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Fleet Operations

Lean and Six Sigma, Part Two

Big Truck TV

In this, the second of a two-part video interview, Matt Coleman, Project Manager at TMW Systems, explains Six Sigma as a management strategy that focuses on a process's "variation". To make the Six Sigma approach more easily understood, Matt uses Domino Pizza's "30-minutes or Free" pledge as an example of a process that, on the surface, could appear to be successful when it reality there's room for improvement.

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Any words of wisdom before I try to find the right approach for our company?

Whatever continuous improvement tool you decide to go with, remember this – it's a journey, a mindset; it's all about getting your business processes right first. I focused on Lean and Six Sigma, but there a lot of different continuous improvement tools out there. I think that if I had impart wisdom on a company, I would say the first order of business is to look hard at your processes before you go out and invest in a technology solution. Technology is great, but you can't apply it in a vacuum. If you layer it into your existing processes without first taking the time to examine your business processes, you aren't going to get the results you're hoping for.With any type of project, whether it's a new software implementation or a new hardware technology, always look first at your business processes and then look to the technology to enable whatever improvements you want to make. And even if you aren't looking at implementing a new technology, or you have already implemented a new system, you can always go back on the business side and improve your processes. By eliminating waste and streamlining your processes, you'll improve your bottom line or customer satisfaction and then ultimately, you'll free up people within the organization to do more value-added activities.And actually, it will help give you a blueprint so that when you do go to adopt a new technology, you'll know where you need to embrace the technology to help get you from point A to point B more efficiently.

Could you give me an example of a Six Sigma analysis that pertains specifically to the trucking industry?

To give you an analogy that would pertain to the trucking industry, you could look at your on time delivery results. So what you would do in Six Sigma is, for example, gather all the delivery data you have for one of your large clients and plot, or map out the distribution of those deliveries from statistical standpoint. This will allow you to see pretty quickly how well you're doing, and you can then analyze those results to look for ways to make improvements on those times. Again, the goal is to reduce the variation because at the end of the day the customer cares less about the average than they do the variation. It's the variation that impacts them. For example, what's better for your customer - to have 20% of their shipments delivered early and 5% of their shipments delivered late, or to have 5% of their shipments delivered early and 1% of their shipments delivered late? Reducing the variation makes you better able to deliver a consistent product to your customers, because they won't remember the 20% of the times you were early, but you can bet the farm they'll remember the 5% of the times you were late - that's when they get emotional.

Can you give me a real-world example of a Six Sigma analysis?

One example that comes to mind is Domino's Pizza and their 30-minute delivery guarantee. In this particular case, their intent is to appeal to customers that want prompt, on-time delivery. Let's say you took a sample of Domino's delivery times and they averaged 23 minutes. You might think that's a great result because it falls well within the 30-minute time requirement, but that might not be telling you the whole story. With Six Sigma, you would look at that average, but you would also look at the variation within that average. For example, they may have had some deliveries that were 10 minutes and some that were 40 minutes. All those deliveries that took longer than 30 minutes are not good for business, so what Six Sigma attempts to do is shrink what is referred to as "normal distribution" and center it closer in order to get more predictable results. Ultimately, this would allow Domino's to deliver more regularly on their 30-minute delivery promise.

Can you give me a brief explanation of what Six Sigma is?

On the Six Sigma side, it starts with the company's understanding their customer's needs and putting critical quality characteristics around that need so they understand what is tolerable to them. And then within that, they examine the process and try to improve it in terms of variation; try to shrink that variation so there are fewer issues around customer service.

Do you sometimes find companies relying too heavily on technology to fix all their problems, when really it's just their flawed business processes that are to blame?

Absolutely. All too often, companies will lead with technology, with business process improvements and optimization taking a secondary role, when in reality it should be the reverse of that.

What is the goal of continuous improvement activities?

The ultimate goal of continuous improvement activities, such as Lean and Six Sigma, is to help businesses streamline their business processes. Both Lean and Six Sigma have different methods to their madness. Lean, for instance, focuses on eliminating waste, streamlining and improving a company's processes and taking incremental steps to get there. Whereas Six Sigma focuses on driving variation out of those same processes so the company produces more predictable or consistent results that fall within specified and acceptable parameters. Both Lean and Six Sigma can be used together; in fact, it has a name: Lean Six Sigma. When used together, they are viewed as complimentary tools that work together strategically.

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