Managing Automation - September 2008 - (Page 33)

CO-HIGH ACHIEVER: CUSTOMER MASTERY IBM High-tech giant uses proven plant floor lean techniques to boost productivity and cut outsourcing service operations costs. BY MARTY WEIL L ife used to be simple for manufacturers. You sold a product, and if it broke, you fixed it. Postsales service was long considered a tactical cost center. Today, however, aftermarket service is fast becoming a strategic imperative. Some manufacturers keen to compete in the face of difficult economic headwinds are focusing on improving the quality and productivity of their postsales service to enhance customer satisfaction and drive profits. “For manufacturers with a service infrastructure, it is becoming essential that service technicians are used to their fullest potential, not sitting idle,” says Sumair Dutta, research analyst for the Strategic Service Management Practice at Aberdeen. IBM has one of the largest service infrastructures around and, in recent years, the high-tech giant has found that virtually all of the lean concepts it has used to streamline manufacturing could be successfully applied to its huge, multibillion-dollar business process outsourcing operation. Its effor ts have helped to reduce ser vice costs while improving the company’s ability to meet service-level agreement commitments and boosting productivity. These results earned IBM a tie for Managing Automation’s 2008 Progressive Manufacturing High Achiever Award for Customer Mastery. IBM began adopting lean principles in its service business as the company’s IT service leadership position was threatened by lower-cost offshore competition. “Lean is old news in manufacturing. It is not such old news in services,” says IBM Distinguished Engineer Dave Northcutt. “We felt it was important to learn from other industries and apply lean to our IT services business. IBM is relying on its new lean approach — called Delivery Excellence — to transform processes across the company’s business process and IT outsourcing businesses. Customers of those businesses include large corporations such as ABB and Visteon. Delivery Excellence, a set of common, technology-enabled service delivery processes, is based on the company’s beliefs that removing waste and latency leads to continual improvement and that performing value-added work IBM in a global, integrated, and Revenue/Employees: $98.8 billion; 386,000 employees simple way drives producLocation: Armonk, NY tivity and maximizes profit. So far, the services lean Industry: Information technology, services journey has circled the Project name: Services process reengineering globe. In 2007, it reached Project leader: Tim Shaughnessy, senior vice president, servdelivery teams serving 22 ices delivery, IBM of IBM’s largest accounts Core technologies: Self-healing server technologies, elecin seven countries. IBM tronic voice recognition technology for password resets, help trained more than 2,400 desk call automation, global services dashboard tool employees in Delivery ExROI/Business benefit: Up to 86% faster trouble response cellence methods, and times, average of 20% productivity improvement, 25% improvement in help desk calls answered within target times those employees touched more than 670 unique DAVE NORTHCUTT client environments in one IBM Distinguished Engineer or more service lines. While results varied among project teams, IBM has seen across-theboard improvements in both quality and productivity. For example, according to Northcutt, the average time to resolve one class of problem tickets in IBM’s server support area has decreased between 45% and 86%. The number of problem tickets closed per day in these same ser ver areas increased between 23% and 66%. The average time required to ser vice customer help desk calls decreased roughly 2% to 17%, while resolution rates improved or stayed constant. The percentage of help desk calls answered within target times increased as much as 25%. Productivity increased on average 20% in targeted areas. “This has been a lot of hard work and effort,” Northcutt says. “Certainly, not everything we have tried has worked out per fectly. On the other hand, in the aggregate, I think we have made tremendous improvement. We’ve taken measurements that show improvements in service quality, efficiency, and effectiveness. But we are not done yet. Lean isn’t a project. It is a never-ending journey.” 33 September 2008

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Managing Automation - September 2008 Contents Take 1 Letters Tech Vendors Defy Economic Slump by Plugging into Developing World Growth New E2open Chief Outlines Plan to Accelerate Growth Is This Marketing as It Used to Be or Something New? The OMAC Group Attempts to Widen Its Influence Automation Federation Names Chief, Plots Growth Notes Cover story: The Innovation Gap Special Report: Meet the Progressive Manufacturing High Achievers Progressive Manufacturer of the Year Business Model Mastery Innovation Mastery Customer Mastery Supply Network Mastery Data & Integration Mastery Education & Training Mastery Leadership Mastery Operational Excellence Mastery Special Report: Catching the Wireless Wave Part 1: No Clear Infrastructure Winner Part 2: Wireless Apps Take Wing Part 3: The Human Side of Wireless Product Scan Advertiser Index Next

Managing Automation - September 2008

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