Six Sigma Sample Project

Six Sigma Sample Project:
Redesigning the Fulfillment Process
of a professional services company
Executive Summary & Project Narrative
Andreas Freund, PhD, San Diego

Six Sigma Sample Project:
Executive Summary
Business Case
• Main Revenue driver – Oder Fulfillment process
– selected for project
• Company wide revenue gains of up to $7,8M p.a.
if fill rate targets of 75%-80% are met
• Scope focused on one business unit only –
migration of approach to other units will be
assessed
Findings Highlights
• One process tried to serve two products –
consulting & staff augmentation
• No process visibility & thus no accountability
• No standard operating procedures (SOP)
• No process artifacts
• No VOC aligned with process
Improvement Highlights
• One-to-Two – order fulfillment process now two
separate processes – by subject area. Project
focused on one of the two new processes
• Less process steps for new process
• Process Dashboard to improve accountability;
SOPs & Required Artifacts to standardize &
ensure repeatability
Results
• Control Period March/April 2010
• Key KPI improved from 58% (2009) to 66% -
within target range for one BU 65%-70%
• Cycle time of new process improved by 28%
• Standardization reduced variance by 67%
• Revenue increased in control period relative to a
lower KPI of 58% (2009) by over $350k
Project Results

Fulfillment Process generates 100% of
annual revenue - $37,3M FYTD
Request for Service
Network
Order Fulfillment
Process
Engagement
Across several
practice areas:
 Business units 1 -4
Key process KPIis significantly varying between practice areas
(35%-70%) and below target rates for 3 out of 4 practice areas

FYTD 2009 [June-30] M2 LSG FS Tech SSG
Projects booked 225 62 96 8 59
Revenue 37,300,000$ 7,513,711$
Average per Project 165,778$ 121,189$
Current Fill rate 62% 58% 64% 35% 70%
Target Fill Rate Min. 70% 65% 70% 50% 80%
Target Fill Rate Max 75% 70% 75% 60% 85%
Revenue Potential Min. 4,567,178$ 914,976$
Revenue Potential Max. 7,766,689$ 1,563,337$
The business case for the project shows
anticipated revenue gains of up to $7.8M
Assumptions:
• Project limited to BU 1 as pilot practice area. Roll-out to other BUs will be assessed later
• Project cost will be covered by run-rate. IT spending, as likely the main cost driver of
solution, cannot currently be reliably estimated
• If IT solution is necessary, current legacy IT system(s) will be integrated into new solution
Risk & Scenario Analysis:
• Risk: Insufficient process adoption; IT cost overrun
• Mitigation: Dedicated change management team in place; Using open source
software in a hosted environment should reduce cost risks
Company BU 1 BU 2 BU 3 BU 4

The order fulfillment process can be
divided into 4 main process phases
Project
Launch
• Information
Gathering
• Engagement
Definition
Identification
& Evaluation
• Selection
• Identification
Present-to-
close
• Presentation &
Interview
• Booking &
Documentation
• Onboarding
Engagement
Management
• Management &
Execution
High-Level process characteristics:
 Highly- manual, people centric and sequential sales process
 Many external factors influence process outcome
 Technology systems support process only at specific, limited points
 Lack of process specific (voice-of-the-process) metrics – existing VOC data
not statistically relevant
 Process execution & use of tools (incl. technology) differs between and
within practice areas – no standardization and no apparent process
ownership across the organization

The Define phase brought significant
insights into process issue root causes
Insufficient Fill-Rate
Environment
People
Machine
Material
Method
Measurement
Project is not well defined
Lack of features in Einstein
Lack of cooperation between people (x)
Insufficient level of training
Sales Skills
Client does not have enough time for consultative approach
Client does not perceive M2 as consulting firm
We are generalists in business development
We are generalists in consulting services
M2 has confused identity
Projects are both consultative
and staff augmentation
Misalignment of firm culture to the actual
services you are selling
Unclear strategic direction
from Senior Management (x)
Changing market landscape (n)
Business Model
Consultants are not
real stakeholders (n)
Business Model does
not make clear distinction (x) Current Market
Conditions (n)
Historical geographic
sales focus
Unclear recruitment
strategy
Very broad
product offering
Unclear strategic direction
from Senior Management (x)No
consistency in how
personal evaluation tool is used (x)
No global visibility in internal talent
leading to underutilization (x)
Recruiting is done
by business unit (x)
Moved forward with people
we had when changing business model
We do not say no to anything
Large Database of consultants (x)
Did not fit the people
to the model (x)
We are very opportunistic
We have large consultant database (x)
We are reactive not proactive
We don’t say no (legacy clients)
We have a large consultant data base (x)
Client does not perceive
value in consultative approach
It is perceived that it is expensive to train people
Lack of assessment
of training needs
Lack of consensus on strategic direction
There is no
vision of M2 strategy (x)
Lack of a method on how to achieve agreement on strategic vision (c) No internal champion for training (x)
No definition of what skill
sets are required to be successful by role
No gap analysis
of training needs
No training strategy (x)
Have insufficient subject area expertise
Because
we are generalists
(same root causes as below)
Consultant pool is unwieldy
Pool is too big
Pool is stale
There is no real barrier to entry
We cannot say no
Made decision that there is value
in network breadth (c)
It cannot harm us (c)
Insufficient
data management (x)
The size of the task
No internal ownership (x)
Home grown system
No unified policy of using EinsteinThree business units operating differently (x)
There is no understanding of
why business units operate differently
Business Units are growing on their own
Type of clients for each (n)
No ownership of which
processes should be unified (x)
No consensus on what Einstein should do
Level of customization of current newer system would be too high (n)
We are opportunistic (x)
Lack of skill sets
Lack of experience (n)
Lack of consultant availability (n)
Lack of Urgency (x)
Lack of attention to detail (x)
Lack of or Miscommunication between people
Lack of confidence
Lack of Trust
Lack of adoption of best-practices (x)
Client does not like being sold to (x)
Not a peer-to-peer
relationship with client (x)
Moving too fast in selling to client
Need to move fast
Not perceived as consulting company but
staffing company (see known root causes
under material)
Client does not feel heard
Consultants are not a fit
Mismatch between skill set,
expectations & budget
Demand on client side
for 100% match is higher (n)Expectations set
during sales call
Because this is our business model (x)
The speed of competition (n)
We do not hear the client
Lack of knowledge in methodology (x)
Try to sell better solution
that meets needs but client does not want
Look for capability
first and then budget (x)
We are generalists
(see root causes for this point
under materials)
Insufficient level of trust
between BDM and CSM Nature of BDM-CSM structure
Different customers
(client vs. consultant) (c)
Lack of understanding
of process timelines
Because processes
are different between BU’s (x)
Lack of visibility into process (x)
Client experience working with consultants (n)
Lack of specific subject matter knowledge (BDM) to understand business problem
Client skill set requirements is too unique
Lack of specific subject matter knowledge (CSM) to understand business problem and vet consultant
Insufficient tools to support specific enough search (x)
Lack of subject matter expertise (BDM/CSM) (x)
Qualification of client to buy a consultant (x)
Business Problem
was not properly understood
Language between client
and BDM does not align
Things are
taken for granted
Move too fast
to close project
(see root causes above
under “need to move fast”)
No consistent metrics (x)
Lack of accountablity
No consistent metrics to measure results (x)
Inconsistent execution of business processes between and within BUs (x)
Lack of subject matter expertise (x)
We are generalists
(see root causes under material)
Insufficient visibility into process (x)
Lack of adoption of best-practices (x)Input
* Project idea after client
approaches M2 with a problem
Quantification: # of project
ideation from client
* Project idea after M2 BDM
approaches client
Quantification: # of project
ideation from M2
* Consultants for project
Quantification: # of
consultants approached
Process
* Project Launch
* Consultant ID & Evaluation
* Present-to-Close
Output
* Booked Projects
Quantification: # of booked
project to total number of
launched project = Fill-rate
* Proper Consultant for Project
Quantification: CSI Score, EOE
score (to-be-defined); # of
extensions per selected
consultant; # of consultants
released from projects to
booked projects
* Revenue
Quantification: TCOR (total
cost of revenue)
Customer
Business Client
Customerrequirements with voice
- Do you really understand my business problem
- Timely delivery of consultant that fits within culture
- Proper definition of project deliverables
- Meeting budget needs
- "If it's going wrong, make it right"
Basic requirements withoutvoice
- Competitively priced
- Highest quality of talent
- High-touch service
Subconsciousexpectations
- On time and on budget
- Building internal project sponsor brand
- Consultant needs little or no internal support
VOC summary
Timely delivery of the right talent to solve the right problem
effectively, in time and on budget
Life Sciences& Growth
Business Unitof M2
commitment
[in plain language understandable
to the customer]
Help to properly frame business
problem, develop deliverable to
overcome the problem and
provision the right talent in a timely
manner to solve the problem with a
tangible ROI
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0
10
20
30
40
50
60
70
80
90
#Observations
Group
Distribution for CT Matrix - Business Client
0
100
200
300
400
500
600
ImportanceScoreonVOC
Process Steps
Pareto Chart - Ranked CTsRelative Importance
to customer
8 10 6 8 8 8 8 6 9 9 8
Process Input
Do you
really
understand
my business
problem
Timely
delivery of
consultant
that fits
within
culture
Proper
definition of
project
deliverables
Meeting
budget
needs
"If it's going
wrong, make
it right"
Competitively
priced
Highest
quality of
talent
High-touch
service
On time and
on budget
Building
internal
project
sponsor
brand
Consultant
needs little
or no
support
Total Score
Define Project with client 9 5 9 6 2 4 7 7 6 7 7 543
Communication between
CSM & BDM - Launch
5 7 3 6 2 3 4 1 6 4 2 360
Interview Consultants 6 6 1 2 1 2 9 2 5 3 5 350
Conduct Consultant
Search
2 9 1 5 1 2 8 2 7 1 2 340
Select Consultants for
interviews
4 6 1 7 1 3 8 1 5 1 3 334
Create Client
Presentation
5 5 2 4 1 3 7 6 4 2 2 328
Communication between
CSM & BDM - Consultant
3 7 1 5 1 3 6 1 5 2 4 321
Consultant Interview
with Client
9 4 3 2 1 5 4 5 2 2 2 308
Onboard consultant to
project/client
2 3 3 1 3 1 1 4 1 6 4 231
Client approve of project
specs
7 1 4 3 1 2 1 1 2 1 2 195
Improvement measures to be implemented over the next 2 – 6 months
were initially developed for “Lack of adoption of best-practices”

Focusing on lower effort, high impact items
yielded 16 possible improvement measures
Further dedicated solution refinement & creation of implementation
roadmap to flesh out the suggested improvement measures is
currently underway
Most important measures identified & implemented during project
Differentiate
products
(staffing vs.
consulting)
engagement within
business process
Create Standard
Operating
Procedures &
Artifacts for each
process step (tools &
best-practice case
samples)
Process dashboard
to create process
visibility (across
multiple processes)
New Process Flow
with reduced number
of process steps to
reduce lead times
 Process improvements after differentiation between products (consulting vs.
staff augmentation) will focus on “staff augmentation”
 Standard Operating Procedures, Required Artifacts and the Process
Dashboard allow for process standardization & process monitoring

Improvement measures during first phase
yielded measurable improvements
Control Sample Analysis
Business Unit LSG
Date Range: 3/1/2010 - 4/30/2010
Total Sample Size 54
Total Pending Projects 16
Total Projects Lost 13
Total Projects Booked 25
Statistical Sample Error 14%
Fill Rate 2009 58%
Fill-Rate Sample 66% +/-
Absolute Improvement 8%
Relative Improvement 13%
Delta to Min. Target -1%
Fill-Rate LSG Target Min. 65%
Fill-Rate LSG Target Max. 70%
Fill Rate – 2009 vs. 2010 Sample
Process Lead times in days for booked
projects – 2009 vs. 2010 Sample
State of Project Measures
Total Lead
Time -
Booking
2009 Analysis
Absolute
Improvement
Relative
Improvement
Mean 10.1 14.0 -4.0 28%
Median 9.0 6.0 3.0 -50%
1-sigma 7.1 21.5 -14.4 67%
Booked
Average Revenue per project (2009 Value) 121,000$
Total Projects either booked or lost in Sample 38
Total Projects booked in Sample with 2009 Fill Rate 22
Total Projects booked in Sample 25
Net Project Gain 3
Net Revenue Gain in Sample compared to 2009 363,000$
Extrapolated Net Revenue Gain for 2010 2,178,000$
Extrapolated Net Revenue Gain for 2010 for 2009 project activity 1,007,528$
Expected Revenue gain before project - Minimal Target 915,000$
Normalized Net Revenue Effect
KPI improved to 66%, above lower bound of target range (65% - 70%)
Projected net revenue gain in 2010 based on sample is $1M within BU 1
Average process lead time/sigma interval reduced vs. 2009 by 28%/67%
1
BU 1
BU 1

The control plan is based on dashboards,
SOPs and questionnaires to verify VOC
• Standard Operating Procedures based on
process artifacts
• Provisioning of usable templates
Standardization
• Process Dashboard of cycle time for process
steps together with process owners to ensure
accountability
Process Visibility
• Cycle time capture in IT –Tool
• Project Initiation Artifact sheet
Required Process
Artifacts
• Internal & External Questionnaires to be used
at regular intervals to readjust process
Continuous
Verification of VOC
Nr. Answer
1 No
2 No
3 No
Type of
Project
Consulting
Project
Do the roles & responsibilities of the assistance you need correspond to a staff position that exists in
your organization?
Question
Do you need assistance in day-to-day or project activities in your devision/department/group?
Do you have a job description for the assistance you seek?
Questions to determine if project is talent-on-demand or consulting project
CSM Project_Name Company Project_Status Started Spec_Sent Spec_Signed Resumes_Sent Booked Completed Lost Lost_Detail Start_Date
John Doe
Business
Program
Manager
LPL Financial Active 1/27/2010 1/28/2010 1/29/2010 1/29/2010
Check list to provide to CSM
Nr. Answer
1
2
3
4
5
6
7
8
9
10
11
12
13 If known and available, list names of possible talent + contact data, if not in Einstein
How many talents have to be provided? Differentiate by job title
Timeline to provide talent (give drop-dead date)
Question
Does the hiring manager have a written job description? Yes, please, provide.
Does it need changes (additions/deletions/changes)?
Have these changes been provided? Please, provide discussed changes.
If not provided, will these changes be available within 48 hours?
If no job description is available, which job title does the position correpond to?
Do we know industry, function, functional and overall experience required and special
requirements (certifications, specific areas/systems/methodologies)? Yes, please, provide.
What is the available billing rate? Hourly, daily, weekly, flat
Is the billing rate comparable to recently placed talent in similar positions and background?
Expected duration of the placement?
Number of weekly/monthly hours?
M² Customer Questionnaires for the
Talent Order Fulfillment Process
The goal of the questionnaires is to understand the voice-of-the-customer with regard to two critical
process phases:
1. Working with the client to define the project
2. The presentation of the consultant to a client
Questionnaire 1: Determining performance of defining the project
The questionnaire is aimed to identify the client perception of how well M² defined the project along
several dimensions. The questionnaire is to be used after the delivery of the project spec either in person
or over the phone at the end of a meeting. The questionnaire should not take longer than 2 – 3 minutes
to complete.
The questionnaire should be completed for each project where a spec is presented.
On a scale from 1 to 5 with 1 strongly disagree to 5 strongly agree, how important (to the customer) are
the following statements regarding M2
’s documenting of customer requirements?
Nr. Statement Score
1
M² listened and fully understood the business problem I am trying to
solve
2
M²’s project specification document carefully defined the project scope
and the skills & experience required for the consultant selected to
complete this project.
3
M²'s project specification clearly defined the project deliverables and the
measures of project success.
Are there other factors that are important to you in terms of project definition,
consultant delivery and project execution
Questionnaire 2: Determining performance of delivering the right
consultant
The questionnaire is aimed to identify the client perception of how well M² did in delivering a consultant
to the customer along several dimensions. The questionnaire is to be used after the consultant interview
either in person or over the phone at the end of a meeting. The questionnaire should not take longer
than 1 – 2 minutes to complete.
Resume Of Jane Doe
What are you?
Mergers & Acquisitions, Corporate Strategy, and Financial Solutions Design Executive
Executive Summary
Summary: senior executive with over twenty years of experience in a full spectrum of
accounting and financial methods and disciplines at renowned companies such as Drexel
Burnham Lambert, Goldman Sacks and Citicorp
Industries: Successfully executed 10 M&A transactions with accumulated valuation of over
$4Bn within Financial Services and the Life Sciences sector
Range of Deliverables: Proven record of project and program management excellence
delivering improved or accelerated growth metrics; numerous commendations for creating and
implementing strategic initiatives, assessing and executing business opportunities in M&A and
restructuring contexts, and developing structured actionable programs
Technologies: Microsoft Office, Excel, Factset, SDC/Prism, DRI McGraw Hill, Geo Carson,
Bloomberg, Peoplesoft E1, SRC, Hyperion
Key Areas of Expertise (bullets only)
 M&A
 FP&A
 Restructuring
 SOX Compliance
Professional Experience
INDEPENDENT CONSULTANT, CA 2007 to Present
DIRECTV, Los Angeles, CA 2008 - 2009
World's largest satellite TV provider with more than $17B in annual US revenues.
Business Operations Improvement Strategist Leadership: Quantitative and
strategy analyses (IT systems and business processes). Created improved 10k and 10q SEC
reporting solution design and implementation plans using Lean Six Sigma methods and BPM
software (KNOA).
Summary of Results
Created Hyperion solution redesign and business process improvement plan for a network of
nearly 30 FP&A sites (1,400+ system users); plan detailed more than $4M in annual cost
savings on a projected investment of less than $2M.
LIFE TECHNOLOGIES, CARLSBAD, CA 2004 to 2007
Director of Finance
Global Operations/FP&A
Director of Corporate Compliance
GOLDMAN SACHS & CO. NY, NY 1997 to 2003
Investment Banking Analyst/Associate
CITICORP NY, NY
Accountant/Analyst 1991 to 1996

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