WHITE PAPER APPLYING LEAN SIX SIGMA TO MOBILE OPERATIONS

Transcription

1 WHITE PAPER APPLYING LEAN SIX SIGMA TO MOBILE OPERATIONS

2 INTRODUCTION A half day service window generates complaints; a twohour service window is grudgingly accepted. However, in a competitive environment, one hour (or less!) will soon be the standard and two hours completely unacceptable. Why is this? Because technologies and methods have emerged that make it possible to consistently achieve a high degree of service reliability and predictability, driving Service Level Agreements (SLAs) and a host of service metrics to previously unattainable levels. This includes technologies that enable real-time visibility and reporting of mobile operational metrics across the enterprise. It also includes methods that apply these technologies in ways that optimize mobile operational processes and provide statistical control as they happen, improving: SHOP FLOOR VS. FIELD OPERATIONS The tremendous operational improvements gained by Lean Six Sigma (LSS) practices are common in enterprises. In fact, companies that implement quality control programs like LSS effectively survive and thrive in a competitive environment, while those that don t often perish. However, LSS implementations are found almost exclusively in manufacturing environments, with physically set components that supply and service chains revolve around, an environment that lends itself to higher degrees of control and access to the information required to analyze and act. On the shop floor, a lot of variables are taken for granted, such as where the machine is, when it produces product, product quality and what state it is in. These variables: On-time arrivals and departures Work efficiency and quality Overtime and fuel conservation. Implementing these new technologies and methods drives improvements in these metrics, from averages below 50% of target to greater than 99% compliance across the enterprise. So how can business executives, who are continually challenged to control the end-to-end effectiveness of field operations, take advantage? Systems can help billing, customer care and work order management. However, when assets hit the road, these systems are blind to critical dimensions, unable to answer the questions: Where are the technicians in relation to the work? When will they arrive at their destination? Are they engaged? How are they performing? This makes it impossible to deploy effective and controlled processes for field operations. How can you improve what you can t measure? ASSET ASSIGNMENT STATE LOCATION TIME are easily measured to derive metrics on performance and quality. For example, the scenario below: MACHINE 1 PAINT VEHICLE ON ROW 1 SLOT 2 10 MINUTES allows us to derive metrics on process velocity (10 minutes per job for machine 1 row 1), reliability (on time % for machine 1 row 1), and quality (number of failed paint jobs for machine 1 row 1 over time). It also allows for deriving relationships to determine the root cause, for instance, relationship of time per job to job failures. However, while the basic concepts of LSS hold true across businesses and industries, application of them has been especially challenging in mobile service environments where a majority of the work effort in the field is in motion, without the paradigm of static controls and compliance of the shop floor. This white paper introduces an approach to solve this problem integrating Location-Based Services (LBS) technologies throughout business operations, applied using Lean (process velocity) and Six-Sigma (statistical control) methods and tools to generate double-digit improvements in productivity, cost, quality and customer satisfaction previously reserved for manufacturing environments. Applying Lean Six Sigma To Mobile Operations 1

3 OUT HERE IN THE FIELD... WE RE IN A FOG (AND MAY NOT REALIZE IT!) Field operations managers are flying blind basic awareness of some critical dimensions is lacking when it comes to their mobile operations, resulting in red flags : ASSET ASSIGNMENT STATE LOCATION TIME The lack of real-time control over these variables can result in serious performance problems. For instance, when a customer calls, the call center generates a work order. A schedule is created based on that work order and available assets, and even an optimal route prepared for the mobile resources, all on the shop floor in a vacuum disconnected from the field. However, once the resources leave for the day, the following questions remain open: Was the schedule followed? How well? Can the schedule be improved? Are the schedule and route optimization programs making the right assumptions, or using the appropriate algorithms? The problem(s) can t be identified, let alone the root cause(s). With the emergence of LBS integrating mobile hardware, software and network technologies, the paradigm shifts. The variables of state, location and time can now be assigned values and applied to the last mile of the service chain to derive, report and validate asset state, schedule, route and work performance with a high degree of precision. We re no longer blind. However, even when field operations are outfitted with cellular modems, GPS receivers and work order management systems, it doesn t necessarily mean management knows where the mobile resources are or what state they re in at any given point in time. For instance, simply relying on the end user to manually report on location and status in a real-time fashion will not achieve the accuracy needed to get results. In some cases, it s actually counterproductive, where inaccurate reporting leads to incorrect assumptions, lost time, resources and money. HOW DO I GET THE VALUE? Intuitively, I know location-based services can add a lot to my operation, but how do I get the value? A majority of field operations executives face this dilemma, both those who are considering an LBS deployment, and, alarmingly, those who have outfitted a significant portion of their mobile workforce but without direction as to how and where to impact the business. The concept of knowing where the work is in space, time and state is appealing; however, making that knowledge useful is challenging. So more important than slapping a GPS receiver in a vehicle and a map on a dispatcher s display is the understanding of how and where these technologies will be deployed to extract value. APPLYING LSS The how and where can effectively be answered by applying Lean (process velocity) and Six Sigma (statistical control) concepts and tools to build an approach: Lean because the introduction of LBS has tremendous potential for positive cross-operational process impact. Six Sigma because statistical control integrating LBSderived data allows for continuous measurement, management and improvement of target metrics. But concepts and tools alone do not complete an approach; they need to be organized using an appropriate methodology to achieve the following objectives: Improve process velocity Improve process control Create awareness throughout the operation by deploying locationbased services. Given these requirements, the DMAIC (Define - Measure - Analyze - Improve - Control) methodology proves to be a great fit. Using DMAIC, a roadmap for LBS initiatives can be laid out, where LSS concepts and tools are employed in each phase. Success requires integration of awareness throughout the operation via automated, validated, real-time reporting of actual location, time and state, understanding where the problems and opportunities lie, determining the root causes, and providing solutions that insert LBS into the basic processes of the operation to generate results. Applying Lean Six Sigma To Mobile Operations 2

4 A DMAIC ROADMAP FOR LSS/LBS 1. DEFINE: The first step can be the most difficult. But if it s well organized, endorsed by management, and accounts for all relevant stakeholder input, the odds of success increase dramatically. Start by creating a project charter where key metrics are identified and targeted for improvement. This will lead to high level mapping of related process that are affected. 2. MEASURE: Perhaps the most important and revealing stage, where the blind spots are illuminated by the addition of LBS data, is measurement. Once the data has been sampled, tested and reported, metrics are prioritized according to business impact. Creating a Sample This can be done rapidly with minimal investment due to availability of: Inexpensive, easy-to-install communications devices (GPS+cellular) set to automatically report Web-based Software-as-a-Service (SaaS) applications with flexible reporting hierarchies and a variety of Key Performance Indicators (KPI s) Open interfaces from the SaaS application to back-office billing, work order management and customer service systems. Conducting a Test Allow the sample population to go about its normal business as little as one week s worth of data can be enough. Although the test can be conducted without participant awareness, awareness is generally a good thing keeping the objectives open and clear is appreciated (see Adoption page 4). Creating Reports Data points like location, engine state, miles driven and work schedule don t tell much alone. The opportunity is in understanding their interrelationships and how they impact business metrics. For instance, measuring and aligning the sample data points of: and provides the synchronization of actual activity with planned activity. One way to present this is using Time Value Analysis essentially a chart that visually separates valueadded from non-value-added time in a process. 84:00 72:00 60:00 48:00 36:00 24:00 12:00 0:00 74:48 17:56 MONTHLY SAVINGS PER VEHICLE = $90 FIGURE 1: BENCHMARKING ENGINE IDLE TIME METRIC COMPARING STANDARD PRACTICE WITH BEST- IN-CLASS. 3. ANALYZE: Once the baseline performance of the processes has been identified via the sample and related reports, the analysis begins. This means pinpointing performance problems by identifying and verifying the root causes. There are a number of tools available, including five why s, cause and effect diagrams, and flowcharting. For example, charting the mobile workflow results in the identification of opportunities for improvement at each stage, including customer and call center awareness. The objective ultimately is to see and report on the delta between current performance and Six Sigma goals. For field operations, with the wide variation of practices and environmental factors, benchmarking is a great tool to determine best practices and target metrics. 4. IMPROVE: In Lean, the heart of the improvement is based on application of Business Process Optimization (BPO) tools. Processes are mapped and technology applied to make them more efficient and effective. In the course of this effort, best practices are identified and deployed. Re-engineering processes across the operation (tech operations, dispatch, fleet, management) while applying LBS process controls (realtime monitoring, alerts, reporting) make it happen. TECH DEPARTURE/ARRIVAL ALERT ROUTE STATUS DISPATCH ASSET + ASSIGNMENT + STATE + LOCATION + TIME SCHEDULE OPTIMIZATION ALERT ESCALATION ROUTE ADJUSTMENT results in the reporting of: ENTERPRISE SCHEDULE PERFORMANCE DATA MANAGEMENT VEHICLE, PARTS, SKILLS WORK STATUS OF WHERE + + ORDER VEHICLE/SKILL + + THEY ARE CUSTOMER AT WHAT TIME FIGURE 2: ON TIME DEPARTURE PROCESS/ARRIVAL OPTIMIZATION AND CONTROL. Applying Lean Six Sigma To Mobile Operations 3

5 DRIVE TIME / START ARRIVE FIRST STOP FIRST STOP DRIVE TIME / DEPART UNAUTHORIZED STOP Provide Estimated Time of Arrival (ETA) to Customer Care & Customer Optimize Drive Route Alert Dispatch, Customer Care Stop Time Alert Job Information Schedule Optimization Provide ETA to Customer / Customer Care Alert Management 5. CONTROL: Once the improvements have been deployed, their performance needs to be tracked by using analytics tools based on Six Sigma concepts to move business metrics in the right direction. This information can then be used to continuously improve the operation, employing techniques including: Charting KPI s over time to evolve trends and identify improvements Analyzing data to identify performance outliers and drilling down into the findings to uncover the root causes Integrating work order databases to provide insight into schedule performance and efficiency Tracking best practices and variations through regular audits, benchmarking, user group input and applications that support communication and collaboration throughout the enterprise Readjusting target performance based on benchmarks, trends, reduction in variation and progress against Six Sigma performance. ADDRESSING THE CHALLENGES As evidenced by the chart below, when operations executives are asked what their biggest challenges are in implementing LBS, they generally respond with a combination of integration effort and capital investment. SYSTEM DEVELOPMENT/ INTEGRATION COSTS HARDWARE COSTS INTEGRATION CHALLENGES WITH CORPORATE BACK-OFFICE IT SYSTEMS NETWORK CONNECTIVITY / BAND- WIDTH COSTS 3.21 NEED TO GO THROUGH MANY DIFFERENT PROVIDERS FOR SOLUTION 3.09 To overcome these challenges, consider the following criteria when evaluating the options in LBS solutions and providers: Providers that have the ability to deliver the entire solution hardware, software, applications, installation and training can simplify the effort. This also avoids the ongoing requirements of integrating and maintaining the components. Support and ongoing enhancements of devices and firmware how, when and what the device is capable of reporting, and the ability to change over time, allows for new feature and benefit introductions, plus a longer solution life. Software-as-a-Service (SaaS) can also simplify the effort while supporting the LSS concept of continuous improvement. Users benefit from the introduction of new features as they re placed in production, minimal management requirements and flexible use. Complementary software tools and services help to ensure results and support continuous improvement pilots, operations analysis, training, Collaborative Management Tools (CMT), and Business Intelligence (BI) software. Integration with existing and planned systems is a current and growing requirement. To be prepared, a number of data services are available, from File Transfer Protocol (FTP) and flat file transmission to real-time, bi-directional web services. Prices for hardware are steadily falling the capital investment for entry is relatively low. Starting with basic functionality (Cellular+GPS) can generate excellent results. As more applications, devices and networks are introduced to the mobile operation, there may be a need to migrate to more powerful platforms that support mobile routing and communications of multiple services. Providers that deliver at both ends of the spectrum are a plus. ONGOING SYSTEMS MAINTENANCE COSTS IT RESOURCE REQUIREMENTS SEVERITY SCALE: 1 - LEAST SEVERE 5 - MOST SEVERE FIGURE 3: SERVICE WORKFORCE AND FLEET MANAGEMENT: DRIVING UTILIZATION WITH LOCATION INTELLIGENCE, ABERDEEN GROUP, MAY 2009 Applying Lean Six Sigma To Mobile Operations 4

6 ADOPTION How is GPS perceived in the organization? For many, the notion of Big Brother comes to mind, which has left an indelible stigma on the acronym. However, this impression could not be further from reality, especially when viewed from the perspective of what s important to most businesses. REAPING THE BENEFITS Once LSS/LBS has been deployed successfully, the results can be dramatic even radical. A few examples: BENEFIT ON TIME ARRIVAL TO THE FIRST JOB REPORTED INPROVEMENT PER TECH* 1 HOUR PER DAY ADDITIONAL JOBS/DAY 30% It s about managing the assets, not the individuals. REDUCED FUEL EXPENDITURE ACCURATE TIME REPORTING/REDUCED LABOR EXPENSES $90 PER MONTH 10 HOURS PER MONTH Location-based solutions are about vehicles, equipment, parts, work orders, appointments, service windows, and getting the job done right the first time. They are not about whether a coffee break was five minutes over, or someone who is delivering newspapers along a repair route. Companies are interested in controlling these behavioral issues, but in the larger picture, nearly all the return from LBS is in asset performance improvement, not as a disciplinary tool. A realtime LBS element whether a GPS location or a change in status is most meaningful and valuable when attached to an asset work order, vehicle, equipment, part, destination instead of an individual. Focusing, then, on improving work performance via asset utilization not via individual penalties is the objective. Common goals related to improving productivity metrics, complemented by incentive systems that reward employees based on performance, will support and reinforce adoption. REDUCED OVERTIME EXPENDITURE 50% REDUCED TRAFFIC INCIDENTS 60% REDUCED OUTAGE TIME (UTILITY) 30% COST PER TRUCK ROLL REDUCTION $150 TO $600 MONTHLY SAVINGS PER TECH $100 TO $700 FIGURE 4: LBS BENEFITS * REPORTED BY CUSTOMERS The introduction of location-based services across field operations is likely inevitable on a wide scale. The question is will companies succeed in getting the most out of them? Many approaches are possible, and applying advanced, proven tools that support Lean Six Sigma concepts, combined with a solution that effectively supports them, will dramatically increase the odds of achieving results. Applying Lean Six Sigma To Mobile Operations 5

7 T: Phone: About CalAmp CalAmp (NASDAQ: CAMP) is a proven leader in providing wireless communications solutions to a broad array of vertical market applications and customers. CalAmp s extensive portfolio of intelligent communications devices, robust and scalable cloud service platform, and targeted software applications streamline otherwise complex machine-to-machine (M2M) deployments. These solutions enable customers to optimize their operations by collecting, monitoring and efficiently reporting business-critical data and desired intelligence from high-value remote assets. For more information, please visit CalAmp. All specifications are typical and subject to change without notice. p/n rev