[email protected] plenary session-i six sigma in service sector delivered by dr. p....

[email protected]

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

SIX SIGMA IN SERVICE SECTOR

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….


Distinguishing characteristics of Service Sector

• People intensive• Process intensive• Skill/Knowledge intensive

Hence Face the challenge of

• Motivation and retention of staff• Customer focus to maintain Performance and

Quality• Continuous Learning for Performance

Improvement• Knowledge sharing and knowledge management

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 don’t add value


Six Sigma is …

• a Statistical measure of performance

• an aspirational goal for quality• an approach and methodology for

continuous improvement of quality

Performance is also a dimension of quality !


6 Sigma = 3.4 defects per million5 Sigma = 230 defects per million 4 Sigma = 6,210 defects per million3 Sigma = 66,800 defects per million 2 Sigma = 308,000 defects per million 1 Sigma = 690,000 defects per million


There is no known or documented Service Organization that has reached the Six Sigma level of quality ( 3 defects in million deliveries) anywhere in the world except the Mumbai Dabbawallas.However Six Sigma Concepts and Methodology ,as a means to improve quality and Performance , are applicable in almost all organizations.


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 the problem

•Measure current process capability

•Analyze root causes of variability

•Improve process capability

•Control to sustain improvements


Six Sigma in action

WORK IS WORSHIP

Tiffin basket’s weight:75-80 kgs.


Nutan Mumbai Tiffin Box Suppliers Association

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


The Flow Logic

Grant Road(12)

Churchgate(1-10)

Lower Parel(14)

2

3

7

4

5

6

Zones for destination

DistributionBy Carriersat lunchtimeTo offices

Point of AggregationAnd Sorting

C DB

A E

Collection from home

1


Coding SystemVLP : 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)

D’souza

Zero % fuel Zero % investmentZero % modern technology Zero % Disputes99.9999% performance 100 % Customer Satisfaction


Working of NMTBSA

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 month’s from customers.



Retention

Aravind Eye Hospital : Madurai

1. Process Mapping and Reengineering

2. Task specialization

3. Assembly Line set up

4. Young rural women recruited as paramedics

5. Rural Eye Camp is the source (1500)

SIX SIGMA IN SERVICE SECTOR: Indian Industries

Aravind US/UK Hospitals

Cost Per Operation in USD

50 to 100 2500 to 3000

Cost of IOL in USD 5 200

No.of operations per day average

800 ?

Capsule rupture & Vitreous loss

2.0 % 4.4 %

Corneal edema 8.0 % 9.0 %

Profitability Very good

anemic

Embedding Six Sigma Concepts in e Business

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 & its Marketing Strategy

Air Deccan Agent less Sales leading to 20 % reduction in costs.Elimination of paper and paper work

e Business innovators


Challenges facing the e Business innovators. They need Six Sigma approach …

Issue

Innovator

Profitability Quality of Service

Market Growth

Service level Different-iation

Optimal mix

Dell

Amazon.com

e Bay

Hotmail

Bhoomi

ICICI Bank

Air Deccan

1. Time taken to book a ticket

2. Timely departure

3. Over booking

4. Revenue realized per seat km

5. Safety

Bus, Train or Air travel



1. Wait time in the system

2. Time taken for a transaction

3. Channel flexibility

4. Timely alerts

5. Statement regularity

Banking Services


1. Defects per 1000 lines of source code

2. Cost of Quality

3. Developer, Tester Productivity

4. Cost and Time over-run

5. Recruitment Effectiveness

Software Services


1. Measure of Faculty Performance

Subject wise

Batch wise (Full time, Part time, Distance Learning)

2. Variance Reduction vs Mean score

3. Attendance impact

Education, Training Sector

Can lead to rewriting business paradigms


Do away with a complete function such as Accounts Receivable & collections Eliminate non value adding intermediaries Reduce finished goods inventory dramatically Meet the expectation of every customer Cross sell effectively Improve operational efficiency and effectiveness by leaps & bounds Reach current information swiftly to stakeholders for their optimal use Be a fair and impartial judge Improve transparency Reduce/ eliminate leakages

Study materials on the net, Examination & Assessment, Alumni Relationship Management are some key innovations in the Education Sector widely being adopted around the world.



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

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

[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


mailto:[email protected]

[email protected] plenary session-i six sigma in service sector delivered by dr. p....

Documents

service sector slide

sigma performance

retention slide

action slide

sigma concepts

service sector services

sigma level of quality

knowledge management