“Streamlining Problem Solving a $22K Cost-Saving Success Story”
S – Situation: At a certain point, our company’s backlog of customer returns in Problem Solving had spiraled out of control. We were dealing with a full truck of problem-solving items and over 40 pallets on the floor. My goal was to find a solution to reduce the backlog and decrease the waiting time for customers to process their returns. The estimated cost to clear the backlog was approximately $50,000 in labor hours and it would take around 100 days.
T – Task: The primary task at hand was to identify the root cause of the backlog and develop a plan to streamline the process, reducing costs and wait times.
A – Action: Here are the steps I took to address the challenge:
- Data Collection and Analysis: I collected data to understand the primary issues leading to the backlog. Through this analysis, I identified that a significant 80% of the backlog was caused by missing/wrong customer information.
- Process Simplification: Recognizing this common issue, I streamlined the Problem Solving research process from five steps down to just one. This reduced the complexity of the process and helped minimize errors. I estimated the error rate would be below 2%, and any errors would require rework but wouldn’t impact the customers negatively.
- Plan Presentation: I discussed my plan and the estimated time frame with my Operations Manager, ensuring alignment and approval.
R – Result: The results of these actions were highly successful:
- Rapid Reduction in Backlog: Thanks to the streamlined process, my team managed to resolve 80% of the backlog within just 15 days. The remaining 20%, along with the estimated 2% rework, was completed in the following 13 days.
- Cost Savings: The project cost amounted to $28,000, a significant reduction from the estimated $50,000. This resulted in a remarkable cost-saving of $22,000 for the company.
- Improved Customer Experience: By reducing the waiting time for customers to process their returns, we also enhanced the overall customer experience.
This success story illustrates the power of data-driven decision-making, process simplification, and efficient problem-solving. By identifying the root cause of the backlog and developing a streamlined process, we not only saved costs but also significantly improved the customer experience, showcasing the tangible benefits of proactive analysis and optimization in the business intelligence field.
