techmahindra - lean_scc
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© Tech Mahindra Limited 2011
A Lean approach in improving the performance of a
Service Call Center
“Improvement usually means doing something that we have never done before.” Shigeo Shingo
Authors:
Jyoti Govekar – Lean Six Sigma Green Belt
Prasoon Agarwal – Lean Six Sigma Black Belt
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Abstract Service Call Centers (SCC) have evolved into multichannel contact centers and increasing competition,
globalization and demanding customers have changed the playing field in the business. Many organizations
have realized that the key for survival is efficiency and effectiveness with focus on productivity and
customer experience.
Lean techniques which focus on waste elimination and Six Sigma which aims to deliver breakthrough
improvement and reduce process variations have provided large scale benefits to manufacturing industries.
Lean Six Sigma approach can help SCC map value stream, standardize operational processes and drive
continuous improvement on the floor.
Lean approach can help SCC transform them from a cost center to a profit center, increase market share and
enhance customer experience in a competitive global economy.
This white paper attempts to highlight the application of Lean in SCC, in identifying different forms of wastes
in the operational processes thereby improving their performance and end customer experience.
Copyright © Tech Mahindra Ltd., 2011. All rights reserved.
TechM maintains that all reasonable care and skill has been used in the compilation of this publication. However, TechM shall not beunder any liability for loss or damage (including consequential loss) whatsoever or howsoever arising as a result of the use of this
publication by the reader, his servants, associates or any third party. All third-party trademarks are hereby acknowledged.
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Table of Contents
Lean: An Introduction .................................................................................................................. 3
Benefits of Lean ........................................................................................................................................ 3
Lean Tools ................................................................................................................................................. 4
Service Call Centers at a glance ................................................................................................... 5
Challenges faced by Voice based SCC ........................................................................................... 7
Metrics that matter..................................................................................................................... 8
Mapping SCC NVAs to 8 Wastes .............................................................................................................. 10
Identifying & Measuring NVA: ................................................................................................................ 11 Value Stream Mapping .............................................................................................................................................. 11 Time & Motion Study ................................................................................................................................................ 12
Way forward............................................................................................................................. 13
Acknowledgement .................................................................................................................... 14
About Tech Mahindra ............................................................................................................... 15
Glossary .................................................................................................................................... 15
References ................................................................................................................................ 16
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Lean: An Introduction
Lean manufacturing is a management philosophy which comes from Japanese manufacturing industry and is
derived from Toyota production system. The term “Lean” was first coined by John Krafcik in a fall 1988
article, "Triumph of the Lean Production System," published in the Sloan Management Review. Elimination
of waste is the goal of Lean, and Toyota defined three broad types of waste as Muda, Muri and Mura.
However most of the Lean implementations consider the focus only on Muda. While the wastes are typically
associated with manufacturing enterprises, it is apparent that they also apply to service industries like
Finance, Banking, SCC, Construction, Government, Healthcare, Insurance and Manufacturing.
Lean focuses on eliminating waste and constantly reducing the cycle time. As the waste is eliminated, quality
improves while cycle time of the process and the cost are reduced.
Lean recognizes eight forms of waste as defined in detail below:
1) Overproduction - Producing more than what is needed by the customer / market demand
2) Over processing/Non value added activity - Inefficient processes that use more steps or tools than
are actually required for the desired outcome/ activities not required for the outcome
3) Waiting – Waiting time for the next step
4) Transportation - Movement of products / items during or after production
5) Defects (scrap/rework) – Errors or mistakes occurred
6) Motion - Excess motion mainly in people, document movement, searching etc.
7) Inventory - Buffer stocks or resources (raw, work in process, bench staff etc).
8) Unused creativity - Losing time, skills, ideas and learning opportunities by not listening to the
employees
Benefits of Lean
Lean provides numerous benefits including:
• Reduced lead/cycle time
• Decreased work-in-process (WIP)
• Reduced cost
• Increased resource (equipment, operator) utilization
• Easier scheduling
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• More streamlined flow
• Reduced floor space
• Improved quality
• Improved employee morale
Lean Tools
The set of Lean "tools" that assist in the identification and steady elimination of waste are:
1. Value Stream Mapping, a Lean tool, takes into account not only the activity of the product but also
the management and information systems that support the basic process. The focus of this tool
is on identifying and eliminating the non value adding activities in each process step thus reducing
the overall cycle time. These eliminations help make a process more compact and aim to reduce
variation. Lean tools can also form a part of a Kaizen cycle, incorporated within the Analyze and
Improve phases of Six Sigma.
2. Poka Yoke, a Japanese term for mistake-proofing is a mechanism to help the users avoid mistakes.
Its purpose is to eliminate defects by preventing, correcting and drawing attention to human errors
as they occur. Either the user is alerted when a mistake is about to be made, or the Poka Yoke
mechanism actually prevents the mistake from being made.
3. In context of a truly “Lean” environment, Kaizen means “Continual Improvement”. When the
possibility for improvements in key process steps arises, they can be taken up as Kaizen events by
the different functions of an organization. Kaizen generates small improvements as a result of
coordinated continuous efforts by all employees. Kaizen events bring together a group of process
owners and managers to map out an existing process and identify improvements that are within the
scope of the participants. Organizations which use Kaizen have found that they generate energy
among those who work in the area being improved, and produce immediate gains in productivity
and quality. Kaizen can be effective if applied in the Lean spirit of continuous improvement utilizing
the rigor and discipline of Six Sigma DMAIC.
4. 5S which stands for five Japanese words - Seiri (sort), Seiton (set in order), Seiso (shine), Seiketsu
(standardize) and Shitsuke (sustain) is a structured program to systematically achieve total tidiness,
orderliness, cleanliness, standardization and discipline in a workplace. 5S aims for spontaneous and
continuous improvement of working environment and working conditions. A well-organized
workplace results in a safer, more efficient, and more productive operation. It boosts the morale of the workers, promoting a sense of pride in their work and ownership of their responsibilities. To get
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SCCs can be categorized as Captive and Outsourced based on their operating models.
ACaptive
call center undertakes business processing only for its own multinational businesses and has
complete control on the operations of their business processes in other countries. However an Outsourced
call center is the one where a company delegates its business processes to an external third party service
provider that in turn owns, administers and manages the selected process based on defined and measurable
performance criteria. There are over 900 companies operating within the Indian SCC space, including captive
and outsourced units (Source: Ernst & Young, Year: 2008).
SCC provides an important channel for organizations not only to connect with their customers globally but
also to listen to their voices. The business benefits of SCC for any organization is twofold –one to keep
existing customers satisfied and two to add new customers, thus expanding their customer base.
But the most important benefit of outsourcing is cost saving for the organizations. Continuous improvement
is the life-blood of any successful organization. Improving processes and increasing efficiencies are more
important if the economy heads south. Although the current economic situation is improving; many
organizations are opting to keep operational expenses on a tight leash and find innovative ways to increase
market share and improve their profit margins.
3.1 4.6 6.3 8.4 10.09 12.8 13.8
FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10
Indian BPO Industry
Figures in $ BillionSource: NASSCOM
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Challenges faced by Voice based SCC
Stability, lack of proper project management, lack of industry expertise among suppliers and dissatisfaction
among employees are the challenges faced by domestic suppliers. The major challenges faced by a voice
based SCC are briefly mentioned below:
Dynamic Process:
Contrast to a traditional industry where the processes are generally fixed and process re-engineering is a
challenge, SCC being part of service industry have dynamic processes which needs to adapt itself to changing
customer expectations, market and regulatory demands. New product updates, schemes, new scripts,
policies keep changing on fortnightly or monthly basis thus making the process dynamic in nature. This is a
major challenge as it greatly impacts all the key KPIs including operational productivity and customer
experience.
Erratic call patterns with crests and troughs:
There may be spikes seen in the call volumes at certain times and tremendous drop other times generating
crests and troughs. This complicates the manager’s ability to sustain the productivity of the work force and
maintain desired service level and answer level at all the times around the clock. It also impacts the ASA
(Average Speed to Answer) and in turn affects the customer experience.
Contractual Obligations:
Due to contractual obligations SCCs need to demonstrate continuous improvement or need to improve to
boost their profit margins. This is specifically applicable to any transaction based call center which gets
payments based on transaction volumes. Hence in SCC milestones like service level, answer level and
productivity needs to be on target irrespective of the call volumes.
Unavailability of competent resources:
Low profit margins leads to the recruitment of resources with minimum educational qualifications, thus
comprising on the right knowledge, attitude and skills. Unavailability of competent resources is a major
challenge in SCC due to huge variation in demand and supply chain. This hampers most of the key KPIs like
average handling time and customer experience.
Communication gap due to diversity:
Some SCCs handle calls of different regions where the local language differs and hence it becomes difficult
for the associate to communicate with the customer fluently. Such kind of language barrier may impact the
key KPIs like productivity and customer experience.
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Customer awareness:
Certain SCCs cater to customer base where the literacy rate is low and hence customers are technologically
challenged. For example customers living in some remote regions are not very familiar with the usage of the
technology like GPRS, 3G. Customers calling in do not comprehend completely with the response of the
associate. These scenarios make it difficult for the associate to maintain the productivity and customer
experience.
Increase in Attrition, Absenteeism:
Attrition and absenteeism along with erratic call patterns make SCCs one of the most dynamic business
environments. Proper allocation of resources needs to be done based on associate skill sets, forecasted call
volumes and current productivity levels. Also at the same time getting new trainee batches within minimum
lead time on the production floor is a major challenge. Increase in the attrition rate and absenteeism can
cause resource shortages and hence may lead to high waiting time for the end customers and reduction in
processes’ service level and answer level.
Metrics that matter
" You can't manage what you don't measure” said by Bill Hewitt, co-founder of Hewlett-Packard.
Delivering a positive customer experience in a SCC is of paramount importance in stabilizing customer
relationships and maximizing customer value. Optimizing operations across and beyond the customer touch
points and striking the appropriate balance between efficiency and effectiveness is the key.
Metrics that make up the business goals for a SCC can be categorized further as depicted in the figure below.
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Applying Lean for improving SCC performance
Lean approach focuses on continuous identification and elimination of waste / non value added (NVA)
activities which can help improve operational efficiency and customer experience in a voice based SCC.
Lean plays a major role to help reduce any waste or NVA in an inbound or outbound call thus reducing the
transaction time (Average Handling Time) and improving the customer experience (CSAT, Repeat calls etc)
by providing only valuable information to the customers.
OperationsPerformance
CostCustomerExperience
• Revenue per agent
• Average cost per agent
• Average training costper agent
•Average Revenue losson account of callabandoned
• % Profit Margin
Cost
• % Answer level
• % Service Level
• % Call Abandoned
• Average speed to answer
• Manpower Utilization
• Average Handling Time (AHT)
Operations Performance
•FCR %
•Repeat Calls %
•Waiting time
•C-SAT Score
•SLA % for TAT
•Agent CommunicationScore
•Service Availability
CustomerExperience
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This section of the paper will focus on the use of Lean approach in improving Productivity & Customer
Experience of a voice based SCC.
Following steps as part of the Lean approach can be applied in a typical voice based SCC environment:
1. Capture VOC (Voice of Customer) - Helps to understand the pain areas of internal and external
customers and also for setting the expectations. This can also be used for identifying the
stakeholders affected by the problem.
2. Define problem statement – Map baseline processes and measures associated with it. This also
helps to calculate the expected cost savings from the Lean improvement project.
3. Map Value Stream - Takes into account the touch points adding value to the processes & systems
starting from the suppliers and ending at the customer.
4. Identify Waste – Identifying & measuring Muda (Japanese word for “waste”) /NVA activities in the
entire value chain. Based on this exercise major areas of improvement could be identified and
targeted.
5. Eliminate Waste – Eliminating the waste / NVA activities by implementation of improvement action
plan. Put control plan in place to ensure benefits are sustained going forward.
Productivity of a voice based SCC is measured in terms of AHT (Average Handling Time), which is a critical
metric for measuring operational efficiency. Presence of NVA activities on call increases the actual talk time
thus providing more opportunities for fatal errors (Example: giving wrong information to the customer,
denial of service, rudeness, call disconnection, call avoidance, wrong service request creation). Hence it
impacts the end customer experience.
Average Handling Time is the average duration in minutes or seconds taken by the associate in resolving
customer query / request/ complaint. Typically it is measured from the time customer initiates the call and
includes talk time, hold time and related tasks that follow the transaction.
Average Handling Time is calculated as = (Total Talk time + Total Hold time + Total After Call Wrap Time)
Total number of calls handled
Following are the different forms of wastes identified in several Lean studies conducted in voice based SCCs
operating for Domestic as well as International clients:
Mapping SCC NVAs to 8 Wastes
NVA types Definition Lean Waste Impact on Impact on
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Productivity CE
Long Call Scripts
Long opening, empathy,
paraphrasing, closing
scripts
Over Processing
/ NVA
Unstructured Scripts
Useless scripts used
increasing customer
interruption/ argument
Defects, Over
Processing /
NVA
Irrelevant ProbingQuestions not pertaining
to the issue
Defects, Over
Processing/
NVA, Motion
Repeated Customer
Interaction/ Interruption
Customer interrupts when
all the required info not
given at a single instance
Defects, Over
Processing/
NVA
Repetition of Associate Queries
Same questions
repeatedly asked by the
associates and theCustomer
Defects,
Motion, Over
Processing/NVA
Dead Air
Situation when both
Customer and associate
not conversing to each
other
Waiting,
Defects, Over
Processing/
NVA
Hold Time Placing the call on hold
Waiting,
Defects, Over
Processing/
NVA
Transfer Time Transfer time to anotherqueue
Waiting,
Defects, OverProcessing/
NVA
Unnecessary Customer
Validation
Customer validation done
even when not required
Over
Processing/
NVA, Defects,
Motion
Lack of Multitasking
Multitasking in terms of
usage of tools on
computer and talking to
the customer at the same
time
Waiting, NVA
Search Time On
Portals/Systems/Applications
Navigation time on the
systems finding difficult to
search the information
Waiting,
Inventory,
Motion
Identifying & Measuring NVA:
Value Stream Mapping
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Value Stream Mapping (VSM) is a strategic improvement planning tool which can help in identifying and
measuring waste in an inbound or outbound call. The purpose of VSM is to look at the flow of conversation,
the systems in use and the time required at each stage from the start of the call till the customer ends the
call. A typical VSM of a call flow in a voice based SCC is as shown in below figure:
The above VSM is called as the current state VSM (CSVSM) which shows the “As-Is” call flow with the
NVAs/wastes shown at each stage of the call. The time accounting to these NVAs increases the average
handling time. CSVSM can be used as the basis for identifying the improvement opportunities with a view of
reducing the wastes over the time. A future state VSM (FSVSM) can be designed for the call flow minus the
NVAS/wastes. Moving from CSVSM to FSVSM improves the Process Cycle Efficiency (PCE) which helps in
reducing the wastes and thus the Average Handling Time (AHT).
Time & Motion Study
The Time and Motion (T & M) study has been instrumental in identifying opportunities for improvingefficiency in manufacturing operations. This scientific technique can be deployed in a SCC to capture the
Customer
Name
Phone no
Address
Customer
details
Call started
Opening
Capture Q/R/CCheck resolution
Resolve Q/R/C
Unable to
resolve Q/R/C
Service
Request
Back endteam
Closing
Issue
Customer
details
Validation Probing
Understand
customer issue
Taking customer
details
Give opening
script
CRM Systems
Resolution
Resolution
Give closing
script
Long
scripts
Unnecessary
authentication
Irrelevant
probing
Repetition of queries,
Hold time, Dear air
Dead air,
system issues,
transfer time
I
I
I
I
Call transferred to
back end team
Value stream map of call flow in a Voice Based SCC
NVARepetition of queries,
Hold time, Dear air
System
Issues
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with less (resources).The principles of VSM, Poka Yoke, 5s and TPS (Toyota Production system) can be
applied in SCC environment to improve operational efficiency and customer experience.
The diagram below gives a pictorial representation of the application of Lean in service management.
The hiring managers need to consider the feedback from operations/training in recruitment of freshers with
right background and experience. This will ensure that defects in process are not passed downstream.
Similarly, the quality assurance team will provide a regular feedback to operations on the NVAs observed in
the process. This will not only help drive continuous improvement on the floor but also help the training
team in assessing the requirements for both fresh and experienced resources.
SCC can become Lean by first developing the awareness and intolerance of waste within all the operating
functions. The waste consciousness should pervade the entire organization in such a way that people
proactively begin seeking improvements and challenges even in the least structured activities to ensure they
align to customer value and business goal.
Acknowledgement
We would like to thank Mr. Siddhartha Shankar Ray, Master Black Belt (MBB) – Tech Mahindra Ltd for
motivating, encouraging and guiding us in writing this white paper. His invaluable suggestions at each stage
have helped us in successful completion of this white paper.
Hiring
(Lean Organization)
Training(Lean Organization)
Operations(Lean Organization)
Quality Assurance & Control
NVA
Pulling Value from suppliers
Feedback on NVA flowing from internal
customer internal to Suppliers
NVA Measurement
system
Pulling Value from suppliers
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About Tech Mahindra
Tech Mahindra Limited (formerly known as Mahindra-British Telecom Limited) is the global leader in
providing E2E IT services and solutions to the Telecom Industry.
Majority owned by Mahindra & Mahindra, India’s fifth largest commercial group, in partnership with BT Plc
(BT), Europe’s second largest telecom service provider, Tech Mahindra has grown rapidly to become the 8th
largest software exporter in India (NASSCOM 2006). With over 34,000 professionals, Tech Mahindra services
customers across geographies from 16 sales offices across USA, Europe and Asia-Pacific.
Tech Mahindra owns 10 state-of-the-art offshore development centers - UK (Milton Keynes, Belfast) and
India (Pune, Mumbai, Bangalore, Kolkata, Chennai, Hyderabad, and Noida). Having serviced premium
telecom companies worldwide, for nearly two decades, Tech Mahindra combines deep domain expertise in
OSS (Operations Support Systems) and BSS (Business Support Systems) systems, intellectual leadership and
a global workforce advantage to provide services to leading players in the telecom ecosystem.
Tech Mahindra provides a wide variety of services ranging from IT strategy and consulting to system
integration, design, application development, implementation, maintenance, and product engineering.
Through a rich Telecom heritage, Tech Mahindra has built long-term sustainable relationships with telecom
customers through delivery of IT services that help them achieve significant ROI and the greatest
competitive advantage in the telecom marketplace. Committed to quality, Tech Mahindra adds value to
client businesses through well-established methodologies, tools and techniques backed by its stringent
quality processes. Its centers are ISO 9001:2000 & BS7799 certified and it also holds a SEI-CMMi Level 5
certification.
Tech Mahindra’s people-care practices are certified at PCMM Level 5. Tech Mahindra is also one amongst
only three companies worldwide to be successfully appraised for SSE-CMM Level 3.
Glossary
AHT Average Handling time
BPO Business Processing Outsourcing
SCC Service Call center
US$ US DollarsVOC Voice of Customer
AL Answer Level
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SL Service Level
ASA Average speed of answer
ATT Average Talk time
NVA Non Value added
T&M Time and Motion
DMAIC Define-Measure-Analyze-Improve-Control
CE Customer Experience
CSAT Customer Satisfaction
GPRS General Packet Radio Service
VSM Value Stream Map
CSVSM Current State Value Stream Map
FSVSM Future State Value Stream Map
PCE Process Cycle Efficiency
3G Third generation
Muda Muda is a traditional Japanese term for an activity that is wasteful and doesn't
add value or is unproductive.
Muri Muri is a Japanese term for overburden, unreasonableness or absurdity, which
has become popularized in the West by its use as a key concept in the ToyotaProduction System.
Mura Mura is avoided through Just In Time systems which are based on little or no
inventory, by supplying the production process with the right part, at the right
time, in the right amount, and first-in, f irst out component flow.
References
1. www.isixsigma.com – Concepts of Six Sigma, Lean and Kaizen.
2. http://en.wikipedia.org/wiki/Lean - Definition of Lean
3. http://www.indobase.com/bpo/global-market-of-bpo.html- Global and Indian BPO
industry
4. http://www.globalservicesmedia.com/BPO/Market-Dynamics/23/28- BPO Market dynamics