LEAN Six Sigma Solutions within
AUTOMOBILE DEALERSHIPS
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sing the practices of LEAN Six Sigma in automotive dealerships has its early beginnings in the early 2000’s, which was embraced by European Automobile Dealerships. This is very interesting because automobile manufacturers have transformed there business operations by implementing LEAN Six Sigma over the last 20 years yet automobile dealerships have remained virtually untouched by LEAN Six Sigma. Automobile
dealerships and service and parts departments that have implemented LEAN Six Sigma Best Practices have experienced a doubling of throughput, an increase in productivity of 50% or more, and returns on sales several times the industry norm.
‘Customer fulfilment’ – getting the service right the first time and on time for customers has led to greater customer satisfaction review, wordof- mouth recommendation
and increase operations effectiveness.
The involvement and commitment of staff – has led to greater job satisfaction, higher staff retention and productivity and better customer service.
The returns for shareholders – by progressively eliminating non-value-creating activity, without major investment in IT, staff numbers, machinery or facilities.
National Automobile Dealers Association (NADA) The National Automobile Dealers Association (NADA) 2014 Annual Financial Profile Report of America’s Franchise New-Car Dealerships —shows a robust and highly competitive industry with dealerships selling or leasing more than 15.5 million new cars and light trucks in 2013, up 7.5 percent from the year before, along with 351,737 new medium- and heavyduty trucks, up 1.7 percent from the previous. Service and parts work accounted for 11.6 percent of dealerships revenue, up 4.8 percent from the previous. Although profitability in service and parts were up from the previous year, service work, whether for warranty repairs or a quick oil change, is an integral part of
WIP (Work In Progress) & FG (Finished Goods)
dealership customer service, operations, profitability. The question too many dealership owners and service department managers
Scheduling based upon Takt time– including proper staffing
A few of the statical tools of LEAN Six Sigma that have great opportunity impacts on operations effectiveness in an Automotive Dealership are the following:
Workplace Triage–based upon time based auto repair job content (time and effort based)
Value Stream Process Mapping
6S – Visual Workplace Kanban of RIP (Raw In Progress),
Value Stream Mapping–based upon common work groupings
Poka Yoke–ensuring quality work and one touch resolution is achieved Standardized work–continuous improvement baseline
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What is the best strategy for increasing customer service expectations and operations excellence?
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Hospital Readmission Rates with LEAN Six Sigma Solutions. Written by Christopher Sanderson
A contributing Six Sigma Black Belt consultant to iSigma Group, originally published in November 2014
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lthough California was rank number one, Texas was second in readmission rates. Texas hospitals have been increasing steadily over the past few years; it has more than doubled the original cost for treatment. This avoidable cost not only makes the patient pay more, but it cost the hospitals in avoidable inefficiencies. In Texas alone, over 213 hospitals were penalized which accounts for more than fifty six percent (56%) of all the hospitals, in a recent Kaiser Health News report under the Medicare program for high numbers in patient readmissions. Due to this issue of high readmission rates the CMS (Center for Medicare & Medicaid Services) launched the Hospital Readmissions Reduction Program (HRRP) in October 2012. Under HRRP, hospitals with high rates of readmissions for acute myocardial infarction, heart failure, and pneumonia saw a one percent reduction in Medicare payment in 2013; yet rates still continue to rise.
percent of patients with Medicare previously had no plan for followup care after they were simply discharged to recover on their own.
Since 2013 reduction repayment rates have continued to rise over three percent, costing hospitals billions of dollars in reimbursement payments. Recently, CMS has currently added more conditions to the program. They have expanded the number of conditions to include chronic obstructive pulmonary disease (COPD) and elective hip and knee replacements. But still, patients are coming back to emergency room seeking help for issues that should have been addressed before they were originally discharged. This problem is causing the numbers in emergency rooms to spike. Fifty
There needs to be improved patient care quality system in assessing the patient upon arrival to discharge and follow up. Another challenge is communication with patient, so they can fully understand symptoms, and various reasons why that they should return for follow up care. Planning for post discharge is imperative because it is a personal plan of responsibility for both the patients and medical care personnel. LEAN Six Sigma can add additional benefits and cost savings in reducing readmission rates for hospitals. LEAN Six Sigma is a practice that relies on a collaborative team effort to improve performance by systematically removing the eight kinds of waste. This waste can be defined as Defects, Overproduction, Waiting, Non-utilized talent, Transportation, Inventory, Motion, and Extraprocessing. Simple abbreviated or referred to as DOWNTIME. The teams at iSigma Group have medical and LEAN Six Sigma practitioners available to assist your organization in address these Readmission Rates and quality patient care system challenges. We believe in
“Building Sustainability First, with People Always! Sources: Centers for Medicare & Medicate Services www.cms.gov Kaiser Health News Report khn.org/news/medicare-readmissions-penalties-by-state
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Six Sigma in the art of Sales & Marketing Written by Christopher Sanderson
A contributing Six Sigma Black Belt consultant to iSigma Group
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ix Sigma is a philosophy (methodology) that has had a strong presence in the 1980’s and gained manufacturing excellence from companies like Toyota, Motorola, and Ford. General Electric is most credited for taking the methodology and applying it throughout their business model which included not just manufacturing, but operations, finance, human resources, information technology, sales, and marketing. But not let us forget, that QUALITY is the cornerstone on which Six Sigma was built upon and Quality has its early beginning in the early 1800’s during the Industrial Revolution. I’m sure that others would suggest even earlier in the Middle Ages. In either case, today’s 20th century challenges are more complex and reach a global market place and Six Sigma is the methodology of choice. Historically; marketing organizations have hypothesized about the effectiveness of promotions, commercials, and marketing campaigns.
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Unfortunately, the economy, politics, employment, and other events keep potential customers from receiving the marketing message. So how do we make sure that we dedicate the right amount of time, revenue, and resources to make wise investments in our marketing efforts? Six Sigma Sales and Marketing is a strong answer. Some non-believers would question the ability and effectiveness of applying such a methodology to the “art” of sales and marketing. Many of them believe that the dynamics and nebulous environment would only hinder the creative magic required to have a successful marketing campaign. The intent of Six Sigma is not to suppress the creativity, but rather develop a framework to channel that message and the vision. Selling a product or service to a customer is the most important part of the sales and marketing process, but there are additional tasks associated with the sale. These tasks could include product
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that can be used to help analyze customer complaints. But the 80/20 rule (Pareto Analysis) can be applied to almost any problem, such as:
80% of sales or services come from 20% of your customers.
80% of delays in schedule arise from 20% of the possible causes of the delays.
20% of your products or services account for 80% of your profit.
launch, literature and sample request, customer complaints, sales promotion results, customer profitability, territory sales opportunity; just to suggest a few. The key to Six Sigma or any problem solution is having information data to analyze. Studies have suggested that a company loses approximately one customer purchase for every five customers encountering problems. Therefore, for every five problems it prevents or fixes, the company will retain the sales of the one customer who was saved. Let’s continue to look at the problem. On the average, 25% of customers having problems do not complain. Many of the customers, who do complain, do so to the wrong people. A formal Suggestion Box, Comment Card, or Survey service system usually receives only on average 35% of the total complaints offered. So, for every complaint received through the complaint system, there are about 12 unhappy customers and 2 or more lost sales.
The art of Sales & Marketing for Six Sigma Have you ever heard of the 80/20 rule? Simply explained, that 80% of your complaints will come from 20% of your product or service issues. Better known by others as Pareto Analysis, which is one of many tools
Marketing campaigns are a series of impressions to drive awareness to a marketing audience to communicate a key message. The key word is “series” since it usually takes multiple impressions for your audience to recognize your message and respond. These marketing campaigns can include old and new media: email, direct mail, tradeshows and events, publicity, radio, tv, merchandise promotions, coupons, point of sales, and rebates. For today’s businesses, how do you decide how effective are your marketing campaigns? Traditionally, we repeat what has always been done in the past and the campaign becomes our yearly exercise yielding little to no sales results. Most likely it’s the same person or group that has always completed the campaign over the past couple of years. But the Six Sigma methodology can help clearly Define the scope, Measure historically past promotions and map steps (SIPOC), Analyze the hypothesis of the promotions (ANOVA) (2 Sample t-Test), Improve or prove if any of the effects had any influence on sales or service, Control and change to promotion process to reflect the appropriate promotion/product relationship. This is a Six Sigma’s DMAIC roadmap that can be applied to any business model. There are many ways to solve problems without Six Sigma, but Six Sigma Sales and Marketing methodology is the strongest problem solving solution meeting today’s 20th Century business challenges. Remember the only constant in life is change. Allow iSigma Group to partner with your company and help integrate Six Sigma into the art of sales and marketing.
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LEAN SIX SIGMA
and Who Moved My Cheese? In explaining to my daughter who has been with me throughout my Six Sigma certification training and job journey over the past few years, What is LEAN Six Sigma? I referred her to a book I shared with her several years ago “Who Moved My Cheese?” by Dr. Spencer Johnson.
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EAN Six Sigma uses a collective team effort to improve performance and remove waste (such as Defects, Over Production, Waiting, NonUtilized Talent, Transportation, Inventory, Motion, and ExtraProcessing) referred to as D.O.W.N.T.I.M.E. In the book, “Who Moved My Cheese?” Dr. Johnson introduces us to characters that have to use their collective efforts to get what they need from the maze, more CHEESE. In appreciating the journey of these characters, we get a better understanding of some of our own life challenges to CHANGE. Let’s take a few minutes to understand the metaphor CHANGE in the story
“Who Moved My Cheese?” and how it may have some similarities to CHANGE in LEAN Six Sigma. In the book we are introduced to four characters (Sniff, Scurry, Hem, and Haw) for whom go’s about their journey in life of finding cheese in a maze. Sniff and Scurry are mice, which may represent parts of us that are simple. While Hem and Haw are little people, representing the complexity within ourselves or team. The maze is the organization process that challenges their efforts to getting to the cheese (their GOAL). We can look at this as a metaphor for where we work, and the organization processes that affect us from achieving our performance goals.
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In appreciating the journey of these characters, we get a better understanding of some of our own life challenges to CHANGE. Let’s take a few minutes to understand the metaphor CHANGE in the story “Who Moved My Cheese?” and how it may have some similarities to CHANGE in LEAN Six Sigma.
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As the Innovator in the group “Sniff” has the ability to sense and respond to CHANGES happening in the environment much more quickly than the others and gets excited about creating new things. This is a good thing to have in a team because if you have a person who can sense change, they tend to be more adapted to it, rather being scared of it. Often in LEAN Six Sigma we have to have members of our team willing to challenge the prevailing assumptions by understanding and measuring their true impact on the problem. The Producer in the group is “Scurry” who has the ability to run and do work from early too late. He tends to get frustrated when there are obstacles in his path and seeks to run around or through them. Team wise this can be an asset or deterrent to the group, depending on the quality of work. In LEAN Six Sigma it’s a team effort in addressing the problems
that prevent us from achieving our performance goals, which are expected from our internal and external customers. The Stabilizer in the group is “Hem” who makes things controllable, and organized. In the book, he gets left behind because he saw change as a real threat. Someone who excels
at control and stability may see this as a threat in a team. In LEAN Six Sigma we have team members who see the new changes as threats to their span of control and influence.
The Unifier in the group is “Haw” who has empathy and connects with others. This is necessary for teamwork. No team can be fully effective with a connection to the problem and the passion to solve it. In LEAN Six Sigma we are often faced with this challenge to garner support in addressing the problem. In summary, the thing that this book teaches most is that CHANGE can be either a blessing or a curse depending a person’s perspective. The importance of teamwork is seen throughout the book and the personalities on how they can conflict or work congruently is shared. The characters influence on one another shows us how our strengths can be used to overcome challenges. Like in the story Who Moved My Cheese?, LEAN Six Sigma is a metaphor of improving performance and removing the waste that affect our business maze on the way to finding our cheese (GOAL).
Remember the handwriting is on the wall “Change Happens” They Keep Moving the Cheese “Anticipate Change” Get Ready for the Cheese to Move “Monitor Change” Smell the Cheese Often So You Know When It Is Getting Old “Adapt to Change Quickly” The Quicker You Let Go of Old Cheese, the Sooner You Can Enjoy New Cheese “Change” Move with the Cheese “Enjoy Change” Savor the Adventure and the Taste of New Cheese!
“Be Ready to Quickly Change Again and Again” They Keep Moving the Cheese “Quality depends on good data. It also depends on executive leadership in using that data.” - Juran Institute, Inc. “I believe the leader’s ultimate job is to spread hope. “ - Bob Galvin (Motorola) “It is not the strongest of the species that survives, nor the most intelligent, but the most responsive to change.” “It is not necessary to change. Survival is not mandatory” - W. Edwards Deming
Resources Who Moved My Cheese and the Four Forces? organizationalphysics.com/2013/04/01/who-moved-my-cheese-and-the-four-forces
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What is iSigma Group? iSigma Group is a consulting services and solution firm in the area of employee OSHA Safety mitigation and Business Operations Excellence. We assist clients in mitigating OSHA safety risk challenges. We improve our client’s business operations with LEAN and Six Sigma quality practitioner and Change Management expertise. We work within our clients business and organizational models to build sustainability capacity and ensure that people and systems are in place for long term changes.
Who is iSigma Group’s OSHA Store? We are the go-to-people when it comes to safety compliance. Since 2005 we have been providing small, medium and large businesses the solutions they need to remain safe and compliant in an increasingly litigious world. From mandatory Labor Law Posters to Safety Training DVD’s, we are the one stop OSHA store for your business safety compliance needs.
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Your Challenges
Our Solutions Our consultants are qualified OSHA Authorized Outreach Instructors and safety practitioners focusing on reducing workplace risks and enhance the safety, health and productivity of your employees.
Safety Solutions
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n solutions ranging from risk evaluations and regulatory compliance checks to safety program development, employee training and workers compensation cost-management programs, iSigma Group applies deep expertise, a unique consultative approach and proven techniques to help organizations mitigate risks, reduce losses, and boost productivity. Learn from where your company has exposure to potential OSHA citations and costly penalties BEFORE it’s too late to do anything about it! Our Mock-OSHA Inspections are conducted by iSigma Group OSHA Compliance Experts to identify physical conditions and workplace practices at your site that are in violation of specific OSHA regulations. Administrative Compliance Audits, where we review all your written health & safety programs, employee training records, inspection forms, and injury/illness logs to identify those items which are missing, deficient, or out-of-date are also included as part of the audit. Occupational Safety Consulting and Training is the foundation of our company. We offer a variety of safety training courses and OSHA 10-Hour and 30-Hour programs are available. These OSHA Outreach Training Programs are available for workers and employers on the recognition, avoidance, abatement, and prevention of safety and
health hazards in the workplace. Some of these programs are centered on specific industries and services in the area of Healthcare, Nursing Home, Oil & Gas, Maritime, Industrial, Construction, Agriculture, Food and Beverage, and Manufacturing.
Example Safety Solutions: Mock-OSHA Inspections OSHA Authorized 10 Hour and 30 Hour Programs Workplace Violence Programs Globally Harmonized System (GHS) Program Safety Management System Program Employee Safety Training Videos Heat Stress Compliance Training Employee Safety Training Classes
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excellence, and it is the hallmark of our services. These workshop services include GE Work-Out, CAP (Change Acceleration Process), LEAN Six Sigma Solutions within Automobile Dealerships and Healthcare, Coaching for Performance, and a number of other training workshops. Some of additional Business Operations Excellence solutions are centered around some of the following. These are designed to address everything from major strategic issues to more basic problems affecting everyday business practices.
Examples include: Management Consulting Strategic Planning Competitive Analysis Business or Product Strategies Organizational Consulting Workflow and Operational Improvements Implementation Project Management Personnel Support Coaching & Skill Development
No matter what your needs, we promise to deliver objective, informed advice, and actionable plans for improving your business operations.
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