Success Case: Optimization of the Payroll Process with Lean Six Sigma
An industrial manufacturing plant was in a heated dispute with the union over frequent errors in paying its workers' weekly payroll. To identify the root cause of the problem and implement solutions that would ensure a “zero defect” result, the company optimized the payroll process based on Lean Six Sigma.
To increase confidence in the project, it was decided to start with a "Kaizen Event" that allowed the identification of "early victories" and solution proposals for the "obvious problems" of the process.
During the definition and preparation phase of the "Kaizen Event" the Voice of the Customer was heard and after processing the available information it was confirmed that the percentage of defects in the first quarter of the year exceeded 3% and for five weeks it reached more than 5 %. In a plant with 1,000 workers, 3% defects implied that 30 workers did not receive their wages correctly each week, generating a total of 120 valid claims per month.
Through the application of Pareto Analysis, the three key causes of process errors were identified:
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Failures in attendance control.
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Failure to comply with the permit procedure.
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Late delivery of medical rest supports.
Once the main causes of the problem have been defined, we delve into the search for the root cause using the "5 Whys" method. This tool made it possible to discover the origin of the problem and based on this, the necessary solutions were defined to reverse the problem in less than 6 months.
During the last 18 weeks of the year, it was possible to stabilize the percentage of errors at levels of less than 1% per week with 99% effectiveness in response time to appropriate claims.
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As a result, we received favorable feedback from both the workers and the union, who acknowledged the significant decrease in process errors and the prompt response to any legitimate complaints. During the last 18 weeks of the year, we successfully stabilized the error rate below 1% per week.
If your organization is facing similar challenges, we are pleased to offer our expertise as allies in implementing effective solutions. Let us help you achieve tangible and lasting results through our proven problem-solving process.
