Six Sigma Infrastructure and

Cultural Development
Knowledge Share Workshop
Defining Six Sigma in your
organisation
Defining Six Sigma for your Organisation

The ‘Technology Operations’ / Vodafone Way

• History
• Process Improvement in Technology
Operations
• Successes
• Delta’s
Defining Six Sigma for your Organisation

History
Technology Operations

2000 2001 2002 2003

Six Sigma PI Team Projects Future?
Specialist Appointed delivering
Appointed benefits

Vodafone Organisation (Quality +)

2001 2002 2003

Quality PI Steering & Future?
Team Operating
Appointed Group Set Up
PI Training
Defining Six Sigma for your Organisation

Technology Operations
• Vodafone network monitoring, enhancement and
Service Management.
• Operate and Maintain Internal Technology services
– IT Network
– Internal Telephony
• Approximately 1500 Staff
Defining Six Sigma for your Organisation

Technology Operations PI Team

Team of Nine based in Warrington / Solihull / Newbury / Hayes

• Process Improvement Projects

• Performance Management
• Change Services
• Quick Wins
• Data Analysis
• Point Consultancy
• Facilitation Support
• Development & Mentoring
 Defining Six Sigma for your Organisation

Data

Collect Data Performance Measure Performance Trend

(Month/Week/Day/Hour etc..) (Month/Week/Day/Hour) (Year/Month/Week/Day)

Action Plan Pareto Chart - Example

What Who When 400

350
100

80
300
250

In c id e n c e
60

Cum %
Defects
200
40 cum%
150
100
20
50
0 0
d o y r
ce io n pe E ch B us e he
le n es t r op ag O t
Si n g D e ss
Co kM
Root Cause Analysis Nw
Customer Complaints

Remedial Action Plan Performance/Defect Analysis

Defining Six Sigma for your Organisation

The ‘Technology Operations’ Way

• Delivered Measure/Analyse Training.

• Socialised Six Sigma In Technology.
• Developed VF Six Sigma Training.
• Recruited First Black Belts (PIM’s).
• First Projects (INSIGHT).
• Developed Operational Metrics.
• Delivering Six Sigma Training To
Wider Vodafone.
• Graphical information is accessed via
the intranet and is available company
wide.
• Databases are queried and relevant
charts produced automatically, by
scripts, overnight or on a 2 hourly basis.
• Here’s an example of how the
charts/data are accessed
• The 2 hourly measures are used by engineers to
control their process throughout the day.
• The Daily Measures are used by team leaders to
identify process issues occurring overnight
• The Weekly measures are reviewed in regional
performance meetings each week. Analysis of
these metrics has been the starting point for the
PI projects including:
– Reduction of resets
– Repeat visit reduction (RFT)
– Reduction of variation in time to investigate a fault
– Link fault – reduction in cycle time
Defining Six Sigma for your Organisation

PI Toolkit
Introduction
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structured

PI Tools 3.1 G uidance Notes

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Back
BacktotoContents
Contents
Defining Six Sigma for your Organisation

Success Stories
• Link Fault Handling
4 152 hour mean reduced to 61 hours (and still falling!)
4 Incorrect diagnosis reduced by 70% -1000 less link faults being raised each
month
4 c.£500k direct cost savings and c.£750k indirect savings and incremental
revenues delivered from a 3 month project

• Provision of Spares
4 On the 11th Feb 2002 there were 51 faults requiring spares totaling over
67,000 hours. On the 30th September 2002 there were 46 faults requiring
spares totally just under 7000 hours. 17 had been raised on that day with just
Four over ten days old. None at P1.
4 Savings include local management costs (£280 estimated), Ediface £100K,
DSC210 £70K, stock available for rollout £400K, re-negotiation of support
costs £500K - total savings £1.35 Million
Defining Six Sigma for your Organisation

Success Stories
• IT Operations Review - War on Waste
4 Director under pressure to employ four additional shift based staff
4 Introduction of automatic functionality to improve customer service
4 Shorter communication links improve call out process
4 Cost avoidance (£155K) and process improvements total £287,000
Defining Six Sigma for your Organisation

Delta’s
• Sponsors at the correct level
• Scope of the Project - stating the end point
• Defining the problem experienced by the
customer
– Don’t state or imply a solution in the problem
statement
• Identifying and delivering a quantifiable Benefit
• Aligning PI with other business initiatives
• Governance - positioning PI as non business as
usual activity
Defining Six Sigma for your Organisation
Hard Saving Vs Soft Savings
Hard Saving vs Soft Saving

Hard Saves = Quantitative results

Soft Saves = No Quantitative results

 Hard Saving vs Soft Saving

The hard and soft saving costs are those which are generated as a result of
eliminating defective material, these costs are categorize as followed;

During product development After product delivery

•Rework labour costs •Product returns

•Additional defect costs
Hard
•Time to market delay
Saves
•Customer delay fines
•Increased fatigue
•Morale problems
Soft •Loss of key talent
Saves •Draining of other projects
•Price concessions
•Loss of business
•Extra customer support costs
•Loss of market share
•Weaker negotiation position
•Damage to product brands
•Damage to firm’s brand
•Less attractive to A-players
•Missed product opportunities
 Cost Avoidance vs Cost Saves

Example Typical Server life cycle

Cost Avoidance Cost Saves

Order Facilities In
Procurement Coordinates Install & Depreciation Support Maintenance
& Finance\ teams together Up an Running

Activity/Item Amount Activity/Item Amount per server

Procurement (FTE) time cost (1hour) $145 Depreciation Time 3 years
Finance (FTE) Time cost $145 Depreciation cost (per year) 33.3% p.a
Install cost (1 1/2Day) $1950 Maintenance cost (UK only per year) $952.38
$2,000,000
Server cost (Average) Based on $21.230
triarch(??),E4-20/E45100 Ultra 2 & 5 Application hardware cost ( Dev, test & $21.230+$1950+
Production) per server $145+$
Coordination cost (time) ½ day
580=$23.905
Facilities Team ½ day per server $ 580
Space Cost (real estate) 144 Sq M 1.8 sm (rack)* $4
(xSq M)
Power cost Input from MR

Reference Reference: Backup cost Input from SS

2100 server in total (consolidation) Fully loaded $255.000/year
Training Cost per person $5000 $70.000
120 new server per year $1160/day
$145/hour Support Cost (14 people) $1700

Server average Usage 10%

 Cost Avoidance vs Cost Saves

EXAMPLE:
The Hard Saves generated by the server consolidation pilot in the UK will be
defined as;

Cost Avoidance: allows you to do the same amount of business with less
servers by;
Reducing the amount of purchased servers per quarter.(100 XQ)
Reducing the employee time (Procurement , Finance and Set up cost)
Cost Avoidance vs Cost Saves

Cost Saves: allows you to do the same amount of business by reducing costs
within the organisation by consolidating existing servers by;

1. Reducing Maintenance cost

2. Reducing Unavailability
3. Reducing Administration cost
4. Reducing Real State Space
5. Reducing Training cost
6. Reducing Backup cost
7. Reducing Support cost
Who is our customer
and their voice
Who is our Customer and their Voice

Who is our customer?

One of the key elements of the Six Sigma methodology is understanding your
customers and their needs (CTQ’s). To Identify our customer we need to identify
our SIPOC

Supplier Inputs Processes Outputs Customers (process)

Who is our Customer and their Voice

Once customers are identified and segmented, if appropriate, customer needs

must be solicited and quantified.
 Who is our Customer and their Voice

What is Voice of the customer?

Is a process used to capture the requirements/feedback from the customer to
provide the customers with the best in class service/product quality.
The voice of the customer can be captured in a variety of ways;

Interviews
 Who is our Customer and their Voice

What is Voice of the customer?

Is a process used to capture the requirements/feedback from the customer to
provide the customers with the best in class service/product quality.
The voice of the customer can be captured in a variety of ways;

Survey
 Who is our Customer and their Voice

What is Voice of the customer?

Is a process used to capture the requirements/feedback from the customer to
provide the customers with the best in class service/product quality.
The voice of the customer can be captured in a variety of ways;

Customer specifications
 Who is our Customer and their Voice

What is Voice of the customer?

Is a process used to capture the requirements/feedback from the customer to
provide the customers with the best in class service/product quality.
The voice of the customer can be captured in a variety of ways;

Focus groups
 Who is our Customer and their Voice

What is Voice of the customer?

Is a process used to capture the requirements/feedback from the customer to
provide the customers with the best in class service/product quality.
The voice of the customer can be captured in a variety of ways;

Observation
 Who is our Customer and their Voice

What is Voice of the customer?

Is a process used to capture the requirements/feedback from the customer to
provide the customers with the best in class service/product quality.
The voice of the customer can be captured in a variety of ways;

Warranty data