26 GEARS August 2007

by Dennis Madden
MAKING IT WORK
Started!
Get That Project
B
efore we start a new project
and establish ways to measure
our progress, lets recap what
weve learned over the past couple
issues. The Whats Working study
showed us that businesses that are
customer centric enjoy a significantly
higher level of success than those who
put profits first.
Based on that, weve established
why customers seek your services in
the first place: they have a need. The
NeedDo gap covered in May illus-
trates the relationship between what the
customer wants (the Need) and what a
business provides (the Do).
When what you provide varies
from what the customer wants, you
have a gap. You may not even realize
theres a gap between what you provide
and what the customer wants; you just
know that business is off and you won-
der why. But if customers are frequent-
ing one business more than others its
because their NeedDo gap is smaller.
In the July issue we discussed the
idea of y = f(x). This formula represents
the dependence of your outcome, the
yield, to your processes and what you
put into these processes. We also estab-
lished that all businesses are bound by
this formula, whether they understand
it or not.
This brings us to the idea that meet-
ing the customers needs is based on the
processes you follow and what you
put into those processes. To make sure
youre achieving the desired results,
you have to monitor the outcome. If
the outcome is less than desirable, you
need to change the process until you get
results that meet the customers needs.
Okay, were getting closer. Lets
make a couple more statements, and
then well get into monitoring and mea-
suring the results of the process. In the
April issue of GEARS we talked about
quality, and declared that quality is a
state where both the customer and pro-
vider realize value entitlement in every
aspect of the business relationship.
So this state of quality is the tar-
get; its the y of our function. Based
on that, were going to call everything
that results in a yield or meets the
customers needs as Critical To Quality,
or CTQ. These are the things we can
identify that customers want and need;
its what they value. On the right side
of the equation we have the Critical
To Process items, or CTPs. These are
the things you do and the processes
you follow that provide the results the
customer is looking for.
Weve come a long way to get to
this point, but these concepts are so
important that you really have to take
them one step at a time. Now were
ready to look at starting projects thatll
narrow the gap, and increase your qual-
ity to the customer. There are many
ways to address a project. How you
do so is primarily based on the type
of project, but regardless, there are 5
basic steps you want to follow. They
are expressed by the acronym DMAIC,
which stands for Define, Measure,
Analyze, Improve and Control.
DMAIC Stage 1: Define
The Define stage is where you
identify the CTQs you want to address.
This can be one of the most difficult
parts of the process, and its why many
people never get their projects off the
ground.
The best way to define a prob-
lem or a CTQ is to state the issue in
the form of a question. For example,
weve established in earlier articles that
you should have about a 60/40% ratio
between male and female customers.
Armed with this knowledge, you ask
What is the male/female ratio in my
shop?
Right away this question moves
you to the next step: Learning the ratio.
If you had stated something like, I
need to increase my female customer
count, or I think my male/female
customer ratio is off, it wouldnt cause
any action. In fact, you probably sensed
the difference just reading these state-
ments versus the question. This holds
true with statements like:
Business is terrible.
I think my rebuilder is slow.
We cant seem to get work out the
door.
We have too many CBs.
and the list goes on and on.
But once you put the issue in the
form of a question, things change.
Instead of stating that business is ter-
rible, you could ask: What has our
profit been each week for the past three
months? or, What have car counts
been for each week over the past year?
If you think your rebuilder is too slow,
you might ask: How long does it take
Charlie to rebuild each transmission?
DMAIC Stage 2: Measure
The next step is to Measure the
data, to answer the question from the
Define step. We asked, What is the
male/female ratio in my shop? This
question is easy to answer: Count them.
Tally the number of men and women
who come to your shop. You could
even take a calendar and make simple
tally marks on it to track the daily calls.
And you should to count the number of
customers that actually come to your
GEARS August 2007 27
shop, too.
If youre tracking your rebuilding
time youll want to think about it first.
Dont try to track all of your rebuild
times; youll never get a handle on
them and get discouraged. First find out
which transmission is the most com-
mon in your shop, and begin with that.
Figure 1 shows an actual list of
transmissions from a shop that partici-
pated in our Whats Working study. It
shows the rebuilds the shop did over a
two-week period. Naturally, the more
weeks you track, the more accurate
your data will be, but in this case you
can easily see the 4L60E, at 13 units,
was the most popular. In fact, it repre-
sents 29% of all the rebuilds they do.
From there, youll want to know
how long it takes your rebuilder to
rebuild a 4L60E. There are several
ways to measure this, and well cover
that in another article. The point is,
Measure the data based on the question
you asked in the Define step.
DMAIC Stage 3: Analyze
Now its time to Analyze the data.
Well use the male/female ratio for
this example: Suppose you counted the
number of customers that called and
the number of customers that actually
came in the shop. Is the ratio the same?
If your female numbers are below the
40% level, it might indicate your adver-
tising is unappealing to women.
On the other hand, if your call-in
ratio is significantly higher than your
walk-in ratio, it indicates your advertis-
ing isnt the problem. Maybe female
customers drive up to your shop and
keep going; the appearance of your
shop is the problem.
Then again, maybe your ratio is
fine but your overall customer count is
Figure 1
26makgWk807.indd 27 7/11/07 11:01:08 AM
28 GEARS August 2007
down. Here you dont have a gender-
specific issue; its just that no one is
calling or coming in. In that case, you
need to look elsewhere.
If your overall customer count is
down, you may want to begin by sur-
veying your customers. Even though
these are the customers who came in,
they may still have some issues with
your shop; they just werent bad enough
to cause them to go elsewhere.
Or you could survey them on how
they heard about you. You might be
surprised to learn that the advertising
youve been using is completely inef-
fective, and the only customers youre
getting are from referrals. Referrals
are great, but this may indicate your
advertising isnt good enough to gener-
ate a call on its own, without a recom-
mendation from someone the consumer
trusts.
Another thing you gain by going
through the Define and Measuring
steps properly is, if you go to a training
seminar or management program, you
have relevant questions to ask and you
can really narrow your focus to areas
youve already identified. You can give
the management expert some real data,
and the advice you get will be far bet-
ter than the generic response theyve
prepared for the program.
Imagine going into a training pro-
gram and your only reason to be there
is business is bad. So you get a couple
good, general ideas, but you dont real-
ly get something that addresses serious
problems with your business, because
you havent taken the time to identify
those problems.
The reason? You havent put the
problem in the form of a question a
question that causes you to take action.
In fact, if you look up the word prob-
lem, youll find a definition something
like this: A question to be considered,
solved, or answered.
Now, before we leave the Analyze
phase, consider this: So far weve been
discussing CTQs; Critical To Quality
components. That is, the y of our for-
mula. The things that are important to
the customer and give us value entitle-
ment. The Define and Measure steps
are related to CTQs.
When you go into the Analyze
phase of the five-step process youre
still considering CTQs, but during this
phase you switch your focus to CTPs
(Critical To Process). Figure 2 illus-
trates this idea. The formula y = f(x) is
transformed to CTQ = f(CTP). As you
can see, the Define and Measure phases
focus on the CTQs, where the Improve
and Control phases focus on the CTPs.
Its the Analyze phase that bridges the
two.
DMAIC Stage 4: Improve
The Improve phase takes the
ideas, training or variation-to-process
concepts you addressed in the Analyze
phase and puts them to work. What you
do here depends completely on what
part of your business youre trying to
improve, based on what you discovered
in the first three steps of the process.
For example, if your male/female
ratio is 90/10 for customers that
come through the door, but its 65/35
for customers that call, you might con-
clude your problem is the appearance
of your shop.
On the other hand, if your ratio for
call-ins and walk-ins is the same, but
low overall, you might look at different
forms of advertising.
Whatever decision you make, you
put it to work during the Improve
phase and continue measuring the
results. Here youre going to Measure,
Analyze and Improve Measure,
Analyze and Improve. If something
works, you continue in that direction; if
it doesnt, you change direction.
Recently, Toyota took the lead in
car sales, unseating General Motors.
Toyota is a company steeped in a pro-
cess known as Lean Manufacturing,
which was actually developed by its
founder, Sakichi Toyoda. Part of Lean
Manufacturing is a process known as
Kaizen; translated it means continuous
improvement. This is more than just a
catchphrase, and if youre interested,
theres all kinds of information on it on
the internet. The point is that its minor
changes over a period of time that gives
you huge results.
DMAIC Stage 5: Control
Once you achieve the changes you
set out, you want to Control them, so
they continue to provide the results
you wanted. You dont just set it and
forget it. No, you continue to Measure,
Analyze and Improve continuous
improvement.
With only two months until Expo,
nows the time to identify some key
areas of your business to improve. Take
those key areas and put them in the
form of questions. If you can, collect
data related to your questions and bring
them to class on Thursday. Well work
on these five key areas, so by Sunday
youll have an action plan you can put
to work the moment you get home.
Because, as Rodger Bland pointed
out in his Whats Working article, page
22 of this issue, its people of ACTION
that get results.
Figure 2
MAKING IT WORK: Get That Project Started!
26makgWk807.indd 28 7/11/07 11:01:54 AM
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