The Systems Thinker Blog

Lean Six Sigma: 3 Business Process Errors That Drive Away Customers!

Posted byRon Carroll

While attending a defensive driving class many years ago (don’t ask why), the instructor mentioned that the typical motorist breaks the law every three minutes. Surprised? As you become a Systems Thinker, you won’t be. Here’s why.

Our daily lives are filled with unintentional mistakes, and your business is no exception. Each mistake or error robs your company of the money that could be used to hire new people, increases wages, buy needed equipment, or give larger dividends to owners and stakeholders. You probably don’t’ see most of this hard-earned cash disappearing into a black hole.

Money Black Hole

Keep It Simple with Lean Six Sigma

In any business, there are hundreds, perhaps thousands of ways for mistakes to happen. However, from Lean Six Sigma, you’ll be happy to know that you only need to focus on preventing or eliminating three bad boys from your business operations.

  1. Delays – Delay is the idle time between steps of a business process—the waiting time. Typically, the actual time required to produce a product or deliver a service is 5% of the total elapsed time (George Stalk, “Competing Against Time”). 

    For example, it only takes about three minutes to print your photos at a store that offers a one-hour photo service. Likewise, a commercial printer may say your job will be ready in five days even though it takes just two hours once the print-job is started. In most businesses, there are many opportunities to reduce idle work-in-process, and increase overall cycle speed.

    Customers also care if you meet your commitment to deliver on time, on schedule, or as promised. FedEx delivers packages overnight—guaranteed! They've built a large following by keeping this promise. Delay is a frequent reason for the loss of customers and valuable referrals.

  2. Defects – Defects are mistakes that render a product or service unacceptable to one of your five customer types.  Good or bad, pass or fail, the product either meets a quality standard, or it doesn’t. For example, a prescription is filled incorrectly; a steak is overcooked; a travel bag is lost by the airline, or a part is missing in a product to be assembled. All are unacceptable!

    Customers want things according to specifications or expectations. If you fail to deliver what is “critical to quality” in their minds, they will shop elsewhere.

  3. Deviation (excessive) – Neither people nor business systems turn out a consistently exact result. Deviation focuses on how far you can stray from precise specifications or expectations and still have an acceptable product or service.

    For example, if a furniture store promises delivery at 11:00 a.m. and delivers at 11:30 a.m., they have not kept their promise. The deviation in time makes the customer unhappy. However, if they commit to deliver between 10:00 a.m. and Noon, and deliver at 11:30 a.m., the promise is kept and the customer is pleased.

    In another example, an Internet service provider promises speeds up to 30 mbps. If Internet speed is too slow, too often, deviation from the speed-guarantee may cause customers to change providers.

    And finally, a machined part may have a tolerance of .003 inches. If machined outside the tolerance limits, the excessive size deviation will prevent the part from fitting or working properly.

    Don’t wait for customers to report unacceptable deviation. Establish your own internal controls to make sure deviation stays within bounds. This can prevent the build-up of defective inventory, a product recall, and even damage to your reputation or brand.

You Can Be Perfect

For fun, let’s look at an easy example from the game of football. A field-goal kicker has only 1.25 seconds to kick the ball after the snap. Any delay, and the kick has a good chance of being blocked; the team will fail to score. If the kicker does get the ball off, and it goes outside the goal posts, the kick is defective—again, no score. However, the goal posts are eighteen feet, six inches apart. The airborne ball can deviate nine feet, two inches left or right of center and still be good for the score.

I once heard John Madden—former football coach and color commentator—describe a ball that went just inside the left goal-post as a “perfect” kick. Why, because it earned the team three points; the deviation was within bounds. It was good enough!

Are your business systems GOOD ENOUGH to be considered PERFECT by your customers? To reduce the many little mistakes and errors in your business systems and processes, start looking for Delays, Defects and excessive Deviation.

Let me know of what you find.

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Tags: Business Systems, Lean Six Sigma, Customer Retention, Quality