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Project Report Presentation

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Presentation on theme: "Project Report Presentation"— Presentation transcript:

1 Project Report Presentation
Six Sigma Example Project Report Presentation Project Number: ABC-123 Project Name: Company New Business Improvement Project Team Leader: Tom Jones Project Sponsor: Sally Run

2 Six Sigma Roadmap Define Measure Analyze Improve Control
Company New Business Improvement 2 .PPT

3 Operational Definitions of Key Terms
Cat 5: Category 5 proposals COPQ: Cost of Poor Quality Delivery SLA: Deliver proposal within agreed time frame, default: 10 business days IS: Infrastructure support On Time delivery: Proposal delivery within agreed timeframes, either to agreed service level of 10 business days between requirement confirmation date and first delivery date or as otherwise agreed RFP: Requirements for Proposal Form, to communicate project PMO: Proposal Management Office Company New Business Improvement 3 .PPT

4 Project Goal & Scope Problem Statement:
The Company Bid & Proposal process requires improvements in the low proposal approval rate (67% overall proposal approval rate), slow delivery speed (only 64.6% of proposals are delivered in the agreed timeframe) and cost (overspend forecasted against FY08 B&P budget). Goals/Objective(s): Improve delivery speed to 95% of Cat 5 proposals delivered in agreed timeframe and approval rate to 94% of Cat 5 proposals approved by the end FY08 (Mar 2008). In Scope: Company account Proposal management process for Cat 5 proposals Items Out of Scope: Cat 1-4 proposals Database process Other accounts Company New Business Improvement 4 .PPT

5 Financial Impact: Business Case or COPQ Calculation
Calculation of potential Cost reduction and Revenue increase Assumptions: Reduction of wasted effort for declined proposals leads to cost savings Reduction of declined proposals leads to increased revenue Half the avoided declined proposals can be won Data: Cat 5 only, source: Database, P/L cost report Proposal data for Apr06 – Aug07 hourly cost only (no allocations, leave pay, …) Item Current Goal Delta Cost of declined, annual $79,654 $10,644 $69,000 Total Proposal Income Lost, annual $2,650,329 $1,325,164 Convert 50% to won 662,582 Potential Cost Reduction of $69,000 and Revenue Increase of $662,582 Company New Business Improvement 5 .PPT

6 High Level Process Map (SIPOC)
Complete Commercial Qualification Technical Confirm Customer Requirements Design Project/ Solution Conduct Internal Reviews The scope of this project covers the Company steps of the Bid and Proposal process Company New Business Improvement 6 .PPT

7 Voice of the Customer—CTQ
Company New Business Improvement 7 .PPT

8 Six Sigma Roadmap Define Measure Analyze Improve Control
Company New Business Improvement 8 .PPT

9 VOC quotes could be translated into 2 Ys
Translate Ys From CTQs VOC quotes could be translated into 2 Ys Company New Business Improvement 9 .PPT

10 Project Y (or Ys) in Y=f(x)
Y1: Proposal Acceptance Rate = accepted Cat 5 proposals / all Cat 5 proposals accepted and declined x 100; calculated monthly Y2: Delivery in SLA timeframe = Cat 5 proposals delivered in agreed timeframe / total Cat 5 proposals delivered x 100; calculated monthly, as calculated by Database system (see operational definition) Company New Business Improvement 10 .PPT

11 Detailed Process Map: Proposal Management Cat 5
Requirements often not well understood Commercial Qualification often rushed Handovers often via Database system, not via verbal comms Even small Cat5 proposals are reviewed Often Rework is not captured properly Work often delegated to inexperienced Solution Designers Final Reviews by PM and Architects are often missed Process workshop immediately identified key issues Company New Business Improvement 11 .PPT

12 Process Measures Defined
Data Collection Process Measures Defined Input Measures: Proposal Requests: Number of proposal requests per month Process Measures: Withdrawn Proposals: Number of proposal requests withdrawn per month Commercial Qualification: Number of proposal requests with completed Commercial Qualification documentation Customer Requirement Confirmation: Business Days between Proposal Request Date and Confirmation Date Proposal Reviews: Number of Proposal Reworks Delivery Time: Days between Customer Requirement Qualification and Proposal delivery Output Measures: Approvals: Number of proposals accepted Declines: Number of Proposals declined Proposal cost: Labor cost per Proposal Proposal Revenue: Expected Revenue per Proposal Company New Business Improvement 12 .PPT

13 Data Collection (continued)
CTQs and Specifications CTQ #1: Proposals delivered in individually agreed timeframe Specification: Proposals are delivered to the customer before or on the agreed delivery date (SLA or individually agreed delivery time) Defect: Proposal delivery date later than agreed delivery date Upper barrier: 100%, LSL: 85% CTQ #2: Customer Requirements confirmed Specification: Proposals are confirmed with the customer on the agreed Customer Requirements Confirmation date Defect: Proposals are not confirmed with the customer on the agreed Customer Requirements confirmation Date Upper barrier: 100%, LSL: 95% CTQ #3: Commercial Qualification Specification: Proposals are fully commercially qualified Defect: Proposals are not fully commercially qualified CTQ #4: Proposal Reviews Specification: Proposals are reviewed by the required people Defect: Proposals are reviewed too often or not by the right people Company New Business Improvement 13 .PPT

14 Plan for Data Collection
Questions to be answered: Y1: Withdrawn proposals How often is a proposal withdrawn before delivery to the customer? What are the reasons for the withdrawals? How much effort/cost is wasted on withdrawn proposals? Y1: Declined proposals How often are proposals declined? What are the reasons a customer declines a proposal? How much effort/cost is wasted on declined proposals? Y2: Delivery timeframe How long does the delivery of a proposal take? How long does it take to deliver a proposal after the requirements are confirmed with the customer? How often is a proposal late, eg delivered after the agreed delivery date? Y2: Proposal rework How often are proposals rejected by the customer and need to be reworked? Company New Business Improvement 14 .PPT

15 Plan for Data Collection (continued)
Company New Business Improvement 15 .PPT

16 Measure Process Capability
Y2 Proposal Delivery Time Proposal : confirmed outlier Proposal : confirmed outlier Proposal Delivery Time displays two outliers Company New Business Improvement 16 .PPT

17 Measure Process Capability (continued)
Note: The 2 confirmed outliers (refer previous slide) were removed for this analysis. Company New Business Improvement 17 .PPT

18 Measure Process Capability (continued)
Plots of Proposal Delivery Time (2 outliers removed) Company New Business Improvement 18 .PPT

19 Measure Process Capability (continued)
Process Capability (12 mth average) Total Proposals Delivered: 230 Delivery SLA met: 130 On Time Ratio: 57% DPMO: 435,000 Y2 Sigma: 1.66 Proposal Delivery Service Level: 10 days from Requirements confirmation or as agreed The Proposal Delivery to an Agreed Date is getting worse Company New Business Improvement 19 .PPT

20 Measure Process Capability (continued)
Process Cycle Time Analysis Analysis of a sample of 26 proposals: 13 accepted, 13 declined 3 key process steps: Request Qualification, Proposal Development, Reviews Rework analysis 46% (12 or 26 proposals) of the sampled proposals had at least 1 rework step (data not shown) Reviews Proposal Development Qualification Commercial Technical Customer Requirement Confirmation Project/ Solution Design Internal Delivery to Many handovers in the Request Qualification and the Review phases as well as the Rework amount appear to be a cause for delay Company New Business Improvement 20 .PPT

21 Measure Process Capability (continued)
Y1 Acceptance Rate Process Capability Proposal Acceptance Proposals Accepted 189 Proposals Declined: 33 Acceptance Ratio: 85% DPMO: 150,000 Y1 Sigma: 2.54 The high number of declined proposals over the last 12 months indicates lost efforts Company New Business Improvement 21 .PPT

22 Measurement System Analysis
Risk of poor Data Data Generation: Low risk: All data is entered into Database, workflow is automated and all Entries are time stamped. Data extraction: All data extracts are carried out via automated Database and SAP reports Data manipulation: All manipulation of data is carried out in EXCEL MSA Incorrect count of delivered Proposals (calculate business days, exclude ‘on hold’ days): based on Extract from Database (801 line items), remove Requests for Change, Budget advices, proposals delivered before Jan 07 or after Aug 07, Cat 1-4 proposals) Error in Database functionality: 2 proposals didn’t have a delivery date, even though they were delivered Measurement System Analysis 2 operators calculating the total category 5 proposals delivered during Jan-Aug 07 from Database Extracts Trial 1 results Operator 1: SE 165 173 Operator 2: SG 162 164 Exact value  164 MSA failed due to wide variance in the calculated number of proposals. Work instructions were created to remove variance. Calculations were not re-tested, due to a changed procedure and staff changes. Company New Business Improvement 22 .PPT

23 Y1 Acceptance Rate: Root Causes
Pareto Charts Y1 Acceptance Rate: Root Causes The circled items equate for approximately 80% of reasons for decline and can be impacted by commercial qualification. Company New Business Improvement 23 .PPT

24 Pareto Charts (continued)
Y1 Acceptance Rate: Root Causes Withdraw reasons don’t directly impact Acceptance Rate Early discovery of these reasons can reduce the wasted effort on these proposals (will not be pursued) Company New Business Improvement 24 .PPT

25 Cause-Effect Diagram(s)
X2 Root Causes After two workshops Company New Business Improvement 25 .PPT

26 Potential Xs: XY Prioritization Matrix
The team agreed on seven potential causes to be analyzed further Company New Business Improvement 26 .PPT

27 Potential Xs: Selection of Xs
Seven potential causes will be analyzed further Company New Business Improvement 27 .PPT

28 Potential Xs—Theories To Be Tested
Seven potential causes will be analyzed to identify the Root Causes (vital few Xs) Company New Business Improvement 28 .PPT

29 Six Sigma Roadmap Define Measure Analyze Improve Control
Company New Business Improvement 29 .PPT

30 Theories for Causal Relationships to be Analyzed
Theories To Be Tested Theories for Causal Relationships to be Analyzed X7 Financial & Comm. Reviews not needed Y1 Poor Proposal Acceptance Y2 Proposals are delivered late X4 Too much Rework X1 Poorly understood requirements X2 Poor Commercial Qualification X3 Missing Communication in Company X5 Not enough contact with the customer X6 Lack of Proposal Ownership A survey was considered but not used due to political and timing reasons Seven potential causes leading to nine theories to be tested. The team decided against using X6 for further analysis (covered in X1, X2, X3, x5). Company New Business Improvement 30 .PPT

31 Data Collection Plan for Analyze Phase
Company New Business Improvement 31 .PPT

32 Y1 Acceptance Rate=f(X1 Understanding of Customer Requirements)
Test of Theories Y1 Acceptance Rate=f(X1 Understanding of Customer Requirements) Theory: No difference in Proposal Acceptance Rate after introduction of customer requirement confirmation date Ho: No difference in Proposal Acceptance rate due to customer requirement date Ha: Significant difference in Proposal Acceptance Rate due to customer requirement date Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = -0.76 P-Value = 0.449 NOTE * The normal approximation may be Inaccurate for small samples. Fisher's exact test: P-Value = 0.683 Statistical Conclusion: alpha = P is greater than 0.05  fail to reject Ho Practical Conclusion: The Proposal Acceptance rate does not change due to customer requirement date. Sample X N Sample p Date OK 3 27 Date not OK 4 21 Company New Business Improvement 32 .PPT

33 Test of Theories (continued)
Y2 Delivery SLA=f(X1 Understanding of Customer Requirements) Theory: No difference in Proposal Delivery SLA performance due to customer requirement date Ho: No difference in Proposal Delivery SLA performance due to customer requirement date Ha: Significant difference in Proposal Delivery SLA performance due to customer requirement date Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = 1.49 P-Value = 0.136 Statistical Conclusion: alpha = P is greater than 0.05  fail to reject Ho Practical Conclusion: There is no difference in Proposal Delivery SLA performance due to customer requirement date. Sample X N Sample p Date OK 16 27 Date not OK 8 21 Company New Business Improvement 33 .PPT

34 Test of Theories (continued)
Y1 Acceptance Rate=f(X2 Commercial Qualification) Theory: No difference in the Proposal Acceptance Rate after introduction of Commercial Qualification meetings (Commercial Qualification meetings were introduced Sept 2007) Ho: No difference in Proposal Acceptance Rate after introduction of CQ meetings Ha: Significant difference in Proposal Acceptance Rate after introduction of CQ meetings Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = 1.08 P-Value = 0.281 Statistical Conclusion: alpha = P is greater than 0.05  fail to reject Ho Practical Conclusion: There is no difference in the Proposal Acceptance rate after the introduction of Commercial Qualification meetings. Sample X N Sample p CQ Meetings 11 56 No CQ Meetings 22 166 Company New Business Improvement 34 .PPT

35 Test of Theories (continued)
Y1 Acceptance Rate=f(X3 Missing Communication Within Company) Theory: No difference in the Proposal Acceptance Rate due to RFP document usage. Ho: No difference in Proposal Acceptance Rate due to RFP document usage Ha: Significant difference in Proposal Acceptance Rate due to RFP document usage Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = -2.18 P-Value = 0.029 Statistical Conclusion: alpha = P is smaller than 0.05  reject Ho Practical Conclusion: There is significant difference in the Proposal Acceptance rate after introduction of good documentation of requirements in RFP documents. Sample X N Sample p RFP OK 7 22 RFP not OK 27 46 Company New Business Improvement 35 .PPT

36 Test of Theories (continued)
Y2 Delivery SLA=f(X3 Missing Communication Within Company) Theory: No difference in Proposal Delivery SLA performance due to RFP document usage. Ho: No difference in Proposal Delivery SLA performance due to RFP document usage Ha: Significant difference in Proposal Delivery SLA performance due to RFP document usage Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = 0.10 P-Value = 0.922 Statistical Conclusion: P is greater than 0.05  fail to reject Ho Practical Conclusion: There is no difference in Proposal Delivery SLA performance due to the use of RFP document for requirement documentation. Sample X N Sample p RFP OK 10 20 RFP not OK 18 37 Company New Business Improvement 36 .PPT

37 Test of Theories (continued)
Y1 Acceptance Rate=f(X4 Rework) Theory: No difference in Proposal Acceptance Rate because of Proposal Rework Ho: No difference in Proposal Acceptance Rate due to the occurrence of rework Ha: Significant difference in Proposal Acceptance Rate due to the occurrence of rework Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = -0.55 P-Value = 0.581 Statistical Conclusion: P is greater than 0.05  fail to reject Ho Practical Conclusion: There is no difference in the Proposal Acceptance rate due to the occurrence of Proposal rework. Sample X N Sample p No Rework 24 50 Rework 10 18 Company New Business Improvement 37 .PPT

38 Test of Theories (continued)
Y2 Delivery SLA=f(X4 Rework) Theory: There is no difference in Proposal Delivery SLA performance because of Rework Ho: No difference in Proposal Delivery SLA performance due to Rework Ha: Significant difference in Proposal Delivery SLA performance due to Rework Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = -1.29 P-Value = 0.196 Statistical Conclusion: P is greater than 0.05  fail to reject Ho Practical Conclusion: There is no difference in the Proposal Delivery SLA performance because of the occurrence of Rework. Sample X N Sample p No Rework 19 50 Rework 10 18 Company New Business Improvement 38 .PPT

39 Test of Theories (continued)
Y1 Acceptance Rate=f(X5 Missing Customer Contact Before Proposal Delivery) Theory: No difference in Proposal Acceptance Rate due to customer contact before proposal delivery. Ho: No difference in Proposal Acceptance Rate due to customer contact before proposal delivery Ha: Significant difference in Proposal Acceptance Rate due to customer contact before proposal delivery Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = -0.17 P-Value = 0.862 Statistical Conclusion: P is greater than 0.05  fail to reject Ho Practical Conclusion: There is no difference in the Proposal Acceptance rate due to customer contact before the delivery of the proposal. Sample X N Sample p Effective contact 12 28 No effective contact 22 49 Company New Business Improvement 39 .PPT

40 Test of Theories (continued)
Y2 Delivery SLA=f(X5 Missing Customer Contact Before Proposal Delivery) Theory: No difference in Proposal Delivery SLA performance due to customer contact before proposal delivery. Ho: No difference in Delivery SLA performance due to customer contact before proposal delivery Ha: Significant difference in Delivery SLA performance due to customer contact before proposal delivery Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = -8.59 P-Value = 0.000 Statistical Conclusion: alpha = P is smaller than 0.05  reject Ho Practical Conclusion: Customer contact before the delivery of the proposal does significantly improve the Delivery SLA performance. Sample X N Sample p Effective contact 14 No effective contact 34 63 Company New Business Improvement 40 .PPT

41 Test of Theories (continued)
Y2 Delivery SLA=f(X7 Financial/Commercial Reviews) Theory: No difference in Proposal Delivery SLA performance due to Financial and Commercial review (F&C review) steps Ho: No difference in Delivery SLA performance due to F&C Review steps Ha: Significant difference in Delivery SLA performance due to F&C Review steps Analysis: Sampled proposals: 53 Average Duration of Financial and Commercial reviews: 0.98 business days Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = 1.42 P-Value = 0.155 Statistical Conclusion: alpha = P is greater than 0.05  fail to reject Ho Practical Conclusion: There is no difference in the SLA performance because of the Financial and Commercial Review steps. Sample X N Sample p No F&C Review 23 53 F&C Review 16 Company New Business Improvement 41 .PPT

42 Summary of Testing Results
Potential Cause X Theory Analyze Results Team Decisions X1 Understanding of Customer Requirements Requirement Confirmation meeting impacts Proposal Acceptance rate False No statistical evidence No relevance Requirement Confirmation meeting impacts Delivery SLA performance Understanding of requirements speeds up the process X2 Commercial Qualification Commercial Qualification meetings impact on Proposal Acceptance rate Commercial Qualification avoids wasted effort in withdrawn and declined proposals X3 Missing Communication within Company Good RFP documentation impacts on Proposal Acceptance rate True Statistical evidence Documented requirements confirm customer expectations Good PRFP documentation impacts on Delivery SLA performance Documented requirements improve internal communication X4 Rework Occurrence of Rework impacts on Proposal Acceptance rate Little relevance Occurrence of Rework impacts on Delivery SLA performance Rework is waste X5 Missing customer contact before delivery Customer contact impacts on Acceptance rate Customer contact impacts on Delivery SLA performance Customer contact is important for expectation management X7 Too many reviews Financial and Commercial reviews impact on Delivery SLA performance On average 1 business day is lost in F&C reviews The team decided to continue looking for solutions for the proven causes X3, X5, and also for causes X1, X2, X4, and X7. Company New Business Improvement 42 .PPT

43 Vital Few Xs Y=f(X1,……Xn) Vital Few Xs are:
X1: Confirmation of Customer Requirements X2: Commercial Qualification X3: Missing Communication Within Company (proven cause) X4: Rework X5: Missing customer contact before delivery (proven cause) X7: Too many reviews Company New Business Improvement 43 .PPT

44 Six Sigma Roadmap Define Measure Analyze Improve Control
Company New Business Improvement 44 .PPT

45 Improvement Strategies for Proven Xs
Proven Xs (Causes): Strategies: X1 Confirmation of Customer Requirements To improve Customer Requirement Confirmation, we need to involve Company staff in the planning discussions X2 Commercial Qualification To improve Commercial Qualification process, we need to install qualification metrics X3 Missing Communication within Company (proven cause) To improve Company-internal communication we need to ensure better documentation of confirmation of customer requirements and remove process handovers where possible. X4 Rework To avoid proposal rework we need to ensure confirmation of customer requirements and standardize the proposal process. X5 Missing customer contact before delivery (proven cause) To better manage Customer expectations, we need to ensure that Company staff informs BlueScope if the proposal is expected to be delivered late. X7 Too many reviews To reduce internal reviews, we need to remove those that don’t add value. The team decided to continue looking for solutions for the proven causes X3, X5, and also for causes X1, X2, and X7. Company New Business Improvement 45 .PPT

46 Solution Alternatives
Cause X Solutions from Workshops X1 Confirmation of Customer Requirements Involve Service Manager in bid process Rotate people on sites to sit in planning meeting Confirm each proposal within 48 hours (meeting or phone) X2 Commercial Qualification Create and implement qualification metrics to review the CQ performance (actual vs. planned: effort, confirmation date). X3 Missing Communication within Company Confirm customer requirements Request sufficient RFP documentation for each proposal Remove process handovers X4 Rework Confirm customer requirements, Create a pricing database. X5 Missing customer contact before delivery Proposal Owner/Solution Developer to contact the customer before the delivery of a proposal, especially if the proposal is expected to be delivered late X7 Too many reviews Remove the mandatory Financial and Commercial review steps for Cat 5 proposals The team workshopped alternative solutions for the various causes X Company New Business Improvement 46 .PPT

47 Possible Solutions Matrix (vs. Proven Xs)
Company New Business Improvement 47 .PPT

48 Selection Criteria The team felt that alternatives selected should fulfill the following criteria’s: A. Must Criteria (Weighting) Has an impact on Y1 or Y2 Y/N Accepted by relevant stakeholders (Account Management, Architects, New Business, Finance, Commercial and PMO) B. Want Criteria Improve delivery on time 10 Reduces Bid and Proposal cost Improve Commercial Qualification 8 Improve proposal review process 7 Increase proposal acceptance rate Improve Requirements Confirmation Company New Business Improvement 48 .PPT

49 Selected Solution and Selection Process
All solution alternatives proposed by the team have been accepted by the Champion. Selection Process Tools Considered: Pugh Concept Selection matrix (shown on next slide) Criteria Based Selection matrix Given that all “must” criteria were met, the Pugh matrix was the preferred tool. The team felt that all solution alternatives satisfy the Must criteria, and a Pugh matrix process was chosen to select the strongest solutions. Company New Business Improvement 49 .PPT

50 Evaluation Using Pugh Concept Selection Matrix
Quick Win Phase 2 Solution Phase 1 solutions The team selected five improvement alternatives based on the Pugh matrix process and one other improvement as a quick win. Five improvements will be implemented in the first project phase and one in a separate project. Company New Business Improvement 50 .PPT

51 Pay-off Matrix of Selected Solutions
Key: Brown Solutions are Phase II Confirm each request within 48 hours Contact customer if proposal is late Request sufficient RFP documentation Rotate Company staff on site New Commercial Qualification metrics Remove Financial and Commercial review steps for Cat 5 proposals High The high cost/ high effort solutions involve significant customer negotiations. One of them will be implemented in Phase 2. Benefit Low All low cost solutions were identified as suitable for quick implementation Low High Cost/Effort Company New Business Improvement 51 .PPT

52 Testing and Validation
Refine Solutions Testing and Validation X1 Confirmation of Customer requirements: It was agreed that multiple changes were required to ensure better understanding of the customer’s needs: Involve staff in planning processes, requesting better documentation, confirmation of requirements after Company started working on the proposals. These changes were validated with the PMO prior to implementation as valid to improve customer requirements understanding. X2 Commercial Qualification: PMO confirmed the need to have a strong qualification process in place. The new qualification process is closer to the model used on other accounts. X3 Missing communication within Company: Other accounts provided the model that was used for the new qualification review meeting on this account. Its validity is proven by the successes of other accounts. X4 Rework: A separate green belt project investigates the occurrence of proposal rework in the IS part of Company. It was assumed that this green belt project will drive further changes in the New Business area or proposal management.. X5 Missing customer contact before delivery: This cause was debated in length, as it was felt by some that customers don’t want to be ‘pestered’ with the vendor’s calls. A cultural and attitude change is required and the implementation of this change will require a longer time to complete. Its validity was confirmed by other Company accounts. X7 Too many reviews: Company’s E2E model doesn’t request financial and commercial reviews for Cat 5 proposals. These were implemented on request of Fin and Comm teams, who now agreed that the reviews can be removed. Company New Business Improvement 52 .PPT

53 Refine Solutions (continued)
Pilot Options A pilot was not required as a Risk assessment was carried out for each solution. Most of the solutions were piloted by other Company accounts in some way. The risk of damage because of failure was eliminated and hence “Piloting” was not required. Cost/Benefit Analysis Since the estimated cost of these solutions was not very significant, implementation proceeded without detailed cost/benefit analysis. The benefits were viewed as significant savings (based on COPQ analysis). All solution alternatives proposed by the team were accepted by the Champion Company New Business Improvement 53 .PPT

54 Solution Details Solution 1: Rotate staff on site at Company
A roster that allows 2 Company staff to be on site every day in the computer center will involve Company sufficiently in the planning processes and ensure more well documented proposal requests. Cost: Wireless network cards for all staff on the roster Risks: Small risk: If on site, Company staff might miss out on Company internal communication Solution 2: Confirm proposal requests within 48 hours As practiced on other Company accounts, for each proposal request, a Company person confirms the receipt, delivery and high level requirements with the customer Detailed requirements are confirmed later if required. Cost: none Risks: Small risk: Delay, if customer is not available for discussion Company New Business Improvement 54 .PPT

55 Solution Details (continued)
Solution 3: Commercial Qualification metrics Metrics that outline the quality of the qualification process: actual vs estimated spend, actual vs estimated requirement confirmation dates, likelihood of success. Cost: extra effort for PMO Risks: none Solution 4: Request sufficient RFP documentation RFP documentation was requested from Company for the last 6 months. Here an increased effort is required to get a better documentation of the proposal requirements. Cost: none Risks: Slow change, un-satisfied clients if not communicated well Company New Business Improvement 55 .PPT

56 Solution Details (continued)
Solution 5: Customer contact for late proposals For most proposals, especially those that might be delivered late, Bid owner or solution developer shall contact the customer and manage their expectations. Cost: none Risks: none Solution 6: Remove Financial and Commercial reviews For Cat 5 proposals, the Financial and Commercial Review steps can be removed Risks: incorrect financial details and commercial terms included in the proposals. None of the six solutions included a significant risk Company New Business Improvement 56 .PPT

57 Example: Selected Solutions Implementation
Company New Business Improvement 57 .PPT

58 Proposal Management Cat 5
Updated Process Map Proposal Management Cat 5 Company New Business Improvement 58 .PPT

59 Updated Process Map (continued)
Proposal Management Cat 5 New step: if requirement (RFP) document is not sufficient, return to customer for more details (Solution 4) New step: Commercial Qualification meeting for each proposal request. (part of Solution 3) New step: Confirm Proposal request within 48 hours (Solution 2) New step: Confirm Proposal Requirements within 5 days (part of Solution 2) Removed step: Financial and Commercial reviews for Cat 5 proposals removed (Solution 6) New step: Customer contact to manage expectation especially if the proposal is late (Solution 5) Five solutions include process changes Company New Business Improvement 59 .PPT

60 Evaluation of Financial Impact
Y1 Acceptance Rate Improved Commercial Qualification Increased income due to focus on ‘Deals we can win’ Y2 Improved Delivery time SLA Reduced waste, quicker proposal delivery, higher customer satisfaction Reduced proposal development cost Financial Impact 2007 Goal Phase 3 (Mar-Apr 2008) Difference Withdrawal Cost ratio 10% 7% 8.0% 2% Withdrawal Cost (annual) $47,277.59 $32,969.42 $ ,990.10 $11,287.49 Decline Cost ratio 18% 6% 5.9% 12% Decline Cost (annual) $83,933.17 $28,259.50 $ ,889.06 $58,044.11 $69,331.59 Declined Income ratio 14% 4.2% Declined Income, annual $2,870,279.81 $1,202,266.86 $ ,103.00 $1,882,176.81 50% convertible to income $941,088.40 Cost Saving The improvements seem to generate the expected financial impact Income increase Company New Business Improvement 60 .PPT

61 Statistical Proof of Improvement
Y1 Acceptance Rate: Three data points after implementation of changes Changes implemented The Acceptance Rate goal of 94% appears achievable based on the results after the first 3 months after the change was implemented Company New Business Improvement 61 .PPT

62 Statistical Proof of Improvement (continued)
Y1 Acceptance Rate Theory: No difference in Proposal Acceptance Rate due to project changes Ho: No difference in Proposal Acceptance Rate due to project changes Ha: Significant difference in Proposal Acceptance Rate due to project changes Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = 2.31 P-Value = 0.021 Statistical Conclusion: alpha = P is smaller than 0.05  reject Ho. Practical Conclusion: The Proposal Acceptance rate has significantly improved because of project changes. Sample X N Sample p Before 35 233 After 1 24 Company New Business Improvement 62 .PPT

63 Statistical Proof of Improvement (continued)
Y2 Delivery SLA: Three data points after implementation of changes : Changes implemented The Delivery SLA goal of 95% appears achievable based on the first three months after the change was implemented Company New Business Improvement 63 .PPT

64 Test of Theories (continued)
Y2 Delivery SLA Theory: No difference in Delivery SLA Performance due to project changes Ho: No difference in Delivery SLA Performance due to project changes Ha: Significant difference in Delivery SLA Performance due to project changes Analysis: Test and CI for Two Proportions Difference = p (1) - p (2) Estimate for difference: 95% CI for difference: ( , ) Test for difference = 0 (vs not = 0): Z = 6.62 P-Value = 0.000 Statistical Conclusion: alpha = P is smaller than 0.05  reject Ho. Practical Conclusion: The Delivery SLA Performance has significantly improved because of project changes. Sample X N Sample p Before 81 241 After 1 29 Company New Business Improvement 64 .PPT

65 Six Sigma Roadmap Define Measure Analyze Improve Control
Company New Business Improvement 65 .PPT

66 Control Plan Company New Business Improvement 66 .PPT

67 Y1 Proposal Acceptance Rated
Control Charts Y1 Proposal Acceptance Rated Changes implemented Company New Business Improvement 67 .PPT

68 Control Charts (continued)
Y1 Proposal Acceptance Rated Changes implemented Company New Business Improvement 68 .PPT

69 Financial (Hard) Benefits
Project Benefits Financial (Hard) Benefits Increased Acceptance Rate: 96% Extra annual revenue: $941,088/a Reduced Decline cost rate: 6% Proposal cost savings: $69,331/a Total financial impact: $1,010, 420/a Soft Benefits Accepted proposal ownership Improved SLA performance leading to improved customer satisfaction with Company’s proposal generation Improved communication within Company Less waste Company New Business Improvement 69 .PPT

70 Project Results Project Baseline: Project Target: Project Actual:
COPQ= $131,210/a $61,229/a $61,879/a Metric= Acceptance Rate DPMO= 150,000 60,000 42,000 Sigma Level= 2.54 3.05 3.25 Delivery SLA 435,000 50,000 34,483 1.66 3.14 3.32 Company New Business Improvement 70 .PPT


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