Six Sigma Applications in Operations

This assignment delves into the practical applications of Six Sigma methodology across various operational contexts. It examines case studies demonstrating Six Sigma's effectiveness in sectors such as government, academic libraries, and manufacturing. The analysis explores key concepts like DMAIC, process improvement, and the benefits of implementing Lean Six Sigma principles. Students are expected to critically evaluate these case studies and synthesize their findings to understand the impact and relevance of Six Sigma in modern operations management.

Running Head: OPERATIONS MANAGEMENT 1
Operations Management
Name
Date

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Executive Summary
Operations management is one of the key aspects for consideration in every business
organization that seeks success. Optimizing the operations of processes helps the company to be
in a better position to offer competitive products or services that are of high quality within the
shortest time possible and with minimum required resources. This paper focuses on the
operations of BPO Inc., a case study company that offers outsourcing services in risk
management, human resource and compensation consulting services. The report discusses the
various operational issues, their causes and effects which underlies one of its processes; The
Health and Welfare Service Delivery division. The report gives an action plan that BPO can use
to implement its operation change process. Further, the paper provides recommendations that are
fit for BPO to adopt towards its success in optimizing the operations. Therefore, the paper is
important in helping BPO optimize its operations.

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Table of Contents
Introduction......................................................................................................................................4
BPO..............................................................................................................................................4
Background of the Case Study.....................................................................................................4
Increased number of escalations......................................................................................................5
Cause and Effect..........................................................................................................................5
Solution........................................................................................................................................6
Inefficiency and Underutilization....................................................................................................7
Cause and Effect..........................................................................................................................7
Solution........................................................................................................................................8
Integration and Software Issue........................................................................................................9
Cause and Effect..........................................................................................................................9
Solution......................................................................................................................................10
Action Plan for Next 18 months....................................................................................................12
Recommendations..........................................................................................................................13
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

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Introduction
BPO
The BPO Inc is a multinational company that deals in offering professional services to
clients that ranges from the risk or insurance management and the management consulting. The
company operates in over 100 different countries of the world and has over 500 offices
distributed in these nations with over 5000 employees. Currently, the organization is headed by
the president called Larry Watts. Under him, is Jim Regit who is the group's chair. Further, it has
other board members and the senior management team that leads the organization.
BPO’s service structure is made up of three main divisions through which the company
offers its services to the customers. Firstly, the company has the Risk/ Brokerage management
unit which provides services of helping other companies to establish and access the risks that
prevail them and develop appropriate management strategies to curb them. The second division
is the human resource consulting which offers the services in Human Resource Outsourcing
(HRO) and Business Process Design (BPD) and the management consulting. The third division
is the compensation consulting division which offers services in helping other companies to
develop effective compensation and reward strategies. Thus, through its structure, the
organization has managed to get a bigger marketing share in this industry.

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Background of the Case Study
The BPO case study unveils the operational issues that exist in BPO Company. In the
case, HA is one of the clients of BPO, which handles of the compensation issues of the company.
Sam Reagan, the CEO of HA had an issue that needed the support of BPO; HA's BPO service
provider, where Sam wanted his former wife to be removed from his benefits. During this event
when he needed help, he got a bad service experience which was below his expectations from the
business partner. Thus, he raised concern over this issue and wrote a mail to Allan Lauren, the
BPO. He also instructed the human resource chief, Kacy Scott, to conduct an audit of the
services offered by BPO.
The mail raised the alarm in BPO and had to involve the board because Sam had sent a
copy of the mail to company's chairman. In his mail, he mentions that the company risks the
business partnership if he audit reports reveal the inefficiencies the process. Allan calls for a
meeting with the leaders of the processes involved, Ethan and Jerry to discuss the issue at hand.
Their discussion reveals various shortcoming that exists in their process operations which must
be lowering their quality of services to the clients. Further, in their discussion, the three proposes
various solutions to the problems that are facing the organization. Therefore, there is need to
restructure the organization's processes to ensure that the company attains maximum efficiency
in its services.
Increased number of escalations
Cause and Effect
The current BPO's Health and Welfare Service Delivery process has the issue of the
increased number of call escalations. The participant sub process receives and handles issues that

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regard the health and welfare services of the employees of the client companies. Thus, there is
need to reduce the number of escalations received in this section to increase its efficiency
(Pardeep & Pyare, 2012). The main cause of increased escalation number in the participant
division is because the customer service representatives lack sufficient knowledge and skills to
handle the issues that the customers raise. Their insufficient ability to handle the customer
concerns has made them escalate most of the issues to the higher authority level; the benefits
administrators (BAs).
The increased number of the escalation in the Health and Welfare Service Delivery
division has many effects on the organization. The effects can be generalized as inefficiency,
both in time and resources. The high number of escalations wastes time that could have been
used in some other better way. Both the CSR, the Benefits Administrators (BA) and the
customers spent a lot of time in cases of escalations. The CSR spent time explaining the issue to
the BA’s to handle the task, then communicate back to the CSR who in turn give feedback to the
customer. Therefore, escalations wastes time for the organization's labour (Chase, Jacobs &
Aquilano, 2007).
Escalations affect the customer experience. When the client reaches the CSRs for
support, they expect an immediate response to their concerns. This shows that the customers feel
unsatisfied when their issues take a long time due to escalations. Thus, they reduce the quality of
services that the company offers to is its customers which in turn ruins the organization's
reputation in the market. The ruin of the brand reduces the market share of the company
(Manuel, Lam, Thu & Zbignew, 2011). Escalations also increase the cost to the company which
lowers the organization's profitability. Thus, increased number of escalations lowers the process

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efficiency, reduces customer satisfaction level and lowers the organization’s profitability
(Hussein, Sameer & Axel, 2009).
Solution
There are various ways that BPO Inc. can apply to handle the issues of an increased number of
escalations at the Health and Welfare Service Delivery Process. Firstly, just as suggested by
Ethan, the company needs to conduct a piece of training for the CSRs. The training will help the
team to get sufficient knowledge and skills to handle the complaints and request that come from
the participant subprocess. When the CSR understands how to solve and handle the customer
issues, the number of escalations will reduce by a large extent. Thus, BPO should conduct
training for the CSR to equip them to have the customers comfortably with little escalations.
The training should cover the process refresh for both the Participant subprocess and the
Database Update sub-process, together with the common customer issues and requests and how
to handle them.
Besides, as a way to increase the efficiency, there is a need for BPO to introduce a new
Case manager position who will work as a link between the CSRs and the BAs. This will help
manage the necessary escalations to ensure that the operations are efficient and also work, to
reduce the time taken to handle escalations. Thus, the case managers will play a critical role in
solving increasing the efficiency by coordinating the two parties. This is critical in optimizing
the operations on the process.
Inefficiency and Underutilization

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Cause and Effect
Underutilization refers to the failure to use the existing resource to its potential. Most
processes and sub-processes underutilize the resources due to poor planning. Some of these
resources include the human resource, where the labour is not used to its capacity, space and
other materials that could otherwise be used to a higher capacity to add productivity to the
company. Usually, inefficiency accompanies underutilization since inefficiencies in the
organization are caused by underutilization. These two aspects have detrimental effects on the
company since they reduce the profitability of the organization.
The current situation of the BPO’s Health and Welfare Service Delivery division shows
that there are aspects of inefficiency and underutilization in its operations. The database update
subprocess in inefficient and underutilized (Ainola & Aben, 2009). For example, the database
update subprocess has many issues that need improvement. The subprocess entails loading data
into the main frame computer, the process takes 80 minutes, at times 5 hours yet it has been
observed in other cases that can take a shorter time of 20 minutes. These among other aspects in
the sub-processes reveals that the process is inefficient (Heizer & Render, 2011). Thus, the
activities can be done within a shorter time. This shows that there is overstaffing especially for
the 31 CSR.
Inefficiency and underutilization bring about many effects to BPO. The company gets
weak performance from the employees, which reduces the profitability of the business (Hossam,
Baher & Mohamed, 2010). Also, the inefficiencies in the operation process reduce the customer
satisfaction level which comes from low-quality services. Such a case may make the company
lose customers and also reduce their market share. This is detrimental to the enterprise because it

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will lower its profitability and reduce its competitive advantage (Krajewski, Ritzman &
Malhorta, 2013)
Solution
The solution for the inefficiency and underutilization Health and Welfare Service
Delivery Process of BPO is through scheduling. This is the best strategy that the company can
adapt to help manage the resources both human and others to deliver the best results. Scheduling
entails planning and controlling the workloads to optimize them for efficiency (Abachizadeh &
Tahani, 2009). The schedule will help the company review the duties and jobs that people
perform to ensure that they are highly optimized. It will help the business ensure that the all the
resources are utilized in the best way possible. Thus, this optimization of the operations through
scheduling will help the company to get more productivity from the employees, which will, in
turn, help BPO to deliver quality services.
Scheduling is likely to benefit the BPO in many ways. It one of the high touch low-cost
approaches for use. This is because BPO will incur a low cost to implement yet powerful in
optimizing the process operations. Scheduling will ensure that the job is done within the shortest
time and with the least resources possible (George, Mark & Hundley, 2007). In the current
system, there are many activities that BAs and the CSRs are taking a long time to implement yet
they can be managed within a shorter time. The current state in the Health and Welfare Service
Delivery division can be changed to a large extent the approach is implemented in the best way
possible (Johnston, Clark & Shulver, 2012).
Integration and Software Issue

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Cause and Effect
The BPO’s Health and Welfare Service Delivery division lacks integration which is a
critical, essential aspect of the efficient operations of the company. Usually, integration issues
arise from poorly coordinated workflows. The discussion of AJ, Ethan and Jerry reveal the
existence of the integration issues in the Health and Welfare Service Delivery division. Jerry
openly says that he faced challenges in developing the roadmap for the integration of the
Database Update subprocess, which is usually done in the batch mode and the Participant Care
subprocess carried out daily.
Besides, Jerry identified a software issue whereby the company expects the system to
record the whole time taken for during the call with the customer, yet it does not add the time on
hold. This makes it difficult to get the reports for monitoring the process. Lack of frequent
updates mainly causes the software issues. Updates help the developer to sort out the issues
through releasing the software versions. Thus, there are many chances that BPO is facing
software issues due to lack of frequent software updates (Ahmad & Al-Zubi, 2010).
The integration and software issues affect the Health and Welfare Service Delivery
process in many different ways. The software issue increases the time that is involved in
performing a duty (Hamza, 2008). The CSR spent extra time recording the time on hold because
the systems do not do it automatically, which has lowered the product the productivity level of
the CSR. Also, the lack of integration makes it difficult to optimize the process because the
related activities cannot be coordinated and managed easily. Thus, integration and software
problems bring about issues which affect the quality of the services produced (Hendrickson &
Tung, 2008).

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Solution
There are various strategies that BPO can put in place to ensure that it curbs the issues
that it is facing currently regarding the software and workflow integration. Firstly, regarding the
software, BPO should work hand in hand with the vendors to ensure that it integrates the new
software shortcomings and requirements through a new software version. Failure of the system
to record the calls on hold means the system has an issue that needs to be resolved. The company
should audit the software systems thoroughly and identify other weaknesses that may be existing
(Branson, 2011). The full enhancements and bugs should be communicated to the software
vendor to work the system and sort out these issues. If the requirements and bugs are all gathered
well, the system will perfect and thus, reduce the operation problems in the process.
On the other hand, BPO can solve the integration issues through the restructuring of the
existing workflows to ensure that they are integrated. When the Database Update and the
Participant Care Unit are integrated, the company will attain an optimized Health and Welfare
Service Delivery process. The integration process entails understanding the two subprocesses
and then restructuring them to work together and have relationships. Therefore, the two sub-
processes are essential to be integrated because they help in optimizing the operations and
increasing the efficiency (Arthur, 2007).

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Action Plan for Next 18 months
No Objective Action Risks and transparency Time
1 To reduce the number
of escalations from the
CSRs to MAs
 Conduct training of the
CSRs, highlighting the
process flow, the common
requests from the customers
and other related issues
 Recruit the Case managers
who will interface between
the MAs and the CSRs
 The company will incur
training costs, and that
required to remunerate
the new case managers
20/10/2017-
04/6/2018

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2 To solve software and
integration issues
 Identify the loops in the
software system, develop
the requirements and
enhancement document, and
contact the vendor for the
changes
 Analyze and restructure the
workflows of the Database
update subprocess and the
Participant subprocess
 The company must
contact the software
vendor.
 The organization will
incur the software update
costs and those required
to restructure the
processes
05/06/2018-
14/12/2018
3 To reduce inefficiency
and underutilization in
the operation process
 Review all the workflows
and process of the Data
Update module and the
Participant module
 Establish the minimum
resources required to
complete the task and the
most efficient way to do
each and relocate the excess
resources.
 Select and adopt the best
strategies identified in the
process above and
document to make it a
formal resource required for
the job.
 The company will incur
the costs required to
undertake the exercise.
 There is need to relocate
the resources that are in
excess, which may lead
to some employees
losing their jobs
16/12/2018-
13/03/2019
Recommendations
It is recommended that BPO considers certain considers various aspects of its operation
to improve and optimize the Health and Welfare Service Delivery process. Apart from the
solutions discussed above regarding the way to curb the operation’s issues discussed above, the
company should also consider adopting creativity and innovation in the process (Moss, Berner,
Savell, 2007). Adopting creativity and innovation is likely to help the company to the device the

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optimal operational strategies, which is a key aspect in delivering quality services to its clients.
Currently, organizations are using creativity and innovation as a tool to gain a competitive
advantage over other players in the industry.
Also, it is recommended that the company adopts motivation strategies to increase the
efficiency in operations (Montgomery, 2012). Motivation is important and makes employees
work to their level best, thus, delivering quality in the services. The motivations could be
promotion, for example, some CSRs can be promoted to the newly created positions of the Case
Managers. This will motivate them to work hard to increase the operations efficiency and
quality.
Finally, BPO should consider coming up with a way to combine implement the best
strategies to improve the process. The best approach for effective policy implementation is
through integration in the corporate culture (Dong-Suk, 2010). This is powerful and
communicates in an effective, thus leaving a greater impact. Therefore, BPO can deliver and
implement the operation objectives through the approach. Thus, the company will attain optimal
operations for the Health and Welfare Service Delivery process.
Conclusion
In conclusion, optimizing the processes is one of the key aspects for the success of
business organizations. Failure to optimize the process operations lowers detrimental effects on
the organization. It lowers customer level satisfaction, increases operational cost, reduces the
productivity resources and other problems. Therefore, unoptimized operations in businesses can

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lead to reduced organization's profitability and reduce the competitive advantage of these
companies.
The process of optimizing the operations entails identifying the issues that are prevailing
in the service process, then establish the effects that it has on the organization. This helps to get a
clear understanding of the problem and then design a solution that will suit the scenario to
optimize the process operations. Thus, optimizing the operations is important because it brings
about many advantages in the organization which make it increase its income, and increase its
market share, which is important for its sustainability.
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