Six Sigma South Africa

What Six Sigma can do for you?

Six Sigma is most definitely NOT just for manufacturing, it is equally useful in a transactional environment.

Six Sigma is all about processes and the banking environment is highly process driven.

Many organizations have taken a look at Six Sigma's track record and surmised that it won't work for them. Why? Because Six Sigma was developed in and for a manufacturing environment; so, how would it apply to a nonmanufacturing environment? Organizations such as financial service providers, health care systems and educational facilities are asking this question. Others have gone so far as to take that leap toward Six Sigma and have witnessed the results first-hand.

Often referred to as "transactional Six Sigma," the methodology is proving to be a useful tool in environments that focus more on people and less on product. Experts agree that the most common reason service companies shy away from Six Sigma are that they see it as a manufacturing solution. One of the major hurdles service organizations must overcome is the notion that, because their company is human-driven, there are no defects to measure. This is wrong, say the experts.

Example 1:

Case Study: Online Banking Deposit Process


This bank`s first project involved the process of how deposits were made to this bank. Deposits were the second largest driver of inquiries to the customer call centre (13% of all calls). Customers expressed frustration in mailing delays and couldn't understand why their checks took so long to post to their account. A project charter was created identifying exactly what the process entailed. The business case was written, the problem statement crafted and the scope clearly identified. The team was formed and quickly moved into the measurement phase. Data surrounding the deposits was collected and the analyze phase began to yield some alarming results. This led to drastic improvements through Improve Phase resulting in yearly savings of $4 Million.

Example 2:

Case Study: Customer Wait Times


Perhaps the greatest strength of the Six Sigma method is that it produces objective, measurable results that can be monitored continuously. In one case, a bank implemented a Six Sigma project to reduce customer wait times. By identifying and controlling the key factors that did the most to increase transaction times, the bank was able to lower its average transaction time from 2.45 minutes to 1.80 minutes, significantly improving customer satisfaction while simultaneously reducing staffing costs.

Note, Six Sigma principles are not limited to reducing customer wait times. Banks have also implemented Six Sigma programs to reduce theft and fraud, and to meet other objectives as well. The Six Sigma DMAIC process can be applied throughout the retail banking organization, wherever managers require measurable results, to design, validate and monitor business process improvements.

Applying Six Sigma's DMAIC process has enabled banks to implement corrective actions based on empirical evidence rather than on anecdotal evidence and gut feeling. In addition, a successful Six Sigma project establishes a precedent for evaluating new programs and technology investments.

Recently, HSBC in the United Kingdom won the Six Sigma Excellence award for "Most Innovative Six Sigma Project"

Comments from Daniel Stusnick, Senior Vice President, Global Transaction Banking at HSBC

"Ultimately, projects must show results, and the futures quality initiative is no exception. When the project started, net income stood at $1.9m, and had been more or less unchanged for several years. Furthermore, the business was in jeopardy due to the changing dynamics of the markets as electronic trading became a factor. As a result of the project:


  • net income climbed to an all time high of $3m during 2003 as many of the improvements were being implemented
  • for 2004, futures net income is projected to climb to $7.1m, a 274 per cent increase since the project began
  • project results were achieved with a ten per cent reduction in headcount and in a declining commission environment
  • while not measured, the improvement in morale was noticeable

Other transactional examples of project case study savings seen as a result of Lean Six Sigma training and consulting support: (figures are annual savings in US Dollars)

Improved procurement system

275,000

Reduce audits and cost of audits

454,000

Improved accuracy of claim payments

578,000

Reducing sick leave at 8 sites

2,839,327
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