BOTH the Six Sigma and Lean methodologies have traditionally been used by companies in the manufacturing industry to improve their quality levels.

In the last two decades, users of these methodologies have systematically identified the causes of waste and defects, subsequently eliminating them by re-engineering the organisations’ internal processes.

Their successes have encouraged retail and service businesses, including financial institutions, to apply these methodologies in their processes to improve service delivery and customer satisfaction.

To show how these methodologies can be applied in a non-manufacturing business, let us use an example from retail banking.

When a customer opens a bank account, he will judge the quality of his experience on two fronts — the “soft” and “hard” aspects.

“Soft” refers to the way the bank employee attends to the customer’s needs, for example, how well the teller knows the bank’s products, makes the customer feel welcomed and attends to him in a warm and friendly manner.

“Hard” refers to the efficiency of the bank in delivering the final product, for example, how quickly and accurately the account opening is processed and the degree of difficulty associated with subsequent transactions.

As long as either aspect fails to live up to the customer’s expectations, he will deem the experience as a negative one.

These days, service organisations tend to focus a lot on improving the “soft” aspect of service delivery, which is important but by itself not adequate for service excellence.

The complementary “hard” aspect cannot be overlooked. This is where the strengths of the Six Sigma and Lean methodologies lie.

Developed in the 1980s by Motorola and popularised by General Electric, the Six Sigma methodology involves systematically measuring and analysing manufacturing processes with the use of statistical and hypothesis testing tools to reduce variations in the process and eliminate defects that result in customer dissatisfaction.

Each Six Sigma project follows a prescribed path: Define, Measure, Analyse, Improve and Control (popularly known as DMAIC for short).

Lean methods, on the other hand, have been made popular by Toyota, well known for its high quality and competitively priced vehicles. Toyota’s whole production system and corporate culture have been built around Lean concepts.

It entails relentless efforts in the pursuit of perfection to identify and remove the “seven wastes” of transportation, inventory, motion, waiting, over-processing, over-production and defects from the production process.

A non-manufacturing business such as a bank can similarly adopt both Six Sigma and Lean methodologies to improve the overall quality of its banking processes.

Over the years, OCBC Bank has applied a combination of Lean and Six Sigma disciplines (Lean Six Sigma) as a systematic approach to defining its customers’ requirements, measuring, analysing and redesigning the processes, and tracking the process performance for continuous improvement.

An in-house training and certification programme has also been put in place to equip its employees with the necessary skills to become “quality leaders”.

These “quality leaders” are responsible for driving process improvements within their departments. Cross-functional project teams are also set up to use Lean Six Sigma tools to review and improve end-to-end processes that cut across various departments.

Such cross-functional projects typically simplify and radically redesign the business processes to make it easier for customers to do business with the bank.

An example of a successful cross-functional project would be the business account opening process for corporate customers. Corporate customers often find it cumbersome to open business accounts as this process usually takes a long time to complete and involves the submission and verification of many documents.

By methodically analysing the process and challenging old norms, OCBC Bank’s cross-functional project team simplified and redesigned the process to enable customers to open accounts instantly. This improved process means customers now receive their cheque books the very same day and operate their new accounts immediately.

Quality is a prerequisite for achieving service excellence. Customers today expect a positive service experience that is flawless, friendly and prompt, every time. If they do not get it, they will not hesitate to defect to a competitor. It is no longer adequate for any business to just deliver what it has always been doing with a big smile.

There is a need to continuously identify potential gaps in processes and be disciplined in making continuous improvements, in order to deliver truly excellent service to our customers and build lasting customer loyalty.