A successful Continuous Improvement Program within your SSC

Amsterdam, 16th May 2012

Elias Miera Pfizer Inc. Managed Services Operations Quality Director Elias.miera@pfizer.com

Agenda

1. Pfizer Inc. 2. Why CI? 3. Deploying CI in a SSC 4. CI Project identification, selecting the right approach for project execution 5. Benefits realisation 6. Key Lessons Learned

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1. Pfizer Inc.

GFS and BT support locations

Memphis, TN

GFS Americas

Markets Supported: • Canada • Mexico • North Latin America • United State & Puerto Rico

Dalian, China

GFS Asia

Markets Supported: • Australia / New Zealand • China • Japan • Singapore

Dublin, Ireland

GFS Europe

Markets Supported: • Austria • Belgium • Denmark • France • Finland • Germany • Ireland • Italy

• Luxembourg • Netherlands • Norway • Portugal • Spain • Sweden • Switzerland • United Kingdom

Delhi, India Bucharest, Romania Dalian, China

Business Process Outsourcing

Pfizer's Business Process Outsourcing (BPO) partner is Genpact . Pfizer's processes are supported from 3strategic locations.

Chennai, India Bangalore, India

Application Support Outsourcing

Pfizer's Financial Application IT Outsourcing partner is Accenture .

Shared Services Markets

Pfizer Location BPO Location

• Three shared services operations offices supported by strategically placed BPO offices

• Highly-skilled and experienced team leveraging global network to deliver standardized solutions

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2. Why Continuous Improvement ?

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History of Continuous Improvement

Adapted by WPAP/WC from: http://www.leansigma.com/about.php

LeanSigma

Six Sigma Lean

1960s

1970s

1980s

1990s

2000s

2010s

Ford Deming

Toyota Production System Quality Improvement Tools

Just In Time Reduce Variation

TQM

Lean Production

Six Sigma (Motorola)

Lean Enterprise

Quality Focus

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A journey of relentlessly

seeking perfection

Everything can be

viewed as a process

Performance is judged by the customer

To manage performance you have to measure it

People closest to the work know the issues &

opportunities

5 Principles of Continuous Improvement

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What is Continuous Improvement?

Maximize Revenue

Manage Costs

Strengthen our Culture

Customer

Satisfaction

Improved Business

performance

Continuous Improvement contribution

More Effective

& Efficient

Processes For

Operating Divisions

And Enabling

Functions

Continuous Improvement techniques

Six Sigma Methods

+

Lean Principles

+

IMPACT

+

Just do It

There are 2 keys to ensuring CI improves Business Performance Identify key processes for improvement, provide colleagues with the necessary skills

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CI is a systematic approach for driving better performance

– Bring the customer voice inside the organization

– Get rid of errors – Eliminate waste – Speed things up – Simplify work – Free up colleague time – Move diverse groups more

quickly to cohesive action

Performance

Time

Step Change • Redesign • Reengineer • Break-Through

Innovation

Maintenance No

Improvement

Without CI, most processes actually degrade

Especially true in non-manufacturing environments • Processes less visible, more difficult to manage • Individuals introduce variability & change

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CI starts with the customer & treats the business as an integrated system

Customers Suppliers Inputs Processes Outputs

Start with Voice of the Customer. What does the customer consider important?

Take a Process Perspective • Reduce waste, errors, delays • Speed up process • Improve productivity

VA NVA

Engage everyone involved in producing the customer benefit. Work together to produce a “total” customer outcome, not just a department activity

Measure and Analyze • Input, output, process data • Process flow • Customer satisfaction

•Design Improvements • Pilot, Implement & Control

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CI links the strategic and the tactical

Ability to Share Talent, Knowledge Across Enterprise

Ability to Command a Price Premium

More Engaged, Productive Colleagues

More Satisfied, Loyal Customers

Ability to Divert Resources to Growth Opportunities

Long-Term, Sustainable Competitive Advantage

Start with your strategic business goals

… and develop tactical CI programs that enable you to reach them

Reduce errors, mistakes & rework

Reduce defects, unwanted variability

Speed up a process, improve flow

Eliminate delays, handoffs, unnecessary steps

Reduce costs, free up resources

Increase capacity / productivity of current resources

Reduce inventories

Reduce frustration

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CI Methodologies

TIME QUALITY

COST

Improved Process

Performance

Efficiency

Effectiveness

• Elimination of waste • Improvement of flow

LEAN

A set of principles and tools that help us to eliminate

process activities that don‘t add value, and to create

“flow“

• Reduction of variance • Improvement of yield

SIX SIGMA A collection of methods and

tools aimed at the significant reduction of unwanted

variation in products and processes

Lean Six Sigma

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3. Deploying CI in a SSC

SSCs and CI CI programs suit wonderfully SSC environments:

• SSCs are typically process and transactional driven centres. • Standardisation is key for repetitive tasks quality management. • Customer centred. • Performance metrics focused. • Workforce profile.

Most SSCs include a division exclusively focused in Business Process Management / Operational Excellence / CI

Customer Centred SSCs

• Customer SLA output definitions.

• Customer SLA KPI definitions.

• Critical To Quality (CTQ) metrics.

• Ongoing Voice Of the Customer (VOC) process: understanding your customer satisfaction drivers, “dissatisfiers” and “delighters”.

• VOC follow-ups, closing the gaps.

Performance Measurement

• Process KPIs.

• Metrics related to VOC: measuring quality in the eyes of the customer.

• Leading vs. Lagging Indicators: applying SIPOC.

• Traffic lights & remediation triggers: Process Control Maps.

“You cannot manage what you cannot measure”

Promoting a CI culture in your SSC

• Public visual displays of completed projects

• Public visual displays for ideas

• Public visual display for total $ achievements for the year

• Recognition at site meetings of CI achievements

• Recognition program, emails from top leadership

SSC staff and CI

• Promoting proactive behaviour when dealing with problems.

• Agreeing Strategic vs. Tactical focus for an individual.

• Sustain & Maintain vs. Improve & Change.

• Top and middle management - CI project sponsorship.

• Incentives for achievements.

• Specific initiatives individually driven / participated in the year.

Setting up appropriate individual objectives is a key driver for instilling a CI culture:

Similarly, CI focus should be part of recruitment & internal promotion process.

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4. CI Project identification, selecting the right approach for project execution

CI Project identification

• VOC process – feedback from customer, closing gaps

• Dashboard – performance issues in key metrics

• Individual employees – ideas for improvements

• Technology developments – new systems available

• Competitors & external parties – new market developments

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Difficulty of finding root causes

Qua

ntity

Lean & Six Sigma Projects

Too Hard Too Easy

“World Hunger” or

Boiling Ocean Problems

Logic & Intuition

Just Do It

CI projects typically include: • Fixing or improving current broken processes • Amending errors • Addressing efficiency issues • Shortening process cycle time • Identifying and fixing root causes for current problems • Etc.

CI Project execution

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Low Hanging Fruit: e.g. Reduce errors during monthly upload process from ERP to Consolidation e.g. Reduce the Sales Reporting Cycle Time

High Hanging Fruit: e.g. Reduce cycle time for financial month-end close

Graphical Analysis, Basic process data

analysis

Root cause validation & solution

identification

Ground Fruit: e.g. Develop an excel macro for automatic cost centre classification

Quick wins: Just Do It

Advanced process data analysis &

change management

$

$$

$$$

CI Project execution

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5. Benefits Realisation

CI projects benefits realisation Common savings categorization for CI projects: • Hard Savings:

Headcount reduction Direct cost reduction / reduced third party payments Working capital / cash flow Revenue generation

• Soft Savings: Released capacity Cost avoidance Revenue retention

• Control / Compliance

Other benefits arising from CI projects: • Customer satisfaction • Employee satisfaction • Staff retention • Reputational risks

Employee engagement • Empowering employees to drive changes within their areas of

responsibility. • Enriching their jobs – project work outside repetitive tasks • Self-fulfilment through accomplishment • Mobilising resources in same direction towards SSC goals • Excellent project results with often incremental savings to planned strategic

initiatives • Releasing capacity / scalability through individual tasks streamlining • Training & personal development plans

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6. Key Lessons Learned

Keys to success in your CI deployment

• Leadership passion for Continuous Improvement

• Selecting the right projects – strategy alignment, scope, impact / savings, suitable for each methodology

• Avoid using the methodology for the sake of certifications

• Select right people to drive these projects

• Creating capacity for colleagues to execute CI projects

• Proactive championing, removing barriers

• Customise the training program / right tools to your particular needs

• Internalize the training and coaching as soon as possible

• Empower your employees to continually drive change, do not turn your CI deployment into a mere PMO executing 2-3 large projects

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Thanks for your time, any questions?

Elías Miera Managed Services Operations Quality & Continuous Improvement Director Portfolio & Application Managed Services Finance & HR Business Technology The Watermarque, Ringsend Road, Ringsend, Dublin 4, Ireland

Direct Line: + 353 1 480 7692 Mobile: + 353 86 8205359 Fax: + 353 1 480 7322

Elias.miera@pfizer.com