The document outlines an ATM improvement project with the goals of reducing costs from poor quality software and improving the delivery and implementation of ATM software. Currently, defects cost over $183 million per year for one major customer. The project aims to reduce the average monthly defects from 20 to 5 through increased system testing, improved communication between users and developers, and monthly defect meetings, saving an estimated $137 million annually.

1. ATM Improvement Project
Andrew Phillips, MBA, SSMBB

2. Project Charter
• To find ways to improve the development and
release of XFS base software.
• To measure the cost of poor quality ATM
software.
• To measure, analysis, improve and control the
delivery and implementation of ATM software.

3. Cost of poor quality
• A recent study of 4 defects for one of our major
customers showed that to correct these defects was 3
millions dollars for an average of $750,000 per defect.
• At a average of a little over 20 defects per month.
These defects for this one customer cost a total of 183
million dollars. Even if you calculate that the cost for
these defects is highly skewed by 80% the cost for this
one customer is still 36.6 million dollars. This
customer represents. About 20% of ATM in the US so
we are looking at a total cost of over 183 million dollars
per year.

4. Current Process

5. Defects Analysis
• monthly defects for the past year
• 32,6,39,5,35,5,12,32,34,14,13,17
• Descriptive Statistics: monthly defects
• Variable N N* Mean SE Mean StDev Minimum Q1 Median Q3
• monthly defects 12 0 20.33 3.77 13.05 5.00 7.50 15.50 33.50
• Variable Maximum
• monthly defects 39.00
• Goodness-of-Fit Test for Poisson Distribution
• Data column: monthly defects
• Poisson mean for monthly defects = 20.3333
• monthly Poisson Contribution
• defects Observed Probability Expected to Chi-Sq
• <=17 7 0.272352 3.26822 4.261
• 18 - 23 0 0.492305 5.90766 5.908
• 24 - 31 0 0.225285 2.70342 2.703
• >=32 5 0.010058 0.12070 197.250
• N N* DF Chi-Sq P-Value
• 12 0 2 210.122 0.000

6. Control Charts

7. Analysis of Data
• Chi-Squared test shows the expected data
does not fit the observe data. This means that
even though the control chart shows a process
in control it is not in control.
• Goal is to reduce defects by 75%. Reduce the
average defects by an average of 20 to an
average of 5
• This will save $137,250,00 per year.

8. Improve Process
• Increase a system test on top 20% of integration
system before base software is released. This should
reduce defects by 50%. We can pass this cost on to the
customer by reducing the trips to ATM and downtime.
• Increase communication by users and developers by
having user groups 3-4 times a year. This should
reduce defects 10%
• Conduct a monthly defect meeting. XFS developers
and integrators can communicate fixes. This can be a
SharePoint site. This should reduce defects by 15%.

9. New Process

10. Total Annual Savings
Total cost of defects $183,000,000.00
Total savings $137,250,000.00
Cost of defects after changes $45,750,000.00
Cost on changes 2,500,000.00
Total Annual savings $134,750,000.00