Page 143 - Six Sigma Demystified

124 Six SigMa DemystifieD

The value- added steps were as follows:
1. generate license code.

2. Process payment.
3. add invoice to accounting software (customers require an invoice, so this
is value- added).
4. generate order to reimburse reseller (if any).
5. Send invoice with download e- mail or shipment to client.

Step 2.01, Enter Web order into CRM, is identified as non- value- added (NVa) be-
cause the data already were available elsewhere, and entering the data into the
customer relationship management (CRM) system served no useful purpose in
the currrent process. Likewise, step 4.2, Record Invoice # in CRM, required data
entry that was not being used. at one time, the process allowed for invoices to be
sent directly from the CRM system. The process had been revised many times over
the years, and invoices no longer could be created within the CRM system, yet this
step had not been removed during these edits.
Using a sample of 50 representative orders, the processing time associated
with the five value- added steps was 25 minutes. The average cycle time was 168
minutes, including an average wait time of 117 minutes. Over half the wait time
was associated with the accounting processes. accounting preferred to batch-run
the credit cards, which then naturally led to batch entry into the accounting soft-
ware for invoice generation. With an average of four orders in queue, the process
lead time was calculated as 4 × 168 = 672 minutes; the process cycle efficiency
was estimated at 4 percent (calculated as 25 minutes of value added divided by
672 minutes of lead time).
as the team considered the process further, team members realized that the
CRM data- entry steps they classified as BVa actually were NVa for orders placed

on the Web as long as that information could be made readily available to order
processing and support staff. This realization, achieved through discussion of the
BVa versus the NVa of each step, later would prove critical to the process improve-
ment plans.

Analyzing­Sources­of­Variation

In the measure stage (described in Chapter 5), a process baseline is established
to quantify the current process conditions. In most cases, a control chart is used
to differentiate between the variation owing to special causes and the variation