Platinum Sponsors
Improving Marketing Operations with
Six Sigma and Affinium Plan
John Derrico, Senior Director Marketing ...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Dis...
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Improving marketing operations with six sigma

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What are some of the marketing challenges across the organization, how to take a Six Sigma approach with utilizing on premise or SAAS solutions and to define the fundamentals for continuous process improvement.

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  • Who is familiar w/ 6 sigma? Who currently uses 6 sigma processes today? From a Unica product point of view Plan users, Campaign, emessage, model … Who is not using plan today but maybe thinking about it? Are you using other MRM solutions?
  • Given the challenges for the industry and internal to Medco ….. Scale for future business growth (increase productivity) -ops: Quality, Productivity, Labor Costs Remove variability when possible to understand and manage the ‘chaos’ Approach - In 2005 Medco started a Six Sigma initiative focusing on the quality and productivity within Marketing Operations I. Business Growth Areas (1) Channel Conversion - > Retail to Mail (2) Maximize plan savings - > use of generic medications (3) New Space - > Medicare population II. Make Operations Measurable Quality -> Deliver ‘defect free’ communications Productivity -> Turnaround time (TAT) , rework Savings ->control costs
  • Who knows / has heard of 6 sigma
  • Michael J. Pestorius – “modern business mandates that the role of the (black Belt) as a “process fixer” needs to evolve to a “business process integrator”
  • Define - the metrics of success
  • Improving marketing operations with six sigma

    1. 1. Platinum Sponsors Improving Marketing Operations with Six Sigma and Affinium Plan John Derrico, Senior Director Marketing Operations Medco Health Solutions, Inc
    2. 2. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Overview • About Medco Health Solutions • Marketing challenges across the spectrum of Marketing Operations • Six Sigma overview and application with Affinium Plan (DMAIC) • Fundamentals for continuous process improvement • Appendix
    3. 3. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Medco Health Solutions, Inc. (NYSE: MHS) • Medco is a leading pharmacy benefit manager (PBM), with one of the nation's largest mail order pharmacy operations. Through advanced pharmacy, Medco helps to improve the health and lower the total cost of care for clients and their members. • Medco helps to ensure that millions of Americans have access to affordable, high-quality prescription healthcare. It is more than our business-it's our calling. • Scope - About 1/3 of the companies on the Fortune 500 list are Medco clients. - Medco provides pharmacy benefit management services for approximately 1 in 5 Americans. - Medco employs more than 20,000 people nationwide, including more than 2,400 pharmacists and more than 500 nurses. - Medco’s 2007 net revenues were $44.5 billion. - In 2007 Medco managed nearly 560 million prescriptions of which 94.8 m, were fulfilled by our Mail order pharmacies Information from the Medco Health Solutions investor web site (4.11.2008). URL, http://phx.corporate-ir.net/phoenix.zhtml?c=131268&p=irol-homeProfile
    4. 4. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. The Medco Goals How we do it: We know our customers so intimately and serve them so well that we are their most trusted advisor and the preferred provider of safe, effective pharmacy benefit management services. Customer Intimacy • Develop Scalable Solutions: Serve the needs of many with the flexibility to meet specific customer requirements • Execute Solutions: quickly, easily, and flawlessly Core Values • Speed without compromise: Delivering quality on time • Strength through teamwork: Collaborating at all times What we do: We’re in the business of keeping prescription drug benefits affordable for America.
    5. 5. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Medco’s Process and Quality History • History: - Ernest A. Codman award for re-engineering pharmacy processes to dramatically reduce medication dispensing errors and improve patient safety. (2004) - URAC (an independent evaluator of health care quality) awarded Medco its inaugural PBM Accreditation for being clinically focused and meeting quality standards for consumer protection and empowerment. (2007) - URAC’s Drug Therapy Management (DTM) Accreditation for its clinical management and member engagement programs that improve pharmacy care and prescription drug safety. (2007) • Utilize Six Sigma to quantify performance, improve efficiency, and continually enhance quality. • Supporting culture and deep core competencies in the areas of process efficiency and cost reduction.
    6. 6. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Medco’s Marketing Operations – Challenges & Solutions • Original Challenge - Increase Productivity - Mange Operational Costs - Manage defects (and implement process improvements) • New Challenge - Visibility to all Marketing Operations - Processes must meet audit standards - Expand the platform for productivity - Intuitive and easy to use - A.Campaign - E.Message - Launch Affinium Plan for List Pull Operations Only Solution Extend Affinium Plan across the “Spectrum of Marketing Operations”
    7. 7. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Spectrum of Marketing Operations Request Creative Composition Digital Asset Management List Selection Criteria Production Presentment Response / Analytics - Storage - Version Control Unica Affinium Toolset [Plan, Campaign & E-Message] Document Composition and Document Storage Applications Lettershop, OB-IB Phone Vendors/Systems Customer Service Platform - Lettershop Instructions and Approvals - Requirements - Development - File Transfer - Copy - Design - Review - Approvals -Communication Request Information -Mail Drop -IB Phone -OB Phone -Email -IVRU Integration and consolidation of operations for effective execution Systems&DB’s Supporting Db’s and Reporting/Analytical Toolsets -Capture Response -Campaign Results Reporting -Response Modelling
    8. 8. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent.
    9. 9. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent.
    10. 10. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. What is Six Sigma? • Six Sigma as the system - Six Sigma (σ) is a comprehensive and flexible system for achieving, sustaining and maximizing business success. Six σ is uniquely driven by a close understanding of customer needs, disciplined use of facts, data and statistical analysis and diligent attention to managing, improving and reinventing business processes from the Six Sigma way by Peter S. Pande, Robert P. Newman & Roland R. Cavanaugh
    11. 11. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. How Six Sigma ‘Drives’ • Six Sigma is the engine - Business performance improvement … using fact based management … via a comprehensive collection of tools…focusing on Top Level Indicators or business objectives (TLI’s) …. to provide increased customer value (internal & external)
    12. 12. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Prerequisite for Six Sigma Use 1. The savings are greater than the process 2. Data will be used to drive decisions (COPQ, TAT) 3. Collaboration around the P’s & Q’s 4. Standard Repeatable Process (↓Defects & remove NVA Processes) Gain consensus that fact driven management will yield measurable results
    13. 13. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Applying Six Sigma – the ‘DMAIC’ & Affinium Plan • What is a ‘DMAIC’? - Product/process improvement methodology - Can be an iterative approach - Phase Steps & Tools: • Define - Charter, SIPOC, VOC • Measure - Process Maps, DPMO • Analyze - Pareto’s, Fishbone, 5 why’s • Improve - Solution Selection Matrix • Control - Control Charts, Control Plans
    14. 14. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Applying Six Sigma – the ‘DMAIC’ & Affinium Plan (D) • Define the Customer, their Critical to Quality (CTQ) issues, Voice of the Customer (VOC) and the Core Business Process involved. - (D) who customers are -> People tab - (D) what's in scope and the requirements for products and services -> Templates, Custom tabs, MO’s - (D) what their expectations are (both stated and unstated) and how the information managed by Affinium Plan will be used An example of a Six Sigma tool (DMAIC) and how it can be used in conjunction with Affinium Plan
    15. 15. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Define Example – VOC ‘Consumability Audit’ Request Creative Composition Digital Asset Management List Selection Criteria Production - Approvals - Storage - Version control - Lettershop Instructions and Approvals - Requirements - Development - File Transfer - Copy - Design - Review -Approvals - Communication Request Information By aligning users to processes, modifications were made to ease the learning curve and speed user adoption of Affinium Plan. -Acct Mgrs -Product Owners -Assessment/ Assignment Team -Program Communication Manager -Traffic Manager -Editorial/ Design Team -Creative Review Managers -Creative Review Team -List Pull Team -Production Mgrs -Lettershops = High Consumability = Medium Consumability = Low Consumability UsersProcess
    16. 16. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Applying Six Sigma – the ‘DMAIC’ & Affinium Plan (M) • Measure the performance of the Core Business Process involved. - Develop a data collection plan for the process -> Questions on the Plan templates (yes/no, drop down, grids), Metrics, Saved Searches and Cognos Reports - Collect data to determine the types of defects and metrics • Validate how the information (data) will be used to drive business decisions
    17. 17. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Applying Six Sigma – the ‘DMAIC’ & Affinium Plan (A) • Analyze the data collected and process maps to determine root causes of defects and opportunities for improvement. - Identify gaps between current performance and goal performance - Prioritize opportunities to improve - Identify sources of variation • - > Workflow target vs actual, saved searches and Cognos reports
    18. 18. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Applying Six Sigma – the ‘DMAIC’ & Affinium Plan (I) • Improve the target process by designing creative solutions to fix and prevent problems. - Create solutions using technology and discipline (automate where possible) - Develop and deploy an implementation plan • Modify templates & MO’s • Execute training as needed
    19. 19. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Applying Six Sigma – the ‘DMAIC’ & Affinium Plan (C) • Control the improvements to keep the process on the new course. - Institutionalize the improvements through the modification of systems and structures - Prevent reverting back to the “old way“ via an ongoing monitoring plan • -> Custom Searches, Cognos ‘Outlier’ reports & training
    20. 20. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Success Indicators 1. Application Ease of Use (in relation to user consumability) 2. Visibility to Operations • Process & Project Management • Operational and Financial Measurement 3. Adherence to Internal Compliance Standards (auditable) 4. Establish a Platform for Increased Productivity End Result via Affinium Plan & Six Sigma Scalable, automated processes to support future growth and to manage operational efficiencies via a fact based approach (data) Challenges became our measurement goals
    21. 21. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Fundamentals for Continuous Process Improvement • Confirm who are the customers • Define what it means to ‘succeed’ • Gain visibility to operations & processes - Create a Process Control Plan • (M3 - Map, Measure & Manage) - Confirm the Q’s, then understand the P’s • Assign ownership • Data, Data, Data • Manage and control
    22. 22. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Appendix • Cognos Reporting • Control charts (mock data)
    23. 23. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Cognos Reports via Affinium Plan Plan Administration Project Leads Business Owners Exe. Summary - Monthly metric summary reports by Business Area - Selectable Business Area for summary metrics, defects and project financials - Defects, resource and task level information - Transactional Level Operational Reports -Data Integrity -User access level and licensing
    24. 24. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Location: Franklin Lakes/BBPA Display/Print Date: 2/2/2007 Owner John Derrico Favorable Results: Metric: 1st Pass Yield Operational Definition Total defect free campaigns / total campaigns (production and new campaigns) Process/Customer impact rework Date Desc. Of OOC Assignable Cause Action Needed 2/06 Below Historical Avg. 5/06 Below Historical Avg. 11/06 Below Mean 12/06 Below Mean 1st Pass Yield 72% 61% 78% 85% 60% 73% 76% 79% 87% 78% 68% 73% 85% 88% LCL=0.47782 CEN=0.74285 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07
    25. 25. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Location: Franklin Lakes/BBPA Display/Print Date: 2/2/2007 Owner John Derrico Favorable Results: Metric: Productivity Operational Definition Hours/List Pull (does not include 1st run of new campaigns) Process/Customer impact Internal Productivity Date Desc. Of OOC Assignable Cause Action Needed 6/06 – 7/06 Above Historical Avg. 8/06 Above Historical Avg. Hours Per Production List Pull 12.93 14.34 19.56 18.12 18.27 17.27 20.05 14.34 20.38 18.98 16.62 UCL=20.483 LCL=7.971 CEN=14.227 4 6 8 10 12 14 16 18 20 22 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07
    26. 26. Medco is a registered trademark of Medco Health Solutions, Inc.© 2007 Medco Health Solutions, Inc. All rights reserved.Distribution prohibited without prior consent. Location: Franklin Lakes/BBPA Display/Print Date: 2/2/2007 Owner John Derrico Favorable Results: Metric: Defect Types Operational Definition Communication defects from enrollment transfer CSG to vendor file release / total CSG supported communications Date Desc. Of OOC Assignable Cause Action Needed Campaign In-Process Defects for May 2006 27 18 10 8 2 1 0.68 0.83 1.00 0.98 0.95 0.41 0 5 10 15 20 25 30 35 Contingency (Inputs Not Received) Other Process Defects Security Patch Defects IW Defects Vendor Defects List Pull Defects Defect Type #Observations 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
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