Page 237 - Lean six sigma demystified

Chapter 6 Tr an S a C T iona L Six Sigm a 215

Your Product or Service May Be Different, But . . .

Whenever I talk to business people, they all tell me how their business is differ-
ent from every other kind of business. Your product or service may be different or
the way you deliver it may be different, but you still have to take orders, pur-
chase supplies, issue invoices or bills, write checks, apply payments, and handle
the same financial transactions as any other business. The core of your business
may be a product or service, but the key to whether you make a profit lies in
how good you are at transaction processing.
With financial transactions, your cash flow depends on

• Accuracy. Right quantities, pricing, taxing, and so on. It doesn’t matter if
you build the perfect product, if the customer asked for something else.

• Speed. How fast the transaction is created and processed (and how fast you
can fix an incorrect one). It doesn’t matter if you make the best product,
if it takes too long to get it ordered, delivered, installed, or paid for.
• Cost. What does it cost to create and process the transaction (and what are
the scrap and rework costs when you have an incorrect transaction)?

The basic tools of Six Sigma such as Control charts, Pareto charts, and fishbone
diagrams can be used to find and fix errors in orders, bills, and so on. A p chart
and XmR chart can be used to monitor transaction errors and cash flow.
The basic tools of Lean can be used to find and eliminate the delays in transac-
tion processing in ways that will accelerate your cash flow. If you’re only using
Lean Six Sigma on your product or service, you’re missing a golden opportunity
to plug the leaks in your cash flow.

Software Bugs and Six Sigma

Recently, CheapTickets.com made a little error loading rates for flights to
Reykjavik, Iceland—round-trip airfare from New York for only $61, a far cry
from the $787 it should have been. About 800 people took advantage of the
glitch during the 22 hours it was available. It seems there’s a website where
frequent flyers share this kind of information: Flyertalk.com. By the time the
listing was posted on Flyertalk, it was late evening in Iceland and no one prob-
ably caught the glitch until the next morning. Unlike some carriers who do
not honor their mistakes, CheapTickets and Icelandic did honor the fares. It’s
cheap marketing, because all of the press services picked up on it and spread
the word nationwide.