six sigma as a competitive advantage
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TRANSCRIPT
Arvinder Singh Monty
Six Sigma as a Competitive Advantage
WCBF's 2nd Annual Six Sigma Conferences, Fall 2005
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Vertical Experience & Process Depth 15 industries 1,000 processes 80+ customers
Reduced Operational Risk Unparalleled experience – 1,000+ transitions Regulatory compliance focus across all
major jurisdictions
Visibility & Control Over Operations Advanced dashboard technology for
increased transparency Real-time views of transactional, operational
and business metrics
Relentless Focus on Process Excellence Six Sigma quality and LEAN productivity techniques
– cornerstones of our GE heritage Single-minded focus on quality and business impact
…Through Global “Right-Shore” Delivery Centers
Europe700 employees across Hungary & Romania
China1,250 employees in Dalian, China
India13,000 employees across five major cities
US & Mexico2,700 employees in Mexico & the U.S.
Leveraging Unparalleled Experience & Expertise
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Industry and Process Expertise Critical
Manufacturing
OEMs, Chemicals, Oil& Gas, Pharmaceuticals, Healthcare, Industrials
TransportationAirlines, car/truck manufacturers, car rentals, rail, trucking, shipping, courier & cargo firms
Business Services
Media & Entertainment, Communications, Retail,
Insurance
Life, Property & Casualty, Mortgage, Reinsurance, Health, Long-Term Care
Banking/Finance
Consumer, Commercial, Mortgage, Investment Banking & Real Estate
Sales & Marketing Analytics
Supply Chain & Procurement
Financial Services Collections / Operations
Customer Service
Finance & Accounting
Information Technology Services
Enterprise Application Services & Program Management
Aftermarket Services
Transaction and Core Operations
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Trusted Provider Offshore talent via trusted provider Multiple global locations for diversification & BCP Strategy
Unmatched Experience & Expertise
Transition Expertise Vast experience with multiple large clients Six Sigma methodologies to facilitate change
Financial Stability $500M 2005E revenues GE backed & supported by leading global private equity firms
Expertise Extensive industry and process expertise 80+ customers across 15 verticalsIntense
Culture of Operational Excellence
Robust Control Efficiency metrics to increase visibility (dashboards) Focus on process discipline & operational excellence
Continuous Improvement GE heritage of continuous productivity improvement Deep industry expertise to foster innovations
Regulatory Compliance Greater visibility to reduce regulatory (e.g.) SOX concerns Deep regulatory knowledge/adherenceStrong
Regulatory & Data Compliance
Data Security/Privacy Proven systems with trusted provider Regular network monitoring and access controlled areas
Disaster Recovery Comprehensive BCP – multi-city, multi-site Redundancy in data, desktop, network, and server
Reduced Risk Through Process Discipline
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Analytical models applied to operational data to pinpoint areas of improvement
Regular Monitoring of pre-defined metrics across customer, products and processes
2 Digital Cockpit Profiling Client Operations
3 Knowledge Central for Information Exchange
1 Client Intranet
Single Window to Client Operations
Links to Digital Cockpit & Knowledge Central
Operating Procedures Process Excellence
Projects Recent Updates Business Highlights
Secured and Restricted Access
Information on SOPs Migration Details Reports
One View into Operations Performance
Real Time Information on• Client SLAs• Process Metrics• Trends on SLAs
Increased Visibility & Control of Operations to Clients
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Direct impact on top line and bottom line
… improve your operations
… to drive tangible business impact
Our capabilities…
Business and domain knowledge
Reduced risk via process discipline
Global service delivery
Six Sigma operational quality
World-class HR practices
Strong governance & controllership
Commitment to transparency
Improvements
in: Revenue Cash Costs Margins Speed Customer
Retention
Better Focus on Core
Competencies Improved Decision-
Making Superior Operational
Performance
Genpact Drives Business Impact Through Process Excellence
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400+ BBs/MBBs/QL
2000+ Certified Green Belts
150 Lean Coaches
400+ Six Sigma Projects, 2400 Lean Improvements in 04…
Delivering >$30 MM Productivity & Customer Benefits YOY
400+ BBs/MBBs/QL
2000+ Certified Green Belts
150 Lean Coaches
400+ Six Sigma Projects, 2400 Lean Improvements in 04…
Delivering >$30 MM Productivity & Customer Benefits YOY
TransitionsSix Sigma
& Lean
Operations
People Movement
across Functions
Domain Knowledge +
Process Excellence +
Customer Centricity
Developing Tomorrow’s Leaders:
Building 6 and Lean into our DNA
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Leading Change
Changing Systems & Structures
CurrentState
TransitionState
ImprovedState
Creating A Shared Need
Shaping A Vision
Mobilizing Commitment
Monitoring Progress
Making Change Last
Quality of Solution * Acceptance = Effectiveness
Change Acceleration Process: A Model For Change
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Break through:Best-In-Class
Continuous Improvement
Process Stabilization
Focus
Work Transfer
•Drive Entitlement
•Bench marking
•Remove Non Value Add
•Simplify , Digitize•Empower
•Metric Performance
•Customer Feedback
•Risk Assessment
•Knowledge Transfer
Voice of the Customer0-6 months 6-18 months 18+ months
Le
vel o
f Im
pro
vem
en
t
Roadmap to Process Excellence
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Work TransferWork TransferWork TransferWork Transfer
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TransitionWork Transfer
Service Delivery
StrategicAssessment
Planning Execution Operations
Feasibility Analysis
D M A I C
StrategicAssessment& Feasibility Analysis
Work Transfer
1. Select the Right Processes
2. Change Management Tools
3. Defining Performance Standards
4. Risk Assessment
1. Mapping Learning Curve
2. FMEA
3. Process Mapping & Reporting
Focus To Stabilize…And Improve
Sig
ma
Lev
el o
f K
ey M
etri
cs
Genpact Perf.
Transition
Time
Baseline24
70% Accuracy 99% Accuracy
Six Sigma Based Work Transfer Methodology
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Process Selection ScorecardClient: A large Global Pharma company Financial AccountingFeasibility Risk Assessment By Business / CustomerScore 0 1 2 3 4 5 Score 0 1 2 3 4 5Decouplable 4 Risk for Business 2Baseline 4 IT/Communication 4Manual Intensive 3 Complexity 3Expected savings 4 HR/ Skill availability 3Direct contact with customer
3Openness to change - Biz. organization 3
Level of standardization 4 People's aspects 4Process capability 4 Proficiency in Language 0Language Requirement 3TOTAL (Max 40/ 35) 29 19
Criteria Assessed
Feasibility:
• De-couplable
• Potential for improvement
• Legal aspects
• Operating procedures
Risk:
• Business risk
• Skill availability
• Preparedness
• IT risk
Selecting Right Processes…
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Scientific Risk Assessment
•Identify ways in which the Transition can fail.
•Helps prepare a response plan for prevention
Ensuring Minimal Disruption To Client Operations
Visibility and Control
•RPN valuation periodically..Is your risk Increasing ?
Failure Modes & Effects Analysis
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Process StabilizationProcess StabilizationProcess StabilizationProcess Stabilization
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DocumentCTQ’s
DevelopDashboards
11 22 33 44 55 66 77 88 99
Create Process Mission
DocumentProcess
ID ProcessMeasures
CreatePM System
Data CollectionPlan
PerformanceMonitoring
ImproveProcess
Infrastructure Implementation Execution
Cross functional involvement
Revisit regularly
1 - 2 Months data
collection
Gauge R & R
Visible & Transparent
Performance
Visual Management
T T
VOC Validation Loop
Business Process Management System
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Continuous ImprovementContinuous ImprovementContinuous ImprovementContinuous Improvement
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Business Case :
The client experienced High turnaround time, leading to:
•Downtime of expensive equipment
•Field engineer visits onsite for issues that
could be fixed remote
•Customer dissatisfaction
Process is to provide Remote Fix capability to clientsProcess is to provide Remote Fix capability to clients
Turnaround time for providing network
connectivity. Baseline: 60 hours
Y Metric
Case Study 1: Medical Diagnostic Business
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Reduced Turnaround time, Uptime of equipment
More Remote Fixes vs field visits Saved $360 K FE Cost
Improved process flow
Genpact team Productivity
Process Improvements
Field Engineer time
Freed up
- 9000 hrs
FE CallsConnectivity Team
@ Gurgaon
Contact Hyderabad team to load
iLink
Hyderabad teamAttempts
Connectivity
On failure, escalate to Bangalore team
> 50% Cases
60 Hour TAT
FE CallsConnectivity Team
@ Gurgaon
Gurgaon team fully equipped and completes
the connectivity
AS ISProcess
ChangedProcess
Business Impact
40 Min TAT
Case Study 1: Medical Diagnostic Business
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• Loan Interest: Direct interface to Oracle GL
• Exp. Amortization: Recurring JE in Oracle
• Mgmt. Fee: Recurring JE in Oracle
• Controllership risk…inefficient controls
• Loss of productivity…manual work
AutomationAutomation
Used 6 Sigma to drill down … More than 50% MJE Reduction
7326 70236142
7375
6041
7718
2735
40% 39% 39%42%
40%42%
23%
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Jul Aug Sep Oct Nov Dec Sep' 04
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
MJE Lines
MJE %
Pre-Project Post
Accrual 43%
Level 1
AP 23%
Cash 23%Others 11%
Level 2 (Analysis of Accruals)
Loan Interest 41%Exp. Amortization 34%Mgmt. Fee 15%
(%JE Lines)
Case Study 2: Commercial Real Estate Company
ResultsResults
Root Cause AnalysisRoot Cause Analysis
Too Many Manual Journal Entries
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Business Case
We call & collect lease/ rental charges.We call & collect lease/ rental charges.
• High volumes; Could contact only 30% accounts each month
• High delinquency & roll over to Post 30
Tools
Logistic regression
Moods Median
Goal :Reduce SPAN from 101 days to 30 days
“Self-Pay Project” – Collections Business
Y Metric: Days to collect
Typical approach:
Hire more collectors, make more calls, bring delinquency down - $ 600K Cost impact
Genpact approach:
Ensure calls are made only on accounts not likely to pay automatically
Case Study 3: Equipment leasing Company
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Prioritized accounts based on dollar balance and risk score
A/c segregation based on profiling
“Self-Pay” –high probability of paying
True Collections accounts – Need to be contacted
Risk Profiling /Watch List processes
Delinquencyhistory of the
Account
30% Increase in Productivity
No Grace period for bad portfolios
$588 $550 $546
$363
$185$309
$171
$0
$200
$400
$600
Millions
Oct
'03
Jan
'04
Fe
b'0
4
Ma
r'04
Ap
r'04
Ma
y'0
4
Jun
'04
Roll-Over to Post-30 ($MM)Business Impact
Process Improvements
Case Study 3: Equipment Leasing Company
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Type of Work HR SkipsAwardsLength of Service
Performance ScoreVariable ShiftBench StatusRedeployment
Key X’s
0 – 6 Mts0 – 6 Mts
6 Mts – 1 Yr
6 Mts – 1 Yr
1 – 2 Yr 1 – 2 Yr
> 2 Yr> 2 Yr
Robust Hiring
Assessment..Screening for 10
Potential Defects Pre Offer Orientation …”Reality Check” Gecis University …1200+ Enrolled Parent Connect Program Improved Voice of Employee Issue
Resolution
Production Bonus Amount …PD
Policy , Move from Forced Raking Improve Shift Scheduling Enhanced R&R Programs – “Cheers”
Rigorous Internal Job Posting…120+
Deployed ,1400+ Applications Defining Multiple Career Paths for
Professional Growth …Process Expert
Path…
Length of ServiceLength of Service
Attrition Below Industry Levels by 50%
Using Six Sigma to impact Attrition Initiatives
Y= Length of service in Days
Case Study 4: Human Resources..Attrition
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Fishbone
Homogeneity of Variance
Pareto
Moods Median Test
Multiple Regression
2 sample T Test
ANOVA
Tools usedTools used
Business Case :
A high Average handle time impacts cost / call and results in
Calls Queuing up at the India site
Customer dissatisfaction
Poor Service levels
Call Abandon Rate
Calls flowing back to the US alternate site; Additional cost of $1.1 million
We handle customer service calls from users of private label credit cards, onWe handle customer service calls from users of private label credit cards, on
Y Metric
Average Handle Time ( AHT ) is the total
time taken by an agent to resolve an issue
Goal
Reduce AHT from 260 to 200 secs
Average Handle Time - for Inbound Customer Service
Case Study 5: Consumer Finance Company
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Knowledge management for exception situations
Refresher Trainings by Call Types
Online process knowledge quizzes and guides
Macros to simplify Screen navigation
“Assistline” to take care of non-availability
of SME’s on the floor
SPAN reduced from
498 secs to 71 secs
4.6 M
Same day turnaround defined
Online Ticker for new updates
Data repository for updates; added to
Process Knowledge tester
Process Knowledge
Main Frame Screens not User Friendly
Process Updates
Dissemination
Reduced AHT
from 260 secs to
180 secs
Key Xs Improvements
Case Study 5: Consumer Finance Company
25
Business Impact
P1 P2 P3
Process Performance
• Collection Efficiency• $$ Collected
Capitalizing Process Efficiency
40%
Cost Arbitrage
… Resulting in significant business impact delivered
Reduction in AP delinquents in 6 months $403M savings Transformation of a client settlement process from 46 to 7 steps 35% productivity gain Re-engineering of a billing process – invoice accuracy to 99% $200M in cash flow Creation of a purchase likelihood model for predicting behavior $25M in revenue Improvement in right party contact by 48% for collections $8M in savings
2004 2005 2006E
Delivering Material Business Impact: The Genpact Model
Process Productivity
25-30%
Continuous ImprovementProcess Aggregation