As part of the Six Sigma Define, Measure, Analyze, Improve and Control process (DMAIC) the 5 Why’s are a good tool to use in determining the root cause of a problem. The 5 Why’s is a very simple tool to use and continually asks the question why until all the symptoms of a problem lead to a root cause
John Smith’s business is struggling with several service issues that are compromising the satisfaction and loyalty of their customers including service efficiency, responsiveness, quality, and rising costs.
Efficiency of a service operation is the key to having satisfied customers. “Poorly defined processes, improper staff training and badly implemented service infrastructure can lead to significant reductions in the efficiency of a service operation. The results are slower response times and longer resolutions windows, higher case backlogs, poor utilization of service staff, poor morale and higher turnover of service staff” (Service Strategies). The root cause of poor efficiency in John Smith’s business stems from the rapid growth of the company with no or poorly defined processes and procedures, a large ramp up of the employees with not enough training, and an overall lack of any type of service structure. The impact on the business is that costs are rising and the efficiency is tanking. Impact on the customers is negative. They are not happy with responsiveness, quality of service, or increasing costs being passes on to them. Smith needs to turn this around or they will start losing customers to the competition.
Responsiveness is critical to the customers. The response times at Smith’s business have increased as the company has grown. The company is taking too long to implement changes made to the customer’s business applications software. The customers need a shorter lead time to have their changes implemented. John Smith’s business as it grew took on more customers with more diverse business application software. This has put a large burden on Smith as there are several customers with several different software systems. Having the correct trained employees to update the different software has become more than he can manage. It is taking them longer and longer to make the updates. Not having a strong service infrastructure and process and procedures is not helping. The impact on the business is that they have more work than they can do and more diverse software systems than they have trained employees to perform the service. This is causing frustration for the company, the employees, and the customers who may take their business elsewhere.
Service degradation is also affecting the company and the customers. The network reliability has degraded and the customers are experiencing outages more frequently and for longer periods. This is not acceptable to a customer that depends on the network to do their job and satisfy their customers. This makes them late on performing their duties and flows down negatively to their customers. The root cause of the network reliability is Smith growing and not keeping a robust network in place that grew with the company. Smith is taking the low cost choice for his networks and internet service providers and they cannot support his growth of the company.
Communications are another problem. Smith is not communicating with the customers on the network outages or the late services provided to them. This just makes a bad situation worse. Root cause of lack of communication is Smith not having a system in place for communicating with the customers. Impact on Smith is dissatisfied and angry customers who will go somewhere else. The customers impacted do not know when they are going to have the software updates that they need and this puts them at risk for their business. Network outages not being communicated to customers impact them greatly as they cannot make any plans or don’t have any idea from Smith what is going on.
Quality of the services has fallen off. When the updates and changes are finally completed they are not what the customer wanted or they are incomplete. This tells me that there is a lack of processes and procedures on how to update the software and lack of training and qualified employees to do so. There is no mention of any type of quality control in Smiths business. There are a lot of technical employees and no system in place to direct them and follow up on their work. Impact on Smith is that the good employees that they do have get stuck with most of the work and get burned out. The new employees are not being trained properly and get frustrated as well. Either way they are at risk to lose employees. Smith is at risk of losing customers because they depend on them to do the software updates and changes right the first time. This causes the customers down time and stress when their software programs that they depend on to do their jobs don’t work.
Costs are rising for both Smith and the customer. Smith has a lot of employees but they are not producing the results to satisfy the customer. Smith hired more people but are they the right people and are they trained to do the job correctly. Smith having network outages and down time that is costing a lot of money. Smith employee headcount is not efficient and there is no idea if they are over staffed, understaffed or if they even has the right staff to do the job. The cost structure also needs to be assessed as Smith spreads the costs evenly across all customers and there are probably customers that use more network and bandwidth and some that use less so that is not a good way to do it. Rising costs impact Smith’s profitability of the company and it also impacts the customer as some of the costs get passed on the them. The customer will look for a better deal because if they costs are rising and the service , reliability, and communication are not acceptable why stay a customer.
Over the past five years, J.L.S. Technology Services Company (John L. Smith’s company) has been experiencing service delivery issues resulting in customer complaints related to the following:
· Service response times
· Degradation of services
· Poor Quality platform and application installations
· Poor communication and lack of coordination
· Increasing service delivery cost on the customer end
The situation John Smith finds his business in is perhaps one of the worse for any business, which is increasing customer costs while the quality of service is declining. It is incumbent upon John Smith and his team to clearly understand the customer defined service delivery failures, overall operational failures, identify the root causes and implement corrective actions. It is important for John L. Smith and his team to understand what these service failures are and how they impact John L. Smith’s company, as well as, his customers.
Service response times or responsiveness relates directly to the quality of service an organization provides. It is a subjective measure and can vary by customer. Responsiveness in the service industry is the speed at which a customer’s concern or inquiry is positively addressed. The Free Dictionary defines responsiveness as readily reacting to influences, appeals or efforts (The Free Dictionary, 2018). For John L. Smith’s company failure to respond to customer complaints and inquiries in a timely manner can be detrimental to his business. For example, he may lose the customers business, be found in breach of contract and possibly have to refund monies and perhaps most importantly, his company’s reputation may be damaged. The customer is adversely impacted if their business application software or connectivity is interrupted, costing the customer time and money.
Based on the customer concerns listed above, there is little question that John L. Smith’s company lacks efficiency. Efficiency, according to Business Service Management, is a “measure of whether the right amount of resources have been used to deliver a process, service or activity” (Burrows, 2012). Further, an efficient process is defined as a process that “achieves its’ objectives with the minimum of time, resources money and people” (Burrows, 2012). Because John L. Smiths’ company is not operating efficiently or effectively, customer concerns, complaints or service failures are not being positively addressed to the customers satisfaction. Again, this can result in lost business and revenues and poor brand image or company reputation. The customer loses time, money, efficiency and effectiveness in their own operations if they are adversely impacted by the lack of efficiency and responsiveness.
The quality of service, as mentioned earlier, is subjective and varies from customer to customer. It is a measure of delivered services or performance against customer expectations (The Business Dictionary, 2018). For John L. Smiths’ company, service quality comprises all the concerns listed above, responsiveness, efficiency, cost, service degradation and communication. Service quality (SQ) is a comparison of performance (P) and expectations € and is expressed as:
SQ = P – E
The same results apply regarding service quality and negatively impacts both provider and receiver of the services.
Cost of service is the price for a service based on the costs incurred providing it (Energy Vortex.com, n.d.) One of the complaints levied was the rising cost of services while the quality of services was degrading. This scenario is certainly not sustainable and certainly adversely impacts the customer where they are paying for an outsourced service that does not yield the efficiencies and effectiveness required and expected. Moreover, with increased pricing for substandard services, John L. Smiths’ customers may choose to bring the functions “in-house”.
The root causes of these symptoms or services failures are numerous. First, John L. Smith did not create a mission, vision or strategic business plan for the company that would guide operations. Second, a robust supply chain that was capable of flexibility and could provide the correct products and grow with John L. Smiths’ company was not established. Finally, and most importantly, there did not appear to be a system for proactively gathering feedback from customers and engaging in continuous process improvement.
There are several methodologies that exist to conduct a robust root cause analysis. As part of the Six Sigma Define, Measure, Analyze, Improve and Control process (DMAIC) the 5 Why’s are a good tool to use in determining the root cause of a problem. The 5 Why’s is a very simple tool to use and continually asks the question why until all the symptoms of a problem lead to a root cause (iSix Sigma, 2018). More importantly, the 5 Why’s a do not require statistical analysis and are best applied to problems that involve human interactions (iSix Sigma, 2018).
Simple collaborative planning, goal setting, measuring performance and proactively soliciting feedback from customers could have potentially prevented the problems John L. Smith and company are experiencing.