MBC638 Data Analysis

Key Dates ---> Team Launch 8/28 Define 9/3 Measure 9/5

Web Metrics Cost Reduction

Process owner: John
Analyze 9/7 Improve 9/7 Control 10/15

DEFINE

MEASURE
Invoice cost increasing
Invoice Cost Increase
$ 16,000

ANALYZE
Page view volume increase starts with data collector changes

IMPROVE

Invoice Cost After Improvement

$ 11,500 $ 11,300 $ 11,100 $ 10,900 $ 10,700 $ 10,500 $ 10,300 $ 10,100

Fee for web Analytics Service up over 20%

$ 14,000

Invo ice Cost

$ 12,000 Invoi ce (X) Mean $ 10,000 UNPL LNPL $ 8,000

$ 6,000

$ 9,900 $ 9,700 $ 9,500

$ 4,000

Annual Budget is at risk of overrun

Jun-07

Jul-07 Aug-07

A ug- 07

Sep- 07

Oc t- 0 7

Pag e V iews Incr ease

18,000,000 17,000,000 16,000,000 15,000,000 14,000,000 13,000,000 12,000,000 11,000,000 10,000,000 9,000,000 8,000,000 Pagevi ews Mean UNPL LNPL

More than one data collector found on some pages

Invoice cost lowered 15%

CONTROL
- Data collector tag instructions added to operational definitions - Page view volumes are reviewed Monthly - Invoices are reviewed monthly - Control charts are maintained

M ay- 0 7

Jun- 0 7

Jul- 0 7

Cpk = 0.382

Page view volume increasing

Joe, Pat and Dave

Process Improvement Project Cycle Time Reduction

Process owner: Dan
Key Dates --->
Team Launch 8/23 Define 9/08 Measure 10/16 Analyze 10/24 Improve 10/31 Control On-Going

DEFINE

MEASURE

ANALYZE
Total Application Errors by Type
100.0% 94.9% 160 86.9% 140 132 75.0% 120 70.0% 60.0% Defects 100 50.0% 80 40.0% 60 30.0% 40 20.0% 21 20 14 9 0 Incomplete/Incorrect Applications Stalled Approvals In The Log-in Phase, Type Stalled Approval At The Managerial Level Reworks 10.0% 0.0% 80.0% 90.0%

IMPROVE

Tim (Days) e

It takes 43 days to process a The Number of applications grant application. Only 8% of received is increasing. applications are being Number of Complete Applications processed within 30 days of 13 13 14 15 11 11 12 receipt. The time to process 9 10 7 8 8 8 7 Series1 5 the application has lead to Linear (Series1) 5 unhappy applicants and staff 0 who are finding more and more of their daily work time being Date devoted to grant administration. The funding The time to complete a process levels available to applicants and the number of applications cycle is also increasing. are expected to increase in the near future, which has the potential to compound the problem.
Num ber

pt

Ma

No

Ja

Ma

00

l,2

Se

Ju

Ju

l,2

00

New Application Procedure = Less Mistakes & Quicker Cycle Time

Time to Complete Proccess Cycle

58

53

48

Problem: Incomplete and inaccurate applications were identified as the primary factor leading to defects in the process cycle. Solution: New Application process incorporating drop down menus

CONTROL
The defect rate reduced from 93% to 32%
Base Group
66 UCL 61
47

43

Data 1 Median Goal

38

C y c l e T im e - D a y s

C y c le T im e

Defects/delays are inherent in the current process. Current SQL is 1.9

62.06

New "Improved" Process

33

56
42

UCL

44.59

28 Jul-06 Aug Sept Oct Nov Dec Jan Feb March April May June Jul-07 Date/Time/Period

51
37

46 CL 41 42.50
32 CL 27 28.56

36

31

22

26 LCL 21 22.94

17

12

LCL

12.53

Number of Applications Cycle Process Time __Tough Times Ahead

16 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 111 116 121 126 Units

7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Units 15 16 17 18 19 20 21 22 23 24 25

Monthly monitor and review procedure is in place. Out of control signal = action plan.

PROJECT TEAM: TEAM: BUSINESS CASE:

Dan y Mary y Karen y Linda y Peter $54,000 in annual processing costs

Closing the Gap in Incoming Material Analysis

Process owner: Bob
Key Dates ---> Team Launch September 14 Define September 8 Measure October 10 Analyze November 10 Improve January 10 Control January 15

DEFINE

MEASURE

ANALYZE

IMPROVE

25% discrepancies between Receiving & Vendor lead to:

Longer lead time for vendor payment. Additional time reconciling invoices. Increased inventory levels waiting for third party analysis. Animosity in relationship.

FY08 high volume vendors

Tungsten Ore Suppliers FY08
140 120 100 80 60 40 20 0 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00%

= .0022
reproducibility
Precision-to-total ratio = .4315

STUs

STUs Cumulative %

Capability ratio = .66

The variation Receiving found

Beralt - OSI Ore Comparison
74.50% 74.00% 73.50% 73.00% 72.50% 72.00% 71.50% 71.00% 70.50% 70.00% 69.50% Beralt OSI

Define how much discrepancy is defined by the process Create clearer operational definitions Modified Process Map to catch defects Create Standard Operating Procedures Expand improvements to other vendors
CONTROL

r a lt DL A S Ca pot nt Dy ung He naco r em sk i rk KM O th T er

Be

Compare analysis on identical samples (DOE)

Unacceptable Measurement System

Maintain lot identity Standardize sampling and analysis

11 15 /2

Buyer (myself), Vendor, Quality, Accounting, Manufacturing

BS 2 BS 61 2 BS 61 2 BS 61 2 BS 61 2 BS 61 2 BS 61 2 BS 61 2 BS 61 26 BS 1 2 BS 61 2 BS 61 2 BS 61 2 BS 61 2 BS 61 2 BS 61 26 1

19 /2 23 /2 27 /2 31 /2 35 /2 39 /2 43 /2 47 /2 51

99

/1

/2

/2

03 07

91

95

/1

/1

/2

/2

MBC 638

Entertainment and Food Spend Reduction

Process owner: Candice
Team Launch 5/18 Define 5/18 Measure 5/19 Analyze 6/27 Improve 7/11 Control 7/18

Key Dates --->

DEFINE Problem Statement Increase in entertainment & dining out cost funds. The funds spent was greater than $1,200 a month. Due to this increase we have experienced over budgeting. Business Impact The target for finances spent on entertainment & dining out is $500 a month. The gap of this situation represents a total of $700 of pain/opportunity.

MEASURE
Entertainment & Food Spend $1,600.00

ANALYZE
93% of entertainment funds spent during 1st and 3rd weekends
Monthly Average Entertainment Spend
$180.00 $160.00 $140.00

$1,400.00

$1,200.00

$1,000.00

$800.00
$120.00

$600.00

$100.00 $80.00 $60.00

$400.00

$200.00

$40.00 $20.00

Limit use of bank cards and use more cash Cook dinner every Monday and Wednesday and eat leftovers the next day. Limit sit down restaurant visits to 2x a week Limit coffee purchases to 3x a week Explore other ways to have fun (movies, bowling, museums, outdoor activities, visiting friends, etc..) Limit fast food to 1x every other day.
Average Spend After Improvements
$1,200.00

IMPROVE

$Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08

M o T u n d a ed esd y T h n es ay u r da s Fr d a y S a id y tu ay S u rd a M n d y on ay T u d a ed esd y T h n e ay u r s d s d ay F S r id a y at a u r y S u d a M n da y o T u n d y a ed esd y T h n e ay u r s da s d y F S r id a y at ay u S u rd a M n d y o a T u n d y a ed esd y T h n e ay u r s da s d y F S r id a y at a u r y S u d a M n d y on ay T u d a ed esd y a n es y da y

$-

Increase in $ spend

Before
$1,000.00

Entertainment Spend

Average

UCL

Savings Account
$2,500.00

The more we dine with, the more we spend. We spend a significant less amount when eating alone.
Eating spend vs. number of people dining with
$50.00 $45.00

$800.00

$600.00

$400.00

After

$200.00

$2,000.00 $-

$1,500.00

$40.00
Series1

Average Cost per Visit

$35.00
$1,000.00

$30.00 $25.00 $20.00

$Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08

Before Fast-food Dining Out

by self Together (Terrence and I) 3 people 4 people 6 people Number of people dining

After (Goal) $10 $30 $50

$500.00

$15 $45 $90

$15.00 $10.00

Decrease in Savings

$5.00 $-

Entertainment

CONTROL: Organize events on a calendar on fridge. Review and update budget weekly Take turns reviewing budget Audit plan 1x a month Team Members: Candice, Terrence

Process Improvement Project Graphing Time Reduction

Mike MBC 638
Key Dates --->
Team Launch 5/11/08 Define 5/19/08 Measure 5/26/08 Analyze 6/6/08 Improve 7/4/08 Control On-Going

DEFINE
Extensive graphing is required for good data analysis of lab qualification testing 350 Engineer hours in the department are spent on repetitive graphing procedures within Excel. This equates to $52,471/year  A 30% reduction in graphing time could result in a $15,741 annual savings.

MEASURE
Identified Critical Inputs and Outputs to Measure
Data Stratification Tree
Que stions about Process
Is y aff ec ted by the number of data points recorded in a test? Is y aff ec ted by the total number of columns graphed? Is y aff ec ted by the person creating the graphs? Is y aff ec ted by the quality of the graph required? Is y aff ec ted by additional graphs required f or c omparison? Is y aff ec ted by the total number of columns of data available?

ANALYZE
Pareto showed Variables 80% of that Graphed Pareto Diagram of Number of graphs consisted of 8 variables or less
SQL Baseline Population Mean = 56.7 Std Deviation = 14.7
Cumulative Frequency

IMPROVE
SQL Improved Process Population Mean = 36.2 Std Deviation = 13.5 X2 (Upper Spec Limit) 60 Z2 = 1.762 P(X>60) = 0.039 P(X is out of spec) = 0.039 DPM = 39052 SQL = 3.26

14.0 12.0

120.0% 100.0% 80.0%

Output

X1 = Total Data points collected X2 = Variables included in graph

Number of data points collected Number of diff erent variables measured Name of engineer Title, labels, pres entation ready Number of graphs Total number of av ailable v ariables

Number Variables

Stra tification Factors X

Me asurements
10.0 8.0

X2 (Upper Spec Limit) 60 Z2 = 0.223 P(X>60) = 0.412 P(X is out of spec) = 0.412 DPM = 411655 SQL = 1.72

60.0% 6.0 40.0% 4.0 2.0 0.0 1 to 4 5 to 7 8 to 10 11 to 13 >13 20.0% 0.0%

Y= Graphing Time = f (X)

X3 = Operator X4 = Graph quality

X5 = Number of graphs X6 = Total number of av ailable v ariables

Y = f(X 1,X2,X 3,X4,X5,X6)

Eliminated wasteful, repetitive steps that can be automated with Excel Macros

Sigma Quality Level Increased from 1.72 to 3.26

Cost Reduction
Time per graph (sec) Time spent graphing/year (hr) Current 57 350 52,471 36% $ Improved 36 224 33,529

Day 1/Ope rator 1 - Xbar Chart 100.0 90.0 80.0 Xbar 70.0 60.0 50.0 40.0 30.0 0 1 2 3 Run # 4 5 6

=
Control

R Charts in control. Xbar Charts show ability to measure differences Day 1/Ope rator= R Chart PTR 1 - 0.22
14.0 12.0 10.0 8.0 R 6.0 4.0 2.0 0.0 0 1 2 3 Run # 4 5 6

Annual Cost Reduction $ % Percent Annual Cost Reduction

n= x bar (sec) = s= 1- alpha = alpha = alpha/2 =

31 56.7 14.7 0.95 0.05 0.025

$18,943 annual cost reduction!

H0: mu >= 40 H1: mu < 40 Acceptable Level of Risk= 10% alpha = 0.10 Hypothesis test n = 31

 Maintain Revision Control on original spreadsheet macros  Provide to Engineering Department  Survey engineers for usage in 3 months

Measurement Systems Analysis using X-bar, R Charts and Precision-To-Total Ratio

U= 61.89 L= 51.56 95% Confidence Interval for the true average graphing time 51.56 <= Population Mean <= 61.89 57 +/- 5.16 seconds

95% confidence interval that true graphing time is 57 +/5.16 seconds

indicates 88% confidence that new process New Processmeets the goal of at least a 30% Mean = 36.2 New Process Variance = 181.8 improvement in graphing time Zo = -1.55
P = 2* Z() 0.12 Confidence = 87.9%

BUSINESS CASE:

$18,943 Annual Cost Reduction if Implemented in Engineering Department

Process owner: Landon

Key Dates Team Launch: September 6 Define: September 10 Measure: September 17 Analyze: September 24 Improve: October 29 Control: November 19

DEFINE Problem Statement Cycle time for a signature sheet averaged 11.25 days with each project manger spending about 11.25 hours for each purchase over $100,000. Business Impact The average wage a project manager earns is $35/hr, therefore it costs $393.75 per project in just gathering signatures! At 144 projects a year this process costs $56,700 annually.
Signature Sheet Cycle Time (man-hours)

MEASURE
Past man-hours 4 11 6 11 6 11 7 11 9 12 9 12 9 13 10 13 10 14 11 14 11 17 11 28 11.25 4.57 11.0

ANALYZE
Project manager signs form

IMPROVE
12 10

Too many steps!

Electronic Signature Sheet New Old

Is project over $100,000?

Frequency

No

Submit to Finance

8 6 4

Obtain engineering supervisor s signature

Mean= Std dev= Median=

Obtain production supervisor s signature

Need to take PM out of all these steps

2 0 1 3 5 7 9 11 13 15 17

Cycle Time (Days)

Is it Thursday? No Wait for Thursday

High manhours
8 7 6 5 4 3 2 1 0 1 3 5 7 9

High cycle time

Cycle time reduced to 2.88 days! Man-hours reduced to 0.20 hours! Cost savings $55,692 annually! SQL raised from 2.3 to 3.6 and rising!
t ! xQ s/ n ! 0.2  11.5 ! 240.7 0.23 / 24

Frequency

Obtain engineering director s signature

SQL = 2.3

P-value 0

Obtain finance supervisor s signature

CONTROL
Hypothesis Test Ho: mu 11.25 hr Ha: mu < 11.25 hr

Obtain group director s signature

11 13 15 17

Cycle Time (Days)

Submit form to Finance Department

- Finance Office will not accept old version of signature sheet. - Purchases tracked in SharePoint - Appraisal rated on compliance

Landon, Engineering Project Managers, Finance Office, Stakeholders