Page 427 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

Design and Improvement of Service Processes—Process Management 385

The customer value-added activities are the activities that add value to
customers; the regulatory value-added activities are the activities that are
required by law or company regulations.

The non-value-added activities included
Screen and route mail
Review loss report
Obtain status and information
Evaluate investigation materials
Determine the cause of loss
Determine loss coverage
Control monetary value
Validate accuracy
Close file

Figure 10.31 is the cause-and-effect diagram for the cost efficiency. Clearly,
the inefficient process flow compounded the problem of a low ratio of value-
added time versus non-value-added time. Figure 10.32 illustrates the
itemized cost figures for conducting value-added works versus non-value-
added works.

In addition to the cause-and-effect analysis, the project team decided that a
simulation study was very necessary to further analyze the process and

Customer value-
added work

Ratio of
Regulatory value- value-added/ Cost
added work non-value-added efficiency

Non-value-
added work

Inefficient
process flow

Figure 10.31 Cause-and-Effect Diagram for Cost Efficiency