Cost Reduction using

Six-Sigma tools

September 10 2009
 D M A I C C S C

Action Description Project Schedule

Problem Definition: Reduction in R&M Cost of South Division Street Light . Milestone Sch. Date Acual Date
Project Start 31/07/2009 31/07/2009
Business Case: Define 31/08/2009 31/08/2009
Goal Statement: Reduction in South Division Street Light R&M cost by 25% by Measure 30/09/2009 30/09/2009
Analyse 10/11/2009
31/04/2011 Improve
Check
Control
Standardize
Close

Close Define

Standardise Measure
Resource
A P
Sponsor : Mr. C.S.SALI
C D
Control Analyse
Steering Committee : Mr. M.M.RAMCHANDANI

Check Improve
Team : Mr. D.D.SAMANT
: Mr. K.K.SHINDE
: Mr.D.P.Nehate

3
 Expense head wise cost

Inferences
Pareto Chart of Total R&M Cost
60000000 1.Material Cost Contribute
100 56% of total R&M cost for
50000000
40000000 80 2008-09.

Percent
Cost

30000000 60
40
2. Contribution of Manpower &
20000000
contracting is 53.9%
10000000 20
0 0 3.For Further Analysis we will
Cost Head
concentrate of Material cost

Count 29729934 16676318 6641644

Percent 56.0 31.4 12.5
Cum % 56.0 87.5 100.0
 Pareto Chart of Division Wise Material and labour cost
50000000 Inferences
100
40000000
80 1. Contribution of East Division

Percent
30000000 60 for total cost is 34.3%
cost

20000000 40
2. Contribution of North & South
10000000 20
Central Division is for total cost
0 0 is 35.6%
Division n
io on on on on
is isi isi i si isi
iv iv iv iv iv
D D lD D lD 3.Futher Analysis Required
st rt
h a
ut
h a
Ea tr tr
No n So n
Ce Ce
h
out
S
Count 15914153 8913185 7603269 7144429 6831216
Percent 34.3 19.2 16.4 15.4 14.7
Cum % 34.3 53.5 69.9 85.3 100.0

5 D M A I C C S C
 TOTAL MATERIAL COST-DIVISION WISE

Pareto Chart of Division Wise Material cost Inferences

30000000 100
25000000 1. Contribution of East Division for
80
total Material cost is 34.1%
20000000

Percent
60
Cost

15000000 2. Contribution of North & South

40
10000000 Central Division is for total cost is
5000000 20 38.4%
0 0
Division 3.Futher Analysis Required on
Number of lamp Basis

Count 10131071 5863800 5551546 4791415 3392102

Percent 34.1 19.7 18.7 16.1 11.4
Cum % 34.1 53.8 72.5 88.6 100.0
 Pareto Chart of Division Wise Material cost /1000 lamps
1800000 Inferences
100
1600000
1400000 80
1200000 1. Contribution of East & South

Percent
COST

1000000 60
800000 Central Division for total Material
40
600000 cost / 1000 Lamps is 54.0%
400000 20
200000
0 0 2. Contribution of North & South
Division
Central Division is for total cost is
38.4%

3.Futher Analysis of Material

Consumption of East & South
Count 475100 449930 288105 287911 212484
Percent 27.7 26.3 16.8 16.8 12.4 Central Division may done
Cum % 27.7 54.0 70.8 87.6 100.0

Total Total Cost/1000

DIVISION Material Lamps Lamps
Central Division 3,392,101.52 15964 212484.43
10,131,071.3
East Division 7 22517 449929.89
North Division 5,863,800.09 20353 288104.95
South Central Division 5,551,546.35 11685 475100.24
South Division 4,791,414.91 16642 287911.00
 East Division –Individual Material Cost

Pareto Chart Of Material Cost Material Description Cost % Cost

100 100 LUMIN STLT LANTERN HPSV 150W
15.73 15.00
240V IP65
80 80
LUMIN STLT LANTERN HPSV 250W

Percent
60 15.04 15.00
COST

60 240V IP65

40 40 LIGHT ACC POLE LOOP IN-OUT BOX

11.09 11.00
FRP
20 20
LAMP HPSV SCREW CAP 250V 250W 9.05 9.00
0 0
Material Description
SWGR POWER CONTACTOR 415V
7.30 7.00
70A 3POLE

LIGHT ACC BRACKET HDG TUB 7FT

5.17 5.00
SINGLE ARM

TERM GLAND PVC/XLPE 25MM2 CA 4.63 5.00

LAMP ACC BALLAST HPSV 250W 4.59 5.00

Count 15.73
15.04
11.09
9.057.305.174.634.594.244.143.663.433.012.892.612.141.681.23 CABLE N-ARM PVC 1.1KV 1C 10MM2
Percent 15 15 11 9 7 5 5 5 4 4 4 3 3 3 3 2 2 1 4.24 4.00
AL
Cum % 15 30 41 50 57 62 67 71 76 80 83 87 90 92 95 97 99100
LAMP HPSV SCREW CAP 240V 150W 4.14 4.00
 South Central Division –Individual Material Cost

Material Description Cost % cost

Pareto Chart of Material Cost -SCD
50 LIGHT ACC POLE LOOP IN-
100 15.64 34.00
OUT BOX FRP
40
80 TERM GLAND PVC/XLPE
4.29 9.00
25MM2 CA

Percent
30
COST

60
LAMP HPSV SCREW CAP 250V
3.51 8.00
20 40
250W

LUMIN STLT LANTERN HPSV

10 20 250W 240V IP66
2.61 6.00

0 0
Material Description SWGR POWER CONTACTOR
2.50 5.00
415V 70A 3POLE

LAMP ACC BALLAST HPSV

2.47 5.00
250W

JNT KIT N-HS STRT 1.1KV

2.45 5.00
25MM2 S3
Count 15.64
4.293.512.612.502.472.452.332.102.08
1.741.571.130.980.410.310.26
Percent 34 9 8 6 5 5 5 5 5 4 4 3 2 2 1 1 1 LAMP ACC BALLAST HPSV
2.33 5.00
Cum % 3443 51 56 62 67 72 77 82 86 90 93 96 98 99 99100 150W
 Lamps up to Poles up to
31/03/2009 31/03/2009
SOUTH CENTRAL DIVISION    

11685 10551
     
Total Cost/1000 Cost/1000
Material Descriptions Issue Qty
Sr.No Cost(Lacs) Lamps Poles
LIGHT ACC POLE LOOP IN-OUT
2736 15.64 1.34 1.48
1 BOX FRP

2 TERM GLAND PVC/XLPE 25MM2 CA 4087 4.29 0.37 0.41

LAMP HPSV SCREW CAP 250V
772 3.51 0.30 0.33
3 250W
LUMIN STLT LANTERN HPSV 250W
58 2.61 0.22 0.25
4 240V IP66
SWGR POWER CONTACTOR 415V
140 2.50 0.21 0.24
5 70A 3POLE

6 LAMP ACC BALLAST HPSV 250W 410 2.47 0.21 0.23

JNT KIT N-HS STRT 1.1KV 25MM2

947 2.45 0.21 0.23
7 S3

8 LAMP ACC BALLAST HPSV 150W 578 2.33 0.20 0.22

 Poles up to
Lamps up to
  East DIVISION     31/03/200
31/03/2009
9
        22517 20547
Cost/1000
Cost/1000 Poles
Sr.No Material Description Issue Qty Cost Lamps
LUMIN STLT LANTERN HPSV 150W
887.00 15.73 0.70 0.77
1 240V IP65
LUMIN STLT LANTERN HPSV 250W
730.00 15.04 0.67 0.73
2 240V IP65
LIGHT ACC POLE LOOP IN-OUT BOX
2111.00 11.09 0.49 0.54
3 FRP
4 LAMP HPSV SCREW CAP 250V 250W 2155.00 9.05 0.40 0.44
SWGR POWER CONTACTOR 415V
409.00 7.30 0.32 0.36
5 70A 3POLE
LIGHT ACC BRACKET HDG TUB 7FT
677.00 5.17 0.23 0.25
6 SINGLE ARM
7 TERM GLAND PVC/XLPE 25MM2 CA 4409.00 4.63 0.21 0.23
8 LAMP ACC BALLAST HPSV 250W 778.00 4.59 0.20 0.22
CABLE N-ARM PVC 1.1KV 1C 10MM2
50084.00 4.24 0.19 0.21
9 AL
10 LAMP HPSV SCREW CAP 240V 150W 1494.00 4.14 0.18 0.20
 SC Division Material Cost /1000 Lamps
Inferences
3.0 100
2.5 80 1. Contribution of Loop in
2.0 out box for Material cost /

Percent
60
COST

1.5 1000 Lamps is 43.8%

40
1.0
0.5 20 2. Contribution of Gland(G2)
0.0 0 & 250W HPSV LAMP is for
Material Discription P 2
FR M 0W 66 LE 0W S3 0W total cost /1000 lamp cost is
M 25 IP O
25 M2 15
X 25 3P 21.9%
BO 0 V 50W 0A SV
M V
T N D 5 7 P 25 PS
U A 2 2 V H T H
-O GL P V
15 ST KI T
IN A M PS 4 A T AS 3.1st five item contribute
L H L N L
OP RN OR BA L
J L
L O E T BA 80% of cost .Hence further
T C
N TA analysis may done for
LA O N
C
That item .
Count 1.34 0.37 0.30 0.22 0.21 0.21 0.21 0.20
Percent 43.8 12.1 9.8 7.2 6.9 6.9 6.9 6.5
Cum % 43.8 55.9 65.7 72.9 79.7 86.6 93.5 100.0
 EAST DIVISION MATERIAL COST/1000 LAMPS Inferences
4 100
1. No single material item
3 80 contribute >20 % .

Percent
COST

60
2 2. Contribution of 150W /250
40 W lantern is 38%.
1
20
3. 1stsix item
0 0
Material Discription contribute 80% of
cost .Hence further
analysis may done for
That item

Count 0.77 0.73 0.540.440.36 0.250.230.22 0.21 0.20

Percent 19.518.5 13.711.1 9.1 6.3 5.8 5.6 5.3 5.1
Cum % 19.538.0 51.662.871.9 78.2 84.189.6 94.9100.0
Inferences

1. Following material is common ( contribute 80%) for East & South Central.

 Loop In out Box

 250W HPSV Lamps
 70A Power Contactor
 Lantern ( 250W & 150W)
 Scatterplot of Issue Qty vs Issue Date Scatterplot of Consumption Cost vs Issue Date
700 400000

600

300000
500

Consumption Cost
400
Issue Qty

200000
300

200 100000

100

0 0

May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09
Issue Date Issue Date