Reducing the Defects of XYZ Insurance

P R O J E C T B Y: C AT E G O R I C A L D ATA T E A M
Define Phase
 Voice of Customer - VOC
Customer Comments Critical to Quality - CTQ’s

Simply put, we are failing to meet the target by a big margin. We outsourced our
John Doe 1 business process to ensure simplification and better service delivery to our customers. Process Complexity
VP, Governance Office But unfortunately, we are at the risk of loosing our entire business! I don’t understand Trainers
ABC Insurance what could be the reason behind this when we are recruiting the best possible trainers Operators
and operators to run the process perfectly.

Shift
A major reason of not meeting the KPI could be recruiting a good number of young
John Doe 2 Gender
female operators by XYZ Insurance. They do not generally want to work at night shifts.
Manager, Operations Age
Also, most of them gets married after few years of service which forces them to allocate
ABC Insurance Marital Status
more concentration on their family affairs than at work.
Tenure

I don’t know what made them think that we are not being able to meet their KPIs. My Location
John Doe 3
recruits at C5 are fantastic. They are the best university graduates, fast at typing and Education
Manager, Operations
mostly fluent in both English and Hindi. Oh wait! You can look for some issues at C6. Mode of Communication
XYZ Insurance
I’ve heard that they are not very good at typing. Typing Speed

Customer / Key Stakeholders’ Personal Interviews

VOC Prioritization – Kano Model
 CTQ Drilldown Tree – VOC to CTQ

System Operator

Process Complexity

Trainer

Shift

Gender

Location
Reduce Defect % CTQ’s
Age

Tenure

Education

Marital Status

Mode of Communication

Typing Speed
 Project Charter
Business Case Team
ABC insurance company is a leading insurance company in Bangladesh. They deal in
Project Sponsor (VP, Governance): John Doe 1
medical, car and other insurance claims and have outsourced its back office claims
Process Owner (Manager, Ops.): John Doe 2
processing work to XYZ insurance company. Considering last 3 months claims
Champion & Master Black Belt: Shashi Prakash
processing data of ABC insurance company, we observed that the ABC has to pay
Project Manager: Ahmad Jawad
BDT 50,000 as penalty its to client because of not meeting the Turn Around Time
Team Members: Fakir Shik Zihad
(TAT) target. This may result ABC’s client dissatisfaction, revenue generation and
Md. Minhajul Islam
majorly contributing to client penalty against process performance for last 3 months.
Musfiqul Azad
This may also impact ABC’s long tern business planning and new business generation
S M Sifat Sarowar
from the existing client.
Goal Statement
To reduce TAT failure from 54% to 30%.

Milestones Start Date End date

Problem Statement D August 01, 2019 August 07, 2019
Last 3 months data shows that the SLA failure has reached to 54%. This high failure
rate might impact ABC’s long term business plan with the existing client and can M August 08, 2019 August 15, 2019
contribute to process penalty, client dissatisfaction etc.
A August 16, 2019 August 31, 2019
Scope Definition
I September 01, 2019 October 15, 2019
In Scope: TAT meeting %
Out Scope: Everything else other than mentioned as ‘In Scope’ C October 16, 2019 October 31, 2019
 Communication Plan
Communication Communication
Purpose Frequency Participants Deliverable Owner
Type method

• Progress report
To track progress, discuss and Meetings Project Team, • Risk log update Project
Project Update Weekly
resolve issues, manage risk (Web / Face to Face) Sponsor • Issue log update Manager
• Meeting minutes

• Progress report
To track and approve the
After Each Phase Meeting Project Team, • Risk log update Project
Tollgate Review progress to move to the next
(As per project plan) (Web / Face to Face) Sponsor • Issue log update Manager
phase
• Meeting minutes

Daily
Daily Update To keep the project on track Emails Project Team • Progress report Team Members
(By end of day)

To inform and get approval

New Requirements / from the project sponsor for As and when Meeting Sponsor, • CR log update Project
Feedbacks any new change request (CR) requires (Web / Face to Face) Project Manager • Approvals Manager
or feedbacks
 RASIC
RASIC Chart Project Team
Solely and directly responsible for the activity (Owner) -

Manager, Operations

Champion & Master

Md. Minhajul Islam

Responsible

S M Sifat Sarowar
Fakir Shik Zihad
Includes approving authority (A)

Project Manager
VP, Governance

Shashi Prakash

Musfiqul Azad
Team Member
Team Member

Team Member

Team Member
Ahmad Jawad
John Doe 2
John Doe 1
Reviews and assures that the activity is being done as per

Black Belt
Approve
expectations
Support Provides the necessary help and support to the owner
Inform Is to be kept informed of the status/progress being made
Consult Is to be consulted for this activity for inputs
Activities
Define
Project Charter A I S R S S
Identify Stakeholdedrs & Communication Plan S A R S S
VOC to CTQ Prioritization S A S R S S
RASIC A C C R S S
SIPOC I A S S R S
Process Map I A S S S R
Measure
Root Cause Analysis I A S S S R
Measurement System Analysis I A S S R S
Data Collection Plan I A S R S S
Process Capability I A R S S S
 RASIC
RASIC Chart Project Team
Solely and directly responsible for the activity (Owner) -

Manager, Operations

Champion & Master

Md. Minhajul Islam

Responsible

S M Sifat Sarowar
Fakir Shik Zihad
Project Manager
Includes approving authority (A)

VP, Governance

Shashi Prakash

Musfiqul Azad
Team Member

Team Member

Team Member

Team Member
Ahmad Jawad
John Doe 1

John Doe 2
Reviews and assures that the activity is being done as per

Black Belt
Approve
expectations
Support Provides the necessary help and support to the owner
Inform Is to be kept informed of the status/progress being made
Consult Is to be consulted for this activity for inputs
Activities
Analyze
Identification Plan for Potential Root Causes I A R S S S
Data Collection for Potential Root Causes I A S S R S
Hypothesis Tests for Potential Root Causes I A S R S S
Hypothesis Tests Result Publication I A R S S S
Improve
Idea Generaation on Solution Design I A R S S S
Quality Function Deployment I A S R S S
Failure Mode & Effect Analysis I A S S R S
Solution Testing on Pilot Phase A I R S S S S
Cost Benefit Analysis I A S S S R
Solution Validation using Before-After Analysis A I R S S S S
Control
Control Plan I A R S S S
Control Charts I A S R S S
SIPOC
Process Map
Measure Phase
Cause & Effect Diagram - High SLA Failure
 Measurement System Analysis
The data was derived from a reliable system which didn’t experience any failure in the last quarter.
Hence, there is no need to perform Measurement System Analysis.

Data Collection Plan

Operational Performance Specification Limits
KPI Defect Definition Opportunity
Definition Standard LSL HSL
Claims Processed vs Maximum 30 claims
SLA Failure % Claims Processed SLA failure > 30% processed beyond N/A 30% Monthly
beyond SLA SLA per 100 claims

Plan to Collect Data

Data Items Formula to What Database Is this an If new, When When is the Plan to
KPI Data Type Unit or Container existing will the planned start
Needed be Used Sample
will be used to database or database be date for data
record this data? new? ready for use? collection?
Claims
Total Number
Processed
of Claims May’19 to
SLA Failure % Discrete beyond SLA / None MS Excel Existing N/A N/A
Processed Jul’19
Claims
with TAT
Processed
 Process Capability

Denominators Values
DPO 0.54
DPMO 537,615
ZLT -0.09
ZST 1.41

Z Score of the process is really poor.

It is foremost to improve the process capability.
Analyze Phase
 Identification Plan for Potential Root Cause
Sl. No. Potential X's Source Data Type Graphical Tool Hypothesis Test

1 System Operator HR Categorical Bar Chart Chi-Square Cross Tabulation

2 Process Complexity MIS Categorical Bar Chart Chi-Square Cross Tabulation

3 Trainer HR Categorical Bar Chart Chi-Square Cross Tabulation

4 Shift HR Categorical Bar Chart Chi-Square Cross Tabulation

5 Gender HR Categorical Bar Chart Chi-Square Cross Tabulation

6 Location HR Categorical Bar Chart Chi-Square Cross Tabulation

7 Age HR Numerical Scatter Plot Binary Logistic Regression

8 Tenure HR Numerical Scatter Plot Binary Logistic Regression

9 Education HR Categorical Bar Chart Chi-Square Cross Tabulation

10 Marital Status HR Categorical Bar Chart Chi-Square Cross Tabulation

11 Mode of Communication MIS Categorical Bar Chart Chi-Square Cross Tabulation

12 Typing Speed MIS Numerical Scatter Plot Binary Logistic Regression

 Hypothesis Test For
System Operator on Defect Generation
Tabulated Statistics: System Operator, TAT Met

Rows: System Operator

Columns: TAT Met

No Yes All

Binny 64 46 110
58.18 41.82 100.00

Jai 58 50 108
53.70 46.30 100.00

Ravi 58 54 112
51.79 48.21 100.00

Shishir 57 46 103
55.34 44.66 100.00

Sunny 56 56 112
50.00 50.00 100.00

All 293 252 545

53.76 46.24 100.00

Cell Contents: Count

% of Row Inference : Since the P-value is ≥ 0.05, hence null
Pearson Chi-Square = 1.781, DF = 4, cannot be rejected. Hence we are safe to conclude that
P-Value = 0.776
Likelihood Ratio Chi-Square = 1.784, System Operator has no impact on Defect Generation.
DF = 4, P-Value = 0.775
 Hypothesis Test For
Process Complexity on Defect Generation
Tabulated Statistics: Process Complexity, TAT Met

Rows: Process Complexity

Columns: TAT Met

No Yes All

L1 133 108 241

55.19 44.81 100.00

L2 160 144 304

52.63 47.37 100.00

All 293 252 545

53.76 46.24 100.00

Cell Contents: Count

% of Row

Pearson Chi-Square = 0.353, DF = 1, P-

Value = 0.552
Likelihood Ratio Chi-Square = 0.353, DF
= 1, P-Value = 0.552

Inference : Since the P-value is ≥ 0.05, hence null

cannot be rejected. Hence we are safe to conclude that
Process Complexity has no impact on Defect
Generation.
 Hypothesis Test For
Trainer on Defect Generation
Tabulated Statistics: Trainer, TAT Met

Rows: Trainer
Columns: TAT Met

No Yes All

Amit 39 49 88
44.32 55.68 100.00

Atul 23 53 76
30.26 69.74 100.00

Daniel 54 64 118
45.76 54.24 100.00

Rashid 47 17 64
73.44 26.56 100.00

Ruby 91 42 133
68.42 31.58 100.00

Sonia 39 27 66
59.09 40.91 100.00

All 293 252 545

53.76 46.24 100.00

Cell Contents: Count

% of Row Inference : Since the P-value is < 0.05, hence null
Pearson Chi-Square = 45.295, DF = 5, P-Value cannot be rejected. Hence we are safe to conclude that
= 0.000
Likelihood Ratio Chi-Square = 46.378, DF = Trainer has significant impact on Defect Generation.
5, P-Value = 0.000
 Hypothesis Test For
Shift on Defect Generation
Tabulated Statistics: Shift, TAT Met

Rows: Shift Columns: TAT Met

No Yes All

Evening 118 121 239

49.37 50.63 100.00

Morning 76 77 153
49.67 50.33 100.00

Night 99 54 153
64.71 35.29 100.00

All 293 252 545

53.76 46.24 100.00

Cell Contents: Count

% of Row

Pearson Chi-Square = 10.253, DF = 2, P-

Value = 0.006
Likelihood Ratio Chi-Square = 10.390,
DF = 2, P-Value = 0.006
Inference : Since the P-value is < 0.05, hence null
cannot be rejected. Hence we are safe to conclude that
Shift has significant impact on Defect Generation.
 Hypothesis Test For
Gender on Defect Generation
Tabulated Statistics: Gender, TAT Met

Rows: Gender Columns: TAT Met

No Yes All

F 127 107 234

54.27 45.73 100.00

M 166 145 311

53.38 46.62 100.00

All 293 252 545

53.76 46.24 100.00

Cell Contents: Count

% of Row

Pearson Chi-Square = 0.043, DF = 1, P-

Value = 0.835
Likelihood Ratio Chi-Square = 0.043, DF
= 1, P-Value = 0.835

Inference : Since the P-value is ≥ 0.05, hence null

cannot be rejected. Hence we are safe to conclude that
Gender has no impact on Defect Generation.
 Hypothesis Test For
Location on Defect Generation
Tabulated Statistics: Location, TAT Met

Rows: Location Columns: TAT Met

No Yes All

C5 172 131 303

56.77 43.23 100.00

C6 121 121 242

50.00 50.00 100.00

All 293 252 545

53.76 46.24 100.00

Cell Contents: Count

% of Row

Pearson Chi-Square = 2.477, DF = 1, P-

Value = 0.115
Likelihood Ratio Chi-Square = 2.478, DF
= 1, P-Value = 0.115

Inference : Since the P-value is ≥ 0.05, hence null

cannot be rejected. Hence we are safe to conclude that
Location has no impact on Defect Generation.
 Hypothesis Test For
Age Group on Defect Generation
Binary Logistic Regression: TAT Met versus Age

Method

Link function Logit

Rows used 545

Response Information

Variable Value Count

TAT Met Yes 252 (Event)
No 293
Total 545

Deviance Table

Source DF Adj Dev Adj Mean

Chi-Square P-Value
Regression 1 0.007 0.00678
0.01 0.934
Age 1 0.007 0.00678
0.01 0.934
Error 543 752.436 1.38570
Total 544 752.443
Inference : Since the P-value is ≥ 0.05, hence null
cannot be rejected. Hence we are safe to conclude that
Age has no impact on Defect Generation.
 Hypothesis Test For
Service Tenure on Defect Generation
Binary Logistic Regression: TAT Met versus Tenure

Method

Link function Logit

Rows used 545

Response Information

Variable Value Count

TAT Met Yes 252 (Event)
No 293
Total 545

Deviance Table

Source DF Adj Dev Adj Mean

Chi-Square P-Value
Regression 1 0.030 0.03034
0.03 0.862
Tenure 1 0.030 0.03034
0.03 0.862
Error 543 752.413 1.38566
Total 544 752.443
Inference : Since the P-value is ≥ 0.05, hence null
cannot be rejected. Hence we are safe to conclude that
Service Tenure has no impact on Defect Generation.
 Hypothesis Test For
Education on Defect Generation
Tabulated Statistics: Education, TAT Met

Rows: Education Columns: TAT Met

No Yes All

G 163 141 304

53.62 46.38 100.00

UG 130 111 241

53.94 46.06 100.00

All 293 252 545

53.76 46.24 100.00

Cell Contents: Count

% of Row

Pearson Chi-Square = 0.006, DF = 1, P-

Value = 0.940
Likelihood Ratio Chi-Square = 0.006, DF
= 1, P-Value = 0.940

Inference : Since the P-value is ≥ 0.05, hence null

cannot be rejected. Hence we are safe to conclude that
Education has no impact on Defect Generation.
 Hypothesis Test For
Marital Status on Defect Generation
Tabulated Statistics: Marital Status, TAT Met

Rows: Marital Status Columns: TAT Met

No Yes All

M 122 105 227

53.74 46.26 100.00

S 171 147 318

53.77 46.23 100.00

All 293 252 545

53.76 46.24 100.00

Cell Contents: Count

% of Row

Pearson Chi-Square = 0.000, DF = 1, P-

Value = 0.995
Likelihood Ratio Chi-Square = 0.000, DF
= 1, P-Value = 0.995

Inference : Since the P-value is ≥ 0.05, hence null

cannot be rejected. Hence we are safe to conclude that
Marital Status has no impact on Defect Generation.
 Hypothesis Test For
Language on Defect Generation
Tabulated Statistics: Mode of Communication,
TAT Met

Rows: Mode of Communication Columns:

TAT Met

No Yes All

E 167 136 303

55.12 44.88 100.00

H 126 116 242

52.07 47.93 100.00

All 293 252 545

53.76 46.24 100.00

Cell Contents: Count

% of Row

Pearson Chi-Square = 0.503, DF = 1, P-

Value = 0.478
Likelihood Ratio Chi-Square = 0.503, DF
= 1, P-Value = 0.478

Inference : Since the P-value is ≥ 0.05, hence null

cannot be rejected. Hence we are safe to conclude that
Language has no impact on Defect Generation.
 Hypothesis Test For
Typing Speed on Defect Generation
Binary Logistic Regression: TAT Met versus Typing
Speed

Method

Link function Logit

Rows used 545

Response Information

Variable Value Count

TAT Met Yes 252 (Event)
No 293
Total 545

Deviance Table

Source DF Adj Dev Adj Mean

Chi-Square P-Value
Regression 1 7.126 7.126
7.13 0.008
Typing Speed 1 7.126 7.126
7.13 0.008
Error
Total
543
544
745.317
752.443
1.373 Inference : Since the P-value is < 0.05, hence null
cannot be rejected. Hence we are safe to conclude that
Typing Speed has significant impact on Defect
Generation.
 Hypothesis Test Summary
Sl. No. Potential X's Source Data Type Graphical Tool Hypothesis Test P-value Inference

1 System Operator HR Categorical Bar Chart Chi-Square Cross Tabulation 0.775 No Impact

2 Process Complexity MIS Categorical Bar Chart Chi-Square Cross Tabulation 0.552 No Impact

3 Trainer HR Categorical Bar Chart Chi-Square Cross Tabulation 0.000 Significant Impact

4 Shift HR Categorical Bar Chart Chi-Square Cross Tabulation 0.006 Significant Impact

5 Gender HR Categorical Bar Chart Chi-Square Cross Tabulation 0.835 No Impact

6 Location HR Categorical Bar Chart Chi-Square Cross Tabulation 0.115 No Impact

7 Age HR Numerical Bar Chart Binary Logistic Regression 0.732 No Impact

8 Tenure HR Numerical Bar Chart Binary Logistic Regression 0.596 No Impact

9 Education HR Categorical Bar Chart Chi-Square Cross Tabulation 0.940 No Impact

10 Marital Status HR Categorical Bar Chart Chi-Square Cross Tabulation 0.995 No Impact

11 Mode of Communication MIS Categorical Bar Chart Chi-Square Cross Tabulation 0.478 No Impact

12 Typing Speed MIS Numerical Bar Chart Binary Logistic Regression 0.006 Significant Impact
Improve Phase
 Shift
Trainer

Typing Speed
Vital Xs

Deployment Matrix
Rating ( 1 to 10)

7
8

8
1 Lowest
10 Maximum

Atul to share best practice with

0
8

3
88
Amit / Daniel / Rashid / Ruby / Sonia

0 Give them feedback &

7

2
72
introduce -Train the Trainer program
8
5

Employee engagement at Night

112
7
0

2
65

Shuffling of people between shifts

6
0

0
42

Fun Activity & Refreshment at night

More of management presence in night

Action Plan Prioritization - QFD

8
5

0
96

shift to be done along with surprise audits

Install typing tutor on system and

7
0

8
113

allowing daily 15 min practice

HR to hire people going forward

6
3

8
130

who have >40 wpm

Completeness Matrix
718
294
224

200
 FMEA
Historical
Defined Evidence / RPN
Items Failure Mode Effect on EDR Severity Occurrence Detection RMS RTP Responsibility Deadline
"X"s Possibility of (S*O*D)
Occurrence

Increase the
Head of
Payout payout for
Best trainer resigns Fatal error 10 3 3 90 Mitigate Employee Dec-19
dissatisfaction critical
Benefits
resource
Prioritize by
Best trainer to Delayed Head of
Schedule mismatch 5 5 3 75 Mitigate top Nov-19
share the best improvement Trainings
management
practice with
others Prioritize by
Unwilling to share the best No / Delayed Head of
7 7 8 392 Mitigate top Nov-19
practices improvement Trainings
Trainer management
Monitor by
Personality clash among No / Delayed Head of
9 7 8 504 Mitigate top Nov-19
trainers improvement Trainings
management
Monitor by
Unwilling to follow the No / Delayed Head of
Standard 7 8 5 280 Mitigate top Nov-19
standard training materials improvement Trainings
training management
materials for Not being a Outsource
all trainers Materials not being the No / Delayed Head of
7 improvement 1 4 28 Transfer training Nov-19
industry standard improvement Trainings
oriented company materials
 FMEA (Contd.)
Historical
Defined Evidence / RPN
Items Failure Mode Effect on EDR Severity Occurrence Detection RMS RTP Responsibility Deadline
"X"s Possibility of (S*O*D)
Occurrence

Incentives Head of
Unwilling to attend the No / Delayed
7 5 2 70 Mitigate for attending Employee Dec-19
night shift improvement
night shifts Benefits

Ensure
Rotational Health concerns for
No / Delayed balance in Head of
working shift attending frequent night 6 4 5 120 Mitigate Dec-19
improvement shift Trainings
for employees shifts
allocation
Shift
Ensure
Head of
Safety concerns for female No / Delayed roaster pick
8 6 5 240 Mitigate Employee Dec-19
employees in night shifts improvement & drop for
Benefits
night shifts
Standard
Maintain Head of
working Unavailability of proper Delayed
6 3 2 36 Mitigate regular Employee Nov-19
environment lighting, A/C, snacks etc. improvement
budget Benefits
for night shifts
Offer rewards Offer non- Head of
Delayed
for best Budget constraints 6 2 2 24 Mitigate monitory Employee Dec-19
improvement
performers rewards Benefits
Typing
Speed Compulsory
Prioritize by
daily usage of Low priority for operations No / Delayed Head of
8 8 3 192 Mitigate top Dec-19
typing tutor managers improvement Trainings
management
for upskilling
 FMEA (Contd.)
Historical
Defined Evidence / RPN
Items Failure Mode Effect on EDR Severity Occurrence Detection RMS RTP Responsibility Deadline
"X"s Possibility of (S*O*D)
Occurrence
Allocate
sufficient Head of
No
Budget constraints 8 4 2 64 Mitigate budget for Employee Mar-20
improvement
competent Benefits
resource
Ensure close
monitoring
Performance degradation No / Delayed Head of
8 2 5 80 Mitigate and offer Dec-19
after joining improvement Trainings
required
trainings
Hire people Offer
Typing with minimum programs to Head of
Speed typing speed No / Delayed
Attrition challenge 8 7 7 392 Mitigate maintain Employee Dec-19
of 40 wpm improvement
employee Benefits
motivation
Maintain an
external
resource Head of
pool and Employee
Competent resource Delayed
8 2 3 48 Mitigate conduct Benefits & Dec-19
unavailability improvement
regular Head of
internal Trainings
upskilling
programs
 Pilot Testing - Validations
Before & After Analysis
Denominators Before After

DPO 0.54 0.23

DPMO 537,615 225,000

ZLT -0.09 0.76

ZST 1.41 2.26

Cost Benefit Analysis

Project Objective Before After

Penalty BDT 150,000 Nil

Customer Satisfaction Dissatisfied Satisfied

Possibility of Loosing Business Huge Threat No Threat

Sigma Level 1.41 2.26

Control Phase
 Control Plan
Control Parameters Standard Frequency Sample Size Responsible

Trainer-wise SLA failure <=27% Daily 20 samples Operations Team Lead

Shift-wise SLA failure <=27% Daily 20 samples Operations Team Lead

Rotational roaster schedule 1 <= Night Shifts <=2 Weekly 1 location Operations Team Lead

Surprise top management visits in night shifts 2 Bi-weekly 1 location Top Management

Typing speed >=40 wpm Weekly 10 employees Operations Team Lead

 Control Charts

C Chart of Old SLA Met C Chart of Improved SLA Met

1.5 1.5

1.0 1.0
_
C=0.775

_
0.5 C=0.462 0.5

0.0 LCL=0 0.0 LCL=0

-0.5 -0.5
1 55 109 163 217 271 325 379 433 487 541 1 5 9 13 17 21 25 29 33 37
Sample Sample
Thank You