Visual Six Sigma: Making Data Analysis Lean

5.2. Framing the Problem: Understanding the Current State Pricing Process

Jane has a few key ideas in mind that help her focus her initial efforts. She realizes that she needs to form a team in order to have the relevant expertise available. She also needs data in order to identify the root causes that will direct her to solutions. Jane's initial thinking is to design a data set using historical data.

In a previous project, Jane employed an approach based on a Product Categorization Matrix. This tool is based on the idea that the seller should view the product from the perspective of the buyer. Jane feels strongly that such a tool could put sales representatives in a stronger negotiating position for certain products. Consequently, Jane intends to integrate product categorization data into the team's investigation.

5.2.1. Defining the Process

Quickly, Jane pulls together a small team consisting of two sales representatives, a sales clerk, and a Polymat financial analyst familiar with the IT system who knows how to access invoice and sales data. The team members agree that they should focus on improving the pricing management process, that is, the process that consists of setting price targets, negotiating prices with customers, and invoicing and tracking orders after a successful sale. To define the scope and focus of the initial work, the team starts by drawing a high-level map of this process (see Exhibit 5.2).

Figure 5.2. Process Map of Polymat's Price Management Process ...