We have been assigned to reduce the ISD call rates by 10% through six sigma project. In this case how can we convert the cost saving themes in problem statement.project definitions?

would love for someone to guide me in detail, on how to measure or articulate or calculate actual cost savings in a process improvement initiative in a banks back office processes

Every process improvement initiative would have some investment that you need to make in order to get the process more mature which inturn would save costs . So, it is important that the actual costs saved consider the investment you have made in the improvement.  Usually you use the ROI ( Return on investment) to calculate the improvement you have achieved .

For banks back office process ( or any process for that matter of fact) the cost of running the process which would include the infrastructure as well as resource cost needs to be worked out and then post the improvement the savins in either the infra cost or the resource cost which is usually measured as a productivity improvement can be calculated.

Hope this helps address your concern

 

Hi,

Could you be more specific in your objective ?

Reducting call rates sounds like you are working for a telecom based company ? If thats the case, reduction in call rates is a Business decision and measurement would then ,depend upon :-

1) Number of customers the company wants to pull in with this cut.

2) Revenue it aims at generating

3) Gestation period for Breakeven.

I think , in this senario, you have more of a Measurement and analysis to be done, tather than Six Sigma.

 

So Please specify the target that you have.

 

Dear Rahul,

 

Some things to keep in mind while writing a problem statement are -

 

1) Mention specific issue

2) Where is the issue occurring (company, deptt etc)

3) What is the trend in performance against expected target

4) For how long has the problem existed

5) How do you know the problem exists

 

If you use these as guidance, you will arrive at your problem statement. E.g. what makes you think that telephony cost is an issue? Is It higher as compared to other similar businesses or departments? Is it the top spending area in your company etc. So you may have something like, The ISD call cost for the last 6 months were___ (which were higher than the previous year/which are higher than comparable businesses). The targeted cost is___ hence a gap of ___ and so on.