Lean Sigma Methods and Tools For Service Organizations: The Story of A Cruise Line Transformation

The Service Systems and Innovations
in Business and Society Collection

Jim Spohrer and Haluk Demirkan, Editors
Lean Sigma
Methods and
Tools for Service
Organizations
The Story of a Cruise
Line Transformation
Jaideep Motwani
Rob Ptacek
Richard Fleming
www.businessexpertpress.com
Lean Sigma Methods
and Tools for Service
Organizations
Lean Sigma Methods
and Tools for Service
Organizations
The Story of a Cruise Line
Transformation
Jaideep Motwani, Rob Ptacek,

and Richard Fleming
Lean Sigma Methods and Tools for Service Organizations: The Story of a
Cruise Line Transformation
Copyright © Business Expert Press, 2012.
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any
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 by

Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.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 Pennell

Interior design by Exeter Premedia Services Private Ltd.,
Chennai, India
First edition: 2012
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.

Abstract
Every business aspires to be competitive and profitable in their markets.
To do this, an organization needs to offer customers value
propositions, whether it is manifest in the product they produce or in
the service they provide. 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. 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. 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 which allows the organization to be
successful.
This book illustrates Lean Sigma on a full range of service offerings:
a cruise ship offers “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. Through 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 The Lean Sigma for Service Challenge ..............................1
Chapter 2 Identification 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
References ..........................................................................................121
Success .............115
Index .................................................................................................12
3
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 fighting in some way since the day Larry
was born. Their fierce sibling rivalry had overshadowed other family
outings in the past. There 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.
Their competitive nature seemed to know no end. This time things
seemed different 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. The local newspaper
had even written a nice article about Joe and his company’s
improvement efforts. The article titled “DR Products (DRP) Wins
Prestigious Continuous Improvement Award,” had several quotes from
Joe regarding his role in the effort. 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’msurprised 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 different
things, but the delivery of the services is simply a series of processes.”
Joe replied.
“But we are so different than a manufacturer.” said
Larry. “That’s what they all say.” commented Joe.
“They do? Who? And what else do they say?” Larry quickly
replied. “They say ‘We’re different. 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
are just a scientific 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 defined as a process. Lean
Sigma methods and tools describe a standardized way to address waste
reduction in a process. I’mcertain it will work for you, but I’mnot 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!” They
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’l 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.” offered
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 different 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 differently for different
organizations. Yet, Lean Sigma philosophy, principles, and concepts of
waste elimination (conservation of resources) and improving flow are
universal. Lean Sigma is a never-ending, systematic/scientific 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
financial 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 different 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
Identification 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 coffee, Joe had them walking
around on the factory floor.
Joe walked at a brisk pace. The first 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 materials, supplies, and products due for the day. The area
was neat and tidy. Larry could almost see how the organization on the
floor 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. The 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 final 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 flow. 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.
The paint line was manually operated. People hung cabinet parts and
panels on hooks or racks and placed them on an overhead conveyor.
The 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. The 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
take the cart away to the assembly area. Joe studied the paint line score-
board for several minutes. The 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
coffee? You do have coffee don’t you?”
Joe chuckled, “Yes, we have coffee. 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. The 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. The 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. The walk makes it easier for me to spot waste and abnormalities
to the plan, and for me to offer 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, “The 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. This method
of ‘Scoreboarding’ allows us to quickly identify abnormalities and non-
standard performance throughout the day. Then we can make
appropriate adjustments or counter measures. We’re ‘PDCAing’
continually throughout the day. This increases the likelihood that
we’ll meet our schedule consistently every day.”
“It sounds confusing,” said Larry.
IDENTIFICATION AND UNDERSTANDING 9
“I’
t 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
flow. 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?
• The 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. Through 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 first 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 different 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 different.
• Our customers expect different things.
• We don’t measure things like a factory does.
• We deliver service to customers, not products.
Then 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
IDENTIFICATION AND UNDERSTANDING
11
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 identified 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
The next day Larry went over his notes and the training content
provided at the Lean Sigma overview. He started to organize the files
and notes in a logical format. The following are Larry’s notes from the
first 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
significant increases in productivity and quality with Six-Sigma
techniques.
3. Lean Sigma is the combination of these powerful tools.
4. The 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
philosophy 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 fit 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
organization, whether it manufactures a product or delivers a service.
Lean methods and tools are simple to learn and apply and have broad
applications. 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-effective. The
goal of lean is to strive for perfection by minimizing and ultimately
eliminating waste which causes variation throughout the value stream.
The 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. The customer enjoys the fruits of the information and
material flow. Information and material flows 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
5S
Pitch
B Butter/
safety
B
Pre-application Application Approval/title Closing prep

Q Q Order appraisal Q Q
Verify emply & 40 hrs & title = 20 m
4 hrs 40 hrs 40 hrs
assets = 60 m File paperwork
Gather financial pending = 5 m Notify parties &
data = 15 m Underwriting confirm = 120 m
= 120 m
Run credit Schedule
report = 15 m S location = 5 m
Determine Print docs
prgm = 120 m 40 hrs 25 m = 120 m
4 hrs 180 m S 40 hrs
150 m 245 m
4
0
Source: Ptacek and Motwani (2011a). h
r
s
Like Lean, Six-Sigma (or 6) is another approach that an organiza-

tion can implement to achieve excellence. Six-Sigma is a statistical term.
Sigma () defines the variation or “spread” of a process. Six-Sigma
defines how much of the total process falls within the normal process
variation.
The 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
–6 –5 –4–3–2 –1 0 1 2 3 4 5 6

Sigma
(Deviation from the mean)
The 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 satisfied 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. The table below summarizes sigma or variation level and
error rate per million opportunities.
Defects (or errors) per
Process capability million opportunities Percentage
or sigma level (DPMO) acceptable (%)
6 3.4 99.99966
5 233 99.9767
4 6,210 99.379
3 66,807 93.32
2 308,538 69.15
1 691,462 30.9
Source: Ptacek and Motwani (2011a).
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 (3.8 ) 99.99966% Good (6)

20,000 lost articles of mail per 7 lost articles per hour
hour (based on 2,000,000 per
hour)
Unsafe drinking water for One unsafe minute every 7 months
almost 15 minutes each day
5,000 incorrect surgical operations 1.7 incorrect operations per week
per week
Two short or long landings daily at One short or long landing every 5 years
an airport with 200 flights per day
2,000,000 wrong drug 680 wrong prescriptions per year
prescriptions each year
No electricity for almost 7 hours One hour without electricity
each month every 34 years
Source: Ptacek and Motwani

(2011a).
17
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. This, in
turn, lowers the cost and improves the quality of the process. The 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 modified to accommo-
date a waste-free Lean Sigma environment. This 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 efficiently;
• 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. These 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 following

diagram. Starting with a strong foundation of Lean Sigma philosophy,
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

Lean innovation
Lean Sigma tools* Six-Sigma
5S
Concepts Continuous flow
Data collection and presentation Concepts
Look for hidden wastes
Plan-Do-Check-Act
Performance measures
Employee balance chart

Quantitative analysis
Speak with data and facts Waste elimination
Total employee involvement Customer focus
Proven methodology Voice of the customer
Just-in-time (JIT)
Layout
DMAIC
Flow
Common goal of Six-Sigma Zero defects
Leveling (heijunka)
Mistake (or error) proofing
Performance dashboards
Plan-Do-Check-Act
Problem solving
Pull systems and kanbans
Value and waste
Seek perfection
Statistical methods
Focus on variation
Scientific method
Quick changeovers
Quality first
Standard work
Statistical process control
Takt time and demand analysis plots
Teamwork
Total productive maintenance (TPM)
Valve stream mapping
Visual controls
Voice of the customer (VOC)
Lean Sigma principles

Continuous improvement in processes and results
Focus on customers and value streams
Total employee involvement
Lean Sigma philosophies

Conservation of resources (sustainability or becoming green)
Relentless pursuit of waste elimination
* Not all inclusive of Lean Sigma tools

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.
19
Lean Sigma Philosophies and Principles

The overriding philosophy of Lean Sigma is defined 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 simplifica- tion of all tasks and efforts to eliminate waste and
improve flow. 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 transformations. They provide the
unchanging, solid foundation to build and improve upon. The 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
fulfillment and customer satisfaction. Focus on how materials
and information flow 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 effective 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.
The Lean Sigma concepts are as follows:
• Add value and remove waste

Value Adding
Organizations add value when they change the weight,
shape, configuration, properties, or attributes of materials or
information. These 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. Things that
consume time, resources, space, or both, but do not contribute
to satisfying customer need.
The 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 flow 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:
21
• PDCA process for implementing improvements. This is

process mirrors the scientific 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 first—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).
• Define and seek PERFECTION.
Adding value through waste identification and elimination is a funda-

mental concept of Lean Sigma. The 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
finished 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. The purpose of Lean Sigma
practices is to identify, analyze, and eliminate all sources of process
inefficiency.
The following table was a handout Larry had from the training ses-
sion. The table summarizes the 12 wastes with examples.
The Dirty Dozen: 12 Forms of Waste

Ways to
Form Description Examples eliminat
e
Overproduction More than • E-mailing, • Task time
required is made faxing the • Proof of need
or served same survey
document • Make to
multiple times order
• Ineffective
meetings
Expertise Under-utilization • Workloads not • Standard work

due to being • Lean Sigma File
placement of completed due System
people into to lack of cross- • Business case for
positions where their training Lean Sigma
knowledge, skills, • Assigning • Office quick-
and abilities aren’t employees two starts
used to the fullest jobs due to
understaffing
Transport Any transport of • Delivering • 5S

files, information, or unneeded • Value stream
materials mapping
documents • Standard
• Updating work
customer records • Lean Sigma File
in different System
systems • Visual controls
• Colocation of
workers
Inventory Excessive piles of • Files • 5S

paperwork, awaiting • Value stream
computer files, signatures or mapping
supplies, and time approvals • Standard
spent searching for • Keeping multiple work
documents copies of reports • Lean Sigma File
System
• Kanbans for office
supplies
• Level
loading-heijunka
Motion Any movement • Hand carrying • Standard work

of people, paper to another • New office layout
paper or process • Kanbans for office
electronic • Using an supplies
exchanges, or excessive number • Pull systems
both, that does of transaction and
(Continued)
not add value screens to support supermarkets
decision making
23
Ways to
e
Corrections All processing • Data entry errors • Standard work
required in creating • Not having • Lean Sigma File
a defect and the integrated IT System
additional work systems • Visual controls
required to correct • Mistake
it proofing
Overprocessing Putting more work • Duplicate reports • Standard work

or effort than or information • Lean Sigma File
required into the • Constantly System
work requested by revising • Data collection
internal or documents techniques
external customers • Excessiv • Document
e tagging
approval
s
Waiting Waiting for • Excessive • Value stream

anything (people, signatures or mapping
signatures, approvals • 5S
information, etc.) • Delay in feedback • Lean Sigma File
from high-level System
management • Runners
• Waiting for a • Pitch
meeting to make • Standard work
a decision • Scoreboards
Overload Overburdening or • An 18-person bus • Standard work

overloading a work carrying 25 • One piece flow
system, machine, people • Statistical analysis
or process • A new contract • Workload
requiring 80
additional hours balancing
of work and not
enough staff to
complete the
work
Unevenness Lack of consistent • Scheduling • 5S

flow of inputs/ all work to be • Value stream
information/ completed at the mapping
scheduled work from end of the month • Standard
upstream processes and not during work
causing many of the month at • Workload
the other types even intervals
of waste • Poor office balancing
previously processes
mentioned for
locating (Continued)
documents when
a staff member
is on leave
(Continued)
Ways to
e
Environmental Any waste that • Paper or plastic • Reduce, reuse,
is generated by used in a recycle
a cafeteria that • Sustainability or
service isn’t recycled Green metrics
organization that • Unnecessary use
impacts the of power when
environment, machines and
whether it is heat, equipment aren’t
solid, liquid, or gas in use
Social Waste from the other • Time spent by • Plan–Do–Check–

areas of society, employees at work Act
such as poverty, socializing • Sustainability
discrimination, • Advertising metrics
malpractice, health products on social • Performance/ga
and injuries, networking sites p analysis
nutrition, literacy that are not read
and education, by target
and also waste on audience
account of social
media networking
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. This 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 eliminated or reconfigured unless they are already
understood as essential to a perfect process.
25
2 of 12: The Waste of Expertise
The 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
effective performance management system will reduce this waste
significantly. Use company policies and procedures to effectively place
people where they will most benefit the organization.
3 of 12: The Waste of Transport
Excess transport affects the time of delivery of any work within an office.
Even with the Internet and e-mail readily available, too often, or not
often enough, documents (i.e., files) 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 office 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 files, supplies, and time spent

searching for a document is waste. They 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. There are basically two types of
inventory waste related to administrative areas: (1) office supplies and
(2) information.
5 of 12: The Waste of Motion
Any movement of people that does not add value is waste. This waste
is created by poor office layout or design, faulty or outdated office
equipment, supply inaccessibility, and movement of information or

data that does not add value. The 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 first 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. This waste can
reduce profits significantly.
7 of 12: The Waste of Overprocessing
Putting more work or effort 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. This is one of the most
difficult administrative wastes to uncover. Some questions to ask to assist
in the identification 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. This

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
27
Inbox folder and try to find it? How many times do you actually touch
something before it is completed? It is the finish it, file it, or throw it
away system that can help eliminate this waste. This waste closely related
to “wasting time.”
9 of 12: The Waste of Overload
The 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 identified 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
customers and employees, and often leads to other wastes and loss
sales.
10 of 12: The Waste of Unevenness
Lack of a consistent flow of inputs/information/scheduled work from

upstream processes causes many of the other types of waste previously
mentioned. Unevenness such as traffic 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 efforts 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 classified as environmental waste. These items can be observed in
an organization’s trash containers and dumpsters. This 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. The 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 identified 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. The 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. This 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

The Lean Sigma methods used for Lean Sigma transformations
include a systematic approach or steps to initiate improvement in an
organization.
29
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.
Transport
Moving tools and materials to the
point of use.
Inventory
Materials or information. This includes
all work in process and finished goods.
Motion
Movement of people. This
includes walking or riding, as well
as smaller movements.
Corrections
This includes rework or fixing of products
or information that is wrong the first
time.
Overprocessing
This includes work above and beyond
the minimum requirements or needs.
Waiting
This includes any time delayed or
waiting for materials, information, or
people.
Overload
This is when workload is too much
and machines break and people
burnout.
Unevenness
This is when workload varies from slow
to fast uncontrollably.
Environmental
This includes pollution and other
wastes of the environment.
Social
This is waste that impacts social issues.
The systematic approach is defined 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 Define–Measure–Analyze–Improve–Control (DMAIC)

improvement process. The DMAIC improvement process phases are
defined as follows:
• Define the project scope, resources, and objectives.
• Measure the current state process key performance
measures, drivers, capabilities, flows, 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
2. Implement a housekeeping and visual control effort

at all worksites.
3. Conduct hourly or daily mini-experiments to
improve processes.
31
By engaging at these three levels, an organization can truly begin to

transform 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.
The Lean Sigma Tool Application Chart presented here is not all
inclusive. It covers the Lean Sigma tools identified in the applications
chart. These 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
environment apply to a service environment, but might not be a direct
fit. 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.
The savvy Lean Sigma practitioner will identify the key applicable Lean
Sigma tools and apply them as needed.
DMAIC Alphabetical ToolLean Sigma improvement

Application Chart phases
Lean Sigma tools Define Measure Analyze Improve Control
1 5Ss X X
2 5-Whys X X
4 Cause and effect X X X
diagrams
5 Check sheets X X
6 Constraint or X X
Bottleneck analysis
7 Cross-training to X X
develop worker
flexibility
8 Flow, process, X X X X
Swim lane, or
value stream maps
(Continued)
(Continued)
Lean Sigma improvement phases
10 Frequency charts X X
11 Future state flow X
maps
12 Histograms X X X X
15 Key metric data X X X
profiles
16 Leveling service X X
flow, pull
signals
(kanbans), and
paced work flow
(Heijunka)
17 Mass customization X
18 Mistake proofing X X
(Poka yoke)
20 Pareto and pie X X X
charts
21 Performance X X
management and
improvement
22 Plan–Do–Check– X X X X
Act process
23 Problem solving— X X X X
Corrective and
preventative
actions
25 Project X X X X
management
26 Quality function X X
deployment (QFD)
27 Queue time X X X X
28 Radar chart X X X
29 Rapid X
improvement
events
30 Run and X X X
control charts
31 Scatter plots X
(Continued)
33
Lean Sigma improvement phases

32 Spreadsheets X X X
and pivot tables
33 Standard work X X X
for leaders
34 Standardized work X X X
35 Statistical process X X X
controls
37 Supplier/Input > X X X
Process > Output/
Customer (SIPOC)
38 Talk time, X X X
predictive selling
or service rate
analysis
39 Value-added versus X X X
non-value-added
analysis
40 Visual controls X X
41 Visual management X X X X
and performance
scoreboards
42 Voice of the X X X
customer (VOC)
Source: Ptacek and Motwani (2011a).
Larry knew he had to do something different 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:
• High organization morale, teamwork and effort through

alignment of goals and measures, and improved leadership
• Clear communication of priorities, expectations, and results
through visual and statistical controls. The “Right” things get
done “Right”
• Clean, organized, and efficient worksite—minimal waste or
errors
• High quality outputs and results
• Smooth flow 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 profit 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 different 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.

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 differences between Lean, Six-Sigma,
and Lean Sigma? Which of these is the most powerful and why?
(Continued
)
35
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 effectively? If not, how would you
go about doing it?
5. Discuss briefly the fundamental Lean Sigma concepts. Can they
be easily applied by Larry in his organization?
6. By means of examples, briefly 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. The 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.
The walk with Larry started in his office. Larry liked his office and
thought it would impress Joe. As they walked into the office, Joe said,
“Pretty fancy! At least it looks like you’re doing well!” “Yeah Joe, this is
one of the ways service is different from manufacturing. If you had an
office this nice your customers would assume you were making too
much money. When they see my office 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 different 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. “There are a lot of areas on this ship, it’s like a
small city!” Joe said.
“I’t s not all about speed and efficiency on a cruise ship,” said Larry.
“Sometimes our customers want slow, relaxing services. They 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, “That 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 efficiency. 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?”
clarified 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 ‘al you can eat’ buffet where the customers can select what food items
they want, or we offer other locations where customers can experience full
service, ‘a la carte’ menu items. Their choice is how we know what they
want,” said Larry.
Joe elaborated, “That’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 different areas on
the ship where you provide multiple types of services. Some of them can
be easily customized and offered 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 pressures and may be engaged in marketing
campaigns in an effort 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 different 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 process, or data entry rather than direct
interaction between a service worker and a customer. Service
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 difficult 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 definition. Get it? Supplier–Input–Process–Output–
Customer = SIPOC. This defines and measures a process so we can make
improvements. ‘Defining’ and ‘Measuring’ are the first two steps in the
DMAIC improvement process,” said Joe. Joe continued, “Let’s get on
to the tour! I’ve talked enough and I’mtired of this office 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 office, Joe wrote his
observations on the white board. Joe’s notes are summarized in the
following table.
ovement ideas
ps add some visual controls to identify key files and information.
41
onboard guest services areas.
the excess and or old items are removed thereby reducing inventory and delays.
standard work method to improve monitoring and create a mobile cashier to reduce wait times and motion for customers.
he maid services, a scheduled runner could deliver new linens and supplies on
is a paced flow of Heijunka system, with the use of a runner or water spider. In the laundry area and Kanban system make sure washers and driers process the exact time, and no less or more.
(Continued
)
42
(Continued
)
Improvement ideas
Establish standard work to address social networking. Consider kanbans for supplies in the exam rooms.
ironment. Consider using statistical analysis to minimize food waste.
Consider using statistical tools to determine more precise product needs and volumes. This will reduce the waste of inventories.
rrect. This is a waste of corrections. Consider flow maps and pitch times for the standard security routes. Also, consider providing additional training to reduce errors and corrections.
Consider a visual management system to plan and schedule customers onto adventures.
LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
s waste of transportation and motion. Consider an improved standard work practice to serve customers. Also, establish a standard maintenance tool cart to take on all calls.
This is mass customization and standardized work. Develop this plan through statistical and historical data analysis.
43
Consider using kanban methods to prevent stock outs. Also, develop a plan to engage people’s thoughts and improvement ideas.
Consider a revised method of handling e-mails. Use an office/software 5S. Develop standard work for processing e-mails that will reduce printing.
Consider mistake proofing methods for the payroll and hours tracking system.
“There 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
improvements, so you have plenty of time. The first 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 find 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 office to stew.
1. Why was Joe critical of Larry’s office? Do you think the criticism
was justifiable?
2. What are some of the thoughts that come to your mind when
you see the list of the different 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. Briefly discuss the three different 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?
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 first 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 office for the next session. Joe got to
Larry’s office 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 office. 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 Thinking: 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, define what to
change to, and to define 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. The vision, mission, and values are too often either
absent entirely, or placed in plaques on the lobby wall, and never
really used to drive improvement 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. This can be done very
effectively through the vision, mission, and value documents, and
proper strategic planning. This 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 effective ways of
doing business. The 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—This is an enabler for Lean Sigma
transformations. If people don’t have the proper instruction and a
systematic 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. They lead the organization in Lean Sigma
learning. I’myour 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. These 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. This 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 first, 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. This 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
organizations to consider flow 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 difficult, if not impossible, for the well-
meaning worker. If nothing is done to break down departmental
barriers, people will become discouraged and only do enough to
get by. They will conclude that leadership really doesn’t care, and
ask, ‘If leadership doesn’t care, why should I?’ The concept of
total systems focus recog- nizes that work and value flows
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 ‘instal’ 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 efforts. It is through their efforts 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. This 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. The basic strategy is to participatively establish key
measures 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.
Things went well at first, 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 fine, thank you! Go blow your stack somewhere
else, Larry.” The 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. The 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. There 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.
The 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.”
Perceived competence
(7) Integration
(2) Denial
and refusal
(6) Realization
(5) Learning
(3) Rational
understanding
(1) Shock (4) Emotional

and surprise acceptance
Current state Time Future state
Managing change time plot.

Source: Ptacek, Coats, and Ptacek
(2012).
KEY ENABLERS 51
The 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 effort. 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). The 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. They established their mission, vision, and
goals. They reviewed the company value statement, and recommitted to
holding each other accountable to these standards. The leadership team
discussed a plan for daily work team sessions or “huddles” in each area
to discuss the day’s activities and key issues. The leadership team
prepared to meet with their respective teams to roll out the strategic
goals, and define Key Per- formance Indicators (KPIs) and develop a
system to monitor and improve their results. The 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.” The 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. This represented the current state, which was filled 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 briefly 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
implementation? 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
organization 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 fixing 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.
“They 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
improvement?” 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
profit?”
Larry replied, “Well, for profit 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

• Satisfied 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.
Increase E B I TA and ROI (Organization Survival)
Increase sales Reduce costs
Sales Increase repeat Increase Reduce Reduce Reduce

promotions and customers referrals by past labor costs materials costs operating costs
advertising customers
Eliminate and Eliminate and Eliminate and
Enjoyable Enjoyable reduce the 12 reduce the 12 reduce the 12
experience in experience in wastes wastes wastes
all areas all areas
Continuous Consume less Continuous
Superior value Superior value improvemen for the same improvemen
for experiences for experiences t in speed service levels t in speed
and and
Easy of booking Easy of booking efficiency efficiency
No hassles or No hassles or Provide the Reduce Provide the

problems problems same level of materials costs same level of
service with through service with
fewer people negotiations fewer operating
Problems Incentive to expenses
resolved quickly return
and to the
customers Provide Provide the Provide
expectation improved same level of improved
and delight service and service with service and
customer fewer materials customer
Pleasant people Problems experience with experience with
resolved quickly the same the same
and to the people operating
customers expenses
expectation
and delight
Provide
improved
Ship amenities Pleasant people service and
and options customer
experienc
e with the
same
Ship amenities materials
and options
Incentive for
referral
Joe further explained that certain lower level activities and work lead to
improving the KPI’s results at higher levels, and that this connection
defines a process of Policy Deployment that puts action to the plan. This
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’sget 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.
They 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. The 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’snot 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. The ‘fence sitters’ will then jump on-board and the
momentum will drive the improvement process forward. The ‘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. The 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. They all felt
they were doing their best. Larry mentioned that he was not dissatisfied
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. The leadership team heard comments such
as:
• That’s not fair! How else are we to do it?

• We don’t have the time to do it differently.
• Do you know a better way?
• Joe doesn’t understand our business—He’s in manufacturing!
• Things have to be done this way.
• That’s the way we’ve always done it, what’s wrong with that?
Larry explained that the idea isn’t to blame or point fingers, 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 find out what
the customers think we need to do to get better. Satisfied 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.”
57
Area Increase sales Reduce costs

Navigation Smooth seas, safe passage, Reduced overtime, less fuel,
on time to ports, less breakdowns
connection with passengers
Guest services Expectations met, room Reduced overtime, less
acceptable and as described or materials costs
better, activities as described or
better, reasonable on-board
costs
Entertainment Exciting and fun, reasonable Reduced costs for acts
costs, connection between and materials
performers and passengers, fresh
acts
Gaming Exciting and fun, easy/no Reduced overtime, increased
hassles, increase passenger stake, reduced passenger
success winnings
Housekeeping Clean rooms, relationships with Reduced overtime,
passengers, all needs meet, reduced materials and
quick response to inquiries and supplies
needs
Medical Help everyone fast, no Reduced overtime,
sea sickness—smooth reduced materials and
seas! supplies
Food services Offerings, friendliness, Reduced overtime, reduced
entertainment during materials and supplies,
service 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 Exciting options, fair prices, Reduced over time, reduced
event planning no delays on popular items materials and supplies,
reduced wastes
Operations and No problems or breakdowns, fast Reduced overtime, reduced
maintenance responses to passenger needs materials and supplies,
and requests reduced wastes
Purchasing and No stock outs, reasonable prices Reduced overtime, reduced
logistics materials and supplies,
(supply chain) reduced wastes
Human resources Support all employees, Reduced overtime, reduced
and training knowledgeable of staff, materials and supplies,
passenger questions answered reduced wastes
quickly and accurately,
customer service orientation
classes
Administration— No billing problems, smooth, Reduced overtime, reduced
Accounting accurate, and hassle-free materials and supplies,
currency exchanges, no credit reduced wastes
defaults, pay checks on time
and accurately, profitable
When the session reconvened, Larry asked the area leaders how they
could affect the CTQ factors illustrated in the CTQ diagram. The
following table summarizes the discussion on how each area could affect
the overall high-level objectives.
The next activity for the team leaders was to define 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 identified for the organization. This
would ensure that their policy deployment efforts would be consistent
and aligned to the strategic plan and goals.
The 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. The results of the work
sessions are defined 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. The responses she received were
eye-opening and proved to be quite useful.
A The 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 Buffet table is poorly organized 68
F Place settings are missing items 15
G Not enough window seats 11
H Drink refills 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. This visually showed the results of the
survey and highlighted which responses represented 80% of the
problems.
budget
t Supply
Financial focus Metric category

costs to
Organization
high-level KPI
Navigation
Supply costs to budget
Guest services
Entertainment
Revenue from adventures and events
Gaming
budget
Supply
Housekeeping
Ocean Treasure Cruise Line High-Level Key Measures
costs to
Medical
Food services
Total spending to budget
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
Supply, training, and recruiting costs to budget

logistics (supply
chain)
Human
budget
Supply
resources and
training
)
costs to
Administration—
Accounting
(Continued
Survey scores
)
Customer focus Metric category

Organization
(Continued
high-level KPI
Navigation
New offerings developed and participation rates
Guest services
Entertainment
Survey scores
Security visibility
Gaming
Survey scores
Housekeeping
Medical
Food services
Retail sales
Security
Survey scores
Adventures and
event planning
Survey scores
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Survey scores
Human resources
and training
Administration—
Survey scores
Accounting
f team members Number of team members Number of team members Number of team members Number of team members Number of team members Number of team members
Service calls made Bookings made Un- planned breakdowns Total spend Employee training hours
Productivity focus
complaints to Assignable complaints to Assignable complaints to Assignable complaints to area Assignable complaints to Assignable complaints to Assignable complaints to
area area area area area
Report- able crimes
Quality focus
peration Hours of operation On time to schedule On time to schedule Stock outs from all areas On-time payments
Delivery focus
(Continued
)
)
(Continued
People focus Metric category
Internal promotions
Training hours
Absentee- ism/ illnesses per day

Injuries
Organization
high-level KPI
Navigation
x
x
x
Guest services
x
x
x
Entertainment
x
x
x
Gaming
x
x
x
Housekeeping
x
x
x
Medical
x
x
x
Food services
x
x
x
Retail sales
x
x
x
Security
x
x
x
Adventures and
x
x
x
event planning
Operations and
x
x
x
maintenance
Purchasing and
logistics (supply
x
x
x
chain)
Human resources
x
x
x
and training
Administration
x
x
x
— Accounting
63
95% 99%
92% 100%
88%
80
60% 78%
70
60
50
32%
40
30
20
10
0
D E B A H F C G
Series1 78 68 48 28 18 15 15 11
The 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! The Pareto chart
is perfect. Now we need to plan out some next steps to take following
the Define–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 significant 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
plans or countermeasures. Larry summarized his approach with the

following chart:
High-level Lean Sigma service journey steps
Conduct current state and key performance indicator (KPI) analysis
Project selection based on current state and KPI analysis
Lean Sigma service project launch(es)
Project team(s) learn and use the DM AI C

improvement process to implement improvements.
Establish and monitor key

organizational performance One or multiple teams and projects depending on resources
measures. Take corrective,
preventative, and 1. Project teams define the project parameters
improvement actions as 2. Project teams measure process variables
needed by assigning DM AI C 3. Project teams analyze process variable data
project teams. 4. Project teams implement improvements using the
Plan-Do-Check-Act (PDCA) improvement tool.
1. PD CA 1
2. PDC A 2
3. 
4. 
5. 
6. PDC A
(n)
5. Project teams establish control processes to ensure the
improvements are maintained.
Source: Modified 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.
The Lean Sigma flow diagram indicated that an initial Lean Sigma KPI
analysis would be required to document their current state situation. The
team felt this was a good idea and agreed to get moving on this effort.
Three 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.
“This 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.
65
Sue told Larry and Joe her story so far…..

She had already formed a team and they had worked on problem
and target statements. The problem they identified was customers waited
too long to be seated. The current situation is 78 of 281 customer
survey responses, that is 32%, indicate waiting to be seated is an issue.
The team thought the expectation might be customers should not have
to wait at all. They 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.
This seemed unreasonable to a few on the team. “What about busy

times? There’s no way we can make sure customers don’t wait at all!
We can never reduce survey results to zero.” The team finally 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?”
The team worked on answering these questions and finally came up
with an operational definition for “waiting too long to be seated,” and a
simple way to collect data. The 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. The
run graph for percentage of customers waiting in excess of 30 seconds by
day looked like this:
12%
10%
Week 1 Week 2 Week 3
Monday 8 9 9 8%
Tuesday 9 8 10 6%
Wed. 7 7 8
Thurs. 7 8 8 4%
Friday 6 6 7 2%
Sat. 4 5 5
0%
Sun. 3 4 4 M T W TH F S S M T WTH F S S M T W TH F S S
The team also collected data on other variables they thought might pro-
vide insight as to why and when waiting was occurring. They 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. The 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.
No. of customers waiting by time of day

2
0
0
1
8
0
1
6
0
1
4
0
10:30 1
11:00 11:30 12:00 1:00 1:30 2:00
12:30 2
0
1
0
0
67
The 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. They’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. The
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.
The 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 “This 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 flow is
all about. An analysis using a ‘Cause-and-Effect’ diagram would be
useful as well. What do you think?” The team all agreed these were
good next steps.
The team constructed the cause-and-effect diagram to determine if
People Policy
any root causes popped out.
We don’t work Don’t clear dishes until
Not enough bus boys people leave table
as a team at busy times
Hostess can’t clear
tables
Wait staff don’t help High nover free Dirty tables take too
clear tables tur when
long to be cleaned
Not enough bus and prepped
Takes too long to carts
take dishes to kitchen Best way not documented
Lack of training Staff not trained in
Tables ar etoo
close ther best approach
Physical toge Procedures
environment
After looking at the flow of work on the floor layout and brainstorming
using the fishbone 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. The group also felt they were not working as well as
they could as a team.
The team then brainstormed some improvement ideas. The 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 first. The goal was to try out an idea quickly and cheaply
to get some data to verify if they were on the right track. The 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. They quickly put together and set up a
temporary station. The 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. This 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. They 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 first goal. The results excited everyone on the team.
Sue asked the team “What did you learn following this process?” She
wrote their responses on the team flip chart:
69
% of customers waiting more than 30

seconds
12%
10%
8%
6%
4%
2%
0%
M T WTH F S S M T WTH F S S M T WTH F S S
90
No. of customer votes on survey
80
70
60
50
40
30
20
10
0
D E B A H F C G
Series1 78 68 48 28 18 15 15 11
Series2 11 42 5 24 9 5 8 6
• 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
• The 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
“So what’s next?” asked Sue. The 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. This way
we can accomplish our ultimate goal of zero complaints.”
“Wow! That 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
benefit from this diagram? Why did Joe insist that Larry find 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 identified 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
)
71
have done differently, 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 efforts 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 first Lean Sigma work sessions in each area. Sue’s progress
continually showed the way for the other teams. The objective of the
first 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
The 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. This training effort supported the
employee training and engagement enabler as well.
The 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. The Team Charter elements listed below were
thought to be common for all teams. They 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. Benefits of Expected Outcomes: Benefits 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.
The area teams spent additional time discussing specific wastes iden-
tified 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. The 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
budget
t Supply
costs
Financial focus Metric category

to
Organization high
level KPI
Navigation
Supply costs to budget
Guest services
Entertainment
Revenue from adventures and events
Gaming
budget
Supply
Housekeeping
Ocean Treasure Cruise Line High-Level Key Measures
costs to
Medical
Food services
Total spending to budget
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
Supply, training, and recruiting costs to budget

logistics (supply
chain)
Human
budget
Supply
resources and
training
)
costs to
Administration—
Accounting
(Continued
Survey scores
)
Customer focus Metric category

Organization high
(Continued
level KPI
Navigation
Guest services
Entertainment
Survey scores
Security visibility
Gaming
Survey scores
Housekeeping
Medical
Food services
Retail sales
Security
Survey scores
Adventures and
event planning
Survey scores
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Survey scores
Human
resources and
training
Administration—
Survey scores
Accounting
f team members Number of team members Number of team members Number of team members Number of team members Number of team members Number of team members
Service calls made Bookings made Un- planned breakdowns Total spend Employee training hours
Productivity focus
complaints to Assignable complaints to Assignable complaints to Assignable complaints to area Assignable complaints to Assignable complaints to Assignable complaints to
area area area area area
Report- able crimes
Quality focus
peration Hours of operation On time to schedule On time to schedule Stock outs from all areas On-time payments
Delivery focus
(Continued
)
)
(Continued
People focus Metric category
Internal promotions
Training hours
Absentee- ism/ illnesses per day

Injuries
Organization high
level KPI
Untargeted Improvement
Targeted Improvement
Navigation
x
x
x
Guest services
x
x
x
Entertainment
x
x
x
Gaming
x
x
x
Housekeeping
x
x
x
Medical
x
x
x
Food services
x
x
x
Retail sales
x
x
x
Security
x
x
x
Adventures and
x
x
x
event planning
Operations and
x
x
x
maintenance
Purchasing and
logistics (supply
x
x
x
chain)
Human
resources and
x
x
x
training
Administration
x
x
x
— Accounting
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. The following table outlines the critical few KPIs selected
Monthly Highlights Report

Section 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 specific.
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 identified by the area leaders.
The 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 provide 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 effectively 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 effectiveness.
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. The Work Session Record
should be initiated prior to the meeting and include updates and
status of actions items, if appropriate. The teams used the Work
Session Record below as a standardized guide to follow as a work
session is scheduled and conducted.
The following checklists will assist the work session leaders to pre-
pare and lead effective 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)
81
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.
(Continued)
7. Try not to allow interruptions.
8. Avoid hidden agendas.
Work Session (Meeting) Leading and Facilitation Checklist
9. Be prepared with information, copies, and so forth.

10.Welcome participants and call the session to order.
11.Restate the objective of the work session.
12.Ask for questions.
13.Explain how the session outcomes will be recorded and tracked.
14.Keep to the schedule. Ask permission to go over your scheduled
ending time.
15.Invite those who haven’t spoken to contribute.
16.Gain closure on each issue as you sense a consensus.
17.Document decisions, deadlines, action items, and
responsibilities.
18. Summarize the outcomes.
19. Communicate next steps.
20. 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.
83
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.
They 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- fied
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.
The 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

The 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 influence over. They also found that their on time to
port performance was related to weather conditions as well. The team
discussed what they could do to improve these situations in spite of
their lack of control over the weather. Improvement ideas that were
identified centered around improving communications and reaction to
the weather conditions. The team also agreed with waste walk
observations that the helm looked a bit disorganized, which caused a
waste of motion and delay while crew members searched for key items
and information. This was made even worse when bad weather quickly
approached.
The 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. The
team agreed to implement the 5Ss in their areas. They sorted (S1) items
out and only kept what was needed. They found many old, worn, and
tat- tered maps that were no longer in use. The captain had his crew
sign these and gave these to the sales team who would frame them and
offer them for sale as cruise mementos in the ship’s gift shops. The maps
almost looked like old treasure maps—a great new offering for the retail
sales team! The 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. The final step for the team’s 5S was to determine a way to sustain
(S5) the gains. The captain offered to perform an audit of sorts on his
daily walk through.
Twice a day the captain walked the ship to observe all areas of
operation. During his walks he would interact with the crew and
passengers. The purpose of this walk through was to connect with the
passengers and crew to communicate critical information about the
voyage. The crew later developed visual control boards in each area to
streamline the communication of information. This 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. The visual control and communication boards helped him
to gain more time to connect with the passengers or to address
adverse weather conditions with the crew.
The 5S effort 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. The 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
85
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

The 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. The
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 specific schedule for activities.
This was great information and it had never been broken down like
this. The 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. This standard
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.
They 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.
The satisfied customer might not fill out the survey, or say anything
at all. The 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. The team hoped for the latter.
The improvement ideas were ways to make the survey data collec-
tion more active. The team brainstormed several ways to do this and
completed several different 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. The
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.
The new method seemed to capture the information from the upset
customers 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 office. The improvement from the 5S process
allowed the team to better serve the customers quickly and efficiently.
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. This
further sped the process of helping the guests, by allowing them to
find the answers to their questions through visual communications.
This also served to reduce the amount of printing the group did in the
office.
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 <2 minutes average wait
time time
Entertainment
The vital few KPIs for the Entertainment team were customer
complaints and passenger contact hours. There were few complaints
for this team so the team focused on developing means to increase
their customer contact time. It had been previously identified that the
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passengers like to meet and greet the performers of the many acts on
the cruise. The entertainers already provided some back stage passes so
they needed to come up with something fresh and exciting. The team
brainstormed ways to increase their passenger contact time and meet
the current schedules for performances and personal time. The per-
formers’ chief complaint was that to increase passenger contact time
would just increase the hours they needed to work. They needed to get
creative. The idea is to contact more passengers with the same amount
of time committed.
The team decided to address this improvement opportunity in a
couple ways. Some of the acts were able to take their performances out
onto the different decks of the ship to provide mini-impromptu
performances. These 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-
nificant 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 effort
to keep things better organized. They included some simple visual con-
trols to indicate the location of the costumes for each act and scene. This
helped the team improve the flow 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 flow
Increased show attendance and sales!
Gaming—Onboard casino
The 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. The team conducted an analysis of the customer complaints
and available survey data/measures. They developed check sheets to
organize the data and then created Pareto charts to determine the most
critical areas to address. They found that one of the primary complaints
was having to wait in line for money exchange or a table. The 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. The team decided to conduct additional studies to
determine when the waiting occurred and how long people had to wait.
The team collected a participation count every hour for several
cruises of different lengths. The data showed a pattern for certain days
and times of day, on different cruise lengths, and destinations. From
these patterns, the team developed a better schedule for staffing based
on projected customer demand. This 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 flow smoother.
They separated the lines by transaction size, which was found to cor-
relate with transaction time. They also implemented a “roving cashier”
to handle smaller cash exchanges. This new standard process and
scheduling technique significantly 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!
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Housekeeping—Maid Services and Laundry

The vital few KPIs for the Housekeeping team were customer complaints
and percentage of guest rooms serviced by 12 noon. The 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. The 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. The
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.
The 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. The team developed a signaling system or
kanban so that guests could signal when their rooms were available for
cleaning. This 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. This 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. The
team used check sheets and a standard work breakdown chart to
document and analyze the laundry area. The 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 significant laundry demands. The
improvement team developed and implemented a heijunka, or paced
laundry processing plan, which enabled both the food services and the
housekeeping groups to be serviced simultaneously. The heijunka
included visual control signals, or kanbans, to pace the work through
the area. The laundry area workers had to produce to the visual signals
and pace the work through for each group needing services. This helped
the housekeeping group reduce the waiting time to service the guest
rooms.
The 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. This 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

The vital few KPIs for the Medical team were customer complaints and
total hours of operation. The primary complaints were illnesses due to
sea sickness, something the team felt they had little influence over, and
their services not being available when needed. The team thought they
noticed a correlation between the number of complaints and the clinic’s
daily operating hours. They constructed a scatter diagram to analyze the
improvement opportunities and issues. The two KPIs did show a positive
correlation: the more hours of operation, the fewer complaints there
were regarding service.
The teams brainstormed for ideas on how to provide improved hours
of operation. They struggled with the ability to predict when people
would need them. They already had an “on call” procedure in place but
they still saw the need to make improvements. The 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. Through data collection
and analysis, the team found a pattern evident when guests needed
services. They 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.
The new scheduling technique not only helped the guests, it also
helped the team as they modified their work schedules to better fit their
needs. Through the brainstorming, the team also addressed something
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that, on the surface, they thought they had little control of—sea
sickness. The team ran some PDCA experiments regarding the proactive
use and availability of sea sickness medication and the most effective
techniques for administering the medication. They established a mini-
training session and note card for each guest and made it clear how to
get the help they needed. They 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 <6 minutes average wait
time 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
The vital few KPIs for the Food Services team were customer com-
plaints and food costs to budget. The team compiled the complaint
data with a check sheet and developed a Pareto chart for analysis of
the guest complaints. They found that the primary complaints for
food services were (a) having to wait for item and (b) running out of
an item—shortages. The 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. The team also knew about the tremendous waste of food
items on a cruise ship. The lavish and extravagant food displays were
something nearly everyone remembered and spoke about after their
cruise experience. The challenge for the team was to meet the guests’
high expectations but also to minimize wastes. They did their best to
manage this every day.
The team decided to do some data collection and monitoring. They
knew certain food items were more popular than the others, and they
knew that some food items were discarded more than others. They 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. They made the appropriate adjustments
to their requisitions and order quantities. The 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 buffets,
the team was using a simple verbal communication system where the
servers would tell the chefs what items were running low. This method
was good but it did not consider the different food preparation times in
the kitchens. The new kanban trigger system identified three different
levels of items based on preparation time. The longer the item took to
prepare, the more advanced notice the chiefs needed to ensure that no
one had to wait. The more experienced servers were already doing this,
but now the new servers were able to do the right thing sooner due to
this improvement.
This 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. This 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
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Reductions in guest wait time frustration

Reduction in crisis management in the kitchens—reduced stress
Retail Sales—Multiple Onboard Stores

The vital few KPIs for the Retail Sales team were customer complaints
and new offerings provided. The team compiled the complaint data with
a check sheet and constructed a Pareto chart to highlight the most
significant reasons for complaints. They found that running out of hot
selling items was the primary complaint. The team was never sure how
many items would sell on any particular voyage, or what the “hot” item
would be. The team conducted a deeper analysis of the historical sales
data by voyage length and ports visited. The team also began to keep a
log recording each time they ran out of an item, what the item was,
and how many sales dollars were lost due to the shortage. This 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. This capability enabled the team to reduce
inventories and the waste of throwing outdated shirts away. This concept
allowed the team to offer an entirely new lineup of tee shirts and to cus-
tomize them to the customer’s requests. This was a hit with the
customers and tee shirt sales increased over 20 percent!
The 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. The
area leader had an idea to offer a reproduction of the old maps at a
lower price point. The original maps, considered higher value items,
could then be offered in higher end boutiques on the deck of the ship.
This 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 offered
Reduced obsolete inventory and associated costs
Security—Onboard Police
The vital few KPIs for the Security team were customer complaints and
reportable onboard crimes. The 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. The team initially pushed
back on this complaint 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. The 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.
The data showed this clearly and was compelling. The 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. The team brainstormed and identi-
fied two primary improvement items. First, while at embarkation and
ports of call, additional security would be assigned to entry and exit
95
points. Second, for the theme cruises with the higher incidence rates a
greater visible presence of security personnel would be provided at
embarkation and at all times during the passage. This 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. This would
inform and assure guests that a security person was nearby and
scheduled to be present at specific 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. The 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. The
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. The 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 efficiency of security personnel
Fewer errors and false calls
Adventures and Event Planning

The vital few KPIs for the Adventures and Event Planning team were
customer complaints and participation rates. The 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. The 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
declining steadily.
To better understand the situation, the team mapped out the process
for each adventure, noting the wait times and points on the map. The
team also conducted extensive data gathering directly from adventure
participants in interviews conducted on adventure days. The team was a
bit surprised to find that it was not hard to find 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 staffed or equipped to handle the
volume of adventurers all ready to go at about the same time. The 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. The scheduled boarding flow and signaling system elimi-
nated the line of people in the hallway and made the experience go
more smoothly for everyone. They even established a VIP area for
special guests who were willing to pay for an advanced seating
arrangement. This is a form of mass customization to meet the needs of
customers with varying expectations.
The team went a step further and constructed an adventure
demand Pareto chart which detailed the demand for each adventure
offered 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
offices waiting for people to come to them to sign up. By taking
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the adventures sign up to the passengers and improving the flow 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

The vital few KPIs for the Operation and Maintenance team were
customer complaints and unplanned breakdowns. The Operations and
Maintenance team had an idea what the biggest customer complaint was
before they did the Pareto chart. They 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. The guests expected everything to be working all the time.
Imagine that! The team knew too well that customers did not like to
wait while regular cleanings and maintenance took place. After all, the
passengers were all on holiday, they didn’t want to be bothered with
breakdowns and faulty equipment.
The Pareto chart showed that the areas of biggest concern were the
operation of public rest rooms and inefficient 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. They 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.
The 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. These were
prioritized, with the aid of data from the Pareto charts on customer
complaints and unplanned breakdown. The team developed a regular
schedule for preventative maintenance on the critical equipment and
facilities. They also developed a critical spares list and key tools to have on
hand. They 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. The 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. This 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. The planned maintenance schedule,
which used to be driven by a computer schedule, now would be
managed with a simple flow—kanban and paced work standard work
plan. The 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. This 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 <1 unplanned breakdown
breakdowns per voyage
per voyage
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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)
The vital few KPIs for the Purchasing and Logistics (Supply Chain)
team were customer complaints and stock outs in all areas. The team
used a Pareto chart analysis to better understand where the biggest
stock-out problems were coming from. They developed a Pareto chart,
first by area and then by the item they ran out of. They 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. The team worked with each of the troubled areas to study
the demand cycles with Demand Analysis tools. They then established
and implemented a flow kanban replenishment plan. The teams
worked jointly through several PDCA improvement cycles to determine
the
proper signal size for each of the critical items.
The Purchasing and Logistics team also worked with the suppliers to
develop and support their own flow—kanban replenishment systems to
support the cruise line. This 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 effort.
The team also developed a new means of communicating the needs
to the supply base which used less printed materials and correspondence.
This reduced the overall use of supplies for the cruise line and the
Before Improvements After Improvements suppliers.
At the next report-out
>6 complaints session, the<1
per voyage Purchasing
complaintand
per Logistics
voyage team
reported 32thestock
following results.
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

The 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. The 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.
The team developed a training curriculum that would address the
primary areas of customer complaints. The 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.
The HR team also developed a comprehensive training matrix to
keep track of the number of training hours people participated in. This
helped leaders to better understand where they were falling behind and
what sessions might be of greatest value. To display this data, the HR
team developed an employee kiosk system where this information
could be accessed by all. At first the information on the kiosk was
overwhelming, but after the team performed a 5S on the computer
filing system the key training documents were easier to find.
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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 effectiveness as determined
through customer surveys
Reduced spending for training
Administration and Accounting—Payroll

and Accounting
The vital few KPIs for the Administration and Accounting team were
customer 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 flow 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 purchasing group to help negotiate different terms of
payment on kanban items. The team also looked internally at why the
accounts payable system took too long.
They mapped out the process flow and found a great deal of redun-
dancy and waste. They were able to make some streamlining improve-
ments to improve overall flow of information through their area. The
biggest improvement was to establish standard work and a paced flow
process in the office. This ensured that something hitting an accountant’s
in-basket today got dealt with in a standard or specified period of time.
Nothing could slip through the cracks of the new paced flow kanban
system.
Other issues discovered by the team were those due to their slow pay-
ments: they were not taking advantage of supplier discounts. This was
fixed quickly by the new flow methods and within a couple of weeks
they
were taking advantage of the key discounts. The 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 files were so cluttered and stored in so many ways that by simply
standardi- zing the rules for the team they could now find things easier
online, and process payments quicker.
Many of the customer complaints were due to errors. The 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 filing system. People’s work got easier and they
were less prone to errors. They also found the time to develop and
implement some mistake-proofing improvements for the most critical
errors. The 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
The above results for all the teams took nearly a year to complete.
Over that time the teams had completed over 90 individual PDCA
improvement trials and had many of them work very well and become
the new standard. Customer complaints were definitely on the decline
and the teams were starting to understand how to make improvements
on their own. Things were looking up. Due to the teams’ many sales-
generating and cost-saving ideas, the financials were starting to turn
around as well.
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At least revenues were not shrinking, and along with that profitability
was increasing! The 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 <3 reportable crimes per
voyage 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 profitable Profitable
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.
That’s what’s next.”
Joe replied, “That’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’vedone 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. There 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.
“That’s the idea. That’s what we do. The 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 identified 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)
105
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. The cruise line has made significant 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. There had been many ups
and downs during the improvement initiatives, but overall the teams
were really making a positive impact. The teams were getting good at
identifying current state data, developing process flow 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.
This map is in a cause and effect 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. They called this
the Future State Culture and used it as a vision for them to achieve
through the continuous improvement (CI) efforts. The following
future state culture map was developed by Larry’s area leads. They all
agreed to try to live up to the vision. The implementation of the
improvement teams went a long way toward helping the teams
achieve the future state culture.
Current state
culture
Manpower Methods
Hard workers No improvements accepted
High turnover No innovation
Low morale Going through the motions
Perception that leadership does Employee or cruise line
not care focused methods
Frustrated
No team work
No fun
Materials Machines
Old materials Old and outdated ship amenities
Making due with what we have Frequent breakdowns
Cost cutting leads to poor service Poor maintenance
Wasteful Not enough equipment for all
Frequent stock outs leads to poor customers
service
Measures Mother nature

No measures No one cleans up after themselves
Only negative feedback from customers Messy areas of the ship take a while to clean up
Only hear about problems Some messy areas never get cleaned up
The weather makes things messy all the time
Future state
culture
Manpower Methods
Hard workers Robust improvement methods being applied
Low turnover Innovative new ways of thinking encouraged
High morale Exciting new methods
Perception Customer focused methods
that leaders
care
Team work
Fun!
Materials Machines
Updated materials Old and outdated ship amenities
Proactively get what we need Frequent breakdowns
Cost reductions through Poor maintenance
continuous improvements
Rarely stock out Not enough equipment for all
Not customers
wasteful
“Green”
Measures Mother nature
Key measure clearly posted and fair Everyone cleans up after themselves Messy
Get positive and negative feedback from customers areas of the ship get cleaned up fast All
Hear about problems and successes messy areas get cleaned up fast
The weather makes things messy all the
time
Joe had assisted Larry with this current state to future state culture
mapping process to help Larry’s area leaders understand where they
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 different than my folks at the
factory. Your people are constantly interacting with customers and I can
tell they’ve had some specific 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.” The two brothers took a walk to the HR
offices to meet with Mary.
At the HR offices Mary outlined their customer service training
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. The 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 different meaning than
an employee. A cast member has to be able to play a role. The 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 five key training classes. Every new
employee receives the following courses over their first 6 weeks of being
hired or cast. Our programs are:
Basic Training Programs

• Orientation
• Lean Sigma Basics—Ptacek & Motwani
• The 7 Habits of Highly Effective People—Steven Covey
• Developing Customer Loyalty—Jeffrey Gitomer
• FISH! Philosophy—Stephen C. Lundin, PhD, Harry Paul,
John Christensen
The orientation was not unlike any organization’s orientation train-

ing. This 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.
“The ‘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 Things First
4. Think Win/Win
5. Seek First to Understand, Then to Be Understood
6. Synergize
7. Sharpen the Saw (Continue learning and teaching)
The objective of this training is to help people develop a success

habit for their personal and professional lives. These habits are described
as ‘expected behaviors’ of cast members and are reviewed during their
performance appraisals.
The Developing Customer Loyalty training is used to help cast
members to help customers more effectively, no matter what the need.
This training teaches specific 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
111
and time again, and refer our cruise line to other people. One critical
technique taught in class is the 3Rs + 1. This 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.
This 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. The video
illustrates the power of four simple principles of customer service and
dealing with people. The FISH philosophies are as follows:
1. Play
2. Be There
3. Make Their Day
4. Choose Your Attitude
The ‘Paly’ principle shows people how to make work fun for the
customer and the worker. Several specific methods are developed during
the training. The ‘Be There’ principle helps employees connect with
customers and people in a more meaningful way. It helps people be
more sincere in their efforts to help people. ‘Make Their 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. This fits 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 difficult than others, but that’s what we
expect.’”
“The training doesn’t stop there,” Mary explained. “Every employee
continues to receive refresher training on these topics on a regular basis.
This supports the future state culture targets. It all fits 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
)
113
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. Define 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 difficult than others, but that’s what we expect.” What can
service leaders learn from this quote?
7. The 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
profitable. 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). The 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
housekeeping and cleanliness, everyone cried, ‘We work on these
floors, 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 floor. This really got the teams fired-up and
we had a lot of fun with the challenge. In fact when the managers were
eating off the floor, a local newspaper reported on it and everyone
enjoyed seeing an article about how clean our company was. That 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
winning 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 competition to get some excitement back into the
improvement effort,” explained Joe.
“When you’re managing change in an organization, things can get
difficult,” continued Joe. Joe sketched the following illustration on a
napkin and explained, “You see, at first, 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. They
start to see some quick hitting improvements and are optimistic. Then,
when the ‘low hanging fruit’ or easy projects have been implemented,
things get tougher, and improvements are harder to find. 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.
Managing
change Organizational stress
Extension
st
Performance Cre
Pride
curve Focus ownership
Plateau energy confidence
deter
Optimistic minati
concerned on
Slide
skeptical
C lim b
Quick hit Pessimism
performance doubtful Helpful
improvements anxious determined
probing
Pit
Fearful Management must

confused provide systems and
Employees need to withdrawn
see management training
commitment
The key is to strive for a short duration in the high stress zone.
If managers and leaders redouble their efforts and commitments at this

point, things will start to turn around and many more significant gains
will occur. The 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, “That’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. They
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. This 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. This is key to sustaining the
effort. 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. This will let
the teams see that these are important to you and to their success,” Joe
added.
“Boy! sustaining the effort 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 ‘The 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 identified 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- flicts? 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 difficult 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 five things that you would
empha- size in order to sustain the success and momentum
achieved from implementing Lean Sigma?
References
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Others Don’t. New York, NY: Harper Business.
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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). The Toyota Way: 14 Management Principles from the World’s
Greatest Manufacturer. New York, NY: McGraw-Hill.
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Guide to Applying Lean Six Sigma and Emerging Technologies to Leadership and
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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). The 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 Thinking: Banish Waste and Create
Wealth in Your Organization. New York: Simon and Schuster.
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Customers Can Create Value And Wealth Together. Free Press, New York, NY.
Index
A Food Services team, 91–93
Administration and Accounting team, Future state cultural assessment
101–102 diagram, 107–108
Adventures and Event Planning team,
95–97 G
Analyze phase, 30 Gaming team, 88
Area team charter commonalities, 74 Gemba Walk, 8–10
Area team work session objective, Guest Services group, 85–86
73
H
C ‘7 habits’ training, 110
Cause-and-Effect diagram, 67–68 Housekeeping team, 89–90
Continuous improvement (CI) Human Resources (HR) and
method. See Lean Six Sigma Training team, 100–101
Control phase, 30
Correction waste, I
23, 26 Critical To Improve phase, 30
Quality (CTQ) Inventory waste, 22, 25
diagram,
54 K
Cruise line Key enablers, Lean Sigma
departments, 38, 41–43 employee involvement, 48
Cultural assessment, leadership, 46
107–108 Current state cultural perseverance and commitment,
assessment 48–49
diagram, 107– policy deployment and goal
108 alignment, 48
process-and results-focused,
D 47–48
Daily huddle, resource commitment, 46–47 total
organization, 8 Define system/value stream focus, 48
phase, 30 training and education, 47
Developing Customer Loyalty Key performance indicators (KPIs)
training, 110–111 Administration and Accounting
Dirty Dozen. See Twelve forms team, 101–102
of waste Adventures and Event Planning
DMAIC alphabetical tool application team, 95–97
chart, 31–33 Entertainment team, 86–87
DMAIC process, 30 Food Services team, 91–93
Gaming team, 88
E Guest Services group, 85–86
Employee involvement, 48 high-level key measures, 58–62
Entertainment team, 86–87 Housekeeping team, 89–90
Environmental waste, 24, 27
Expertise waste, 22, 25
124 INDEX
Human Resources and Training training and education, 47

team, 100–101 methods
Medical Services team, 90–91 leadership level, 30
Navigation-Captain and Crew project/systems/team
team, 83–85 level, 30
Operation and Maintenance worker level, 30–31
team, 97–99 organization perspectives-case
Purchasing and Logistics team, study, 1–3
99–100 outcomes, 33–34
Retail Sales team, 93–94 overview session in organization,
Security team, 94–95 10 philosophy, 19
KPIs. See Key performance indicators principles, 19
(KPIs) scoreboarding issues,
5–8 tools
L alphabetical application chart,
Leadership Lean Sigma, 46 31–33
Leadership team mass customization, 30
cause-and-effect diagram, uses of, 17
67–68 Lean transformation
comments, 56 leadership
CTQ diagram, 55 level, 30
flip chart, 68–70 project/syste
high-level objectives, 57 ms/team level, 30
key performance indicators, 58–62 worker level,
Lean Sigma flow diagram, 63–66 30–31
Pareto chart, 63
strategies, 51 M
Lean Mass
goal, 14 customization, 39
value stream maps, 14 Measurable
Lean Sigma outcomes, 40
building blocks, Measure phase,
18 concepts 30
non-value Medical Services team,
adding, 20–21 90–91 Motion waste, 22,
value adding, 25–26
20
cruise line departments, 38, N
41–43 cruise line issues, 10 Navigation-Captain and Crew,
key enablers 83–85 Non-value-adding concept,
employee involvement, 48 20–21.
leadership, 46 See also Twelve forms of
perseverance and commitment, waste
48–49
policy deployment and goal O
alignment, 48 Objective outcomes, 40
process-and results-focused, Onboard Medical Center, 90–
47–48 91
resource commitment, 46–47 Operation and Maintenance
total system/value stream team, 97–99
focus, 48 Organization
daily huddle, 8
Lean Sigma overview session, 10
INDEX 125
P T
Pareto chart, 63 Total Quality Management
Perseverance and commitment Lean (TQM), 13
Sigma, 48–49 Total system focus, 48
Plan–Do–Check–Act (PDCA) TQM. See Total
experiments, 8, 21, 68, 83, Quality
86, 88, 91, 107 Management
Policy deployment, 48 Training and education Lean
Process-and results-focused Lean Sigma, 47
Sigma, 47–48 Transport
Purchasing and Logistics team, waste, 22, 25 Twelve
99–100 forms of waste
correction,
R 23, 26
Resource commitment, 46–47 environment
Retail Sales team, 93–94 al, 24, 27
expertise, 22,
S 25
Scoreboarding, 5–8 inventory,
Security team, 94–95 22, 25
Service business motion, 22, 25–26
categories overloading/overburdening,
service delivered to external 23, 27
customer, 39 overprocessing, 23,
service process internal to
U 26
organization, 40 overproduction,
Unevenness waste, 23, 27 22,
service process used by external 24
customer, 39–40 social, 24, 27–28
objective outcomes, 40 V
transport, 22, 25
subjective outcomes, 40 Value adding concept, 20
unevenness, 23, 27
SIPOC. See Suppler–Input–Process– Value stream focus, 48
waiting, 23, 26–27
Output–Customer Value stream maps, 14
Six-Sigma (6)
definition, 15 W
goal of, 16 Waste of waiting, 23, 26–27
in organization, 16 Work session meeting, 80, 82
Social waste, 24, 27–28 Work session leading and facilitation
Subjective outcomes, 40 checklist, 82
Suppler–Input–Process–Output– Work session prep checklist, 80, 82
Customer (SIPOC), 40 Work session record, 81
OTHER TITLES IN OUR SERVICE SYSTEMS AND
INNOVATIONS IN BUSINESS AND SOCIETY
COLLECTION
Jim Spohrer, IBM and Haluk Demirkan, Arizona State University, Collection
Editors
• Service Process Design for Value Co-Creation by Joey Field, due out in December
2012
TITLES IN OUR INDUSTRY PROFILES COLLECTION

Donald N. Stengel, California State University, Editor
• A Proﬁle of the Electric Power Industry: Facing the Challenges of the 21st Century
by Charles E. Clark, Jr., due out in October 2012
• A Proﬁle of the Steel Industry: Global Reinvention for a New Economy by Peter Warrian,
due out in November 2012
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Lean Sigma Methods and Tools for
Service Organizations
The Story of a Cruise Line
Transformation
Jaideep Motwani, Rob Ptacek, and Richard
Fleming
Every business aspires to be competi ti ve a n d profi table i n its m arket. To do
this, a n organizati on needs to off er c ustom ers value propositi ons, w h i c h
m a y be m anife st i n the product it produces or the service it provides. T h i s
i n turn w ill create custom er loyalty a n d growth.
T he re are a n um be r of organizati onal philosophies a n d strategies used
by businesses to help a c c o m pl is h this goal, a m o n g w h i c h are the concepts
of S i x S i g m a a n d Lean. T h i s book proposes to integrate the best practi ces
from each of these philosophies a n d apply t h e m to a custom er-focused
organizati on—a cruise s hi p— w h os e overriding m i s s i o n is to deliver supe-
rior service to its custom ers. T h e authors dem onstrate i n this book h o w
key c om po nents of both S i x S i g m a a n d L e a n— s uc h a s identi f ying a n d
rem oving defects, elim inati on of waste, m etrics, speed of delivery, a n d
the se am less integrati on of these concepts a n d practi ces throug hout the
operati on—ser ve to e nhance the k i n d of value propositi ons that custom ers
recog nize a n d that allow a n organizati on to be successful.
Jaideep Motwani, PhD, is c hairperson a n d professor of m a n a g e m e n t at

S e i d m a n College of Business, Grand Valley State University, since 2000. H e
received hi s P h D i n Operati ons Managem ent from the University of North
Texas. Dr. Motwani ser ves a s editor for two internati onal journals a n d is on
the editorial board of 12 presti gious nati onal a n d internati onal journals.
Rob Ptacek is president a n d C EO of Com peti ti ve Edge Training &

C o ns ult- ing & Partner, Global L e a n Insti tute, L LC . H e holds a B S i n
Metallurgical Engineering from Michigan Technological University,
H oug hton, MI, a n d a Masters of Managem ent from A q u i n a s College, Grand
Rapids, MI. Mr. Ptacek currently instructs i n the L E A N C h a m p i o n
certi fi cati on program at Grand Ra pids C o m m u n i t y College.
Richard Fleming is president a n d C EO of C o nti nuous Im prove m ent (CI)

Associates and, for m ore t ha n 20 years, h a s provided hundre ds of m a n u -
facturing c om p a ni e s a n d service fi rm s w i t h lean enterprise transform ati on
consulti ng , lean culture developm ent training, a n d opportunity assess-
m ents. Mr. F l em in g holds a m ast ers i n Mechanical Eng ine ering from the
University of Michigan a n d h a s served a s lean m anufa ct uring eng ineering
m a na g e r for the Industrial Technolog y Insti tute.
Service Systems and Innovations

in Business and Society Collection
Jim Spohrer and Haluk Demirkan,
Editors
ISBN:
www.businessexpertpress.com 1 7
978-1-
60649-

Lean Sigma Methods and Tools For Service Organizations: The Story of A Cruise Line Transformation

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The Service Systems and Innovations

in Business and Society Collection

Jaideep Motwani, Rob Ptacek,

First published in 2012 by

ISBN-13: 978-1-60649-407-3 (paperback)

ISBN-13: 978-1-60649-408-0 (e-book)

Business Expert Press Service Systems and Innovations in Business and

Collection ISSN: forthcoming (print)

Cover design by Jonathan Pennell

First edition: 2012

Printed in the United States of America.

The Lean Sigma for Service

Larry had always thought CI was easier for a manufacturer as

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

Chapter 1—Discussion Questions

appear to take it to the shipping area where final shipping paperwork

• How many parts have been produced?

Every leader in the organization can get this information just by

• A cruise line is completely different from a manufacturing

Then Larry remembered what he’d said to Joe at the picnic,

Chapter 2—Discussion Questions

Lean Sigma Methods

1. Lean Sigma is the most successful continuous improvement (CI)

Larry thought to himself how smoothly things worked at DR Prod-

What is Lean, Six-Sigma, and Lean Sigma?

Pre-application Application Approval/title Closing prep

Like Lean, Six-Sigma (or 6) is another approach that an organiza-

–6 –5 –4–3–2 –1 0 1 2 3 4 5 6

The goal of Six-Sigma is to eliminate defects and minimize variability. In

Source: Ptacek and Motwani (2011a).

Six-Sigma forces organizations to pursue perfection by asking if 99%

99% Good (3.8 ) 99.99966% Good (6)

Source: Ptacek and Motwani

Lean Sigma is the most powerful improvement technique as it

• improve customer satisfaction and total customer experience;

Lean Sigma is truly a compilation of world-class CI practices.

Conceptually, these building blocks are illustrated in the follow- ing

Delighted customers and profitable growth

Best quality, lowest costs, fastest delivery, and

Employee balance chart

Proven methodology Voice of the customer

Common goal of Six-Sigma Zero defects

Lean Sigma principles

Lean Sigma philosophies

* Not all inclusive of Lean Sigma tools

Lean Sigma Philosophies and Principles

• Continuous improvement in processes and results—Do not

Lean Sigma Concepts

The Lean Sigma concepts are as follows:

• Add value and remove waste

The 12 categories of waste are as follows:

1. Overproduction—Making more than is needed.

• PDCA process for implementing improvements. This is

Adding value through waste identification and elimination is a funda-

Twelve Forms of Waste—The Dirty Dozen

The Dirty Dozen: 12 Forms of Waste

Expertise Under-utilization • Workloads not • Standard work

Transport Any transport of • Delivering • 5S

Inventory Excessive piles of • Files • 5S

Motion Any movement • Hand carrying • Standard work

Overprocessing Putting more work • Duplicate reports • Standard work

Waiting Waiting for • Excessive • Value stream

Overload Overburdening or • An 18-person bus • Standard work