Healthcare is important to all of us. We like to believe that not only are we being cured of our ailment, but that our healthcare provider really does care about us. If it is our loved one that is being affected, we’d like to believe that the healthcare provider did everything within their power to save or improve their quality of life.

On the other hand, the healthcare provider has to deal with operating costs, government control of health insurance reimbursements, rising malpractice lawsuits, among other financial issues. It is safe to assume that rising healthcare costs isn’t all the fault of the economy; some of those costs could be attributed to the providers not being as efficient and effective as they could be.

Six Sigma to the Rescue

Six Sigma is a data driven process, which means the decision maker is…data. So gut instinct, intuition, even past history doesn’t play any part in changes that need to be made in the present.

This data includes Six Sigma’s own tactics that will prioritize and isolate the issue at hand; then given a time frame (usually 4-6 months) to improve the issue by 50%. Please understand that Six Sigma’s ultimate goal is to get the problem corrected to as near perfection as possible.

The healthcare industry is the ultimate service industry. So as an example, you’d have to define the patient’s needs, requirements and the process that is being targeted for improvement. Each improvement has its own targeted requirement. Patient satisfaction is top priority in the healthcare industry, and it looks like Six Sigma is making its mark.

6Sigma.com has many clients across the healthcare field, including Blue Cross Blue Shield, California Department of Mental Health, Vanderbilt University Medical Center, Aetna, among others.

If you would like more information or are interested in one of our courses please visit the 6Sigma.com training class schedule.

Learn more information about 6Sigma.com’s Lean Six Sigma training coursework, available as classroom, onsite, or online options.

The post Six Sigma and the Health of Healthcare appeared first on 6sigma.

The Conversion

Although the processes are the same, they have to be converted on a personal scale with a personal meaning to your specific issues. The Six Sigma tools are brilliant in their simplicity, and can be used to ultimately fix the root causes.

DMAIC: The Phases

See how applying DMAIC makes sense with your own budgeting needs:

D-Define: In this phase, you will need to establish your issue (problem) in a clear concise statement. Then, outline what you expect to achieve (goal) along with a specific time frame. This also includes why it is important that this change takes place.

M-Measure: In this phase, collecting data is done on a continuous bases, so we should know the minute we have hit one of our prime causes for the current situation. So, we want to identify all those causes. Sample causes are — not having a budget or not staying to current budget, eating out too much, being undisciplined in spending, or not making enough money for current lifestyle.

A-Analyze: This phase is a little tricky, because there is the surface issue of what is causing the problem, and then there is the root cause of the problem. So looking at the Measure phase, figure out which issue is causing your lack of money. Then figure out why you are doing that. So, if you find that you are impulse buying after you have a bad day at work, now you need to figure out what is causing those “bad” days at work.

I-Improve: So, after you have figured out the deep rooted causes for your excess spending, it’s now time to get creative and start thinking of possible solutions. You need to test drive these solutions to see if they are sustainable.

C-Control: Be gentle with yourself in the control phase. After all, the improvements might have worked short term in the test drive stage of the Improve phase, but aren’t really sustainable in the long term. So armed with strong intention, if the new recommendations you have established aren’t working, then redo them to more controlled, sustainable ones.

Learn more about Six Sigma tools through one of our training courses! For more information on our courses or services please visit 6sigma.com.

The post Using Six Sigma For Fixing Your Personal Finances appeared first on 6sigma.

Pete Abilla is the founder of Shmula. He helps companies like Amazon, Zappos, eBay, Backcountry, and others reduce costs and improve the customer experience. He does this through a systematic method for identifying pain points for the customer and the business and encourages broad participation from the company associates to improve their own processes.

His work is used in case studies at the Harvard Business School, Darden School of Business at the University of Virginia, and at Tepper School at Carnegie Mellon University. He’s been quoted by various authors, most notably, Clayton Christensen in his book The Innovator’s Dilemma. Continue Reading

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Update: Week of 1/6/2014

Hey there. I wanted to update you on a few things. You can find the items discussed below in the content libraries and in the video section.

Templates

We’ve added the following templates this week:

• Signal to Noise Ratio
• FMEA Excel Spreadsheet
• Countermeasure Worksheet
• Takt Time Calculator
• Kanban Card Generator
• Attribute Gauge R&R Automated Sheet
• Paired T Test Template

eBooks

We’ve added a lot of eBooks this week for you:

• Overview: Cause and Effect
• Overview: Histogram
• Overview: Run Chart
• Overview: Scatterplot
• Overview: SMART Action List
• Overview: KPI and Business Needs
• 4Q Project Management
• Tree Diagram Guide
• What is the Matrix Diagram?
• How to Use the Prioritization Matrix
• Opportunity Storming
• Overview: Control Charts
• Overview: 7 Wastes and Lean
• Basic Tools: The Flowchart
• Basic Tools: Frequency Plot

Videos

I’m finishing up several videos that I’ll place on the DMAIC Table of Contents next week.

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In the healthcare industry, there is plenty of room for improvement. I have studied healthcare operations for the last 8 years and have found that there is a lot of excess and not a lot of improvement or innovation. For example, in 2011, Medicare spent $549.1 billion on health care coverage (about 15% of the national budget) for 48.7 million beneficiaries. One could easily argue that Medicare is one health care organization that has a lot of excess/burdensome processes with not a lot of solutions for its stakeholders. Not to mention the VA, who most recently shocked Americans when it was discovered that 731 VA facilities were operating wait lists of roughly 57,436 veterans awaiting scheduled care and another 63,869 who enrolled in VA benefits (over the last 10 years) and have never been seen for an appointment (CNN.com).

Healthcare, and operations management, is my preferred career. News of inefficient health care processes not only keeps me employed but also motivates me to seek tools to protect my organization from burdensome business practices.

For roughly two years I had been searching for a Six Sigma training program that met my needs as a professional in the healthcare industry. After a recent job transfer, I had the pleasure of meeting Pete Abilla, founder of Shmula.com. I was impressed with his wealth of knowledge and I quickly became a member of Shmula.com. I continue to be blown away at the knowledge, tools, and experiences that I’ve gained. Shmula’s training model is unique, clear, and concise. The learning modules are filled with content that help drive concepts and encourage real-world application. The videos presented in each module are professionally produced and further illustrate the quality of the knowledge found in each learning module. My current job role has drastically improved as I’ve learned to apply the lean strategies and tools into real organizational problems to streamline work processes.

I highly encourage operational leaders to invest their time into Shmula.com’s program. As Albert Einstein once said, Strive not to be a success, but rather to be of value. This program will inevitably add value to your organization and increase your marketability as a leader.

– Rico Jensen, MHA

The post Scratchpad – NEVER PUBLISH appeared first on 6sigma.

But never mind all of that. I want to talk about one quote that, at least for our purpose today, makes a ton of sense.

I know that I’m inferior to everybody in some way. You may be a better singer than I am or more centered in some ways. But I also know that I’m superior to you in something else. I know how to create a process to achieve things, and I never, ever give up. That makes us equal.

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The post Self-Improvement Means Creating a Process to Achieve Things appeared first on 6sigma.

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The post Value and Foundation of Six Sigma appeared first on 6sigma.

Streamlining Your Customer Service Experience

There’s always a lot that can be done to provide a faster, more adequate customer service to your clients. You may not even realize that you have any problems on that front, especially if you aren’t tracking the right metrics. But at the end of the day, providing a good service is not something that people see as a bonus tacked on to their initial purchase it’s become a fundamental requirement in the eyes of many consumers.

Expectations Are Changing Fast

That’s because things like the internet and smartphones have completely changed the landscape, and have promoted a much more rapid style of interaction between consumers and the businesses they use. Many people now expect their queries to be answered as fast as possible, in some cases even immediately. And while it’s possible to reach that state, it won’t happen without a significant amount of effort on your part, as well as lots of planning ahead of time.

Responding to a Growing Market

You have to adapt the way you’re working to a market that’s constantly growing and changing at a very rapid rate. Approaches that are relevant today will be anything but just a few years from now, and you have to come to terms with that fact. You must also ensure that your company is able to keep up with the growing demands of its consumers. In some cases, it’s not just about providing fast and reliable support you have to make sure that your customer always feels like they are your top priority.

Product or Service?

The distinction between a product and an ongoing service is becoming thinner and thinner, and many people now treat all of their purchases like the latter. It’s not hard to see why either, with the advance of various new solutions like software-as-a-service that consumers have realized, have lots of benefits. But it’s not always that easy to implement these methodologies in the work of every company, especially those that provide more specific types of products that are likely not immediately susceptible to this.

The point is, you have to figure out a way to present your product as more of a service if you want to draw the attention of your consumers and keep it pinned. This is not as easy as it looks, and it’s going to take some effort.

Eliminating Unnecessary Points

Waste is a big problem in customer service and remains a troubling factor for many companies on the market. It’s not always that easy to address it either, because it can take some surprising forms. You have to implement methodologies like Six Sigma if you want to ensure that waste is kept to a minimum, but finding the right specialists who are familiar enough with those topics can be quite the challenge. It’s also something that can benefit your company tremendously in the long run though, so if you can afford to do this kind of search now, it’s definitely a good idea to get started on it.

The Importance of Constant Evaluation

You should also keep track of your progress at all times, and ensure that you’re moving in the right direction. This can be difficult to do without an adequate overview of how well you’re doing though, and that in turn requires some complex analytical systems that produce enough data from multiple points. It will take some time to set those things up at first, but once you’ve got the ball rolling, you should be able to easily keep track of everything that’s happening in your support facilities, and know when there’s a problem that needs your intervention.

If you’ve done things right though, that should not happen often at all. And when it does, you should not treat it as a negative factor by itself. Problems can be surprisingly useful in the long run, because they can teach you various details about the way your business is running that may not have been obvious otherwise. And the more you continue to explore your market and collect data about the way it works, the more confident you’re going to be in the long run when making your next moves. And with that, you’ll be able to create the perfect customer support system.

The post Streamlining Your Customer Service Experience appeared first on 6sigma.

The core of Six Sigma is reducing and/or eliminating waste or defects through process improvement. Beyond the initial process improvement efforts, it is about ensuring that standards are set in place that ensures that processes are perpetually improved. This is what is usually referred to as continuous improvement – without this, all Six Sigma projects will be rendered mute over time.

And why go through all this trouble of improving processes? To make sure that value flows through each process unhindered, all the way to the customer.

In order to improve a process, its performance has to be measured. You have probably heard the saying that what cannot be measured cannot be managed. It is in the measurement of performance that KPIs are important to Six Sigma.

What is a KPI?

Before we talk about how KPIs are important to Six Sigma, let’s define what they are. A KPI or key performance indicator is any numerical value that can tell an organization how well it is performing when it comes to achieving its goals. Organizations usually have goals that they wish to achieve, and KPIs tell them what progress they have made so far versus how much more progress they need to make to achieve their goals.

It is believed that KPIs are an invaluable tool for an organization’s decision-makers. By looking at the KPIs, they can tell if the performance they see is expected or below expectations. If the performance is below expectations, then leadership will make the appropriate decision to get the organization back on track. 

And the decisions are likely to lead to successful outcomes since they will be highly informed decisions. 

How to come up with good KPIs?

Now that you know what a KPI is, let us look at how one can come up with good KPIs. While this is not an exhaustive list, you are likely to come up with a good one if the KPI has the following characteristics:

• A good KPI has to be measurable, otherwise, there is no way it can be called a KPI.
• It also has to be related to the organization’s strategic objectives at that time, otherwise, you will end up measuring an irrelevant KPI.
• The KPI needs to be in line with the customers’ requirements and demands
• It has to be simple and well defined.
• It needs to be assigned to an owner; someone who is responsible for reporting and measuring it.
• The KPI needs to be assigned to an individual, team or department that is capable of making sure positive outcomes are achieved from measuring the KPI.

How are they important to Six Sigma?

The question of how KPIs are important to Six Sigma is all about picking the right project to work on. When the performance of an organization is measured, KPIs reveal whether certain targets are being met or not. By looking at which targets are not being met, an organization can identify the processes that need to be improved and start working on the appropriate Six Sigma project to meet those targets.

Without knowing which targets to aim for through the KPIs, it can be all too easy to work on irrelevant projects. Once this happens, the organization will not achieve its goals, and a lot of time, effort and money would have been wasted for nothing.

Besides that, measuring KPIs in Six Sigma projects tells the organization if the improvements efforts are leading them towards their goals. If not, then the Green Belt or Black Belt can take the appropriate action to ensure everything is on track. And by continually measuring the performance of projects, KPIs can also ensure that continuous improvements efforts are being followed through in the organization

Conclusion

As you can see, KPIs are also an essential part of Six Sigma. They ensure the Six Sigma projects being worked on are the right ones and are helping the organization achieve its goals. Overall, it is hard to see how Six Sigma can even be effective without KPIs.

The post Are KPIs Important to Six Sigma? appeared first on 6sigma.

Any organization that sells products and services needs to communicate the value of its offerings to the target market. It is up to marketers to not only help the organization reach potential customers but convince them the offerings will provide the value they are looking for. That way, the customers will purchase the offering and the organization will make revenue.

To help organizations become profitable, marketers often launch campaigns to reel in potential customers. But sometimes this process can run into problems, which can lead to the expected return on investment (ROI) not being realized. In Six Sigma, the marketers are said to have experienced variation. This is a mismatch between what was expected and what has occurred.

In the face of variation, it is reasonable to ask what the cause is and how it can be resolved. Luckily, Six Sigma can help marketers get to the bottom of variation using a data-driven, scientific approach known as DMAIC (Define, Measure, Analyze, Improve, Control). 

Here’s how that would work for a marketing campaign.

Define

The first step is to define the problem being experienced. The team would come up with a problem statement. This is a document that will contain a clear and concise definition of the issue and how it is affecting the organization.

The team would look at the goals of the campaign, how they would benefit the organization and if they are S.M.A.R.T (Specific, Measurable, Achievable, Relevant, Time-Based). An example of a S.M.A.R.T goal would be to increase the ranking of the organization’s website on Google to be in the top three results by the end of the year.

Measure

In the Measure phase, the marketers will gather all the necessary campaign data and measure it. Then they would make sure that the measurement system used is effective and that data integrity was preserved. Examples of data they can collect for a marketing campaign include click-through rates, conversion rate, number of impressions, number of social shares, and number of backlinks.

Analyze

After gathering and measuring the data, the marketers will then analyze it to extract insights. They can look at, for instance, where most clicks are coming from. Or how long people are staying on the page when they visit it. After all, the more people visit a website and stay on it long enough, the more Google will think it’s relevant. The Google search engine algorithm will award points to the website, which will boost its ranking.

Improve

From the insights gained in the previous step, marketers will know which marketing channels to focus on to increase their SEO ranking. By shifting focus away from the non-performing channels, they would be saving a considerable amount of time and money.

Control

By understanding what works and what doesn’t, marketers can now control the marketing process. The goal would be to standardize the procedures they used to increase the ROI of the marketing campaign. It also involves continuously measuring the results from the procedures, as well as updating the procedures when they are improved. The result will be a set of guidelines and/or an SOP.

As you can see, Six Sigma is a valuable tool for marketers. It can help them see a return on investment on their marketing efforts when the expected results don’t match the actual results. Through the DMAIC methodology, marketers can improve their marketing processes and improve drive positive outcomes.

You can check our online training here.

The post How Can Six Sigma Help Marketers? appeared first on 6sigma.

Ask yourself, do you want to deliver faster Six Sigma projects that don’t overstep your budgeting parameters? Then it’s essential for you to outline a detailed plan in your project charter. Your plan will act as your guide through the rough waters of process improvement.

Key performance indicators are highly useful tools here, enabling you to identify precisely which actions benefit you as a company. As such, there are numerous KPIs to help you on your Six Sigma journey, one of which we look at today: Project Cost Variance (PCV). Join us and learn how you can use PCV to deliver Six Sigma projects on time and on budget.

Stay Focused with Project Cost Variance

It’s important to know that Six Sigma relies on the measurement and analysis of process issues. Controlling problems allows you to create solutions that prevent them from recurring, benefitting the business in the long- and short-term. Without a strong plan to follow, you’re likely to lose sight of your goals and business needs. Losing track of your priorities will only send you veering off budget towards slow delivery times. Moreover, this doesn’t just impact you, but also your customers, who depend on you for quality products and services. If customers don’t see any value in your services, or if they see you as unreliable, they’ll take their business elsewhere. For you, this is detrimental, but Six Sigma can help. First, however, we must define cost variance.

What is a Cost Variance?

A cost variance is the amount by which your project exceeds or falls under your maximum budget. Cost variance is one of two key areas that you should monitor throughout your project, the other being schedule variance, i.e., how early or late you are to meet project deadlines. You can use the following equations to calculate both cost and schedule variance:

• Cost Variance = BCWP (budgeted cost of work performed) – ACWP (actual cost of work performed)
• Schedule Variance = BCWP – BCWS (budgeted cost of work scheduled)

What is Project Cost Variance?

PCV is the process of evaluating your project’s financial performance. You should compare the budget you agreed before starting the project with the actual amount you spend. You can calculate PCV by finding the difference between BCWP and ACWP. Your ideal project cost variance should be when your BCWP equals the same as your ACWP. Your project cost variance provides otherwise unavailable insight into your finances throughout the scope of your project. Using it to your advantage allows you to monitor when and where you breach your budget. When you use PCV together with DMAIC, you can actively control your finances, targeting areas for improvement, like overspending. The result is a more focused, efficient, and successful project.

The post Six Sigma and KPIs: Project Cost Variance appeared first on 6sigma.

The construction industry has been mired in an environment that has been siloed and antiquated for years. The view has been that things have always been done a certain way and there is no reason to change. Meanwhile, numerous industries have embraced lean methodologies and have significantly reduced waste, improved efficiency and delivered higher quality products which meet or exceed customer expectations. Surveys show that at least 50% of processes involved in planning and construction are wasteful. The industry has adopted lean construction methods, which are starting to change an industry that lagged behind others.

Learn more here about lean construction!

The post [VIDEO] Lean Construction Methods Transform the Industry appeared first on 6sigma.

Muda is all about waste and Lean manufacturing is about eliminating Muda. It is any activity that adds no real value to the product or service being created or delivered. The diligent attention to the elimination of waste in how work is performed is a fundamental tenet of Lean manufacturing, the operational excellence strategy that was developed over many years and is widely used in business today.

The post [VIDEO] Muda Is All About Waste appeared first on 6sigma.

Muda means waste and refers to a wide range of non-value-adding activities; eliminating waste is the key to efficiency. When you look at the Toyota Production System (TPS), eliminating Muda waste is one of the main principles of the Just-in-Time system. Some things that are considered waste are unnecessary financing costs, storage costs and worthless stock of old items. Toyota divides Muda into seven categories:

1. Transportation – increases risk of product being damaged, lost or delayed.
2. Inventory – Outlay of capital that doesn’t immediately produce income.
3. Motion – Damage inflicted through the production process.
4. Waiting – Product sitting idle.
5. Over-processing – Doing more work than is necessary.
6. Over-production – Making more product than is required by the customer.
7. Defects – Replacing faulty parts or products.

Processes consumes resources and naturally, waste can occur. The more resources that are used, the more opportunity exists for waste. The tools of Lean manufacturing and the TPS help focus on the elimination of Muda waste and create a heightened awareness. Understanding exactly what waste exists and where it is exists is crucial to any Lean manufacturing process. Even though products differ between manufacturing organizations, lean practitioners understand that the types of wastes are very similar.

The post Elimination of Muda is the Key to Efficiency appeared first on 6sigma.

Boeing builds the venerable 737 workhorse at a rate of one every nine days! That is a monumental feat of Lean manufacturing. The Boeing 737 is the workhorse of many airlines across the globe, flying short and medium range flights. It was originally designed in 1964 and took its first flight in 1967. In 1968, Lufthansa airlines put the Boeing 737 into service across their service areas. Since its inception, the aircraft has been through numerous upgrades and modernization changes that continue to make it an in-demand aircraft among airlines. As of 2006, there were an average of 1,250 Boeing 737s airborne at any given time, with two either departing or landing somewhere every five seconds. 

Watch this video and see how they do it!

The post [VIDEO] Boeing Builds Them in Nine Days appeared first on 6sigma.

Since 2006, Great American Cutlery has built the reputation for making the finest quality traditional pocket knives in the US. Located in historic Titusville, PA, the brand focuses on a hands-on process which yields the most beautiful and high quality pocket knives on the market. Their products exceed expectations from customers by producing a product that first became a mainstay in the late 19th century.

Check out the unique insights to the process that is Great American Cutlery!

The post [VIDEO] Great Eastern Cutlery Factory Tour appeared first on 6sigma.

Since 1906, the name Rolls Royce has been recognized as quality and luxury in transportation. Throughout its legendary history, discerning people from around the globe have chosen Rolls Royce vehicles for their transportation. They are understood to be the finest example of luxury and comfort in motor vehicles. Take a few minutes and immerse yourself in the luxury of Rolls Royce.

The post [FACTORY TOUR] How Rolls Royce Builds Quality appeared first on 6sigma.