application of six sigma

1. Assignment of O.P.C
Topic- “application of six sigma in finance ”
 SUBMITTED TO:-
Mr. Bhupendra gehlot
ASSISTANT Prof. Of ME
DEPARTMENT
 SUBMITTED BY:-
 Hariom
 UID k-10655
 BRANCH-
MECHANICAL

2. TABLE OF CONTENTS
Introduction
Purpose of six sigma in finance
Types of six sigma finance
 application
Benefit of six sigma in finance
 most finance operation
Conclusions

3. introduction
Today, all major finance operations are highly
regulated and dealing with substantial financial risks.
Whether you are running a finance department ,
working in banking operations, or providing credit
card statements , mortgage applications and
insurance policies , Six Sigma is the indispensable
toolbox that makes “real-world”savings possible. Never
before has there been a stronger demand for client
retention than in today’s hyper-competitive market.
Six Sigma in Finance provides the answer!

4. purpose of six sigma
 The vast majority of Six Sigma applications have been in
manufacturing/engineering
 For example, according to Dusharme* (2003), the top three
application areas for Six Sigma have been:
 Manufacturing
 Plant Operations
 Engineering
 Research as far back as the 70’s & 80’s has shown that
rework and waste costs are higher in service than in
manufacturing
 Finance is literally “where the money is”

5. types of six sigma in finance
 Conceptual Differences
 Lack of tangible output or
“product”
 Lack of a process view of
work
 Lack of an improvement
mindset
 Technical Differences
 Lack of measurement
systems for data*
 Lack of standardized work
processes
 Lack of “engineers”

6. Application of six sigma in finance
Accounts receivable
Accounts payable
Factoring inventories
Closing the books
Financial auditing
Manual account
reconciliation
Acquisitions
Realizing revenue
 Hedging foreign
currencies
 Cash flow
 Credit scoring
 Journal entry accuracy
 Forecast accuracy
 Financial reporting
 Filing taxes
 Managing pension funds
 Payroll accuracy

7. Benefits of six sigma
 Six Sigma like any other improvement initiative is not the
final
 answer to all quality problems that might arise in
manufacturing and
 in transaction. Other gains can be achieved when
sophisticated
 Merged Models are applied. TRIZ is a systematic creativity
method
 that is finding a growing audience in Six Sigma,
complementing the

8. most finance operatation
 The majority of operations in the financial sector fail to
realise the full potential of Six Sigma tools. Despite
declining product prices and growing competition,
business-as-usual continues.
 Classical barriers to change:
 Reliance on trial and error
 Rewarding fire-fighting behavior
 Functional silos that inhibit collaboration
 Can ‘Low Hanging Fruits’ convince top-management of Six
 Sigma implementation?

9. conclusion
Project focus – “Skip Tracing” in consumer
credit – finding people for whom we had
invalid contact information
About half in increased cash, half in reduced
write-offs
Senior management did not believe the
estimated savings, asked for a 6 month trial
After 6 months, about $1.45MM in actual
savings had been documented - $2.9MM
annually