Every Beginning is Difficult
New undertakings or experiences are always challenging at first. This is no different when Schenker Singapore (Pte) Ltd, a transportation & logistics company, decides to embark on something new like Lean Six Sigma. It might seem to be even more demanding at the outset since the number of 3rd party logistics providers rising to this challenge is very limited. Best practices in this industry are not widely spread and hard to come by. ...

Sushi and more - The Importance of the Moment of Truth
A “Moment of Truth” is the moment that the company interfaces with the buyer. Careful product development, successful marketing and perfect product preparation can easily be shattered by small misfortunes during the moment of truth. Unfortunately, in a restaurant you have a series of these moments, all of which are able to shape the impression of the experience dramatically. Often, this experience is much more important than the price or even the food itself.

The later in the service delivery the Moment of Truth turns bad, the less time remains for a remedy. If the remedy is not applied on the spot, the chance may be gone forever. ...

A Lesson of Leadership
A couple of months ago, I was having lunch with the Chairman of a medium-sized contract manufacturing company in Singapore. When we made the appointment, we agreed to meet at a posh club in the centre of the city-state. After arriving there I found myself in the middle of his management team. He brought MD and CFO along.

As they explained they just came back from their annual study trip. This year’s topic for the study was about Strategy Deployment, presented by a well known Harvard Professor in Boston/MA. They found the lesson learnt impressive enough to try inviting this Professor to Singapore to the benefit of their staff. As they mentioned, every year they visit one of the think-tanks to keep track of new developments in modern business management. As they emphasised, this has brought great benefits to their organisation. ...

INSPIRE – Seven Essential Steps to Building a Coaching Culture
Coaching is “Expanding a person’s capacity to take quicker, more effective actions.” Robert Hargrove. In a coaching culture people continually discover how they create their own reality and how they can change it. Everyone understands the goals of the organisation and the personal contributions necessary to achieve them. Organisational resources are maximised.

In coaching cultures, all members engage in candid, respective coaching conversations with one another, unrestricted by reporting relationships, about how they can improve their working relationships, individuals and collective team performance. Everyone learns to value and effectively use feedback as a powerful learning tool to produce higher levels of personal accountability, professional development, high-trust working rela-tionships, continually improve job performance and ever increasing customer satisfaction.

This article is elaborating potential steps for building and sustaining a coaching culture. Our next article will illustrate its application. ...

The Difference Between Black Belt and Black Belt
Six Sigma has been developed 20 years ago and fine-tuned by many companies since then. However, there is no ISO standard or something similar guiding the deployment or regulating the certification of the key players, Green Belts or Black Belts. There is only one key requirement that helps distinguishing between success and failure: the business result.

The by far easiest task in the journey to deploy Six Sigma or similarly Lean Six Sigma is the training of Green Belts and Black Belts. Many training companies have discovered this gold mine and produce hundreds of Belts every year. For small money, nearly everyone can attend twenty 3-hour evening sessions to become a Green Belt including certificate. Taking this certificate, attaching it to the CV and going for the next job application is a question of days. ...

Workforce Planning Strategically Aligns Human Capital with Business Direction
An uncertain labour market coupled with a rapidly changing marketplace creates the need for organisations to proactively plan for expected and unexpected shifts in business demand and talent supply. Furthermore, the business implications of the aging workforce position human capital planning as an essential element of comprehensive business planning. However, many organisations are only beginning to see the value of such planning and may be at a disadvantage in the coming years without building a structured planning process that ties human capital strategies to business goals.

This article describes the workforce planning approach and illustrates the strategic alignment of workforce planning. ...

Three Rules for Data Analysis: Plot the Data, Plot the Data, Plot the Data
Very often we draw conclusions and make decisions based on a limited perspective on data only: we look at means and evaluate yield and defects. Some simple yet powerful tools can help to make much more out of the data available. The first three steps of any data analysis shall be: Plot the Data, Plot the Data, Plot the Data. ...

Six Sigma In The Bloodstream
One day I was asked why I left the stable, “money-printing” ISO 9000 business to join the riskier Six Sigma environment. My explanation went something like this: "Well, I think it makes more sense to implement a real business improvement and management system than to hang a nice certificate in the CEO’s office.” But is this statement really true? Does starting a Six Sigma initiative automatically mean you’ll have an effective Quality management system? Definitely not. The downside of Six Sigma is that there are currently no “standards”, nor an “official” certifying institution, to make sure that everyone walks the talk. Six Sigma means more than starting a few projects, training some Black Belts and educating some business leaders about what it all means. The Six Sigma criteria depend on the business implementing this approach. ...

Manager as Coach
Coaching is a powerful style of leadership for developing people and enhancing business performance. With the rapid changes at workplaces, keeping employees' committed and motivated during tough economic times seems like a tall task, especially after downsizing or programme cutbacks. It is evident that the very survival and success of any organization depends on the human capital: people are highly knowledgeable, versatile, innovative and mobile.
Their skills and talents are the currency of competitiveness, and companies who hope to retain their services need to recognize that these individuals expect greater personal choice, autonomy and an active voice in the management of their workplace. The days of the command-and-control style of leadership are long over. Leaders are required to engage the energy and thoughts of their teams in order to make them commit totally to a given course of action. The process of coaching is on-going and lifelong as learning is one of the few activities that one must frequently be engaged in as leaders sustain competitiveness through people development. . ...

Tightening Credit Terms for Almost Free
How do we know if receivables are well managed to terms? Are we performing at our best? What if we are the best in industry according to external benchmarks? How may we then do better or is it possible at all? Credit managers often face these questions in the never-ending quest to collect to terms and to drive down terms where possible. An analysis of the customer master is requisite to answering these questions as well as to enable one aspect of credit term optimisation. ...

What to Do With Special Causes?
“Don’t use Six Sigma to tackle special cause variation!” is one of the common phrases being repeated by Lean Six Sigma coaches and a very important recommendation for the management, too. The Six Sigma methodology is indeed targeting variation that is an inherent part of the process – common cause variation - that has been expected and tolerated due to its unknown and supposedly complex root causes. Understanding this variation and analysing the real root causes before implementing improvements is a fundamental pillar of the methodology and driver for its success. Collecting data over time and going through the project work tool by tool take time - normally some month, sometimes more than half a year. This is time we cannot effort to invest in case that something unexpected, something special jeopardises our process and its output, endangers our employees or compromises our relationship with our clients. ...

Forecast to Fulfil – SKU (Product) Proliferation
Supply chain strategies often take second or third place to operations in the growth and development phase of an organisation. One of the unintended (though sometimes strategically intentional) operational consequences of aggressive growth, both organically as well as through M&As, is that of product or SKU proliferation. SKU proliferation manifests itself as a hindrance to supply chain efficiencies in a variety of forms including: - An ‘impressive’ range of product. - Dramatic levels of raw material or WIP, the latter held as a strategy of postponement. - Elaborate operational set ups that often challenges productivity and efficiency KPIs resulting in large production batches. - Loss of operational and commercial control as batched production produces a bull whip effect in finished goods inventory. - An inflated balance sheet where inventory is concerned and gradually thinner margins due to missed or short ships as a result of batch & efficiency metrics. ...

Procure to Pay – Spend Policies
Spending, apart from capital investments, tends to grow a little faster then organisations in most cases. Left unchecked firms face a ‘mid-life’ crisis where working capital is stretched to levels requiring borrowings incurring heavier and heavier finance costs. A lack of policies guarding the growth of spend is often an underlying cause. Naturally, many other factors come into play as well – an extreme focus on growth, inorganic growth (M&As), lack of standardisation for spend reviews, infrequent and irregular supplier reviews, poor supplier maintenance, spend policy over-riding behaviour or a ‘just get it done now’ (covered as maverick spend in an earlier article) culture among others. ...

Customer to Cash – Dispute Management (Receivables)
A portion of collection activities often relegated to „customer service" is that of actual dispute management. Customers who need „correction" on invoicing information, goods returned, quality claims, delivery issues among others get directed to a generic „customer service" department that attempts to secure resolutions from throughout the organisation. As opposed to „customer service" per se we see these activities specifically as „dispute management" as it relates to receivables management. ...

Forecast to Fulfill – Inventory Management (Work In Progress)
Deliveries to the customer are often delayed due to lack of appropriate product mix. Meanwhile the factory floor looks like it could serve the same number of customers or more for the next two years without replenishing any inventory. Raw material fed into the production unit seems to be never enough. WIP goods are stacked along walls and corridors or any available space – until a new warehouse is available. Work centres are filled beyond capacity and people and machines work around the clock to make the next customer order. Sounds somewhat familiar? ...

Working Capital Meets Lean Six Sigma
The South-East Asian logistics centre of a German multi-national supplier of electrical products for industrial use had decided to reduce inventory for common items from over 82 days stock turnaround time to 55 days – the world-wide standard for their company. Savings would have been significant if they could keep on time delivery (OTD) stable above the standard of 96%. Inventory reduction was achieved due to policy changes and new target settings. At the beginning all seemed to go well. ...

Procure to Pay - Spend Management
Overlooked in many firms ‘spend management’ is a pro-active way of containing cost and contributing to overall profitability. It falls into the strategic level of enlightened decision making in a firm but requires operational execution at many levels. A quick look at Figure 1 shows that this area does not fall into the regular purview of most functional management teams. Often confused with cost cutting or cost controlling measures, spend management fails, as it is mainly defined today, to capture the imagination of executives though the benefits can be both operational and strategic in nature. ...

Make Use of Your Survey Data - Kano It
Nearly all medium-size and large companies spend hundreds of thousands or even millions on customer surveys every year. Customer survey results are being used to amend strategies, design new products and services and focus improvement activities. Gathering customer survey data is only the first step. The second step involves making best use of the expensive data, analysing them, drawing business relevant conclusions and making important decisions. How are we doing in this step? ...

Customer Segmentation for AR. Total Working Capital Series
Collections represents the ‘end’ of a sales cycle. It also represents the firm’s ability to convert cash expended from when a customer order arrives through fulfilment and payment. For many firms the operating motto in this area of working capital management is to simply try to collect faster. Few go beyond to address this ‘end of sales cycle’ activity that is the key provider of cash for the firm.

Collections management represents an opportunity to fully utilize a firms systems and resources. Leveraging simple technology is possible and enhanced through customer segmentation. ...

Cheap Cash - Working Capital Management. Total Working Capital Series
Credit lines drying up are common phenomena these days. Past credit performance, even with a great history, seems to have no impact on the decisions of banks to lu-bricate the wheels of commerce. There is, however, a relatively cheap and available source of cash many firms have that may be tapped into now: Working Capital. Working capital - or the cash flow of a firm - can broadly be categorised into:
1. Customer to Cash (Receivables Management)
2. Forecast to Fulfil (Inventory and Sup-ply Chain Management)
3. Procure to Pay (Payables Manage-ment)

Often simply referred to as ‘cash flow,’ work-ing capital resides on the balance sheet of a firm. Improvements in this firm-spanning area yield many returns including the re-duced need for cash to keep operations run-ning, a reduced requirement for finance fa-cilities that attract interest payments (Weighted Average Cost of Capital or WACC), well tuned and simplified processes which often mean a reduction in operating expense and P&L impacts. All these are some of the critical fundamentals that every analyst looks for in all eco-nomic climates. Even more so today. ...

Take Care of Your Talent – Develop Your Belts
Against the common belief, statistical knowledge is not a criterion for selecting your Belts. However, the capability to acquire new technical skills, to apply these skills successfully is an important prerequisite. More important is the aptitude to involve, motivate, coach and train people, to lead and manage teams towards delivering results and to communicate effectively with different levels in the organisation. A study by iSixSigma Magazine about the importance of different skills and characteristics for a successful Black Belt was showing that Communication Skills is by far the most important requirement. Leadership Skills came in second and Technical Skills third. ...

The Power of Webbing - Revealing Assumptions to Solve the Problem a Different Way
If you want to clarify or explore a task, find root causes of a problem or develop your strategic thinking skills you may want to consider the queen of exploration tools: WEBBING. One of the ways to remember this tool is by looking at Spiderman. Like Spiderman you can use the tool to move from building to building (question to question) having always a different perspective of the world (task). Why would you do that? ...

Leaders in The Driver’s Seat
In times like this, every penny counts. So, how do we ensure we get the most out of our learning & development dollars spent? Many studies prove what practitioners have known for long: formal training programmes do not deliver the promised ROI – especially when the so-called ‘soft skills’ are concerned. We must find a way to craft a learning experience for our leaders that will really make a change....

What You Measure is What You Get
Developing a compelling vision and mission statement as well as a sound strat-egy is vital for any organisation. Equally important is the translation of the strat-egy into the day-to-day business. This step becomes even more critical for multi-national companies with their need for regional adaptation and alignment with corporate at the same time. So, how do we make sure our mid- and long-term plans - developed in the head quarter – make sense to business leaders and em-ployees in other regions?....

Take Care of Your Talent, Or Someone Else Will - Begin With the End in Mind
Your Lean Six Sigma initiative has taken off well, project teams led by Belts have done a nice work and results are in. Good job so far?! However, this is the rather easy part of your journey. The more difficult part is about retaining and accelerat-ing the trained Black Belts and Green Belts (Belts).

Talking to both, Lean Six Sigma consultants as well as their clients, paints a surprisingly consistent picture: Nearly half of the companies who kick-off a Lean Six Sigma initiative lose some of their Belts shortly after certification. Another tendency is alarming: we are not talking about one or two Belts who resign at that point in time, a considerable 20 – 30% of the first batch of trainees may decide to leave.

So, what went wrong? ....

What’s Next After Employee Opinion Survey?
OurBank is a small German bank with branches in Germany and approximately 300 employees working either in the headquarter office or in one of the branches. OurBank went through an acquisition, i.e. we became part of a large American multi-national enterprise focussing on financial services.

Due to the acquisition and the resulting uncertainty, staff turnover was sky-high, morale was down and performance was unsatisfactory. All communication activities nicely drafted in the 100-day M&A plan were not able to make the turn-around. Further talking about “Change Management” would have been devastating. Surveying employee satisfaction every quarter only reemphasised the problem for the management and sent the wrong signal to the staff. So, what happens next?

Excuse Me, Why Should HR Know About Six Sigma?
A friend recently spoke at an HR Conference on a competency development roadmap for Six Sigma professionals. During the break, a few participants went up to him and asked him what Six Sigma is. Only then it occurred to him that not every HR person is familiar with well known basic principles and management practices contributing to business performance and leadership development….

Red Tape? - Not Here
Everyone, undoubtedly, has had the unenviable honour of experiencing ‘bureaucratic government processes.’ Be it applying for your first ID or passport to initially obtaining a driving license and the inevitable dealings with the tax man. Judging by the time it takes and the “milestones” or number of departments one has to go through when dealing with German government bodies, the processes behind ID, passport or driving license must be highly complex and are usually being done by constantly overworked people….

Can Our Staff Innovate?
Innovation has drawn tremendous attention in the business world over the last decades and seems to be up on the radar screens again. The character of Innovation has changed over time from the traditional research-based theory towards the knowledge-driven approach that is based heavily on our social networks. Innovation has made its way from the laboratory into all parts of business life.

The more important is to identify drivers and hindrances for Innovation. The Readiness to Innovate depends on basically three factors: Individual Creativity and Innovativeness, Support by Organisational Climate and System Openness. This article aims to explore the motivation for Individuals’ Innovativeness and hence their influence on company’s growth and revenue ….

Complaints - The Tip of the Iceberg
“Voice of the Customer” – VOC in short – is a key topic in all kind of customer service, TQM or Six Sigma training and project work. There are two main categories for VOC, reactive data and proactive data. Whereas proactive data is collected with methods like focus groups, in-terviews, observations, surveys or test customers, reactive data is mainly based on customer complaints, feedback, hotline data or warranty claims ….

People Development - The Smart Way
A couple of years ago, I was meeting the President of an Asian multi-national mid-sized service company for a Six Sigma Training on Saipan, a nice sunny pacific island south-east of Japan. Together with a colleague we were sitting at the beach, wearing swimming suits and preparing the next days session whilst getting sun-tanned. When the President arrived – he was in shorts and ugly slippers! - we had a casual briefing for the Leadership Team session and the Staff Awareness Sessions we were about to run during that week.

One of the first questions I normally ask before starting the engagement with a new client is always about the “Why”. His answer was very surprising: “We need a robust and systematic tool to select and train future leaders for our company ….

Measure The Success of Your Journey – A Lean Six Sigma Meter?
Some well-known companies have been “doing Six Sigma” for years. They keep doing im-provement projects in all kinds of business and support processes, rolling it out in Sales and R&D. They are extending the application of Six Sigma to the entire value chain - suppliers and customers – in their drive for sustained performance improvement. They are successful in building the Six Sigma principles into their daily business life and using this powerful ap-proach as a vehicle to drive cultural change ….

Great, We Have Improved … or Not?
Many companies spend considerable amounts of money on customer surveys every year. Customer survey results are being used to amend strategies, design new products and ser-vices, focus improvement activities and … to celebrate success. Since the impact of cus-tomer service results can be quite hefty the data driving important decisions shall be trust-worthy. The question is: Can we always rely on what we see?….

Six Sigma and Innovation
Over the last decade, companies and organisations in nearly every industry all over the world have introduced Six Sigma to increase customer satisfaction and to deliver impressive results. Another term that has been able to catch tremendous attention in the Business World: Innoation. On the one hand, Six Sigma works towards very low variation. Innovation, on the other hand, seeks to find undiscovered, uncertain territory. Such efforts are inherently inefficient. Innovation requires risk-taking and failure. Can a corporate culture be based on both key thinking patterns in order to get the best out of Six Sigma Efficiency and Innovative Solutions?….

Succession Planning: Is Your Organisation Ready For The Future?
Thinking ahead is a cardinal rule of business. In addition to monitoring the daily operations of your business, you need to think about the future. And, as difficult as it may be, it’s important to envision the day when you no longer will be in charge. For successful organisations faced with demanding leadership requirements in a changing and competitive business environment, a succession planning process may be the most important human resource management investment the company can make.….

The Future Challenges for the HR Practitioner
The role of HR is changing as a result of many influences. These include: globalisation resulting in increased competition; a change to the service- and consultative-approach; demographic trends evidenced by falling birth rates and extended life expectancy. These trends affect the labour market and have resulted in skill shortages in specific areas. The HR practitioner needs to understand the impact of these factors on his/her organisation. …

Six Sigma - Show Me The Money
Globalisation and instant access to information, products & services continue to change the way our customers conduct business. The article explores new ways to delight, and exceed the expectations of our customers...

What Makes A Good Leader for Change
In response to evolving conditions, you realise that your organisation must change. As a leader of the organisation, one of your first & critical decisions is to appoint the team that will lead the project. What makes a good change leader then?...

Managing Conflict in Team Meetings
In the course of meetings, be it Six Sigma project team meetings or management meetings, conflict is inevitable; it is cited as one of the main reasons people dislike working in teams. Team players should find a way to manage conflict since teamwork is a key to success. Team leaders must understand that when two or more people meet, the stage is set for a potential conflict. As such, preparation is essential. Problems can be solved if these are anticipated. If a problem does happen, the result may be positive or negative depending on our approach...

Contextual Thinking - The Key to Success in Communicating Innovative Proposals?
You may have heard and read much in the last few years regarding creativity and innovation. Or you may even have attended a creativity workshop that you found interesting, fun and helped you come up with some new ideas. Now your current employer may be requiring in-novative input. However, you find that your suggestions are mostly ignored or frowned upon. This is mainly because nobody has told you the „The Secret"....

Six Sigma in Financial Services
OurBank is an American international bank with 50 branches in Germany and approximately 300 employees working either in the headquarter office or in one of the branches. In 2003, the senior management of OurBank decided to adopt and implement Six Sigma as their business management tool across all business units in the Europe region.

According to the OurBank business strategy, the car loan business was identified as one of the business priorities in the next 12 months. The strategy was to significantly grow the car loan business market share within the region in two years time, by 100% in the first year, and by another 70% in the second year....

HR Optimisation and Re-engineering
In a world of rapid flux, organisations must change their priorities from a traditional focus on planning and control to emphasising speed, innovation, flexibility, quality, service and cost. The HR team has to demonstrate their commitment to meet these key business drivers.

A major problem confronting HR managers today is to increase line management and employee productivity, provide higher more value-adding levels of HR service and internal customer responsiveness and at the same time reduce costs. What is needed is an HR team that is customer-focused and market-driven in its external relations with customer and process-focused and team-oriented in its internal operations....