Honeywell Inc. process operations leader Sandie Barker—along with her team, American Express and GetThere—employed Six Sigma methodology to move 93 percent of the company's airline bookings online, reaching an 83 percent touchless rate in the United States and yielding more than $6 million in savings.
Although Barker said the travel department uses Six Sigma for all of its projects, using it to advance a fully functional online booking process was the department's most significant undertaking yet.
Barker noted that Six Sigma—a quality assurance methodology that aims to clearly define, achieve and maintain process improvements in a manner that limits inefficiencies and "removes causes of process variation"—yields only about 3.4 defects per million opportunities. "This is how we do business. It wasn't a trickle-down theory. This was our change strategy that is essential and common across the company," she said.
A spokesperson added that Honeywell requires that "all professionals in certain capacities" become Green Belt certified in Six Sigma. However, team leaders and managers, such as Barker, have attained one of the highest accreditations, Six Sigma Black Belt.
The initial thrust toward omnipresent online booking adoption began in the fourth quarter of 1999 when the company shifted from a "manual, telephonic agent-assisted reservation process" to its online self-service tool, which at the time was Sabre BTS. Although Honeywell ultimately used Six Sigma to achieve a 68 percent adoption rate by the end of 2000 with BTS, Barker and her team noted traveler discontent. Barker said travelers were "dissatisfied with some features and functionality of the Sabre BTS tool," which made it difficult to reach an adoption goal of more than 90 percent. Use of the tool dipped down to 55 percent by the end of 2001, and the company was paying fees for additional offline bookings. So began the second phase of Honeywell's online booking project—smoothly migrating to the American Express CTO booking tool from Sabre BTS.
"We had some early successes, then started migrating from BTS to American Express in late fourth-quarter 2001 and made the full migration in the third quarter of 2002," Barker said. She added that the switch provided Honeywell with the opportunity to cut transaction fees in half and yield up to 10 percent off of the average ticket price.
A significant portion of Six Sigma strategy, Barker said, is in the planning phase—using the process to define a problem, measure the frequency of "defects," analyze where and why those issues occur, then determine a way to improve the process and finally maintain and control a sustainable solution. With the aid of a team, Barker painstakingly detailed the migration plan from BTS to American Express CTO, mapping each step along the way and ensuring each goal was met flawlessly before the next began.
Before launching CTO countrywide in the United States, Barker worked with her team and American Express to create a site for the booking tool and prepare the database. The team then tested the site, piloted and obtained feedback from select users and continually used the feedback to tweak the site. "It was probably six months worth of work," Barker said.
Once the booking tool passed a series of preliminary tests, Honeywell began transferring roughly 22,156 traveler profiles to the new site—seamlessly—and creating traveler awareness for the new tool. Barker and her team also began "familiarization sessions" for travelers. Given Barker's detailed planning approach and a strong awareness among travelers, adoption jumped to 70 percent within one month of the tool's official U.S. launch.
Barker said within one year of launching in the United States, satisfaction among travelers improved by 20 percent, average ticket price declined 7 percent and utilization jumped to 93 percent. Barker said Honeywell now is focusing on "sustaining the gains" and continuing the level of success.
"One of the next areas of focus within the online arena is going to be our first pass yield," Barker said of increasing the touchless rate. "It stayed relatively flat over both booking tools, and we're wondering why we're only at 83 percent. We really should be at 90 percent."
Meanwhile, Honeywell is beginning a similar Six Sigma strategy to roll out a booking tool in Europe. "That's the next horizon," Barker said. "They're using Six Sigma and leveraging best practices from this, but recognizing that EMEA is a completely different playing field."
While Six Sigma is credited with being introduced by Motorola and is consequently a federally registered trademark of the company, many corporations have used the methodology or variations of it to yield defect-free products as well as services. DuPont
(BTN, May 10), Federated Department Stores
(BTN, Dec. 8, 2003) and General Electric
(BTN, July 7, 2003), among others, also have used the methodology for their travel programs.
When they merged in 1999, Honeywell and AlliedSignal both were proponents of Six Sigma. However, the combined company took the process a step further with the launch of "a proprietary system called Six Sigma Plus." Described as a new Six Sigma generation, the methodology became prevalent at Honeywell in recent years. Boasting "billions in cumulative savings from Six Sigma-related activities," Honeywell has brought the quality assurance methodology into nearly every facet of its operations, from manufacturing processes to internal administrative functions. Although process improvements in the travel department may seem small when compared with the billions of dollars saved companywide, Barker and her team helped contribute $6 million in savings to the company's bottom line.