Lean Six Sigma PDF

The Service Systems and Innovations
in Business and Society Collection

Jim Spohrer and Haluk Demirkan, Editors
Lean Sigma
Methods and
Tools for Service
Organizations
The Story of a Cruise
Line Transformation
Jaideep Motwani
Rob Ptacek
Richard Fleming
www.businessexpertpress.com
Lean Sigma Methods
and Tools for Service
Organizations
Lean Sigma Methods
and Tools for Service
Organizations
The Story of a Cruise Line
Transformation
Jaideep Motwani, Rob Ptacek,

and Richard Fleming
Lean Sigma Methods and Tools for Service Organizations: The Story of a
Cruise Line Transformation
Copyright Business Expert Press, 2012.
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any
meanselectronic, mechanical, photocopy, recording, or any other
except for brief quotations, not to exceed 400 words, without the prior
permission of the publisher.
First published in 2012 by

Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com
ISBN-13: 978-1-60649-407-3 (paperback)
ISBN-13: 978-1-60649-408-0 (e-book)
DOI 10.4128/9781606494080
Business Expert Press Service Systems and Innovations in Business and

Society collection
Collection ISSN: forthcoming (print)

Collection ISSN: forthcoming (electronic)
Cover design by Jonathan Pennell

Interior design by Exeter Premedia Services Private Ltd.,
Chennai, India
First edition: 2012
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.

Abstract
Every business aspires to be competitive and profitable in their markets.
To do this, an organization needs to offer customers value propositions,
whether it is manifest in the product they produce or in the service they
provide. This in turn will create customer loyalty and growth. There are
a number of organizational philosophies and strategies used by busi-
nesses to help accomplish this goal, among which are the concepts of
Six-Sigma and Lean. Both are widely recognized and implemented, and
both have been successful in improving value propositions of a variety
of organizations, mostly in manufacturing concerns. Lean Sigma Meth-
ods and Tools for Service Organizations proposes to integrate the best
practices from each of these philosophies and apply them to a customer-
focused organizationa cruise shipwhose overriding mission is to
deliver superior service to its customers. The authors demonstrate in
this book how key components of both Six-Sigma and Lean, such as
identifying and removing defects, elimination of waste, metrics, speed
of delivery, and the seamless integration of these concepts and practices
throughout the operation, serve to enhance the kind of value proposi-
tions that customers recognize and which allows the organization to be
successful.
This book illustrates Lean Sigma on a full range of service offerings:
a cruise ship offers whole service to their guests including gaming,
entertainment, food and medical services, retail sales, security, events
and adventure planning, operations and maintenance, purchasing and
logistics, human resources and training, and administration of payroll
and accounting. By covering Lean Sigma applications in each of these
areas in a story book format, service providers can begin to understand
how Lean Sigma methods and tools can be applied in their service
organizations. Through a unique and captivating story of two competi-
tive brothers, one (Joe) who has had phenomenal success with Lean
Sigma methods and tools in a manufacturing business, and the other
(Larry), the manager of a cruise line desperately in need of improvement
in all performance areas, this story illustrates the discovery, application,
and transformation of a variety of service organizations supporting the
cruise line operations.
Keywords
lean, lean sigma, service, waste elimination, continuous improvement,
service excellence
Contents
Chapter 1 The Lean Sigma for Service Challenge ..............................1
Chapter 2 Identification and Understanding of Lean Sigma
Implementation ................................................................5
Chapter 3 Lean Sigma Methods and ToolsBasic Concepts ............13
Chapter 4 Comparing Manufacturing and Service
Environments ..................................................................37
Chapter 5 Key EnablersPolicy Deployment,
Accountability Sessions, Employee Training and
Involvement, and Lean Sigma Tool Selection and
Application ......................................................................45
Chapter 6 Analysis of the Current State............................................53
Chapter 7 Application of Lean Sigma Tools and Results ...................73
Chapter 8 Making Cultural Transitions ..........................................107
Chapter 9 Achieving, Sustaining, and Celebrating Success .............115
References ..........................................................................................121
Index .................................................................................................123
CHAPTER 1
The Lean Sigma for Service

Challenge
Shut up Joe! Everyones tired of your bragging, Larry said as he
slammed his chicken bone down on his plate and stood up from the
picnic table.
Joe shouted back, Its not bragging, its just the truth, and youre the
only one tired of it cause youre such a miserable loser and your so-called
cruise line is about to sink!
Joe and Larry have been fighting in some way since the day Larry was
born. Their fierce sibling rivalry had overshadowed other family outings
in the past. There was the time Larry challenged Joe to a foot race around
the house, which ended up in a wrestling match, and the time Joe beat
Larry at darts, and Larry tore the dart board off the wall. Their competitive
nature seemed to know no end. This time things seemed different though.
Joe was right that Larrys cruise line was in terrible trouble. While other
cruise lines were enjoying banner years, Larrys was barely breaking even,
and the booking rate was declining. Larry had already cut many expenses
but this only seemed to make things worse. Joe always said You cant cut
your way to prosperity.
Joe, on the other hand, was enjoying great success in his manufacturing
company. He was leading his organizations continuous improvement
(CI) program and had received several promotions over the past few years
as a result of the improvements. The local newspaper had even written a
nice article about Joe and his companys improvement efforts. The article
titled DR Products (DRP) Wins Prestigious Continuous Improvement
Award, had several quotes from Joe regarding his role in the effort.
Joe was telling his cousins about the article when Larry blew up at the
picnictable.
2 LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
Larry had always thought CI was easier for a manufacturer as

compared to a service organization and that Joe had practically had
the CI process given to him by his companys leadership. Most of the
CI books and methods were for manufacturers, not cruise lines. All Joe
did was to follow the plan in the books to get the CI award. For the
past 3 years DRP had been credited with establishing best practices
in CI. Many of the best practices were credited to Joe and his produc-
tion teams.
Larry, on the other hand, was in trouble. Not only was his cruise
line barely breaking even and losing customers, the employees werent
happy either. Just last week two more key people had quit. Larry was
spending so much time trying to replace these people that he didnt
have time for CI.
It was time for Larry to swallow his pride and talk to Joe about
business. As Joe came into the kitchen, Larry mustered up a meek
apology. Sorry I blew up out there Joe, Ive been under a lot of stress
lately.
Nothing you didnt bring on yourself. Joe shot back.
Seriously Joe, how do you do it at DRP? asked Larry.
Do what? replied Joe.
You know, that CI thing. What do you call itLean Sigma? said
Larry.
Yeah thats the name. Im surprised you remembered.
Yeah, I remembered. But it seems like a manufacturing thing. Would
it work for a cruise line? asked Larry.
Im certain it would. Its just a systematic approach to seeing and
reducing the waste in a process. Your cruise line operation is just a
bunch of processes. Sure the customers may want and expect different
things, but the delivery of the services is simply a series of processes.
Joe replied.
But we are so different than a manufacturer. said Larry.
Thats what they all say. commented Joe.
They do? Who? And what else do they say? Larry quickly replied.
They say Were different. Lean Sigma wont work here. Even
manufacturers say that, but theyre all wrong. Lean Sigma CI methods
THE LEAN SIGMA FOR SERVICE CHALLENGE 3
are just a scientific or data-driven way to systematically and continually

improve a process. Everything an organization does, whether theyre a
service organization or manufacturer, can be defined as a process. Lean
Sigma methods and tools describe a standardized way to address waste
reduction in a process. Im certain it will work for you, but Im not sure
youre bright enough to lead it!
Yeah right! responded Larry. If you can do it, anybody can do it!
Anything you can do, I can do better. boasted Larry.
Care to make a wager on that? asked Joe.
Sure, what are you thinking? added Larry.
Well, if it works, you give my family and me a free 7-day cruise. If
it doesnt work, Ill give you a job at DRP when you go bankrupt! They
both laughed, and then Larry groaned.
Im even willing to help you, added Joe. One concept of Lean
Sigma is to share the knowledge freely. Why dont you come to the factory
tomorrow and Ill give you a tour and show you some of the Lean Sigma
activities were doing. I could even have you attend a current Lean Sigma
work session, and maybe a team huddle. offered Joe.
Without hesitation, Larry said What time?, and the plan was set.
Tomorrow, Larry would arrive bright and early at DRP for a full day of
Lean Sigma learning.
Larrys perspective that his organization is different and Lean Sigma may
not apply is very common. In fact, no two organizations are exactly alike;
therefore, Lean Sigma methods and tools may work differently for different
organizations. Yet, Lean Sigma philosophy, principles, and concepts of
waste elimination (conservation of resources) and improving flow are
universal. Lean Sigma is a never-ending, systematic/scientific approach to
identify and eliminate or reduce waste for any organization that delivers
any product or service. By viewing a business as a series of processes with
Suppliers, Inputs, a Process, Outputs, and Customers (the Six-Sigma
acronym is SIPOC), any organization can employ Lean Sigma methods
and tools to improve their quality, productivity, customer satisfaction, and
financial performance.
Chapter 1Discussion Questions

1. Why did Larry seek help from Joe? Do you think the two bitter
rival siblings could work together?
2. Do you think it is a good idea for Larry to benchmark Joes
organization? What are some of the challenges that Larry may
encounter?
3. Discuss Joes success with continuous improvement and Lean
Sigma initiatives in his organization. What lessons can Larry learn
from DRPs approach?
4. Do you think Lean Sigma can be successfully implemented in
Larrys company? How would you address Larrys skepticism that
But we are so different from a manufacturer.
5. What is Lean Sigma? Do you think Lean Sigma can be applied to
any business? Why or why not?
6. Why do you think Joe is willing to help Larry?
7. Larry has been spending a lot of time replacing people. Do you
think he has the time to devote to continuous improvement and
Lean Sigma initiatives?
CHAPTER 2
Identification and
Understanding of Lean
Sigma Implementation
Larry arrived at DR Products (DRP) before dawn the next morning. Joe
met Larry at the gate, had him sign in and get a visitors badge. Larry had
to read a brief statement of DRPs values, vision, mission, and safety rules
in order to enter the plant.
Joe said, Come on, we have to get going. I dont want to be late for
my walk. Before Larry even got a cup of coffee, Joe had them walking
around on the factory floor.
Joe walked at a brisk pace. The first stop was in shipping and
receiving. Larry had a shipping and receiving area on the cruise ship as
well. It didnt look this organized. Joe went right to the 4 8 shipping
scoreboard which showed the planned inbound and outbound materi-
als, supplies, and products due for the day. The area was neat and tidy.
Larry could almost see how the organization on the floor matched the
details on the board. Everythings to plan here, lets get to the next
operation, Joe said.
DRPs primary products are metal cabinets and work surfaces.
Upstream from shipping was the assembly area. In the assembly area,
they had three U-shaped cells. Joe explained to Larry that each cell pro-
duced several similar models of cabinets or work surfaces. Specials were
produced in the cell where they had the most commonalities as deter-
mined by engineering. The cabinets were coming out of the cells like
clock-work. Each worker in the cell seemed to work in unison with the
others, moving parts to the next station in the cell at about the same time.
Larry thought to himself that it looked like an orchestrated dance. As soon
as one cabinet was completed and on the skid, a forklift would magically
appear to take it to the shipping area where final shipping paperwork was
prepared. Everything seemed to be in sync, like the interlocking teeth of
gears that always match up exactly to the timing or flow. At the assembly
area, Joe studied each cells scoreboard. Larry noticed that the scoreboards
had red and green coloring in certain areas. Larry assumed that green
meant good and red meant bad, and he was right.
Joe made some notes, and said Lets go, and off to the paint line
they went. Larry thought the cells were very similar to the laundry area
on the ship, except they werent quite as structured. Any laundry basically
just went into any available machine. Larry made the following sketches
of the cells and scoreboards.
The paint line was manually operated. People hung cabinet parts and
panels on hooks or racks and placed them on an overhead conveyor. The
conveyor system carried the parts through several cleaning steps and then
through a paint booth where two painters manually sprayed each part
with the desired color. The parts would then be conveyed through an
oven to dry or cure the paint. After drying, the parts would be inspected
and set on roller carts to move to the assembly area. Just like in assembly,
when a painted parts cart was full, someone would magically appear to
IDENTIFICATION AND UNDERSTANDING 7
take the cart away to the assembly area. Joe studied the paint line score-
board for several minutes. The board was very colorful: red, green, and
yellow highlights covered the board. Joe made some notes and moved on
to the metal fabrication area. Larry made the following sketch of the paint
line scoreboard showing the red and green coloring.
Joe went right to the metal fabrication scoreboard, made some notes,
and stopped at the quality hold area to look at some parts. Larry watched
as Joe picked up the parts tagged with red tags and examined them closely.
Larry couldnt help but think how this looked like his chef inspecting the
shipments of fruit coming on the ship. Joe made some notes about the
quality hold area and moved on. Larry sketched the red tag below.
Trying to keep up with Joes pace, Larry said When do we get some
coffee? You do have coffee dont you?
Joe chuckled, Yes, we have coffee. Well get some at our daily huddle,
he replied.
Huddle? Are we playing football now? Larry said with a smile.
Joe replied, No. Our daily huddle is similar to a football huddle in
that we review the current situation, and set the plan for the day. Like
a quarterback calls a play, we cover the plan for the day and then get to
working the plan. Its part of our PlanDoCheckAct (PDCA) Lean
Sigma process for CI. The walk we just completed, we call a Gemba
Walk. Gemba means where the work is done and we do a Gemba Walk
to check on the progress to plan and then huddle to adapt, adjust, and
act with countermeasures as needed. The huddle aligns everyone on the
action plan.
Do you do the Gemba Walk every day? asked Larry.
At least once in the morning as part of my standard leader work, but
I sometimes take the walk several times a day to stay on top of things. The
walk makes it easier for me to spot waste and abnormalities to the plan,
and for me to offer help to the teams to make the proper adjustments
quicker, replied Joe.
I thought standard work was only for the workers, Larry replied.
Absolutely not! Standard work is for everyone in the organization.
Each person in the organization has standard work to complete. Its part
of our Lean Sigma CI initiatives, Joe replied. Larry sketched the follow-
ing standard work form.
Joe explained, The process is pretty simple. Everyone has standard
work thats kept track of on a scorecard. We measure our actual perfor-
mance and post this on our scoreboards several times during the day so
we can compare our actual performance to the standards. This method
of Scoreboarding allows us to quickly identify abnormalities and non-
standard performance throughout the day. Then we can make appropriate
adjustments or counter measures. Were PDCAing continually through-
out the day. This increases the likelihood that well meet our schedule
consistently every day.
It sounds confusing, said Larry.
Its not. Its really easy once you get used to it. As I said, I do the
Gemba walk two or three times a day to stay connected with the work
flow. With a 15-minute Gemba walk I can get critical information such as:
How many parts have been produced?

How many parts should have been produced?
Are we to schedule?
What issues are preventing us from meeting schedule?
What job is next?
Do we have all the materials we need to continue?
Are there any quality problems?
The who, what, when, where, and why for the current
situations.
Every leader in the organization can get this information just by going
to Gemba, Joe said with a grin.
Im not sure this would work for me, said Larry.
Well, when you lose your cruise line you can do it for me,
quippedJoe.
Joe had a series of activities lined up for Larry. Through the day, Larry
would visit with several leaders and workers and near the end of the day,
Joe had arranged for Larry to sit in on a Lean Sigma overview session for
a small group of new employees. Every employee at DRP received basic
Lean Sigma CI training within the first few weeks of employment.
In each of the work sessions with the leaders, Larry reviewed depart-
ment, team, or area scorecards and standard work for the leaders. Every-
one seemed to tell the same story regarding how they worked, how they
communicated, and how they made improvements.
By the end of the day Larry was exhausted. He couldnt wait to get
home, have a beer, and relax. Joe arrived at the training room and asked,
Are you ready for another Gemba walk?
Again? questioned Larry.
Come on Larry, its only 15 minutes and its needed to set up second
and third shift plans. We run three shifts here you know prodded Joe,
and off they went to the Gemba walk.
On the drive home, Larry couldnt help but think of all the reasons
Lean Sigma would not work for his cruise line.
A cruise line is completely different from a manufacturing

company.
We work with people, not parts.
No two customers are the sameours is not a consistent
process.
Our products and deliverables are different.
Our customers expect different things.
We dont measure things like a factory does.
We deliver service to customers, not products.
Then Larry remembered what hed said to Joe at the picnic, Anything
you can do, I can do better! Hed taken some great notes throughout
the day and at the Lean Sigma overview session. Intrigued, he made a
commitment to himself to go through the notes, and to determine what
might work versus what wouldnt. It was a good thing he had some time
the next day to review his notes and make a plan.

1. Critically evaluate Larrys visit to Joes organization. What lessons
can organizations learn from this visit?
2. Discuss the manufacturing process at DRP. What lessons can
Larry learn from this process?
3. According to Joe, why is it necessary for every organization to
have a daily huddle? If you were in charge of the daily huddle
in your organization, how would you go about doing it?
4. Why is score boarding so critical to Lean Sigma and CI success?
Compare your organizations approach to score boarding with
DRPs?
5. What do you mean by a Gemba walk? Why do you think Joe
put so much emphasis on it?
6. Why is it necessary for all organizations to conduct a Lean Sigma
overview session for their employees? If you were organizing one,
what would you cover in this session?
7. On the drive home from DRP, Larry identified several reasons why
Lean Sigma would not work in a cruise line? Do you think these
concerns are valid? What made Larry motivated to pursue it?
CHAPTER 3
Lean Sigma Methods

and ToolsBasic Concepts
The next day Larry went over his notes and the training content provided
at the Lean Sigma overview. He started to organize the files and notes in
a logical format. The following are Larrys notes from the first day at Joes
factory:
1. Lean Sigma is the most successful continuous improvement (CI)

method in the history of the world.
2. It combines the simple and versatile methods and tools of Lean with
the powerful analytical approach of Six-Sigma methods to provide
continuous incremental improvement with Lean and significant
increases in productivity and quality with Six-Sigma techniques.
3. Lean Sigma is the combination of these powerful tools.
4. The origin of these methods goes back to the industrial revolution
and the concept of time and motion studies with Fredrick Taylor and
Henry Fords production lines. Lean Sigma represents the philoso-
phy of total conservation of resources.
5. Edwards Deming brought this to Japan after World War II and is
credited with Lean Sigmas predecessor, Total Quality Management
(TQM), which focuses on the customers needs, CI, and employee
involvement.
6. Dr. Deming worked with the Toyota Motor Company, Motorola,
and others to implement his TQM systems and develop the methods
and tools we now know as Lean Sigma. Often, the Toyota Produc-
tion System (TPS), waste elimination, and process or continuous
improvement are used synonymously with Lean Sigma methods
throughout the world.
Larry thought to himself how smoothly things worked at DR Prod-

ucts (DRP), and wondered how his observations fit with the training
materials hed received at the session. Larry continued to review his
notes.
What is Lean, Six-Sigma, and Lean Sigma?

Lean is a way of thinking and can be applied to every type of organi-
zation, whether it manufactures a product or delivers a service. Lean
methods and tools are simple to learn and apply and have broad appli-
cations. Lean methods even work in peoples personal life! People can
apply Lean tools to their hobbies, chores, and households to make things
simpler, easier, more enjoyable, and cost-effective. The goal of lean is to
strive for perfection by minimizing and ultimately eliminating waste
which causes variation throughout the value stream. The entire focus of
lean is customer-driven and its the customer who determines the value and
the amount theyre willing to pay for the product or service. The customer
enjoys the fruits of the information and material flow. Information and
material flows are often documented in Value Stream Maps as shown
below.
LEAN SIGMA METHODS AND TOOLSBASIC CONCEPTS 15
or
The 30-year fixed mortgage application current state value stream map
Client
5S
Pitch
B Butter/
B
safety
Pre-application Application Approval/title Closing prep

Q Q Q Q
4 hrs 40 hrs 40 hrs 40 hrs
Gather financial Verify emply & Order appraisal Notify parties &
data = 15 m assets = 60 m & title = 20 m confirm = 120 m
Run credit Underwriting File paperwork Schedule
report = 15 m = 120 m pending = 5 m S location = 5 m
Determine S Print docs
prgm = 120 m = 120 m
4 hrs 40 hrs 40 hrs 40 hrs
150 m 180 m 25 m 245 m
Source: Ptacek and Motwani (2011a).
Like Lean, Six-Sigma (or 6s) is another approach that an organiza-

tion can implement to achieve excellence. Six-Sigma is a statistical term.
Sigma (s) defines the variation or spread of a process. Six-Sigma defines
how much of the total process falls within the normal process variation.
The term Six-Sigma refers to the number of standard deviations
away from the mean in a bell-shaped normal distribution curve (see
below). Why?
Mean or average
6s 5s 4s3s2s 1s 0 1s 2s 3s 4s 5s 6s
Sigma
(Deviation from the mean)
The goal of Six-Sigma is to eliminate defects and minimize variability. In

statistical terms, if an organization achieves Six-Sigma level of performance,
99.99966% of its customers are satisfied as they are receiving services that
are defect-free and meet their expectations. In other words, an organization
that has achieved Six-Sigma status will have no more than 3.4 complaints,
defects, or errors per million opportunities. The table below summarizes
sigma or variation level and error rate per million opportunities.
Defects (or errors) per

Process capability million opportunities Percentage
or sigma level (DPMO) acceptable (%)
6s 3.4 99.99966
5s 233 99.9767
4s 6,210 99.379
3s 66,807 93.32
2s 308,538 69.15
1s 691,462 30.9
Six-Sigma forces organizations to pursue perfection by asking if 99%

acceptability is good enough? If 99% acceptability is good enough, con-
sider the following:
99% Good (3.8s) 99.99966% Good (6s)

20,000 lost articles of mail per hour 7 lost articles per hour
(based on 2,000,000 per hour)
Unsafe drinking water for almost One unsafe minute every 7 months
15 minutes each day
5,000 incorrect surgical operations 1.7 incorrect operations per week
per week
Two short or long landings daily at an One short or long landing every 5 years
airport with 200 flights per day
2,000,000 wrong drug prescriptions 680 wrong prescriptions per year
each year
No electricity for almost 7 hours each One hour without electricity every
month 34 years

Lean Sigma is the most powerful improvement technique as it

systematically blends the best of the two approaches above to elimi-
nate all waste or non-value-added activities from processes. This, in
turn, lowers the cost and improves the quality of the process. The con-
tinued focus on the elimination of waste should be a daily, hourly, or
minute-by-minute concern. Lean Sigma is designed to use people and
materials wisely to satisfy customer needs. With that thought in mind,
work elements or job duties may need to be modified to accommo-
date a waste-free Lean Sigma environment. This will allow companies
to remain globally competitive, develop a cross-trained workforce, and
establish a safe workplace.
Lean Sigma tools are used to
improve customer satisfaction and total customer experience;

identify and eliminate waste quickly and efficiently;
increase communication and speed at all levels of the
organization;
reduce costs, improve quality, and meet delivery obligations of
a product or service in a safe environment;
initiate improvement activities and empower employees to
make improvements themselves;
track and monitor improvements to ensure sustainability.
Lean Sigma is truly a compilation of world-class CI practices.

To understand Lean Sigma, one must understand that Lean
Sigma is, in its broadest sense, a philosophy of conservation of resources
and waste elimination. Building on the Lean Sigma philosophy are
Lean Sigma principles, concepts, methods, and tools. These ideas are
building blocks of a structured and supported approach to a total Lean
Sigma transformation. Lean Sigma principles must be built on a basic
understanding of Lean Sigma philosophy. Many organizations have
forgone a basic understanding of Lean Sigma philosophy and tried
to build a Lean Sigma organization on a weak foundation, only to be
disappointed with their results. It truly pays to start with and build on a
strong foundation of Lean Sigma understanding.
Conceptually, these building blocks are illustrated in the follow-

ing diagram. Starting with a strong foundation of Lean Sigma philoso-
phy, Lean Sigma principles can be used to support an organization in
utilizing Lean Sigma concepts, methods, and tools to become a superior
organization.
Larry was starting to understand his role as a leader and continued to
review the training materials from the class at DRP. He took a closer look
at each of the Lean Sigma building block levels.
Delighted customers and profitable growth
Best quality, lowest costs, fastest delivery, and innovation

Lean Lean Sigma tools* Six-Sigma
5S
Concepts Continuous flow
Concepts
Data collection and presentation
Focus on variation Look for hidden wastes
Plan-Do-Check-Act
Proven methodology Voice of the customer

Seek perfection Performance measures
Employee balance chart

Speak with data and facts Waste elimination
Total employee involvement Customer focus
Quantitative analysis
Just-in-time (JIT)
Common goal of Six-Sigma Zero defects
Layout
DMAIC
Flow
Leveling (heijunka)
Mistake (or error) proofing
Performance dashboards
Plan-Do-Check-Act
Problem solving
Pull systems and kanbans
Value and waste
Statistical methods
Scientific method
Quality first
Quick changeovers
Standard work
Statistical process control
Takt time and demand analysis plots
Teamwork
Total productive maintenance (TPM)
Valve stream mapping
Visual controls
Voice of the customer (VOC)
Lean Sigma principles

Continuous improvement in processes and results
Focus on customers and value streams
Total employee involvement
Lean Sigma philosophies

Conservation of resources (sustainability or becoming green)
Relentless pursuit of waste elimination
* Not all inclusive of Lean Sigma tools

Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect ServiceUsing a Practical Approach to
Lean Six Sigma to Improve the Customer Experience and Reduce Costs in Service Industries. Chelsea,
MI: MCS Media, Inc.
Larrys notes on the building blocks are shown on the following pages.
Lean Sigma Philosophies and Principles

The overriding philosophy of Lean Sigma is defined by the continuous
elimination of waste and non-value-added activities in everything we do,
the conservation of all resources at every level of operation. Additionally,
Lean Sigma philosophies include continuous learning and improvement
in everything thats done. Lean Sigma philosophy calls for the simplifica-
tion of all tasks and efforts to eliminate waste and improve flow. Absolute
perfection is seen as the goal. Very few organizations embrace Lean Sigma
philosophies at this level. Toyota Motor Company has been practicing
Lean Sigma for over 60 years, and they still believe they need to improve!
Lean Sigma principles are the bedrock for Lean Sigma transfor-
mations. They provide the unchanging, solid foundation to build and
improve upon. The three key Lean Sigma principles, supported by Lean
Sigma philosophies, are as follows:
Continuous improvement in processes and resultsDo not

be results or bottom-line only focused. Instead, focus on
processes that deliver consistent, waste-free results.
Focus on customers and value streamsFocus on the entire
process, from the customer pull or demand to demand
fulfillment and customer satisfaction. Focus on how materials
and information flow through a process.
Employee participation in a non-blaming, fear free environment
Organization leaders must make it safe for people to suggest
possible improvements in the way things are done.
Lean Sigma Concepts

Lean Sigma concepts drive Lean Sigma transformations. It is essential
that people at all levels be trained in and understand Lean Sigma concepts
to facilitate a smooth and effective Lean Sigma transformation. Do not
underestimate the power of these concepts.
Larry knew he had a lot of training and communicating to do if
he wanted his cruise line to apply Lean Sigma methods and tools, and
continued to review his notes shown on the following page.
The Lean Sigma concepts are as follows:
Add value and remove waste

Value Adding
Organizations add value when they change the weight,
shape, configuration, properties, or attributes of materials or
information. These are the things the customer is willing to
pay for.
Waste (Non-Value-Adding)
Waste is anything that does not add value. Non-value-adding
activities fall into the 12 categories of waste. Things that
consume time, resources, space, or both, but do not contribute
to satisfying customer need.
The 12 categories of waste are as follows:
1. OverproductionMaking more than is needed.

2. ExpertiseNot using peoples knowledge.
3. Transportation.
4. Inventory and Work in process (WIP).
5. Motion.
6. Rework or Corrections.
7. OverprocessingProcessing more than is needed.
8. Waiting or delays.
9. Overload or straining a systemOverloading systems
capabilities usually leads to other forms of waste.
10. UnevennessUnevenness in work flow usually leads to other
wastes.
11. Environmental wastePollution, excess consumption.
12. Social wasteSocial networking while at work. Literacy, hun-
ger, or cultural oppression.
Larry wondered why Time was not a waste. He concluded that each of
the 12 wastes wastes time as well! He continued to review his notes on the
following Lean concepts:
PDCA process for implementing improvements. This is

process mirrors the scientific method and drives improvement
activities.
Next process or operation is the customerServe them.
Upstream qualityBuild quality in; do not pass along poor
quality.
Customer needs firstAlways focus on the customer and
their requirements
Decisions at the lowest appropriate levelGo to where
the work is done or the value is added. Sometimes called
Gemba.
Speak with dataUse objective information to evaluate
process performance. Use other statistical tools to turn
subjective information into objective data.
Variation reduction and control through statistical process
control (SPC).
Define and seek PERFECTION.
Adding value through waste identification and elimination is a funda-

mental concept of Lean Sigma. The customer is paying for value; waste is
anything that your organization does to a product or service for which the
customer may be paying, and probably should not be. Waste is anything
that adds time, resources, or cost without adding value to the finished
product or service. When waste is removed value increases. Waste can
occur in customer processes as well.
Twelve Forms of WasteThe Dirty Dozen

Lean Sigma tools and concepts assist employees (and customers in service
processes) in identifying and eliminating all types of waste. It is critical that
employees have a fundamental knowledge and understanding of waste
in order to identify and eliminate it. The purpose of Lean Sigma practices
is to identify, analyze, and eliminate all sources of process inefficiency.
The following table was a handout Larry had from the training ses-
sion. The table summarizes the 12 wastes with examples.
The Dirty Dozen: 12 Forms of Waste

Ways to
Form Description Examples eliminate
Overproduction More than required E-mailing, Task time
is made or served faxing the Proof of need
same document survey
multiple times Make to order
Ineffective
meetings
Expertise Under-utilization Workloads not Standard work
due to placement being completed Lean Sigma File
of people into due to lack of System
positions where their cross-training Business case for
knowledge, skills, Assigning Lean Sigma
and abilities arent employees two Office quick-starts
used to the fullest jobs due to
understaffing
Transport Any transport of Delivering 5S
files, information, or unneeded Value stream
materials documents mapping
Updating Standard work
customer records Lean Sigma File
in different System
systems Visual controls
Colocation of
workers
Inventory Excessive piles of Files awaiting 5S
paperwork, computer signatures or Value stream
files, supplies, and approvals mapping
time spent searching Keeping multiple Standard work
for documents copies of reports Lean Sigma File
System
Kanbans for office
supplies
Level
loading-heijunka
Motion Any movement Hand carrying Standard work
of people, paper paper to another New office layout
or electronic process Kanbans for office
exchanges, or both, Using an supplies
that does not add excessive number Pull systems and
value of transaction supermarkets
screens to support
decision making
(Continued)
Ways to
Corrections All processing Data entry errors Standard work
required in creating Not having Lean Sigma File
a defect and the integrated IT System
additional work systems Visual controls
required to correct it Mistake proofing
Overprocessing Putting more work Duplicate reports Standard work

or effort than or information Lean Sigma File
required into the Constantly System
work requested by revising Data collection
internal or external documents techniques
customers Excessive Document tagging
approvals
Waiting Waiting for anything Excessive Value stream
(people, signatures, signatures or mapping
information, etc.) approvals 5S
Delay in feedback Lean Sigma File
from high-level System
management Runners
Waiting for a Pitch
meeting to make a Standard work
decision Scoreboards
Overload Overburdening or An 18-person bus Standard work
overloading a work carrying 25 people One piece flow
system, machine, or A new contract Statistical analysis
process requiring 80 Workload
additional hours balancing
of work and not
enough staff to
complete the work
Unevenness Lack of consistent Scheduling 5S
flow of inputs/ all work to be Value stream
information/ completed at the mapping
scheduled work from end of the month Standard work
upstream processes and not during Workload
causing many of the month at even balancing
the other types of intervals
waste previously Poor office
mentioned processes
for locating
documents when
a staff member is
on leave
(Continued)
(Continued)
Ways to
Environmental Any waste that Paper or plastic Reduce, reuse,
is generated by a used in a cafeteria recycle
service organization that isnt recycled Sustainability or
that impacts the Unnecessary use Green metrics
environment, of power when
whether it is heat, machines and
solid, liquid, or gas equipment arent
in use
Social Waste from the other Time spent by PlanDoCheck
areas of society, employees at work Act
such as poverty, socializing Sustainability
discrimination, Advertising metrics
malpractice, health products on social Performance/gap
and injuries, networking sites analysis
nutrition, literacy that are not read
and education, by target audience
and also waste on
account of social
media networking
Larry thought about where these wastes could be present at his cruise line
and made the following notes.
1 of 12: The Waste of Overproduction
Producing some type of work prior to it being required is waste of over-

production. Providing a service above and beyond what is needed is also
considered overproduction. Overproduction is when too much of some-
thing is made or served. This is the greatest of all the wastes. Overproduc-
tion of work or services can cause other wastes. For example, by preparing
extra copies of a report, you are using extra paper, extra time to handle
the reports, and extra motion and transportation to dispose of the reports,
and so on. Activities without direct immediate purpose should be elimi-
nated or reconfigured unless they are already understood as essential to a
perfect process.
2 of 12: The Waste of Expertise
The under-utilization of peoples expertise is a result of not placing people

where they can (and will) use their knowledge, skills, and abilities to the
fullest providing value-added work and services. An effective performance
management system will reduce this waste significantly. Use company
policies and procedures to effectively place people where they will most
benefit the organization.
3 of 12: The Waste of Transport
Excess transport affects the time of delivery of any work within an office.
Even with the Internet and e-mail readily available, too often, or not often
enough, documents (i.e., files) that provide little or no value are moved
downstream regardless of need. Reducing or eliminating excess transport
waste is important. Locating all work in sequential process operations and
as physically close together as possible will help eliminate or reduce this
waste. Transport between processes that cannot be eliminated should be
automated as much as possible. Ask questions such as, Is the office layout
optimal?, Is the release and request for work automated? and Is IT
aware of the problem and can they help?
4 of 12: The Waste of Inventory
Excessive piles of paperwork, computer files, supplies, and time spent

searching for a document is waste. They all take up space or require
someones time. If a document is waiting for additional information (i.e.,
signature, review, approval, etc.) and there is a change, then the time
the document has been waiting is waste. There are basically two types
of inventory waste related to administrative areas: (1) office supplies and
(2)information.
5 of 12: The Waste of Motion
Any movement of people that does not add value is waste. This waste
is created by poor office layout or design, faulty or outdated office
equipment, supply inaccessibility, and movement of information or

data that does not add value. The waste of motion is insidious and
is hidden in service procedures that have not been reviewed for CI
initiatives. Regardless of the industry, motion waste may appear as
someone who is looking busy but not adding value to the work or
service. Lean Sigma tools will assist to identify, reduce, and eliminate
this waste.
6 of 12: The Waste of Corrections
Correction waste refers to all processing required in creating a defect, or

mistake, and the additional work required to correct a defect. And defects
(either internal or external) result in additional administrative processing
that will add no value to the product or service. It takes less time to do
work correctly the first time than the time it would take to do it over.
Rework and corrections are wastes and add more costs to any product or
service for which the customer will not pay. This waste can reduce profits
significantly.
7 of 12: The Waste of Overprocessing
Putting more work or effort into the work required by internal or exter-
nal customers is waste. Excessive processing does not add value for the
customer and the customer will not pay for it. This is one of the most
difficult administrative wastes to uncover. Some questions to ask to assist
in the identification of this waste are, What are the most basic processes
required to meet the customer needs? or Is there a clear understanding
of the customers needs?
8 of 12: The Waste of Waiting
Waiting for anything (people, signatures, information, etc.) is waste. This

waste of waiting is low hanging fruit which is easy to reach and ripe for
the taking. We often do not think of paper sitting in an In basket or an
unread e-mail as waste. However, when looking for the item (document
or e-mail), how many times do we mull through that In basket or the
Inbox folder and try to find it? How many times do you actually touch
something before it is completed? It is the finish it, file it, or throw it
away system that can help eliminate this waste. This waste closely related
to wasting time.
9 of 12: The Waste of Overload
The overburdening or overloading of a work system or process typically

causes other wastes to occur. Overload must be handled as a separate
waste as it can be identified easily during the value mapping process, and
is often expressed in terms of capacities of equipment or people. Usually
this waste causes a great sense of frustration and aggravation, for custom-
ers and employees, and often leads to other wastes and loss sales.
10 of 12: The Waste of Unevenness
Lack of a consistent flow of inputs/information/scheduled work from

upstream processes causes many of the other types of waste previously
mentioned. Unevenness such as traffic jams, loading and unloading ten-
der boats, lunch hour rushes, and the like create special needs for service
organizations wanting to provide the highest level of service.
11 of 12: Environmental Waste
As service organizations become more sustainable or Green, they have

to make extra efforts to protect the environmental resources as they are
becoming very scarce. Any waste that is generated by a service organiza-
tion that impacts the environment, whether it is heat, solid, liquid, or gas,
is classified as environmental waste. These items can be observed in an
organizations trash containers and dumpsters. This is a huge opportunity
for Larrys cruise lineLarry double starred this item!
12 of 12: Social Waste
Social waste is another category of waste that service organizations need to

focus on if they wish to become more sustainable. The term social waste
is broad and includes areas such as poverty, discrimination, malpractices,

health and injuries, nutrition, literacy and education, and also waste on
account of social media networking. When people who are suppose to
be working are using their social media when not allowed, or when an
organization is not capitalizing on the use of social media applications
where appropriate. Larry triple starred this waste!
Larry knew that each of the 12 wastes existed for his cruise line and
reviewed the leading waste questions identified in class.
Leading Waste Questions
1. Where is waste causing us to spend excess time, resources, and

money?
2. How can I communicate these wastes throughout the organization?
3. What are some of the obvious wastes (low hanging fruit)?
4. What can be done to immediately improve customer satisfaction?
Larry thought hed use these questions to stimulate people and promote
more open communication regarding waste and continuous improve-
ments.
Larry reviewed the following Lean Sigma Service Excellence Waste
Walk form. The form can be used by teams or individuals to identify
waste in their work environments. Simply take the form into the work
environment and look for a waste or two in each of the Dirty Dozen
waste categories. This exercise develops a deeper understanding for waste
and may provide a starting point for an initial project. At a minimum, the
results will stimulate discussion, learning, and waste observation. Larry
thought about how he could use this form to help teach his team about
wastes and CI opportunities.
Larry continued to review his notes from the training session at DRP.
Lean Sigma Methods

The Lean Sigma methods used for Lean Sigma transformations include a
systematic approach or steps to initiate improvement in an organization.
Lean Sigma Service Excellence

Waste Walk Check List
Types of waste Waste observations
Overproduction
Producing more material or information
than is needed or used.
Expertise
Not using peoples minds and getting them
involved.
Transport
Moving tools and materials to the point
of use.
Inventory
Materials or information. This includes all
work in process and finished goods.
Motion
Movement of people. This includes
walking or riding, as well as smaller
movements.
Corrections
This includes rework or fixing of products
or information that is wrong the first time.
Overprocessing
This includes work above and beyond the
minimum requirements or needs.
Waiting
This includes any time delayed or waiting
for materials, information, or people.
Overload
This is when workload is too much and
machines break and people burnout.
Unevenness
This is when workload varies from slow to
fast uncontrollably.
Environmental
This includes pollution and other wastes
of the environment.
Social
This is waste that impacts social issues.
The systematic approach is defined at three levels of engagement. Each

level must use the PDCA improvement process. Larry recalled the various
levels of engagement from his day at DRP.
Leadership Level
Develop Lean Sigma understanding and commitment for

organization leaders.
Develop and communicate Lean Sigma strategy to the
organization.
Develop and deploy a tactical plan to transform the
organization into a Lean Sigma enterprise.
Set, align, and communicate measureable goals and rewards to
sustain and support the Lean Sigma enterprise and thinking.
Conduct regular organizational performance reviews.
Project, Systems, or Team Level
1. Use the DefineMeasureAnalyzeImproveControl (DMAIC)

improvement process. The DMAIC improvement process phases are
defined as follows:
Define the project scope, resources, and objectives.
Measure the current state process key performance
measures, drivers, capabilities, flows, and outcomes.
Analyze the current state process data to identify and
prioritize improvement opportunities.
Improve the process by applying Lean Sigma improvement
tools and techniques.
Control the process so that the improvements are
sustainable.
Worker Level
1. Implement a housekeeping and visual control effort at all worksites.

2. Conduct hourly or daily mini-experiments to improve processes.
By engaging at these three levels, an organization can truly begin to trans-

form their culture to a CI-driven environment. Further, discussion and
cases are analyzed elsewhere to further illustrate how these levels work
together to transform an organization.
Lean Sigma Tools

Larry reviewed the following Lean Sigma Tool Application Chart and his
notes on Lean Sigma tool applications.
The Lean Sigma Tool Application Chart presented here is not all
inclusive. It covers the Lean Sigma tools identified in the applications
chart. These tools are found to be the most applicable for organizations.
Not all Lean Sigma tools will work the same in every environment. Lean
Sigma tools that apply directly in a mass production manufacturing envi-
ronment apply to a service environment, but might not be a direct fit. Just
as one would not use a screw driver to loosen a hex-head bolt, not every
Lean Sigma tool will apply to every environment and culture. The savvy
Lean Sigma practitioner will identify the key applicable Lean Sigma tools
and apply them as needed.
DMAIC Alphabetical Tool Application Chart

Lean Sigma improvement phases
Lean Sigma tools Define Measure Analyze Improve Control

1 5Ss X X
2 5-Whys X X
4 Cause and effect X X X
diagrams
5 Check sheets X X
6 Constraint or X X
Bottleneck analysis
7 Cross-training to X X
develop worker
flexibility
8 Flow, process, X X X X
Swim lane, or
value stream maps
(Continued)
(Continued)

10 Frequency charts X X
11 Future state flow X
maps
12 Histograms X X X X
15 Key metric data X X X
profiles
16 Leveling service X X
flow, pull signals
(kanbans), and
paced work flow
(Heijunka)
17 Mass customization X
18 Mistake proofing X X
(Poka yoke)
20 Pareto and pie X X X
charts
21 Performance X X
management and
improvement
22 PlanDoCheck X X X X
Act process
23 Problem solving X X X X
Corrective and
preventative
actions
25 Project X X X X
management
26 Quality function X X
deployment (QFD)
27 Queue time X X X X
28 Radar chart X X X
29 Rapid improvement X
events
30 Run and control X X X
charts
31 Scatter plots X
(Continued)

32 Spreadsheets and X X X
pivot tables
33 Standard work for X X X
leaders
34 Standardized work X X X
35 Statistical process X X X
controls
37 Supplier/Input > X X X
Process > Output/
Customer (SIPOC)
38 Talk time, X X X
predictive selling
or service rate
analysis
39 Value-added versus X X X
non-value-added
analysis
40 Visual controls X X
41 Visual management X X X X
and performance
scoreboards
42 Voice of the X X X
customer (VOC)
Larry knew he had to do something different with his cruise line but he
was beginning to feel a bit tired until he got to his notes on the Lean
Sigma outcomes listed below. His notes on these potential results gave
him a bit of inspiration.
Lean Sigma Outcomes

Successful Lean Sigma transformations have been documented for hun-
dreds of enterprises in nearly all sectors of the economy. In planning your
Lean Sigma transformation, be careful not to set your expectations too
low. Organizations implementing Lean Sigma transformations can expect
to realize some or all of the following:
High organization morale, teamwork and effort through

alignment of goals and measures, and improved leadership
Clear communication of priorities, expectations, and results
through visual and statistical controls. The Right things get
done Right
Clean, organized, and efficient worksiteminimal waste or
errors
High quality outputs and results
Smooth flow of work or services
No unscheduled downtime or surprises
PerfectionZero defects or errors
Less inventory, delays, transportation, motion, and rework
Less costs and more profit and returns on investment (ROIs)
Increased capacity and sales growth potential
All of this information was a bit overwhelming for Larry. He still wasnt
convinced that Lean Sigma would work for his cruise line but he didnt
have many alternatives. He knew that doing the same thing and expect-
ing different results would just not work! Larry wanted to ask Joe some
more questions about the process so he gave Joe a call and invited him for
a tour of the cruise ship. Larry thought hed have some time to pick Joes
brain about how to begin. Larry just needed to know what the next step
was and how to get started.
Joe agreed to the tour if his family could spend the day on-board with
a full pass to the amenities. Larry agreed and the tour date was set.

1. In his notes from his visit to Joes factory, Larry stated Lean Sigma
is the most successful continuous improvement (CI) method in
the history of the world. Do you agree with this statement? Why
or why not?
2. Discuss the similarities and differences between Lean, Six-Sigma,
and Lean Sigma? Which of these is the most powerful and why?
(Continued )
3. Why do the authors recommend understanding the building

blocks in order to understand what Lean Sigma is? Discuss the
building blocks and how can it help an organization prepare for
its Lean Sigma journey?
4. What are the three key Lean Sigma principles? Does your organi-
zation address these principles effectively? If not, how would you
go about doing it?
5. Discuss briefly the fundamental Lean Sigma concepts. Can they
be easily applied by Larry in his organization?
6. By means of examples, briefly explain the 12 categories of waste?
Why is it important for an organization to be aware of and to
address these wastes using the waste walk checklist?
7. Why is it important that a Lean transformation be conducted
at three levels? If you were Larry, what steps would you take to
ensure a smooth transformation at all three levels? What outcomes
would you expect to achieve?
CHAPTER 4
Comparing Manufacturing
and Service Environments
Joe and his family were up early on the morning of the ship tour. Joes
wife had cooked a pancake breakfast and the sugar high was just kick-
ing in for the kids as they arrived at the port. Joe spotted Larry talking
with a crew member outside the ship boarding area. Larry! yelled
Joe with a wave. Larry wrapped up his conversation and walked over
to Joe.
Boy, we are sure ready for this. Whats the day-plan? asked Joe.
Larry explained that he thought hed drop Joes wife and children
off at the family pool and set everyone up with a day pass for the ships
amenities. The ship was at port today preparing for the next voyage.
Many of the restaurants were in a changeover mode, yet there were plenty
of things to do and places for Joe and his family to eat. Once Joes family
settled in, Joe and Larry would take a walk around the ship.
The walk with Larry started in his office. Larry liked his office and
thought it would impress Joe. As they walked into the office, Joe said,
Pretty fancy! At least it looks like youre doing well! Yeah Joe, this is
one of the ways service is different from manufacturing. If you had an
office this nice your customers would assume you were making too much
money. When they see my office they assume the entire ship has such nice
features, Larry replied with a smile.
Yeah this is nice, but you probably shouldnt spend too much time
in here, said Joe.
Well I wanted to start here to show you how we are organized and
how different we are when compared to a manufacturer. Larry showed
Joe the list (see next page) of the key areas he was responsible for in the
cruiseline.
Cruise Line Departments
1. NavigationCaptain and crew

2. Guest servicesBookings and onboard guest services
3. Entertainment
4. GamingOnboard casino
5. HousekeepingMaid services and laundry
6. MedicalOnboard medical center
7. Food servicesMultiple onboard restaurants
8. Retail salesMultiple onboard stores
9. SecurityOnboard police
10. Adventures and event planning
11. Operations and maintenance
12. Purchasing and logistics (supply chain)
13. Human resources and training
14. AdministrationPayroll and accounting
Joe was impressed. There are a lot of areas on this ship, its like a small
city! Joe said.
Its not all about speed and efficiency on a cruise ship, said Larry.
Sometimes our customers want slow, relaxing services. They want to be
pampered, they want opulence! explained Larry. He continued, For
example, if we charge $150 for a foot massage, we dont want to rush
through in 10 minutes.
Joe smiled a knowing smile, That may be true, but they might not
want to wait 45 minutes in the lobby before getting their massage either.
Are guests ever put on hold when trying to schedule an appointment?
I get what you are saying, but there are a lot of other areas on the ship
where you do need improved speed and efficiency. You might want to
focus on those areas before its too late! Lets take a walkI cant stand
sitting still, said Joe, and off they went.
How do you know what your customers want? asked Joe.
What do you mean? asked Larry, seeming a bit confused by the
question.
Well, how do you know if the customer wants a $150, 2-hour foot
massage experience, or only a simple foot rub for a couple minutes?
clarified Joe.
COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS 39
Well, we set up standard services and let our customers select the service
or option they want. Its like our food services, in that we provide a full all
you can eat buffet where the customers can select what food items they want,
or we offer other locations where customers can experience full service, a la
carte menu items. Their choice is how we know what they want, said Larry.
Joe elaborated, Thats great! We call that Mass Customization, which
is a Lean Sigma tool that allows customers a unique selection of exactly
what they want. You see it a lot in food services, but what about the other
services you provide? I studied a little about cruise lines before coming
today. Your brochure does a great job of explaining the different areas on
the ship where you provide multiple types of services. Some of them can
be easily customized and offered to the customers, some cant. For exam-
ple, security, maintenance, and housekeeping are all services. Some have
direct ties to customers, some dont. Some have tangible or measurable
outcomes, some dont. In fact, services can fall into three categories:
Service Delivered to an External Customer which is characterized by a

high level of customer interaction and total number of transactions
completed by an organization. Organizations providing services
to external customers may have to face extreme competitive pres-
sures and may be engaged in marketing campaigns in an effort to
gain additional clients. In this category, a service provider or person
interacts with the customer directly and typically performs a task or
physical deliverable. Delivered services usually have more tangible
outcomes than service process completions. Organizations compete
on quality of outcomes. Examples include fast food restaurants, bank
tellers, lawn maintenance services, laundry services, and the like.
Service Process Used by an External Customer is similar in that they

typically face extreme competition, yet are different in that the
service provider may also have to educate their potential clients
on how to use the service process. Many of these organizations are
using the power of the Internet to improve their process delivery
and options, by having customers complete the ordering pro-
cess, or data entry rather than direct interaction between a ser-
vice worker and a customer. Service processes typically have less
tangible outcomes than delivered services. Organizations compete
on speed and simplicity of the process. Examples include auto-

mated teller machines (ATMs), self check-in monitors for air-
lines, self check-outs at retail stores, vending machines, and all
other service types where customers use a process directly without
direct person-to-person interaction.
Service Process Internal to an Organization typically faces less

competitive pressures because they have been established by the
organization to serve the organization. However, they too must
educate their users regarding the features and use of their internal
service processes. Examples include human resources, Information
Technology (IT), counseling, internal supply rooms, or janitorial
services within an organization.
(Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect ServiceUsing

a Practical Approach to Lean Six Sigma to Improve the Customer Experience
and Reduce Costs in Service Industries. Chelsea, MI: MCS Media, Inc.)
Each of these services has either objective and measurable, or subjective

and more difficult to measure outcomes. For example, subjective out-
comes might be the feeling of relaxation, enjoyment from a concert or
show, and similar things. Objective outcomes are things like the drinks
being served on time, rooms being cleaned to standard, the ship sailing to
the next port on schedule, and the like.
Wow! You sound like a service expert Joe! said Larry.
Well, we learned about processes in our Lean Sigma training and
each of these types of service is a process with a Supplier, Inputs, a Process,
Outputs, and Customers. We learned this analysis as the SIPOC process
definition. Get it? SupplierInputProcessOutputCustomer = SIPOC.
This defines and measures a process so we can make improvements.
Defining and Measuring are the first two steps in the DMAIC improve-
ment process, said Joe. Joe continued, Lets get on to the tour! Ive talked
enough and Im tired of this office already!
Larry provided Joe with an extensive tour of each of the main areas.
Joe made notes about his observations regarding the 12 wastes as they
visited each area. When they returned to Larrys office, Joe wrote his
observations on the white board. Joes notes are summarized in the
following table.
Area Lean Sigma ideas already in use Wastes observed Improvement ideas
Navigation Some good visual controls exist in the The helm looked a bit disorganized. This caused a waste 5S the helm. Perhaps add some visual controls to
Captain and crew helm for maneuvering the ship. in motion and delay while crew members look for key identify key files and information.
items and information.
Guest services The boarding had many visual controls, This onboard areas all looked disorganized. This caused Perform a 5S in the onboard guest services areas.
Bookings and from directional arrows to color-coded customers to wait while workers tried to find critical
onboard guest alphabetical registration signage. information. Making the customer wait is worse than
services making a coworker wait, but both are wasteful.
Entertainment Many of the backstage areas were well Some of the storage areas were overflowing with props and A 5S would ensure the excess and or old items are
organized. Clearly the entertainers are costumes. This represented waste in inventory as some removed thereby reducing inventory and delays.
used to quick costume and act changes. of the props were no longer being used. Working around
useless props and items causes a bit of waste of waiting.
Gaming Casinos and gaming areas use a high The casino area was a bit outdated, and many manual Develop a low-cost standard work method to
Onboard casino level of visual controls and visual methods of monitoring the area were observed. This is a improve monitoring and create a mobile cashier
stimulation to attract and direct the waste of overload and motion as the monitoring group did to reduce wait times and motion for customers.
customers. not have the tools to do the rework without undue wastes.
The casino area only had one cashier; this sometimes
causes customers excessive motion and waiting.
Housekeeping The maid services were using standard Driers were running well after the clothes were dry. To further improve the maid services, a scheduled
Maid services and carts with everything they needed to This is a waste of overprocessing. There was also an runner could deliver new linens and supplies on
laundry service guest quarters. This prevented unevenness and overload of laundry processing. Some a specific pitch. This is a paced flow of Heijunka
waste of motion and transportation as days were extremely busy, and some days were very slow. system, with the use of a runner or water spider.
items were consumed or needed. In the laundry area and Kanban system make sure
COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS
washers and driers process the exact time, and no

less or more.
41
(Continued)
42
(Continued)
Area Lean Sigma ideas already in use Wastes observed Improvement ideas
Medical Healthcare areas typically use visual Several people were surfing the web, when they should Establish standard work to address social
Onboard medical controls and signage to help people have been working. This is a social waste. The exam networking. Consider kanbans for supplies in the
center interact with their systems. rooms seemed to be missing many items. This can cause exam rooms.
the waste of waiting or delay as well as motion.
Food services Several signaling or kanban systems Cruise ships are well known for their lavish food Consider using statistical analysis to minimize
Multiple onboard were being used to inform chefs of the offerings, but where does all the excess food go? And food waste.
restaurants needed items. how do they know how much food to prepare? Excess
food waste is a waste of social responsibility and the
environment.
Retail sales Onboard stores were already using visual Even with the statistical tools in place, excessive and Consider using statistical tools to determine more
Multiple onboard controls to attract and direct customers obsolete inventories were observed. precise product needs and volumes. This will
stores and workers. reduce the waste of inventories.
Security The security group is using a mistake- At times several security personnel were overlapping in Consider flow maps and pitch times for the
Onboard police proofing method to ensure they are their standard routes. This is a waste of overprocessing. standard security routes. Also, consider providing
achieving proper coverage and support Additionally, the security group was continually having additional training to reduce errors and
to all key areas of the ship. to modify their reports as they were often incorrect. This corrections.
is a waste of corrections.
Adventures Similar to onboard stores, the Many corrections are needed as adventure sign-ups Consider a visual management system to plan and
and event adventures and event planning group are often overbooked. These wastes or corrections schedule customers onto adventures.
planning was using visual controls to attract and overburdened and caused customers to wait.
LEAN SIGMA METHODS AND TOOLS FOR SERVICE ORGANIZATIONS
guide customers.
Operations and The maintenance crew was using a Customer maintenance calls sometimes took several Consider an improved standard work practice
maintenance standard preventative maintenance hours to resolve. This is a waste of waiting. Often the to serve customers. Also, establish a standard
program to maintain the ship and engine maintenance member would make the initial visit to the maintenance tool cart to take on all calls.
room mechanicals. area requiring maintenance support, and then go to get This is mass customization and standardized
the proper tooling. This too is waste of waiting, as well work. Develop this plan through statistical and
as waste of transportation and motion. historical data analysis.
Purchasing and The purchasing and logistics group Several stock-out notices were found in the area. This Consider using kanban methods to prevent stock
logistics (supply was already using statistical analysis to causes customers and workers to wait. The group was outs. Also, develop a plan to engage peoples
chain) determine order quantities to reduce also not using the ideas from the various areas of the thoughts and improvement ideas.
costs. ship. This is a waste of people as resources.
Human resources The HR department used standard The HR department printed every e-mail they received, Consider a revised method of handling e-mails.
and training work regarding the orientation training and had multiple people read them. This is a waste of Use an office/software 5S. Develop standard work
program for all new members of the staff. environment, social responsibility, and overproduction for processing e-mails that will reduce printing.
or overprocessing.
Administration Payroll was using standard work to Quite often they had to make corrections in payroll and Consider mistake proofing methods for the payroll
Payroll and process check on a weekly basis for checks due to the hours accounting system. This is a and hours tracking system.
accounting all employees, as well as the regular waste on corrections, which causes waste of waiting by
financial reports. They also used double- the staff.
entry accounting techniques which is a
form of mistake-proofing.
COMPARING MANUFACTURING AND SERVICE ENVIRONMENTS
43
There are a lot of opportunities for Lean-Sigma methods and tools here.
I think you should start a couple of improvement projects, commented Joe.
Great! How do I do that? We sail tomorrow! asked Larry.
First, you need to build a foundation to support Lean Sigma improve-
ments, so you have plenty of time. The first step starts with you, Joe said.
Me? Why me? Tell me more Joe, tell me more! replied Larry a bit
sarcastically, but with real surprise.
Not today. Ive done enough work for you today! I need to find my
wife and kids and enjoy your sinking ship! Joe said.
Quiet, Joe, Larry said while looking around to see who was near. I
dont want anything like that getting around. Ill set something up for us
next week.
Great, wheres the pool? Joe said with a sigh and a stretch. Larry
took Joe to the pool and went back to his office to stew.

1. Why was Joe critical of Larrys office? Do you think the criticism
was justifiable?
2. What are some of the thoughts that come to your mind when you
see the list of the different departments in the cruise line? Do you
think that Lean Sigma can be applied to all these departments?
Why or why not?
3. Discuss the concept of mass customization. Why was Joe eager
that Larry apply this concept in his cruise line?
4. Briefly discuss the three different categories of service. Under
which category does the cruise line fall under and why?
5. Why is it critical to have both subjective and objective outcomes
and measurements in a service business? If you were Larry, pro-
vide examples of subjective and objective outcomes and measure-
ments that you would use.
6. Critically evaluate the table that summarizes the notes Joe made
when he toured the cruise line with Larry. What lessons can your
organization learn from this table and the process Joe used?
7. If you were Larry, what would you do with the list that was
provided to you? What lessons can we all learn from this?
CHAPTER 5
Key EnablersPolicy
Deployment, Accountability
Sessions, Employee Training
and Involvement, and Lean
Sigma Tool Selection and
Application
Larry left Joes waste walk notes on his white board during the cruise and
through the next week. He studied the notes and at first was a little upset
about Joes comments. However, as time went by, he began to realize
Joe had some good points. Larry became excited about Lean Sigma and
invited Joe back to his office for the next session. Joe got to Larrys office
right on time. Youre going to have to put me on your payroll pretty soon
Larry, boasted Joe as he arrived at Larrys office. Joe handed Larry a single
piece of paper. On the paper was the following.
Key Enablers for Lean Sigma Success
1. Leadership establishing, communicating, and living up to the vision,

mission, and valuesDirection setting or setting the course
2. Resource commitment
3. Training and education
4. Process- and results-focused
5. Policy deployment and goal alignment
6. Total system or value stream focus
7. Employee involvement
8. Perseverance and commitment
(Source: Womack, J.P. & Jones, D.T. (1996). Lean Thinking: Banish Waste
and Create Wealth in Your Organization. New York: Simon and Schuster;
Ptacek, R. & Motwani, J. (2011). Pursuing Perfect ServiceUsing a Practical
Approach to Lean Six Sigma to Improve the Customer Experience and Reduce
Costs in Service Industries. Chelsea, MI: MCS Media, Inc.)
Joe explained where the document came from and each key to Larry.
Recently we visited several highly successful Lean Sigma organizations
in a variety of industries to learn what had made each of them so suc-
cessful. What we found was amazing; each company we visited generally
concluded the same eight keys to success. We found that this was an
enhancement to the current literature on Lean Sigma transformations,
explained Joe. Joe further explained each key enabler.
1. Leadership establishing, communicating, and living up to the

vision, mission, and valuesSetting the course. Lean Sigma trans-
formations do not happen by accident. It takes leadership to identify
and communicate the need to change, define what to change to, and
to define a process to use to continually improve. Too often leaders
will have good intentions in mind for their organizations, but do not
provide the key elements for continuous improvement. The vision,
mission, and values are too often either absent entirely, or placed in
plaques on the lobby wall, and never really used to drive improve-
ment and excellence. One of leaderships chief responsibilities is to
create an environment where the need for continual improvement
and excellence can be understood by all and people can motivate
themselves to excellence. Leaders need to communicate the current
business realities and priorities to the workforce, and challenge them
with delivering continuous improvement. This can be done very
effectively through the vision, mission, and value documents, and
proper strategic planning. This starts with you Larry.
2. Resource commitmentTransforming an organization to Lean
Sigma takes energy. Resources such as time for team work sessions,
training materials and instructors, and materials for improvement
projects and PDCA experiments all will be required during a Lean
Sigma transformation. If the proper resources are not provided,
KEY ENABLERS 47
progress will slow or stop. People will perceive a lack of com-

mitment from leadership and go back to less effective ways of
doing business. The continued commitment of key resources at
key times is one way leaders show their resolve to transform the
organization. Remember, Larry, a leaders actions speak louder
than their words. It helps if leaders actually participate in early
events and hold themselves accountable to use the tools for their
own worktoo.
3. Training and educationThis is an enabler for Lean Sigma transfor-
mations. If people dont have the proper instruction and a system-
atic approach to improvement, random and sometimes detrimental
results may occur. Some level of expertise needs to be developed by
the leaders and key workers within an organization to fully transform
an organization to a Lean Sigma environment. Not only the right
materials, but the right counseling and mentors providing guidance
at the right times will also support a Lean Sigma transformation. It
should be expected that key leaders show their leadership by aggres-
sively learning about Lean Sigma methods and tools. They lead the
organization in Lean Sigma learning. Im your master grasshopper,
injected Joe with a smile.
Joe continued.
4. Process- and results-focusedProcess and results mean not only

focusing on the results or the bottom line, but also to be concerned
for how the gains are being achieved. During the initial stages of a
Lean Sigma transformation its normal for several early successes to
be realized. These are commonly referred to as low hanging fruit
or quick hit items. While these successes should be celebrated, its
equally important for leaders to recognize and speak of the process,
methods, and tools being applied. This dual focus will reinforce the
workforces commitment to follow the process to achieve results.
It is also important to note that there is not always low-hanging
fruit. Teams diligently following the Lean Sigma improvement
process methods should be celebrated regardless of the outcome. By
rewarding or celebrating the process, leaders will encourage more
people to follow the process, and as they do, more improvements

and results will be realized eventually. Remember, process first, then
results.
5. Policy deployment and goal alignment. Policy deployment is the
process of establishing, aligning, and communicating the measures,
goals, and objectives throughout the organization. This provides a
total connectedness or alignment of the entire organization. It is
the report card, or score, for how things are going. If properly done,
policy deployment encourages and excites people into high levels of
personal and team performance. Remember our scoreboards on the
Gemba walks? Joe continued.
6. Total system or value stream focus. Total system focus forces organi-
zations to consider flow of products, services, and people in the
delivery process. Too often businesses are organized into islands or
silos through the organizational chart, and communicating across
islands or silos is difficult, if not impossible, for the well-meaning
worker. If nothing is done to break down departmental barriers, peo-
ple will become discouraged and only do enough to get by. They will
conclude that leadership really doesnt care, and ask, If leadership
doesnt care, why should I? The concept of total systems focus recog-
nizes that work and value flows horizontally through organizations
to service their clients.
7. Employee involvementEmployee involvement and participation
is how any Lean Sigma transformation actually gets done. Man-
agement cannot simply install a Lean Sigma culture. People of an
organization are key stakeholders in transforming the organization.
When they understand why the change is needed, what to change
to, and what processes to use to change, they can fully deploy their
energy and efforts. It is through their efforts and actions that a Lean
Sigma transformation occurs. In general, people want to be on a
winning team and when an environment exists where people can
strive for improvement, where the question of Whats in it for me?
is clear and inspirational, employees will motivate themselves and
strive for excellence.
8. Perseverance and commitmentLean Sigma transformations do not
happen overnight. Nor are they easy. Organizational leaders must
KEY ENABLERS 49
display long term perseverance and commitment for a full trans-

formation to occur. Patience is needed to allow teams to progress
through the DMAIC process and learn though PDCA improvement
cycles. Remember, not everything a continuous improvement (CI)
team tries will yield positive results. Consider celebrating the failures
as learning opportunities. Leaders will also need to navigate issues
and concerns along the way. Its not enough to pursue Lean Sigma
methods when times are good. Rather, it must be a deep rooted
philosophy of applying the tools and techniques in good times and
bad. Lean Sigma techniques are a way of working and behaving all the
time. Once leaders shift their behaviors to Lean Sigma philosophy,
the organization will begin to shift as well. Leading by example is
my best advice, added Joe, as he went right on to the next steps for
Larry.
Your next step, Larry, should be to develop a strategy for improvement

and then share this with your leadership team. From there, the team can
develop high level goals to help achieve the strategy and then begin the
process of cascading these goals to all areas of the organization. This pro-
cess is called Policy Deployment and is a Key Enabler and is sorely
missing here, Joe explained.
Larry organized his thoughts and developed the improvement strat-
egy and began the policy deployment process with the leadership team, as
Joe described it. The basic strategy is to participatively establish key meas-
ures and goals for each area, and then measure and post, in a scoreboard
fashion, the actual performance to goals for each area. Once this is done,
the teams will need a method to regularly review and respond to achieve
continuous improvement.
Things went well at first, but then Larry met with some resistance
in the ranks of his leadership team. A mutiny if you will, Captain
Bob burst out at a leadership work session, We dont need this for the
crew, we are doing just fine, thank you! Go blow your stack somewhere
else, Larry. The captain had been known for his arrogance and blunt
approach. After all, on the ship he was the captain and he was used
to people following his orders, not taking improvement lessons from a
land-lover like Larry!
Larry pushed back. Captain Bob, I think your behavior is inappropri-

ate and as long as you are an employee of this cruise line youll follow our
rules and policies and we are going to involve everyone in this improvement
initiative. The life of the cruise line depends on it! Captain Bob clearly was
not happy and he kept to himself the rest of the session. Larry caught up
to him later that day and explained that his crew and operations may be
top notch, but Larry still needed him to participate as he was a respected
leader in the organization. There was still some tension between Larry and
Captain Bob, but Larry remembered the discussion on resistance to change
he had learned about during the Lean Sigma session at Joes factory.
The instructor at the session explained that resistance to change is a
natural human reaction to change, and should be expected. Often peo-
ple are afraid of the unknowns that change can bring. People may not
express their fear, but it will manifest itself in resistance. Deep down, even
subconsciously, they may fear not being the expert, not being able to learn
the new skill or method, having to learn something new, or the sense of
loss of security due to not knowing the system. Resistance was actually a
sign that real progress is being made!
Larry reviewed the managing change graph (shown below) he
received at the training session regarding managing change, and thought
to himself, I must be doing something right, hitting a nerve somewhere,
if people are starting to resist.
Perceived competence
(7) Integration
(2) Denial
and refusal
(6) Realization
(5) Learning
(3) Rational
understanding
(1) Shock (4) Emotional

and surprise acceptance
Current state Time Future state
Managing change time plot.

Source: Ptacek, Coats, and Ptacek (2012).
KEY ENABLERS 51
The lack of resistance may mean that leaders are not pushing fast or
hard enough. Larry then decided to stay the course. His strategy to deal
with the resistance was to focus on the people who were showing interest
and nurture and cultivate their interest, rather than those who were resist-
ing. He was hopeful that this approach would convince people to try to
engage in the improvement effort. Other strategies to deal with resistance
are as follows:
Recognize that the root of resistance is based in a fear of

something and is a natural human response.
Answer the leading change questions: why do we need
to change, what to change to, and how to do it together.
Communicate this message often and consistently.
Be honest and truthful. Do not guarantee anything except
more need for change and improvement.
Look for subtle change resistant behaviors and address them
quickly.
Help people understand why change is needed and to settle
their fears.
(Source: Ptacek, R. & Motwani, J. (2011). The Lean Six Sigma Pocket
Guide XLCombining the Best of Both Worlds Together to Eliminate Waste!
Chelsea, MI: MCS Media, Inc.)
With the managing change plan set, Larry led a series of sessions with
his leadership team. They established their mission, vision, and goals.
They reviewed the company value statement, and recommitted to holding
each other accountable to these standards. The leadership team discussed
a plan for daily work team sessions or huddles in each area to discuss the
days activities and key issues. The leadership team prepared to meet with
their respective teams to roll out the strategic goals, and define Key Per-
formance Indicators (KPIs) and develop a system to monitor and improve
their results. The mandate was clear: we must improve or cease to exist
as an organization. Staying the current course would not lead to success.
Change for the better was needed and expected from everyone. Full speed
ahead with Lean Sigma was needed!
Larry felt good that his work with the leadership team had addressed
the key enablers. He was disappointed that it had taken 6 weeks to get
this done, but Joe told him to Steady the ship, plan the work, and work
the plan. The next step was for Larry to share with the area teams the
results and notes from Joes waste walk that was still etched on his white
board. This represented the current state, which was filled with waste.
Larry thought hed ask Joe to attend these sessions as he thought there
could be some rough sailing and resistance!

1. Discuss briefly the key enablers for Lean Sigma success. Why is it
important for every organization to know these enablers prior to
Lean Sigma implementation?
2. What role do top leaders play in the success of Lean Sigma imple-
mentation? If you were Larry, what steps would you take to ensure
success?
3. Why is it important not only to focus on the bottom line results
but also on how the gains are being achieved? Does your organi-
zation have the same focus? Why or why not?
4. Why is it critical to have a total system or value stream focus?
What are the typical mistakes organizations make when they
dont have this focus?
5. What do you mean by the term policy deployment? Why did
Joe tell Larry that this enabler was solely missing in his organiza-
tion? How did Larry go about fixing it?
6. Discuss some of the strategies to overcome resistance to change.
What strategies does your organization incorporate to combat
resistance?
7. Critically evaluate the process used by Larry to get his leadership
team on board.
CHAPTER 6
Analysis of the
Current State
Joe arrived early as usual to the current state work sessions scheduled by
Larry. As he greeted Larry, Joe asked, So Larry, if you start your Lean
Sigma journey, how will you know youre getting better?
Larry looked puzzled. Well I thought itd be obvious. Wont our
KPIs tell us? Larry replied.
They should, but having the base-line or current state or base-line
Key Performance Indicators documented is critical to show the long term
success. So what are your high level KPIs and how will you show improve-
ment? Joe asked.
Joe and Larry continued their dialog. Larry indicated that the primary
key measures are sales revenue, and Earnings Before Income Taxes and
Adjustments (EBITA). If sales and EBITA do not improve there may be
no cruise line to worry about.
Joe asked Larry, Okay, so what leads to increasing sales revenue and
profit?
Larry replied, Well, for profit to go up our operating costs need to go
down, for sales to increase we need more customers.
What leads to more customers? Joe asked. Larry wrote the following
on the white board:
To increase customer bookings we need the following:
Advertising and promotions that attract customers

Satisfied and repeat customers/passengers
Referrals from past customers/passengers
Okay, so how do you get any of these to happen? asked Joe. Larry
had that puzzled look again. Joe spoke up again, Well take a look at what
we call a Critical To Quality (CTQ) diagram. He sketched the follow-

ing diagram on the white board.
Increase EBITA and ROI (Organization Survival)
Increase sales Reduce costs
Sales Increase repeat Increase Reduce Reduce Reduce

promotions and customers referrals by past labor costs materials costs operating costs
advertising customers
Enjoyable Enjoyable Eliminate and Eliminate and Eliminate and
experience in experience in reduce the 12 reduce the 12 reduce the 12
all areas all areas wastes wastes wastes
Superior value Superior value Continuous Consume less Continuous
for experiences for experiences improvement for the same improvement
in speed and service levels in speed and
efficiency efficiency
Easy of booking Easy of booking Provide the Reduce Provide the
same level of materials costs same level of
service with through service with
fewer people negotiations fewer operating
expenses
No hassles or No hassles or Provide Provide the Provide
problems problems improved same level of improved
service and service with service and
customer fewer materials customer
experience with experience with
the same the same
people operating
expenses
Problems Incentive to Provide
resolved quickly return improved
and to the service and
customers customer
expectation experience
and delight with the
same materials
Pleasant people Problems
resolved quickly
and to the
customers
expectation
and delight
Ship amenities Pleasant people
and options
Ship amenities
and options
Incentive for
referral
Joe further explained that certain lower level activities and work lead
to improving the KPIs results at higher levels, and that this connection
defines a process of Policy Deployment that puts action to the plan. This
is the linkage between action items and worker level measures, and higher
level organizational results.
Okay, so how do you measure any of those, and how can my team
leaders drive this improvement? asked Larry.
ANALYSIS OF THE CURRENT STATE 55
Lets get to the current state work session and ask the team leaders,
said Joe.
To start the current state sessions, Joe and Larry agreed to cover the
CTQ diagram and concept, as well as the high-level objectives and KPIs.
They also decided to ask the area leaders to solidify KPIs in their areas that
will support the CTQ concepts as well as the high-level KPIs that Larry
and Joe had developed.
Joe encouraged Larry to be on the lookout for a team leader who
was energetic about the new approach. The goal was to establish a pilot
area for fast track improvement and to provide guidance to the rest of
thegroup.
Joe said, Initially, we want to spend our time and positive energy on
someone who wants to move forward.
Larry was skeptical about this. Dont we want to get them all on
board and moving forward at the same time? We have to make sure the
stubborn team leaders are bought in before taking the next steps. We
want them all to make progress as a team!
Joe smiled and said, Lets not waste energy trying to convince those
who are skeptical. When you spend time with the people who demon-
strate the behavior you want, others will take notice. Everyone will see
that the nay-sayers and complainers dont get all the attention anymore.
The fence sitters will then jump on-board and the momentum will drive
the improvement process forward. The nay-sayers will realize theyre
being left behind.
Larry slowly smiled an understanding smile. Larry quipped, Ah! I
need to change my people approach as well. Reinforce the behaviors I
want. The squeaky wheel shouldnt always get the grease!
At the current state work sessions Larry explained the current business
environment to the team. Larry didnt pull any punches. He told them
the brutal truth; if they didnt improve, they may have to close or sell the
cruise line. Everyone understood the seriousness of the situation but they
had no clue as to what to do about it. They all felt they were doing their
best. Larry mentioned that he was not dissatisfied with any of the teams
performance, but that the organization as a whole just wasnt getting
the job done. Basically, Larry felt that they were underachieving, and he
wanted to do something about it.
Larry provided a brief description of how the leadership team got
to this point. He described the walk through with Joe, and provided
a summary of Lean Sigma methods and tools, and the enablers.
WhenLarry shared the wastes summary table, there was a great deal
of resistance in the form of explanations and reasoning for doing
things the way Joe had observed. The leadership team heard comments
suchas:
Thats not fair! How else are we to do it?

We dont have the time to do it differently.
Do you know a better way?
Joe doesnt understand our businessHes in manufacturing!
Things have to be done this way.
Thats the way weve always done it, whats wrong with that?
Larry explained that the idea isnt to blame or point fingers, but to be able
to see the waste so improvements can be made. After the group calmed
down, a good discussion started to take place. During one of the breaks,
Sue, the food service team leader, pulled Larry aside. Larry, I have an idea
for an improvement that needs to happen in one of my restaurants, the
Good Time Diner. Id like to move ahead with an improvement project
with your help and Joes if thats okay.
Larry considered her idea for a minute or two, remembering
Joes pilot idea, and then said, Sounds good. Well support you any
way we can. Im sure Joe will help out when he can. What are you
thinking?
Sue responded, I want to do a customer survey and find out what
the customers think we need to do to get better. Satisfied customers equal
happy customers, dont you think?
Absolutely! Larry said excitedly. Conduct your survey and
let me know how I can help. Lets get back to our discussion on
improvements.
Area Increase sales Reduce costs

Navigation Smooth seas, safe passage, Reduced overtime, less fuel, less
on time to ports, connection breakdowns
with passengers
Guest services Expectations met, room Reduced overtime, less materials
acceptable and as described or costs
better, activities as described or
better, reasonable on-board costs
Entertainment Exciting and fun, reasonable costs, Reduced costs for acts and
connection between performers materials
and passengers, fresh acts
Gaming Exciting and fun, easy/no hassles, Reduced overtime, increased
increase passenger success stake, reduced passenger winnings
Housekeeping Clean rooms, relationships with Reduced overtime, reduced
passengers, all needs meet, quick materials and supplies
response to inquiries and needs
Medical Help everyone fast, no sea Reduced overtime, reduced
sicknesssmooth seas! materials and supplies
Food services Offerings, friendliness, Reduced overtime, reduced
entertainment during service materials and supplies, reduced
wastes
Retail sales No stock outs, reasonable prices Reduced overtime, reduced
materials and supplies, reduced
wastes
Security No problems, safe voyage Reduced overtime, reduced
materials and supplies, reduced
wastes
Adventures and Exciting options, fair prices, no Reduced over time, reduced
event planning delays on popular items materials and supplies, reduced
wastes
Operations and No problems or breakdowns, fast Reduced overtime, reduced
maintenance responses to passenger needs and materials and supplies, reduced
requests wastes
Purchasing and No stock outs, reasonable prices Reduced overtime, reduced
logistics (supply materials and supplies, reduced
chain) wastes
Human resources Support all employees, Reduced overtime, reduced
and training knowledgeable of staff, passenger materials and supplies, reduced
questions answered quickly and wastes
accurately, customer service
orientation classes
Administration No billing problems, smooth, Reduced overtime, reduced
Accounting accurate, and hassle-free materials and supplies, reduced
currency exchanges, no credit wastes
defaults, pay checks on time and
accurately, profitable
When the session reconvened, Larry asked the area leaders how
they could affect the CTQ factors illustrated in the CTQ diagram. The
following table summarizes the discussion on how each area could affect
the overall high-level objectives.
The next activity for the team leaders was to define their KPIs and
processes. Each area needed a base-line data set for the KPIs so they could
determine if experiments and trials were actually improving things. Joe
helped Larry explain that the KPIs should align with the strategic goals
and high-level KPIs identified for the organization. This would ensure
that their policy deployment efforts would be consistent and aligned to
the strategic plan and goals.
The process to establish and align KPIs and goals took several
work sessions. Larry led these work sessions without Joe, but kept
in contact with Joe as his team progressed. The results of the work
sessions are defined in the following table that Larry published after
the sessions.
In the meantime, during the weeks that area KPI discussions took
place, Sue began working on her idea. She developed and distributed a
survey to customers over several weeks. The responses she received were
eye-opening and proved to be quite useful.
A The room is cold and drafty 28

B A lot of tables not clearedLooks bad 48
C No sweetener at the table 15
D Waited too long to be seated 78
E Buffet table is poorly organized 68
F Place settings are missing items 15
G Not enough window seats 11
H Drink refills took a long time 18
Total: 281
Sue took this data and put together a Pareto chart, as Larry had shown in
one of their work sessions. This visually showed the results of the survey
and highlighted which responses represented 80% of the problems.
Ocean Treasure Cruise Line High-Level Key Measures
Metric category
Organization
high-level KPI
Navigation
Guest services
Entertainment
Gaming
Housekeeping
Medical
Food services
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Human
resources and
training
Administration
Accounting
Sales Sales from Revenue Revenue Revenue

revenue shows from from retail from
(increase gaming sales adven-
sales) tures and
events
Profit
Return on
invest-
ment
EBITA
Financial focus
Perfor- Fuel costs Supply Supply Supply Supply Supply Food costs Wholesale Supply Supply Supply Total Supply, Supply
mance to per costs to costs to costs to costs to costs to to budget costs to costs to costs to costs to spending training, costs to
budget nautical budget budget budget budget budget budget budget budget budget to budget and budget
(reduce mile recruiting
costs) costs to
budget
(Continued)
(Continued)
Metric category
Organization
high-level KPI
Navigation
Guest services
Entertainment
Gaming
Housekeeping
Medical
Food services
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Human resources
and training
Administration
Accounting
Customer Response
satisfac- rate
tion
survey
response
rate
Customer Passenger Survey Passenger Survey Survey Survey Survey Survey Survey Survey Survey Survey Survey Survey
satisfac- contact scores contact scores scores scores scores scores scores scores scores scores scores scores
tion hours hours
survey
Customer focus
scores
New New New New New New Security New
offerings offerings offerings offerings offerings offerings visibility offerings
per developed developed developed developed developed developed
quarter and par- and par- and par- and par- and par- and par-
ticipation ticipation ticipation ticipation ticipation ticipation
rates rates rates rates rates rates
Sales Number Number Number Number Number Number Number Number Number Number Number Number Number Number
revenue of crew of team of team of team of team of team of team of team of team of team of team of team of team of team
per members members members members members members members members members members members members members
employee
Sales Nautical Passengers Shows Rooms Patients Meals Service Bookings Un- Total Employee
revenue miles served delivered served served served calls made made planned spend training
per sailed break- hours
operating downs
Productivity focus
costs
Wait Rooms Wait Wait
times for complete times for times for
service by noon service service
Customer Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable
com- complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints
plaints to area to area to area to area to area to area to area to area to area to area to area to area to area to area
Repeat Report-
visits able
crimes
Quality focus
Percent
fill rate
Commit- On time On time Hours of Hours of Hours of Hours of Hours of On time On time Stock outs On-time
ments to ports to sched- operation operation operation operation operation to sched- to sched- from all payments
met per ule ule ule areas
schedule
or plan
Delivery focus
Stock outs
(Continued)
People focus Metric category
ism/
tions
Organization
hours
(Continued)
per day
promo-
Injuries
Internal
illnesses
Training
high-level KPI
Absentee-
x
x
x
Navigation
x
x
x
Guest services
x
x
x
Entertainment
x
x
x
Gaming
x
x
x
Housekeeping
x
x
x
Medical
x
x
x
Food services
x
x
x
Retail sales
x
x
x
Security
Adventures and
x
x
x event planning
Operations and
x
x
x
maintenance
Purchasing and
x
x
x
logistics (supply
chain)
Human resources
x
x
x
and training
Administration
x
x
x
Accounting
95% 99% 100%

92%
88%
80
60% 78%
70
60
50
32%
40
30
20
10
0
D E B A H F C G
Series1 78 68 48 28 18 15 15 11
The Pareto chart indicated the biggest issue was that customers
waited too long to be seated. Sue was excited at the prospect of kicking
off a team in the restaurant to begin attacking this issue. She felt this
was right in line with her KPIs and the work that had taken place during
the sessions with Larry so far. Sue decided to share this information
with Larry and get some ideas for the next steps during the next work
session.
Larry smiled broadly as Sue explained what she had done so far and
what the survey responses revealed. Great job Sue! The Pareto chart
is perfect. Now we need to plan out some next steps to take following
the DefineMeasureAnalyzeImproveControl (DMAIC) approach.
We just so happen to be covering that information today. After the
meetinglets talk some more to make sure youre comfortable with all
the steps.
With the KPIs in place, the next step was for Larry to ask that each
area leader initiate an improvement project in their area that would
have a significant positive impact for the areas KPIs and the strategic
goals. Larry would lead sessions twice a month with the leadership
team to review project progress and monitor area KPIs and action
plans or countermeasures. Larry summarized his approach with the

following chart:
High-level Lean Sigma service journey steps
Conduct current state and key performance indicator (KPI) analysis
Project selection based on current state and KPI analysis
Lean Sigma service project launch(es)
Project team(s) learn and use the DMAIC

improvement process to implement improvements.
Establish and monitor key

organizational performance One or multiple teams and projects depending on resources
measures. Take corrective,
preventative, and 1. Project teams define the project parameters
improvement actions as 2. Project teams measure process variables
needed by assigning DMAIC 3. Project teams analyze process variable data
project teams. 4. Project teams implement improvements using the
Plan-Do-Check-Act (PDCA) improvement tool.
1. PDCA 1
2. PDCA 2
3.
4.
5.
6. PDCA (n)
5. Project teams establish control processes to ensure the
improvements are maintained.
Source: Modified from Ptacek, R. & Motwani, J. (2011). The Lean Six Sigma Pocket Guide XL
Combining the Best of Both Worlds Together to Eliminate Waste! Chelsea, MI: MCS Media, Inc.
The Lean Sigma flow diagram indicated that an initial Lean Sigma KPI
analysis would be required to document their current state situation. The
team felt this was a good idea and agreed to get moving on this effort.
Three weeks later while at port, Larry met with Joe. Larry shared what
was going on with Sue and how he had provided some coaching. Joe was
surprised at how well Larry had done. Youre a natural Larry, or did you
just get lucky? Joe teased.
This old dog can learn new tricks just as well as you, only quicker.
How long did you say you spent trying to understand this Lean Sigma
stuff? Larry countered.
You have a great teacher thats all, laughed Joe. Over the next few
hours Joe and Larry discussed next steps and went to visit Sue to answer
any questions she might have.
Sue told Larry and Joe her story so far..

She had already formed a team and they had worked on problem
and target statements. The problem they identified was customers waited
too long to be seated. The current situation is 78 of 281 customer survey
responses, that is 32%, indicate waiting to be seated is an issue. The team
thought the expectation might be customers should not have to wait at
all. They developed their target statement to read:
Reduce customer waited too long to be seated survey results

from 78 to 39 by March 1, this year and then to zero by April 30.
This seemed unreasonable to a few on the team. What about busy

times? Theres no way we can make sure customers dont wait at all!
We can never reduce survey results to zero. The team finally realized,
with Sues help, they needed to put some parameters on a measure
for waited too long to be seated. After some lively discussion, the
team decided progress would be measured by reducing the percentage
of customers each day who have to wait in excess of 30 seconds to
beseated.
Someone on the team wondered how they could possibly time this
and do it consistently. A team member asked, When does the wait time
start? When they get to the hostess stand? When they walk through the
door? When?
Another person chimed in When does it end? Do we stop the watch
when they are actually seated? Or should it be when the hostess asks the
customer to follow her to the table?
Another member of the team asked How will we actually time this?
With a stopwatch? Give the customer one of those lighted things like you
get at fancy restaurants?
The team worked on answering these questions and finally came up
with an operational definition for waiting too long to be seated, and a
simple way to collect data. The data collection began the next day.
After 3 weeks of data collection, the team put the results into a table
and generated a run graph, again with some direction from Sue. Of
course Sue learned this from Larry after one of their work sessions. The
run graph for percentage of customers waiting in excess of 30 seconds by
day looked like this:
12%
10%
Week 1 Week 2 Week 3
Monday 8 9 9 8%
Tuesday 9 8 10 6%
Wed. 7 7 8
Thurs. 7 8 8 4%
Friday 6 6 7 2%
Sat. 4 5 5
0%
Sun. 3 4 4 M T WTH F S S M T WTH F S S M T WTH F S S
The team also collected data on other variables they thought might pro-
vide insight as to why and when waiting was occurring. They looked at
the times during lunch when waiting occurred, the number of customers
waiting and the reason customers were waiting.
Time of afternoon and no. of customers waiting for a table:

10:30 = 14 11:00 = 52
11:30 = 139 12:00 = 185
12:30 = 118 1:00 = 83
1:30 = 27 2:00 = 17
Of course the team had learned to put the information in graphical

format to allow them to see what it was telling them. Not surprisingly,
most of the waiting took place during the busiest hour of the day. The top
reasons for waiting seem to be either most people had a seating preference
near a window, or a table was not available, or both.
No. of customers waiting by time of day

200
180
160
140
120
100
80
60
40
20
0
10:30 11:00 11:30 12:00 12:30 1:00 1:30 2:00
The team had a discussion about tables not being available. One team
member blurted out during the discussion I know why! Customers are
lingering around after eating and not leaving to free up tables for others.
Theyre just rude.
Sue quickly asked Do you have data to support that?
No. I just know. Its obvious, retorted the team member.
Sue reminded the team to collect data to verify their hypothesis. The
team investigated further and determined that 83% of the time a table was
not available because the tables had not been cleaned and prepped quickly
enough for new seatings and not due to customers just lingering around.
The team asked the obvious question. So, why are tables not being
cleaned fast enough? Everyone was quiet for a moment and then a bus
boy complained Im working as fast as I can during the lunch rush. I
think all the bus boys are working really hard! Its not our fault.
Sue said This is not about blame. We need to look at the process.
Whats taking so much time to clean and prep dirty tables? Perhaps we
should draw up a layout of the restaurant and see what the work flow is all
about. An analysis using a Cause-and-Effect diagram would be useful as
well. What do you think? The team all agreed these were good next steps.
The team constructed the cause-and-effect diagram to determine if
any root causes popped out.
People Policy
We dont work Not enough bus boys Dont clear dishes until
as a team people leave table
at busy times
Hostess cant clear
tables when
Wait staff dont help High turnover free Dirty tables take too
clear tables long to be cleaned
Not enough bus and prepped
Takes too long to carts
take dishes to kitchen Best way not documented
Lack of training
Tables are too Staff not trained in
close together best approach
Physical Procedures
environment
After looking at the flow of work on the floor layout and brainstorming
using the fishbone diagram, the team concluded that the most likely cause
of tables not being cleaned and prepped quickly enough is the time spent
taking dirty dishes to the kitchen, particularly from the west side of the
restaurant. The group also felt they were not working as well as they could
as a team.
The team then brainstormed some improvement ideas. The list of
possible countermeasures included the following:
Schedule more people during busy times to clear tables

Buy more bus carts that are bigger
Build a dirty dish holding station near the center of the
seating area
Have hostess clear tables when possible
Have waitress help to clear tables
Have bus person move quickly between kitchen and tables
Fill the section closest to the kitchen as much as possible
Out of this list, the team decided to conduct PDCA experiments with
two ideas first. The goal was to try out an idea quickly and cheaply to get
some data to verify if they were on the right track. The team decided to
experiment with having a temporary holding station located at the center
of the seating area, which could not be seen by customers, for placing
dirty dishes. They quickly put together and set up a temporary station.
The group also decided they would work as a team more and waitresses
would help clear tables whenever possible, even if it was only a few dishes
per table. This would be easier to accomplish with the temporary station
close by.
Within a day the team constructed a holding station and placed it
in position. They continued to collect data to see what the results would
be. After 3 weeks the team analyzed the new data and the results were
dramatic.
Sue decided it was time to conduct another survey to see if they had
met their first goal. The results excited everyone on the team.
Sue asked the team What did you learn following this process? She
wrote their responses on the team flip chart:
% of customers waiting more than 30 seconds

12%
10%
8%
6%
4%
2%
0%
M T WTH F S S M T WTH F S S M T WTH F S S
90
No. of customer votes on survey
80
70
60
50
40
30
20
10
0
D E B A H F C G
Series1 78 68 48 28 18 15 15 11
Series2 11 42 5 24 9 5 8 6
Did not expect such a simple solution to have such a dramatic

impact
Exploring all ideas and agreeing on what to do helped us
work more as a team
The storyboard helped to guide us through the process and
identify true root cause
It is fun to measure and see success
Our tips seem to have gone up due to better service and
turning tables more often
Maybe we should track this in the future to link
improvements to earnings
So whats next? asked Sue. The team quickly responded:
We need to replace the temporary holding station with

a permanent one. We will use labeling and other visual
techniques to organize the station. Make it look nice so
customers dont view it as an eye sore.
We need to have daily huddles to review progress and look
for additional improvement opportunities. This way we can
accomplish our ultimate goal of zero complaints.
Wow! That is a great success story Sue! exclaimed Joe.

Well done, Larry also recognized her success. Sue, you did a fan-
tastic job. You have got to share this with the other team leaders so they
can see whats possible.
Sue was a little unsure about standing in front of her peers to tell the
story. She said How about I have the team share what they did using the
storyboard we created?
Even better yet, said Larry.
Joe whole-heartedly agreed.

1. Larry seemed very puzzled when Joe asked him about the KPIs.
Do you think the cruise line had the right measurement system
in place? If you were Larry, what else would you have measured?
2. What is a Critical to Quality (CTQ) diagram? How can Larry
benefit from this diagram? Why did Joe insist that Larry find a
team leader who was energetic about the new approach?
3. Critically evaluate the stance/approach that Larry took at the cur-
rent state work sessions.
4. Do you think Larry and his team have identified the right
approach and process on how each area in the cruise line could
achieve the overall high level objectives? Explain.
5. Do you think Larry and the team have done a good job in
identifying and aligning KPIs and the goals? What would you
(Continued )
have done differently, if you were Larry? Do you think it is feasi-

ble for Larry and the team to implement these measures?
6. Critically evaluate Sue and her teams efforts in implementing
Lean Sigma in her area. What can other area leaders learn from
her?
7. Why is it important to identify and focus on the right KPIs?
What lessons can your organization learn from the approach used
in this chapter?
CHAPTER 7
Application of Lean Sigma

Tools and Results
Standardized objectives and agendas were set by Larry and Joe to facilitate
the first Lean Sigma work sessions in each area. Sues progress continually
showed the way for the other teams. The objective of the first area team
work session is to provide a brief update on the business conditions and
competitive realities, to provide a brief overview of Lean Sigma for service
industries, and to review the project objectives initiated by Larry.
Initial Area Team Work Session Objective Standard Agenda

1. Provide a brief review of the business conditions and competitive
realities
2. Provide a brief overview of Lean Sigma for service organizations
3. Review the project objectives initiated by the area leader and Larry
4. Begin developing the team objectives to support Larrys initiatives
5. Establish the path forward, expectations, and the next steps for the
area teams
The Lean Sigma overview is to be provided by the area leaders. By

doing this, the area leaders will have to study the Lean Sigma material a
bit more and be prepared to teach their teams about Lean Sigma methods
and tools. A brief written statement from Larry regarding the business
update and competitive realities will be provided to the area leaders to
be used as a training aid. This training effort supported the employee
training and engagement enabler as well.
The work sessions went well and, for the most part, the teams under-
stood the common objectives of the Lean Sigma projects and journey.
Some of the area leaders struggled a bit with the training portion of the
session, so Larry helped where he needed to. Most employees could see
what was happening to the cruise line in the market place and wanted to
make improvements. Some people were skeptical that this new approach
would be any better than the last new approach. Regardless, the leaders
pressed forward. Since Larry had standardized the approach, the teams
had many things in common when developing their Team Charters and
KPIs. The Team Charter elements listed below were thought to be com-
mon for all teams. They used Sues teams initial success as a guide.
Area Team Charter Commonalities

1. Mission or Purpose of the Project: Since this is the initial or launch
project for each area, the primary purpose is to establish key measures
and implement some key improvements using the Lean Sigma tools. A
secondary purpose is to learn and use Lean Sigma methods and tools.
2. Deliverables or Expected Outcomes: Expected outcomes are
(a)measurable improvements in every area and (b) practice and learn
using Lean Sigma methods and tools.
3. Benefits of Expected Outcomes: Benefits are as follows: (a) We will
begin the Lean Sigma Transformation Journey, which can revitalize
our business. (b) Our work should become easier to perform.
(c)Our guests and customers will have an improved and pleasurable
experience which can lead to repeat business.
4. Expected Approach and Activities: Each area team will use the
Lean Sigma DMAIC process to initiate and manage their projects,
as Sues pilot team had.
5. Time Frame(Start date, end date, and major milestone target
dates): Project will be ongoing for the next 6 months, with monthly
report-out sessions with Larry.
The area teams spent additional time discussing specific wastes iden-
tified in their area, the area KPIs, how they would collect and display
the KPIs, and how they could use Lean Sigma tools to make measur-
able improvements. Each team was asked to select the vital few KPIs to
improve. The idea being that if each group focused on improving one or
two vital KPIs rather than trying to impact every KPI, the teams would
make better progress and be able to make key improvements to high
impact areas. Larry asked that every area include customer complaints as
one of their vital few KPIs to measure and improve.
Ocean Treasure Cruise Line High-Level Key Measures
Metric category
Organization high
level KPI
Navigation
Guest services
Entertainment
Gaming
Housekeeping
Medical
Food services
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Human
resources and
training
Administration
Accounting
Sales Sales from Revenue Revenue Revenue

revenue shows from from retail from
(increase gaming sales adven-
sales) tures and
events
Profit
Return on
invest-
ment
EBITA
Financial focus
Perfor- Fuel costs Supply Supply Supply Supply Supply Food costs Wholesale Supply Supply Supply Total Supply, Supply
mance to per costs to costs to costs to costs to costs to to budget costs to costs to costs to costs to spending training, costs to
budget nautical budget budget budget budget budget budget budget budget budget to budget and budget
(reduce mile recruiting
costs) costs to
budget
(Continued)
(Continued)
Metric category
Organization high
level KPI
Navigation
Guest services
Entertainment
Gaming
Housekeeping
Medical
Food services
Retail sales
Security
Adventures and
event planning
Operations and
maintenance
Purchasing and
logistics (supply
chain)
Human
resources and
training
Administration
Accounting
Customer Response
satisfac- rate
tion
survey
response
rate
Customer Passenger Survey Passenger Survey Survey Survey Survey Survey Survey Survey Survey Survey Survey Survey
satisfac- contact scores contact scores scores scores scores scores scores scores scores scores scores scores
tion hours hours
survey
Customer focus
scores
New New New New New New Security New
offerings offerings offerings offerings offerings offerings visibility offerings
per developed developed developed developed developed developed
quarter and par- and par- and par- and par- and par- and par-
ticipation ticipation ticipation ticipation ticipation ticipation
rates rates rates rates rates rates
Sales Number Number Number Number Number Number Number Number Number Number Number Number Number Number
revenue of crew of team of team of team of team of team of team of team of team of team of team of team of team of team
per members members members members members members members members members members members members members
employee
Sales Nautical Passengers Shows Rooms Patients Meals Service Bookings Un- Total Employee
revenue miles served delivered served served served calls made made planned spend training
per sailed break- hours
operating downs
Productivity focus
costs
Wait Rooms Wait Wait
times for complete times for times for
service by noon service service
Customer Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable Assignable
com- complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints complaints
plaints to area to area to area to area to area to area to area to area to area to area to area to area to area to area
Repeat Report-
visits able
crimes
Quality focus
Percent
fill rate
Commit- On time On time Hours of Hours of Hours of Hours of Hours of On time On time Stock outs On-time
ments to ports to sched- operation operation operation operation operation to sched- to sched- from all payments
met per ule ule ule areas
schedule
or plan
Delivery focus
Stock outs
(Continued)
People focus Metric category
ism/
tions
Organization high
hours
(Continued)
per day
promo-
Injuries
Internal
illnesses
Training
level KPI
Absentee-
x
x
x
Navigation
x
x
x
Guest services
x
x
x
Entertainment
Targeted Improvement
Untargeted Improvement
x
x
x
Gaming
x
x
x
Housekeeping
x
x
x
Medical
x
x
x
Food services
x
x
x
Retail sales
x
x
x
Security
Adventures and
x
x
x
event planning
Operations and
x
x
x
maintenance
Purchasing and
x
x
x
logistics (supply
chain)
Human
x
x
x
resources and
training
Administration
x
x
x
Accounting
APPLICATION OF LEAN SIGMA TOOLS AND RESULTS 79
Larry then asked Sues team to present what they had accom-
plished using a storyboard laid out in the DMAIC format. After a brief
presentation by the whole team, all the area leaders went on a tour of
the Good Time Diner and discussed their success. Everyone was excited
and energized. The following table outlines the critical few KPIs selected
Monthly Highlights Report

Section 1
What are 35 key accomplishments or problems solved in the last 4 weeks?
Section 2
What improvement PDCA experiments were completed in the past 4 weeks, and what
were the results and outcomes?
Section 3
Was there any individual outstanding performances or successes that should be
recognized? List the person, what they did, and how it helped the team or organization.
Be specific.
Section 4
What are 35 key issues, improvement targets, and or problems to resolve in the
upcoming 4 weeks?
Section 5
What resources or training might be required to achieve performance objectives in the
next 4 weeks?
Source: Ptacek, Coats, and Ptacek (2012).

(highlighted light gray), and some secondary KPIs (highlighted dark gray)
as identified by the area leaders.
The next steps were for each of the area leaders to establish a meeting
or work session schedule and meet regularly with their teams to begin the
improvement initiatives. Larry also asked that each of the area leaders pro-
vide a monthly progress report. Each month Larry asked the area leaders
to complete the following Monthly Highlights Report.
Since leading meetings or work sessions was a new requirement for
many of the area leaders, Larry provided the teams with some basic train-
ing on how best to lead a meeting and how to effectively document what
was discussed during the meeting.
Meeting or Work Session Leading is the process of presiding over,

running, or facilitating a meeting to maintain focus and effectiveness.
It involves establishing an agenda, identifying the necessary people to
attend, scheduling a time and location, facilitating the meeting, and
communicating the meeting action items and minutes.
It is wise to use a standard meeting agenda format to help you plan
and stay on track during a meeting. The Work Session Record should
be initiated prior to the meeting and include updates and status of
actions items, if appropriate. The teams used the Work Session Record
below as a standardized guide to follow as a work session is scheduled
and conducted.
The following checklists will assist the work session leaders to pre-
pare and lead effective meetings.
Work Session (Meeting) Prep Checklist
1. Make sure the meeting is needed.

2. Specify and limit who should attend.
3. Distribute an agenda before the meeting, unless its not
appropriate.
4. Tell participants what preparation is expected.
5. Set an appropriate time.
6. Get started on time and keep to the schedule.
(Continued)
Work Session Record

Instructions: Use this page and the back to record work session occurrence. Make copies of this form
and have the scribe take notes on each topic discussed. Copy the completed page(s) and distribute
the completed form at the end of the work session.
Session Number: Date: Location:

Project Name: Session Time:
Attendance Agenda
1.
2.
3.
4.
5.
6.
7.
Action and Agreement Register*

*Provide a brief summary of topics, discussions, agreements, or conclusions on back side if more
space is needed.
Description Who When
1.
2.
3.
4.
5.
6.
Future File/Parking Lot Meeting Review

1. +
2.
3.
4.
5.
Next Work Session:
Date: Time: Location:
Recorder/Scribe:
(Continued)
(Continued)
7. Try not to allow interruptions.
8. Avoid hidden agendas.
Work Session (Meeting) Leading and Facilitation Checklist
1. Be prepared with information, copies, and so forth.

2. Welcome participants and call the session to order.
3. Restate the objective of the work session.
4. Ask for questions.
5. Explain how the session outcomes will be recorded and tracked.
6. Keep to the schedule. Ask permission to go over your scheduled
ending time.
7. Invite those who havent spoken to contribute.
8. Gain closure on each issue as you sense a consensus.
9. Document decisions, deadlines, action items, and responsibilities.
10. Summarize the outcomes.
11. Communicate next steps.
12. Distribute the minutes within one business day after the meeting.
Key Points for Work Session (Meeting) Leading
Make sure a work session is needed to accomplish the task

or objective.
Establish clear and objective outcomes for the work session.
Set the agenda, start and stop times, and attendee list.
Start and stop the work session on time. Facilitate
the agenda to stay on track and allow everyone to
participate. If the session is going to run long, ask for
permission from the attendees to continue after the
proposed end time.
When the objectives have been met, or the session time
is up, summarize the agreements, action items, the next
steps, and then adjourn the session on time. If appropriate,
document and distribute work session minutes.
Source: Fleming and Ptacek.
Sue was full of energy and excitement. She was eager to start moving
forward quickly. She took the initiative several weeks prior to other area
leaders jumping into action. She shared her story with Larry and he asked
her to present to the others what had been done. Sues story was inspiring
and each team kicked into high gear and started their work. They used
Sue and her team as a resource when they got stuck.
Over the next several months each of the area teams conducted
numerous CI work sessions and improvement PlanDoCheckAct
(PDCA) experiments. Each experiment was documented and veri-
fied with data to determine if it was an actual improvement or not. As
improvements were made, the teams documented their new methods
with standard work documents. Some were more formal than others,
but progress was seen everywhere and a new excitement had taken over
the ship.
The following reports summarize the activities, actions, and accom-
plishments from each area over a several-month period. Larry would
review the reports monthly with the group of area leaders, along with Joe,
when Joe had time.
NavigationCaptain and Crew

The vital few KPIs for the Captain and Crew were customer complaints,
and on time to ports. In their analysis, the team found that many of the
customer complaints were due to rough seas, something the crew had
little influence over. They also found that their on time to port perfor-
mance was related to weather conditions as well. The team discussed what
they could do to improve these situations in spite of their lack of control
over the weather. Improvement ideas that were identified centered around
improving communications and reaction to the weather conditions. The
team also agreed with waste walk observations that the helm looked a bit
disorganized, which caused a waste of motion and delay while crew mem-
bers searched for key items and information. This was made even worse
when bad weather quickly approached.
The team brainstormed for ideas to reduce these wastes and improve
the speed and accuracy of communicating information. Although the
captain was not sure his team needed this approach, he remembered his
time in the Navy when things were required to be better organized. The
team agreed to implement the 5Ss in their areas. They sorted (S1) items
out and only kept what was needed. They found many old, worn, and tat-
tered maps that were no longer in use. The captain had his crew sign these
and gave these to the sales team who would frame them and offer them for
sale as cruise mementos in the ships gift shops. The maps almost looked
like old treasure mapsa great new offering for the retail sales team! The
captains team then established an exact location to set things in order (S2),
they scrubbed (S3) things clean, and developed and standardized (S4) the
new rules to keep things clean and in the right place. The final step for
the teams 5S was to determine a way to sustain (S5) the gains. The captain
offered to perform an audit of sorts on his daily walk through.
Twice a day the captain walked the ship to observe all areas of opera-
tion. During his walks he would interact with the crew and passengers.
The purpose of this walk through was to connect with the passengers
and crew to communicate critical information about the voyage. The
crew later developed visual control boards in each area to streamline the
communication of information. This move alone allowed the captain
to complete his walk through in less time, usually in about an hour.
Before the visual control and communications boards were started, the
captains walk through took an hour-and-a-half to two to complete,
depending on how long he would chat with the crew. The visual con-
trol and communication boards helped him to gain more time to con-
nect with the passengers or to address adverse weather conditions with
thecrew.
The 5S effort by the captain and crew spread over into other areas as
well. As the captain observed untidy areas during his walk, he would radio
housekeeping or maintenance to quickly get the area cleaned up. It didnt
take long for others to follow the captains lead. The captain felt better
about being in control of the ship, and keeping it in ship shape!
At the next group report out, the Captain was proud to share the
following results.
Before Improvements After Improvements

>4 complaints per voyage <2 complaints per voyage
90% on time to port 95% on time to port
Plus, 12 hour captain walk through ~1 hour captain

walk through
Reduction in engine and equipment breakdowns
Guest ServicesBookings and Onboard Guest Services

The vital few KPIs for the Guest Services group were customer complaints
and survey response rates. For their analysis, the team collected data
on a check sheet to document the reasons for the complaints and then
constructed a Pareto chart for further analysis. The team found that the
top passenger complaints were waiting for services, not having a service
completed to their expectation/satisfaction, rough seas, being rushed, and
having to be on a specific schedule for activities. This was great informa-
tion and it had never been broken down like this. The team decided to
develop standard work practices for the regular breakdown, analysis, and
improvement planning/implementation for each complaint. Part of the
standard work would be to close the loop with the passenger and let them
know how their feedback has helped the cruise line improve. This stand-
ard process would be shared with each area of the organization, and area
teams would be accountable for closure.
Regarding the customer survey response rate, the team analyzed
and measured the current state process with a simple process map.
They found that the current process was too passive in that the survey
was left in the guest rooms near the end of each voyage. It was left up to
the guest to complete the survey or not and it was typical that only the
most upset customers would complete the survey to complain. The sat-
isfied customer might not fill out the survey, or say anything at all. The
data suggested that only the most pleased or delighted customers and
the most upset customers completed the survey response forms. Worse
yet, the upset people completed the form at three times the rate of
the most pleased customers! Either there were three times more upset
customers or the survey method was not working. The team hoped for
the latter.
The improvement ideas were ways to make the survey data collec-
tion more active. The team brainstormed several ways to do this and
completed several different PDCA cycles to test which improved method
worked the best. From the PDCA experiments, a new survey method
was implemented which involved a roving interviewer who would ask
as many passengers as possible several standardized questions each day.
The daily surveys eliminated the likelihood of negative responses from a
customer who angrily completed the survey on the last day of the cruise
while they were in a bad mood, possibly because the cruise was about to
end or because of some last minute unpleasant event that had happened.
The new method seemed to capture the information from the upset cus-
tomers in time for the team to take corrective actions as well as capture a
better cross section of happy passengers. Not only did the survey response
rate improve, but the overall scores did as well, because the data was more
representative of all the passengers.
Another improvement activity the team conducted was a simple
5S of the Guest Services office. The improvement from the 5S process
allowed the team to better serve the customers quickly and efficiently.
Some visual signals, including color coded signal cards for special die-
tary needs and requirements, were used to communicate the answers
to the most frequently requested services and adventure needs. This
further sped the process of helping the guests, by allowing them to
find the answers to their questions through visual communications.
This also served to reduce the amount of printing the group did in the
office.
At the next report-out session, the Guest Services team reported the
following results.

43% VOC response rate 80% VOC response rate
Plus, 4 minutes average wait time <2 minutes average wait time
Entertainment
The vital few KPIs for the Entertainment team were customer
complaints and passenger contact hours. There were few complaints
for this team so the team focused on developing means to increase
their customer contact time. It had been previously identified that the
passengers like to meet and greet the performers of the many acts on
the cruise. The entertainers already provided some back stage passes so
they needed to come up with something fresh and exciting. The team
brainstormed ways to increase their passenger contact time and meet
the current schedules for performances and personal time. The per-
formers chief complaint was that to increase passenger contact time
would just increase the hours they needed to work. They needed to get
creative. The idea is to contact more passengers with the same amount
of time committed.
The team decided to address this improvement opportunity in
a couple ways. Some of the acts were able to take their performances
out onto the different decks of the ship to provide mini-impromptu
performances. These performers were excused from the standard back
stage meet and greet sessions to compensate them for their time. With
this new work method, the performers were able to connect with more
passengers than just those with back stage passes. When measured in
terms of total passenger contact time the team was able to show a sig-
nificant increase in the number of passengers contacted for the same
time spent by the performers. Not only did the customer contact hour
KPI improve, the team also realized an increase in show attendance and
sales revenue as more people wanted to see the performers acts on stage
after seeing one of the mini-performances. It was truly a winwin for
everyone.
Additionally, the team also performed a 5S event backstage in effort
to keep things better organized. They included some simple visual con-
trols to indicate the location of the costumes for each act and scene. This
helped the team improve the flow between acts and scenes.
At the next report-out session, the Entertainment team reported the
following results.

~30 customer contact ~50 customer contact
hours per day hours per day
Plus, Improved costume/scene change flow
Increased show attendance and sales!
GamingOnboard casino
The vital few KPIs for the Gaming team were customer complaints and
survey scores. Everyone knew that they could achieve higher survey
scores if they let the guests win more money but that was not the desired
approach as they also were monitoring the revenue from gaming. The
team conducted an analysis of the customer complaints and available sur-
vey data/measures. They developed check sheets to organize the data and
then created Pareto charts to determine the most critical areas to address.
They found that one of the primary complaints was having to wait in
line for money exchange or a table. The team felt that they had more
than enough staff to handle the volume of passengers on the ship so they
wondered why the passengers felt they had to wait. The team decided to
conduct additional studies to determine when the waiting occurred and
how long people had to wait.
The team collected a participation count every hour for several cruises
of different lengths. The data showed a pattern for certain days and times
of day, on different cruise lengths, and destinations. From these patterns,
the team developed a better schedule for staffing based on projected
customer demand. This proactive scheduling made it easier to manage
this area.
Additionally, to reduce wait times for money exchange the team
tried a few PDCA experiments to make this process flow smoother.
They separated the lines by transaction size, which was found to cor-
relate with transaction time. They also implemented a roving cashier
to handle smaller cash exchanges. This new standard process and
scheduling technique significantly reduced the wait times for the
gaming team.
At the next report-out session, the Gaming team reported the follow-
ing results.

Meets Expectations survey Exceeds Expectations survey
scores scores
Plus, Increasing overall customer spend and revenue!
HousekeepingMaid Services and Laundry

The vital few KPIs for the Housekeeping team were customer complaints
and percentage of guest rooms serviced by 12 noon. The teams analysis of
the measurements showed that the primary passenger complaint was due
to the rooms not being cleaned soon enough in the day. The team worked
on a planned schedule or route, but often was thrown of course as some
of the guests would be in their rooms until various times of the day. The
schedule was very hard to stick to. Additionally, the laundry area was slow
and sometimes the cleaning crew had to wait for clean linens and towels.
The team had to make improvements in a couple key areas. First, the team
brainstormed for a better way to plan the schedule around guest preferences
and behaviors. The team developed a signaling system or kanban so that
guests could signal when their rooms were available for cleaning. This was
not just a simple do not disturb sign, but a color coded tag which the
guest could signal when they would like their room cleaned. This simple
visual control kanban helped both the customer and the staff.
To address the laundry area, the team had to complete a more
detailed study to determine why there was a backlog occurring. The team
used check sheets and a standard work breakdown chart to document
and analyze the laundry area. The teams investigation, data collection,
and analysis indicated that the laundry area was trying to serve the food
services group at precisely the same time when the housekeeping teams
demand was highest. Both the food service group and the housekeeping
group had significant laundry demands. The improvement team devel-
oped and implemented a heijunka, or paced laundry processing plan,
which enabled both the food services and the housekeeping groups to be
serviced simultaneously. The heijunka included visual control signals, or
kanbans, to pace the work through the area. The laundry area workers had
to produce to the visual signals and pace the work through for each group
needing services. This helped the housekeeping group reduce the waiting
time to service the guest rooms.
The laundry area was also able to reduce the total amount of water
used as they began to process more full loads, and fewer partial/rush order
loads. This reduced the overall operating costs and environmental wastes.
At the next report-out session, the Housekeeping team reported the

following results.

76% of rooms cleaned by 97% of rooms cleaned by
12 noon 12noon
Plus, Reduction in water usage in the laundry
Reduction in rush orders and crisis management
MedicalOnboard Medical Center

The vital few KPIs for the Medical team were customer complaints and
total hours of operation. The primary complaints were illnesses due to
sea sickness, something the team felt they had little influence over, and
their services not being available when needed. The team thought they
noticed a correlation between the number of complaints and the clinics
daily operating hours. They constructed a scatter diagram to analyze the
improvement opportunities and issues. The two KPIs did show a positive
correlation: the more hours of operation, the fewer complaints there were
regarding service.
The teams brainstormed for ideas on how to provide improved hours
of operation. They struggled with the ability to predict when people would
need them. They already had an on call procedure in place but they still
saw the need to make improvements. The team looked at their current
scheduled hours of operation and concluded that there was too much of a
gap in services in the overnight hours. Through data collection and analy-
sis, the team found a pattern evident when guests needed services. They
built their operating hours around the times and days when the demand
showed they were needed most. In off hours, the team used a heijunka
schedule which put someone in the medical center every hour at the top
of the hour. With this schedule, a guest would know exactly how long they
would have to wait or when they could expect to be seen immediately.
The new scheduling technique not only helped the guests, it also
helped the team as they modified their work schedules to better fit their
needs. Through the brainstorming, the team also addressed something
that, on the surface, they thought they had little control ofsea sickness.
The team ran some PDCA experiments regarding the proactive use and
availability of sea sickness medication and the most effective techniques
for administering the medication. They established a mini-training ses-
sion and note card for each guest and made it clear how to get the help
they needed. They found that through this proactive training approach
the overall emergency calls due to sea sickness were reduced. Even the
captain was happy to hear this!
At the next report-out session, the Medical Services team reported the
following results.

>6 complaints per voyage <1 complaint per voyage
16 available hours per day 24 available hours per day
14 minutes average wait time <6 minutes average wait time
Plus, Proactive reduction in sea sickness incidents
Reduced use of the medical center
Reduced environmental impact and costs
Reduced inventory
Reduction in inappropriate social networking time
Food Services and CateringMultiple

Onboard Restaurants
The vital few KPIs for the Food Services team were customer com-
plaints and food costs to budget. The team compiled the complaint
data with a check sheet and developed a Pareto chart for analysis of
the guest complaints. They found that the primary complaints for
food services were (a) having to wait for item and (b) running out
of an itemshortages. The team knew that in order to not run out
of an item they would have to carry more food item inventory on
board, but they understood that their other key objective was to keep
to budget. The team also knew about the tremendous waste of food
items on a cruise ship. The lavish and extravagant food displays were
something nearly everyone remembered and spoke about after their
cruise experience. The challenge for the team was to meet the guests
high expectations but also to minimize wastes. They did their best to
manage this every day.
The team decided to do some data collection and monitoring. They
knew certain food items were more popular than the others, and they
knew that some food items were discarded more than others. They won-
dered if there was any correlation that they could use to identify a means
of reducing food item wastes. After collecting data on several passages the
data showed where there was consistently too much of one item and too
little of another. They made the appropriate adjustments to their requisi-
tions and order quantities. The team developed a standard practice to
complete this analysis every 3 months to better understand the shifting
tastes of their passengers.
Regarding the waiting issues, the team decided to establish a kanban
trigger system to help reduce or eliminate guest waiting. For the buffets,
the team was using a simple verbal communication system where the
servers would tell the chefs what items were running low. This method
was good but it did not consider the different food preparation times in
the kitchens. The new kanban trigger system identified three different
levels of items based on preparation time. The longer the item took to
prepare, the more advanced notice the chiefs needed to ensure that no
one had to wait. The more experienced servers were already doing this,
but now the new servers were able to do the right thing sooner due to this
improvement.
This method of demand or consumption-based service helped
the Food Services team to reduce the waiting. Since the waiting did
not go away all at once, some of the servers learned magic tricks to
perform for guests as they waited. This seemed to turn the wait into
somethingmore interesting and enjoyable, and the complaints further
declined.
At the next report-out session, the Food Services team reported the
following results.

1520% over budget On or below budget for each voyage
Plus, Reductions in guest wait time
Reductions in guest wait time frustration

Reduction in crisis management in the kitchensreduced stress
Retail SalesMultiple Onboard Stores

The vital few KPIs for the Retail Sales team were customer complaints
and new offerings provided. The team compiled the complaint data with
a check sheet and constructed a Pareto chart to highlight the most signifi-
cant reasons for complaints. They found that running out of hot selling
items was the primary complaint. The team was never sure how many
items would sell on any particular voyage, or what the hot item would
be. The team conducted a deeper analysis of the historical sales data by
voyage length and ports visited. The team also began to keep a log record-
ing each time they ran out of an item, what the item was, and how many
sales dollars were lost due to the shortage. This data was eye-opening and
the team began to submit purchase requisitions based on this data.
One of the most frequent shortages was determined to be in printed
tee shirts. Since the data was not conclusive on the exact printing of the
tee shirts, the team was uncertain what to do. After a brief brainstorming
session, they decided to develop a custom tee shirt printing capability.
With this mass customization concept, they could purchase blank tee
shirts and print to demand. This capability enabled the team to reduce
inventories and the waste of throwing outdated shirts away. This concept
allowed the team to offer an entirely new lineup of tee shirts and to cus-
tomize them to the customers requests. This was a hit with the customers
and tee shirt sales increased over 20 percent!
The team began tracking sales by item and posting the data to a real-
time online scorecard/spreadsheet. Now anyone who was interested in
how the days sales were going could simply look at the online scorecard.
In addition to the tee shirt breakthrough, the captains old maps were
selling well and this also showed on the scorecard. The area leader had an
idea to offer a reproduction of the old maps at a lower price point. The
original maps, considered higher value items, could then be offered in
higher end boutiques on the deck of the ship. This move served to create
sales of the reproduced maps that were signed by the captain and crew,
just as the originals were.
To sustain the new products offered KPI, the team established

a standard practice to add three new items each month. It was a
challenge some months to come up with three new items, but the
team kept this as a goal and held themselves accountable for results.
The new process at least caused the team to review the product
offerings on a regular basis and to make appropriate corrective and
improvement actions.
At the next report-out session, the Sales team reported the following
results.
3 items stock outs per voyage 0 item stock outs per voyage
Plus, Increasing sales revenue due to new products offered
Reduced obsolete inventory and associated costs
SecurityOnboard Police
The vital few KPIs for the Security team were customer complaints and
reportable onboard crimes. The security teams Pareto chart of complaints
showed that the leading complaint is that there is never a security person
around when you need one. The team initially pushed back on this com-
plaint saying that there are security phones at many locations throughout
the ship. Regardless, the customers perception was that security was not
around when needed.
Regarding the onboard reportable crimes, the team analyzed the data
from the past 20 voyages by plotting a run chart of the data and found
a disturbing trend. The run chart trend data indicated that they had
been experiencing a higher incidence of crime on certain theme cruises
and that the trend for reportable onboard crimes was increasing overall.
The datashowed this clearly and was compelling. The team had to stop
thistrend.
From the demand analysis of when onboard reportable crimes were
occurring, it was determined that embarkation and debarkation points
and times were especially a concern. The team brainstormed and identi-
fied two primary improvement items. First, while at embarkation and
ports of call, additional security would be assigned to entry and exit
points. Second, for the theme cruises with the higher incidence rates a
greater visible presence of security personnel would be provided at embar-
kation and at all times during the passage. This is a simple demand-based
scheduling plan.
For all voyages, the team decided to implement a visual management
method and a paced or heijunka travel route to follow. This would inform
and assure guests that a security person was nearby and scheduled to be
present at specific times. It was brought up that this may also inform the
bad guys of where the security forces were, so the team developed a
contingency plan for this also. Standard work and routes were developed
for security personnel to follow. The customer visible standard routes and
times were displayed visually. Overlapping with the customer viewable
standard work, a security-facing standard work route and timing was also
established and run concurrently. The customer-facing standard work
helped the passengers to feel a sense of safety and the security-facing
standard work helped the team catch the bad guys before they committed
the crime. The implementation of these two sets of standard work served
to reduce the reportable onboard crime rates and reduce the customer
complaints.
At the next report-out session, the Security team reported the follow-
ing results.

5 reportable crimes per voyage <3 reportable crimes per voyage
Plus, Greater visibility of security personnel
Improved efficiency of security personnel
Fewer errors and false calls
Adventures and Event Planning

The vital few KPIs for the Adventures and Event Planning team were
customer complaints and participation rates. The team completed a
check sheet and Pareto chart of the historical customer complaint data
and determined that the primary complaints were adventure availability,
wait times to get to adventures, and the lack of understanding regarding
how to sign up for adventures. The team thought that this may be the
reasons for the poor participation rates as well. When the team analyzed
the participation rates in adventures they found a disturbing trend. Over
the past 3 years the participation rates in the adventures had been declin-
ing steadily.
To better understand the situation, the team mapped out the process
for each adventure, noting the wait times and points on the map. The
team also conducted extensive data gathering directly from adventure
participants in interviews conducted on adventure days. The team was
a bit surprised to find that it was not hard to find time for an interview
as the adventures were usually found in a hot hallway waiting to board a
small tender craft to get to the adventure.
Clearly, they were making their customers wait. It seems the ten-
der vessel service was not adequately staffed or equipped to handle the
volume of adventurers all ready to go at about the same time. The team
worked out a scheduled signaling system or visual signal to indicate to
adventurers when the next tender vessel was to arrive. By giving the
adventurers a color coded signal, or kanban card, the adventurer could
simply monitor the color posted over the boarding area to determine if
they were to board now or not. Instead of waiting in the hot hallway,
participants could wait on the rear deck in clear view of the boarding
area signal. The scheduled boarding flow and signaling system elimi-
nated the line of people in the hallway and made the experience go more
smoothly for everyone. They even established a VIP area for special
guests who were willing to pay for an advanced seating arrangement.
This is a form of mass customization to meet the needs of customers with
varying expectations.
The team went a step further and constructed an adventure demand
Pareto chart which detailed the demand for each adventure offered
at each port of call. With this information the team developed an
improved plan with their tender service team to better service the
adventure passengers.
Additionally, to increase participation, the adventures planning
team took to the passenger decks to seek sign ups and explain the
adventures better. In the past, the adventures team just sat in their
offices waiting for people to come to them to sign up. By taking
the adventures sign up to the passengers and improving the flow of

information the adventures team was able to increase overall participa-
tion levels and revenue.
At the next report-out session, the Adventures team reported the
following results.

54% passenger participation 79% passenger participation
rates rates
Plus, Increased sales revenue due to increased passenger participation
Improved services from supporting vendors as participation rates
increased
Operations and Maintenance

The vital few KPIs for the Operation and Maintenance team were
customer complaints and unplanned breakdowns. The Operations and
Maintenance team had an idea what the biggest customer complaint was
before they did the Pareto chart. They knew that customers did not like
it when certain parts of the ship were not available due to breakdown.
Breakdown in guest areas always got top priority. Even so, customers still
complained. The guests expected everything to be working all the time.
Imagine that! The team knew too well that customers did not like to wait
while regular cleanings and maintenance took place. After all, the passen-
gers were all on holiday, they didnt want to be bothered with breakdowns
and faulty equipment.
The Pareto chart showed that the areas of biggest concern were the
operation of public rest rooms and inefficient air conditioning units in
guest quarters. Unplanned breakdowns and service calls caused chaos
in the operations and maintenance area. Some days they felt like they
accomplished nothing except urgent service calls. They needed to do
something to prevent the service calls from occurring, but they had very
little time to work in advance, in a preventative mode, as they were so
busy with the crisis of the day.
The team decided to use the Total Productive Maintenance Lean Sigma
tools to try to make improvements. First, they performed a basic 5S on all
the key pieces of equipment and facilities. These were prioritized, with the
aid of data from the Pareto charts on customer complaints and unplanned
breakdown. The team developed a regular schedule for preventative mainte-
nance on the critical equipment and facilities. They also developed a critical
spares list and key tools to have on hand. They developed a key tool roller
cart for emergency calls. No longer would the person on call have to go to
the area needing assistance without the proper tools. The key tool cart had
everything they could possibly need on it, and it was 5Sed so it was always
ready to go at a moments notice. This helped the team to be more respon-
sive but they still needed to prevent the breakdowns from occurring.
After further analysis of the breakdown data, the team made some
improvements and minor changes to some of the equipment and their
planned maintenance schedule. The planned maintenance schedule,
which used to be driven by a computer schedule, now would be managed
with a simple flowkanban and paced work standard work plan. The
team divided up the work using an employee balance chart and developed
a paced preventative maintenance route to follow based on frequency of
historical breakdowns.
Another novel idea the team discovered through brainstorming
was the quick change plan for room air conditioners. Rather than
making the guest wait while the service person repaired a faulty air
conditioner, the team decided it was better to have a spare air condi-
tioning unit available at all times and simply do a quick change over of
the good air conditioner for the faulty one if the repair was going to take
longer than the quick change. This made the guests quite a bit happier,
and the more extensive repairs were done in the maintenance area, out
of sight of the guests.
At the next report-out session, the Operations team reported the
following results.

5 unplanned breakdowns <1 unplanned breakdown
per voyage per voyage
Plus, Reduction in inventory of spare parts and supplies

Reduction in consumption of supplies leading to
operating cost reductions and environmental wastes
Less crisis management
Purchasing and Logistics (Supply Chain)

The vital few KPIs for the Purchasing and Logistics (Supply Chain) team
were customer complaints and stock outs in all areas. The team used a
Pareto chart analysis to better understand where the biggest stock-out
problems were coming from. They developed a Pareto chart, first by area
and then by the item they ran out of. They discovered that the retail, food
services, and Operations and Maintenance areas had the most trouble
with stock outs. Almost all of the customer complaints assigned to
purchasing and logistics were either baggage handling issues or stock outs.
The team worked with each of the troubled areas to study the
demand cycles with Demand Analysis tools. They then established and
implemented a flow kanban replenishment plan. The teams worked
jointly through several PDCA improvement cycles to determine the
proper signal size for each of the critical items.
The Purchasing and Logistics team also worked with the suppliers
to develop and support their own flowkanban replenishment systems
to support the cruise line. This development of the upstream and down-
stream supply chain helped to reduce costs for everyone on the value
stream. It also reduced overall inventory by connecting replenishment to
actual consumption and sales. It took a while to work the bugs out but it
was well worth the effort.
The team also developed a new means of communicating the needs
to the supply base which used less printed materials and correspondence.
This reduced the overall use of supplies for the cruise line and the suppliers.
At the next report-out session, the Purchasing and Logistics team
reported the following results.

>6 complaints per voyage <1 complaint per voyage
32 stock outs per voyage 5 stock outs per voyage
Plus, Improved on-time delivery from suppliers and vendors

Reduced inventories and associated costs
Reduced environmental impact due to better management of
deliveries
Human Resources and Training

The vital few KPIs for the Human Resources (HR) and Training team
are employee turnover, customer complaints, and employee training
hours. In previous analyses, it had been found that employee training
hours correlated to greater customer satisfaction. But the team decided
to verify this through data collection and a scatter diagram. Again, the
team found a positive correlation between training hours and customer
satisfaction. The Pareto chart of the customer complaints assigned
to HR was primarily due to how an employee handled a situation.
Not only was the customer disappointed in some feature or situation
on the voyage, but the person helping them further aggravated the
dissatisfaction.
The team developed a training curriculum that would address the
primary areas of customer complaints. The team found that not only
the hours of training mattered, but also what the training was on, and
how well it was put into application. With this data in hand, the team
designed several ways for employees to get the training they needed and to
be accountable to use it. Some of the training delivery methods explored
were (a) online sessions, (b) facilitated, (c) self-paced, (d) supervisor-lead
mini-training sessions at the start of a shift, (e) lunch and learn sessions
facilitated by content experts, and (f ) other more formal training classes
as peoples schedules allowed.
The HR team also developed a comprehensive training matrix to keep
track of the number of training hours people participated in. This helped
leaders to better understand where they were falling behind and what ses-
sions might be of greatest value. To display this data, the HR team devel-
oped an employee kiosk system where this information could be accessed
by all. At first the information on the kiosk was overwhelming, but after
the team performed a 5S on the computer filing system the key training
documents were easier to find.
At the next report-out session, the Human Resources team reported

the following results.

~2% training time per person >9% training per person
Plus, Training effectiveness as determined
through customer surveys
Reduced spending for training
Administration and AccountingPayroll

and Accounting
The vital few KPIs for the Administration and Accounting team were cus-
tomer complaints and on-time payments. On-time payments related to
both employees and to external suppliers. Both groups had recently been
complaining of delays in payments. When the team completed a Pareto
analysis of the reasons for late payments, they found that their accounts
payable flow could not keep up with the increasing transactions due to
some of the supplier replenishment systems that had been put into place
by the purchasing group. For these instances, the team asked the purchas-
ing group to help negotiate different terms of payment on kanban items.
The team also looked internally at why the accounts payable system took
too long.
They mapped out the process flow and found a great deal of redun-
dancy and waste. They were able to make some streamlining improve-
ments to improve overall flow of information through their area. The
biggest improvement was to establish standard work and a paced flow
process in the office. This ensured that something hitting an accountants
in-basket today got dealt with in a standard or specified period of time.
Nothing could slip through the cracks of the new paced flow kanban
system.
Other issues discovered by the team were those due to their slow pay-
ments: they were not taking advantage of supplier discounts. This was
fixed quickly by the new flow methods and within a couple of weeks they
were taking advantage of the key discounts. The new organization of their
work area, a 5S event in the physical space as well as the computer system,
also seemed to streamline processing. It seems the computer system files
were so cluttered and stored in so many ways that by simply standardi-
zing the rules for the team they could now find things easier online, and
process payments quicker.
Many of the customer complaints were due to errors. The team
began to track their errors and plotted them on a Pareto chart. Here
again, many of the errors were eliminated by streamlining the system
and cleaning up the filing system. Peoples work got easier and they
were less prone to errors. They also found the time to develop and
implement some mistake-proofing improvements for the most critical
errors. The new methods also required quite a bit less of paperwork
and printing so the team was also able to reduce their environmental
impact.
At the next report-out session, the Administration and Accounting
team reported the following results.

>12 complaints per month <2 complaints per month
89% on-time payments 99% on-time payments
Plus, Better, more sustainable standard work practices
Ability to take advantage of supplier discounts for
prompt payment
Reduced environmental impact and cost due to
less printing and supplies
The above results for all the teams took nearly a year to complete. Over
that time the teams had completed over 90 individual PDCA improve-
ment trials and had many of them work very well and become the new
standard. Customer complaints were definitely on the decline and the
teams were starting to understand how to make improvements on their
own. Things were looking up. Due to the teams many sales-generating
and cost-saving ideas, the financials were starting to turn around as well.
At least revenues were not shrinking, and along with that profitability was
increasing! The following table shows a summary of some of the team and
overall key measures.
Year One Results Summary Table
Before After
~200 complaints per voyage <80 complaints per voyage and
declining
90% on time to port 95% on time to port and
improving
43% VOC response rate 80% VOC response rate and
growing
Meets Expectations survey score Exceeds Expectations survey
scores
76% of rooms cleaned by 12 noon 97% of rooms cleaned by
12noon
1520% over budget each voyage On or below budget for each
voyage
35 items stock outs per voyage 5 item stock outs per voyage
5 reportable crimes per voyage <3 reportable crimes per
voyage
54% passenger participation rates 79% passenger participation
rates
5 unplanned breakdowns per voyage <1 unplanned breakdown per
voyage
89% on-time payments 99% on-time payments
Unacceptable passenger wait times Reduced passenger wait times
in all areas
Few referrals Some enthusiastic referrals
Unpleasant work environment Dynamic, exciting, and fun
work environment
Declining sales revenue Increasing sales revenue
Not profitable Profitable
Shrinking Growing
Larry had consulted with Joe many times through the improvement
process, especially when he reached critical sticking points with the teams.
Joe was very helpfulfor the most part.
So what are you going to do next, Larry? asked Joe.
Next? Larry said quizzically, Next were going to stay the course.
Thats whats next.
Joe replied, Thats good, but as the leader you must always stay ahead
of the group; you know, to lead them somewhere. Where are you leading
the teams to next?
Weve done a great job so far, whats next? asked Larry.
Ive seen many companies get complacent and back-slide after they
make some really good progress. To prevent a back-slide, keep moving
forward. There is always a weakest link in a process, always more waste to
remove. Id recommend you start over again once you think youre done,
Joe injected.
Kind of like my cruise ships returning to port and doing the whole
thing over again, we could start back at the beginning and do it again?
said Larry.
Thats the idea. Thats what we do. The Lean Sigma CI process is
never ending, said Joe.

1. Do you think it is a good idea to standardize the approach to
implementing Lean Sigma in the cruise line? Critically evaluate
the Area Team Charter Elements that were developed.
2. What do you think of the critical few KPIs selected and the sec-
ondary KPIs identified by the area leaders? Do these KPIs address
all the critical areas? Do you think it is feasible to monitor all
these measures?
3. Compare and contrast the updates and accomplishments reported
by each of the areas. Do you think all the areas are on the right
track?
(Continued)
4. Evaluate the critical KPIs that each area has achieved after Lean
Sigma was implemented. Do you think it is important to com-
pare and benchmark the results across each area? What can each
of the area leaders learn from one another?
5. If you were Larry, what would you do with these improvements
and results? How would you communicate the improvements
within and outside your organization?
6. Identify the three most creative initiatives made by the area lead-
ers in the Lean Sigma journey. If you were a regular customer of
the cruise line, what obvious changes would you be able to see or
experience.
7. The cruise line has made significant improvements over the past
year of Lean Sigma implementation. How can Larry use these
results to motivate top management, area leaders, and employees
to get more excited about the Lean Sigma journey and to take
the organization to the next level? What can other service
organizations learn from the cruise line?
CHAPTER 8
Making Cultural Transitions

Larry and his teams had made great progress. There had been many ups
and downs during the improvement initiatives, but overall the teams
were really making a positive impact. The teams were getting good
at identifying current state data, developing process flow and value
stream maps, and then creating future state PDCA experiments to
try to make improvements. However, there were still some areas that
Larry was wondering about. Namely, Larry was concerned about the
people side of the improvement initiatives. Some of the people side
issues Larry was concerned about were training to sustain the gains
and momentum, the discipline to stick to the standard work, and the
accountability.
In the early days of the transformation Joe had Larry work with his
area leaders to develop a current state culture assessment. To do this
Larry led a brainstorming session with his area leaders, and developed the
following current state culture diagram.
This map is in a cause and effect format and shows clearly the
problems and potential target improvement areas. Teams can use this
or similar methods to document their current culture and target areas
for improvement. With this completed, Larry thought it would be a
good idea to lead the team of area leaders through the future state
development to show what they wanted to become. They called this the
Future State Culture and used it as a vision for them to achieve through
the continuous improvement (CI) efforts. The following future state
culture map was developed by Larrys area leads. They all agreed to
try to live up to the vision. The implementation of the improvement
teams went a long way toward helping the teams achieve the future
state culture.
Current state
culture
Manpower Methods
Hard workers No improvements accepted
High turnover No innovation
Low morale Going through the motions
Perception that leadership does Employee or cruise line focused methods
not care
Frustrated
No team work
No fun
Materials Machines
Old materials Old and outdated ship amenities
Making due with what we have Frequent breakdowns
Cost cutting leads to poor service Poor maintenance
Wasteful Not enough equipment for all customers
Frequent stock outs leads to poor
service
Measures Mother nature

No measures No one cleans up after themselves
Only negative feedback from customers Messy areas of the ship take a while to clean up
Only hear about problems Some messy areas never get cleaned up
The weather makes things messy all the time
Future state
culture
Manpower Methods
Hard workers Robust improvement methods being applied
Low turnover Innovative new ways of thinking encouraged
High morale Exciting new methods
Perception that leaders care Customer focused methods
Team work
Fun!
Materials Machines
Updated materials Old and outdated ship amenities
Proactively get what we need Frequent breakdowns
Cost reductions through Poor maintenance
continuous improvements
Rarely stock out Not enough equipment for all customers
Not wasteful
Green
Measures Mother nature
Key measure clearly posted and fair Everyone cleans up after themselves
Get positive and negative feedback from customers Messy areas of the ship get cleaned up fast
Hear about problems and successes All messy areas get cleaned up fast
The weather makes things messy all the time
Joe had assisted Larry with this current state to future state culture
mapping process to help Larrys area leaders understand where they
MAKING CULTURAL TRANSITIONS 109
were going and what they were trying to become with the Lean Sigma
improvement methods.
Joe was most impressed with some of the customer service training
that Larry had developed and thought he might be able to use it in his
factory. So Larry, tell me about your customer service training program.
Your people are clearly doing something different than my folks at the
factory. Your people are constantly interacting with customers and I can
tell theyve had some specific training regarding how to talk to customers,
so what is it? Joe asked Larry.
Larry said, Lets go talk with our HR manager, Mary, shes the one
who developed the program. The two brothers took a walk to the HR
offices to meet with Mary.
At the HR offices Mary outlined their customer service train-
ing program. Mary explained, Ive studied the Disney training pro-
grams and had the opportunity to attend several courses at the highly
regarded Disney Institute. The Disney Institute is widely recognized
as a world leader in service training and development. Im taking
a page from the Walt Disney Company where they call all of their
employees cast members. A cast member has a different meaning than
an employee. A cast member has to be able to play a role. The cast
members role may be a singer or magician, or it might be a janitor or
maintenance person. In any case, a cast member is expected to act in
an appropriate way, to play their role as though they are at the happiest
place on earth!
Mary continued, We are trying to instill this philosophy at the
cruise line. To do this, I use five key training classes. Every new employee
receives the following courses over their first 6 weeks of being hired or
cast. Our programs are:
Basic Training Programs

Orientation
Lean Sigma BasicsPtacek & Motwani
The 7 Habits of Highly Effective PeopleSteven Covey
Developing Customer LoyaltyJeffrey Gitomer
FISH! PhilosophyStephen C. Lundin, PhD, Harry Paul,
John Christensen
The orientation was not unlike any organizations orientation train-

ing. This course introduced the new cast member to the organization and
covered the following topics:
General orientation and facts about the cruise line

Vision, mission, values
Organization structure
Key Performance Indicators (KPIs)
Performance expectations
SafetyCrew and passengers
Since the organization was making so much progress with the Lean
Sigma methods and tools, we recently updated the key training programs
to include the basics of Lean Sigma. Now, the new employees know what
is expected of them regarding CI and how they can participate. I recruit
various area leaders to facilitate this training, continued Mary.
The 7 habits training covered the following seven habits from the
popular book by Steven Covey.
1. Be Proactive
2. Begin with the End in Mind
3. Put First Things First
4. Think Win/Win
5. Seek First to Understand, Then to Be Understood
6. Synergize
7. Sharpen the Saw (Continue learning and teaching)
The objective of this training is to help people develop a success

habit for their personal and professional lives. These habits are described
as expected behaviors of cast members and are reviewed during their
performance appraisals.
The Developing Customer Loyalty training is used to help cast
members to help customers more effectively, no matter what the need.
This training teaches specific skills, tools, and techniques. Practice time
is provided in class so people can develop their skills. One of the key
concepts taught is that we want loyal customers who come back time
and time again, and refer our cruise line to other people. One critical
technique taught in class is the 3Rs + 1. This technique teaches cast
members how to respond to customers who need help. When a customer
asks for assistance cast members are expected to:
react to the situation and customer emotion with certain

phrases in a sincere manner;
respond to the need in an appropriate manner to develop
customer loyaltyAs they would want it responded to;
resolve the issue to the customers satisfactionHow they
would want the situation resolved it they were the customer;
+1 Do one extra thing for the customer that is not expected,
but welcomed.
This is a simple and powerful technique if done properly, Mary

continued.
We use the FISH! Philosophy video, which highlights the operations
and philosophy of the Pikes Fish Market in Seattle, WA, to instill a sense
of service and fun in each cast member. The video illustrates the power of
four simple principles of customer service and dealing with people. The
FISH philosophies are as follows:
1. Play
2. Be There
3. Make Their Day
4. Choose Your Attitude
The Play principle shows people how to make work fun for the customer
and the worker. Several specific methods are developed during the train-
ing. The Be There principle helps employees connect with customers
and people in a more meaningful way. It helps people be more sincere
in their efforts to help people. Make Their Day helps cast members to
understand what it takes to develop customer loyalty and is complemen-
tary to the Customer Loyalty training. It gives cast members additional
ideas on how to develop customer loyalty and future referrals. Finally,
the Choose Your Attitude training delivers the message that we expect
every cast member to be the best every day and only they can choose their
attitude. This fits well with the 7 Habits training on being proactive, as
well as many other habits.
In the Choose Your Attitude session, I like to ask the trainees how
many holidays are there in a year. As the participants begin the mental
counting of holidays, I interrupt them and say: Every day is a holiday
for our guests! Our guests may be on the vacation of a lifetime. Many
have been saving their money and anticipating this very special trip for
years. Its our job to show up every day with a positive attitude of service
andenthusiasm, even when we may not feel it inside. Your job is to be
the best, happiest, most service-oriented person you can imagine. Some
days your acting may be more difficult than others, but thats what
weexpect.
The training doesnt stop there, Mary explained. Every employee
continues to receive refresher training on these topics on a regular basis.
This supports the future state culture targets. It all fits together, and were
making such huge improvements in retention and customer feedback.
After listening to Marys passion about this training, Joe asked Larry
and Mary if they would consider delivering some of this training at Joes
factory. After the help Joe had provided to Larry and the struggling cruise
line, Larry quickly agreed to help Joe and the two began developing the
cross-organizational training plan.

1. Critically evaluate the current state cultural assessment diagram
prepared by Larry and his team. Why do you think Larry has
undergone this exercise and what do you think he would like to
achieve from this process?
2. Critically evaluate the future state cultural assessment to indicate
what the cruise line would like to become. Assume you are an
area leader, why do you think it is important to know what the
future state should be? What steps would you take to achieve the
future state?
(Continued )
3. What does Larry and his team do special that got Joe excited? Do
you think it is a good idea for Joe to benchmark Larrys cruise line
customer service training program?
4. What are the salient features of the customer service training
program implemented in the cruise line? What can all organiza-
tions learn from it?
5. Define the 3R + 1 strategy. Dont you think every service organi-
zation needs to instill this simple strategy? What do you think are
potential challenges that an organization would encounter when
implementing this strategy?
6. Critically evaluate the following quote made by Mary, Every day
is a holiday for our guests! Some days your acting maybe
more difficult than others, but thats what we expect. What can
service leaders learn from this quote?
7. The people side of Lean Sigma implementation is extremely
critical and frequently neglected. Why is it so important for an
organization to focus on the people side? What are some special
things that your organization does that Larry and his team can
learn from?
CHAPTER 9
Achieving, Sustaining, and

Celebrating Success
Larry had been working on the Lean Sigma improvements for nearly
2years, and at their annual family picnic cornered Joe again. Joe, weve
been doing this Lean Sigma thing for nearly 2 years now and have made
some great progress. We are actually growing now and becoming quite
profitable. But the teams are losing their enthusiasm and the whole thing
is starting to seem stale. Any hints on how to re-energize the teams?
asked Larry.
We always go back to the basics to recharge our teams. Its important
to show your commitment. Remember the key enablers? Ask yourself
what, if anything, is missing? Joe replied.
Key Enablers for Lean Sigma Success

1. Leadership establishing, communicating, and living up to the vision,
mission, and values
2. Resource commitment
3. Training and education
4. Process- and results-focused
5. Policy deployment and goal alignment
6. Total system or value stream focus
7. Employee involvement
8. Perseverance and commitment
(Source: Ptacek, R. & Motwani, J. (2011). Pursuing Perfect ServiceUsing
a Practical Approach to Lean Six Sigma to Improve the Customer Experience
and Reduce Costs in Service Industries. Chelsea, MI: MCS Media, Inc.;
Ptacek, R. & Motwani, J. (2011). The Lean Six Sigma Pocket Guide XL
Combining the Best of Both Worlds Together to Eliminate Waste! Chelsea, MI:
MCS Media, Inc.)
Joe continued, We also try to come up with some new challenges or

themes to keep things fresh. One time when we set new goals for house-
keeping and cleanliness, everyone cried, We work on these floors, not eat
from them! So we told the teams that when we meet the new goals, we
would celebrate by having the management team eat breakfast and lunch
off the floor. This really got the teams fired-up and we had a lot of fun
with the challenge. In fact when the managers were eating off the floor,
a local newspaper reported on it and everyone enjoyed seeing an article
about how clean our company was. That was quite a celebration. We
served cake, on plates, to the rest of the company to celebrate the goal
achievement.
Source: Holland Sentinel, 12-23-95, used with permission.
We then created another theme to push accomplishment even far-

ther. We created a competition within the organization and the win-
ning team with the most improvements would get their car washed
by the management team. Again we had a lot of fun with this. It took
about a year to achieve the goal, but we succeeded in raising the bar
of achievement. You might try a theme or a challenge or internal com-
petition to get some excitement back into the improvement effort,
explained Joe.
When youre managing change in an organization, things can get
difficult, continued Joe. Joe sketched the following illustration on a
napkin and explained, You see, at first, once everyone sees that youre
serious about improving, and gets over the shock and denial, people
begin to see how the Lean Sigma improvements can help them. They
start to see some quick hitting improvements and are optimistic. Then,
when the low hanging fruit or easy projects have been implemented,
things get tougher, and improvements are harder to find. When this
happens things start to plateau or level out. If left alone, this plateau
ACHIEVING, SUSTAINING, AND CELEBRATING SUCCESS 117
will turn into pessimism and doubt. At this point people need to see
managements commitment to Lean Sigma methods and tools. Too
many leaders throw in the towel at this point and say Lean Sigma
doesnt work.
Managing
change Organizational stress
Extension
st
Performance Cre
Pride
curve Focus ownership
Plateau energy confidence
determination
Optimistic
concerned
Slid
Climb
skeptical
Quick hit
e
Pessimism
performance doubtful Helpful
improvements anxious determined
probing
Pit
Fearful Management must

Employees need to confused provide systems and
withdrawn training
see management
commitment
The key is to strive for a short duration in the high stress zone.
If managers and leaders redouble their efforts and commitments at this

point, things will start to turn around and many more significant gains
will occur. The key is to push through the trough or organizational stress
as quickly as possible by sticking to key projects and the Lean Sigma
methods and tools.
Larry said, Thats interesting, but I think we are beyond that
now, and I just want to get some more excitement around the ship.
Ithink a challenge, something big, will be a good way to get the excite-
mentback.
In Jim Collins book Good to Great he called them Big Hairy
Audacious Goals or BHAGs, and many organizations have them. They
provide long term focus and can be fun, Joe added.
Another key is to continue to hold people accountable to use the
Lean Sigma methods and tools. This should be built right into your
performance management system. Keep to the accountability sessions
or Meeting Rhythms as Harnish called them in his book Mastering the
Rockefeller Habits. In the book, Harnish describes a meeting rhythm
with daily huddles, weekly, monthly, and quarterly work sessions to

review progress to goals, ensure resources are provided, and to hold
people and teams accountable for results. This is key to sustaining the
effort. Remember our Gemba walks? Make these work sessions standard
work for you and your area leaders. Perform layered process audits to
make sure they are doing them, and doing them correctly. This will let
the teams see that these are important to you and to their success, Joe
added.
Boy! sustaining the effort is hard work! replied Larry.
Remember what Dad always says, Anything worth doing is worth
doing right, and Do whats right, not whats easiest! replied Joe.
Yeah, said Larry, and The harder you work, the luckier youll be!
and they both laughed.
Now, lets get back to the party where you can tell everyone how
Ibailed your sinking cruise line out of troubled waters! said Joe.

1. Do you agree with Joes statement that We always go back to the
basics to recharge our team? Why do you think it is important to
go back to the basics? Do you think that the key enablers identi-
fied earlier in this book were the right ones? Why or why not?
2. What do you think of Joes new goal for housekeeping and clean-
liness? Dont you think all organizations should instill it?
3. Is it a good idea to create a competition within the organization
on which functional area comes up with the most improvements?
Will such a competition raise the bar or will it create more con-
flicts? What do you think of Joes reward to the team that won
this competition?
4. Discuss the change cycle presented by Joe. Why is it difficult to
implement change in any organization?
5. What do you think of Larrys statement on how to get more
excitement on the ship? What lessons can Larry learn from Jim
Collins book?
(Continued)
ACHIEVING, SUSTAINING, AND CELEBRATING SUCCESS 119
6. Why is it critical for an organization to hold people accountable

for the use of Lean Sigma methods and tools?
7. If you were Larry, what are the five things that you would empha-
size in order to sustain the success and momentum achieved from
implementing Lean Sigma?
References
Collins, J.C. (2001). Good to Great: Why Some Companies Make the Leap and
Others Dont. New York, NY: Harper Business.
Covey, S. (1997). The Seven Habits of Highly Effective People: Restoring the
Character Ethic. Thorndike, ME, G K Hall & Co.
Gitomer, J. (1998). Customer Satisfaction Is Worthless, Customer Loyalty Is Priceless.
Austin, TX, Bard Press.
Harnish, V. (2002). Mastering the Rockefeller Habits: What You Must Do to Increase
the Value of Your Growing Firm. New York, NY, Gazelles, Inc.
Liker, J.K. (2004). The Toyota Way: 14 Management Principles from the Worlds
Greatest Manufacturer. New York, NY: McGraw-Hill.
Liker, J.K. (2008). Toyota Culture: The Heart and Soul of the Toyota Way. NewYork,
NY: McGraw-Hill.
Lundin, S., Paul, H., & Christensen, J. (2000). Fish! A Proven Way to Boost Morale
and Improve Results. New York, NY, Hyperion.
Ptacek, R., Coats, M., & Ptacek, T. (2012). Todays Lean Leader! A Practical
Guide to Applying Lean Six Sigma and Emerging Technologies to Leadership and
Supervision! Chelsea, MI: MCS Media, Inc.
Ptacek, R. & Motwani, J. (2011a). Pursuing Perfect ServiceUsing a Practical
Approach to Lean Six Sigma to Improve the Customer Experience and Reduce
Costs in Service Industries. Chelsea, MI: MCS Media, Inc.
Ptacek, R. & Motwani, J. (2011b). The Lean Six Sigma Pocket Guide XL
Combining the Best of Both Worlds Together to Eliminate Waste! Chelsea, MI:
MCS Media, Inc.
Spear, S. (1999, May). Learning to Lead at Toyota. Harvard Business Review, 19.
Spear, S. & Bowen, H.K. (1999, September). Decoding the DNA of the Toyota
Production System. Harvard Business Review, 97106.
Womack, J.P. & Jones, D.T. (1996). Lean Thinking: Banish Waste and Create
Wealth in Your Organization. New York: Simon and Schuster.
Womack, J.P. & Jones, D.T. (2005). Lean Solutions: How Companies And
Customers Can Create Value And Wealth Together. Free Press, New York, NY.
Index
A Food Services team, 9193
Administration and Accounting team, Future state cultural assessment
101102 diagram, 107108
Adventures and Event Planning team,
9597 G
Analyze phase, 30 Gaming team, 88
Area team charter commonalities, 74 Gemba Walk, 810
Area team work session objective, 73 Guest Services group, 8586
C H
Cause-and-Effect diagram, 6768 7 habits training, 110
Continuous improvement (CI) Housekeeping team, 8990
method. See Lean Six Sigma Human Resources (HR) and Training
Control phase, 30 team, 100101
Correction waste, 23, 26
Critical To Quality (CTQ) I
diagram,54 Improve phase, 30
Cruise line departments, 38, 4143 Inventory waste, 22, 25
Cultural assessment, 107108
Current state cultural assessment K
diagram, 107108 Key enablers, Lean Sigma
employee involvement, 48
D leadership, 46
Daily huddle, organization, 8 perseverance and commitment,
Define phase, 30 4849
Developing Customer Loyalty policy deployment and goal
training, 110111 alignment, 48
Dirty Dozen. See Twelve forms process-and results-focused, 4748
ofwaste resource commitment, 4647
DMAIC alphabetical tool application total system/value stream focus, 48
chart, 3133 training and education, 47
DMAIC process, 30 Key performance indicators (KPIs)
Administration and Accounting
E team, 101102
Employee involvement, 48 Adventures and Event Planning
Entertainment team, 8687 team, 9597
Environmental waste, 24, 27 Entertainment team, 8687
Expertise waste, 22, 25 Food Services team, 9193
Gaming team, 88
F Guest Services group, 8586
FISH philosophies, 111112 high-level key measures, 5862
Flip chart, 6870 Housekeeping team, 8990
124 INDEX
Human Resources and Training training and education, 47

team, 100101 methods
Medical Services team, 9091 leadership level, 30
Navigation-Captain and Crew project/systems/team level, 30
team, 8385 worker level, 3031
Operation and Maintenance team, organization perspectives-case
9799 study, 13
Purchasing and Logistics team, outcomes, 3334
99100 overview session in organization, 10
Retail Sales team, 9394 philosophy, 19
Security team, 9495 principles, 19
KPIs. See Key performance indicators scoreboarding issues, 58
(KPIs) tools
alphabetical application chart,
L 3133
Leadership Lean Sigma, 46 mass customization, 30
Leadership team uses of, 17
cause-and-effect diagram, 6768 Lean transformation
comments, 56 leadership level, 30
CTQ diagram, 55 project/systems/team level, 30
flip chart, 6870 worker level, 3031
high-level objectives, 57
key performance indicators, 5862 M
Lean Sigma flow diagram, 6366 Mass customization, 39
Pareto chart, 63 Measurable outcomes, 40
strategies, 51 Measure phase, 30
Lean Medical Services team, 9091
goal, 14 Motion waste, 22, 2526
value stream maps, 14
Lean Sigma N
building blocks, 18 Navigation-Captain and Crew, 8385
concepts Non-value-adding concept, 2021.
non-value adding, 2021 See also Twelve forms of waste
value adding, 20
cruise line departments, 38, 4143 O
cruise line issues, 10 Objective outcomes, 40
key enablers Onboard Medical Center, 9091
employee involvement, 48 Operation and Maintenance team,
leadership, 46 9799
perseverance and commitment, Organization
4849 daily huddle, 8
policy deployment and goal Lean Sigma overview session, 10
alignment, 48 Six-Sigma status, 16
process-and results-focused, Organizations orientation training,
4748 110
resource commitment, 4647 Overloading waste, 23, 27
total system/value stream Overprocessing waste, 23, 26
focus,48 Overproduction waste, 22, 24
INDEX 125
P T
Pareto chart, 63 Total Quality Management
Perseverance and commitment Lean (TQM),13
Sigma, 4849 Total system focus, 48
PlanDoCheckAct (PDCA) TQM. See Total Quality
experiments, 8, 21, 68, 83, Management
86, 88, 91, 107 Training and education Lean
Policy deployment, 48 Sigma,47
Process-and results-focused Lean Transport waste, 22, 25
Sigma, 4748 Twelve forms of waste
Purchasing and Logistics team, correction, 23, 26
99100 environmental, 24, 27
expertise, 22, 25
R inventory, 22, 25
Resource commitment, 4647 motion, 22, 2526
Retail Sales team, 9394 overloading/overburdening,
23, 27
S overprocessing, 23, 26
Scoreboarding, 58 overproduction, 22, 24
Security team, 9495 social, 24, 2728
Service business transport, 22, 25
categories unevenness, 23, 27
service delivered to external waiting, 23, 2627
customer, 39
service process internal to
U
organization, 40
Unevenness waste, 23, 27
service process used by external
customer, 3940
objective outcomes, 40 V
subjective outcomes, 40 Value adding concept, 20
SIPOC. See SupplerInputProcess Value stream focus, 48
OutputCustomer Value stream maps, 14
Six-Sigma (6)
definition, 15 W
goal of, 16 Waste of waiting, 23, 2627
in organization, 16 Work session meeting, 80, 82
Social waste, 24, 2728 Work session leading and facilitation
Subjective outcomes, 40 checklist, 82
SupplerInputProcessOutput Work session prep checklist, 80, 82
Customer (SIPOC), 40 Work session record, 81
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Jim Spohrer, IBM and Haluk Demirkan, Arizona State University, Collection Editors
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Donald N. Stengel, California State University, Editor
A Prole of the Electric Power Industry: Facing the Challenges of the 21st Century
by Charles E. Clark, Jr., due out in October 2012
A Prole of the Steel Industry: Global Reinvention for a New Economy by Peter Warrian,
due out in November 2012
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Lean Sigma Methods and Tools for
Service Organizations
The Story of a Cruise Line Transformation
Jaideep Motwani, Rob Ptacek, and Richard Fleming
Every business aspires to be competitive and profitable in its market. To do
this, an organization needs to offer customers value propositions, which
may be manifest in the product it produces or the service it provides. This
in turn will create customer loyalty and growth.
There are a number of organizational philosophies and strategies used
by businesses to help accomplish this goal, among which are the concepts
of Six Sigma and Lean. This book proposes to integrate the best practices
from each of these philosophies and apply them to a customer-focused
organizationa cruise shipwhose overriding mission is to deliver supe-
rior service to its customers. The authors demonstrate in this book how
key components of both Six Sigma and Leansuch as identifying and
removing defects, elimination of waste, metrics, speed of delivery, and
the seamless integration of these concepts and practices throughout the
operationserve to enhance the kind of value propositions that customers
recognize and that allow an organization to be successful.
Jaideep Motwani, PhD, is chairperson and professor of management at

Seidman College of Business, Grand Valley State University, since 2000. He
received his PhD in Operations Management from the University of North
Texas. Dr. Motwani serves as editor for two international journals and is on
the editorial board of 12 prestigious national and international journals.
Rob Ptacek is president and CEO of Competitive Edge Training & Consult-
ing & Partner, Global Lean Institute, LLC. He holds a BS in Metallurgical
Engineering from Michigan Technological University, Houghton, MI, and a
Masters of Management from Aquinas College, Grand Rapids, MI. Mr. Ptacek
currently instructs in the LEAN Champion certification program at Grand
Rapids Community College.
Richard Fleming is president and CEO of Continuous Improvement (CI)

Associates and, for more than 20 years, has provided hundreds of manu-
facturing companies and service firms with lean enterprise transformation
consulting, lean culture development training, and opportunity assess-
ments. Mr. Fleming holds a masters in Mechanical Engineering from the
University of Michigan and has served as lean manufacturing engineering
manager for the Industrial Technology Institute.
Service Systems and Innovations

in Business and Society Collection
Jim Spohrer and Haluk Demirkan, Editors
ISBN: 978-1-60649-407-3
90000
www.businessexpertpress.com 9 781606 494073

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The Service Systems and Innovations

in Business and Society Collection

Jaideep Motwani, Rob Ptacek,

First published in 2012 by

ISBN-13: 978-1-60649-407-3 (paperback)

ISBN-13: 978-1-60649-408-0 (e-book)

Business Expert Press Service Systems and Innovations in Business and

Collection ISSN: forthcoming (print)

Cover design by Jonathan Pennell

First edition: 2012

Printed in the United States of America.

The Lean Sigma for Service

Larry had always thought CI was easier for a manufacturer as

are just a scientific or data-driven way to systematically and continually

Chapter 1Discussion Questions

How many parts have been produced?

A cruise line is completely different from a manufacturing

Chapter 2Discussion Questions

Lean Sigma Methods

1. Lean Sigma is the most successful continuous improvement (CI)

Larry thought to himself how smoothly things worked at DR Prod-

What is Lean, Six-Sigma, and Lean Sigma?

Pre-application Application Approval/title Closing prep

Source: Ptacek and Motwani (2011a).

Like Lean, Six-Sigma (or 6s) is another approach that an organiza-

The goal of Six-Sigma is to eliminate defects and minimize variability. In

Defects (or errors) per

Source: Ptacek and Motwani (2011a).

Six-Sigma forces organizations to pursue perfection by asking if 99%

99% Good (3.8s) 99.99966% Good (6s)

Source: Ptacek and Motwani (2011a).

Lean Sigma is the most powerful improvement technique as it

improve customer satisfaction and total customer experience;

Lean Sigma is truly a compilation of world-class CI practices.

Conceptually, these building blocks are illustrated in the follow-

Delighted customers and profitable growth

Best quality, lowest costs, fastest delivery, and innovation

Proven methodology Voice of the customer

Employee balance chart

Lean Sigma principles

Lean Sigma philosophies

* Not all inclusive of Lean Sigma tools

Lean Sigma Philosophies and Principles

Continuous improvement in processes and resultsDo not

Lean Sigma Concepts

The Lean Sigma concepts are as follows:

Add value and remove waste

The 12 categories of waste are as follows:

1. OverproductionMaking more than is needed.

PDCA process for implementing improvements. This is

Adding value through waste identification and elimination is a funda-

Twelve Forms of WasteThe Dirty Dozen

The Dirty Dozen: 12 Forms of Waste

Overprocessing Putting more work Duplicate reports Standard work

1 of 12: The Waste of Overproduction

Producing some type of work prior to it being required is waste of over-

2 of 12: The Waste of Expertise

The under-utilization of peoples expertise is a result of not placing people

3 of 12: The Waste of Transport

4 of 12: The Waste of Inventory

Excessive piles of paperwork, computer files, supplies, and time spent

5 of 12: The Waste of Motion

equipment, supply inaccessibility, and movement of information or