NOCO Energy Corp.
Over its 80-year existence, NOCO Energy Corp. has expanded from an operation delivering coal by pickup truck to one of Western New York’s largest private-sector employers. The Tonawanda-based company experienced explosive growth over the last 10 years – greatly expanding its revenue, employee count and geographic footprint. The evolution has spawned both growing pains and opportunities for improvement. Earnest attempts at solving problems have only brought incremental improvements. Vice President of Corporate Operations Scott Ernst attributes this to NOCO’s historic emphasis on leadership training, with much less focus on developing analytical skills. To build a “bench” of special project analysts, he covertly introduced data-based methodologies by enlisting three employees to receive TCIE’s web-based Six Sigma instruction and weekly mentoring sessions. They and two others are now certified Lean Six Sigma Black Belts; one among them was reassigned to provide full-time project support companywide. More than a dozen colleagues were subsequently enrolled in the slightly less-demanding Green Belt training, including NOCO’s president. The effects? There are fewer rumblings of “I think” or “I heard” when discussing contentious issues, and more talk of quantifiable observations. The knee-jerk reaction to rush to a solution is phasing out in favor of using a disciplined framework.
A Black Belt project undertaken by Fuel Billing Manager Emily Lynett has become emblematic of the company’s fledgling Six Sigma program. Lynett is responsible for issuing credits and revising bills when residential and commercial customer invoices are incorrect. Under normal circumstances, a certain amount of credits/rebills are expected and should result in under 15 minutes’ worth of daily work. The number became excessive following rapid growth of the fuel business and implementation of new software, and caused Lynett to spend most of her day on rework. In addition to placing elevated pressure on the billing department – which was constantly blamed for the issue – the inaccuracies agitated customers, delayed cash flow and diverted the sales team from its primary job. Once Lynett started systematically analyzing the problem with Six Sigma tools, she found the problem originated during an earlier process before surfacing at her doorstep.
- Inspected NOCO’s electronic-based system for tracking credit/rebill requests to identify:
- The reasons for incorrect bills
- The point of sale (the field office) affiliated with each incorrect bill
- Visited all six field offices to investigate order entry processes upon determining that pricing was the factor behind most credits/rebills
- Documented best practices of all plants, with particular focus on the site experiencing minimal inaccuracies
- Standardized the order entry process and trained employees at every plant in its proper use
- Diminished number of credits/rebills by 90 percent, from an average of over 100 per week to around 10 per week
- Drastically reduced turnaround time for credits/rebills, from 12 hours to 1 hour and 47 minutes, due to the decrease in requests
- Improved relations between the billing department and other NOCO departments, as well as between individuals, as a result of determining the problem’s root cause
- Decreased Lynett’s stress level by “500%” and enabled her to refocus on innate responsibilities of the Fuel Billing Manager position
- Triggered an extensive review of invoice data to reveal a sizable occurrence of undercharging, which prompted changes in process sequence and defining all possible pricing combinations
- Eliminated nearly all problems arising from fixed-price commercial contract procedures by replacing an inconsistent, email-dependent approach with an electronic help desk ticket system
- Implemented daily invoice reporting to flag issues
Project ROI
How do we measure the impact of projects? It’s a mix of tangible, quantifiable savings with the more elusive “soft savings” – such as cost avoidance and improved customer satisfaction.