PRINCIPLES OF MANAGEMENT-JNTUK-UNIT-5-2016-2018 BATCH

UNIT-5
sanjaykanagala,rimsmba,kakinada

 Contemporary issues
in Management
 MBO
 Management By
Walking Around
 Out of the Box
Thinking
 Balanced Score Card
 Time Management
 BPOs
 Stress Management
causes and remedies
 JIT
 TQM
 Six Sigma
 CMM levels

 Contemporary Management Issues examines
the way of thinking that is needed to address
issues as they emerge. Contemporary issues
have arisen as a result of past, and current,
thinking and practices. Similarly, future
issues will emerge as a result of current
thinking and practices.

 One of the dominant themes in quality
management literature is the degree of
complexity that the contemporary manager
must be able to take into account in making
decisions that shape the response to current
issues and the future of their organizations.

 Contemporary Management Issues invites re-
evaluation of traditional management
practices. Beyond that, the subject focuses on
developing thinking tools and practices that
facilitate more adaptive responses to novel
issues as they emerge. A key focus is the
response to complexity in society and how
issues of leadership, ethics, and social
responsibility are interconnected with all
business decisions.

 An effective management goes a long way in
extracting the best out of employees and
make them work as a single unit towards a
common goal.
 The term Management by Objectives was
coined by Peter Drucker in 1954.

 The process of setting objectives in the
organization to give a sense of direction to the
employees is called as Management by
Objectives.
 It refers to the process of setting goals for the
employees so that they know what they are
supposed to do at the workplace.
 Management by Objectives defines roles and
responsibilities for the employees and help them
chalk out their future course of action in the
organization.
 Management by objectives guides the employees
to deliver their level best and achieve the targets
within the stipulated time frame.

S specific
Mmeasurable
A achievable
R result oriented
T time-related
WORK HAVE
S
U
C
C
E
S
S
In an MBO, good goals are SMART goals:

Peter Drucker, (1954, “The Practice of Management”)
• Is a systematic and organized approach that
allows management to focus on achievable
goals and attain the best possible results from
available resources
• Aims to increase individual and organizational
effectiveness by aligning organizational goals
and subordinate objectives
• Clarifies and quantifies objectives to allow for
monitoring, evaluation, and feedback
throughout the hierarchy of objectives
WHAT IS MBO ?

• MBO emphasises the importance of
objectives as a tool to be used by
managers in fulfilling their managerial
roles (accomplish their tasks)
• Divide problem into manageable,
“bite-size” chunks
IN SIMPLE WORDS,
MBO IS…

Vision

Vision
Mission
Tactical
Plans
Management
by
Objectives
Operational
Plans
Standing
Plans
Single-Use
Plans
Top
Managers
Middle
Managers
First-Level
Managers

 Single-use Plans are developed to achieve
objectives that are not likely to be repeated in the
future. Single-use plans include both programs
and projects.
 Standing Plans are used to provide guidance for
tasks performed repeatedly within the
organization. The primary standing plans are
organizational policies, rules, and procedures.
 Operational Plans are used to identifies specific
results to be accomplished within a given short
term time period. Contain detailed information
used in the lower levels in an organization.

Peter Drucker also stated that:
 For the business to succeed, the
managers and employees must
work towards a common goal
 Managers must identify and
agree targets for achievement
with subordinates
 Managers must negotiate the
support needed to achieve the
targets with subordinates
 Evaluate the objectives over time
FEATURES OF MBO

 Short and long-term planning
 Optymalization of organization
structure
 Better work and collaboration quality
Appraisal based on objective results
BONUSES

1.Cascading of organizational goals and
objectives
2.Specific objectives for each team member
3.Participative decision making
4.Explicit time period
5.Performance evaluation & feedback

 Improves employee motivation
 Improves communication in the
organisation
 Flags up and highlights training
needs required to achieve
objectives
 Improves overall performance and
efficiency
 Attainment of goals can lead to
the satisfaction of Maslow’s
higher order needs
ADVANTAGES OF MBO

“We each have a hierarchy of needs that ranges
from "lower" to "higher." As lower needs are
fulfilled there is a tendency for other, higher
needs to emerge.”
Daniels, 2004
Maslow’s theory maintains that a person does
not feel a higher need until the needs of the
current level have been satisfied. Maslow's basic
needs are as follows:

Esteem Needs
Self-Actualization
Safety
Social Needs
(Love & Belonging)
Basic Human Needs
(Physiological)
• Food, Air, Water, Sex,
Clothing
• Protection, Stability, Pain
Avoidance, Routine/Order
• Affection, Acceptance,
Inclusion
• Self-Respect, Self-Esteem,
Respected by Others
• Achieve full potential,
Fulfillment

 May demotivate staff if targets are too high
and unrealistic, also if imposed rather than
agreed
 Requires the cooperation of all employees to
succeed
 Can be bureaucratic and time consuming
(meetings, feedback)
 Can encourage short-term rather a more
focused long-term growth
 Objectives may go out of date and can restrict
staff initiative and creativity
 Setting targets for certain specialised
employees may be difficult

 MBO could be suitable for a
medium to large business, using a
democratic approach to
management and operating in a
stable market
 The overriding issues therefore are
size of the business, the leadership
style it uses and the rate of change
in the market it operates.

 Jointly identify common goals.
 Define major areas of
responsibility in terms of results
expected.
 Use measurements as guides
for operating and assessing
contributions of members.

1. Clarify organization’s goals and
plans at all levels.
2. Gain better motivation and
participation from
organization’s members.

Jointly plan
• Setting
objectives
• Setting
standards
• Choosing
actions
Individually act
• Performing
tasks
(subordinate)
• Providing
support
(supervisor)
Jointly control
• Reviewing
results
• Discussing
implications
• Renewing MBO
cycle
Supervisor
Subordinate
and

1. Top management team studies
system.
2. Team sets up methods of
measuring performance.
3. Goal-setting sessions are held
at all levels of organization.

Appraise
Performance
•Corporate Strategic goals
•Departmental goals
•Individual goals
STEP 1: SET GOALS
STEP 4: APPRAISE
OVERALL PERFORMANCE
Action Plans
Review Progress
&
Take Corrective Action
STEP 2: DEVELOP PLANS
STEP 3: REVIEW PROGRESS

 Set Goals (The most difficult step)
◦ What are we trying to
accomplish?
 Develop Action Plans
◦ “What do we need to do to get
there?”
◦ Groups and individuals
 Review Progress
◦ “How are we doing?”
◦ Periodically (How Often?)
◦ Does plan need to be tweaked?
 Appraise Performance
◦ Rewards?

Mission statement
Corporate objectives
Departmental
objectives
Individuals and team
targets
To become the leading supplier
of computers in London
To increase sales in London
by 10% in the next 5 years
e.g. (marketing department) to
achieve a 10% share of the
computer market in London
within the next 5 years
e.g. to design questionnaires
as part of market research

SOURCES OF MBO FAILURES
1. Lack of top management commitment and
follow through on MBO.
2. Employees’ negative beliefs about
management’s sincerity in its efforts to
include them in the decision-making
process.

MANAGEMENT
BY WALKING
AROUND

 Unstructured approach to hands-on, direct
participation by the managers in the work-
related affairs of their subordinates, in contrast
to rigid and distant management.
 In MBWA practice, managers spend a significant
amount of their time making informal visits to
work area and listening to the employees.
 The purpose of this exercise is to collect
qualitative information, listen to suggestions and
complaints, and keep a finger on the pulse of the
organization.
 Also called management by wandering around.

 “Management by walking around emphasizes
the importance of interpersonal contact, open
appreciation, and recognition. It is one of the
most important ways to build civility and
performance in the workplace.”
 Management by walking around (MBWA) is
based on the concept that a manager needs
to actually understand what is really going on
- not just view reports in an office.

 By seeing the actual state of affairs they can
better understand what management
improvements are actually doing where work is
being done.
 Managers getting away from their desks and
starting to talk to individual employees. The idea
is that they should learn about problems and
concerns at first hand.
 At the same time they should teach employees
new methods to manage particular problems.
The communication goes both ways.


 Managers consistently reserving time to walk
through their departments and/or to be
available for impromptu discussions. (MBWA
frequently goes together with an open-door
management policy.)
 Individuals forming networks of
acquaintances throughout their
organisations.
 Lots of opportunities for chatting over coffee
or lunch, or in the corridors.

 Managing by walking around was popularized by Tom
Peters and Robert Waterman in the early 1980s
because it was (already then) felt that managers were
becoming isolated from their subordinates.
 At Hewlett-Packard, where the approach was
practiced from 1973, executives were encouraged to
know their people, understand their work, and make
themselves more visible and accessible.
 Bill Hewlett and Dave Packard's business philosophy,
centered on deep respect for people and
acknowledgment of their built-in desire to do a good
job, had evolved into informal, decentralized
management and relaxed, collegial communication
styles. Theirs was the opposite of drive-by
management.

 The basic principle is that command-and-
control is ineffective in modern
organizations. Nothing is more instructive
than seeing what actually transpires in the
real world and learning from that.
 Management by walking around is a
leadership technique that has stood the test
of time and can be used by any manager.

 Except for virtual organizations —and most of us still
do not work through these even if we interface
variously with them—face-to-face interaction
remains a sure way to receive and give feedback
wherever managers see staff regularly. Why? Because
it is staff, not managers, who create an organization's
products and deliver its services, and appreciation of
that can only come from knowing what happens on
the ground.
 Because people live to be part of something, and
being intimately in touch opens up more lines of
informal communication and produces stronger team
dynamics and performance. The human touch still
works best.

 Managing by walking around requires:
 Personal involvement, good listening skills,
and the recognition that most people in an
organization want to contribute to its
success.
 It should not be forced and cannot be a
charade.
 It works if you display sincerity and civility
and are genuinely interested in staff and their
work.

1. Wander about as often as you can, but recurrently and preferably
daily.
2. Relax as you make your rounds.
3. Share and invite good news.
4. Talk about family, hobbies, vacations, and sports.
5. Watch and listen without judgment.
6. Invite ideas and opinions to improve operations, products, services,
etc.
7. Be responsive to problems and concerns.
8. Look out for staff doing something right, and give them public
recognition.
9. Project the image of a coach and mentor, not that an inspector.
10. Give people on-the-spot help.
11. Use the opportunity to transmit the organization’s values.
12. Swap value and legacy stories.
13. Share your dreams.
14. Have fun.

 Managing by walking around does not just cut
through vertical lines of communication. It also
 1. Builds trust and relationships.
 2. Motivates staff by suggesting that
management takes an active interest in people.
 3. Encourages staff to achieve individual and
collective goals.
 4. Strengthens ability to drive cultural change for
higher organizational performance.
 5. Refreshes organizational values.
 6. Makes work less formal.
 7. Creates a healthy organization

 Accountability. You will feel uncomfortable
facing the person again if you haven't
addressed their concerns.
 Increased efficiency.
 One of the main benefits of MBWA was
recognised by W. Edwards Deming, who once
wrote: “If you wait for people to come to you,
you’ll only get small problems. You must go
and find them. The big problems are where
people don’t realise they have one in the first
place.”

 MBWA has been found to be particularly helpful
when an organisation is under exceptional stress;
for instance, after a significant corporate
reorganisation has been announced or when a
takeover is about to take place. It is no good
practising MBWA for the first time on such
occasions, however. It has to have become a
regular practice before the stress arises.
 The difficulty with MBWA is that (certainly at
first) employees suspect it is an excuse for
managers to spy and interfere unnecessarily.
 This suspicion usually falls away if the
walkabouts occur regularly, and if everyone can
see their benefits.

 1. Do it to everyone.
2. Do it as often as you can.
3. Go by yourself.
4. Don’t circumvent subordinate managers.
5. Ask questions.
6. Watch and listen.
7. Share your dreams with them.
8. Try out their work.
9. Bring good news.
 10. Have fun.
11. Catch them in the act of doing something
right.
12. Don’t be critical.

 Visit everyone
 Stay positive
 Be genuine
 Make sure it’s not all business
 Don’t expect results right away

Out of the Box
Thinking

 ‘Think outside the box’ is one of the biggest
creativity cliches. The basic idea is that to be
creative you need to challenge your own
assumptions and look at things from a fresh
angle. You need to break out of conventional
thinking and take off the blinkers formed by
past experience.

 Lung and Dominowski’s strategy instructions plus dot-to-
dot. training facilitated solution of the nine-dot problem, but
still only a little more than half of the subjects solved the
problem, and they did so not smoothly in a sudden burst of
insight, but only after a number of tries. This study provides
particularly graphic evidence that insightful behavior,
contrary to the Gestalt view, is the result of expertise.
-Robert Weisberg, The Myth of Genius.
 The phrase is generally held to have originated with the
classic ‘nine-dot’ creativity puzzle. If you haven’t seen
this problem before, try to solve it before scrolling
down and reading the rest.

 Get a pen and some paper and copy the nine
dots arranged in a square below. To solve the
problem, you need to join all nine dots by
drawing no more than four straight lines. The
straight lines must be continuous – i.e. you
must not lift your pen from the paper once
you start drawing. Don’t read any further
until you’ve tried to solve the problem.

 How did you get on? If you managed to solve it, give
yourself a pat on the back and read on. If you’re not
there yet, here’s a clue to help you. If you’re like most
people, you will have tried to solve the problem by
keeping your lines inside the ‘box’ created by the
dots. But if you look at the instructions, there is no
requirement to do this. So have another go at solving
the problem, allowing yourself to draw outside the
box. Again, don’t read any further until you’ve either
solved it or given up.
 OK if you’ve either solved it or had enough, click on
the image below to see two of the usual solutions.
Each time you click, a new solution will be revealed.

 What did you make of that? Could you solve
the problem the first time? Did it make any
difference when I said you could go outside
the box?

 The usual way of presenting this problem is for a
creativity trainer to only give the first set of
instructions – i.e. without mentioning the fact
that you allow to go outside the box. And nearly
everybody (including me, when I first saw it)
completely fails to solve the problem. But most
creativity trainers don’t bother with the second
stage – they simply reveal the solution to cast of
astonishment and protest from the audience:
“that’s not fair! You didn’t tell us we could go
outside the box!” To which the trainer typically
responds “Aha! But I didn’t tell you
you couldn’t go outside the box!”.

 The trainer then trots out the conventional explanation of
the puzzle: we can’t solve the problem as long as we are
thinking ‘inside the box’ created by our assumptions.
Once we start to think ‘outside the box’ we open up many
more possibilities and it becomes easy to solve the
problem. This is true in so many areas of life – our
education, past experience and habitual thinking patterns
keep us trapped in limiting assumptions. It takes a real
effort to challenge the assumptions and think outside the
box. Most of us are very poor at doing this and have to
work hard at it – unlike creative geniuses to whom this
kind of thinking comes naturally.
 In case you think I’m having a go at creativity trainers I’ll
confess that a few years ago, on a couple of occasions, I
was that trainer. Never again.

 The trouble with the usual way of presenting the
nine-dot problem is that it contains (ahem) an
unexamined assumption. I.e. that all we have to
do is tell people they can go outside the box and
they will find it easy to solve the problem. But
most of the time people are not given the chance
to find out – they are simply given the solution
and told that the problem was their limited
thinking. They are usually so astonished to
discover that they are allowed to draw outside
the box that they readily accept this explanation.

 A few researchers have been sceptical and curious
enough to test this assumption. InCreativity – Beyond
the Myth of Genius Robert Weisberg describes two
experiments in which people were told that the only
way to solve the problem was to draw lines outside
the square. Contrary to the ‘outside the box’ school
of thought, this did not make problem easy to solve.
In fact, only 20-25% of subjects were able to solve
the problem, even though all of them allowed
themselves to draw outside the box. And even the
ones who did solve the problem took a long time to
do so, and used trial and error, making many
different drawings, rather than any special form of
‘creative thinking’.

 Researchers went on to show that the success
rate could be improved by giving subjects prior
training in solving simpler line-and-dot
problems, and also by giving them “detailed
strategy instructions” about how to solve the
problem:
 So the research evidence suggests that thinking
outside the box fails to produce the expected
creative solution. And far from being a
hindrance, past experience and training can
actually be the key to creative problem-solving.

 'A strategic planning and management
system used to align business activities to the
vision statement of an organization'. More
cynically, and in some cases realistically, a
Balanced Scorecard attempts to translate the
sometimes vague, pious hopes of a
company's vision/mission statement into the
practicalities of managing the business better
at every level.

Department Areas
Finance  Return On Investment
Cash Flow
Return on Capital Employed
Financial Results (Quarterly/Yearly)
Internal Business Processes  Number of activities per function
Duplicate activities across functions
Process alignment (is the right process in the
right department?)
Process bottlenecks
Process automation
Learning & Growth  Is there the correct level of expertise for the
job?
Employee turnover
Job satisfaction
Training/Learning opportunities
Customer  Delivery performance to customer
Quality performance for customer
satisfaction rate
Customer percentage of market
Customer retention rate
balanced scorecard - factors examples

 Implementing the Balanced Scorecard system
company-wide should be the key to the
successful realization of the strategic
plan/vision.
 A Balanced Scorecard should result in:
 Improved processes
 Motivated/educated employees
 Enhanced information systems
 Monitored progress
 Greater customer satisfaction
 Increased financial usage

There are many software packages on the market that claim
to support the usage of Balanced Scorecard system.
For any software to work effectively it should be:
 Compliant with your current technology platform
 Always accessible to everyone - everywhere
 Easy to understand/update/communicate
 It is of no use to anyone if only the top management keep
the objectives in their drawers/cupboards and guard them
like the Holy Grail.
Feedback is essential and should be ongoing and
contributed to by everyone within the organization.
And it should be borne in mind that Balanced Scorecards do
not necessarily enable better decision-making!

 Time management is
straightforwardly defined as the
management of time in order to
make the most out of it.

 But in a 2001 interview, David Allen observed:
You can't manage time, it just is. So "time
management" is a mislabeled problem, which has
little chance of being an effective approach. What
you really manage is your activity during time, and
defining outcomes and physical actions required is
the core process required to manage what you do.

 Time - the measured or measurable period during
which an action, process, or condition exists or
continues.
 Management - the act or art of managing : the
conducting or supervising of something (as a
business).
 Managing - to handle or direct with a degree of
skill.

 How much time do you have?
 What are your goals?
 Does free time really mean free time?
 Do you have a schedule?
 Do you use a planner?
 Do you procrastinate?
 Are you equipped with Time Management
Tips?

 There are 24 hours in a day.
 7 days in a week ( 168 hours).
 365 days in a year.
 An extra day during leap year.
◦ Make a list of everything you have to do.
◦ Figure out how much time you can devote to each task.
 By analyzing your time, you will know what time of the day
you do your best work.
 You will discover how much time your wasting with telephone
calls, interruptions, or just hanging out with friends.
◦ Make sure you include class and study time.

 Make your goals specific and
concrete.
 Set long-term and short-term
goals?
 Set a deadline for your goals.
 Monitor your goals.
 Change goals if needed.

 Set up your semester calendar.
◦ Review Syllabus for class schedules.
◦ Block all class and lab times
◦ Highlight exams and project due dates.
◦ Identify routine homework.
◦ Incorporate break time.
 Divide study time into 50-minute blocks.
 Use spare time to review.
 Don’t forget to reward yourself when you do
something right.
 “Work smarter, not harder.” – Alan Lakein

 Which goals are important to you?
 Which goals are urgent?
◦ Assignments due at the ends of the semester can be completed
in a series of steps and need not be completed immediately.
 It is important to work on one task at a time.
 Plan time to begin the process, i.e. visiting the library on several
occasions to gather research data for a paper that is due.
 Try to plan at least two hours of study time to per day to review
class notes from your courses and to work on assignments that
are due.
 Faithfully using your student planner/calendar will help you to
prioritize your work.
◦ How can you establish priorities?
 “to-do list” – Cross off each task as you complete them.

 1. Our Needs
 Eating, sleeping, personal hygiene, etc.
 2. Our Desires
 Socializing, concerts, vacations, reading, exercising,
shopping, TV/video games.
 3. Our Obligations
 Fulfilling the expectations of others.
 Hanging out with friends instead of doing homework or
preparing for an exam.
 Arriving late or missing class will send a negative message
to faculty about what you value.
 Constant stress and anxiety of accompany ineffective time
management.
 An awareness of how you balance your time is good.

 Find balance between:
◦ Academic schedule
◦ Social life
◦ Time alone

 Procrastination is a major obstacle that can
prevent you from practicing good time
management skills.
 It is the constant pushing aside of tasks that
need to be completed and is the archenemy
of all students.

 1. Make the Task Meaningful
◦ Ask yourself why the task is important to you and what it has to do with your
long-term goal.
 2. Take the task apart
◦ Sometime an assignment can appear to be overwhelming. Breaking large
assignments into manageable parts will help. Set dates to work on each of the
pieces.
 3. Keep yourself organized
◦ Having everything you need right at your fingertips will save a lot of time when
starting a project.
 4. Be positive
◦ Avoid speaking negatively about the task and your ability to move toward
completion. Instead, by positive. Tell yourself, “I know that I can finish this
work.”
 5. Plan a reward
◦ Do something for yourself that you would not normally no, but withhold the
reward if the task remains incomplete.
 6. Just do it – Complete the task
◦ The moment you find yourself procrastinating, complete the task; then, you
won’t have to think about it anymore.

 Write things down.
◦ Don’t rely on memory
 Prioritize your list
 Plan your week.
◦ Spend some time at the beginning of each week
to plan your schedule.
 Carry a notebook.
◦ Write down those great ideas and brilliant
insights (capture your thoughts).
 Learn to say no.
◦ Say no to low priority requests.

 Students who control and monitor their time
give themselves the ability to be flexible.
 They understand that TIME can be used as an
important resource.

 Business process outsourcing (BPO) is a
subset of outsourcing that involves the
contracting of the operations and
responsibilities of a specific business process
to a third-party service provider.

Business process outsourcing (BPO) is a
subset of outsourcing that involves the
contracting of the operations and
responsibilities of specific business
functions
(or processes) such as payroll, customer
service, accounting, data recording and
much more to a third-party service
provider.

Not all companies, especially the smaller one, have the cost expertise
needed to manage a complex network of the activity they need. For eg.
many bank don’t have expertise to manage a complex network of ATMs.
Outsourcing enables an enterprises to concentrate its time and efforts on
its key function.
Companies need not invest money in creating and maintaining system
non core activities.
When the predictability of the process/service is not important.
When there is limited opportunity for the firm to distinguish itself
competitively through a particular process/service.

 It is often divided into two categories :
◦ Back Office Outsourcing which includes
internal business functions such as billing or
purchasing.
◦ Front Office Outsourcing which includes
customer-related services such as marketing
or tech support.

BPO that is contracted outside a
company's own country.
BPO that is contracted with the
company's own country.
BPO that is contracted to a
company's neighboring country.

1. Customer Support Services
1
2. Technical Support Services
››› Customers calling to check on their order status.
››› Customers calling to check for information on products and services.
››› Customers calling to verify their account status.
››› Customers calling to check their reservation status etc.
››› Customers calling to resolve a problem with their home
PC.
››› Customers calling to understand how to dial up to their
ISP.
››› Customers calling with a problem with their software or
hardware.
››› Customers calling to resolve other problems with their
products. sanjaykanagala,rimsmba,kakinada

3. Telemarketing Services
1
4. Employee IT Help-desk Services
››› Outbound calling to sell wireless services for a telecom provider.
››› Outbound calling to retail households to sell leisure holidays.
››› outbound calling to existing customers to sell a new rate card for
a mobile service provider.
››› outbound calling to sell credit or debit cards etc.
››› System problem resolutions related to desktop
››› Notebooks, OS, connectivity etc.
››› Office productivity tools support including browsers and
mail.
››› New service requests.
››› IT operational issues.
››› product usage queries etc.

5. Insurance Processing
1
6. Data Entry Services / Data Processing Services
››› New Business / Promotion:
Inbound/outbound sales, Initial Setup, Case Management, Underwriting,
Risk assessment, Policy issuance etc.
››› Policy Maintenance / Management:
Record Changes like Name, Beneficiary, Nominee, Address; Collateral verificati
Surrender Audits Accounts Receivable, Accounting, Claim Overpayment,
Customer care service via voice/email etc.
››› Data entry from Paper/Books with highest accuracy and
quick.
››› Data entry from Image file in any format .
››› Business Transaction Data entry like sales / purchase /
payroll.
››› Data entry of E-Books / Electronic Books.
››› Receipt and Bill Data Entry etc. sanjaykanagala,rimsmba,kakinada

7. Book Keeping and Accounting Services
1
8. Internet / Online / Web Research
››› General Ledger
››› Accounts Receivables and Accounts Payable
››› Financial Statements
››› Bank Reconciliation
››› Assets / Equipment Ledgers etc.
››› Internet Search.
››› Product Research & Market Research.
››› Survey, Analysis.
››› Web and Mailing list research etc.

BPO appears to be an all inclusive term that covers everything:
››› Medical transcription
››› Animation
››› Power point presentations
››› Equity research
››› Contract research
››› Call centres
››› Collections
››› IT Help desk
››› Internet chat
››› Customer service
››› Transaction processing
››› Travel bookings
››› Accounting
››› etc. etc. etc.

Everyone industry is into outsourcing:
››› Banks
››› Insurance
››› Asset management
››› Manufacturing
››› Healthcare and Pharma
››› IT
››› Telecom
››› Travel agencies
››› Airlines
››› Governments

Advantages
•Productivity Improvements
•Cost Savings
•Improved HR
•Focus on Core Business
Competency
•Improve Service Level
•Reengineer Business
Process
• Access to world class
capabilities
•Higher level of service with
lower cost
Disadvantages
•Knowledge Disappears and
is Transferred to the
Outsourcing Partner
•Poor Quality Control
•Restoring Operations is
Complicated
•Lack of Loyal Employees
•Reduction in Strategic
Alignment
•Political and religious
instability

Knowledge Process
Outsourcing
Information
technology
Enabled service
Business Process
Outsourcing
BPO ITES KPO

Business process outsourcing is progressing fast in India.
As of 2008, around 0.7 million people work in outsourcing sector.
During the years 2003-04, the ITES-BPO segment achieved a 54
percent growth in revenues as compared to the previous years.
The number of Indians working for the ITES sector jumped to
245,500 in the year 2004.

ITES, Information Technology Enabled Service, is defined as
outsourcing of processes that can be enabled with information
technology and covers diverse Areas like finance, HR,
administration, health care, telecommunication, anufacturing
etc. Armed with technology and manpower, these services are
provided from e-enabled locations. This radically reduces costs
and improve service standards. In short, this Internet service
provider aims in providing B2B e-commerce solutions.
The main objectives of ITES are :
» Enabling business strategy
» Achieving an organization's business goals

Knowledge process outsourcing (KPO) is a form of outsourcing, in
which knowledge related and information-related work is
carried out by workers in a different company.
KPO services include the following:
>> Investment research services
(equity, fixed income and credit, and quantitative research)
>> Business research services
>> Data Analytics
>> Market research services
>> Valuation and fairness opinions
>> Legal process outsourcing
>> Patent research services
>> Business operations support, analytics & management
>> Editorial process outsourcing

Genpact
WNS
WiproBPO
HCL TechnologiesBPO
ICICI OneSource
IBM Daksh
Progeon(Infosys)
Aegis BPOService
EXLServiceHolding
Convergys
Zenta
Mphasis
Tracmail
GTLLtd.
VCustomer
HTMT
24/7Customer
SutherlandTechnologies

Why People
Leave
1. Did not get a better
job.
2. Find nothing better to
do.
3. Education level doesn't
matter
4. Good work
environment
5. Good Benefits
6. Flexibility of time
7. Attractive life style
Why People Prefer
Why people prefer Join and Leave BPO
In generalapersonwithany graduationcanjoinanyofthe BPO. SomeBPO'slike
totake peoplewithMBA butthenagainthe specializationareofanindividualhardly
makes anydifference.Again,this istheindustry,wherethereisno referencechecks
and veryoften peopledon't evenspecifythereexact age.Letsmesharewithyou
someofthe reasonsaswhy peopleprefertojoinand leaveaBPO:
1. No growth
opportunity/lack of
promotion
2. For higher Salary
3. For Higher education
4. Misguidance by the
company
5. Policies and procedures
are not conducive
6. No personal life
7. Physical strains
8. Uneasy relationship with
peers or managers

Strengths
•Large no. of talented graduates
•Affordable and quality education as compared
to developed countries
•English language benefit
•Strong customer base of well known companies
•Powerful venture capital interest in investing in
growth opportunity
S W
TO
SWOT Analysis for BPO in India
Weakness
•Scarce foreign language skills other than
English.
•Lack of customer service culture
•Expensive and poor quality telecom
infrastructure
•Poor electricity supply
•Cultural differences
Opportunities
•Horizontal and vertical expansion of existing
customer base into new markets
•Time zone difference between India and target
markets
Threats
•High Billing rates
•Political instability
•India's competitors in Eastern Europe, Latin
America and the Asia

12 March 2014 Version 1

Advanced Learning Workshop –
Status (14 June 2013)
Do you personally suffer from excessive
stress?
What are the signs of excessive stress?
What can you do to help alleviate your stress?

Common Physical symptoms of stress can include:
 Rapid heartbeat.
 Headache.
 Stiff neck and/or tight shoulders.
 Backache.
 Rapid breathing.
 Sweating and sweaty palms.
 Upset stomach, nausea, or diarrhea.
 Sleep trouble.
 Weakening of the immune system

Common Mental symptoms of stress include:
 Irritability
 Intolerance
 Short Temper
 Exhaustion
 Lack of concentration
 Frustration over minor challenges

Using the handout for reference, rate how often on a
scale of 1 to 10 (1 being never, 10 being more than 5-6
times a week) you experience the below mentioned
symptoms:
Headaches
Back/neck pain
Chest pain or discomfort
Problems with digestion/nausea
Dizziness, numbness or tingling in your fingers or toes
Irritability
Frustration
Emotional Fatigue
Concentration/Memory Problems

If you’ve rated 6 or more of the symptoms on the
handout with a 5 or higher, you should consider
reviewing your stress level and possibly taking some
action to reduce it. If you have rated 6 or more of the
above with a 4 or less, it shows you manage your
stressful situations well.
It can’t hurt to get some ideas on different ways of
coping with stress regardless of your personal score. So,
let’s take a look.

If you determine that you are experiencing
excessive stress, what can you do?
◦ Find out what is causing stress in your life and
determine ways to reduce or eliminate the cause.
◦ Change your response to the stress by using old
and new coping techniques
◦ Learn healthy ways to prevent stress and reduce its
harmful effects.
Options to Alleviate Your
Stress

Some of these may include:
 Being fired
 Being Promoted or Demoted
 Moving/Relocation
 Marriage/Divorce
 Pregnancy
 Death of family or friends
These are just examples of major life changes that can have
a serious impact on our lives and cause our bodies to react
with stress. Often times, the most common and stressful
things happen on a daily basis.

 Adjustments to your daily routine
 Sleeping and eating habits
 Time-management due to additional academic
work loads, finding the balance of studying, free
time and deadlines
 Missing your social support network of high school
friends and family
 Learning new navigations such as getting around
campus, living on your own, choosing your classes,
choosing new friends, choosing your life’s
direction and career path for your future

Using the handout, take a few
minutes to honestly consider what
causes your daily stresses
Family?
School?
Friends?
Work?
Etc…
List the top 10 on your worksheet

1) Time Management can be a huge cause for stress in
many peoples’ lives. Consider taking a class or course
or reading information available online or in
magazines or books on how to better manage your
time and tasks.
2) Schedule - You may get more done with less stress if
you make a schedule. Think about which things are
most important, and put those at the top of your
schedule/list to do those things first.
3) Take good care of yourself. Exercise, get plenty of rest,
try to eat well, don't smoke and limit how much
alcohol you drink.

4) Stop negative thoughts. Easier said then done
right? Well, it’s a skill that would be beneficial to
develop. Try writing down your worries and work on
letting go of things you cannot change. Don’t worry
about things that have past. Focus on the positives
and the future that you can still impact.
5) Speak up. Assertive communication can help you
express how you feel in a thoughtful, tactful way.

6) Ask for help. People who have a strong network of
family and friends manage stress better.
7) Do something you enjoy. A hobby, a bath, meditation,
walking, or volunteering are good, helpful ways to help
you feel better and relieve stress. Listen to relaxing music.
8) Keep a journal. Try including dates, time of day, time
of year, current events in your life, even your food intake
and exercise routine (if any).

Status (14 June 2013)9) Focus on the present. Try meditation, imagery exercises, or
self-hypnosis. Don’t keep thinking back to your mistakes and
reliving the negative things that happened. There is nothing you
can do about it. Let it go and look ahead, not behind.
10) Laugh it up! Try to look for the humor in life. Don’t take
yourself so seriously. Everything will pass eventually and keeping
a sense of humor will help lighten the load. Laughter really can be
the best medicine!

Status (14 June 2013)From Exercise 2, select your top two factors of stress in your life from
Handout B
For each of these two, ask yourself the following questions:
1) Can this situation be changed or improved? If so,
how?
(As an example: Relationship stress - assertive communication training, setting
boundaries, resolving conflict
Over commitment stress - setting boundaries, saying no, eliminating some things
from your schedule
Grief and loss stress - seeking support, journaling, finding enjoyable activities to
fill your day)

2) What coping mechanisms (old or new) may help me to
better handle the current stressful situation in my life?
 (As an example: Meditation, Exercise, Engaging with friends, Listen to
relaxing music, write down in a journal what things you want to let go)
3) Is there anything I can do to prevent or avoid having this
situation reoccur in the future?
 (As an example: Implement a schedule to better manage my time, ask
for help if there are too many actions on my to-do list, go to bed
earlier to have a better night’s sleep and more productive day)

 There are times you might need external help in
dealing with your stress
 If it becomes too much to handle reach out . . . The
university offers several resources to help:
◦ Student Services Center
◦ Moderators
◦ Department Heads
◦ Health Counselors
◦ Upper Classman Associations

In Conclusion, make a commitment to yourself to change
the situation(s) causing you stress, seek new and
different ways to cope with the daily stresses and attempt
to become more efficient so that you may foresee what
stresses may arise and possibly, avoid or alleviate them.

Name
E-mail
Phone
Campus Student Life contact(s):
Ombudsman, Dean of Students, etc.

JIT

 JIT philosophy means getting the right
quantity of goods at the right place and the
right time
 JIT exceeds the concept of inventory
reduction; it is an all-encompassing
philosophy geared to eliminate waste,
anything that does not add value
 A broad JIT view – or lean production/lean
systems - is one that encompasses the entire
organization

 JIT originated in Japan at Toyota Motor Co,
fueled by a need to survive the devastation
post WWII
 JIT gained worldwide prominence in the
1970s
 Often termed “Lean Production” or “Lean
Systems”
 Broad view that entire organization has the
same goal - to serve customers

 JIT is built on simplicity - simpler is better
 Continuous improvement – often using kaizen
blitz
 Visibility – all waste must be visible to be
identified and eliminated
 Flexibility - to adapt to changes in environment

 JIT manufacturing focuses on production
system to achieve value-added
manufacturing
 TQM is an integrated effort designed to
improve quality performance at every level
 Respect for people rests on the philosophy
that human resources are an essential part
of JIT philosophy

 JIT Manufacturing is a philosophy of value-
added manufacturing
 Achieved by focusing on these elements:
◦ Inventory reduction - exposes problems
◦ Kanbans & pull production systems
◦ Small lots & quick setups
◦ Uniform plant loading
◦ Flexible resources
◦ Efficient facility layouts

 Inventory = Lead Time (less is better)
 Inventory hides problems

down?orupround:Question
containerskanban4.4
25
10(200)(.5)
C
SDT
N
bottles10.5)0.10(200)(d)(T)0.10(demanS
containerperbottles25C
hour.5minutes30T
hourperbottles200D
:Solution










N = number of containers
D = demand rate at the withdraw station
T = lead time from supply station
C = container size
S = safety stock
C
SDT 
N

 Kanban boxes – space on factory floor for
storing supplies
 Flags – used to indicate when supplies need
to be ordered
 Supplier kanbans – brings filled containers to
point of usage in factory/picks up empty
containers

 Small lots mean less average inventory and shorten
manufacturing lead time
 Small lots with shorter setup times increase
flexibility to respond to demand changes
 Strive for single digit setups- < 10 minutes
 Setup reduction process is well-documented
◦ External tasks- do as much preparation while present job is
still running
◦ Internal tasks- simplify, eliminate, shorten steps involved
with location, clamping, & adjustments
 Ultimate goal is single unit lot sizes

 A “level” schedule is developed so that the same mix of
products is made every day in small quantities
 Leveling the schedule can have big impact along whole supply
chain
Monday Tuesday Wednesday Thursday Friday
AAAAA BBBBB BBBBB DDDDD EEEEE
AAAAA BBBBB BBBBB CCCCC EEEEE
Monday Tuesday Wednesday Thursday Friday
AABBBB AABBBB AABBBB AABBBB AABBBB
CDEE CDEE CDEE CDEE CDEE
5 units
5 units
10 units
Weekly Production Required
Traditional Production Plan
JIT Plan with Level Scheduling
A
B
C
D
E
10 units
20 units

 Moveable, general purpose equipment:
◦ Portable equipment with plug in power/air
◦ Drills, lathes, printer-fax-copiers, etc.
◦ Capable of being setup to do many different
things with minimal setup time
 Multifunctional workers:
◦ Workers assume considerable responsibility
◦ Cross-trained to perform several different duties
◦ Trained to also be problem solvers

 Workstations in close physical proximity to
reduce transport & movement
 Streamlined flow of material
 Often use:
◦ Cellular Manufacturing (instead of process focus)
◦ U-shaped lines: (allows material handler to quickly
drop off materials & pick up finished work)

 Associates gather performance
data
 Team approaches used for
problem-solving
 Decisions made from bottom-up
 Everyone is responsible for
preventive maintenance

 Integrate quality into all processes
◦ Focus on continuous improvement - Kaizen
 Quality at the source - sequential
inspection
◦ Jidoka - authority to stop line
◦ Poka-yoke - fail-safe all processes
 Preventive maintenance - scheduled
 Work environment - everything in its place,
a place for everything

The Role of Employees:
◦ Genuine and meaningful respect for associates
◦ Willingness to develop cross-functional skills
◦ Bottom-round management – consensus
management by committees or teams
◦ Quality circles – small volunteer teams that solve
quality problems

Lifetime Employment:
◦ Everyone feels secure/is
empowered
◦ Everyone is responsible for quality:
understand both internal and
external customer needs

The Role of Management:
 Responsible for culture of mutual trust
 Serve as coaches & facilitators
◦ Responsible for developing workers
◦ Provide multi-functional training
◦ Facilitate teamwork
 Support culture with appropriate incentive
system including non-monetary

Supplier Relationships
 Single-source suppliers
◦ Can supply entire family of parts
 Build long-term relationships with small
number of suppliers
◦ Fewer contracts
◦ Cost and information sharing
◦ Work together to certify processes

 Reduction in inventories
 Improved quality
 Reduced space requirements
 Shorter lead times
 Lower production costs
 Increased productivity
 Increased machine utilization
 Greater flexibility

 Starts with a company shared vision of where
it is and where it wants to go
 Management needs to create the right
atmosphere
 Implementation needs a designated
“Champion”

 Implement the sequence of seven steps:
1. Make quality improvements
2. Reorganize workplace
3. Reduce setup times
4. Reduce lot sizes & lead times
5. Implement layout changes
6. Switch to pull production
7. Develop relationship with suppliers

Many JIT concepts also apply to Service
companies
 Improved quality such as timeliness, service
consistency, and courtesy
 Uniform facility loading to provide better service
responsiveness
 Use of multifunction workers
 Reduction in cycle time
 Minimizing setup times and parallel processing
 Workplace organization

JIT: an overriding philosophy that affects all
other business decisions
 Quality Improvements (chs 5 & 6)
 Partnering with suppliers (ch 4)
 Changing job designs (ch 11)
 Facility layout (ch 10)
 Changes in production process (ch 3)
 Changes in inventory (ch 12)

 JIT eliminates organizational barriers and
improves communications
◦ Accounting changes or relies on activity-based
costing
◦ Marketing by interfacing with the customers
◦ Finance approves and evaluates financial
investments
◦ Information systems create the network of
information necessary for JIT to function

 JIT is a philosophy that was developed by the
Toyota Motor Company in the mid-1970s. It
has become the standard for many industries
by focusing on simplicity, eliminating waste,
taking a broad view of operations, visibility,
and flexibility. Three key elements of this
philosophy are JIT manufacturing, total quality
management, and respect for people.
 JIT views waste as anything that does not add
value.

 Traditional manufacturing systems use “push”
production; JIT uses “pull” production. Push
systems anticipate future demand and produce
in advance in order to have products in place
when demand occurs. Pull systems work
backwards. The last workstation in the
production line requests the precise amounts
of materials required.

 JIT manufacturing is a coordinated production
system that enables the right quantities of parts
to arrive when/where they are needed. Key
elements of JIT manufacturing are the pull
system and kanban production, small lot sizes
and quick setups, uniform plant loading,
flexible resources, and streamlined layout.

 TQM creates an organizational culture that
defines quality as seen by the customer. The
concepts of continuous improvement and
quality at the source are integral to allowing for
continual growth and the goal of identifying the
causes of quality problems.

 JIT considers people to be the organization’s
most important resource.
 JIT is equally applicable in service
organizations, particularly with the push toward
time-based competition and the need to cut
costs.
 JIT success is dependent on interfunctional
coordination and effort.

◦ (a) Time must be consistent (e.g.; everything in
minutes or hours or days). Safety stock is omitted if
not stated. Number of containers must be a whole
number—round up, not down.
◦ (b) Ignore demand changes, just think about the
affect on the formula if the system were improved.

TQM

What is TQM?
TQM is the integration of all functions and processes within
an organization in order to achieve continuous improvement
of the quality of goods and services. The goal is customer
satisfaction.
“ No doubt , humans are always deficient”
(Al-Quran)

 Deming: the best known of the “early” pioneers, is
credited with popularizing quality control in Japan in early
1950s.Today, he is regarded as a national hero in that
country and is the father of the world famous Deming prize
for quality.

 Juran, like Deming was invited to Japan in 1954 by the
union of Japanese Scientists and engineers.
 Juran defines quality as fitness for use in terms of design,
conformance, availability, safety and field use. He focuses
on top-down management and technical methods rather
than worker pride and satisfaction.

 Quality is defined as conformance to requirements, not
“goodness”
 The system for achieving quality is prevention, not
appraisal.
 The performance standard is zero defects, not “that’s close
enough”
 The measurement of quality is the price of non-
conformance, not indexes.

 Inspection is never the answer to quality improvement, nor
is “policing”.
 Involvement of leadership and top management is essential
to the necessary culture of commitment to quality.
 A program for quality requires organization-wide efforts
and long term commitment, accompanied by the necessary
investment in training.
 Quality is first and schedules are second.

 The concept and vocabulary of quality are elusive. Different
people interpret quality differently. Few can define quality
in measurable terms that can be proved operationalized.
When asked what differentiates their product or service;
The banker will answer” service”
The healthcare worker will answer “quality health care”
The hotel employee will answer “customer satisfaction”
The manufacturer will simply answer “quality product”

 Harvard professor David Garvin, in his book
Managing Quality summarized five principal
approaches to define quality.
 Transcendent
 Product based
 User based
 Manufacturing based
 Value based

 Those who hold the transcendental view would say “I can’t
define it, but I know it when I see it”
 Advertisers are fond of promoting products in these terms.
“ Where shopping is a pleasure” (supermarket). “We love
to fly and it shows" (airline).
Television and print media are awash with such indefinable
claims and therein lies the problem:
 Quality is difficult to define or to operationalize. It thus
becomes elusive when using the approach as basis for
competitive advantage. Moreover, the functions of design,
production and service may find it difficult to use the
definition as a basis for quality management.

 Quality is viewed as a quantifiable or measurable
characteristic or attribute. For example durability or
reliability can be measured and the engineer can design to
that benchmark.
 Quality is determined objectively.
 Although this approach has many benefits, it has limitation
as well. Where quality is based on individual taste or
preference, the benchmark for measurement may be
misleading.

It is based on idea that quality is an individual matter and
products that best satisfy their preferences are those with
the highest quality. This is rational approach but leads to
two problems;
 Consumer preference vary widely and it is difficult to
aggregate these preferences into products with wide appeal.
This leads to the choice between a niche strategy or a
market aggregation approach which tries to identify those
product attributes that meet the needs of the largest number
of consumers.
 Another problem concerns the answer to the question “Are
quality and customer satisfaction the same?” the answer is
probably not. One may admit that a Lincoln continental has
many quality attribute, but satisfaction may be better
achieved with an Escort.

 Manufacturing-based definitions are concerned primarily
with engineering and manufacturing practices and use the
universal definition of “conformance to requirements”.
Requirements or specifications are established by design
and any deviation implies a reduction in quality. The
concept applies to services as well as product. Excellence in
quality is not necessarily in the eye of the beholder but
rather in the standards set by the organization.
 This approach has the serious weakness. The consumer’s
perception of quality is equated with conformance and
hence is internally focused.

 It is defined in term of costs and prices as well as
number of other attributes. Thus, the consumer’s
purchased decision is based on quality at an
acceptable price. This approach is reflected in the
popular Consumer Reports magazine which ranks
products and services based on two criteria: Quality
and Value.
 The highest quality is not usually the best value.
That designation is assigned to the “best- buy”
product or service.

MANAGEMENT
OF PROCESS
QUALITY
HUMAN RESOURCE
DEVELOPMENT
AND
MANAGEMENT
STRATEGIC
QUALITY
PLANNING
INFORMATION
AND ANALYSIS
CUSTOMER
FOCUS
AND
SATISFACTION
QUALITY
AND
OPERATIONAL
RESULTS
SENIOR
EXECUTIVE
LEADERSHIP
System Approach for TQM
Driver
System

LM
DM KM

 Visible, Committed and Knowledgeable
 A Missionary Zeal
 Aggressive Targets
 Strong Drivers
 Communication of Values
 Organization
 Customers Contact

Five Principles are:
 Quality Work the First Time
 Focus on the Customer
 Strategic Holistic Approach to Improvement
 CI as a Way of Life
 Mutual Respect and Teamwork

Customer Expectations
Company Operations
(Processes)
Customer Satisfaction

 Frontline empowerment
 Excellent hiring, training, attitude and morale for front line
employees
 Proactive customer service system
 Proactive management of relationship with customers
 Use of all listening posts
 Quality requirements of market segment
 Commitment to customers
 Understanding customer requirements
 Service standards meeting customers requirements

Higher quality means higher cost.
 Quality attributes such as performance and features cost more in
terms of labor, material, design and other costly resources.
 The additional benefits from improved quality do not compensate
for additional expense.
The cost of improving quality is less than the resulting savings.
 The saving result from less rework, scrap and other direct expenses
related defects.
 This is said to account for the focus on continuous improvement of
processes in Japanese firms.

Quality costs are those incurred in excess of those
that would have been incurred if the product were
built or the service performed exactly right the first
time.
 This view is held by adherents of TQM philosophy.
Costs include not only those that are direct, but also
those resulting from lost customers, lost market share
and the many hidden costs and foregone opportunities
not identified by modern cost accounting systems.

COST OF QUALITY IS THE COST OF
NON QUALITY
1: 10:100 Rule
“A stitch in time saves nine”

Types of Quality Costs
The cost of quality is generally classified into four
categories
1. Cost of Prevention
2. Cost of Appraisal
3. Cost of Internal Failure
4. Cost of External Failure

Cost of Prevention
 Prevention costs include those activities which remove and
prevent defects from occurring in the production process.
 Included are such activities as quality planning, production
reviews, training, and engineering analysis, which are
incurred to ensure that poor quality is not produced.
Appraisal
 Those costs incurred to identify poor quality products after
they occur but before shipment to customers. e.g. Inspection
activity.

Internal Failure
 Those incurred during the production process.
 Include such items as machine downtime, poor quality
materials, scrap, and rework.
External Failure
 Those incurred after the product is shipped.
 External failure costs include returns and allowances,
warranty costs, and hidden costs of customer dissatisfaction
and lost market share.

 Greater customer loyalty
 Market share improvement
 Higher stock prices
 Reduced service calls
 Higher prices
 Greater productivity

 A metric, methodology and philosophy.
 3.4 defects per million opportunities or being
99.9997% defect free in process and product.
 Measure how many "defects" are in a process
then systematically figure out how to eliminate
them and get as close to "zero defects" as
possible.
 Should be in in everything we do and in every
product we design.

 3.4 million defects per opportunity
 What’s the difference between 99% and
99.9997%
 7 lost mail per hour instead 20000 per hour.
 Unsafe drinking water for 2 minutes per year
instead of 15 minutes per day.
 1 plane crash every 5 years instead 2 plane
crashes annually.

 The Customer
 The Process
 The Employee

 Customers are the center of
any company’s universe:
they define quality. They
expect performance,
reliability, competitive
prices, on-time delivery,
service, clear and correct
transaction processing and
more. Our customers’
satisfaction is priority
number 1. If we don't keep
them happy, someone else
will.

 Outside-In Thinking
 By understanding the
transaction lifecycle from
the customer's needs and
processes, we can discover
what they are seeing and
feeling. With this
knowledge, we can identify
areas where we can add
significant value or
improvement from their
perspective

 Employees must focus their talents and
energies on satisfying customers.
 Employees are trained in the strategy,
statistical tools and techniques of Six
Sigma quality. Training courses are
offered at various levels:
 Quality Overview Seminars: basic Six
Sigma awareness.
 Team Training: basic tool introduction to
equip employees to participate on Six
Sigma teams.
 Master Black Belt, Black Belt and Green
Belt Training: in-depth quality training
that includes high-level statistical tools,
basic quality control tools, Change
Acceleration Process and Flow
technology tools.
 Design for Six Sigma (DFSS) Training:
prepares teams for the use of statistical
tools to design it right the first time.

 Black Belt
 Champion
 DMAIC(Define, Measure, Analyze, Improve
and Control)
 Master Black Belt
 Root Cause
 Yellow Belt

 Someone who has undergone intensive Six Sigma
training, passed a certification exam, becomes a full-time
Six Sigma project leader and successfully implements
Six Sigma projects with defined business results within a
certain time period. People who are taken out of their
current roles, participate in intense training, take the
certification exam and lead two to four Six Sigma
projects each year. At the end of a two-year rotation,
Black Belts will return to their business unit and continue
to use their skills in new assignments.

 Business leaders and senior
managers who identify Six Sigma
projects and work with Black Belts to
promote successful implementation of
Six Sigma methodology in their
respective areas of responsibility.

 A Six Sigma methodology that involves five
phases: Define, Measure, Analyze, Improve
and Control. Black Belts use DMAIC to improve
processes, products and programs.

 Unlike Black Belts, they do not leave
their current work assignments or
spend 100% of their time on Six
Sigma initiatives. Instead, they are
trained in Six Sigma and then
incorporate it into the way work gets
done in their current area of
responsibility.

 Someone who works with senior leaders to define Six
Sigma projects, objectives, goals and plans. Then,
he/she works with Black Belts to track progress,
continue training and coordinate efforts.
 Root Cause - The fundamental cause of errors, which, if
eliminated, would prevent recurrence of errors. Six
Sigma methodology strives to identify root causes of
quality problems and implement plans to permanently
correct them.

 Someone who typically has a basic knowledge
of Six Sigma, but does not lead projects on their
own, like a Black Belt or Green Belt. A Yellow
Belt often supports different phases of a Black
Belt’s or Green Belt’s project plan.

 To achieve Six Sigma quality, a process must produce no more than
3.4 defects per million opportunities.
 Critical to Quality (CTQ):Attributes most important to the customer
 Defect:Failing to deliver what the customer wants
 Process Capability:What your process can deliver
 Variation:What the customer sees and feels
 Stable Operations:Ensuring consistent, predictable processes to improve what the
customer sees and feels
 Design for Six Sigma:Designing to meet customer needs and process capability
 Customers don't judge us on averages, they feel the variance in each transaction,
each product we ship. Six Sigma focuses first on reducing process variation and then
on improving the process capability.
 Customers value consistent, predictable business processes that deliver world-class
levels of quality.

 Define
 Measure
 Analyze
 Improve
 Control

 Define the Customer, their Critical to
Quality (CTQ) issues, and the Core Business
Process involved.
 Define who customers are, what their
requirements are for products and services,
and what their expectations are
 Define project boundaries (scope) the stop
and start of the process
 Define the process to be improved by
mapping the process flow

 Measure the performance of the Core
Business Process involved.
 Develop a data collection plan for the process
 Collect data from many sources to determine
types of defects and metrics
 Compare to customer survey results to
determine shortfall

 Analyze the data collected and process map
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

 Improve the target process by designing
creative solutions to fix and prevent
problems.
 Create innovate solutions using technology
and discipline
 Develop and deploy implementation plan

 Control the improvements to keep the
process on the new course.
 Prevent reverting back to the "old way"
 Require the development, documentation
and implementation of an ongoing
monitoring plan
 Institutionalize the improvements through
the modification of systems and structures
(staffing, training, incentives)

 Why customers place calls to our customer care centers? The company found that over 12,000 calls related to an inquiry or dispute about sales
and property taxes. Another audit revealed that the same issue was costing the company more than $500,000 annually in uncollected taxes, interest
and fines. A cross-enterprise team was assembled to resolve the problem, using a Six Sigma methodology (DMAIC).
 The team included: Bob Rosenblum, who championed the project, Janet Garner, Sandy Pfannkuch and Charlie Elms, who owned the processes
related to the project, Alan Daniels, the project’s Six Sigma Black Belt, Alan Carlo and Bill Gowrie, the project’s Six Sigma Green Belts, (Yellow
Belts) Pat Nissley and Dianne Askew, from our call center operations, Lynne Vidal and John McKenna from Voyager, Dawn Hallaman, Kirti Bhardwaj
and Mike Wilk from IT/Systems, Alesia Pratcher and Kathy Cracas from Tax
 ***Define The team defined the problem and scope of the project: inaccurate sales and tax exemption records resulted in over $500,000 in uncollected
taxes, interest and fines paid by Pitney Bowes in 2002. To resolve the issue, the team would look at the corporate, GMS and IBS sales tax exemption
processes and recommend changes/solutions that would permanently address the issue.
 ***Measure The team collected one month of data from the daily processes performed at the corporate and IBS tax departments. They
also took a random sampling of 200 customers who were coded as “tax exempt” in our databases to check if we had valid certificates that proved their
status. The team also looked at how many times we approved or rejected customers’ requests for tax exempt status.
 ***Analyze· 83% of exemption requests rejected because no certificate was received
 · When certificates are received, 78% of accepted result in a billing adjustment for taxes that billed on the first invoice
 · 71% of IBS customers that require a certificate had one on file
 · 24% of other customers that required a certificate had one on file
 · No process existed to identify expired certificates and request new certificates from customers
 The team also analyzed what actions were critical to ensure a new process would permanently resolve the problem. They identified items
like timely submission and delivery of certificates, prompt reviews of customers’ requests, closed loop communications with customers and PB
departments and more.
 ***Improve After all of this analysis, the team implemented a simpler, more disciplined process for managing tax exempt requests.
Now, the direct sales force and customers fax a tax exempt certificate directly to the Tax Department for review and imaging, rather than sending it inter-
office mail -- which caused a tremendous time and control delay. As a result, the process for handling tax exempt requests takes just two days – that’s
compared to 25 days under the old process.
 ***Control To ensure the improvements would work and be maintained, the team assigned clear accountabilities for each part of the
process, implemented metrics to measure results and identified what the company should do to keep the process in check, should certain issues arise.
 The Results: The number of customer calls related to tax exempt issues has decreased. The number of billing adjustments that have to be made as a
result of the tax departments not receiving certificates has decreased. The number of customer complaint letters about this issue has decreased. And
the new process is expected to save the company over $500,000 in 2004 and beyond.

 CMM: Capability Maturity Model
 Developed by the Software Engineering
Institute of the Carnegie Mellon University
 Framework that describes the key elements of
an effective software process.

 Describes an evolutionary improvement
path for software organizations from an ad
hoc, immature process to a mature,
disciplined one.
 Provides guidance on how to gain control
of processes for developing and
maintaining software and how to evolve
toward a culture of software engineering
and management excellence.

 Software Process
◦ set of activities, methods, practices, and
transformations that people use to develop
and maintain software and the associated
products (e.g., project plans, design
documents, code, test cases, user manuals)
 Software Process Capability
◦ describes the range of expected results that
can be achieved by following a software
process
◦ means of predicting the most likely outcomes
to be expected from the next software project
the organization undertakes

 Software Process Performance
◦ actual results achieved by following a software
process
 Software Process Maturity
◦ extent to which a specific process is explicitly
defined, managed, measured, controlled and
effective
◦ implies potential growth in capability
◦ indicates richness of process and consistency
with which it is applied in projects throughout the
organization

Maturity level indicates level of process
capability:
 Initial
 Repeatable
 Defined
 Managed
 Optimizing

Initial : The software process is
characterized as ad hoc, and occasionally
even chaotic. Few processes are defined,
and success depends on individual effort.
At this level, frequently have difficulty making
commitments that the staff can meet with an
orderly process
Products developed are often over budget and
schedule
Wide variations in cost, schedule, functionality
and quality targets
Capability is a characteristic of the individuals,
not of the organization

Basic process management processes are
established to track cost, schedule, and
functionality. The necessary process
discipline is in place to repeat earlier
successes on projects with similar
applications.
Realistic project commitments based on
results observed on previous projects
Software project standards are defined and
faithfully followed
Processes may differ between projects
Process is disciplined
earlier successes can be repeated

The software process for both management
and engineering activities is documented,
standardized, and integrated into a standard
software process for the organization. All
projects use an approved, tailored version of
the organization’s standard software process
for developing an maintaining software.

Detailed measures of the software
process and product quality are
collected. Both the software process and
products are quantitatively understood
and controlled.
Narrowing the variation in process
performance to fall within acceptable
quantitative bounds
When known limits are exceeded, corrective
action can be taken
Quantifiable and predictable
predict trends in process and product quality

Continuous process improvement is
enabled by quantitative feedback from the
process and from piloting innovative ideas
and technologies.
Goal is to prevent the occurrence of defects
Causal analysis
Data on process effectiveness used for cost
benefit analysis of new technologies and
proposed process changes

 Except for level 1, each level is decomposed
into key process areas (KPA)
 Each KPA identifies a cluster of related
activities that, when performed collectively,
achieve a set of goals considered important
for enhancing software capability.
◦ commitment
◦ ability
◦ activity
◦ measurement
◦ verification

 Requirements Management
◦ Establish common understanding of customer
requirements between the customer and the
software project
◦ Requirements is basis for planning and
managing the software project
◦ Not working backwards from a given release
date!
 Software Project Planning
◦ Establish reasonable plans for performing the
software engineering activities and for
managing the software project

 Software Project Tracking and Oversight
◦ Establish adequate visibility into actual progress
◦ Take effective actions when project’s
performance deviates significantly from planned
 Software Subcontract Management
◦ Manage projects outsourced to subcontractors
 Software Quality Assurance
◦ Provide management with appropriate visibility
into
 process being used by the software projects
 work products

 Software Configuration Management
◦ Establish and maintain the integrity of work
products
◦ Product baseline
◦ Baseline authority

 Organization Process Focus
◦ Establish organizational responsibility for
software process activities that improve the
organization’s overall software process capability
 Organization Process Definition
◦ Develop and maintain a usable set of software
process assets
 stable foundation that can be institutionalized
 basis for defining meaningful data for quantitative
process management

 Training Program
◦ Develop skills and knowledge so that individual
can perform their roles effectively and efficiently
◦ Organizational responsibility
◦ Needs identified by project
 Integrated Software Management
◦ Integrated engineering and management activities
◦ Engineering and management processes are
tailored from the organizational standard
processes
◦ Tailoring based on business environment and
project needs

 Software Product Engineering
◦ technical activities of the project are well
defined (SDLC)
◦ correct, consistent work products
 Intergroup Coordination
◦ Software engineering groups participate
actively with other groups
 Peer Reviews
◦ early defect detection and removal
◦ better understanding of the products
◦ implemented with inspections, walkthroughs,
etc

 Quantitative Process Management
◦ control process performance quantitatively
◦ actual results from following a software
process
◦ focus on identifying and correcting special
causes of variation with respect to a baseline
process
 Software Quality Management
◦ quantitative understanding of software quality
 products
 process

 Process Change Management
◦ continuous process improvement to improve
quality, increase productivity, decrease cycle time
 Technology Change Management
◦ identify and transfer beneficial new technologies
 tools
 methods
 processes
 Defect Prevention
◦ causal analysis of defects to prevent recurrence

 Helps forge a shared vision of what
software process improvement means for
the organization
 Defines set of priorities for addressing
software problems
 Supports measurement of process by
providing framework for performing reliable
and consistent appraisals
 Provides framework for consistency of
processes and product

Obtain data that helps us to better control
 schedule
 cost
 quality of software products

 Quantitatively expressing requirements,
goals, and acceptance criteria
 Monitoring progress and anticipating
problems
 Quantifying tradeoffs used in allocating
resources
 Predicting schedule, cost and quality

 Historical
 Plan
 Actual
 Projections

Unit of Measure Characteristics Addressed
Physical source lines of code
Logical source lines of code
Size, reuse, rework
Staff hours Effort, cost, resource allocations
Calendar dates for process
milestones
Calendar dates for deliverables
Schedule, progress
Problems and defects Quality, improvement trends,
rework, readiness for delivery

 Estimated number of requirements
 Actual number of requirements
 Estimated source lines of code (SLOC)
 Actual SLOC
 Estimated number of test cases
 Actual number of test cases

 Estimated man-hours to design/code a given
module
 Actual man-hours expended for
designing/coding the module
 Estimated number of hours to run builds for a
given release
 Actual number of hours spent running builds
for the release

 Number of issues raised at requirements
inspection
 Number of requirements issues open
 Number of requirements issues closed
 Number of issues raised during code
inspection
 Number of defects opened during unit testing

 Number of defects opened during system
testing
 Number of defects opened during UAT
 Number of defects still open
 Number of defects closed
 Defect age

 Total number of build failures
 Total number of defects fixed for a given
release
 Total number of defects verified and accepted
 Total number of defects verified and rejected

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