1.1 Research background
Services have experienced significant growth over the past decades; they now represent a major portion of the economies of the world’s more industrialized nations.
Even in lesser-developed countries, the service sector still accounts for a substantial part of their economies (Davis and Heineke, 2003). In addition, the service industries not only have grown in size, but along the way they also have absorbed all the jobs shed by traditional industries such as agriculture, mining, and manufacturing. For instance, by the mid-1990s, the service industries employed nearly 80 percent of the workforce in the United States (Hoffman and Bateson, 2002).
Today, in service applications, the revenue growth potential of improving the speed of and quality of service often overshadows the cost reduction opportunities.
However, service processes are typically slow processes, because there is far too much waste such that the costs of services are inflated and service quality deteriorates.
Moreover, one of the characteristics of service proposed by Zeithaml et al. (1985) is the heterogeneity, which means the occurrence of variations in the level of service to customers, and it consequently results in poor service quality and customers’
dissatisfaction. These service issues represent a huge opportunity to improve the service quality by increasing the speed of service delivery and reducing the variations in service level.
Meanwhile, according to Ramaswamy (1996), excellent service quality can be achieved by developing a superior service process design. This means that a
well-designed service process is necessary for delivering higher level of service quality. In addition, as highlighted in literature, at least 80 percent of the service quality is committed in the early design phases of the process life cycle (Yang and El-Haik, 2003), and up to 80 percent of the total cost of the service is accrued in the concept development stage of these upfront phases (Fredriksson, 1994). Such research results have motivated recent attention given by various fields to shift from improving the service performance during the later phases of the process life cycle to the front-end design phases where the service was initially developed.
In recent years, Lean and Six Sigma disciplines have been popularized because their successful implementations by many world-class organizations around the world to improve business processes and reap substantial benefits of cost savings. On the other hand, to deliver a higher quality level of service than the rival, Design for Six Sigma (DFSS) works on the early stages of the process life cycle and utilizes the most powerful tools and methods presently known for developing optimized service designs. The major objective of DFSS, when applied to the service field, is to design the service right the first time to avoid painful and costly downstream experiences.
Finally, it was found in a literature study that although it is possible to have independent successes in Lean, Six Sigma, and DFSS, each magnifies the strengths of the other while compensating for the weaknesses when integrated in an overall improvement or design strategy. Therefore, it is the motivation for this research that blending the strengths of Lean and Six Sigma can be synergistic in the context of service process improvement, while the combination of Lean and DFSS can achieve the goal of providing excellent service process designs.
1.2 Research objectives
The primary objectives of this research can be outlined as follows based on the premise described in Section 1.1. Firstly, it aims at developing a unique strategy for improving the existing service processes through a combined approach of Lean and Six Sigma. Next, the focus is placed on the design and/or redesign of new service processes by fusing the powers of Lean and DFSS to develop a Design for Lean Six Sigma methodology. Finally, to demonstrate the efficacy and effectiveness of the two integrated systems, several empirical case studies in the service field are conducted.
Furthermore, a clear rationale for the integration of either Lean with Six Sigma or Lean with DFSS must be provided to justify these combined approaches. First of all, the reason for why we adopted Lean, Six Sigma, and DFSS instead of other quality methods mostly lie on the facts of the successful implementation of each discipline by numerous world-class organizations over the recent past decade.
Moreover, the well-proven and previously known principles, methods, and tools used by these methodologies make the deployment strategies we developed more easily to understand and implement. The next level of the question is why we used a combined but not individual approach. The answers to this question have to be clarified and understood before we go into details for the development of an integrated system.
Lastly, one issue also need to be addressed is to explain why these integrated strategies are applicable for the service settings particularly. To work out this issue, we have to start form understanding the basics of the service, and establish a correlation between the service essentials and the strategies we intend to develop.
Only after achieving this, then it would be appropriate to position these integrated approaches as being service-oriented. The final task to be done is to prove their
capabilities through practical case studies in the service field.
1.3 Research framework
Prior to starting the research work, it is helpful to provide an overview of the research structure for briefly understanding the philosophies and approaches underlying the overall research process. To fill this need, a research framework was constructed as shown in Figure 1.1.
Improvement of service
process
Design/redesign of service
process
Lean methodology
Six Sigma methodology
(DMAIC)
Lean methodology
DFSS methodology
(DMADV) Service process
improvement or design/redesign
Figure 1.1 A research framework
The picture in Figure 1.1 also indicated the methods utilized in the different aspects of this research topic which are service process improvement and design/redesign. For the service process improvement, the five-step methodology of Lean and Six Sigma’s well-known DMAIC methodology are applied together; while a selected DFSS methodology, DMADV, is combined with the Lean methodology for
their applications to service process design and/or redesign.
The occasions of using DMAIC and DMADV methodologies can be further distinguished and depicted in Figure 1.2. The DMAIC methodology should be used when a process is in existence in an organization but is not meeting customer specifications or is not performing adequately. On the other hand, the DMADV methodology should be used when a process is not existence and one is needed to be developed, or when the existing process exists but still doesn’t meet the level of customer specifications.
Define
Yes No
Does a process currently
exist?
Figure 1.2 The occasions of using DMAIC and DMADV methodologies
Measure Measure
Analyze
Improve
Control
Is incremental improvement
enough?