Embedding Six Sigma Concepts in e Business

8/6/2019 Embedding Six Sigma Concepts in e Business

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PLENARY SESSION-I

SIX SIGMA IN SERVICE SECTOR

delivered by

Dr. P. Balasubramanian, Ph.D.

Founder & CEO, Theme Work Analytics, Bangalore

& Entrepreneur in Residence at Purdue University, USA

at M.S.Ramaiah Institute of Technology, Bangalore on March 10, 2008

NATIONAL WORKSHOP ON INNOVATIVE QUALITY PRACTICES


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Services Sector consists of

Transportation, logistics and warehousing Wholesale and Retail Distribution Installation, Implementation and Maintenance

Financial Services such as Banking and Insurance Health Care Hospitality and Tourism Travel Consulting Services Information Technology Services Media & Entertainment Education & Training Government Services such as RTO. Registrar of

PropertiesAnd more.


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Distinguishing characteristics of Service Sector

People intensive Process intensive

Skill/Knowledge intensive

HenceFacethechallengeof

Motivation and retention of staff

Customer focus to maintain Performance and Quality Continuous Learning for Performance Improvement Knowledge sharing and knowledge management


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Six Sigma is a philosophy that underlies

efforts to improve business performance

and customer satisfaction

Using facts and data to eliminate waste and

variation

Eliminating activities that dont add value



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Six Sigma is

a Statistical measure of performance

an aspirational goal for quality an approach and methodology for

continuous improvement of quality

Performanceis also a dimensionof quality !



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6 Sigma = 3.4 defects per million

5 Sigma = 230 defects per million

4 Sigma = 6,210 defects per million

3 Sigma = 66,800 defects per million

2 Sigma = 308,000 defects per million1 Sigma = 690,000 defects per million



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Thereisno knownordocumented ServiceOrganization

that hasreached theSix Sigma level of quality ( 3

defects inmilliondeliveries) anywhereintheworld

except theMumbai Dabbawallas.

However Six Sigma Concepts and Methodology ,as

a means to improve quality and Performance , areapplicable in almost all organizations.



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Align Performance

measures to Goals.

Let PMs be

measurable

Set

benchmarks

Document As

is Where is

Processes

Choose

appropriate

paths for

improvement

Implement,

Monitor &

Control

Define theproblem

Measure current process capability

Analyze root causes of variability

Improve process capability

Control to sustain improvements


Six Sigma inaction


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WORK IS WORSHIP

Tiffin baskets weight:

75-80 kgs.


Nutan Mumbai Tiffin Box Suppliers Association


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Mumbai Dabbawallas (NMTBSA)

History : Started in 1890

Charitable trust : Registered in 1956

Avg. Literacy Rate : 8th Grade Schooling

Total area coverage : 60 Kms to 70 Kms

Employee Strength : 5000

Number of Tiffin's :2,00,000 Tiffin Boxes

i.e 4,00,000 transactions every day.

Time taken : 3 hrs



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The Flow Logic

Grant Road

(12)

Churchgate

(1-10)

Lower Parel(14)

2

3

7

4

5

6

Zones for destination

Distribution

By Carriers

at lunchtime

To offices

Point of

Aggregation

And Sorting

CDB

A E

Collection from home

1



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Coding System

VLP : Vile Parle (suburb in

Mumbai)

9EX12 : Code for Dabbawalas

at Destination

EX : Express Towers

(building name)

12 : Floor no.

E : Code for Dabbawala

at residential station

3 : Code for destination

Station eg. Churchgate

Station (Nariman Point)Dsouza


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Zero % fuel Zero % investment

Zero % modern technology Zero % Disputes

99.9999% performance 100 % Customer Satisfaction



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Working ofN

MT

BSA

Error Rate : 1 in 16 million transactions Six Sigma performance (99.999999)

Technological Backup : Nil. Cost of service - Rs. 300/month ($ 6.00/month)

Standard price for all (Weight, Distance, Space)

Rs. 36 Cr. Turnover approx.

[6000*12*5000=360000000 i.e Rs. 36 crore p.a.]

No strike record as each one a share holder Earnings -5000 to 6000 p.m.

Diwali bonus: one months from customers.



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Retention


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Aravind Eye Hospital :Madurai

1. Process Mappingand

Reengineering

2. Taskspecialization

3. Assembly Linesetup

4. Youngrural womenrecruitedasparamedics

5. Rural Eye Campisthesource (1500)

SIX SIGMA IN SERVICE SECTOR: Indian Industries

Aravind US/UK Hospitals

Cost Per Operation in

USD50 to 100 2500 to

3000

Cost of IOL in USD 5 200

No.of operations per

day average800 ?

Capsule rupture &Vitreous loss 2.0 % 4.4 %

Corneal edema 8.0 % 9.0 %

Profitability Very

good

anemic


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EmbeddingSix Sigma Concepts ineBusiness

Dell Direct reach to end customers .Elimination of the Accounts Receivable function.

Met specific needs of each customer.

Amazon.com First Virtual Store with delivery functions.

Inventory Aggregation

eBay Most successful market place for buyers and sellers to

meet.Fair value determination of used and new goods.

Buyer ,Seller assurance.

Hotmail First major product innovation in internet.

Revolution in Marketing.

Bhoomi Pioneering use of internet in e Governance.Malpractices killer

ICICI Bank Internet as a channel defines the Market Segment & itsMarketing Strategy

Air Deccan Agent less Sales leading to 20 % reduction in costs.

Elimination of paper and paper work

e Businessinnovators


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Challenges facingthe e Businessinnovators.Theyneed Six Sigmaapproach

Issue

Innovator

Profitability Quality ofService

MarketGrowth

Service level Different-iation

Optimal mix

Dell

Amazon.com

e Bay

Hotmail

Bhoomi

ICICI Bank

AirDeccan


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1. Timetakento bookaticket

2. Timelydeparture3. Over booking

4. Revenuerealizedperseatkm

5. Safety

Bus, Train or Air travel



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1. Waittimeinthesystem

2. Timetakenforatransaction3. Channelflexibility

4. Timelyalerts

5. Statementregularity

Banking Services


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1. MeasureofFacultyPerformance

SubjectwiseBatch wise (Fulltime,Parttime,

Distance Learning)

2. Variance ReductionvsMeanscore

3. Attendanceimpact

Education, Training Sector


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Canlead torewritingbusinessparadigms


Do away with a complete function such as Accounts Receivable & collections

Eliminatenon value adding intermediaries

Reduce finished goods inventory dramatically

Meettheexpectation ofevery customer Cross sell effectively

Improve operational efficiency and effectiveness by leaps & bounds

Reach current information swiftly to stakeholders fortheiroptimal use

Be a fairand impartial judge

Improvetransparency

Reduce/eliminate leakages

Study materials on the net, Examination & Assessment, AlumniRelationship Management are some key innovations in the EducationSector widely being adopted around the world.


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AcknowledgementAravind Eye Hospital Slides and Information from

Dr. Aravind Srinivasan,Administrator

www.iimb.ernet.in/~review/DOCUMENTS/Aravind.pdf

Dr. Usha Kim, MLOP ( Mid Level Ophthalmic personnel)

www.aravind.org/education/coursedetails.asp?tmpcatcode=C000000091

Mumbai Dabbawalla Slides & information from

www.geocities.com/hr_era/DabbawallasofMumbai.ppt


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[email protected]


Thanks and Best Wishes

Dr.P.Balasubramanian

Founder and C.E.O.,

Theme Work Analytics,

Bangalore, India, 560 041

[email protected] Ph : 91 80 4121 4297


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Embedding Six Sigma Concepts in e Business