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SERVICE QUALITY SIX SIGMA CASE STUDIES

Elizabeth Keim
Six Sigma Master Black Belt
Integrated Quality Resources, LLC
4220 Pebble Beach Drive
Niwot, CO 80503-8359
liz.keim@worldnet.att.net

LouAnn Fox Julie S. Mazza, Esq.
Black Belt Black Belt
CNH Capital E. I. DuPont de Nemours and Company

SUMMARY

This presentation will discuss the effective use of Six Sigma tools to improve several service processes.
Each case will cover the following five steps:

• Define the problem
• Measure the defect
• Analyze the data
• Improve the process
• Control the process

KEYWORDS

Case Studies, Service, Six Sigma

INTRODUCTION

Below are two cases studies, using the Six Sigma methodology for defect reduction using Define,
Measure, Analyze, and Control, from CNH. Each will discuss the nature and quantification of the
problem and the benefits of resolving the problem. Then, each will describe the analysis done to
determine the root cause and evaluate potential solutions to the problem. Lastly, each will discuss control
mechanisms used to ensure sustainability and the results achieved.

CASE STUDIES

Asset Management Cycle Time Reduction in Posting Repossessions

LouAnn Fox, CNH Capital

SUMMARY

historical data across departments was linked. a new goal was set to drive cycle time to eight days.This presentation will discuss the effective use of the Six Sigma tools to reduce the cycle time in posting a repossessed unit to the bid list and remarketing website. Equipment available for sale is communicated to dealers two main ways.No parameters had been established or communicated regarding what was an acceptable timeframe before starting work on a file. After the baseline was taken and the process was better understood. the faster Asset Management can sell a piece of equipment. The preliminary objective (before the baseline was taken) was to reduce the cycle time by ten days. It involved the associate looking up values in equipment guides and providing preliminary information to a more knowledgeable remarketer who would then verify or adjust the pricing. resulting in significant ongoing dollar savings. DEFINE & MEASURE THE PROBLEM At the start of the project. INTRODUCTION CNH Capital’s Asset Management department is responsible for managing the sale of lease returns and repossessed equipment. In order to produce a baseline. based on the condition of the unit and knowledge of the market. Therefore. These three steps provided appropriate focus for the improve and control phases of the project.” This analysis will demonstrate how Six Sigma tools were applied to decrease cycle time 75%. the higher the sales price should be. cycle time is very important. • Establishment of a wholesale value – This step was the most time consuming step of the entire process. “Asset Management Cycle Time Reduction in Posting Repossessions. . A Pareto Diagram visually organized the data we had started gathering and showed more than 75% of the total process time was attributable to three steps: • File awaiting initial review -. The project specifically addresses posting units to the Bid List and website as quickly as possible. through the use of a Bid List (printed database) and through Asset Management’s website. Its objective is to sell the equipment quickly and at a fair price. from 40 days to ten days. It will take you through a project CNH Capital completed. ANALYZE THE DATA We applied various Six Sigma tools to identify Vital X’s or the root causes of the defect (cycle time delays). a tracking mechanism was put in place to gather specific information on each step of the process. • Verification of the wholesale value – The file was transferred to the remarketer to verify or adjust the pricing of the unit. particularly as repossession inventory increases. there was no tracking mechanism in place to break apart the components of cycle time within Asset Management. Combined with carrying costs of holding equipment on the company’s books. and reflected a starting point of 40 days. Given equipment depreciation schedules.

along with additional information.I. then received the file back to input onto the Bid List. using a simple excel chart. Cost Reduction for Document Processing in Major Litigations Julie S. Mazza. cycle time was expected to decrease further after project-end. the following changes were made over the course of the project: • Cycle time reporting established electronically • Staffing changes in the associate role • Redistribution of responsibilities within the associate role • Operations manager added to the department • “Complete File” checklist established for use between departments to minimize rework • Priorities established and time frame expectations communicated to the entire team • Lines of communication opened between departments Median cycle time at the end of the project was ten days from file receipt to web site posting. This project has given the Asset Management department a solid grounding in documenting processes and managing its cycle time.IMPROVE THE PROCESS Because two of the three Vital X’s related to pricing the equipment. their tolerances. a DOE was performed comparing the cycle time of the then-current versus proposed pricing methodologies. The operations manager is using a report that calculates median cycle time and identifies outliers. the remarketer forwarded the file to the associate for data entry onto the Bid List. He is also posting monthly progress in the Asset Management department’s common area. E. measurement methods and reaction plans. however. In addition to pricing method. It was reviewed with each team member and their back-up people. when the control plan was shared. the associate (one person) priced all units. sent the pricing to the remarketer for verification and/or adjustment. CONCLUSION Applying the Six Sigma methodology gave the team a structured approach to identifying and resolving root cause issues. Therefore. In addition to the reallocation of the pricing responsibilities. Under the current method. outlining each step of the process. file type and complexity were also examined. The proposed method gave each remarketer (there are five) complete responsibility for the pricing of the units they would be selling. CONTROL THE PROCESS A control plan was put in place. Esq. du Pont de Nemours and Company . The results of the DOE showed significant cycle time reduction under the proposed method. This is still above the eight-day target. time expectations were not communicated with the team until project-end. When complete. periodic audits are being performed to eliminate any potential conflict of interest in the pricing area. which will be invaluable going forward. In addition.

costly and frustrating. By improving the quality of our document productions. we compared that cost to the unit cost of the scanning and imaging each document. The most significant of those factors included: . legal subject matter experts.SUMMARY This presentation will discuss the application of Six Sigma methodology to the collecting and processing of documents in major litigations. thereby eliminating the opportunities for errors. and that these problems were recurring. DEFINE THE PROBLEM We chose for our project one of our most significant dockets. We had recognized that such collecting and processing was proving to be increasingly complicated. including the cost of labor and the unit costs of pages copied and printed. document collection begins when the Legal Department receives a request for production. A review of invoices revealed that the number of document inspections had been increasing. Accordingly. which revealed numerous steps of which we had not been aware. Later. with the attendant bad publicity. we have often been forced to repeat that process numerous times – thus providing for multiple opportunities for “pulling” the wrong documents. MEASURE THE DATA The team consisted of the process owners. we have required the services of numerous clerks and legal assistants. Because these cases typically involve millions of pages of documents. INTRODUCTION Generally. are maintained only in their original. either from a governmental agency or from an adversary in a pending civil case. We examined the data derived from these invoices. At almost every stage of the process. the team identified the key variables affecting cost. the process of maintaining and providing responsive documents has been entirely manual. and coded into an electronic database. to pull responsive documents. The team also reviewed invoices from the contractor that had been managing the document collection. The team mapped the entire document production process.for example. for producing duplicate copies. hardcopy form. contract clerks and an Information Systems professional. Our objective was to reduce the non-value-adding steps in the process. ANALYZE THE DATA Using FMEA and Cause & Effects analysis. with a resulting rise in costs. often contractors. however. The responsive documents are then collected. we hoped to avoid future allegations of discovery abuse. we found steps being duplicated -. organized. We also hoped to reduce our costs. and for similar quality control issues. In serial litigation involving “families” of cases. a family of cases with a hardcopy document depository of over four million pages. to derive a per-unit cost for each page going through the entire production process. without the expected improvement in quality. pulling a specific document and logging it into a “pull log” – all in an apparent effort to eliminate errors. The actual documents.

we concluded that the manual handling of the documents was the root cause of the defects. This led us to consider scanning the documents into a database in order to reduce “paper touches” or human error. we re-mapped the process as it would appear using the scanned documents. the unit cost of processing one page was reduced by 53%. This provides real time reports to the process owners who can identify and control any “unexpected” variations in the process. As a result. .130. The following chart summarizes the “before “ and “after” results: Before… After… Collect∗ Collect∗ Copy Originals∗ Image Number Copies∗ Index∗ Stamp with Designations∗ Produce (Electronically) Create Manual Index∗ Copy for Storage∗ Index∗ Code into Database∗ Pull for Production Copy for Production∗ Produce (Paper) Refile Copies Update Database Store & Maintain∗ ∗ = Inspection Needed The scanning solution eliminated ten (10) of the fourteen (14) steps previously required. This reflects average annual savings of $1. IMPROVE THE PROCESS Once we factored in the one–time cost of scanning. CONTROL PLAN Several control mechanisms are being implemented to monitor the new process and ensure that the improvements are sustained. ♦ high turn-over of contractor clerks ♦ lack of adequate training ♦ lack of ownership in the process and inattention to the task at hand ♦ large number of documents Based on these results. ♦ A tracking mechanism was designed into the database of imaged documents that monitors the costs associated with each step in the new process.000.

Improve. CONCLUSION The Six Sigma methodology was applied successfully in this project to achieve significant improvements with substantial cost savings. The use of data to guide decision-making ensures that the right root causes are identified and addressed. ACKNOWLEDGEMENTS DuPont: Marjorie W. ♦ The process owners have direct access to invoices from the imaging contractor and can react and control cost variations as they appear. OVERALL CONCLUSION The Six Sigma problem solving methodology of Define. Niehaus . Lastly. this application of Six Sigma methodology to the practice of law is unique but clearly promising for this disciple and the business of law. Doyle CNH: Karen L. and Control can be used successfully in service processes to gain significant defect reductions. the lessons learned from this project have been translated into opportunities for other projects in the Litigation group with similar impressive results. Measure Analyze. The Control phase ensures that the improvements are sustained. In addition. to our knowledge.