Achieving a Six Sigma Level of Meeting Customers’ Expectations in a Services Business

I nnovation &

Q uality Solutions

Copyright – Innovation and Quality Solutions

Achieving a Six Sigma Level Achieving a Six Sigma Level of Meeting Customers’ of Meeting Customers’

ExpectationsExpectationsin a Services Businessin a Services Business

Engage the Entire Company to Systematically Engage the Entire Company to Systematically

Deliver Deliver Customer Focused Innovation & QualityCustomer Focused Innovation & Quality

1

Bill Robinson

Innovation and Quality Solutions

[email protected]

I nnovation &

Q uality Solutions


Keep a laser-focus on the Customer Quality = meeting Customers’ expectations

Make meeting Customers’ expectations everyone’s job!

• Set improvement goals and cascade to everyone in the business

•Get everyone engaged, not just the Green/Black Belts

Become the best ... and prove it!• Be highly results-focused• Monitor and manage performance & Post results for all

to see

Use Six Sigma as a tool to continuously get better!

• The real value of Six Sigma isn’t just about reducing costs

• Never stop improving

Achieving a Six Sigma Level of Meeting Achieving a Six Sigma Level of Meeting Customers’ Expectations in a Services Customers’ Expectations in a Services

BusinessBusiness

I nnovation &

Q uality Solutions


Delivering Delivering Customer Customer

ValueValueis a is a

Team SportTeam Sport

You know it when you feel it.

six sigmasix sigma

I nnovation &

Q uality Solutions


Our new headquarters in Piscataway, NJ

Leading provider of B2B Transaction Delivery Services

powering the exchange of information among enterprises and their trading communities and customers

Over 1 Million transactions every business day

purchase orders, insurance claims, wire transfers, trade and travel confirmations

20,000 customers in 65 countries400+ of the Fortune 500

About EasyLink ServicesAbout EasyLink Services

500 Employees in 14 countries

I nnovation &

Q uality Solutions


Enable Businesses to Transact Electronically Enable Businesses to Transact Electronically – Any-to-Any Network – Any-to-Any Network

Internet

GlobalTelex

NetworkFunds

Transfers

E-mail Applications

Buyer Trading Communities

Web Based EDI

Interconnects to over 25 EDI VANs

GlobalTelephony Network

Paper & Forms

Travel Insurance Freight

BankingShipping

Baltimore

VerisignEntrust

PKI Libraries

ERP CRM DBMS

Small Suppliers

E-commerce Applications

Baan, SAP, PeopleSoft,

Oracle, Yahoo

EasyLinkTransaction Delivery Network

$200 billion transaction value/yr

Infrastructure

Supplier Trading

Communities

• 20,000 Customers

• Stringent Quality, Reliability and Security Requirements

• Very Dynamic Environment

I nnovation &

Q uality Solutions


We are very serious about QualityWe are very serious about Quality

Quality = Meeting Customers’ expectations Quality = Meeting Customers’ expectations

… and that is … and that is everyone’s job!everyone’s job!

We are the bestWe are the best … and we can prove it!… and we can prove it!

Six Sigma is the tool we use Six Sigma is the tool we use … to continuously get … to continuously get even better!even better!

Better Quality = Better CompanyBetter Quality = Better Company

I nnovation &

Q uality Solutions


Our Quality Approach

Customer-centric Customer-centric Six Sigma Quality goalSix Sigma Quality goal

Clear/measurable Clear/measurable targets for each yeartargets for each year

Regular Leadership Team review of resultsRegular Leadership Team review of resultsRegular Customer review of resultsRegular Customer review of results

Mission & ValuesMission & ValuesMission & Mission &

ValuesValues

Deploy Deploy ObjectivesObjectives

FinalizeFinalizeObjectives & Objectives &

PlansPlans

Implement Plans

UURRNN

LL Cascade Cascade goals & metricsgoals & metricsto all organizationsto all organizations

AssessmentAssessmentCustomer Customer SatisfactionSatisfaction

Reset Measures Reset Measures

Regular Review & Diagnosis

D

M

A

I

C

Long-term Long-term Quality goalQuality goal

Annual Annual ObjectivesObjectives

Results

Annual Annual Review & Review & DiagnosisDiagnosis

I nnovation &

Q uality Solutions


Our Long Term GoalOur Long Term Goal

8

Our long term goal is to achieve a Our long term goal is to achieve a Six Sigma level Six Sigma level

of meeting of meeting our Customers’ expectations. our Customers’ expectations.

For all areas of Customer expectations, For all areas of Customer expectations, we will improve by at least 50% each year.we will improve by at least 50% each year.

I nnovation &

Q uality Solutions


• Accuracy level of 3.4 defects per million opportunities

• Measure of quality in terms of product non-conformances

• Consensus industry benchmark

Defective/Million Accuracy

3 Sigma 66,807 93.32%4 Sigma 6,210 99.38%5 Sigma 233 99.9767%6 Sigma 3.4 99.99966%

Most companies operate at 35,000 - 50,000 defects per million, Most companies operate at 35,000 - 50,000 defects per million, or about “3+ Sigma”or about “3+ Sigma”

1040 Submissions

Payroll Processing

Best-in-class Software

““We will achieve a Six Sigma level We will achieve a Six Sigma level of meeting our Customers’ expectations” of meeting our Customers’ expectations”

I nnovation &

Q uality Solutions


Customer-Impacting Level 1 MetricsCustomer-Impacting Level 1 Metrics

Service Reliability

Implementation Quality

On-time Delivery

On-time Problem Resolution– Critical– Major– Minor

Billing QualityCustomer Satisfaction

Customer Radar Screen

Focus Customer-Impacting Metric

Cus

tom

erR

elat

ions

hip

Ser

vice

Q

ualit

y S

uppo

rt Q

ualit

y

I nnovation &

Q uality Solutions


Customer Success is Our Success

Listen Understand Respond NurtureListen Understand Respond Nurture

Customer Satisfaction SurveyCustomer Radar Screen

Customer Satisfaction SurveyCustomer Satisfaction SurveyCustomer Radar ScreenCustomer Radar Screen

Six Sigma GoalCustomer-impacting MetricsService Level Agreements

End-to-end Process ManagementIssue Management

Six Sigma Improvement TeamsMarketing ProgramsService Innovation

Six Sigma GoalSix Sigma GoalCustomer-impacting MetricsCustomer-impacting MetricsService Level AgreementsService Level Agreements

End-to-end Process ManagementEnd-to-end Process ManagementIssue ManagementIssue Management

Six Sigma Improvement TeamsSix Sigma Improvement TeamsMarketing ProgramsMarketing ProgramsService InnovationService Innovation

Customer Service & Platinum/Gold ProgramAccount Management

Executive Sponsor Program

Customer Service & Platinum/Gold ProgramCustomer Service & Platinum/Gold ProgramAccount ManagementAccount Management

Executive Sponsor ProgramExecutive Sponsor Program

I nnovation &

Q uality Solutions


Service Reliability/QualityService Reliability/Quality

Results !!

98.00

98.20

98.40

98.60

98.80

99.00

99.20

99.40

99.60

99.80

100.00

May

-02

Aug-

02

Nov

-02

Feb-

03

May

-03

Aug-

03

Nov

-03

Feb-

04

May

-04

Aug-

04

Nov

-04

Feb-

05

May

-05

Aug-

05

Nov

-05

Feb-

06

May

-06

Actual

Target60% Imp

60% Imp

75% Imp

41% Imp

Yr-Yr Target Improvement

Total Imp by Target = 96%, Total Actual Imp = 88%

GoodGood0

20

40

60

80

100

120

140

160

ActualTarget

50% Imp


50% Imp

25% Imp

50% Imp


GoodGood

0:00:00

4:48:00

9:36:00

14:24:00

19:12:00

24:00:00

28:48:00

33:36:00

38:24:00

43:12:00

48:00:00

Jan-

02

Apr-

02

Jul-0

2

Oct

-02

Jan-

03

Apr-

03

Jul-0

3

Oct

-03

Jan-

04

Apr-

04

Jul-0

4

Oct

-04

Jan-

05

Apr-

05

Jul-0

5

Oct

-05

Jan-

06

Apr-

06

Actual

Target


50% Imp


50% Imp

25% Imp

77% Imp

0:00:00

12:00:00

24:00:00

36:00:00

48:00:00

60:00:00

72:00:00

Jan-

02

Apr-

02

Jul-0

2

Oct

-02

Jan-

03

Apr-

03

Jul-0

3

Oct

-03

Jan-

04

Apr-

04

Jul-0

4

Oct

-04

Jan-

05

Apr-

05

Jul-0

5

Oct

-05

Jan-

06

Apr-

06

Actual

Target


50% Imp


20% Imp

91% Imp

0% Imp

0:00:00

12:00:00

24:00:00

36:00:00

48:00:00

60:00:00

72:00:00

Jan-

02

Apr-

02

Jul-0

2

Oct

-02

Jan-

03

Apr-

03

Jul-0

3

Oct

-03

Jan-

04

Apr-

04

Jul-0

4

Oct

-04

Jan-

05

Apr-

05

Jul-0

5

Oct

-05

Jan-

06

Apr-

06

Actual

Target


50% Imp


0% Imp

76% Imp

0% Imp

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Feb-0

2

May-02

Aug-02

Nov-02

Feb-03

May-03

Aug-03

Nov-03

Feb-04

May-04

Aug-04

Nov-04

Feb-05

May-05

Aug-05

Nov-05

Feb-06

Actual

Target

50% Imp


88% Imp

24% Imp

50% Imp


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Actual

Target


50% Imp


-238% Imp

25% Imp

80% Imp

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

2.00%

Actual

Target


50% Imp


-18% Imp

-36% Imp

50% Imp

GoodGood

GoodGoodGoodGood

GoodGood

GoodGoodGoodGood

Issue ResolutionIssue Resolution

OnOn--Time PerformanceTime Performance

I nnovation &

Q uality Solutions


0:00

:00

9:36

:00

19:1

2:00

28:4

8:00

38:2

4:00

48:0

0:00

57:3

6:00

67:1

2:00

76:4

8:00

86:2

4:00

96:0

0:00

8/1/

2004

7/1/

2004

6/1/

2004

2/1/

2004

1/1/

2004

12/1

/200

39/

30/2

003

7/30

/200

36/

1/20

031/

1/20

038/

1/20

020

100

200

300

400

500

600

Customers Feel the Variation !

GoodGood

6X5X

4X3X

2X1X

Num

ber

of M

ajor

issu

es p

er m

onth

Time to resolve 24 Months of Results

1. Minimize the number of Major Issues2. Minimize the average resolution time3. Minimize the distribution (variation)

0 Hours0 Hours

to to ResolveResolve

Way Too LongWay Too Longto to

ResolveResolve

I nnovation &

Q uality Solutions


0:00

:00

9:36

:00

19:1

2:00

28:4

8:00

38:2

4:00

48:0

0:00

57:3

6:00

67:1

2:00

76:4

8:00

86:2

4:00

96:0

0:00

8/1/

2004

7/1/

2004

6/1/

2004

2/1/

2004

1/1/

2004

12/1

/200

39/

30/2

003

7/30

/200

36/

1/20

031/

1/20

038/

1/20

020

100

200

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500

600


GoodGood

6X5X

4X3X

2X1X

Num

ber

of M

ajor

issu

es p

er m

onth


6X re

ducti

on in

2 ye

ars

6X re

ductio

n in 2

year

s

I nnovation &

Q uality Solutions


0:00

:00

9:36

:00

19:1

2:00

28:4

8:00

38:2

4:00

48:0

0:00

57:3

6:00

67:1

2:00

76:4

8:00

86:2

4:00

96:0

0:00

8/1/

047/

1/04

6/1/

042/

1/04

1/1/

0412

/1/0

39/

30/0

37/

30/0

36/

1/03

1/1/

038/

1/020

100

200

300

400

500

600


GoodGood

6X5X

4X3X

2X1X

Num

ber

of M

ajor

issu

es p

er m

onth


6X re

ducti

on in

2 ye

ars

6X re

ductio

n in 2

year

s

??

I nnovation &

Q uality Solutions


0:00

:00

9:36

:00

19:1

2:00

28:4

8:00

38:2

4:00

48:0

0:00

57:3

6:00

67:1

2:00

76:4

8:00

86:2

4:00

96:0

0:00

8/1/

047/

1/04

6/1/

042/

1/04

1/1/

0412

/1/0

39/

30/0

37/

30/0

36/

1/03

5/29

/03

1/1/

038/

1/020

10

20

30

40

50

60

70

80


1X

Num

ber

of M

ajor

issu

es p

er m

onth


GoodGood

1. Minimize the number of Major Issues2. Minimize the average resolution time3. Minimize the distribution (variation)

Zoom In

0 Hours0 Hours

to to ResolveResolve

ReallyReallyUnhappyUnhappy

Customers !Customers !

I nnovation &

Q uality Solutions


0:00

:00

9:36

:00

19:1

2:00

28:4

8:00

38:2

4:00

48:0

0:00

57:3

6:00

67:1

2:00

76:4

8:00

86:2

4:00

96:0

0:00

8/1/

047/

1/04

6/1/

042/

1/04

1/1/

0412

/1/0

39/

30/0

37/

30/0

36/

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1/020

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1X

Num

ber

of M

ajor

issu

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onth


GoodGood

I nnovation &

Q uality Solutions


1Q06 CurrentTarget Value

Service Reliability % Available / mo. x y G G

Implementation Quality % defective / mo. x y Y G

On-time Delivery % late / mo. x y G G

On-time Problem Resolution– Critical avg. resolution time x y G G

– Major avg. resolution time x y G G

– Minor avg. resolution time x y R Y

Billing Quality # Defects x y G G

Customer Satisfaction % Sat x y G G

Customer Radar Screen # Red x y G G

StatusFocus Customer-Impacting Metric Units

Cus

tom

erR

elat

ions

hip

Ser

vice

Q

ualit

y S

uppo

rt Q

ualit

y

Trend

Customer-Impacting ScorecardCustomer-Impacting Scorecard

EXAMPLE

I nnovation &

Q uality Solutions


““we facilitate over 800,000 transactions every business day …”we facilitate over 800,000 transactions every business day …”

What this means to our CustomersWhat this means to our Customers

19

53,440

4,960192 3

-

10,000

20,000

30,000

40,000

50,000

60,000

3 Sigma 4 Sigma 5 Sigma 6 Sigma

Defective transactions per day

I nnovation &

Q uality Solutions


Front Line

Customers

LT

First LineSupervisors

Directors

Customer-Impacting Customer-Impacting Innovation & QualityInnovation & Quality

Goals & MetricsGoals & Metrics

Process M&I TeamsSS QITs…

QC

LT

It is a Team SportIt is a Team Sport

I nnovation &

Q uality Solutions


FunctionA

FunctionB

FunctionC

FunctionD

FunctionE

activity

activity

activity activity activity

activity

activity

activity

Mapping the Process‘Cards-on-the-wall’

Decision Data

ManualInp ut

Document

Input

MM

DD

Output

Gate

30% inputs 30% inputs tightly connected tightly connected end-to-end end-to-end

26% outputs 26% outputs tightly connectedtightly connectedend-to-endend-to-end

Functionally Functionally optimizedoptimized

100% inputs tightly 100% inputs tightly connected end-to-end connected end-to-end

100% outputs tightly 100% outputs tightly connected end-to-endconnected end-to-end

End-to-end optimized

Improving the Improving the Full-Stream ProcessFull-Stream Process

I nnovation &

Q uality Solutions


Un-cage the Tigers - SORTUn-cage the Tigers - SORT

0

20

40

60

80

100

120

140

160

Date

Apr-02

Aug-0

2

Dec-0

2

Apr-03

Aug-0

3

Dec-0

3

Apr-04

Aug-0

4

Dec-0

4

Apr-05

Aug-0

5

Dec-0

5

Apr-06

ActualTarget

50% Imp


50% Imp

25% Imp

50% Imp


DefineDefine

MeasureMeasure

AnalyzeAnalyze

Improve Improve

CCoonnttrrooll

I nnovation &

Q uality Solutions


0

100

200

300

400

500

600

700

Jul-0

2

Oct-02

Jan-0

3

Apr-0

3Ju

l-03

Oct-03

Jan-0

4

Apr-0

4Ju

l-04

Oct-04

Jan-0

5

Apr-0

5Ju

l-05

Oct-05

Jan-0

6

Apr-0

6

Actual

Target

Total Imp by Target = 91%, Total Actual Imp =96%

DefineDefine

MeasureMeasure

AnalyzeAnalyze

Improve Improve

CCoonnttrrooll

Billing Quality Billing Quality Improvement TeamImprovement Team

I nnovation &

Q uality Solutions


Tool/MethodTool/Method

Six Sigma as Six Sigma as a Team Sporta Team Sport

Engage the Engage the Entire Company Entire Company

to Surpass to Surpass Customer Customer

ExpectationsExpectations

Un-Cage the Tigers Expert

Define

CTQs Pareto charts Histograms process map, SIPOC MetricsMetrics Problem statement

Measure Basic probability conceptsBasic probability concepts check sheetscheck sheets histogramshistograms

ANOVAANOVA Process capabilityProcess capability

Analyze Hypothesis testingHypothesis testing Root-cause analysisRoot-cause analysis

Mutli-vari ANOVAMutli-vari ANOVA

Improve

Problem-solving Problem-solving SPC, control charts SPC, control charts QFDQFD DFXDFX FMEA/FMECAFMEA/FMECA Countermeasure MatrixCountermeasure Matrix

DOE DOE LeanLean Theory of ConstraintsTheory of Constraints DFSSDFSS TRIZTRIZ

Control

Monitoring, Control System Standards, Procedures Implement SPC new Process Capability Transfer Plan Verify Benefits Document Communicate, Celebrate


I nnovation &

Q uality Solutions


Service Reliability/QualityService Reliability/Quality

98.00

98.20

98.40

98.60

98.80

99.00

99.20

99.40

99.60

99.80

100.00

May

-02

Aug-

02

Nov

-02

Feb-

03

May

-03

Aug-

03

Nov

-03

Feb-

04

May

-04

Aug-

04

Nov

-04

Feb-

05

May

-05

Aug-

05

Nov

-05

Feb-

06

May

-06

Actual

Target60% Imp

60% Imp

75% Imp

41% Imp



GoodGood0

20

40

60

80

100

120

140

160

ActualTarget

50% Imp


50% Imp

25% Imp

50% Imp


GoodGood

0:00:00

4:48:00

9:36:00

14:24:00

19:12:00

24:00:00

28:48:00

33:36:00

38:24:00

43:12:00

48:00:00

Jan-

02

Apr-

02

Jul-0

2

Oct

-02

Jan-

03

Apr-

03

Jul-0

3

Oct

-03

Jan-

04

Apr-

04

Jul-0

4

Oct

-04

Jan-

05

Apr-

05

Jul-0

5

Oct

-05

Jan-

06

Apr-

06

Actual

Target


50% Imp


50% Imp

25% Imp

77% Imp

0:00:00

12:00:00

24:00:00

36:00:00

48:00:00

60:00:00

72:00:00

Jan-

02

Apr-

02

Jul-0

2

Oct

-02

Jan-

03

Apr-

03

Jul-0

3

Oct

-03

Jan-

04

Apr-

04

Jul-0

4

Oct

-04

Jan-

05

Apr-

05

Jul-0

5

Oct

-05

Jan-

06

Apr-

06

Actual

Target


50% Imp


20% Imp

91% Imp

0% Imp

0:00:00

12:00:00

24:00:00

36:00:00

48:00:00

60:00:00

72:00:00

Jan-

02

Apr-

02

Jul-0

2

Oct

-02

Jan-

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Apr-

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Jul-0

3

Oct

-03

Jan-

04

Apr-

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Jul-0

4

Oct

-04

Jan-

05

Apr-

05

Jul-0

5

Oct

-05

Jan-

06

Apr-

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Actual

Target


50% Imp


0% Imp

76% Imp

0% Imp

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Feb-0

2

May-02

Aug-02

Nov-02

Feb-03

May-03

Aug-03

Nov-03

Feb-04

May-04

Aug-04

Nov-04

Feb-05

May-05

Aug-05

Nov-05

Feb-06

Actual

Target

50% Imp


88% Imp

24% Imp

50% Imp


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Actual

Target


50% Imp


-238% Imp

25% Imp

80% Imp

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

2.00%

Actual

Target


50% Imp


-18% Imp

-36% Imp

50% Imp

GoodGood

GoodGoodGoodGood

GoodGood

GoodGoodGoodGood

Issue ResolutionIssue Resolution

OnOn--Time PerformanceTime Performance

Results !!

•Improved Customer Satisfaction Improved Customer Satisfaction (>90% Satisfied)

•Reduced costs due to ‘failure’, i.e., defects, by more than 50%

I nnovation &

Q uality Solutions


"EasyLink enables fast, reliable worldwide communications with

our customers regardless of what technology they use. The vendor is

also reducing our costs while minimizing variance in each

transaction. Our communications are time-sensitive, making rapid

and reliable delivery essential. EasyLink as met these important requirements largely due to their

Six Sigma Program.“

A global transportation companyA global transportation company

"The business case for EasyLink was an easy one. Beyond the

economic factor of lowering the costs of our operation and

strengthening the balance sheet, there is the ‘peace of mind’ that comes with knowing our vendor

has implemented acustomer-centric Six Sigma

Program. As one of the country's largest suppliers of energy, we

value consistent, predictable business processes that deliver

world-class levels of quality.“

A leading U.S. energy companyA leading U.S. energy company"We’re lowering our messaging costs and driving new efficiencies by outsourcing to EasyLink. Since the company follows a rigorous Six Sigma Program, our global messages

to our customers are protected by the latest advances in security and compliance as well as specific metrics around

network uptime. This gives us the ability to sleep at night.“

A Fortune 100 global bankA Fortune 100 global bank

What Customers are SayingWhat Customers are Saying

I nnovation &

Q uality Solutions


Simplified Business CaseSimplified Business Case

Continuous ProfitabilityContinuous Profitability

Profit

Revenue Cost

‘Failure’ Cost

Other

The Ironic Outcome

>5% increase in >5% increase in SatisfactionSatisfaction

>5% increase in >5% increase in Worth-what-paid-forWorth-what-paid-for

50% decrease 50% decrease

Operating ExpenseCustomerExpectatio

ns

Customer-FocusedQualityPrice Customer-Valued

Innovation

Value

50% improvement 50% improvement

I nnovation &

Q uality Solutions


Keep a laser-focus on the Customer Quality = meeting Customers’ expectations

Make meeting Customers’ expectations everyone’s job!

• Set improvement goals and cascade to everyone in the business

•Get everyone engaged, not just the Green/Black Belts

Become the best ... and prove it!• Be highly results-focused• Monitor and manage performance & Post results for all

to see

Use Six Sigma as a tool to continuously get better!

• The real value of Six Sigma isn’t just about reducing costs

• Never stop improving

Some Some Parting

Parting Thoughts

Thoughts

Achieving a Six Sigma Level of Meeting Achieving a Six Sigma Level of Meeting Customers’ Expectations in a Services Customers’ Expectations in a Services

BusinessBusiness

I nnovation &

Q uality Solutions


To learn more:To learn more:

www.easylink.com/about/six_sigma.cfm

InnovationAndQualitySolutions.com

OR

Bill Robinson

Innovation and Quality Solutions

[email protected]

http://www.easylink.com/about/six_sigma.cfm

Achieving a Six Sigma Level of Meeting Customers’ Expectations in a Services Business

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