Subhrajyoti Das

The first and foremost step is to calculate the Project Profitability Index and show the impact to the senior management where the PPI stands in terms of present value of the future cash inflows. If the PPI is greater than 1 it is very obvious that the Management would rethink on the next approach. Next,apply theory of constraints and showcase the major road blocks how this affects the entire goal and vision of the organization. We have to prioritize the problem areas which are realistic and achievable in a definite time line like anything achievable in next 5-6 months

DPMO is an opportunity and it is more exhaustive than PPM because the later indicates the number of defective units in 1 million units. For example in Car manufacturing unit it is always better to consider DPMO because to produce one unit we have to make many operations. and in all operations there are opportunities to produce defects. Thus it is always robust because we have to accurately determine the no of ways a defect can occur and thus quality assurance would be of high standard. In any assembly operation therefore it is necessary have the DPMO calculated because PPM can only showcase the no of defective units per million and it is a straight forward approach, whereas DPMO does considers all the possible permutations to identify the no of ways error might occur.

Any matured process fall into one of the four states: 1. Ideal 2. threshold 3. brink of chaos 4. state of chaos an ideal process is one where the variations are within the control limits, increase in the variation means standard deviation is increasing and the the control limit X+- 3 sigma also increases at the same time. Therefore target should always be to stay within the control limits which is nothing but the voice of the process. We should always watch for the below in a control chart: a. if an observation is outside the control limits b. 9 points in a row above or below the center line c. 6 points in a row steadily increasing or decreasing Variation is present in output of every process. The degree of variation or distribution pattern of the output is an indicator of to what extent the process is matured. The six key process elements people, environment, material, machinery, method, and measurement impact the variation. If the variation is within a predictable range as mentioned at the starting which are nothing but the common causes of variation and over the period the process could still be brought down within the range after reducing the effect of common causes. on the contrary if we look for different ways to reduce the variation as defined by the customer we could never be able to reach an optimal solution because for a customer who is receiving an ordered food from zomato, +- 20 minutes could be a tolerance level where as for customer2 it could be +- 30 minutes. The question indicates variation level which sounds more like defined by the voice of the customer but by the voice of the process.

Customer Effort Score An important parameter which focuses on how efficiently customer queries are resolved . this could take place after an interaction with the customer for any queries he/she has in respect to credit card's different offers after account or billing updates after resetting a password after upgrading membership after return or refund we could do a study here for e.g if there is 1000 calls in day and we divide the queries into the above categories and now do a sample study among 25 operators dividing them equally among the 5 categories, then start measuring what is the max and min time to resolve a query. this could be set as a baseline and we could do the similar activity after a week to see if there is any improvement in CES NPS 2nd important parameter to assess the customer loyalty and it could be send out at any time once a call is over.We can have 3 different sets of out comes here : Promoters, dis-tractors and Passive, while interacting with 100 customers we find that 60 customers like the way operator has resolved the query and gives a rating of 8 out of 10 their locality could be considered high (95-100%) , rest 15 customers are passive and they are not bothered about how the queries are resolved and they have also done minimal transaction and so we can discard them. the rest 25 customer's response is crucial since they have disliked the way queries have been resolved or not and they would be the real dis-tractor for the credit card business to grow l. But the advantage would be that as a seller you would be able to find out the gaps in the existing products like billing cycle, offers, discounts and you could benchmark your product with the other products in the market. CSAT 3rd important parameter because high CSAT can guarantee that the existing customer is going to use the card for longer time but poor CSAT could lead to customer loss and making things difficult to acquire a new customer Churn A valuable indicator to see for a specific period % of customers the credit card company has lost and gives a broader spectrum to brainstorm and find the root causes of the loss and which could lead to revamp the existing product CAC A valuable indicator to understand how much cost has been incurred to acquire a customer and how much spending they have done over a period

According to my opinion the sequence for the five metrics will be as below: 1. CSAT- Most important parameter for decision making as higher the CSAT(%) users are more likely to use the website 2. Customer effort Score- Second important parameter to evaluate the user experience based on the feedback out come like once a user searches for a product a. it shows similar products from different retailers with the economic price available b. user can customize a product as per his/her desire c. poor feedback rating automatically forces the seller to interact with the customer to understand the difficulties they face d. easy return policy all these above phases make thew users' journey smooth and easier to use the website 3. NPS - a useful parameter that truly reflects the overall customer experience in the journey of a product. We can have different sets of out comes here : Promoters, dis-tractors and Passive. For e.g. if due to special discount no of customers visiting the website is higher though they actually prefer a different website NPS can easily categorize that. 4. Customer Churn rate - can be a useful parameter to see for a specific duration how many existing customers have stopped visiting the website and haven't done any transaction in last 3/6/9 month. A vital indicator to understand if there is a potential loss of customer. 5. Customer Acquisition Cost - will not be much helpful

According to my opinion the sequence for the five metrics will be as below: 1. Customer Churn rate - can be a useful parameter to see for a specific duration how many customers have stopped visiting the website and haven't done any transaction. A vital indicator to understand if there is a potential loss of customer. 2. Customer effort Score- Second important parameter to evaluate the user experience based on the feedback out come like once a user searches for a product a. it shows similar products from different retailers with the economic price available b. user can customize a product as per his/her desire c. poor feedback rating automatically forces the seller to interact with the customer to understand the difficulties they face d. easy return policy all these above phases make thew users' journey smooth and easier to use the website 3. NPS - a useful parameter that truly reflects the overall customer experience in the journey of a product. We can have different sets of out comes here : Promoters, dis-tractors and Passive. For e.g. if due to special discount no of customers visiting the website is higher though they actually prefer a different website NPS can easily categorize that. 4.CSAT- a good parameter for decision making as higher the CSAT(%) users are more likely to use the website 5. Customer Acquisition Cost - will not be much helpful 5. CSAT- same as above

According to my opinion the sequence for the five metrics will be as below: 1. NPS should come first as this truly reflects the overall customer experience in the journey of a product. We can have 3 different sets of out comes here : Promoters, dis-tractors and Passive. Since on field sales require massive face to face interaction with the customer this can showcase the real value to the above mentioned parameters. For e.g. while interacting with 100 customers we find that 60 customers like the product and they would also use the product for next 5 years they locality could be considered high (95-100%) , rest 15 customers are passive since they are only buying the credit card if it is a promotional offer and so we can discard them. the rest 25 customer's response is crucial since they have opted No for the product and they are real distractors and negativity of your product would spread as word of mouth to the other people as well. But the advantage would be that as a seller you would be able to find out the gaps in the existing products like billing cycle, offers, discounts and you could benchmark your product with the other products in the market. 2. Customer Acquisition Cost - An important parameter to understand the no of customers acquired after spending a certain amount. It can help to draw a trend analysis to understand for acquiring x number of customers what should be the range of spending. 3. Customer Churn rate - can be a useful parameter to see for a specific duration how many customers have stopped using the card and have done no expenses. A vital indicator to understand there is a potential loss of customer 4. Customer effort Score- this will not be much helpful here as this will be much effective once the product is sold out 5. CSAT- same as above

Example 1 In restaurants when a waiter comes to take an order with a order slip in his hand this is an example of Poka-Yoke as once the waiter writes the order for the first time he again repeats the order with them to ensure he has taken the correct order. While incorporating this error proofing into the work environment, understanding human limits is essential. These limits include: Hearing: Individual upper and lower thresholds of hearing change of the waiter when background noise is added. Repetition Ability: Muscular efficiency and mental tracking decrease of the waiter as rates of repetition increase. Therefore in the above example though mistake proofing was in place still it could not be utilized to 100% because of the environmental and physiological factors. Example 2 Suppose a salon shop is thinking on how to increase their low client turn out. The salon is a service oriented business therefore there a lot of avenues where an error may occur. Errors or mistakes can be caused by either employees or customers. The goal of Mistake Proofing is to identify these potential errors to prevent defects from happening. A possible error may occur as soon as the customer enters the salon. It could be a displeased customer because he or she was not immediately greeted by the staff or the staff was not there to welcome them. To address this possible error using Mistake Proofing, the salon can install an electronic sensor or hang a bell to signal the staff that someone had entered the shop. Another Mistake Proofing solution is to assign a staff whose job is to welcome the customers. Potential errors caused by employees may happen every step of the service process. From asking what salon service the customer wanted, doing the service, asking if the customer wanted additional salon service or wants to avail their promotion, securing payment, and up to the time the customer leaves the salon. Every step should be considered and all possibilities should be studied to be able to come up with solutions that will prevent further defects. A possible error on the part of the customer is that when they are greeted and asked what kind of salon service they wanted, they would not understand this question if there is loud noise produced either by people inside the salon or music from an audio player. A Mistake Proofing method that aims to prevent this from happening is to ensure that music inside the shop should be in minimal volume so it will not cause distraction to other people. Staff should also be trained to use audible not loud voice when conversing with their customers. Setting of rules such as no horse-play, no distractive conversations amongst staff is also an example. Example 3 The fingerprint sensor on the iPhone is a great example of a Poka-yoke failure. Setting up a password and typing it in every time can also be tedious, and there’s also a slight chance you can forget your password. The fingerprint sensor is a great solution to this, because it’s faster than typing in a password. But the problem is that many times due to accident/age if there is a change in the muscular structure of a finger the sensor would not be able to realize the finger print and thus it causes the error

A key process input variable (KPIV) is a process input that provides a significant impact on the output variation of a process or a system or on the key process output variable (KPOV) of a product. This means that the KPOV is determined by the KPIV; so, if the KPIV is held constant, then it would yield a predictable and consistent output. As such, the KPIV determines the overall quality of the KPOV or, simply, the quality of the output of either a process or a product. In many cases the output and input of a process might be similar. For example in a oil heater we are using heat itself as an input to generate the temperature. here the heat is acting both as an input as well output in the system. Similarly in a milk vending machine we are pouring milk and the same is processed inside the machine and we can get hot milk as an output The KPIV determines the output of a process or product, which is the KPOV. For example, if the KPOV is the traction provided by a certain model of a car tire, then the KPIVs would be the width of the tire and the compound used to make it. Certain combinations of the two KPIVs will result in a particular KPOV (traction), so if the KPIVs are kept constant, then they will yield a specific traction rating, and if these variables are changed, then the tire model obtained will either have a high traction, which can be more expensive, or have a low traction yet more affordable, and these two variations will fill different segments of the market. Another good example of KPIV is the size and number of transistors that are placed in a microchip. These two directly affect the capacity, speed and power consumption of the chip. As the size gets smaller, the power consumption of each transistor also decreases and it allows for more transistors to be placed in the same small space. This results in a more efficient and powerful chip that consumes less power. The challenge is in determining the correct KPIV in a product or system that would yield the most favorable results for the selected KPOVs. This can be done through experimentation, but this would cost too much and would be too imprecise. Design of experiments (DOE) is a tool used for conducting a structured and scientific experimentation in order to efficiently model different process behaviors and understand the underlying cause-and-effect relationships that link KPIV and KPOV. Examples of KPIV: The number of transistors in a microchip The size of the components of a microchip The surface area of a heat sink The shape of cooling fan blades In many cases if there is a defect generating out of a process that would also be used as an input through change control unless it is processed error free.

As per my opinion the cost cutting process starts in an organisation when the overall business is deteriorating. In the first phase all those units are targeted which are the cost center and not generating any revenue, though these units are the backbone of the growth of any organisation. Majority of the services industry is focusing towards product based organisation where individual business units are taking the responsibility to generate profit. In the current scenario process excellence professionals are attached to different business units and they are mentoring and training operators for improvement in any function. Once these people get trained and well verged with the implication of lean and six sigma they themselves can train and start working on gap analysis and process improvement projects. In this way the role of a operation excellence person might become mundane at certain point. let's also revisit the three main phases of cost reduction: Phases in creating value for money and cost reduction Cost Identification Cost Elimination through Process Improvement Cost Reduction through Procurement Strategies Among these, many organisations today focus only cost identification method and due to that all major expenses are driven from the profit and loss account. Since process excellence folks do not contribute directly to the revenue of the organisation they become victim of the cost cutting. This could be avoided if every process focused organisation could set up a Center of Excellence with lean and six sigma professionals and this CoE should start directly engage with the internal and external clients as an independent unit rather as a supporting function