Measurement and Collection of Data

In the service industry, many companies struggle to measure and collect data. The reasons for this are varied but the impact is the same–if you don’t have reliable, valid data, it will be nearly impossible to carry a Six Sigma project through to completion. The obvious reason is that the measure, analyze, and improve steps of the DMAIC model require quantifiable data.

One of the main reasons that many service industry companies do not measure many of their inputs and outputs is because these variables are often difficult to measure. For example, how does a service company measure the satisfaction level of their customers? Customer surveys jumps to mind but these efforts are time consuming and costly. Further, even if a company commits to the costs associated with surveying customers, it is very difficult to measure customer satisfaction in a valid, reliable fashion. Consider how often you, personally, fill out customer satisfaction surveys. If you filled one out recently, you most likely received some sort of incentive to do so (think big dollars for the company that wanted that survey from you). Then if you did receive a survey, did that incentive alter the ratings you gave the company?

Another reason that service companies opt not to measure and collect data on some of their important inputs or outputs is that they do not believe that investing in the collection of such data will prove cost effective. In some cases, managers that make these decisions may be right. It does not make sense to measure every possible input or output variable. Key inputs and outputs, however, should be measured and tracked if a company intends to succeed.

Though I have not worked in the manufacturing industry, I suspect there is often less deliberating over whether to measure most input and output variables because most of them are relatively simple to measure. There are obviously still costs involved but many of the variables are a little more tangible than things like customer satisfaction.

I find the mental exercise of listing key input and output variables for a process useful. Then I review the list and identify which of the variables are already measured and collected. This way I can quickly identify projects with the greatest potential for success.

Making a business case to start measuring a key metric (that is not currently measured or tracked) can also be a useful strategy to create potential Six Sigma project opportunities.

While the service industry faces the challenge of measuring and collecting business data, there is hope and plenty of innovation opportunities for those that are persistent.