Breakthrough Business Results With MVT: A Fast, Cost-Free, ''Secret Weapon'' for Boosting Sales, Cutting Expenses, and Improving Any Business Process

338 Pages·2005·3.69 MB·English

by  Charles W. Holland

Breakthrough
Business Results
MVT
with
A Fast, Cost-Free “Secret Weapon” for
Boosting Sales, Cutting Expenses, and
Improving Any Business Process
C H A R L E S H O L L A N D
D AV I D C O C H R A N
W I T H
John Wiley & Sons, Inc.

Breakthrough
Business Results
MVT
with
A Fast, Cost-Free “Secret Weapon” for
Boosting Sales, Cutting Expenses, and
Improving Any Business Process
C H A R L E S H O L L A N D
D AV I D C O C H R A N
W I T H
John Wiley & Sons, Inc.
Copyright © 2005 by Charles Holland. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
QualPro offers its unique MVT* services to achieve improved client profitability. QualPro’s
MVT services include a variety of products including MVT experimentation, MVT
measurement optimization, MVT process control, and MVT capability analysis. QualPro’s
MVT seminars, MVT training, and MVT consulting services support all of these products.
*MVT is a trademark of QualPro Inc.
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Library of Congress Cataloging-in-Publication Data:
Holland, Charles, 1940–
Breakthrough business results with MVT : a fast, cost-free “secret
weapon” for boosting sales, cutting expenses, and improving any business
process / Charles Holland.
p. cm.
ISBN 0-471-69771-0 (cloth : alk. paper)
1. Industrial management—Statistical methods. 2. Industrial
management—Methodology. I. Title.
HD30.215.H65 2005
658.4′03—dc22
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
Foreword
Ifeel privileged to be part of this book because I have never come
across a more powerful business tool than MVT to identify what
needs to be done. My experience with Chuck Holland and the MVT
process goes back to the early 1990s when I was the CEO of a multi-
billion dollar telecommunications provider. We believed there were
many opportunities to apply quality principles to improve our work
and, like many companies, were seeking the help of experts. After an
intensive search, our company selected Chuck Holland’s consulting
firm, QualPro, as our process improvement partner. I am still using
them over a decade later, now in a different industry, and I am proud
to say my education has been enlightening and the financial gains
substantial.
QualPro brings a refreshing approach to solving business problems.
First, they assume we, the business community, know more about our
business than a consultant would. A great start. Next they apply sound
statistical principles to test proposed improvement solutions from our
own employees.
The MVT statistical process is brilliant. In a nutshell, it enables
you to test many business improvement solutions simultaneously and
discover those solutions that help, those solutions that make no dif-
ference, and those solutions that hurt. Yes, there are many “solu-
tions” that actually make your problem worse. You must read the
iii
iv Foreword
book to understand why this is so. I will warn you that the real so-
lutions will many times not be intuitive.
The MVT implementation process is also brilliant. You are encour-
aged to pick only solutions that are practical, fast, and cost free. This
means you can implement the winning ideas immediately. How many
consultant reports have you commissioned that have great recommen-
dations but require extensive process changes that you cannot afford?
Let me conclude by giving you a few key tips I learned by trial and
error. These will help you over some bumps along the way.
• Whoever authorizes the MVT initiative must be high enough in
the organization to put a referee shirt on.
• Your people have the answers; let them put their proposed solu-
tions forward and use MVT to test them. Resist your bias to
squelch those solutions you don’t like.
• Choose problems where improvements can be quantified and eas-
ily measured. Sounds like a “no brainer,” but it can be more dif-
ficult than you think.
• If you are the senior executive, stay involved in order to maxi-
mize the benefits. There will be no substitute for your personal
effort. This is not something to delegate.
• Tackle your biggest problems first and expect speed in the testing
phase.
• Never assume that once you have a successful test that it can be
exported to another part of your company. If it is to be exported
to a like operation within the company, do a “refining test” be-
fore implementing. Refining is defined in the text to follow.
• Be diligent in the implementation phase. Process change is gen-
erally resisted until new habits are institutionalized. My biggest
MVT challenges have occurred due to my inability to implement
solutions, not because the solution proven most effective by the
MVT Process was incorrect.
I predict that as you learn more you too will understand why I am
so passionate about MVT. Good luck and happy reading.
ED MUELLER,CEO
Williams-Sonoma
Acknowledgments
Iwould like to thank:
• All the 1,000+ clients of QualPro who have allowed us to be in-
volved in over 13,000 projects utilizing the MVT process since
1982.
• The 400+ client personnel who have presented their MVT pro-
cess success stories at the annual QualPro Leadership Symposium.
There have been 25 to 30 such presentations each year since 1989.
Most of the successes discussed in this book came from those pre-
sentations.
• David Cochran, without whose help I would never have been
able to finish this book. He helped me gather the material,
arrange the format, and translate my East Tennessee English into
something we hope people can understand. He kept asking, “Do
you want to say it that way?” and “Maybe we should include
this.”
• Debbie Faust who formatted the material, prepared the tables and
figures, worked long hours, and smiled through it all.
• Special thanks to Art Hammer and Kieron Dey. They are
true MVT Process Improvement Masters, who made significant
v
vi Acknowledgments
contributions to this book and were involved in many of the
13,000+ MVT success stories.
• QualPro consultants, who were involved in the generation of
QualPro MVT successes discussed in this book.
• Bill Leydorf, Jim Brown, Jeff Dolak, and Bill Huckaby, who
helped prepare and format materials for the book.
• Joy Rhea, Shirley Holland, Sandy Holland, Britni Holland, Cara
Holland, Clyde Buck, Randy Conway, Kieron Dey, Jeff Dolak,
and Jim Brown for proofreading the book. Sue Lusk and Joyce
Jones for gathering materials.
• Ken Holland, who made many suggestions on book content.
• Dean Gardenhire, who helped develop the text for several chapters.
• Richard Narramore, who greatly helped shape the book’s out-
line. Also, Arlette Ballew for her help in editing the text.
• Dr. W. Edwards Deming, whose input and encouragement helped
me successfully launch QualPro.
• Dr. George Box, who attended QualPro symposiums and made
kind comments about the MVT process and QualPro’s work.
• Special thanks to client senior managers such as Carl Bouckaert,
Gordon Cain, Pete DeBusk, Roger Milliken, Ed Mueller, and
Bob Potter, all of whom taught me valuable lessons.
Contents
Introduction: An Outlandish Claim xi
Part I
The Case for MVT 1
Chapter 1
The Power of MVT: Practical, Fast, Cost-Free Solutions to
Any Business Problem 3
Chapter 2
How MVT Works: Using Data to Take the Guesswork,
Politics, and Emotions Out of Major
Business Decisions 20
Chapter 3
Using MVT to Increase Sales, Cut Costs, and Improve
Customer Satisfaction: Stories from Citibank, DuPont,
Williams-Sonoma, and Others 38
Chapter 4
MVT Compared to Six Sigma and Other
Popular Improvement Approaches 47
vii
viii Contents
Part II
Implementing an MVT Business Improvement
Project in Your Company 55
Chapter 5
Step 1: Choose a High-Payoff Goal and Create
the Environment 57
Chapter 6
Step 2: Define How You Will Measure Success and Validate
Your Measurement System 68
Chapter 7
Step 3: Use Control Charts to Hunt for Good Ideas to Test 79
Chapter 8
Step 4: Use Data Mining and Other Statistical Techniques to
Find Good Ideas to Test 87
Chapter 9
Step 5: Brainstorm for Improvement Ideas with Everyone
Who Could Have Worthwhile Suggestions 96
Chapter 10
Step 6: Select Improvement Ideas That Are Practical, Fast,
and Cost Free 104
Chapter 11
Step 7: Design an MVT Screening Experiment to Test Many
Ideas with Only a Few Tests 112
Chapter 12
Step 8: Execute the MVT Screening Experiment and Measure
Test Results 127
Chapter 13
Step 9: Analyze Screening Test Results to Determine Which
Ideas Help, Hurt, or Have No Impact on Performance (Prepare
to Be Surprised) 142