Lean Six Sigma Project Example

Let’s explore an example of Lean Six Sigma project in the service industry by using the example of an online mail ordering system.

lean six sigma project

Lean Six Sigma Project: Business Case

The accounting department and external customers of an online mail-order company are complaining about the organization’s invoicing system. It takes much longer than it should to complete and submit an invoice. Also, the customers find the invoices confusing and often have to call the accounting department for clarification. A preliminary investigation indicates that in addition to other problematic issues, there is no standard operating procedure for filling out the invoice. Management decides to take immediate action. To justify the product financially, companies use the cost of poor quality or COPQ. It is estimated that it cost the company $400,000 per year.

Lean Six Sigma Project: Goal Statement

To reduce the invoice processing time by 50%.

Define Phase

  • During the define phase, the project team identifies the parameters of the problem and determines how to conduct the project.
  • The team uses the project charter first. The team documents the project goal, scope, budget, personnel, resources, and the problem in the project charter.
  • The team draws a SIPOC diagram to learn all the relevant elements of the project, including the suppliers, inputs, processes, outputs, and customers.
  • The team members interview employees and external customers to learn what level of service they expect from the help desk.
  • In addition to phone interviews, the team members also send out surveys.

Measure Phase

  • During the measure phase, the team collects data about cycle time and help desk processes.
  • The team finds that the cycle time is 167 minutes with a standard deviation of 81 minutes.
  • Next, the team also creates a detailed process map. They also identify the inputs and outputs of each step.
  • Then, the team determines whether the steps are controllable or not. Improvement can be achieved for steps that are controllable.

Analyze Phase

  • Next, during the analyze phase, the team analyzes each step of the process map.
  • The team also brainstorms intensively and creates the cause-and-effect diagram. This is to identify all the potential causes of long invoice processing times.
  • Next, the team concludes that the root causes of longer-than-acceptable processing times are the lack of a documented operating procedure and the lack of expertise among the technical help desk personnel.

Improve Phase

  • The team adopts a multi-pronged approach during the improve phase.
  • The team advises the organization to develop an SOP to enhance the delivery of services with speed and efficiency.
  • In addition, they suggest implementing a prerequisite of a minimum of two years of technical experience for individuals seeking to work on the help desk. As a final recommendation, they propose conducting semi-annual monitoring of the help desk to ensure employees stay updated with the changes in technology.

Control Phase

  • During the control phase, the last phase of the Six Sigma project, the team creates a checklist for internal management to use.
  • The team also creates a control chart to monitor service processing time over the long term.

Benefits from the Lean Six Sigma project

  • This project which ran slightly over four months helped reduce the processing time from 167 minutes to 80 minutes.
  • This also resulted in a total cost savings of $300,000.
  • While the Lean Six Sigma project ran slightly over four months, it was able to reduce the invoice processing time by 50%.
  • The team used the Six Sigma DMAIC methodology in addition to SIPOC process maps, statistical tools, and control charts.
  • This also resulted in a cost saving of $300,000.
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