4.5. Identifying Projects

Alex and Alice are ready to make recommendations to management relative to areas that should be addressed by green belt project teams. Recall that the January data showed that the late charge problem involves 186,533 absolute dollars. Here are the rationale and recommendations that Alex and Alice make to management:

• First and foremost, a team should be assembled and chartered with developing a value stream map of the billing process. This will provide future teams with a basis for understanding and simplifying the process. The non-value-added time, or wait times, will indicate where cycle-time improvement efforts should be focused. Meanwhile, teams can be chartered to address the problems below. These teams and the value-stream mapping team need to stay in close contact.

• There is a pervasive pattern of charges being offset by credits. A team should be organized to determine what drives this phenomenon and to find a way to eliminate this rework.

• There are 85,839 absolute dollars tied up in six charge codes, and 140,115 absolute dollars tied up in eight charge locations. Since the codes used in the locations seem proprietary to the locations, the recommendation is that a green belt project team should be given the task of reducing the level of late charges, and that the initial focus be these eight areas. Take note that one of these areas, T2, deals with many charge codes, which may entail using a different approach in that area.

• Two complex accounts were found that contributed greatly to the late charges in January. In fact, 984 of the 2,030 records of late charges in January involved transactions for these two accounts. The absolute dollars involved were $43,995. A green belt team should investigate whether this was the result of a special cause or whether such occurrences are seen regularly. In either case, the team should suggest appropriate ways to keep the problem from recurring.

• There is also a tendency to not report the charge code. For example, one of the locations, LB1, is always missing the charge code entry. A team should be formed to address this issue. Is the information redundant and hence unnecessary? Is the information not useful? Is it just too difficult to input this information? The team should address this information flow, and make appropriate recommendations.