Statistical Process Control (SPC) solutions are now gaining adoption in services industries

Written By:
Content Copyright © 2009 Bloor. All Rights Reserved.

There is a lot of interest in ‘lean thinking’ these days. The global recession has forced companies to take a good long hard look at their operations to identify waste and cost savings while improving customer experience.

Efficiency-oriented disciplines such as Just-In-Time (JIT) manufacturing, Total Quality Management (TQM), and Six Sigma have been around a long time. Since the early days of Ford Motors and Bell Labs in the 1920s manufacturing companies have strived to reduce waste and improve efficiency in production processes. All leading manufacturing companies extensively use quality management tools today.

‘Lean’ is a relatively new concept, pioneered by Toyota, and is now being extended into services businesses where productivity and efficiency improvements are measured from a customer perspective to reduce waste and add customer value.

Such quality tools rely heavily on ongoing measurement and monitoring. The principal tool used is Statistical Process Control (SPC). SPC measures abnormal deviations in a ‘performance corridor’ over time to attract management attention and action. This type of technology helps credit card companies to spot potential fraudulent use of a customer’s credit card, for example.

SPC is now being adopted by service-oriented domains such as health care, financial services, insurance and public services. These industries are customer oriented and wish to optimise their business processes to ensure excellent customer experience. This is where Lightfoot Solutions scores by adapting and extending traditional SPC concepts to services industry performance management applications.

Lightfoot’s tag line and product brand name issignalsfromnoise’ (sfn). This means identifying and extracting statistically meaningful data from a mass of data points. These are known as ‘control charts’ in SPC speak. Lightfoot uses ‘graphical statistical corridors’ to identify significant variations. The upper and lower lines on the graphical screen display (sometimes called the ‘natural process limits’) show the degree of variation that is statistically inherent in a process—they show its ‘capability’. Hence sfn highlights the consistency boundaries within which a service is delivered. This is ideal for managing a Call Centre environment, for example.

The tighter these control lines are to the mean, the lower the variation and the better controlled the process is. If there is a wide deviation either side of the mean, there is a high likelihood of process defects e.g. rogue call centre operatives. The objective is to reduce variation (by narrowing the upper and lower control limits) through pro-active and directed process management to reduce waste and improve predictability.

Lightfoot is in the analytics / predictive analytics and performance management market, as well as the SPC software market, and sfn is positioned as a “performance improvement solution”. Lightfoot’s sfn is a web-based system that uses easily understood graphical dashboards and charts to display the performance of service processes, such as 1st call resolution in the case of call centres, for example. sfn provides automatic visual feedback on a daily basis to show how service delivery is improving. Conversely, sfn also highlights areas of excellent performance and ensures that ‘best practice’ is collaboratively shared.

sfn automatically extracts data from transactional systems to provide analytics. This is fundamentally different from the way traditional BI tools such as those of SAP Business Objects and IBM Cognos operate. Therefore, it is more of an enterprise-wide operational (CEO => front-line) end user application than these traditional tools, can be implemented in days, and does not require any special end user training. sfn can analyse large volumes of performance data and is scalable to 1000s of users.

Cost reduction and streamlining business processes are uppermost management priorities today, and these are areas where Lightfoot’s SPC solutions are especially appropriate and relevant. By taking SPC out of the manufacturing environment and into services industries, Lightfoot offers a market focus that is differentiated from its traditional specialist manufacturing-oriented rivals that include Minitab, Hertzler, DataNet, and PQ Systems. In addition, by providing an easy-to-use interface, Lightfoot is taking SPC out of the exclusive domain of specialist end user operators, and into the domain of practicing operations managers who view it as “the democratisation of 6-sigma”. This is where most cost savings can be readily and quickly realised. Such managers appreciate access to data in an easily digestible form that was previously trapped in corporate transactional systems. This data is leveraged and consumed in customised local implementations that mirror a manager’s own personal operating environment. sfn is a manager-friendly tool, which is rarely said of traditional BI solutions.

Lightfoot Solutions was established in 2003 and now has around 50 staff. Lightfoot has some impressive marque clients in both public and private sector including Accenture, BT, London Underground (Amey), West Midlands Police, the Welsh Ambulance Service, Centrica, and the Highways Agency. Although Lightfoot’s clients are predominantly UK-based, it has recently opened an office in Australia, and has ambitions to become a global SPC vendor. For medium and large service-oriented organisations that are looking to reduce waste and improve operational management, Lightfoot’s sfn solution is definitely worth considering.