Dell BPI Overview

for
UT Performance Excellence
McCombs MBA Master Class

Felix Chou
Director, Global BPI
October 13, 2003

Copyright © 2002 Dell Computer Corporation

Dell FYI’s – Fiscal Year Initiatives

Customer
Experience
Product
Globalization
Leadership

Winning Culture

BPI is an integral part of

the Winning Culture

Copyright © 2002 Dell Computer Corporation

 BPI Builds The Winning Culture
Business Results
Making BPI the Way We Work!

•Key initiatives are done through BPI project teams

•Abundant BPI projects impacted bottom line company wide
•Increased financial savings

Culture Change
Leadership
Every Employee Using BPI!
Every Leader Living BPI!
•Employees use BPI tools in daily decision making
•Leaders sponsor projects & award BPI successes
•Key metrics focus on VOC & critical processes
•Utilize BPI in strategic planning
•Statistical methods are being used in monitor
•FT BPI resources deployed in solving critical
operations performance
business issues

Copyright © 2002 Dell Computer Corporation

 BPI Modeled BIC and Adapted Dell’s Culture

Motorola
Wins
Deming Chain Baldridge
Reaction 1988 6σ ResearchMikel Harry
Bill Smith Institute Co founds
If Japan … coins Six Sigma
Dell BPI
Six Sigma Black Academy
1986 Belt 1994 1999

1980 1985 1990 1995 2000

Motorola, 1986

IBM (1990-92), TI (1990-1994)

Kodak, 1992-
Bob GalvinGeorge Fisher
Allied Signal, 1992

General Electric, 1995

Larry Bossidy
Jack Welch Supplier Base

Copyright © 2002 Dell Computer Corporation

 Dell’s BPI Evolution

BPI in Dell: Focus: Objective:

’98:Revitalize QMS Mfg Ops Missing Wrong
with BPI growth & & Damage
quality Reduction
’99:Expand BPI to OEM Products Incoming Parts
the Suppliers Quality

’00:BPI move into the New Product Product Design

Product Group Introduction for
Ops Manufacturing
’01:Fulfillment Customer e-Enabling
Processes end- Demand / Business
to-end BPI Customer Transaction
BPI Initiative
’02:Focus Business People
Experience Processes
Becomes Key Process Focus Engagement
Component of & Improve & Winning Culture
Winning Culture Human
capacity

Copyright © 2002 Dell Computer Corporation

Why BPI?

 Best Customer Experience

 Quicker Cycle Time
 Better Quality
Customers  Lower TCO

 BPI = Significant Savings To Bottom Line

Stockholders  Higher Valuation of Dell Stock

 Added Skills, Career Enhancing

Employees  Better Decisions, Team Building
 More Efficient Work Environment

Copyright © 2002 Dell Computer Corporation

 Why BPI Now?

Dell share drive during soft market via aggressive pricing enabled
by:

 Commoditization / industry standard push

 COGS reduction via procurement /transformation/ warranty
 OPEX scaling

Competition responding with equally aggressive pricing enabled by:

 Services or imaging margin subsidization of negative margin pricing

 Scale consolidation

Winner will be the one who can sustain aggressive pricing longer

Dell believes that cost reduction driven by process improvement is

superior strategy to subsidization or scale consolidation of
sub-optimal model

Copyright © 2002 Dell Computer Corporation

 BPI at Dell

BPI is a Process Management System that:

 Drives the customer experience
 Is used to understand, interrogate, and improve
business processes
 Improve all business processes
 Deliver financial validated savings

Copyright © 2002 Dell Computer Corporation

 Dell BPI Principles

 Process: understand inputs & outputs in the

process to address customer’s pain points

 Y = f (x): identify root causes and cause/effect

correlations

 Data: use data to remove emotions in decision

making and focus on vital few causes

 Discipline: follow DMAICR rigor

Copyright © 2002 Dell Computer Corporation
BPI Model at Dell

1.
1.Define
Define
What’s
What’sthe
theproblem?
problem?
Who
Who canfix
can fixit?
it?
What’s the process?
What’s the process?

6.
6.Report
Report 2.
2.Measure
Measure
BPI
Tell
Tellothers.
others. Can
CanI Iexplain
explainaaproblem
problem
Implement
Implementbest
bestpractice.
practice. with data?
with data?

5.
5.Control
Did
Control Model 3.
3.Analyze
Analyze
Didwe
weimprove?
improve? What’s
Did What’sthe
thereal
realproblem?
problem?
Did we savemoney?
we save money?

4.
4.Improve
Improve
Let’s
Let’simprove
improvethe
theprocess!
process!

Copyright © 2002 Dell Computer Corporation

 Dell BPI Approach

 Know what’s important to the customer (CTQ)

 Reduce defect levels & eliminate wastes

 Reduce the variations

 Improve process to center around the target or shift the

mean

Copyright © 2002 Dell Computer Corporation

 Dell BPI – A Practical Solutions
Define

What’s the Voice of Customer

(CTQ) Measure

Analyze Redesign
Reduce Defects/Variability

Modify Yes
Yield Improvement Design
?

No

Improved Consumer Experience Improve

Control
Higher Net Income
Report
Copyright © 2002 Dell Computer Corporation
 How We Drive BPI at Dell

Critical Success Factors

 Sr. Leadership ‘walks the talk’

 Work on projects focused on the business
imperatives (NEED to do, not NICE to do)
 Select the right resources/structure to
execute the initiative
 Focus on the Process AND Results

Copyright © 2002 Dell Computer Corporation

 Driving BPI: Critical Success Factors

Sr. Leadership ‘walks the talk’

“If you are not currently involved in a
BPI project, I would encourage you to
learn more and participate in this
important process.”
Michael Dell 7/13/2001 Webcast

World Wide Quality Day

On BPI… “Pervasive, Simple, Direct, Proactive,

Systemic, Rewarding Experience for Employees,
Foundation for All Business Improvement,
Embraced by All Levels and Functions.”
Kevin Rollins 11/26/2001 DAO BPI 2nd Annual Banquet

Copyright © 2002 Dell Computer Corporation

 Driving BPI: Critical Success Factors

Work on projects focused on the

business imperatives

Customer
Experience

• Voice of Customer
• Customer Loyalty
Quality
Cost

• Product design
• Warranty
• Supplier quality
• Total Cost Ownership

Cycle Time

• Order Processing/Velocity
• Manufacture/Delivery

Copyright © 2002 Dell Computer Corporation

 Driving BPI: Critical Success Factors

Select the right resources / structure to

execute the initiative

BPI Program Level Structure BPI Project Level Structure

GEMC Executive
Sponsor

Executive Chartering
Champions Manager

Project Lead &

BPI Champions Team Members

Area
Champions Project Financial
Mentor Analyst

Master Black
Area BPI
Belts
Champion Facilitator
Copyright © 2002 Dell Computer Corporation
 Driving BPI: Critical Success Factors

Focus on the Process AND Results

1. Define
D
D
What’s the problem?
Who can fix it?
4. Improve D Let’s improve the process!

R
R M
M What’s the process? R M

C
C A
A C A

II I

Potential Potential S Potential O S D R Actions O D R

Process Current Recommended
Failure Effects of E Causes of C * E P Taken C E P
Function Controls Actions
Mode Failure V Failure C O T N Y/N C T N

As-is Should-be Childrides

bike
Bike breaks
down
Softinjury 5
Brokenseat
post
2 10 None 10 100 None No 2 10 100

Process Map Pull Process Map Chainderail 5 25 None 10 250

Dad monthly
preventative
Yes 3 10 150
Tricks and Remove dirtpile
7 35 None 10 350 Yes 5 10 250
jumps and boards
Bike Ride
2 Blowntire 4 8 4 32 None No 4 4 32

Customers Output Input Suppliers damage

Road
8 16
check
None 10 160 None No 8 10 160
Process conditions
Tricks and
7 14 None 10 140
Remove dirtpile
Yes 5 10 100
jumps and boards

Push FMEA
COPIS
ct
le
Pl
ol
an
C

A
na Force Field
ly
pt

ze Analysis
da
A

BPI Contract Project Tracking Tool

2. Measure D
Can I explain a 5. Control D Did we improve?
Did we save money?
R M problem with data? R M

C A C A

I I
Characterization

Show BPI Scorecard

Who What Where When Closure Containment

xxxxx xxxxx xxxxx xxxxx

Corrective
xxxxx xxxxx xxxxx xxxxx Action
Causal
Analysis

xxxxx xxxxx xxxxx xxxxx

Pareto
Closed Loop
Data Collection
Corrective Action

Here
Realized
Cost-Benefit Analysis
X X

LSL USL

Process Capability
Graphical Display
Cost-Benefit Analysis

3. Analyze DD What’s the real problem?

6. Report DD
Tell Others.
RR M
M RR M
M Transfer Knowledge.

CC AA CC AA

II II

Cause Cause Cause

Best Practices
Histogram Standard Operating Procedure
Effect
Training

Cause Cause Cause

Cause and Effect Diagram

Project
Run Chart Final Report

Scatter Diagram Team Presentation

Copyright © 2002 Dell Computer Corporation

The Winning Formula

Dell
Dell Direct
Direct Model
Model
++
BPI
BPI Empowered
Empowered Employees
Employees

Sustained
Sustained Competitive
Competitive Advantage
Advantage
++ Enhanced
Enhanced Customer
Customer Experience
Experience

Copyright © 2002 Dell Computer Corporation