joe.

COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS 39

“Well, we set up standard services and let our customers select the service

or option they want. It’s like our food services, in that we provide a full ‘all

you can eat’ buff et where the customers can select what food items they want,

or we off er other locations where customers can experience full service, ‘a la

carte’ menu items. Th eir choice is how we know what they want,” said Larry.

Joe elaborated, “Th at’s 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 diff erent areas on

the ship where you provide multiple types of services. Some of them can

be easily customized and off ered to the customers, some can’t. For exam-

ple, security, maintenance, and housekeeping are all services. Some have

direct ties to customers, some don’t. Some have tangible or measurable

outcomes, some don’t. 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 eff ort 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 diff erent 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 Service—Using

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 diffi 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

defi nition. Get it? Supplier–Input–Process–Output–Customer = SIPOC.

Th is defi nes and measures a process so we can make improvements.

‘Defi ning’ and ‘Measuring’ are the fi rst two steps in the DMAIC improve-

ment process,” said Joe. Joe continued, “Let’s get on to the tour! I’ve talked

enough and I’m tired of this offi 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 Larry’s offi ce, Joe wrote his

observations on the white board. Joe’s notes are summarized in the

following table.


Are

aL

ean

Sigm

a id

eas

alre

ady

in u

seW

aste

s ob

serv

edIm

prov

emen

t id

eas

Nav

igat

ion—

Cap

tain

and

cre

wSo

me

good

vis

ual c

ontr

ols e

xist

in th

e he

lm fo

r man

euve

ring

the

ship

.T

he h

elm

look

ed a

bit

dis

orga

nize

d. T

his c

ause

d a

was

te

in m

otio

n an

d de

lay

whi

le c

rew

mem

bers

look

for k

ey

item

s and

info

rmat

ion.

5S th

e he

lm. P

erha

ps a

dd so

me

visu

al c

ontr

ols t

o id

enti

fy k

ey fi

les a

nd in

form

atio

n.

Gue

st se

rvic

es—

Boo

king

s and

on

boar

d gu

est

serv

ices

The

boa

rdin

g ha

d m

any

visu

al c

ontr

ols,

from

dir

ecti

onal

arr

ows t

o co

lor-

code

d al

phab

etic

al re

gist

rati

on si

gnag

e.

Thi

s onb

oard

are

as a

ll lo

oked

dis

orga

nize

d. T

his c

ause

d cu

stom

ers t

o w

ait w

hile

wor

kers

trie

d to

fi nd

cri

tica

l in

form

atio

n. M

akin

g th

e cu

stom

er w

ait i

s wor

se th

an

mak

ing

a co

wor

ker w

ait,

but b

oth

are

was

tefu

l.

Perf

orm

a 5

S in

the

onbo

ard

gues

t ser

vice

s are

as.

Ente

rtai

nmen

tM

any

of th

e ba

ckst

age

area

s wer

e w

ell

orga

nize

d. C

lear

ly th

e en

tert

aine

rs a

re

used

to q

uick

cos

tum

e an

d ac

t cha

nges

.

Som

e of

the

stor

age

area

s wer

e ov

erfl o

win

g w

ith p

rops

and

co

stum

es. T

his r

epre

sent

ed w

aste

in in

vent

ory

as so

me

of th

e pr

ops w

ere

no lo

nger

bei

ng u

sed.

Wor

king

aro

und

usel

ess p

rops

and

item

s cau

ses a

bit

of w

aste

of w

aitin

g.

A 5

S w

ould

ens

ure

the

exce

ss a

nd o

r old

item

s are

re

mov

ed th

ereb

y re

duci

ng in

vent

ory

and

dela

ys.

Gam

ing—

Onb

oard

cas

ino

Cas

inos

and

gam

ing

area

s use

a h

igh

leve

l of v

isua

l con

trol

s and

vis

ual

stim

ulat

ion

to a

ttra

ct a

nd d

irec

t the

cu

stom

ers.

The

cas

ino

area

was

a b

it o

utda

ted,

and

man

y m

anua

l m

etho

ds o

f mon

itor

ing

the

area

wer

e ob

serv

ed. T

his i

s a

was

te o

f ove

rloa

d an

d m

otio

n as

the

mon

itor

ing

grou

p di

d no

t hav

e th

e to

ols t

o do

the

rew

ork

wit

hout

und

ue w

aste

s. T

he c

asin

o ar

ea o

nly

had

one

cas

hier

; thi

s som

etim

es

caus

es c

usto

mer

s exc

essi

ve m

otio

n an

d w

aiti

ng.

Dev

elop

a lo

w-c

ost s

tand

ard

wor

k m

etho

d to

im

prov

e m

onit

orin

g an

d cr

eate

a m

obile

cas

hier

to

redu

ce w

ait t

imes

and

mot

ion

for c

usto

mer

s.

Hou

seke

epin

g—M

aid

serv

ices

and

la

undr

y

The

mai

d se

rvic

es w

ere

usin

g st

anda

rd

cart

s wit

h ev

eryt

hing

they

nee

ded

to

serv

ice

gues

t qua

rter

s. T

his p

reve

nted

w

aste

of m

otio

n an

d tr

ansp

orta

tion

as

item

s wer

e co

nsum

ed o

r nee

ded.

Dri

ers w

ere

runn

ing

wel

l aft

er th

e cl

othe

s wer

e dr

y.

Thi

s is a

was

te o

f ove

rpro

cess

ing.

The

re w

as a

lso

an

unev

enne

ss a

nd o

verl

oad

of la

undr

y pr

oces

sing

. Som

e da

ys w

ere

extr

emel

y bu

sy, a

nd so

me

days

wer

e ve

ry sl

ow.

To fu

rthe

r im

prov

e th

e m

aid

serv

ices

, a sc

hedu

led

runn

er c

ould

del

iver

new

line

ns a

nd su

pplie

s on

a sp

ecifi

c pi

tch.

Thi

s is

a pa

ced

fl ow

of H

eiju

nka

syst

em, w

ith th

e us

e of

a ru

nner

or w

ater

spid

er.

In th

e la

undr

y ar

ea a

nd K

anba

n sy

stem

mak

e su

re

was

hers

and

drie

rs p

roce

ss th

e ex

act t

ime,

and

no

less

or m

ore.

(Con

tinue

d)


Are

aL

ean

Sigm

a id

eas

alre

ady

in u

seW

aste

s ob

serv

edIm

prov

emen

t id

eas

Med

ical

—O

nboa

rd m

edic

al

cent

er

Hea

lthc

are

area

s typ

ical

ly u

se v

isua

l co

ntro

ls a

nd si

gnag

e to

hel

p pe

ople

in

tera

ct w

ith

thei

r sys

tem

s.

Seve

ral p

eopl

e w

ere

surfi

ng th

e w

eb, w

hen

they

shou

ld

have

bee

n w

orki

ng. T

his i

s a so

cial

was

te. T

he e

xam

ro

oms s

eem

ed to

be

mis

sing

man

y it

ems.

Thi

s can

cau

se

the

was

te o

f wai

ting

or d

elay

as w

ell a

s mot

ion.

Esta

blis

h st

anda

rd w

ork

to a

ddre

ss so

cial

ne

twor

king

. Con

side

r kan

bans

for s

uppl

ies i

n th

e ex

am ro

oms.

Food

serv

ices

—M

ulti

ple

onbo

ard

rest

aura

nts

Seve

ral s

igna

ling

or k

anba

n sy

stem

s w

ere

bein

g us

ed to

info

rm c

hefs

of t

he

need

ed it

ems.

Cru

ise

ship

s are

wel

l kno

wn

for t

heir

lavi

sh fo

od

offe

ring

s, bu

t whe

re d

oes a

ll th

e ex

cess

food

go?

And

ho

w d

o th

ey k

now

how

muc

h fo

od to

pre

pare

? Exc

ess

food

was

te is

a w

aste

of s

ocia

l res

pons

ibili

ty a

nd th

e en

viro

nmen

t.

Con

side

r usi

ng st

atis

tica

l ana

lysi

s to

min

imiz

e fo

od w

aste

.

Ret

ail s

ales

—M

ulti

ple

onbo

ard

stor

es

Onb

oard

stor

es w

ere

alre

ady

usin

g vi

sual

co

ntro

ls to

att

ract

and

dir

ect c

usto

mer

s an

d w

orke

rs.

Even

wit

h th

e st

atis

tica

l too

ls in

pla

ce, e

xces

sive

and

ob

sole

te in

vent

orie

s wer

e ob

serv

ed.

Con

side

r usi

ng st

atis

tica

l too

ls to

det

erm

ine

mor

e pr

ecis

e pr

oduc

t nee

ds a

nd v

olum

es. T

his w

ill

redu

ce th

e w

aste

of i

nven

tori

es.

Secu

rity

—O

nboa

rd p

olic

eT

he se

curi

ty g

roup

is u

sing

a m

ista

ke-

proo

fi ng

met

hod

to e

nsur

e th

ey a

re

achi

evin

g pr

oper

cov

erag

e an

d su

ppor

t to

all

key

area

s of t

he sh

ip.

At t

imes

seve

ral s

ecur

ity

pers

onne

l wer

e ov

erla

ppin

g in

th

eir s

tand

ard

rout

es. T

his i

s a w

aste

of o

verp

roce

ssin

g.

Add

itio

nally

, the

secu

rity

gro

up w

as c

onti

nual

ly h

avin

g to

mod

ify th

eir r

epor

ts a

s the

y w

ere

ofte

n in

corr

ect.

Thi

s is

a w

aste

of c

orre

ctio

ns.

Con

side

r fl o

w m

aps a

nd p

itch

tim

es fo

r the

st

anda

rd se

curi

ty ro

utes

. Als

o, c

onsi

der p

rovi

ding

ad

diti

onal

trai

ning

to re

duce

err

ors a

nd

corr

ecti

ons.

Adv

entu

res

and

even

t pl

anni

ng

Sim

ilar t

o on

boar

d st

ores

, the

ad

vent

ures

and

eve

nt p

lann

ing

grou

p w

as u

sing

vis

ual c

ontr

ols t

o at

trac

t and

gu

ide

cust

omer

s.

Man

y co

rrec

tion

s are

nee

ded

as a

dven

ture

sign

-ups

ar

e of

ten

over

book

ed. T

hese

was

tes o

r cor

rect

ions

ov

erbu

rden

ed a

nd c

ause

d cu

stom

ers t

o w

ait.

Con

side

r a v

isua

l man

agem

ent s

yste

m to

pla

n an

d sc

hedu

le c

usto

mer

s ont

o ad

vent

ures

.

(Con

tinue

d)


Ope

rati

ons a

nd

mai

nten

ance

The

mai

nten

ance

cre

w w

as u

sing

a

stan

dard

pre

vent

ativ

e m

aint

enan

ce

prog

ram

to m

aint

ain

the

ship

and

eng

ine

room

mec

hani

cals

.

Cus

tom

er m

aint

enan

ce c

alls

som

etim

es to

ok se

vera

l ho

urs t

o re

solv

e. T

his i

s a w

aste

of w

aiti

ng. O

ften

the

mai

nten

ance

mem

ber w

ould

mak

e th

e in

itia

l vis

it to

the

area

requ

irin

g m

aint

enan

ce su

ppor

t, an

d th

en g

o to

get

th

e pr

oper

tool

ing.

Thi

s too

is w

aste

of w

aiti

ng, a

s wel

l as

was

te o

f tra

nspo

rtat

ion

and

mot

ion.

Con

side

r an

impr

oved

stan

dard

wor

k pr

acti

ce

to se

rve

cust

omer

s. A

lso,

est

ablis

h a

stan

dard

m

aint

enan

ce to

ol c

art t

o ta

ke o

n al

l cal

ls.

Thi

s is m

ass c

usto

miz

atio

n an

d st

anda

rdiz

ed

wor

k. D

evel

op th

is p

lan

thro

ugh

stat

isti

cal a

nd

hist

oric

al d

ata

anal

ysis

.

Purc

hasi

ng a

nd

logi

stic

s (su

pply

ch

ain)

The

pur

chas

ing

and

logi

stic

s gro

up

was

alr

eady

usi

ng st

atis

tica

l ana

lysi

s to

dete

rmin

e or

der q

uant

itie

s to

redu

ce

cost

s.

Seve

ral s

tock

-out

not

ices

wer

e fo

und

in th

e ar

ea. T

his

caus

es c

usto

mer

s and

wor

kers

to w

ait.

The

gro

up w

as

also

not

usi

ng th

e id

eas f

rom

the

vari

ous a

reas

of t

he

ship

. Thi

s is a

was

te o

f peo

ple

as re

sour

ces.

Con

side

r usi

ng k

anba

n m

etho

ds to

pre

vent

stoc

k ou

ts. A

lso,

dev

elop

a p

lan

to e

ngag

e pe

ople

’s th

ough

ts a

nd im

prov

emen

t ide

as.

Hum

an re

sour

ces

and

trai

ning

The

HR

dep

artm

ent u

sed

stan

dard

w

ork

rega

rdin

g th

e or

ient

atio

n tr

aini

ng

prog

ram

for a

ll ne

w m

embe

rs o

f the

staf

f.

The

HR

dep

artm

ent p

rint

ed e

very

e-m

ail t

hey

rece

ived

, an

d ha

d m

ulti

ple

peop

le re

ad th

em. T

his i

s a w

aste

of

envi

ronm

ent,

soci

al re

spon

sibi

lity,

and

ove

rpro

duct

ion

or o

verp

roce

ssin

g.

Con

side

r a re

vise

d m

etho

d of

han

dlin

g e-

mai

ls.

Use

an

offi c

e/so

ftw

are

5S. D

evel

op st

anda

rd w

ork

for p

roce

ssin

g e-

mai

ls th

at w

ill re

duce

pri

ntin

g.

Adm

inis

trat

ion—

Payr

oll a

nd

acco

unti

ng

Payr

oll w

as u

sing

stan

dard

wor

k to

pr

oces

s che

ck o

n a

wee

kly

basi

s for

al

l em

ploy

ees,

as w

ell a

s the

regu

lar

fi nan

cial

repo

rts.

The

y al

so u

sed

doub

le-

entr

y ac

coun

ting

tech

niqu

es w

hich

is a

fo

rm o

f mis

take

-pro

ofi n

g.

Qui

te o

ften

they

had

to m

ake

corr

ecti

ons i

n pa

yrol

l and

ch

ecks

due

to th

e ho

urs a

ccou

ntin

g sy

stem

. Thi

s is a

w

aste

on

corr

ecti

ons,

whi

ch c

ause

s was

te o

f wai

ting

by

the

staf

f.

Con

side

r mis

take

pro

ofi n

g m

etho

ds fo

r the

pay

roll

and

hour

s tra

ckin

g sy

stem

.



1. Why was Joe critical of Larry’s offi ce? Do you think the criticism

was justifi able?

2. What are some of the thoughts that come to your mind when you

see the list of the diff erent 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. Briefl y discuss the three diff erent 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?

“Th ere 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. Th e fi rst 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. I’ve done enough work for you today! I need to fi nd my

wife and kids and enjoy your sinking ship!” Joe said.

“Quiet, Joe,” Larry said while looking around to see who was near. “I

don’t want anything like that getting around. I’ll set something up for us

next week.”

“Great, where’s the pool?” Joe said with a sigh and a stretch. Larry

took Joe to the pool and went back to his offi ce to stew.

CHAPTER 5

Key Enablers—Policy Deployment, Accountability Sessions, Employee Training and Involvement, and Lean Sigma Tool Selection and

Application

Larry left Joe’s waste walk notes on his white board during the cruise and

through the next week. He studied the notes and at fi rst was a little upset

about Joe’s 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 offi ce for the next session. Joe got to Larry’s offi ce

right on time. “You’re going to have to put me on your payroll pretty soon

Larry,” boasted Joe as he arrived at Larry’s offi 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 values—Direction 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 Th inking: Banish Waste

and Create Wealth in Your Organization. New York: Simon and Schuster;

Ptacek, R. & Motwani, J. (2011). Pursuing Perfect Service—Using 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 values—Setting the course. Lean Sigma trans-

formations do not happen by accident. It takes leadership to identify

and communicate the need to change, defi ne what to change to, and

to defi ne 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. Th e 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 leadership’s 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. Th is can be done very

eff ectively through the vision, mission, and value documents, and

proper strategic planning. Th is starts with you Larry.

2. Resource commitment—Transforming 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 eff ective ways of

doing business. Th e continued commitment of key resources at

key times is one way leaders show their resolve to transform the

organization. Remember, Larry, a leader’s 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 work too.

3. Training and education—Th is is an enabler for Lean Sigma transfor-

mations. If people don’t 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. Th ey lead the

organization in Lean Sigma learning. I’m your master grasshopper,”

injected Joe with a smile.

Joe continued.

4. “Process- and results-focused—Process 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 it’s normal for several early successes to

be realized. Th ese are commonly referred to as ‘low hanging fruit’

or ‘quick hit’ items. While these successes should be celebrated, it’s

equally important for leaders to recognize and speak of the process,

methods, and tools being applied. Th is dual focus will reinforce the

workforce’s 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 fi rst, 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. Th is 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 fl ow 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 diffi 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. Th ey will

conclude that leadership really doesn’t care, and ask, ‘If leadership

doesn’t care, why should I?’ Th e concept of total systems focus recog-

nizes that work and value fl ows horizontally through organizations

to service their clients.

7. Employee involvement—Employee 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 eff orts. It is through their eff orts 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 ‘What’s in it for me?’

is clear and inspirational, employees will motivate themselves and

strive for excellence.

8. Perseverance and commitment—Lean 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. It’s 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. Th is 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. Th e 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.

Th ings went well at fi rst, 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 don’t need this for the

crew, we are doing just fi ne, thank you! Go blow your stack somewhere

else, Larry.” Th e 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 you’ll follow our

rules and policies and we are going to involve everyone in this improvement

initiative. Th e 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. Th ere 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 Joe’s factory.

Th e 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) Denialand refusal

(5) Learning(6) Realization

(7) Integration

(1) Shockand surprise

Current state Time

Per

ceiv

ed c

ompe

tenc

e

Future state

(4) Emotional acceptance

(3) Rationalunderstanding

KEY ENABLERS 51

Th e 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 eff ort. 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). Th e Lean Six Sigma Pocket

Guide XL—Combining 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. Th ey established their mission, vision, and goals.

Th ey reviewed the company value statement, and recommitted to holding

each other accountable to these standards. Th e leadership team discussed

a plan for daily work team sessions or “huddles” in each area to discuss the

day’s activities and key issues. Th e leadership team prepared to meet with

their respective teams to roll out the strategic goals, and defi ne Key Per-

formance Indicators (KPIs) and develop a system to monitor and improve

their results. Th e 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.” Th e next step was for Larry to share with the area teams the

results and notes from Joe’s waste walk that was still etched on his white

board. Th is represented the current state, which was fi lled with waste.

Larry thought he’d ask Joe to attend these sessions as he thought there

could be some rough sailing and resistance!


1. Discuss briefl y 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

don’t 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 fi xing 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 you’re getting better?”

Larry looked puzzled. “Well I thought it’d be obvious. Won’t our

KPIs tell us?” Larry replied.

“Th ey 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

profi t?”

Larry replied, “Well, for profi t 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

• Satisfi ed 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.

Reducelabor costs

Reducematerials costs

Eliminate andreduce the 12wastes

Continuousimprovementin speed andefficiency

Provide thesame level ofservice withfewer people

Provideimprovedservice andcustomerexperience withthe samepeople

Provideimprovedservice andcustomerexperiencewith thesame materials


Consume lessfor the sameservice levels

Reducematerials coststhroughnegotiations

Provide thesame level ofservice withfewer materials

Reduceoperating costs


Continuousimprovementin speed andefficiency

Provide thesame level ofservice withfewer operatingexpenses

Provideimprovedservice andcustomerexperience withthe sameoperatingexpenses

Salespromotions and

advertisingIncrease repeat

customersIncrease

referrals by pastcustomers

Pleasant people

Ship amenitiesand options

Problemsresolved quicklyand to thecustomersexpectationand delight

Enjoyableexperience inall areas

Superior valuefor experiences

Easy of booking

No hassles orproblems

Problemsresolved quicklyand to thecustomersexpectationand delight

Pleasant people

Ship amenitiesand options

Incentive forreferral

Incentive toreturn

Enjoyableexperience inall areas

Superior valuefor experiences

Easy of booking

No hassles orproblems

Increase sales Reduce costs

Increase EBITA and ROI (Organization Survival)

Joe further explained that certain lower level activities and work lead

to improving the KPI’s results at higher levels, and that this connection

defi nes a process of Policy Deployment that puts action to the plan. Th is

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

“Let’s 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.

Th ey 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. Th e goal was to establish a pilot

area for fast track improvement and to provide guidance to the rest of

the group.

Joe said, “Initially, we want to spend our time and positive energy on

someone who wants to move forward.”

Larry was skeptical about this. “Don’t 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, “Let’s 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’ don’t get all the attention anymore.

Th e ‘fence sitters’ will then jump on-board and the momentum will drive

the improvement process forward. Th e ‘nay-sayers’ will realize they’re

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. Th e squeaky wheel shouldn’t always get the grease!”

At the current state work sessions Larry explained the current business

environment to the team. Larry didn’t pull any punches. He told them

the brutal truth; if they didn’t 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. Th ey all felt they were doing their

best. Larry mentioned that he was not dissatisfi ed with any of the team’s

performance, but that the organization as a whole just wasn’t “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. Th e leadership team heard comments

such as:

• Th at’s not fair! How else are we to do it?

• We don’t have the time to do it diff erently.

• Do you know a better way?

• Joe doesn’t understand our business—He’s in manufacturing!

• Th ings have to be done this way.

• Th at’s the way we’ve always done it, what’s wrong with that?

Larry explained that the idea isn’t to blame or point fi ngers, 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.’ I’d like to move ahead with an improvement project

with your help and Joe’s if that’s okay.”

Larry considered her idea for a minute or two, remembering

Joe’s pilot idea, and then said, “Sounds good. We’ll support you any

way we can. I’m sure Joe will help out when he can. What are you

thinking?”

Sue responded, “I want to do a customer survey and fi nd out what

the customers think we need to do to get better. Satisfi ed customers equal

happy customers, don’t you think?”

“Absolutely!” Larry said excitedly. “Conduct your survey and

let me know how I can help. Let’s get back to our discussion on

improvements.”


Area Increase sales Reduce costsNavigation 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 sickness—smooth seas!

Reduced overtime, reduced materials and supplies

Food services Offerings, friendliness, entertainment during service

Reduced overtime, reduced materials and supplies, reduced wastes

Retail sales No stock outs, reasonable prices Reduced overtime, reduced materials and supplies, reduced wastes

Security No problems, safe voyage Reduced overtime, reduced materials and supplies, reduced wastes

Adventures and event planning

Exciting options, fair prices, no delays on popular items

Reduced over time, reduced materials and supplies, reduced wastes

Operations and maintenance

No problems or breakdowns, fast responses to passenger needs and requests


Purchasing and logistics (supply chain)

No stock outs, reasonable prices Reduced overtime, reduced materials and supplies, reduced wastes

Human resources and training

Support all employees, knowledgeable of staff, passenger questions answered quickly and accurately, customer service orientation classes


Administration—Accounting

No billing problems, smooth, accurate, and hassle-free currency exchanges, no credit defaults, pay checks on time and accurately, profi table



When the session reconvened, Larry asked the area leaders how

they could aff ect the CTQ factors illustrated in the CTQ diagram. Th e

following table summarizes the discussion on how each area could aff ect

the overall high-level objectives.

Th e next activity for the team leaders was to defi ne 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 identifi ed for the organization. Th is would ensure

that their policy deployment eff orts would be consistent and aligned to

the strategic plan and goals.

Th e 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. Th e results of the work

sessions are defi ned 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. Th e responses she received were

eye-opening and proved to be quite useful.

A Th e room is cold and drafty 28

B A lot of tables not cleared—Looks bad 48

C No sweetener at the table 15

D Waited too long to be seated 78

E Buff et table is poorly organized 68

F Place settings are missing items 15

G Not enough window seats 11

H Drink refi lls 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. Th is visually showed the results of the survey

and highlighted which responses represented 80% of the problems.

Oce

an T

reas

ure

Cru

ise

Lin

e H

igh-

Lev

el K

ey M

easu

res

Metric category

Organization high-level KPI

Navigation

Guest services

Entertainment

Gaming

Housekeeping

Medical

Food services

Retail sales

Security





Administration— Accounting

Financial focus

Sale

s re

venu

e (i

ncre

ase

sale

s)

Sale

s fro

m

show

sR

even

ue

from

ga

min

g

Rev

enue

fr

om re

tail

sale

s

Rev

enue

fr

om

adve

n-tu

res a

nd

even

ts

Profi

t

Ret

urn

on

inve

st-

men

t

EBIT

A

Perf

or-

man

ce to

bu

dget

(r

educ

e co

sts)

Fuel

cos

ts

per

naut

ical

m

ile

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Food

cos

ts

to b

udge

tW

hole

sale

co

sts t

o bu

dget

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Tota

l sp

endi

ng

to b

udge

t

Supp

ly,

trai

ning

, an

d re

crui

ting

co

sts t

o bu

dget

Supp

ly

cost

s to

budg

et

(Con

tinue

d)

Metric category


Navigation

Guest services

Entertainment

Gaming

Housekeeping

Medical

Food services

Retail sales

Security






Customer focus

Cus

tom

er

sati

sfac

-ti

on

surv

ey

resp

onse

ra

te

Res

pons

e ra

te

Cus

tom

er

sati

sfac

-ti

on

surv

ey

scor

es

Pass

enge

r co

ntac

t ho

urs

Surv

ey

scor

esPa

ssen

ger

cont

act

hour

s

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

es

New

of

feri

ngs

per

quar

ter

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

Secu

rity

vi

sibi

lity

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

(Con

tinue

d)

Productivity focus

Sale

s re

venu

e pe

r em

ploy

ee

Num

ber

of c

rew

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Sale

s re

venu

e pe

r op

erat

ing

cost

s

Nau

tica

l m

iles

saile

d

Pass

enge

rs

serv

edSh

ows

deliv

ered

Roo

ms

serv

edPa

tien

ts

serv

edM

eals

se

rved

Serv

ice

calls

mad

eB

ooki

ngs

mad

eU

n-pl

anne

d br

eak-

dow

ns

Tota

l sp

end

Empl

oyee

tr

aini

ng

hour

s

Wai

t ti

mes

for

serv

ice

Roo

ms

com

plet

e by

noo

n

Wai

t ti

mes

for

serv

ice

Wai

t ti

mes

for

serv

ice

Quality focus

Cus

tom

er

com

-pl

aint

s

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Rep

eat

visi

tsR

epor

t-ab

le

crim

es

Perc

ent

fi ll r

ate

Delivery focus

Com

mit

-m

ents

m

et p

er

sche

dule

or

pla

n

On

tim

e to

por

tsO

n ti

me

to sc

hed-

ule

Hou

rs o

f op

erat

ion

Hou

rs o

f op

erat

ion

Hou

rs o

f op

erat

ion

Hou

rs o

f op

erat

ion

Hou

rs o

f op

erat

ion

On

tim

e to

sche

d-ul

e

On

tim

e to

sche

d-ul

e

Stoc

k ou

ts

from

all

area

s

On-

tim

e pa

ymen

ts

Stoc

k ou

ts

(Con

tinue

d)

Metric category


Navigation

Guest services

Entertainment

Gaming

Housekeeping

Medical

Food services

Retail sales

Security






People focus

Abs

ente

e-is

m/

illne

sses

pe

r day

xx

xx

xx

xx

xx

xx

xx

Inju

ries

xx

xx

xx

xx

xx

xx

xx

Trai

ning

ho

urs

xx

xx

xx

xx

xx

xx

xx

Inte

rnal

pr

omo-

tion

s

(Con

tinue

d)


Th e Pareto chart indicated the biggest issue was that customers

waited too long to be seated. Sue was excited at the prospect of kicking

off 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! Th e Pareto chart

is perfect. Now we need to plan out some next steps to take following

the Defi ne–Measure–Analyze–Improve–Control (DMAIC) approach.

We just so happen to be covering that information today. After the

meeting let’s talk some more to make sure you’re 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 signifi cant positive impact for the area’s 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

0D E B A H F C G

78Series1 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 DMAICimprovement process to implement improvements.

One or multiple teams and projects depending on resources

1. Project teams define the project parameters2. Project teams measure process variables3. Project teams analyze process variable data4. 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 keyorganizational performancemeasures. Take corrective,preventative, andimprovement actions asneeded by assigning DMAICproject teams.

Conduct current state and key performance indicator (KPI) analysis

Source: Modifi ed 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.

Th e Lean Sigma fl ow diagram indicated that an initial Lean Sigma KPI

analysis would be required to document their current state situation. Th e

team felt this was a good idea and agreed to get moving on this eff ort.

Th ree 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. “You’re a natural Larry, or did you

just get lucky?” Joe teased.

“Th is 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

stuff ?” Larry countered.

“You have a great teacher that’s 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. Th e problem they identifi ed was customers waited

too long to be seated. Th e current situation is 78 of 281 customer survey

responses, that is 32%, indicate waiting to be seated is an issue. Th e team

thought the expectation might be customers should not have to wait at

all. Th ey 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.

Th is seemed unreasonable to a few on the team. “What about busy

times? Th ere’s no way we can make sure customers don’t wait at all!

We can never reduce survey results to zero.” Th e team fi nally realized,

with Sue’s 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

be seated.

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?”

Th e team worked on answering these questions and fi nally came up

with an operational defi nition for “waiting too long to be seated,” and a

simple way to collect data. Th e 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. Th e

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 WTH F S S M T WTH F S S M T WTH F S S

2%

4%

6%

8%

10%

12%

Th e team also collected data on other variables they thought might pro-

vide insight as to why and when waiting was occurring. Th ey 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. Th e 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.

010:30 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


Th e 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.

Th ey’re just rude.”

Sue quickly asked “Do you have data to support that?”

“No. I just know. It’s obvious,” retorted the team member.

Sue reminded the team to collect data to verify their hypothesis. Th e

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.

Th e 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 “I’m working as fast as I can during the lunch rush. I

think all the bus boys are working really hard! It’s not our fault.”

Sue said “Th is is not about blame. We need to look at the process.

What’s 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 fl ow is all

about. An analysis using a ‘Cause-and-Eff ect’ diagram would be useful as

well. What do you think?” Th e team all agreed these were good next steps.

Th e team constructed the cause-and-eff ect diagram to determine if

any root causes popped out.

People

We don’t workas a team

Not enough bus boysat busy times

Don’t clear dishes untilpeople leave tableHostess can’t clear

tables whenfree

Best way not documented

Staff not trained inbest approach

Lack of training

Not enough buscarts

Tables are tooclose together

Takes too long totake dishes to kitchen

Wait staff don’t helpclear tables High turnover

Policy

Dirty tables take toolong to be cleaned

and prepped

ProceduresPhysicalenvironment

After looking at the fl ow of work on the fl oor layout and brainstorming

using the fi shbone 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. Th e group also felt they were not working as well as they could

as a team.

Th e team then brainstormed some improvement ideas. Th e 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 fi rst. Th e goal was to try out an idea quickly and cheaply to get

some data to verify if they were on the right track. Th e 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. Th ey quickly put together and set up a temporary station.

Th e 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. Th is 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. Th ey 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 fi rst goal. Th e results excited everyone on the team.

Sue asked the team “What did you learn following this process?” She

wrote their responses on the team fl ip 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

• Th e 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

40

50

60

70

80

90

No.

of c

usto

mer

vot

es o

n su

rvey

Series1

Series2


“So what’s next?” asked Sue. Th e 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 don’t view it as an eye sore.”

• “We need to have daily huddles to review progress and look

for additional improvement opportunities. Th is way we can

accomplish our ultimate goal of zero complaints.”

“Wow! Th at 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 what’s 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

benefi t from this diagram? Why did Joe insist that Larry fi nd 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 identifi ed 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 diff erently, 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 team’s eff orts 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 fi rst Lean Sigma work sessions in each area. Sue’s progress continually

showed the way for the other teams. Th e objective of the fi rst 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 Larry’s initiatives

5. Establish the path forward, expectations, and the next steps for the

area teams

Th e 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. Th is training eff ort supported the employee

training and engagement enabler as well.

Th e 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. Th e Team Charter elements listed below were thought to be com-

mon for all teams. Th ey used Sue’s team’s 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. Benefi ts of Expected Outcomes: Benefi ts 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 Sue’s 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.

Th e area teams spent additional time discussing specifi c wastes iden-

tifi ed 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. Th e 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.

Oce

an T

reas

ure

Cru

ise

Lin

e H

igh-

Lev

el K

ey M

easu

res

Metric category

Organization high level KPI

Navigation

Guest services

Entertainment

Gaming

Housekeeping

Medical

Food services

Retail sales

Security






Financial focus

Sale

s re

venu

e (i

ncre

ase

sale

s)

Sale

s fro

m

show

sR

even

ue

from

ga

min

g

Rev

enue

fr

om re

tail

sale

s

Rev

enue

fr

om

adve

n-tu

res a

nd

even

ts

Profi

t

Ret

urn

on

inve

st-

men

t

EBIT

A

Perf

or-

man

ce to

bu

dget

(r

educ

e co

sts)

Fuel

cos

ts

per

naut

ical

m

ile

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Food

cos

ts

to b

udge

tW

hole

sale

co

sts t

o bu

dget

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Supp

ly

cost

s to

budg

et

Tota

l sp

endi

ng

to b

udge

t

Supp

ly,

trai

ning

, an

d re

crui

ting

co

sts t

o bu

dget

Supp

ly

cost

s to

budg

et

(Con

tinue

d)

Metric category


Navigation

Guest services

Entertainment

Gaming

Housekeeping

Medical

Food services

Retail sales

Security






Customer focus

Cus

tom

er

sati

sfac

-ti

on

surv

ey

resp

onse

ra

te

Res

pons

e ra

te

Cus

tom

er

sati

sfac

-ti

on

surv

ey

scor

es

Pass

enge

r co

ntac

t ho

urs

Surv

ey

scor

esPa

ssen

ger

cont

act

hour

s

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

esSu

rvey

sc

ores

Surv

ey

scor

es

New

of

feri

ngs

per

quar

ter

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

Secu

rity

vi

sibi

lity

New

of

feri

ngs

deve

lope

d an

d pa

r-ti

cipa

tion

ra

tes

(Con

tinue

d)

Productivity focus

Sale

s re

venu

e pe

r em

ploy

ee

Num

ber

of c

rew

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Num

ber

of te

am

mem

bers

Sale

s re

venu

e pe

r op

erat

ing

cost

s

Nau

tica

l m

iles

saile

d

Pass

enge

rs

serv

edSh

ows

deliv

ered

Roo

ms

serv

edPa

tien

ts

serv

edM

eals

se

rved

Serv

ice

calls

mad

eB

ooki

ngs

mad

eU

n-pl

anne

d br

eak-

dow

ns

Tota

l sp

end

Empl

oyee

tr

aini

ng

hour

s

Wai

t ti

mes

for

serv

ice

Roo

ms

com

plet

e by

noo

n

Wai

t ti

mes

for

serv

ice

Wai

t ti

mes

for

serv

ice

Quality focus

Cus

tom

er

com

-pl

aint

s

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Ass

igna

ble

com

plai

nts

to a

rea

Rep

eat

visi

tsR

epor

t-ab

le

crim

es

Perc

ent

fi ll r

ate

Delivery focus

Com

mit

-m

ents

m

et p

er

sche

dule

or

pla

n

On

tim

e to

por

tsO

n ti

me

to sc

hed-

ule

Hou

rs o

f op

erat

ion

Hou

rs o

f op

erat

ion

Hou

rs o

f op

erat

ion

Hou

rs o

f op

erat

ion

Hou

rs o

f op

erat

ion

On

tim

e to

sche

d-ul

e

On

tim

e to

sche

d-ul

e

Stoc

k ou

ts

from

all

area

s

On-

tim

e pa

ymen

ts

Stoc

k ou

ts

(Con

tinue

d)

Metric category


Navigation

Guest services

Entertainment

Gaming

Housekeeping

Medical

Food services

Retail sales

Security






People focus

Abs

ente

e-is

m/

illne

sses

pe

r day

xx

xx

xx

xx

xx

xx

xx

Inju

ries

xx

xx

xx

xx

xx

xx

xx

Trai

ning

ho

urs

xx

xx

xx

xx

xx

xx

xx

Inte

rnal

pr

omo-

tion

s

Unt

arge

ted

Impr

ovem

ent

Targ

eted

Impr

ovem

ent

(Con

tinue

d)

APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 79

Larry then asked Sue’s 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. Th e following table outlines the critical few KPIs selected

Monthly Highlights ReportSection 1

What are 3–5 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 specifi c.

Section 4

What are 3–5 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 identifi ed by the area leaders.

Th e 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 eff ectively 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 eff ectiveness.

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. Th e Work Session Record should

be initiated prior to the meeting and include updates and status of

actions items, if appropriate. Th e teams used the Work Session Record

below as a standardized guide to follow as a work session is scheduled

and conducted.

Th e following checklists will assist the work session leaders to pre-

pare and lead eff ective 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 it’s 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 haven’t 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. Sue’s story was inspiring

and each team kicked into high gear and started their work. Th ey 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 “Plan–Do–Check–Act”

(PDCA) experiments. Each experiment was documented and veri-

fi ed 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.

Th e 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.

Navigation—Captain and Crew

Th e 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 infl uence over. Th ey also found that their on time to port perfor-

mance was related to weather conditions as well. Th e team discussed what

they could do to improve these situations in spite of their lack of control

over the weather. Improvement ideas that were identifi ed centered around

improving communications and reaction to the weather conditions. Th e

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. Th is was made even worse

when bad weather quickly approached.

Th e 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. Th e

team agreed to implement the 5Ss in their areas. Th ey sorted (S1) items

out and only kept what was needed. Th ey found many old, worn, and tat-

tered maps that were no longer in use. Th e captain had his crew sign these

and gave these to the sales team who would frame them and off er them for

sale as cruise mementos in the ship’s gift shops. Th e maps almost looked

like old treasure maps—a great new off ering for the retail sales team! Th e

captain’s 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. Th e fi nal step for

the team’s 5S was to determine a way to sustain (S5) the gains. Th e captain

off ered 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.

Th e purpose of this walk through was to connect with the passengers

and crew to communicate critical information about the voyage. Th e

crew later developed visual control boards in each area to streamline the

communication of information. Th is 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

captain’s walk through took an hour-and-a-half to two to complete,

depending on how long he would chat with the crew. Th e 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

the crew.

Th e 5S eff ort 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 didn’t

take long for others to follow the captain’s lead. Th e 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, 1½–2 hour captain walk through ~1 hour captain

walk through

Reduction in engine and equipment breakdowns

Guest Services—Bookings and Onboard Guest Services

Th e 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. Th e 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 specifi c schedule for activities. Th is was great informa-

tion and it had never been broken down like this. Th e 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. Th is 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.

Th ey 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. Th e sat-

isfi ed customer might not fi ll out the survey, or say anything at all. Th e

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. Th e team hoped for

the latter.

Th e improvement ideas were ways to make the survey data collec-

tion more active. Th e team brainstormed several ways to do this and

completed several diff erent 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.

Th e 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.

Th e 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 offi ce. Th e improvement from the 5S process

allowed the team to better serve the customers quickly and effi 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. Th is

further sped the process of helping the guests, by allowing them to

fi nd the answers to their questions through visual communications.

Th is also served to reduce the amount of printing the group did in the

offi 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

Th e vital few KPIs for the Entertainment team were customer

complaints and passenger contact hours. Th ere were few complaints

for this team so the team focused on developing means to increase

their customer contact time. It had been previously identifi ed that the


passengers like to meet and greet the performers of the many acts on

the cruise. Th e entertainers already provided some back stage passes so

they needed to come up with something fresh and exciting. Th e team

brainstormed ways to increase their passenger contact time and meet

the current schedules for performances and personal time. Th e per-

formers’ chief complaint was that to increase passenger contact time

would just increase the hours they needed to work. Th ey needed to get

creative. Th e idea is to contact more passengers with the same amount

of time committed.

Th e team decided to address this improvement opportunity in

a couple ways. Some of the acts were able to take their performances

out onto the diff erent decks of the ship to provide mini-impromptu

performances. Th ese 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-

nifi cant 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 win–win for

everyone.

Additionally, the team also performed a 5S event backstage in eff ort

to keep things better organized. Th ey included some simple visual con-

trols to indicate the location of the costumes for each act and scene. Th is

helped the team improve the fl ow 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 fl ow

Increased show attendance and sales!


Gaming—Onboard casino

Th e 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. Th e

team conducted an analysis of the customer complaints and available sur-

vey data/measures. Th ey developed check sheets to organize the data and

then created Pareto charts to determine the most critical areas to address.

Th ey found that one of the primary complaints was having to wait in

line for money exchange or a table. Th e team felt that they had more

than enough staff to handle the volume of passengers on the ship so they

wondered why the passengers felt they had to wait. Th e team decided to

conduct additional studies to determine when the waiting occurred and

how long people had to wait.

Th e team collected a participation count every hour for several cruises

of diff erent lengths. Th e data showed a pattern for certain days and times

of day, on diff erent cruise lengths, and destinations. From these patterns,

the team developed a better schedule for staffi ng based on projected

customer demand. Th is 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 fl ow smoother.

Th ey separated the lines by transaction size, which was found to cor-

relate with transaction time. Th ey also implemented a “roving cashier”

to handle smaller cash exchanges. Th is new standard process and

scheduling technique signifi cantly 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!


Housekeeping—Maid Services and Laundry

Th e vital few KPIs for the Housekeeping team were customer complaints

and percentage of guest rooms serviced by 12 noon. Th e team’s analysis of

the measurements showed that the primary passenger complaint was due

to the rooms not being cleaned soon enough in the day. Th e 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. Th e

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.

Th e 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. Th e team developed a signaling system or kanban so that

guests could signal when their rooms were available for cleaning. Th is 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. Th is simple

visual control kanban helped both the customer and the staff .

To address the laundry area, the team had to complete a more

detailed study to determine why there was a backlog occurring. Th e team

used check sheets and a standard work breakdown chart to document

and analyze the laundry area. Th e team’s 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 team’s

demand was highest. Both the food service group and the housekeeping

group had signifi cant laundry demands. Th e 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. Th e heijunka included visual control signals, or

kanbans, to pace the work through the area. Th e laundry area workers had

to produce to the visual signals and pace the work through for each group

needing services. Th is helped the housekeeping group reduce the waiting

time to service the guest rooms.

Th e 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. Th is 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 12 noon

Plus, Reduction in water usage in the laundry

Reduction in rush orders and crisis management

Medical—Onboard Medical Center

Th e vital few KPIs for the Medical team were customer complaints and

total hours of operation. Th e primary complaints were illnesses due to

sea sickness, something the team felt they had little infl uence over, and

their services not being available when needed. Th e team thought they

noticed a correlation between the number of complaints and the clinic’s

daily operating hours. Th ey constructed a scatter diagram to analyze the

improvement opportunities and issues. Th e two KPIs did show a positive

correlation: the more hours of operation, the fewer complaints there were

regarding service.

Th e teams brainstormed for ideas on how to provide improved hours

of operation. Th ey struggled with the ability to predict when people would

need them. Th ey already had an “on call” procedure in place but they still

saw the need to make improvements. Th e 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. Th rough data collection and analy-

sis, the team found a pattern evident when guests needed services. Th ey

built their operating hours around the times and days when the demand

showed they were needed most. In off 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.

Th e new scheduling technique not only helped the guests, it also

helped the team as they modifi ed their work schedules to better fi t their

needs. Th rough the brainstorming, the team also addressed something


that, on the surface, they thought they had little control of—sea sickness.

Th e team ran some PDCA experiments regarding the proactive use and

availability of sea sickness medication and the most eff ective techniques

for administering the medication. Th ey established a mini-training ses-

sion and note card for each guest and made it clear how to get the help

they needed. Th ey 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 Catering—Multiple Onboard Restaurants

Th e vital few KPIs for the Food Services team were customer com-

plaints and food costs to budget. Th e team compiled the complaint

data with a check sheet and developed a Pareto chart for analysis of

the guest complaints. Th ey found that the primary complaints for

food services were (a) having to wait for item and (b) running out

of an item—shortages. Th e 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. Th e team also knew about the tremendous waste of food

items on a cruise ship. Th e lavish and extravagant food displays were

something nearly everyone remembered and spoke about after their

cruise experience. Th e challenge for the team was to meet the guests’


high expectations but also to minimize wastes. Th ey did their best to

manage this every day.

Th e team decided to do some data collection and monitoring. Th ey

knew certain food items were more popular than the others, and they

knew that some food items were discarded more than others. Th ey 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. Th ey made the appropriate adjustments to their requisi-

tions and order quantities. Th e 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 buff ets,

the team was using a simple verbal communication system where the

servers would tell the chefs what items were running low. Th is method

was good but it did not consider the diff erent food preparation times in

the kitchens. Th e new kanban trigger system identifi ed three diff erent

levels of items based on preparation time. Th e longer the item took to

prepare, the more advanced notice the chiefs needed to ensure that no

one had to wait. Th e more experienced servers were already doing this,

but now the new servers were able to do the right thing sooner due to this

improvement.

Th is 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. Th is seemed to turn the wait into

something more interesting and enjoyable, and the complaints further

declined.

At the next report-out session, the Food Services team reported the

following results.



15–20% 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 kitchens—reduced stress

Retail Sales—Multiple Onboard Stores

Th e vital few KPIs for the Retail Sales team were customer complaints

and new off erings provided. Th e team compiled the complaint data with

a check sheet and constructed a Pareto chart to highlight the most signifi -

cant reasons for complaints. Th ey found that running out of hot selling

items was the primary complaint. Th e team was never sure how many

items would sell on any particular voyage, or what the “hot” item would

be. Th e team conducted a deeper analysis of the historical sales data by

voyage length and ports visited. Th e 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. Th is 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. Th is capability enabled the team to reduce

inventories and the waste of throwing outdated shirts away. Th is concept

allowed the team to off er an entirely new lineup of tee shirts and to cus-

tomize them to the customer’s requests. Th is was a hit with the customers

and tee shirt sales increased over 20 percent!

Th e 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 day’s sales were going could simply look at the online scorecard.

In addition to the tee shirt breakthrough, the captain’s old maps were

selling well and this also showed on the scorecard. Th e area leader had an

idea to off er a reproduction of the old maps at a lower price point. Th e

original maps, considered higher value items, could then be off ered in

higher end boutiques on the deck of the ship. Th is 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 off ered

Reduced obsolete inventory and associated costs

Security—Onboard Police

Th e vital few KPIs for the Security team were customer complaints and

reportable onboard crimes. Th e security team’s Pareto chart of complaints

showed that the leading complaint is that there is never a security person

around when you need one. Th e team initially pushed back on this com-

plaint saying that there are security phones at many locations throughout

the ship. Regardless, the customer’s 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. Th e 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.

Th e data showed this clearly and was compelling. Th e team had to stop

this trend.

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. Th e team brainstormed and identi-

fi ed 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. Th is 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. Th is would inform

and assure guests that a security person was nearby and scheduled to be

present at specifi c 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. Th e 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. Th e 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. Th e 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 effi ciency of security personnel

Fewer errors and false calls

Adventures and Event Planning

Th e vital few KPIs for the Adventures and Event Planning team were

customer complaints and participation rates. Th e 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. Th e 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. Th e

team also conducted extensive data gathering directly from adventure

participants in interviews conducted on adventure days. Th e team was

a bit surprised to fi nd that it was not hard to fi nd 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 staff ed or equipped to handle the

volume of adventurers all ready to go at about the same time. Th e 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. Th e scheduled boarding fl ow and signaling system elimi-

nated the line of people in the hallway and made the experience go more

smoothly for everyone. Th ey even established a VIP area for special

guests who were willing to pay for an advanced seating arrangement.

Th is is a form of mass customization to meet the needs of customers with

varying expectations.

Th e team went a step further and constructed an adventure demand

Pareto chart which detailed the demand for each adventure off ered

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

offi ces waiting for people to come to them to sign up. By taking


the adventures sign up to the passengers and improving the fl ow 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

Th e vital few KPIs for the Operation and Maintenance team were

customer complaints and unplanned breakdowns. Th e Operations and

Maintenance team had an idea what the biggest customer complaint was

before they did the Pareto chart. Th ey 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. Th e guests expected everything to be working all the time.

Imagine that! Th e 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 didn’t want to be bothered with breakdowns

and faulty equipment.

Th e Pareto chart showed that the areas of biggest concern were the

operation of public rest rooms and ineffi 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. Th ey 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.


Th e 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. Th ese were prioritized, with the

aid of data from the Pareto charts on customer complaints and unplanned

breakdown. Th e team developed a regular schedule for preventative mainte-

nance on the critical equipment and facilities. Th ey also developed a critical

spares list and key tools to have on hand. Th ey 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. Th e key tool cart had

everything they could possibly need on it, and it was 5Sed so it was always

ready to go at a moment’s notice. Th is 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. Th e planned maintenance schedule,

which used to be driven by a computer schedule, now would be managed

with a simple fl ow—kanban and paced work standard work plan. Th e

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. Th is 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)

Th e vital few KPIs for the Purchasing and Logistics (Supply Chain) team

were customer complaints and stock outs in all areas. Th e team used a

Pareto chart analysis to better understand where the biggest stock-out

problems were coming from. Th ey developed a Pareto chart, fi rst by area

and then by the item they ran out of. Th ey 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.

Th e team worked with each of the troubled areas to study the

demand cycles with Demand Analysis tools. Th ey then established and

implemented a fl ow kanban replenishment plan. Th e teams worked

jointly through several PDCA improvement cycles to determine the

proper signal size for each of the critical items.

Th e Purchasing and Logistics team also worked with the suppliers

to develop and support their own fl ow—kanban replenishment systems

to support the cruise line. Th is 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 eff ort.

Th e team also developed a new means of communicating the needs

to the supply base which used less printed materials and correspondence.

Th is 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

Th e 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. Th e 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.

Th e team developed a training curriculum that would address the

primary areas of customer complaints. Th e 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 people’s schedules allowed.

Th e HR team also developed a comprehensive training matrix to keep

track of the number of training hours people participated in. Th is 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 fi rst the information on the kiosk was overwhelming, but after

the team performed a 5S on the computer fi ling system the key training

documents were easier to fi nd.


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 eff ectiveness as determined

through customer surveys

Reduced spending for training

Administration and Accounting—Payroll and Accounting

Th e 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 fl ow 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 diff erent terms of payment on kanban items.

Th e team also looked internally at why the accounts payable system took

too long.

Th ey mapped out the process fl ow and found a great deal of redun-

dancy and waste. Th ey were able to make some streamlining improve-

ments to improve overall fl ow of information through their area. Th e

biggest improvement was to establish standard work and a paced fl ow

process in the offi ce. Th is ensured that something hitting an accountant’s

in-basket today got dealt with in a standard or specifi ed period of time.

Nothing could slip through the cracks of the new paced fl ow kanban

system.

Other issues discovered by the team were those due to their slow pay-

ments: they were not taking advantage of supplier discounts. Th is was

fi xed quickly by the new fl ow methods and within a couple of weeks they


were taking advantage of the key discounts. Th e 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 fi les

were so cluttered and stored in so many ways that by simply standardi-

zing the rules for the team they could now fi nd things easier online, and

process payments quicker.

Many of the customer complaints were due to errors. Th e 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 fi ling system. People’s work got easier and they

were less prone to errors. Th ey also found the time to develop and

implement some mistake-proofi ng improvements for the most critical

errors. Th e 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

Th e 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 defi nitely on the decline and the

teams were starting to understand how to make improvements on their

own. Th ings were looking up. Due to the teams’ many sales-generating

and cost-saving ideas, the fi nancials were starting to turn around as well.


At least revenues were not shrinking, and along with that profi tability was

increasing! Th e 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

12 noon

15–20% 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 profi table Profi table

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 helpful—for the most part.

“So what are you going to do next, Larry?” asked Joe.

“Next?” Larry said quizzically, “Next we’re going to stay the course.

Th at’s what’s next.”

Joe replied, “Th at’s 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?”

“We’ve done a great job so far, what’s next?” asked Larry.

“I’ve seen many companies get complacent and back-slide after they

make some really good progress. To prevent a back-slide, keep moving

forward. Th ere is always a weakest link in a process, always more waste to

remove. I’d recommend you start over again once you think you’re 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.

“Th at’s the idea. Th at’s what we do. Th e 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 identifi ed 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. Th e cruise line has made signifi cant 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. Th ere had been many ups

and downs during the improvement initiatives, but overall the teams

were really making a positive impact. Th e teams were getting good

at identifying current state data, developing process fl ow 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.

Th is map is in a cause and eff ect 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. Th ey called this the

Future State Culture and used it as a vision for them to achieve through

the continuous improvement (CI) eff orts. Th e following future state

culture map was developed by Larry’s area leads. Th ey all agreed to

try to live up to the vision. Th e implementation of the improvement

teams went a long way toward helping the teams achieve the future

state culture.


Future stateculture

Methods

Machines

Mother nature

ManpowerHard workers Robust improvement methods being applied

Innovative new ways of thinking encouragedExciting new methodsCustomer focused methods

Old and outdated ship amenities

Everyone cleans up after themselvesMessy areas of the ship get cleaned up fastAll messy areas get cleaned up fastThe weather makes things messy all the time

Frequent breakdownsPoor maintenance

Not enough equipment for all customers

Updated materialsProactively get what we needCost reductions through continuous improvementsRarely stock outNot wasteful“Green”

Key measure clearly posted and fairGet positive and negative feedback from customersHear about problems and successes

Low turnoverHigh moralePerception that leaders careTeam workFun!

Materials

Measures

Joe had assisted Larry with this current state to future state culture

mapping process to help Larry’s area leaders understand where they

Current stateculture

Methods

Machines

Mother nature

ManpowerHard workers No improvements accepted

No innovationGoing through the motionsEmployee or cruise line focused methods

Old and outdated ship amenities

No one cleans up after themselvesMessy areas of the ship take a while to clean upSome messy areas never get cleaned upThe weather makes things messy all the time

Frequent breakdownsPoor maintenanceNot enough equipment for all customers

Old materialsMaking due with what we haveCost cutting leads to poor serviceWastefulFrequent stock outs leads to poor service

No measuresOnly negative feedback from customersOnly hear about problems

High turnoverLow moralePerception that leadership does not careFrustratedNo team workNo 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 diff erent than my folks at the

factory. Your people are constantly interacting with customers and I can

tell they’ve had some specifi c training regarding how to talk to customers,

so what is it?” Joe asked Larry.

Larry said, “Let’s go talk with our HR manager, Mary, she’s the one

who developed the program.” Th e two brothers took a walk to the HR

offi ces to meet with Mary.

At the HR offi ces Mary outlined their customer service train-

ing program. Mary explained, “I’ve studied the Disney training pro-

grams and had the opportunity to attend several courses at the highly

regarded Disney Institute. Th e Disney Institute is widely recognized

as a world leader in service training and development. I’m taking

a page from the Walt Disney Company where they call all of their

employees ‘cast members.’ A cast member has a diff erent meaning than

an employee. A cast member has to be able to play a role. Th e cast

member’s 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 fi ve key training classes. Every new employee

receives the following courses over their fi rst 6 weeks of being hired or

cast. Our programs are:

Basic Training Programs

• Orientation

• Lean Sigma Basics—Ptacek & Motwani

• Th e 7 Habits of Highly Eff ective People—Steven Covey

• Developing Customer Loyalty—Jeff rey Gitomer

• FISH! Philosophy—Stephen C. Lundin, PhD, Harry Paul,

John Christensen


Th e orientation was not unlike any organization’s orientation train-

ing. Th is 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

• Safety—Crew 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.

“Th e ‘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 Th ings First

4. Th ink Win/Win

5. Seek First to Understand, Th en to Be Understood

6. Synergize

7. Sharpen the Saw (Continue learning and teaching)

Th e objective of this training is to help people develop a success

habit for their personal and professional lives. Th ese habits are described

as ‘expected behaviors’ of cast members and are reviewed during their

performance appraisals.

Th e Developing Customer Loyalty training is used to help cast

members to help customers more eff ectively, no matter what the need.

Th is training teaches specifi c 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. Th is 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 loyalty—As they would want it responded to;

• resolve the issue to the customers satisfaction—How 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.

Th is 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 Pike’s Fish Market in Seattle, WA, to instill a sense

of service and fun in each cast member. Th e video illustrates the power of

four simple principles of customer service and dealing with people. Th e

FISH philosophies are as follows:

1. Play

2. Be Th ere

3. Make Th eir Day

4. Choose Your Attitude

Th e ‘Play’ principle shows people how to make work fun for the customer

and the worker. Several specifi c methods are developed during the train-

ing. Th e ‘Be Th ere’ principle helps employees connect with customers

and people in a more meaningful way. It helps people be more sincere

in their eff orts to help people. ‘Make Th eir 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. Th is fi ts 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. It’s our job to show up every day with a positive attitude of service

and enthusiasm, 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 diffi cult than others, but that’s what

we expect.’”

“Th e training doesn’t stop there,” Mary explained. “Every employee

continues to receive refresher training on these topics on a regular basis.

Th is supports the future state culture targets. It all fi ts together, and we’re

making such huge improvements in retention and customer feedback.”

After listening to Mary’s passion about this training, Joe asked Larry

and Mary if they would consider delivering some of this training at Joe’s

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 Larry’s 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. Defi ne the 3R + 1 strategy. Don’t 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 diffi cult than others, but that’s what we expect.” What can

service leaders learn from this quote?

7. Th e 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, we’ve

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

profi table. 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. It’s 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 Service—Using

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). Th e 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 fl oors, 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

off the fl oor. Th is really got the teams fi red-up and we had a lot of fun

with the challenge. In fact when the managers were eating off the fl oor,

a local newspaper reported on it and everyone enjoyed seeing an article

about how clean our company was. Th at 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 eff ort,”

explained Joe.

“When you’re managing change in an organization, things can get

diffi cult,” continued Joe. Joe sketched the following illustration on a

napkin and explained, “You see, at fi rst, once everyone sees that you’re

serious about improving, and gets over the shock and denial, people

begin to see how the Lean Sigma improvements can help them. Th ey

start to see some quick hitting improvements and are optimistic. Th en,

when the ‘low hanging fruit’ or easy projects have been implemented,

things get tougher, and improvements are harder to fi nd. 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

management’s commitment to Lean Sigma methods and tools. Too

many leaders throw in the towel at this point and say Lean Sigma

doesn’t work.

Performancecurve

Plateau

Slide

Clim

b

Optimisticconcernedskeptical

Pit

Fearfulconfused

withdrawnEmployees need tosee management

commitment

The key is to strive for a short duration in the high stress zone.

Pessimismdoubtfulanxious

Management mustprovide systems and

training

Helpfuldetermined

probing

Focusenergy

determination

Prideownershipconfidence

Extension

Organizational stressManagingchange

Crest

Quick hitperformanceimprovements

If managers and leaders redouble their eff orts and commitments at this

point, things will start to turn around and many more signifi cant gains

will occur. Th e 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, “Th at’s interesting, but I think we are beyond that

now, and I just want to get some more excitement around the ship.

I think a challenge, something big, will be a good way to get the excite-

ment back.”

“In Jim Collins’ book Good to Great he called them ‘Big Hairy

Audacious Goals’ or BHAGs, and many organizations have them. Th ey

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. Th is 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. Th is is key to sustaining the

eff ort. 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. Th is will let

the teams see that these are important to you and to their success,” Joe

added.

“Boy! sustaining the eff ort is hard work!” replied Larry.

“Remember what Dad always says, ‘Anything worth doing is worth

doing right,’ and ‘Do what’s right, not what’s easiest!’” replied Joe.

“Yeah,” said Larry, “and ‘Th e harder you work, the luckier you’ll be!’”

and they both laughed.

“Now, let’s get back to the party where you can tell everyone how

I bailed your sinking cruise line out of troubled waters!” said Joe.


1. Do you agree with Joe’s 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-

fi ed earlier in this book were the right ones? Why or why not?

2. What do you think of Joe’s new goal for housekeeping and clean-

liness? Don’t 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-

fl icts? What do you think of Joe’s reward to the team that won

this competition?

4. Discuss the change cycle presented by Joe. Why is it diffi cult to

implement change in any organization?

5. What do you think of Larry’s 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 fi ve 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 Don’t. New York, NY: Harper Business.

Covey, S. (1997). Th e Seven Habits of Highly Eff ective People: Restoring the

Character Ethic. Th orndike, 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). Th e Toyota Way: 14 Management Principles from the World’s

Greatest Manufacturer. New York, NY: McGraw-Hill.

Liker, J.K. (2008). Toyota Culture: Th e Heart and Soul of the Toyota Way. New York,

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). Today’s 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 Service—Using 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). Th e 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, 1–9.

Spear, S. & Bowen, H.K. (1999, September). Decoding the DNA of the Toyota

Production System. Harvard Business Review, 97–106.

Womack, J.P. & Jones, D.T. (1996). Lean Th inking: 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.

AAdministration and Accounting team,

101–102Adventures and Event Planning team,

95–97Analyze phase, 30Area team charter commonalities, 74Area team work session objective, 73

CCause-and-Eff ect diagram, 67–68Continuous improvement (CI)

method. See Lean Six SigmaControl phase, 30Correction waste, 23, 26Critical To Quality (CTQ)

diagram, 54Cruise line departments, 38, 41–43Cultural assessment, 107–108Current state cultural assessment

diagram, 107–108

DDaily huddle, organization, 8Defi ne phase, 30Developing Customer Loyalty

training, 110–111Dirty Dozen. See Twelve forms

of wasteDMAIC alphabetical tool application

chart, 31–33DMAIC process, 30

EEmployee involvement, 48Entertainment team, 86–87Environmental waste, 24, 27Expertise waste, 22, 25

FFISH philosophies, 111–112Flip chart, 68–70

Food Services team, 91–93Future state cultural assessment

diagram, 107–108

GGaming team, 88Gemba Walk, 8–10Guest Services group, 85–86

H‘7 habits’ training, 110Housekeeping team, 89–90Human Resources (HR) and Training

team, 100–101

IImprove phase, 30Inventory waste, 22, 25

KKey enablers, Lean Sigma

employee involvement, 48leadership, 46perseverance and commitment,

48–49policy deployment and goal

alignment, 48process-and results-focused, 47–48resource commitment, 46–47total system/value stream focus, 48training and education, 47

Key performance indicators (KPIs)Administration and Accounting

team, 101–102Adventures and Event Planning

team, 95–97Entertainment team, 86–87Food Services team, 91–93Gaming team, 88Guest Services group, 85–86high-level key measures, 58–62Housekeeping team, 89–90

Index

124 INDEX

Human Resources and Training team, 100–101

Medical Services team, 90–91Navigation-Captain and Crew

team, 83–85Operation and Maintenance team,

97–99Purchasing and Logistics team,

99–100Retail Sales team, 93–94Security team, 94–95

KPIs. See Key performance indicators (KPIs)

LLeadership Lean Sigma, 46Leadership team

cause-and-eff ect diagram, 67–68comments, 56CTQ diagram, 55fl ip chart, 68–70high-level objectives, 57key performance indicators, 58–62Lean Sigma fl ow diagram, 63–66Pareto chart, 63strategies, 51

Leangoal, 14value stream maps, 14

Lean Sigmabuilding blocks, 18concepts

non-value adding, 20–21value adding, 20

cruise line departments, 38, 41–43cruise line issues, 10key enablers

employee involvement, 48leadership, 46perseverance and commitment,

48–49policy deployment and goal

alignment, 48process-and results-focused,

47–48resource commitment, 46–47total system/value stream

focus, 48

training and education, 47methods

leadership level, 30project/systems/team level, 30worker level, 30–31

organization perspectives-case study, 1–3

outcomes, 33–34overview session in organization, 10philosophy, 19principles, 19scoreboarding issues, 5–8tools

alphabetical application chart, 31–33

mass customization, 30uses of, 17

Lean transformationleadership level, 30project/systems/team level, 30worker level, 30–31

MMass customization, 39Measurable outcomes, 40Measure phase, 30Medical Services team, 90–91Motion waste, 22, 25–26

NNavigation-Captain and Crew, 83–85Non-value-adding concept, 20–21.

See also Twelve forms of waste

OObjective outcomes, 40Onboard Medical Center, 90–91Operation and Maintenance team,

97–99Organization

daily huddle, 8Lean Sigma overview session, 10Six-Sigma status, 16

Organization’s orientation training, 110

Overloading waste, 23, 27Overprocessing waste, 23, 26Overproduction waste, 22, 24

INDEX 125

PPareto chart, 63Perseverance and commitment Lean

Sigma, 48–49Plan–Do–Check–Act (PDCA)

experiments, 8, 21, 68, 83, 86, 88, 91, 107

Policy deployment, 48Process-and results-focused Lean

Sigma, 47–48Purchasing and Logistics team,

99–100

RResource commitment, 46–47Retail Sales team, 93–94

SScoreboarding, 5–8Security team, 94–95Service business

categoriesservice delivered to external

customer, 39service process internal to

organization, 40service process used by external

customer, 39–40objective outcomes, 40subjective outcomes, 40

SIPOC. See Suppler–Input–Process–Output–Customer

Six-Sigma (6σ)defi nition, 15goal of, 16in organization, 16

Social waste, 24, 27–28Subjective outcomes, 40Suppler–Input–Process–Output–

Customer (SIPOC), 40

TTotal Quality Management

(TQM), 13Total system focus, 48TQM. See Total Quality

ManagementTraining and education Lean

Sigma, 47Transport waste, 22, 25Twelve forms of waste

correction, 23, 26environmental, 24, 27expertise, 22, 25inventory, 22, 25motion, 22, 25–26overloading/overburdening,

23, 27overprocessing, 23, 26overproduction, 22, 24social, 24, 27–28transport, 22, 25unevenness, 23, 27waiting, 23, 26–27

UUnevenness waste, 23, 27

VValue adding concept, 20Value stream focus, 48Value stream maps, 14

WWaste of waiting, 23, 26–27Work session meeting, 80, 82Work session leading and facilitation

checklist, 82Work session prep checklist, 80, 82Work 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 Profi le of the Electric Power Industry: Facing the Challenges of the 21st Century

by Charles E. Clark, Jr., due out in October 2012

• A Profi le of the Steel Industry: Global Reinvention for a New Economy by Peter Warrian,

due out in November 2012

Announcing the Business Expert Press Digital Library

Concise E-books Business Students Need for Classroom

and Research

This book can also be purchased in an e-book collection by your library as

• a one-time purchase,

• that is owned forever,

• allows for simultaneous readers,

• has no restrictions on printing, and

• can be downloaded as PDFs from within the library community.

Our digital library collections are a great solution to beat the rising cost of textbooks.

e-books can be loaded into their course management systems or onto student’s e-book readers.

The Business Expert Press digital libraries are very affordable, with no obligation to buy in

future years. For more information, please visit www.businessexpertpress.com/librarians. To set

up a trial in the United States, please contact Adam Chesler at adam.chesler@businessexpertpress

.com for all other regions, contact Nicole Lee at [email protected].

Lean Sigma Methods and Tools for Service OrganizationsThe Story of a Cruise Line TransformationJaideep Motwani, Rob Ptacek, and Richard Fleming

Every business aspires to be competitive and profitable 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 organization—a cruise ship—whose 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 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 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 certification 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 firms 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

www.businessexpertpress.com

Service Systems and Innovations in Business and Society CollectionJim Spohrer and Haluk Demirkan, Editors

Date post:	21-Jul-2016
Category:	Documents
Upload:	rexmichael1226
View:	281 times
Download:	1 times

Lean Six Sigma

Documents