Using LSS to improve the efficiency and quality of a refund process in a logistics center

Purpose – This study aims to demonstrate a service quality improvement project implemented by the Lean Six Sigma (LSS) methodology to achieve dramatic improvements with respect to service quality and speed in the refund process of the logistics center in Amway Company, Taiwan. It describes in detail how the LSS methodology was applied and how various qualitative and quantitative tools and techniques within the define, measure, analyze, improve and control (DMAIC) logic roadmap have been employed. Design/methodology/approach – This paper adopts the case study methodology to illustrate how to use LSS approach to increase the efficiency of refund process. Findings – The DMAIC scheme with logical analysis, qualitative tools and statistical verification, were employed to identify the key process input variables (KPIVs) that affect the key process output variables (KPOVs) in the refund process. The project team also successfully eliminated non-valued-added (NVA) activities and redesigned the refund process. The most significant improvement is to increase customer satisfaction substantially by reducing the credit voucher waiting time from 14 days to 14 min and the error rate in the refund process is down to almost zero. The results prove that combining the tools of Six Sigma and lean production effects successful improvement of service activities as well as the improvement of manufacturing sectors. Research limitations/implications – The case study method limits the generalization of the findings, but provides a novel way to solve problems for the logistics center. Originality/value – This is one of the rare studies to utilize LSS approach to increase service quality of logistics centers. For the logistics center of Amway Taiwan, the financial benefit of the project was about NT$1,200,000 in annual savings. Numerous invisible gains from the LSS projects are more important for the organization, for example providing customers excellent service, increasing customer satisfaction, training the employees of the company, enhancing the reputation of Amway Taiwan and establishing continuous improvement culture.