Thursday, June 11, 2009

Lean Six Sigma

Lean Six Sigma Training is meant to enhance efficiency. Based on my observations and discussions, we are living in a world where the profit motive is pushing for inefficiencies.

Let me discuss the business model of a certain airport shuttle.
1. The shuttle has a bunch of vans.
2. People call in and make a reservation for a shuttle van pick-up.
3. It is not profitable to just pick up one person (more later).
4. They hope that during the week that there will be at least two or three people from an area so the pick-up will be profitable.
5. They make the reservation about 3 hours early. They don't tell you why. The reason is so that they can cancel if need be. If they cancel, to assuage the customer, they will pay the differential between cab fare and the shuttle fare, let's say up to $10.
6. Here is how this business model worked for me.

1. I had a pick-up scheduled for 130 pm. That was earlier than I would have wanted because I wanted to be there at 4Pm for a 5pm flight, but I accepted it.
2. At 145, I called up and asked where the van was, they said it was on the way, expect within 30 minutes.
3. At 215 I called up and was told it was on the way and would be there in 10 minutes.
4. At 230, I was told it was around the corner.
5. At 245, I was told a mistake had been made, the van had been cancelled for the day since there were not enough people. They asked if I wanted them to call a cab. I said yes. (Driving was not a good option since this was to be a two week trip (9 times 15 = $135 vs $35 for cab fare). The smartest thing I did on this whole thing was make my own reservation.
6. At 400pm, the cab that I made a reservation for came (the other cab never came, I checked!) It was exciting now since if there was a rush hour traffic snarl, no way would I make it. It worked out that traffic was perfect. I was let out at the airport curb, checked my bags there at the corner and fought my way through security to get on the flight with 7 minutes to spare.

Summary- Their business model makes money, but where the rubber meets the road, it really causes problems. Someone asks, "well, why don't you just get a cab? I did reserve a cab for 4am so I could get to the airport at 5am. At 415am the cab company called and said it was cancelled. Ever try to get a cab within 30 minutes at 415 am. Luckily, I got a ride. My business model should have been t0 reserve 2 or 3 cabs and apologize to the ones that show up after I leave!!!

2 comments:

Lita said...

Six Sigma sounds like a typical Star Trek-esque term spouted by MBAs and managers when referring to IT processes and services. When my company had chosen me as the one to implement a Six Sigma program, I initially freaked out. I tried to read up as much as possible about it on the net. Finally, I came across a site, which nicely explains all that one needs to know about implementing Six Sigma. If you would like to know more, then visit http://tinyurl.com/mb8qtz

Mou khan said...

Hi
i'm actually a final year student in one of the local university...
i got a set of industry data with both numerical and non numerical data... and i need to analyse the data to determine which factor is the crucial towards the output..
for instance there are 5 factors that might affect the output and i need to determine which factors are important based on the data i have.
so, may i know in such situation is six sigma applicable?