SIX SIGMA

PROJECT PRESENTATION
Reduction in number of amendments to the contract
By

Mr. Brahmadeo Roy

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DEFINE

PROJECT CHARTER
PROJECT ID GB BB MBB CHAMPION START DATE PROJECT FOCUSSED PROJECT CURRENT IMPROVED SAVINGS Z Z : : Mr. Brahmadeo Roy : Mr Puvendra D : Mr. Girish SR , Sr DGM/BEQI : Mr Amol Newaskar, GM, MilCom : April 2011 : To reduce Number of amendments to the contract. : Elimination of amendments from the contracts : : : Nov 2011 : Rs7,48,800

COMPLETION DATE

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DEFINE

PROJECT CHARTER
BUSINESS CASE
We receive enquiries for quotations from the various customers. Quotations are generated against RFQs through SAP and submitted to the customers. We receive orders from the customers. On receipt of orders , Contract review is done. Finance, Marketing, Production Control, Testing, and Quality departments take part in the Contract Review meeting. Concerned departments check the contract from their prospective and if they find any discrepancies, they give feedback to marketing department to seek amendments from the customers. The amendments may be pertaining to the various parameters like payments terms, Inspection, Part No. not correct, Description not matching as per drawing etc. These discrepancies need to be corrected before the items are offered to customer for inspection.

6
DEFINE

PROJECT CHARTER
PROJECT SCOPE: From Receipt of order to the completion of the dispatch of the material.
GOAL STATEMENT: From present status of many amendments to Zero amendments SUPPORT REQUIRED: Bharat Electronics Quality Institute, Sr.DGM, Mktg&CS /MCE . SCHEDULE: Complete within 6 months

6
DEFINE

PRESENT SYSTEM

Presently quotations are submitted to the customers by Marketing departments. Quotations are generated through SAP and also off-line. Because of discrepancy in the SAP data bases, errors are bound to creep in. Before sending the quote to the customers, Part No. and descriptions are not checked by other concerned departments. Sometimes in hurry , Description , Part No. and other commercial terms go unnoticed. Which creates problem when the final order is received. Some times , customer uses his own data base (Old data base viz Part No. and Description and generates order based on that.

On receipt of order , contract review is done with QA, PC, testing, D&E, and Finance Departments. Marketing department takes care of pricing. Other concerned departments give letter to seek amendments to rectify the errors in the contract.

6
DEFINE

SIPOC
Supplier
Customers

Input
Supply Order / Contract

Process

Output

Customer

Contract Review BEL Documents SAP BEL Drawings SAP Descriptions

Discrepancies

Army/Navy/Air force

Agenda for meeting

Conduct Meeting

Feed Back

Commn. For amdt.

Req. letter to customers for amdt.

Receipt of Amendments

6
DEFINE

CRITICAL TO QUALITY TREE

BUSINESS NEED DRIVERS
BEL drawing

CTQ
Correct Description

SAP Data Base

Correct Data Base

Zero amendments to the supply order / Contract

Customers Data Base

Correct Data Base

Project Officers

Experienced officer

Other Departments

Elimination of errors

6
DEFINE

CTQ SPECIFICATION TABLE

CTQ DEFECT DEFINITION OPERATION DEFINITION OF MEASURE OF DEFECT
Method of Designation Wrong description In correct data Base Mistake in typing Errors in documents

KANO STATUS

Correct Description

Description not matching with Drawing Wrong description Old Data base Lack of Knowledge Errors in documents

Must be

SAP Data Base Customer Data base Project Officer Other Departments

Must be Must be Must be Must be

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MEASURE

DATA COLLECETD
AMENDMENTS TO THE CONTRACT
Sl .No.
CUSTOMER PROJECT Date 10-Sep-11

ORDER

AMENDMENT FOR

AMD/ REQ/ DATE

Types of Amdt

1 2 3 4

GRSE GRSE

PRC6020A PRC6020A

4700000979 /N10 DT 16.04.11 4700000979 /N10 DT 16.04.11 HZW/317060/VJ DT. 22.12.2010

IV-17013/15/2009/24.03.2009 /PCT/395, Dt. 02.03.2009

BEL Inspection, Inclusion of Part.Nos for two items BEL Inspection, Inclusion of Part.Nos for two items

7-Sep-11 7-Sep-11

Inspection Part No. Part No. Part No.

L&T

PRC6020A

Amdt. For the change in the P.No. of data transfer software[ to 458610121218 frm 991910906692]

21-Aug-11

ITBP

LHP265D

Amdt.in P.No.

31-Jul-11

ITBP

LHP265D

IV-17013/15/2009/24.03.2009 /PCT/395, Dt. 02.03.2009

Descp. For Sl.No. 1,4, 14, 18, 21[ LHP-265D set, Ni-Cd Bty, Carrying box, Antenna HF-BB Dipole, Data Cable.]

31-Jul-11

Description

6 7 8 9

MO(KAR)

EK896

10WBLC004 DT 04.7.11, DT 06.7.11 10WBLC004 DT 04.7.11, DT 06.7.11 10KBLC012 DT. 22.06.2011

1) TERMS OF PRICE, 2) CHANGE IN PART No. OF X'stor as 429300200123

28-Jul-11

Terms of price Part No. Order Value Description

MO(KAR) MO(K)

EK896 PRC6020A

1) TERMS OF PRICE, 2) CHANGE IN PART No. OF X'stor as 429300200123 PO Value is not CORRECT

28-Jul-11 25-Jul-11

BSF

LHP265D

IG/Comn/BSF/3087dt 13.06.2011 and 3244 dt 16.06.2011 1) Antenna nomenclature , Ni Cd Bty & Charger Bty nomenclature

25-Jul-11

10 11 12 13 14 15 16 17

BSF

LHP265D

IG/Comn/BSF/3087dt 13.06.2011 and 3244 dt 16.06.2011 ED and VAT 5% 10VBLC909 DT. 10.6.2011 4700001687/N10 dt. 09.06.2011 4700001687/N10 dt. 09.06.2011 4700001687/N10 dt. 09.06.2011 4700001687/N10 dt. 09.06.2011 4700001687/N10 dt. 09.06.2011 09BBLC001 Dt. 10.5.10
CHANGE IN NOMENCLATURE FOR 04 ITEMS Part.No., Mistake

25-Jul-11

Tax Description Part No. Terms of price Payment Terms Tax Inspection Description

MO(V) GRSE

EK896 PRC6020A

16-Jul-11 5-Jul-11

GRSE

PRC6020A

TERMS OF PRICE

5-Jul-11

GRSE GRSE

PRC6020A PRC6020A

Payment Terms Wrong tax, Warrnty instead of Guarantee

5-Jul-11 5-Jul-11

GRSE

PRC6020A

BEL Inspec,

5-Jul-11

MO(MB)

EK896

Change in Nomen. For cable, coil RF VAR

25-Jun-11

18

L&T

PRC6020A

HZW/317060/VJ DT. 22.12.2010

(1)Amdt. For the inclusion of all the P.Nos. in the PO [ wittn by Mktg-Milcomm]

21-Jun-11

Part No.

19 20 21

L&T

PRC6020A

HZW/317075/VJ, Dt. 12.02.11 LTSB/SHYU/PO/1011/218 dt. 10.3.11 4700000979/N10 dt. 16.4.11

Amdt. For the change in the P.No. of the Data Transfer software ( i.e. to 458610121218)

20-Jun-11

Part No. Part No. Inspection

L&T GRSE

PRC6020A PRC6020A

Amdt. For the change in the P.No. BEL Inspection

20-Jun-11 10-Jun-11

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MEASURE

DATA COLLECETD
22
MoD, New Delhi EK896

15/DNS Dt. 27.3.11

DD Extn till 31.12.2011

8-Jun-11

DD Extn

23 24 25 26 27 28 29 30 31 32

MO(V)

LHP265D

07VBLC042 DT. 14.7.08 07VBLC042 DT. 14.7.08 181614 DT. 26.3.07 10KBLC009 DT. 07.04.11 10KBLC009 DT. 07.04.11 10KBLC009 DT. 07.04.2011 10KBLC009 DT. 07.04.2011 10VBLC007 DT.28.6.10 P/W-SSB-2009(17) Dt. 28.03.11 3030003509 DT. 16.4.11

BSP Ni-Cd Part No. 1800 100 12331

8-Jun-11

Part No. Description DD Extn Part No. Description Part No. Description DD Extn Order Value Tax

MO(V) GSL, GOA MO(K) MO(K) MO(K) MO(K) MO(V) SSB NEW DELHI

LHP265D PRC6020A PRC6020A PRC6020A PRC6020A PRC6020A EK896 LHP265D

Nomenclature wrong. DD Extn till 31.12.2011 BSP Ni-Cd Part No. 1800 100 12331 Nomenclacure Mistake Amdt. for Ni-Cd P.No. & Descp. Amdt. for Ni-Cd P.No. & Descp. DD Extn till 31.12.2011 PRICE Amdt. It should be Rs. 107026958/- instead of Rs 106551036/-

8-Jun-11 7-Jun-11 27-May-11 27-May-11 27-May-11 27-May-11 10-May-11 10-May-11

MDL

PRC6020A

1) Warranty instead of guarantee

2) ED , CD octroi exemption certificates

7-May-11

33 34 35 36 37 38 39 40

MO(KAR)

PRC6020A

11WBLCOO1 DT. 05.4.11 11WBLCOO1 DT. 05.4.11 9BRD/PROV/SO/18(09) DT. 18.12.09

PAYING AUTH. AND I-BOND

6-May-11

Payment Terms Indemnity Bond Part No. Description Payment Terms Indemnity Bond DD Extn Terms of price

MO(KAR) BSF

PRC6020A LHP265D

PAYING AUTH. AND I-BOND MHM/LHP/LHP219/229 OBSOLETE

6-May-11 6-May-11

CGHQ

PRC6020A

LC/438/CGS(MP)/75/SO-07/11-12 DT. 18.4.11 1) P.No NOT MATCHING WITH RESPECTIVE DESCRIPTION 3030003509 DT. 16.04.2011 3030003509 DT. 16.04.2011 3030003509 DT. 16.04.2011 3030003509 DT. 16.04.2011
100% Payment on proof of despatch

5-May-11

MDL

PRC6020A

7-Apr-11

MDL

PRC6020A

I-Bond

7-Apr-11

MDL

PRC6020A

DD minimum of 03 months frm the date of receipt of order .

7-Apr-11

MDL

PRC6020A

7-Apr-11

41

MO(V)

EK896

08VBLC017 DT. 07.08.09

DD Extn till 30.04.11

15-Mar-11

DD Extn

42

MO(MB)

EK896

06BBLC012/L-3537 DT. 23.8.07

SHORT CLOSURE : XF MRC coil .098 mic Henry VAR 496016252558 obsolescence

15-Mar-11

Part No.

43

COD-AGRA

RRF

IND/OS/Z1/RRF/60 DT. 16.04.09

SHORT CLOSURE: MICRO CKT. DIGITAL TYPE CLA 82039 OBSOLESCENCE

15-Mar-11

Part No.

44

COD-AGRA

RRF

IND/OS/Z1/RRF/76 DT. 16.6.09

SHORT CLOSURE: TRANSISTOR LTE 42012R AND CONTROL UNIT OBSOLESCENCE

15-Mar-11

Part No.

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ANALYSE

Types of Amendments year wise

Year 2011 18 17 10 3 6 3 2 6 2010 14 20 12 1 3 4 2 10 2009 7 6 4 1 1 1 1 1 2008 3 2 4 0 1 0 1

Part No. Description DD extn Inspection Indemnity Bond

Terms of price
Payment Terms Tax

Order Value

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ANALYSE

Number of Amendments Project wise

Sl.No.
1 2 3 4 5

Projects
EK896 PRC6020 LHP265D RRF Stars V

Nos. of Errors
44 83 23 2 5

6
7

VRC6100M
1KW

7
3

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ANALYSE

Nos. of Amendments Project wise graph

90 83 80 70 60 50 40 30 23 20 10 2 0 5 7 3 Nos. of Amdt.

44

Nos. of Amdt.

EK896 44

PRC6020 83

LHP265D 23

RRF 2

Stars V 5

VRC6100M 7

1KW 3

Nos. of Amdt.

10

20

40

50

60

30

DD Extn

Description

Indemnity Bond

Inspection
Nos.
Nos.

Order Value

Part No.

Payment Terms

Tax

Types of Amendment graph

Terms of Price

ANALYSE

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ANALYSE Sl.No. Types of Amendements 1 2 3 4 5 6 7 8 9 DD Extn Description Indemnity Bond Inspection Order Value Part No. Payment Terms Tax Terms of Price Nos. 30 45 11 5 4 42 4 17 8

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ANALYSE

Vital few: 80% of the Amendments are due to the following steps 1 2 3 4 : Description of the items : Part No. of the items : DD Extension : Tax

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ANALYSE

EXISTING PROCESS MAP

Receipt of Enquiry

Send for vetting by PC

Receipt from PC

Generation of Enquiry in SAP

Generation of Quote in SAP

Pricing Decision

Valuation Type by PC

Receipt of Order

Submission of Quote to Customer

Preparation
of Quote

Management Approval

Contract Review

Decision for Acceptance

Yes

Creation of
Sale Order

MRP run &

Production

Offering to
the customer

No Intimate to customer
Dispatch of Items

Generation of OBD

Inspect ion

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ANALYSE

CAUSE AND EFFECT DIAGRAM

Data Base Person Skill and Experience CQAE/SQAE Inspectors

C1

Drawing Title
Wrong Part No.

SAP description

C6

C2

C4

Data Base with the customer

C5

C3

More Nos. of Amendments

C9
DD extension

C8

Duties and Taxes

Entry Permit

C10

Generation of Enquiry & Quotation

C11

C7

Terms of price

Customer Process

C12

Commercial terms

Method

EXPERIMENTAL FACTORS ( NIL)

C1
Drawing title SAP Description Data Base with the customer Wrong Part No. CQAE/SQAE inspector Skill and Experience Terms of price Duties and Taxes DD extension Entry Permit Generation of Enquiry/Quotation Customer process

C2 C3 C4 C5 C6 C7 C8

CONSTANTS

NOISE FACTORS (NIL)

Order processing
C9 C10 C11 C12 More no. of Amendments

CNX Diagram for Amendments

RESPONSE

ANALYSE

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IMPROVE

C FACTORS ARE ADDRESSED AS FOLLOWS

C- FACTORS
C1:Drawing Title

EARLIER PROCESS Drawing Title and Method of designation do not match with SAP description While Generating Quotations , Description comes from SAP Master data Customer uses his own data Base for Part No. and description Due to wrong part no. available with customer or Typographical error, customer gives wrong part no. in the order

IMPROVED PROCESS SAP description has been corrected/Updated for PP/MP of deliverable items SAP description and Drawing Description match

C2: SAP Description

C3: Data Base with Customer

Customer are communicated to issue order exactly as per quotation

C4: Wrong part no.

Requested to follow exactly as per quotation submitted

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IMPROVE

C FACTORS ARE ADDRESSED AS FOLLOWS

C- FACTORS
C5: CQAE/SQAE inspector

EARLIER PROCESS CQAL/SQAL Inspector inspects the items as per Drawing / Contract / Offering Letter Skill and Experience of Purchase offices and sales officers play vital role in determining correctness of Contract/ Supply Order Many Customers place the order without negotiating the Terms of price. Many Customers place the order without indicating correct Duties and Taxes. Excise , CST & VAT

IMPROVED PROCESS No change

C6: Skill and Experience

No changes

C7: Terms of Price

Customer are communicated to issue order exactly as per quotation

Customer are communicated to issue order exactly as per quotation

C8: Duties and taxes

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IMPROVE

C FACTORS ARE ADDRESSED AS FOLLOWS

C- FACTORS
C9: DD Extension

EARLIER PROCESS Delivery Date is indicated as per the quotation. Due to some unavoidable reasons DD slip. Sometimes customer does not indicate End use and does not provide us Entry Permit. Octroi and Road Permit etc. Partially done in SAP because of many other reasons.

IMPROVED PROCESS Strict monitoring is done for on time delivery of items.

C10:Entry Permit/End Use.

Customer is requested to provide End Use and Entry Permit along with the order.

C11: Generation of Enquiry and Quote

Enquiry and Quote are generated through SAP. This makes sure correctness of part No. and description No control over customer process.

C12:Customer Process

Customer process data in their own method

IMPROVE

IMPROVEMENT AFTER COMPLETION OF PROJECT

SLNO 1 PARAMETER Description of Items EXISTING Taken from Earlier quote or SAP master data base IMPROVEMENT Master data base is created and maintained the same in SAP Enquiry and Quote and generated through SAP SAP Description and Drawing description both match. Done through SAP where is validation is inbuilt in the system

Generation of Enquiry and Quote Correctness of Description

Done manually with little help from SAP Mis-match of SAP description and Drawing Description Mistakes are cropping due to manual typing

Correctness of Part Number

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IMPROVE

IMPROVEMENT AFTER COMPLETION OF PROJECT

SLN O PARAMETER EXISTING IMPROVEMENT

DD Extension

DD is not correctly indicated in the Purchase Order

Some time duty and taxes are not indicated properly and later customer give End Use. The customer always wants FOR destination . We always want FOR Bangalore . Normally customer does not provide Entry permit along with the order

Realistic Delivery time is indicated in the quote . At the same time we also monitor strictly
Order type is finalized in the beginning to avoid any avoid any custom, Excise, CST and VAT This confusion is removed by bearing Freight and insurance by BEL.

Duties and taxes

Terms of price

Entry Permit

Depending on consignee, Customer are requested to provide Entry permit along with the order.

6
IMPROVE

DATA BASE MAINTAINED

6
IMPROVE

Customer Communication

6
IMPROVE

Customer Communication

6
IMPROVE

SAP MASTER DATA BASE CORRECTED

6
SAP MASTER DATA BASE CORRECTED
IMPROVE

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CONTROL

IMPLEMENTATION AND CONTROL

Data Base has been corrected for ever.

Changes are

updated as and when communication is received from D&E Quotations are generated by the well trained professional Customer communications to generate the order exactly as

per the quote submitted.

Method is channelized

6
CONTROL

BENEFITS OF THE IMPROVED SYSTEM On an average 26 hours per operator per month saved

Time saving in generation of quotation from on an average 30

days to 13 days. (Additional benefits) System is channelized Customer satisfaction improved

Quotation generation becomes easy and fool proof

Less paper work and better utilization of time and resource

6
CONTROL

Saving
26 hours per operator per months Rs.800 per hour For 3 projects (at least) For 2 operators (at least) Total saving = 26x12x800x3= Rs.7,48,800