MEASURE PHASE

2Something to think about . . .

3Content

To be covered in Measure phase

• Introduction 5

• Overview 6

• Core Tools 7

• Key Activities with tools illustrations 8Functional Process Flowchart 10Quick Win 11Histogram 12Run Chart 13

• Exercise Time 18

• Measure Phase Recap 19

• Measure Checklist 23

4MEASURE

Define the customer opportunity

Measure thecurrent performance

Improve processdelivery to the customer

Analyze thecurrent processes

Control and maintain the gains

Client-driven, consistent,

metrics focused, results oriented

5What have we learnt from previous phase

We have defined our problemWe have created our Project CharterWe have listen to our customer, obtain VOC and translating that to measurable CTQs

Now we’re ready to move the project forward by investigating further into our processes and gathering

data / facts to validate our understanding of the problem

6Introduction

The purpose of the The purpose of the MeasureMeasure phase is to study the magnitude of the problem defined earlier phase is to study the magnitude of the problem defined earlier by by understanding the current performance of the existing process, iunderstanding the current performance of the existing process, identifying how to best measure dentifying how to best measure current performance and to start measuring it. The measurements current performance and to start measuring it. The measurements used should be useful and used should be useful and relevant to identifying and measuring the source of variation inrelevant to identifying and measuring the source of variation in the process. the process.

First identify what to measure, collect the data for the identifFirst identify what to measure, collect the data for the identified items and output of the process. ied items and output of the process. This data helps you to determine how well the customer requiremeThis data helps you to determine how well the customer requirements are being met by the current nts are being met by the current process. This is also known as establishing baseline capability.process. This is also known as establishing baseline capability.

Key Steps1.1. Select Key Measures (based on CTQ)Select Key Measures (based on CTQ)2.2. Collect Data Collect Data 3.3. Develop Detailed Process MapDevelop Detailed Process Map4.4. Validate that problem exists based on the measurementsValidate that problem exists based on the measurements5.5. Determine Performance Standards/ Process CapabilityDetermine Performance Standards/ Process Capability

C I A M D

Questions to be answered in MeasureWhat is the Process? How does it function? Which Outputs/Inputs affect CTQ’s most? Is our ability to measure/detect sufficient? How is our current process performing? What is the best that the process was designed to do?

Gather the numbers Measure the Current Performance

8Core ToolsCORE ToolsCORE Tools::

Process Maps Process Maps ““AsAs--IsIs”” AnalysisAnalysisFunctional Flow Chart / Deployment Flow ChartFunctional Flow Chart / Deployment Flow ChartQuick Wins AnalysisQuick Wins AnalysisData Collection PlanData Collection PlanHistogram ChartHistogram ChartRun ChartRun Chart

C I A M D

9Measure – Step 1 : Select Key Measures

Select Key Measures Based On CTQ CharacteristicsBased on the CTQs identified in the Define phase, you identify the key items to be measured in the process. This applies to the input, the process, and the output.

Input measures are important and help you identify if the inputs to the process are adequate.

Process measures are collected at critical points in the process to let you know how the process is operating.

Output measures are the most important measures that tell you how well the process meets customer needs i.e how good are we in delivering what we promise

C I A M D

10Measure – Step 2 : Collect DataAfter identifying the key measures, you collect data in two steps:

1. Develop a Data Collection Plan2. Collect Data Consistently and Accurately

Develop a Data Collection PlanBefore beginning to collect data, determine the parameters to evaluate and develop a useful data collection plan. Ensure that the data collection plan does not change during the process of data collection. Key areas to take note in developing a data collection plan include:

Determine the different performance measures that need to be investigated - eg cycle time, transaction volume, no of errorIdentify the source of data to be collected – counter application form, complaint log, surveyDetermining the sample size, sampling method and time frame – eg daily volume over 3 mthsDefine an operational definition*

Collect Data Consistently and AccuratelyCollecting data for a process can help you identify redundant activities in the process. Eliminating such activities can help increase the effectiveness of the process. Note the following:

– Follow the data collection plan diligently– Ensure that the people who are collecting data are trained and

the data collection procedures are error-proof– Decide how you will display the data

C I A M D

11Data Collection PlanAn operational definition is a concise description of what is to be measured or observed, so that everyone in the team can measure in a consistent manner. is a key element of a data collection plan. It provides guidance on whatparameters to measure and how to measure them.

The purpose of the operational definition is to:– Remove ambiguity:– Everyone has a common understanding.– Provide a clear way to measure the characteristic:– Identifies what to measure – Identifies how to measure it– Ensures that no matter who measures, the rules are the same

C I A M D

Elements for a data collection plan

12Data collection plan (sample)

Data means nothing… without an understanding of what the data is, how it was collected, and the conditions under which itwas measured

Data properly collected and analyzed will help us to understand the root cause(s) of the problem

Performance Measure Operational Definition Data Source and Location Sample SizeAccount Opening Cycle Time

Time from form receipt by RM/Branch Staff to RM informing client of account open

1. Account Opening form : Time Stamp and Date2. Account creation time in SCORE3. 3. RM informing customer of account open

Last 2 months

Who will collect the data When will data be collected How will data be collected

Other Data that should be collected at the same time

RM, Operation Daily when account is open Manual tracking in a datasheet of application receipt time, system input time and RM notification to customer

No of Account OpenedRM nameBranchType of Customer

13Measure – Step 3 : Develop Detailed Process MapA detailed process map illustrates the flow of activity and data as well as hand-off points within the process. Also, it provides an awareness of all the detailed tasks of the process and an opportunity to examine where rework or breakdowns might occur.

Tip: The “As Is” process map should document the process as it currently exists—include in the process map all the alleged Non-Value-Added steps.

Resist the urge to improve at this time! If we don’t take the time to understand the past, then we may repeat it!

Sales & Ordering Process Manual System

Mutual Funds Process FlowControl

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Fill order form

Checkcompleteness oforder form and

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Verify Excel fileagainst order form

Book transactionin Finacle

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File order formandrelated document

accordingly

Send order toFund House

Perform allotmentbased on

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Generate contractnote for customer

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Generate order forFund House in

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Upload NAV fromLipper on daily

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Cut Off Time 2:30 & 3:30

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Checkcompleteness of

order form & Inputtxn in Excel file

Authorize txn inMFS (Officer 2)

Input txn in MFSbased on Excel file

(Officer 1)

Prepare ticket forbooking

14Quick Wins – low hanging fruits

Conducting a common sense assessment of the value of each process step may help to identify improvement opportunities, referred to as “quick wins”, “quick hits” or “low hanging fruits”.

Easy to implement

Fast to implement

Cheap to implement

Any change must be reversible

C I A M D

15Measure – Step 4 : Determine Performance StandardsAfter collecting data according to the data collection plan and identifying the existing process, you evaluate the performance of the process. This step consists of two tasks.

1. Display the Collected Data Graphically2. Determine process stability and capability

Display the Collected Data GraphicallyDisplaying the data in a graphical format gives a better idea of how the process is performing and where to focus your analysis. Possible tools that are useful would be

A. HistogramYou use a histogram to present a summary of a large amount of data collected over a period of time. Ahistogram displays the frequency distribution of data in a bar chart form. Using histograms, you can:

Identify trends in data, such as, centering and variation

Determine whether the process meets customer requirements

16Run Chart

A Run Chart, also known as a trend chart, is a line graph that can visually represent the performance of a process over a period of time. It can be created by plotting events or data points on a graph in the order in which they occurred.

For example, observing the problem resolution cycle times as they occurred over a specific time frame or sequence.

Any data points that are significantly above or below the trend or average performance levels indicate variation in the performance.

Investigate such data points to determine the cause of the variation and the solution to correct the variation.

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30Variation exists in all processes.

Measuring and understanding variation in our business processes help identify specifically what the current level of performance is and what needs to change in order to reduce the variability and thereby reduce the defects delivered to customers.

C I A M D

17Run Chart – example call center dataThe HK call center Incoming Call data :

2 colored bars show the no of call received within 20 seconds and no of abandoned calls (not picked up after 5s)The red line shows the daily average waiting time (in seconds) for those calls that are abandoned and by showing the data in a run chart, it seems to illustrate a certain patterns of “up and downs”. The dotted blue line is the monthly average of the daily abandoned call waiting time (in secs)= 33sUpon further review of the data, Fri and Sun calls seems to have more abandoned calls with average daily waiting time of greater than 33s i.e 3 Sundays out of 4 for the month of September.

Call Center Incoming Calls

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PCA 20 (Ans + Aban w/i 20s)Incoming CallsAbandoned Calls (%)

Abandoned Calls Daily Avg Waiting time ( sec )

Monthly avg of the daily average waiting time = 33

secs (blue dotted line)

C I A M D

18

Exercise Time : 3. Create As-Is Process Map

19Process Map - Common Symbols

20

MEASURE Phase

RECAP

21Measure: Recap

Process Maps

Tools that can be applied

Documentation of Level 1, 2 and 3 “As-Is” process, including process boundaries and key inputs/outputs

Team consensus on the “As-Is”process flow

To identify where the project fits within the overall end-to-end Customer driven process as a means to ensure that all potential upstream and downstream project impacts on the end Customer are understood

To provide the participants with an understanding of how their respective activities relate to the operation of the process as a whole

3. Define the project within an end-to-end framework

Measure

Expected Output /Deliverables

Minimum Requirements for project team

Six Sigma Management Disciplines

Phase

Define Measure Analyze Improve Control

22Measure: Recap

Histograms

Run Chart

Data Collection Plan

Tools that can be applied

Thorough understanding of current performance

Finance validated Cost of Poor Quality (COPQ)

To establish an understanding of the current performance, in relation to Customer requirements, as a baseline from which project generated improvements can be subsequently measured and tracked

4. Determine today’s process performance & the associated Cost of Poor Quality (COPQ)

Measure

Expected Output /Deliverables

PurposeSix Sigma Management Disciplines

Phase

Define Measure Analyze Improve Control

23Where are we at the Project PlanSample project plan shows possible activities for “Measure Phase”

24Questions to be answered for the review of this phase:

At the end of the Measure tollgate, the project team should be able to answer these questions:

What input, process, and output measures are critical to understand the performance of this process? Have you prioritize them ?

What is your data collection plan? How much data will you collect? How will you sample?

How was the detailed “as-is” process map created? What level of detail did you include?

Has the process map been validated with key stakeholders/ other internal departments?

Were you able to generate any “Quick Wins”?

What does the variation of the process look like? What patterns are exhibited in the data ?

What is the baseline process sigma level/target metrics and goal for this project?

Did you refine the project objective?

What is the status of your stakeholders’ action plan?