Applying DFSS to Transactional Processes


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Applying DFSS to Transactional Processes

  1. 1. Applying DFSS to Transactional Processes Jeff Aldaz June 2005 Confidential and proprietary information of Ingram Micro Inc. — Do not distribute or duplicate without Ingram Micro's express written permission. How to really make it work ®
  2. 2. Ingram Micro – A Leader in IT <ul><li>The world’s largest wholesale provider of technology products and services </li></ul><ul><li>Annual revenues for 2004 - $25.5 billion </li></ul><ul><li>13,600 associates worldwide </li></ul><ul><li>Serves customers in more than 100 countries </li></ul><ul><li>Number 81 on Fortune 500 </li></ul>
  3. 3. The Six Sigma Journey Results Share best practices Deployment of Scorecard concept 6 σ, the way we do business Deployment of methodology Create Awareness 2004 Achievements 2001 2002 2003 2004 2005 2006 2007
  4. 4. Six Sigma & Ingram Micro <ul><li>US started implementing Six Sigma in 2002 </li></ul><ul><ul><li>Operations </li></ul></ul><ul><li>Global COE </li></ul><ul><ul><li>North America </li></ul></ul><ul><ul><li>Europe </li></ul></ul><ul><ul><li>Asia Pacific </li></ul></ul><ul><ul><li>Latin America </li></ul></ul>
  5. 5. DFSS at Ingram Micro <ul><li>At the beginning of 2004 IM identified the need for DFSS: </li></ul><ul><ul><li>Customers required new services </li></ul></ul><ul><ul><li>Processes optimized with DMAIC did not meet requirements </li></ul></ul><ul><ul><li>DMAIC resulted in measurable financial/operational benefit, DFSS was introduced to drive transformational change </li></ul></ul><ul><li>First training in April 2004 </li></ul><ul><ul><li>Class Details – </li></ul></ul><ul><ul><ul><li>Oriel delivered training </li></ul></ul></ul><ul><ul><ul><li>Cross-functional participants </li></ul></ul></ul><ul><ul><ul><li>Selected projects with cross-functional impact/support </li></ul></ul></ul>
  6. 6. 1 year into DFSS <ul><li>Projects completed: 8 </li></ul><ul><li>Financial benefits (annualized): $4.5 MM </li></ul><ul><li>Success factors: </li></ul><ul><ul><li>Start with your customers and end with your customers </li></ul></ul><ul><ul><li>Executive support is critical – even more than in DMAIC </li></ul></ul><ul><ul><li>Involve all core functions in the first projects </li></ul></ul><ul><ul><li>Select a few good projects in the first wave </li></ul></ul><ul><ul><li>Tollgate meetings to maintain momentum </li></ul></ul>
  7. 7. U.S. Sales Utilization Metrics Overview (GB: Frank Kapperman) <ul><li>Critical Y: Optimization of Sales & Order Management processes </li></ul><ul><li>Scope: U.S. Sales Organization </li></ul><ul><li>Solutions: Provide an effective tool for managing workload optimization </li></ul><ul><ul><ul><ul><ul><li>Enhanced utilization report </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Predictive modeling to forecast capacity requirements </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Comparison tool for workload activity versus $GP/head </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Drive focus to processes that are more important to our customers </li></ul></ul></ul></ul></ul><ul><li>Rationalization of Sales Coverage Model </li></ul><ul><ul><ul><ul><ul><li>Diversification of the performance metrics (based on differentiation in workflow) to accurately assess appropriate staffing levels </li></ul></ul></ul></ul></ul><ul><li>Rationalization of Sales Communication </li></ul><ul><ul><ul><ul><ul><li>Reduced non-value added activities in the workflow of the Sales Rep’s (i.e. e-mails, vendor activities, etc) </li></ul></ul></ul></ul></ul><ul><li>Savings: Rationalization of Sales Coverage Model: 1.200.000 USD </li></ul><ul><li>Rationalization of Sales Communication: 500.000 USD </li></ul><ul><li>TOTAL 1.700.000 USD </li></ul>
  8. 8. DFSS Tools in Transactional <ul><li>MEASURE </li></ul>Understand Voice of the Customer Translate VOC into CTQs Prioritize CTQs House of Quality #1
  9. 9. Results <ul><ul><li>Gross Profit / Day increased from $40 K to $50K </li></ul></ul><ul><ul><li>Productivity increased from 70% to 85% </li></ul></ul>Increased GP/day from $40K to $50K Increased utilization from 70% to 85%
  10. 10. Current State-Sales Communication Sales Force (700 Rep’s) 50-100 E-Mails/Day Marketing Product Mgt. Vendor Other <ul><li>Action Required </li></ul><ul><li>What Types of communication do rep’s receive? </li></ul><ul><li>Volume by type? </li></ul><ul><li>Operational & Financial Impact (Orders, Revenue, Machine Margin %, Etc.) </li></ul><ul><li>Interview Stakeholders </li></ul><ul><li>Assess Impact to PD&R and Marketing Revenue </li></ul>How much of the Rep’s day do we influence? 20% Sales Mgt. 10% Other 20% Vendor 20% Product Management 20% Marketing % of Influence Channel
  11. 11. Future State-Sales Communication Prioritized Workflow Marketing Product Mgt. Vendor Other <ul><li>Results </li></ul><ul><li>Pre-Formatted tools and templates </li></ul><ul><li>Regularly scheduled delivery of communication (a.m. & p.m.) </li></ul><ul><li>Channel communication to appropriate tool (e-mail, champ site, huddle, etc.) </li></ul><ul><li>Prioritize Workflow (Orders, Revenue, Machine Margin %, Etc.) </li></ul>How much of the Rep’s day do we influence? Sales Force (700 Rep’s) 75% Sales Mgt. 10% Other 5% Vendor 5% Product Management 5% Marketing % of Influence Channel Communication Filter
  12. 12. <ul><li>Identification of sales rep’s, teams & branches that are below peer average and development of action plan to improve results. </li></ul><ul><li>Establishment Of A Formal Utilization Review Process </li></ul><ul><ul><li>Sales Manager Review With: </li></ul></ul><ul><ul><ul><li>Sales productivity team for branches that are out of tolerance for 30 days </li></ul></ul></ul><ul><ul><ul><li>Area sales director after 60 days </li></ul></ul></ul><ul><ul><ul><li>General manager after 90 days </li></ul></ul></ul><ul><li>Identification, evaluation, and thresholds established for activities that were previously excluded from measurement </li></ul><ul><ul><li>Electronic commerce orders, team e-mail boxes, e-forms, etc. </li></ul></ul><ul><li>Linkage to skills for success performance criteria and career path </li></ul><ul><li>Identification of additional project opportunities: </li></ul><ul><ul><li>Enhanced EDI Order Processing Efficiency </li></ul></ul><ul><ul><li>Special Pricing Administration </li></ul></ul>Project Results
  13. 13. Pitfalls to Avoid in DFSS <ul><li>Don’t assume you understand what the external customers want </li></ul><ul><li>Don’t assume internal functional departments understand linkages and how end results impact customers </li></ul><ul><ul><li>Marketing / Sales / Product Management </li></ul></ul><ul><li>DFSS projects are different than DMAIC projects </li></ul><ul><ul><li>Timing </li></ul></ul><ul><ul><li>Complexity </li></ul></ul><ul><ul><li>Team members </li></ul></ul>
  14. 14. Confidential and proprietary information of Ingram Micro Inc. — Do not distribute or duplicate without Ingram Micro's express written permission. ®