Operational Excellence Maturity

Fundamentals Training

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What is Operation Excellence?

Operational Excellence is our
comprehensive framework to drive
a culture of Superior Execution by
shaping our business to be:
 Measurable
 Repeatable
 Predictable

Lean Lean Six Sigma

Helps identify steps that don’t add value Identifies problems in the Improves the capability of Improving the capability can
and provides tools to eliminate them flow steps that do add value eliminate additional steps

X
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X
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Maturity categories
Focused operation
Understand what your customer
wants
OE Methods:
•SIPOC
• High Level Process Flow
• Control Charts
•3x3 Scorecard
Standardized operation
Define what the process is and
how to perform it consistently
OE Methods:
• Detailed Process Flow
• Standard Work Instructions
• Control Plan and MOS
Planned operation
Balance workload by matching
available capacity to demand
OE Methods:
•Cross Training Skills Matrix
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Operational Maturity Framework
• Able to predict meeting the
service expectation using
control charts & understand
variations
• Team operates at ODE
(original deal economics) &
consistently meeting service
expectations.
• Defined standard processing times
that are linked to performance
expectations.
• Operational reviews at all levels
(process / deal / MOR) are done
through effective use of data.
• There is clear linkage between
leading metrics targets and the
control plan
• Load balancing is used to
manage daily fluctuations in
volume without the need for
increased headcount.
• Capacity is measure across
all teams to understand how
and when to flex capacity
Organized operation
Organize teams around the
process
OE Methods:
• Office Layout, 5S
Visual operation
Visual information displayed to
manage performance
OE Methods:
• Visual Controls
• Visual Management Plan
Improving operation
How to continually improve
performance
OE Methods:
• Rolled Throughput Yield
• Fishbone Diagram / 5 Whys
• 8 Forms Waste
• Team uses and effective office layout
to organize around the process to
reduce waste.
• Teams are aware of 5S and
consistently practice 5S as a means to
drive improvement.
• Use Visual controls to trigger when to
proactively react to avoid potential
service or capacity issues.
• Process & Leadership teams are able
to gauge the health of the process
through the visual representation seen
when walking the floor
• Team measures Rolled through Put
Yield and use tools like 8 forms of
waste to identify & implement
improvement opportunities.
• Teams have a mechanism to identify
& prioritize improvement opportunities
as par of MOS
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Operational Maturity – Rating

Maturity Ratings Score

NOT STABLE < 1.83
STABLE >=1.83 and <2.83
CAPABLE >=2.83 and <3.83
Gen 4 OPTIMIZED >=3.83

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SIPOC
SIPOC - is a simple process mapping tool used to map process inputs and supplier of those inputs, process outputs and
customers of those outputs

Input vs. Input Requirement – Input requirement defines the quality of input required.
Output vs. Output Requirement – Output requirement defines the quality of output required.

TAT and Quality requirements

of the desired output

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High-level Process Map

It shows major steps of end to end process with outputs defined as Ys and inputs defined as Xs classified as
controllable or non controllable. Output = Lagging Metrics = Ys. Input = Leading Metrics = Xs

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Detailed Level Process Map

Detailed Level Process Map / Responsible, Accountable, Consulted, Informed – is a tool that can be

Process Analyst

IC management
used for identifying and attributing roles and responsibilities associated with any process.

Team Lead
Exception Resolution

Client
# Process Steps/Tasks
1 Run Exception report in Oracle R A C I
Transaction data Interface happens from E-mail to CEVA 2 Download exception report on shared drive R A C I
CEVA

entered in CLASS CLASS to Oracle operations team / 3 Research in Oracle / CLASS R A C C, I

by operations team financials IC managment
4 Make corrections in Oracle R A C I
5 Add comments in Oracle R A C I
Communicate with CEVA - US stations / IC R A
6
management C C, I
Receive
settlement date
from CEVA
Foreign trade
partners Research in
Oracle / CLASS

Responsibility – the person who is ‘doer’

R - Responsible
A - Accountable
Upload / complete C - Consulted
settlement data in Accountable – the person with ultimate responsibility
Oracle I - Informed
– Yes / No authority
Is resolution Add comments in
N
avialable? Oracle
Consulted – the person to be consulted before final
Accenture

Run and decision / action

Download Y
Exception report

Informed – the person to be informed after action has

Resolutions been taken
actioned in Oracle

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Cause & Effect Matrix

Is a tool for correlating Key process inputs (KPIs) with Key Process Outputs (KPO)

Process Outputs
C&E Matrix, Inter Company Accounting, Project Test, Site Test BACK

Exceptions

comments
in Oracle
Resolve

Total Value
Add
Weight 9 5
Process Step Process Inputs
1. Transactional data by Ceva's 81 45
Run Exception report in Oracle operational system in operation 9 9 126
81 45
2. Receiving of Settlement data 9 9 126
3. Uploading / Completing of 81 45
settlement files in Oracle 9 9 126
81 45
4. Automatch program has been 9 9 126
1. Exception report has been run 81 45
Download exception report on shared drive in Oracle. 9 9 126
2. Availablilty of CEVA shared 45 25
drive (UC) 5 5 70
1. Availability of Formatted 45 25
Research in Oracle / CLASS exception report (C). 5 5 70
2. Knowledge of Error Messages 81 25
on exception report (CC) 9 5 106
3. Availablility of Oracle / CLASS 81 45
system (UC) 9 9 126
81 45
Corrections to be made in Oracle 1. Availability of resolutions (CC) 9 9 126
1. Availability of Standard 81 45
Add comments in Oracle description field comments to be added (CC). 9 9 126

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Standard Work Instructions

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Criteria to select an Output

For Any Operations Process there Are 3 Critical Output Categories

Speed Quality Cost

Customer Client Client Internal

End to End Cycle Time to Error Rate – Percentage of Productivity – Number of

Definition
process a transaction Output units that are defective Outputs per FTE per day

What is critical is to balance all three so that performance is on target for each. There is no point in improving
speed by increasing Cost, or by reducing Quality

OE Training
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3x3
What is a 3x3?
• A matrix for displaying the vital metrics of any process

STEP 1 Understand what the Customer Wants (VOC)

STEP 2 Identify a measurable Outputs / Outcomes (Output metrics) which connect to

VOC

STEP 3 Identify measurable inputs and targets which drive the Output / Outcomes
(Input Metrics)

STEP 4 Validate and Calibrate Input Metrics – Are we measuring the right things and
reacting at the right time? (Causality Analysis)

Leading Metrics: Leading Metrics are ones that are proactive, controllable and are useful in decision making

Lagging Metrics: Lagging metrics are ones that are reactive and we get to know the result only after the event is over

Note: “Y” is always Lagging and “X’s” can either be Leading / Lagging

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3x3 Example

Client dependency
Measurement definition Type Category Target Oct-13 Nov-13 Dec-13 Trend
(Y/N)

Timely Submission of HFM Lagging Quality 100.00% Y 100.00% 100.00% 100.00%

To track the time for system of applications available for use Leading Productivity 0.0% Y 0.00% 0.00% 0.00%
To measure the closing activities performed on time Leading Cycle Time 0.0% N 0.00% 0.00% 0.00%
To measure the closing Journal performed on time Leading Cycle Time 0.0% N 0.00% 0.00% 0.00%
To track all the review are done on time Leading Cycle Time 0.0% Y 0.00% 0.00% 0.00%
To measure the HFM Validations completion on time Leading Cycle Time 0.0% N 0.00% 0.00% 0.00%
% of inputs received on time Leading Cycle Time 0.0% Y 0.00% 0.00% 0.00%
To track the correct backups attached to the Journals Leading Quality 0.0% N 0.00% 0.00% 0.00%
Accurately Completion of MEC tasks Lagging Cycle Time >=98% N 100.00% 100.00% 98.96%
To measure process steps performed Leading Quality 0.0% N 0.00% 0.00% 1.04%
To measure the activities rejected by client due to error Leading Quality 0.0% Y 0.00% 0.00% 0.00%
Track the Timely Completion of Monthly Reconciliation Leading Cycle Time 0.0% Y 0.00% 0.00% 0.00%
% of MEC accuracy in internal Quality Check Leading Quality 99.0% Y 100.00% 100.00% 100.00%
Timely Completion of Monthly Reconciliation Lagging Cycle Time >=95% N 100.00% 100.00% 100.00%
To track the time for system of applications available for use Leading Productivity 0.0% Y 0.00% 0.00% 0.00%
% of Reconciliation input delay from CEVA Leading Cycle Time 0.0% Y 0.00% 0.00% 0.00%
% of Reconciliaton submission on time Leading Cycle Time <=2% N 0.00% 0.00% 0.00%
% of Reconcliation dealy because of Process Changes Leading Productivity 0.0% Y 0.00% 0.00% 0.00%
% of Reconcliation prepared late by Accenture Leading Cycle Time 0.0% N 0.00% 0.00% 0.00%
% of Reconcliation dealyed because of error Leading Cycle Time 1.0% N 0.00% 0.00% 0.00%
Accuracy of Recons Lagging Quality >=95% N 100.00% 100.00% 100.00%
% of Reconciliation Rejected because of balance & format Leading Quality 0.0% N 0.00% 0.00% 0.00%
% of Reconciliation Rejected because of listing and grouping Leading Quality 0.0% N 0.00% 0.00% 0.00%
% of Reconciliation Rejected because of inappropriate comments Leading Productivity <=1% N 0.00% 0.00% 0.00%
% of Reconciliation Rejected because of inappropriate Backup Leading Quality <=2% N 0.00% 0.00% 0.00%
% of Reconciliation accuracy in internal Quality Check Leading Quality 97.0% N 100.00% 100.00% 100.00%
Potential Exposure in EURO Lagging Cycle Time TBD Y EUR 0 EUR 0 EUR 0

EUR value of Inappropriate supports Leading Quality TBD Y 0 0 0

EUR value of Supports not available to clear the open items Leading Quality TBD Y 0 0 0
Copyright
EUR value © 2010
of items requiring Accenture
clarification All Rights
of supporting Reserved.
documents Leading Quality TBD Y 0 0 0
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Control Charts
• Helps us understand the variation in process (Special Cause and Common cause variation)
• Provides an early warning where a process might go out of control (brings in predictability)
• Upper control limit and Lower control limits are defined with the help of below formula to track the process inputs and outputs. UCL=
Mean + (3 * Standard Deviation) LCL = Mean - (3 * Standard Deviation)

Without any UCL & LCL this chart does indicate any thing Stable – If all points are between UCL & LCL
whether process is not stable, stable, capable or not

Not Stable – If there are any points above the UCL or below the LCL Capable –
1. If target specified by client is within current UCL and LCL.
2. We need to meet or exceed target all the time.

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FMEA – Failure Modes and Effect Analysis

It is a risk management process that prioritizes the potential process failures and steps needed to correct.
Prioritization is done by calculating risk priority number (RPN).

RPN = Severity x Occurrence x Delectability

FMEA should be reviewed every 3 months to re-priortise risks

FMEA, Inter Company Accounting, Project Test, Site Test BACK

Process Potential Failure Potential S Potential O Current D R Actions Plans / R R R Rev.

Step Mode Failure Effects E Causes C Controls E P Recommended Responsibility e e e RPN
What is the What can go w rong What is the impact V What are the root C What are the T N What are the actions for Who is responsible v. v. v.
process step? w ith the process on customer or cause reasons (Xs) existing controls reducing the OCC of the and w hat is the S O D
step/output (Ys)? internal for the process that detect and cause or improving DET? target date for
E C E
requirements? step/output to go prevent either the completion?
V C T
w rong? cause or the
failure mode?

Current report not Raise incident Prompt resolution of

Run Exception available to w ork System dow ntime / ticket w ith CEVA incident tickets raised
report in Oracl Oracle not available on 8 Access not given 3 helpdesk 8 192 w ith CEVA helpdesk 8 3 8 192
Exception report Shared drive
Dow nload cannot be save on mapping not done / Raise incident Prompt resolution of
Exception report Shared drive not CEVA shared access to shared ticket w ith CEVA incident tickets raised
on shared drive available drive 3 drive not given 3 helpdesk 8 72 w ith CEVA helpdesk CEVA / Accenture 3 3 8 72
Raise incident Prompt resolution of
Research in Access to Oracle / Exceptions cannot System dow ntime / ticket w ith CEVA incident tickets raised
Oracle / CLASS CLASS not available be w orked upon 3 Access not given 3 helpdesk 8 72 w ith CEVA helpdesk CEVA / Accenture 3 3 8 72
Continous
Negligence / revision of
Insufficient / Wrong documentations /
Exceptions not documentations / Continous
Corrections in
Copyright Lack of know ledge of actioned / w rongly
© 2010 Accenture All Rights Reserved.Lack of proper trainings / Hands Continous / Peridic
Oracle Process analyst resolved 5 training 5 on practices 5 125 assessments of analysts Accenture 5 3 3 45
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Process Control Plan

What Does the Tool Deliver?
• Enables management to focus on what’s important.
• Enable early detection of problems, prompting proactive responses.
• Escalation plans involve stakeholders with the appropriate level of information.
• Establish stability in a new situation through effective process control

Lets look at some of the common control plans available in a flight

Scenario = Journey Experience in an Air Plane
Failure Point Control Measure
1. Lack Of Oxygen Oxygen Mask will be automatically available when the oxygen level goes down

2. Emergency Landing in Emergency exits available, Pathway light, Safety Jacket

water
3. Emergency – Pilot health Auto Pilot mode available

4. Take off, Landing & Announcements by in-flight coordinator and seat belt sign
Turbulence

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Management Operating System

MOS is the whole system of process governance right from team

huddles to governance calls with client.
It is a dialogue at every stage to check we are going in right direction,
if not what corrective actions need to be taken

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Cross Training Skill Matrix

• Matches skills available to skills required

Which process is the safest?

Which Process is the riskiest?

Who would be the most valuable team member?

Who could be least valuable team member?

• Cross training skills matrix helps in answering these question and hence in taking proactive actions if answer are
not encouraging

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5S

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First Pass Yield

There is a difference between the Error Rate the Customer Feels and the true number of defects in a process.
Understanding the real Yield helps to identify true waste in the process

The first pass yield is the yield of the process output before and errors are corrected.

The customer still feels

an Error rate of 0.5%

Customer
Sort and Scan Enter Resolve Invoice Post Invoice for
99.5%
Invoices Invoice Exceptions Payment
2%

Now we can see that typically 2% of

processed units are picked up as defective Rework Loop
on their first pass through the process and
corrected – This means the FIRST PASS
YIELD is 98%

First Pass Quality % = No. of error free units processed

Total No. of Inputs
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Rolled Throughput Yield

Every step may have a rework loop prior to work being passed down the line

To understand the actual error rate within a process, and the scale of extra rework, we need to understand the 1st
pass defects at every stage and roll them up as if no corrections were made. This is called the ROLLED
THROUGHPUT YIELD

Customer
Sort and Scan Enter Resolve Invoice Post Invoice for
Invoices Invoice Exceptions Payment

5% 30% 2%

Yield of
Process Step 95% x 70% x 98% =

Rolled Throughput Yield = FPY Step 1 X FPY Step 2 X FPY Step 3

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Eight Forms of Waste

Manufacturing Example Office Example
1 Motion Operators reaching for parts, bending, lifting, Reaching, bending, unnecessary steps within office or
excessive movement within cell work area

2 Parts that are hand-carried or moved by conveyor, Functional hand-offs (including electronic), document
Transportation
hand truck, tow motor, truck, ship, plane. movement (physical or electronic)

Working ahead of schedule, building up large transaction

Producing more pieces than required, large batches,
3 Over Production queues, keeping people “busy”
keeping machines “busy”

Excessive information, unnecessary reports, unnecessary

Machining to overly tight tolerances, washing parts approvals, excessive specifications
4 Over Processing longer than required, excessive polishing

Parts waiting to be processed by a machine Time waiting to receive a quote from a

5 Waiting or work cell supplier, turnaround time to get an approval

Transactions/documents waiting in queue (e.g.

Accumulation of raw materials, WIP and finished
incomplete customer order, unreleased engineering
6 Inventory goods stored in warehouses, or staging areas
drawing)

Rejected parts that do not meet specifications, parts Customer orders with incomplete information, rejected
7 Defects damaged during processing or transportation drawings and documents, revisions/iterations

Insufficient time devoted to continuous Insufficient time devoted to continuous improvement,

8 Behavioral improvement, limited knowledge sharing limited knowledge sharing

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For Your Reading - OM 1 to OM 2

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 BPO - Generations
To get the most value from BPO, it’s crucial to partner with a provider who is able to deliver tangible
business outcomes that far exceed cost reduction and labor arbitrage (3rd Generation BPO).

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For Your Reading –
OE Docs Instruction Sheets

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