OAIS-TR Six Sigma Project 27 February 2008

1. OAIS-TR Six Sigma Project 27 February 2008 Project Title: Improve the Process Efficiency to Achieve Timely, Accurate and Cost-Effective Booking of Hotels For Mission TravelProject Identifier: OAS-06-008 (2W)

2. OAIS-TR Six Sigma Project Improve the Process Efficiency to Achieve Timely, Accurate and Cost-Effective Booking of Hotels For Mission Travel Team Leader: Risa Flores Asst. Team Leaders: Warren Ty, Gina SorianoMembers: AMEX: Teri Savellano, Joan Cruz, Olga Giron, Marivic Ramos

3. Project Charter DEFINE • PROBLEM STATEMENT: • American Express Transnational, the ADB in-plant travel agency, books hotels for mission travel using a direct reservation link to the hotels reservation systems (GDS or Global Distribution System). • In booking hotels used by ADB staff on mission, the travel consultants must take into consideration various details and traveler preferences. When these preferences are not attended to, or when the traveler’s expectations are not met, then there is much customer dissatisfaction. From July to November 2007, an average of 35% of travelers expressed dissatisfaction with the travel agency services due to hotel booking errors.

4. Project Charter DEFINE • GOAL STATEMENT: • Reduce errors in the hotel booking process and thereby decrease customer dissatisfaction from 35% to 20%.

5. Project Charter DEFINE • BUSINESS CASE: • The process of booking hotel rooms should result in a consistently high level of customer satisfaction. The inclusion of amenities and other special service requests entails high attention to detail on the part of the in-plant travel agency and heightens expectation on the part of the traveler. When the requested amenities and other preferences are not provided as per request, then this becomes a cause of complaint by the mission traveler.

6. DEFINE High Level Process Map

7. DEFINE Detailed Process Map

8. DEFINE Output Characteristics Potential Output Measures Hotel understanding of requirement Timely booking Accuracy Requested hotel and amenities provided Service delivered according to original hotel booking ¤ ¤ ¡ ¡ ¤ ¡ - moderate relationship r - weak relationship - strong relationship

9. DEFINE Critical to Quality High-Level Need Reduce Hotel Booking Errors C T Q

10. In plant travel agency TC Hotel ADB Traveler DEFINE SIPOC -- CTQs S I P O C Supplier Inputs Process Outputs Customer CTQs • Book hotel with any special requests • TCs’ attention to detail when making hotel booking • Cooperation of hotel in responding to requests • Delivery of services booked by hotel 1. Request for hotel booking conveyed to travel consultant (TC) Service request thru email or phone. ADB Traveler Hotel requirement 2. TC validates hotel request against ADB approved hotel list Service request received by hotel In-plant travel agency TC 3. TC books hotel & other required services and confirms hotel ADBApproved hotels • Passenger checks in / checks out

11. DEFINE Time Line D M A I C DEFINE 15 SEP 07 TO 30 SEP 07 MEASURE 01 OCT 07 TO 30 NOV 07 ANALYZE 01 DEC 07 TO 07 DEC 07 IMPROVE 08 DEC 07 TO 31 JAN 08 CONTROL 01 FEB 08 TO 22 FEB 08

12. MEASURE SAMPLE POPULATION Survey Results Survey period – March-April 2006 No. of mission travelers: 1,159 No. of surveys sent: 1,058 Total Respondents: 144 mission travelers or 13.6 %

13. SAMPLE POPULATION March-April 2006 Hotel Survey Results MEASURE Total Respondents: 144 mission travelers or 13.6 % Total Responses: 261 hotel bookings 176 or 67.4% – Met expectation 85 or 32.6% – Did not meet expectation Did not meet expectation Met expectation

14. MEASURE SAMPLE POPULATION Survey Results • Categories of Responses: • Airport transfer amenity not provided • Free breakfast amenity not provided • Type of bed specified not provided • Non-smoking room/floor not provided • Rate paid different from the one confirmed • Location not good • Amex could not book hotel

15. MEASURE Pareto Chart

16. MEASURE Performance Status March-April 2006 Current Process Capability Dpu = No. complaints resulting from booking process total transactions Dpu = 85 / 261 = 0.32567 Dpm = 0.32567 x 1,000,000 = 325,670 Z score = 1.9 σ level or 65% process capability

17. July-November 2007 Travel Agency Satisfaction Survey MEASURE Travel Agency Survey Results on Hotel Bookings

18. July-November 2007 Travel Agency Satisfaction Survey MEASURE Travel Agency Survey Results on Hotel Bookings

19. MEASURE Revised Performance Status Revised Process Capability Dpu = No. complaints resulting from booking process total transactions Dpu = 131 / 377 = 0.347480 Dpm = 0.347480 x 1,000,000 = 347,480 Z score = 1.89 σ level or 65.25% process capability

20. July-November 2007 Travel Agency Satisfaction Survey MEASURE Travel Agency Survey Results on Hotel Bookings by Reason

21. ANALYZE Cause & Effect Analysis ADB HOTEL PROGRAM METHOD PEOPLE Booking skills, mastery of GDS use GDS formats fixed, rigid Negotiation on rooms for ADB Attention to detail Telephone calls – undocumented w/ or w/o transfers Initiative to search Fax, email – response not mandatory w/ or w/o breakfast Lack of communication HOTEL BOOKING ERRORS Requirements unclear Non-chain hotels usually not on GDS GDS system down Traveler profile incomplete Fax lines down Limited inventory Missions have non-standard needs Email system down Rate loading HOTEL POLICY HARDWARE TRAVELERS

22. ANALYZE C - Control Factors N – Noise Factors ADB HOTEL PROGRAM METHOD PEOPLE GDS formats fixed, rigid Booking skills, mastery of GDS use Negotiation on rooms for ADB N C N Telephone calls – undocumented C Attention to detail N N w/ or w/o transfers C Initiative to search Fax, email – response not mandatory N w/ or w/o breakfast N Lack of communication C HOTEL BOOKING ERRORS Non-chain hotels usually not on GDS Requirements unclear N C N GDS system down Traveler profile incomplete C N Fax lines down N Limited inventory N Missions have non-standard needs N Email system down N Rate loading HOTEL POLICY HARDWARE TRAVELERS

23. ANALYZE Prioritized List of Controllable Factors PEOPLE Booking skills, mastery of GDS use C C Attention to detail C Initiative to search Lack of communication C HOTEL BOOKING ERRORS Requirements unclear C Traveler profile incomplete C TRAVELERS

24. ANALYZE Prioritized List of Controllable Factors 1 PEOPLE Booking skills, mastery of GDS use C C Attention to detail C Initiative to search Lack of communication C HOTEL BOOKING ERRORS Requirements unclear C Traveler profile incomplete C 2 TRAVELERS

25. ANALYZE Prioritized List of Controllable Factors 1 PEOPLE QUICK WIN: AMADEUS TRAINING FOR TCs Booking skills, mastery of GDS use C C Attention to detail C Initiative to search Lack of communication C HOTEL BOOKING ERRORS Requirements unclear C QUICK WIN: SBT UPDATE OF TRAVELER PROFILE Traveler profile incomplete C 2 TRAVELERS

26. IMPROVE IDENTIFIED CONSTRAINTS WITH IMPROVEMENTS PEOPLE • Booking Skills - mastery of GDS technicalities in making hotel bookings the Amex Travel Consultants - • All TCs should undergo Amadeus training on basic hotel reservations • TCs should know how to pull the traveler hotel profile from the GDS • Upon hiring of new staff, training needs should be identified, and the appropriate training module to be scheduled with Amadeus asap • Attention to detail – minimize minor errors • Reorganization of TCs into regional groupings to facilitate ownership of transactions, and to increase knowledge of hotels within a limited scope • Mandatory use of hotel checklist by mid-office travel consultants • Team leaders spot check to ensure compliance

27. IMPROVE IDENTIFIED CONSTRAINTS WITH IMPROVEMENTS PEOPLE • 3. Lack of communication – need to clarify requirements of traveler • Provide email templates for general day-to-day communications • Management of expectations by taking effort to provide explanation and proper feedback to travelers. • 4.Initiative to search for appropriate hotels • Encourage TCs to be more pro-active to provide information instead of simply “taking orders”. • TC Regions to document hotels being used in past as well as those suggested by travelers, including comments and feedback. This info to be shared among the travel consultants. • Team leaders to check the individual PNRs to verify hotel locations vs. traveler requirements • OAIS-TR to assist Amex in obtaining city maps showing RM and hotel locations; updating OAIS-TR website to publish info for ADB-wide use.

28. IMPROVE IDENTIFIED CONSTRAINTS WITH IMPROVEMENTS • TRAVELERS • Travelers requirements unclear • Team leaders to monitor PNRs to ensure travelers’ requirements are clear • Travel profile incomplete • OAIS-TR to come out with periodic ADB Today announcements to advise travelers to update their profiles on the i-Travel SBT. • Train Amex TCs to assist non-SBT users in updating their traveler profiles • Grant Amex Team Leaders access to the SBT to enable them to update the traveler’s profile only if necessary

29. IMPROVE SOLUTIONS MATRIX

30. IMPROVE SOLUTIONS MATRIX

31. Travel Agency Satisfaction Survey Dec 07 – Jan 08 CONTROL Travel Agency Survey Results on Hotel Bookings with Improvements Applied in Dec 2007 and Jan 2008

32. Travel Agency Satisfaction Survey Dec 07 – Jan 08 IMPROVE Travel Agency Survey Results on Hotel Bookings with Improvements Applied in Dec 2007 and Jan 08

33. IMPROVE HYPOTHESIS TESTING • TEST AND CONTINUOUS IMPROVEMENT (CI) FOR TWO PROPORTIONS • Sample X N Sample p • 1 131 377 0.347480 • 2 15 83 0.180723 • Difference = p (1) - p (2) • Estimate for difference: 0.166757 • 95% CI for difference: (0.0710333, 0.262481) • Test for difference = 0 (vs not = 0): Z = 3.41 P-Value = 0.001 • Fisher's exact test: P-Value = 0.003 • Since the P-Value is less than 0.05, we reject the Null Hypothesis Ho (i.e. that there is no significant difference in the two processes) and we accept the Alternative Hypothesis Ha. This shows there was a significant improvement in the hotel booking processes that resulted in a decrease in customer dissatisfaction over the 2 month period.

34. IMPROVE Calculating Improved Process Sigma Improved Process Capability Dpu = No. complaints resulting from booking process total transactions Dpu = 15 / 83 = 0.180723 Dpm = 0.180722 x 1,000,000 = 182,723 Z score = 2.41 σ level or 81.93% process capability

35. CONTROL CONTROL PLAN CONTROL SHEET

36. CONTROL CONTROL PLAN CONTROL SHEET

37. CONTROL CONTROL PLAN CONTROL SHEET

38. CONTROL CONTROL PLAN CONTROL SHEET

39. CONTROL CONTROL PLAN CONTROL SHEET

40. CONTROL FINANCIAL SAVINGS • HARD SAVINGS – none • SOFT SAVINGS for Amex – time reallocation due to process improvements • Time savings for the Amex Travel Consultants: • – Controlling the occurrence of booking errors would free up Amex TCs time in correcting or revising hotel bookings. Estimated amount of time savings for 1 year: 418 hours. • Time savings for the Amex Team Leaders and Managers: • – When bookings are done right the first time, then the TLs would save 251 hrs. in quality checking the transactions and the managers would save 120 hrs. in investigating SLA issues. Estimated amount of time savings for 1 year: 371 hrs. • TOTAL TIME SAVINGS: 789 hours or 98 staff days • Management of customer expectations • - Time saved spent on checking and redoing work could better be spent on providing proper feedback to the clients, thereby reducing complaints and miscommunication. Customer expectations would also be better managed. An estimated additional time required to better manage customer expectations would be around 30 mins. per day per mid-office TC, or a total of: 753 hrs. or 94 staff days

41. CONTROL FINANCIAL SAVINGS • Reduce customer dissatisfaction • – Although the time (and financial) savings would be mostly offset by time spent to manage customer expectations, the final result would ultimately be a decrease in customer dissatisfaction with regards to hotel bookings and less traveler complaints. • C. SOFT SAVINGS for OAIS-TR – approx. $3,068/year • 5. Time savings for OAIS-TR • - Improvements in hotel bookings processes would minimize the necessity for OAIS-TR to constantly intervene when travelers appeal for assistance, and to trouble-shoot hotel incidents, thereby freeing up an estimated weekly 6 hours of OAIS-TR staff time which could be used for other more strategic matters. This efficiency will translate to additional savings of approximately $ 3,068.00 for 1 year.

42. CONTROL FINANCIAL SAVINGS • COST ANALYSIS FOR TRANSACTION COSTS • 1. No. of hotel revisions per year (est. 10/day x 251 wd/yr) = 2,510 revisions • x no. of minutes per hotel revision 10 mins./revision • = Time spent in doing hotel revisions (in hours) 418 hrs./yr. • or 52 staff days/yr. • Estimated time by TLs on QC doing hotel investigation 1 hour daily • Total hours spent per year 251 hours • or 31 staff days/yr. • Estimated time by Managers investigating hotel SLA infractions 10 hours/mo. • Total hours spent per year 120 hours • or 15 staff days/yr

43. CONTROL FINANCIAL SAVINGS • COST ANALYSIS FOR TRANSACTION COSTS • Estimated time needed by TC to provide quality • feedback to traveler regarding hotel bookings 5 mins/trans. • No. of daily hotel bookings that need more communication 6 transactions • Total time needed per TC per day: 30 mins./day • x 6 mid-office TCs 180 mins./day • x 251 working days/year 753 hours • or 94 staff days

44. CONTROL FINANCIAL SAVINGS COST ANALYSIS FOR TRANSACTION COSTS 5. No. of hours for OAIS-TR staff intervention L6 staff – approx 3 hrs/week or 156 hrs. per year L7 staff – approx 3 hrs/week or 156 hrs. per year x ADB SS hourly rate (midpoints of L6 and L7) = Value of OAIS-TR staff time for 1 year $3,068.00

45. CONTROL LESSONS LEARNED • Proactive and timely communication between the Travel Consultant and the ADB mission traveler is essential in achieving the goal of decreasing customer complaints. Travel Consultants should not make presumptions when determining traveler requirements. Good communication skills are therefore extremely important. • Technical skills in making hotel reservations and in the use of the GDS will ultimately make work less difficult. The investment in time for skills training will pay off in the long run. Constant knowledge sharing and mentoring by senior staff is also invaluable. • An ounce of prevention is worth a pound of cure. Time spent in efficient communication early in the process will outweigh time spent in correcting errors later. • The analysis of the customer survey pinpoints areas of concern so that process improvements and solutions can be fine-tuned and effectively implemented.