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SIX SIGMA
PROJECT PRESENTATION
By
Mr. Brahmadeo Roy
Reduction in number of amendments to the contract
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PROJECT ID :
GB : Mr. Brahmadeo Roy
BB : Mr Puvendra D
MBB : Mr. Girish SR , Sr DGM/BEQI
CHAMPION : Mr Amol Newaskar, GM, MilCom
START DATE : April 2011
PROJECT : To reduce Number of amendments to the contract.
FOCUSSED PROJECT : Elimination of amendments from the contracts
CURRENT Z :
IMPROVED Z :
COMPLETION DATE : Nov 2011SAVINGS : Rs7,48,800
PROJECT CHARTER
6 DEFINE
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BUSINESS CASE
We receive enquiries for quotations from the various customers.Quotations are generated against RFQs through SAP and submitted to thecustomers. 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 ifthey find any discrepancies, they give feedback to marketing departmentto seek amendments from the customers. The amendments may bepertaining to the various parameters like payments terms, Inspection,Part No. not correct, Description not matching as per drawing etc. Thesediscrepancies need to be corrected before the items are offered tocustomer for inspection.
PROJECT CHARTER
6 DEFINE
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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
PROJECT CHARTER
6 DEFINE
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SIPOC
Customers Supply Order /Contract
BEL Documents BEL Drawings
SAP DescriptionsSAP
Contract Review Army/Navy/Air forceDiscrepancies
Supplier Input Process Output Customer
ConductMeeting
FeedBack
Commn.For amdt.
Req. letter tocustomersfor amdt.
Receipt ofAmendments
6 DEFINE
Agenda formeeting
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BUSINESS NEED DRIVERS CTQ
BEL drawing
SAP Data Base
Customers Data Base
Project Officers Experienced officer
Correct Data Base
Correct Data Base
Correct Description
Zero amendments to
the supply order /
Contract
Other Departments Elimination of errors
CRITICAL TO QUALITY TREE
6 DEFINE
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CTQ DEFECTDEFINITION
OPERATIONDEFINITION OFMEASURE OF
DEFECT
KANO STATUS
Correct Description Description not
matching withDrawing
Method of
Designation
Must be
SAP Data Base Wrong description Wrong description Must be
Customer Data base Old Data base In correct data Base Must be
Project Officer Lack of Knowledge Mistake in typing Must be
Other Departments Errors in documents Errors in documents Must be
CTQ SPECIFICATION TABLE
6 DEFINE
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6 MEASURE
AMENDMENTS TO THE CONTRACT Date 10-Sep-11
Sl .No. CUSTOMER PROJECT ORDER AMENDMENT FOR AMD/ REQ/ DATE Types of Amdt
1 GRSE PRC6020A 4700000979 /N10 DT 16.04.11 BEL Inspection, Inclusion of Part.Nos for two items 7-Sep-11 Inspection
2 GRSE PRC6020A 4700000979 /N10 DT 16.04.11 BEL Inspection, Inclusion of Part.Nos for two items 7-Sep-11 Part No.
3 L&T PRC6020A HZW/317060/VJ DT. 22.12.2010 Amdt. For the change in the P.No. of data transfer software[ to 458610121218 frm 991910906692] 21-Aug-11 Part No.
4 ITBP LHP265D IV-17013/15/2009/24.03.2009 /PCT/395, Dt. 02.03.2009 Amdt.in P.No. 31-Jul-11 Part No.
5 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 MO(KAR) EK896 10WBLC004 DT 04.7.11, DT 06.7.11 1) TERMS OF PRICE, 2) CHANGE IN PART No. OF X'stor as 429300200123 28-Jul-11 Terms of price
7 MO(KAR) EK896 10WBLC004 DT 04.7.11, DT 06.7.11 1) TERMS OF PRICE, 2) CHANGE IN PART No. OF X'stor as 429300200123 28-Jul-11 Part No.
8 MO(K) PRC6020A 10KBLC012 DT. 22.06.2011 PO Value is not CORRECT 25-Jul-11 Order Value
9 BSF LHP265D IG/Comn/BSF/ 3087 dt 13.06.2011 and 3244 dt 16.06.2011 1) Antenna nomenclature , Ni Cd Bty & Charger Bty nomenclature 25-Jul-11 Description
10 BSF LHP265D IG/Comn/BSF/ 3087 dt 13.06.2011 and 3244 dt 16.06.2011 ED and VAT 5% 25-Jul-11 Tax
11 MO(V) EK896 10VBLC909 DT. 10.6.2011 CHANGE IN NOMENCLATURE FOR 04 ITEMS 16-Jul-11 Description
12 GRSE PRC6020A 4700001687/N10 dt. 09.06.2011 Part.No., Mistake 5-Jul-11 Part No.
13 GRSE PRC6020A 4700001687/N10 dt. 09.06.2011 TERMS OF PRICE 5-Jul-11 Terms of price
14 GRSE PRC6020A 4700001687/N10 dt. 09.06.2011 Payment Terms 5-Jul-11 Payment Terms
15 GRSE PRC6020A 4700001687/N10 dt. 09.06.2011 Wrong tax, Warrnty instead of Guarantee 5-Jul-11 Tax
16 GRSE PRC6020A 4700001687/N10 dt. 09.06.2011 BEL Inspec, 5-Jul-11 Inspection
17 MO(MB) EK896 09BBLC001 Dt. 10.5.10 Change in Nomen. For cable, coil RF VAR 25-Jun-11 Description
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 L&T PRC6020A HZW/317075/VJ, Dt. 12.02.11 Amdt. For the change in the P.No. of the Data Transfer software ( i.e. to 458610121218) 20-Jun-11 Part No.
20 L&T PRC6020A LTSB/SHYU/PO/1011/218 dt. 10.3.11 Amdt. For the change in the P.No. 20-Jun-11 Part No.
21 GRSE PRC6020A 4700000979/N10 dt. 16.4.11 BEL Inspection 10-Jun-11 Inspection
DATA COLLECETD
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6 MEASURE
22 MoD, New Delhi EK896 15/DNS Dt. 27.3.11 DD Extn till 31.12.2011 8-Jun-11 DD Extn
23 MO(V) LHP265D 07VBLC042 DT. 14.7.08 BSP Ni-Cd Part No. 1800 100 12331 8-Jun-11 Part No.
24 MO(V) LHP265D 07VBLC042 DT. 14.7.08 Nomenclat ure wrong. 8-Jun-11 Description
25 GSL, GOA PRC6020A 181614 DT. 26.3.07 DD Extn till 31.12.2011 7-Jun-11 DD Extn
26 MO(K) PRC6020A 10KBLC009 DT. 07.04.11 BSP Ni-Cd Part No. 1800 100 12331 27-May-11 Part No.
27 MO(K) PRC6020A 10KBLC009 DT. 07.04.11 Nomenclacure Mistake 27-May-11 Description
28 MO(K) PRC6020A 10KBLC009 DT. 07.04.2011 Amdt. for Ni-Cd P.No. & Descp. 27-May-11 Part No.
29 MO(K) PRC6020A 10KBLC009 DT. 07.04.2011 Amdt. for Ni-Cd P.No. & Descp. 27-May-11 Description
30 MO(V) EK896 10VBLC007 DT.28.6.10 DD Extn till 31.12.2011 10-May-11 DD Extn
31 SSB NEW DELHI LHP265D P/W-SSB-2009(17) Dt. 28.03.11 PRICE Amdt. It should be Rs. 107026958/- instead of Rs 106551036/- 10-May-11 Order Value
32 MDL PRC6020A 3030003509 DT. 16.4.11 1) Warranty instead of guarantee 2) ED , CD octroi exemption certificates 7-May-11 Tax
33 MO(KAR) PRC6020A 11WBLCOO1 DT. 05.4.11 PAYING AUTH. AND I-BOND 6-May-11 Payment Terms
34 MO(KAR) PRC6020A 11WBLCOO1 DT. 05.4.11 PAYING AUTH. AND I-BOND 6-May-11 Indemnity Bond
35 BSF LHP265D 9BRD/PROV/SO/18(09) DT. 18.12.09 MHM/LHP/LHP219/229 OBSOLETE 6-May-11 Part No.
36 CGHQ PRC6020A LC/438/CGS(MP)/75/SO-07/11-12 DT. 18.4.11 1) P.No NOT MATCHING WITH RESPECTIVE DESCRIPTION 5-May-11 Description
37 MDL PRC6020A 3030003509 DT. 16.04.2011 100% Payment on proof of despatch 7-Apr-11 Payment Terms
38 MDL PRC6020A 3030003509 DT. 16.04.2011 I-Bond 7-Apr-11 Indemnity Bond
39 MDL PRC6020A 3030003509 DT. 16.04.2011 DD minimum of 03 months frm the date of receipt of order 7-Apr-11 DD Extn
40 MDL PRC6020A 3030003509 DT. 16.04.2011 . 7-Apr-11 Terms of price
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.
DATA COLLECETD
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6 ANALYSE
Year 2011 2010 2009 2008
Part No. 18 14 7 3
Description 17 20 6 2
DD extn 10 12 4 4
Inspection 3 1 1 0
Indemnity Bond 6 3 1 1
Terms of price 3 4 1 0
Payment Terms 2 2 1 1
Tax 6 10 1
Order Value 3 1 1 0
Types of Amendments year wise
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6 ANALYSE
Sl.No. Projects Nos. of Errors
1 EK896 44
2 PRC6020 83
3 LHP265D 23
4 RRF 2
5 Stars V 5
6 VRC6100M 7
7 1KW 3
Number of Amendments Project wise
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6 ANALYSE
EK896 PRC6020 LHP265D RRF Stars V VRC6100M 1KWNos. of Amdt. 44 83 23 2 5 7 3
44
83
23
25 7 3
0
10
20
30
40
50
60
70
80
90 Nos. of Amdt.
Nos. of Amdt.
Nos. of Amendments Project wise graph
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6 ANALYSE
0
10
20
30
40
50
60
D D E x
t n
D e s c r i p t
i o n
I n d e m n
i t y
B o n
d
I n s p e c t i o n
O r d e r
V a l u e
P a r t N
o .
P a y m e n
t T e r m s
T a x
T e r m s o
f P r i c e
Nos.
Nos.
Types of Amendment graph
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6 ANALYSE
Sl.No. Types of Amendements Nos.
1 DD Extn 302 Description 45
3 Indemnity Bond 11
4 Inspection 5
5 Order Value 4
6 Part No. 42
7 Payment Terms 4
8 Tax 179 Terms of Price 8
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Vital few: 80% of the Amendments are due to the following steps
1 : Description of the items
2 : Part No. of the items
3 : DD Extension
4 : Tax
6 ANALYSE
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EXISTING PROCESS MAP
6
Receipt of
Order
Send for
vetting by PCReceipt
from PC
Generation
of Enquiry in
SAP
Generation of
Quote in SAP
Submission of
Quote to Customer
Intimate to
customer
Creation of
Sale Order
Preparation
of Quote
Contract
Review
DecisionforAcceptance
PricingDecision
Management
Approval
Yes
No
Offering to
the customer
Valuation Type
by PC
MRP run &
Production
Generation
of OBD
Inspect
ion
Receipt of Enquiry
Dispatch of Items
ANALYSE
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6 ANALYSE
CAUSE AND EFFECT DIAGRAM
More Nos. ofAmendments
Commercial terms Method
PersonData Base
DrawingTitleC1
Data Base withthe customerC4
SAPdescription C2
C9
Duties and
TaxesC8
Terms of price
C7
Wrong Part No.C5
EntryPermit
C6Skill andExperience
CQAE/SQAE
Inspectors
CustomerProcess
DDextension
C3
C11Generation of
Enquiry & Quotation
C10
C12
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6 ANALYSE
Order processing
CONSTANTS
E X P E R I M E N T A L F A C T O R S
( N I L )
NOISE FACTORS (NIL)
C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12
RESPONSE
More no. of Amendments
D r a w
i n g
t i t l e
W r o n g
P a r
t N o .
S A P D e s c r
i p t i o n
C Q A E / S Q A E i n s p e c
t o r
D a t a
B a s e w i
t h t h e c u s t o m e r
S k i l l a n
d E x p e r
i e n c e
T e r m s o f p r i c e
D u
t i e s a n
d T a x e s
D D e x
t e n s i o n
CNX Diagram for Amendments
E n t r y
P e r m
i t
G e n e r a t
i o n o
f E n q u
i r y /
Q u o t a t
i o n
C u s t o m e r p r o c e s s
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6 IMPROVE
C FACTORS ARE ADDRESSED AS FOLLOWS
C- FACTORS EARLIER PROCESS IMPROVED PROCESS
C1:Drawing Title
C2: SAP Description
C3: Data Base withCustomer
C4: Wrong part no.
Drawing Title and Method of designation do not match withSAP description
While Generating Quotations ,Description comes from SAPMaster data
Customer uses his own data
Base for Part No. anddescription
Due to wrong part no. availablewith customer or Typographi-cal error, customer gives wrong
part no. in the order
SAP description has beencorrected/Updated for PP/MP of deliverable items
SAP description and DrawingDescription match
Customer are communicated to
issue order exactly as per quotation
Requested to follow exactly as perquotation submitted
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6 IMPROVE
C FACTORS ARE ADDRESSED AS FOLLOWS
C- FACTORS EARLIER PROCESS IMPROVED PROCESS
C5: CQAE/SQAEinspector
C6: Skill andExperience
C7: Terms of Price
C8: Duties and taxes
CQAL/SQAL Inspector inspectsthe items as per Drawing / Contract / Offering Letter
Skill and Experience of Purchaseoffices and sales officers playvital role in determiningcorrectness of Contract/ SupplyOrder
Many Customers place the order
without negotiating the Terms of price.
Many Customers place the orderwithout indicating correct Dutiesand Taxes. Excise , CST & VAT
No change
No changes
Customer are communicated to
issue order exactly as perquotation
Customer are communicated toissue order exactly as perquotation
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6 IMPROVE
C FACTORS ARE ADDRESSED AS FOLLOWS
C- FACTORS EARLIER PROCESS IMPROVED PROCESS
C9: DD Extension
C10:Entry Permit/EndUse.
C11: Generation of Enquiry and Quote
C12:Customer Process
Delivery Date is indicated as perthe quotation. Due to someunavoidable reasons DD slip.
Sometimes customer does notindicate End use and does notprovide us Entry Permit. Octroiand Road Permit etc.
Partially done in SAP because of
many other reasons.
Customer process data in theirown method
Strict monitoring is done for ontime delivery of items.
Customer is requested to provideEnd Use and Entry Permit alongwith the order.
Enquiry and Quote are generatedthrough SAP. This makes surecorrectness of part No. anddescription
No control over customer process.
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6
SLNO PARAMETER EXISTING IMPROVEMENT
1 Description of Items Taken from Earlier quoteor SAP master data base
Master data base iscreated andmaintained the samein SAP
2 Generation of
Enquiry and Quote
Done manually with little
help from SAP
Enquiry and Quote
and generatedthrough SAP
3 Correctness of Description
Mis-match of SAPdescription and DrawingDescription
SAP Description andDrawing descriptionboth match.
4 Correctness of PartNumber Mistakes are croppingdue to manual typing Done through SAPwhere is validation isinbuilt in the system
IMPROVEMENT AFTER COMPLETION OF PROJECT
IMPROVE
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6 IMPROVE
SLNO
PARAMETER EXISTING IMPROVEMENT
5 DD Extension DD is not correctlyindicated in thePurchase Order
Realistic Delivery time isindicated in the quote . Atthe same time we alsomonitor strictly
6 Duties and taxes Some time duty and
taxes are notindicated properlyand later customergive End Use.
Order type is finalized in
the beginning to avoid anyavoid any custom, Excise,CST and VAT
7 Terms of price The customeralways wants FOR destination . We
always want FOR Bangalore .
This confusion is removedby bearing Freight andinsurance by BEL.
8 Entry Permit Normally customerdoes not provideEntry permit alongwith the order
Depending on consignee,Customer are requested toprovide Entry permit alongwith the order.
IMPROVEMENT AFTER COMPLETION OF PROJECT
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6 IMPROVE
DATA BASE MAINTAINED
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6 IMPROVE
Customer Communication
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6 IMPROVE
Customer Communication
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6 IMPROVE
SAP MASTER DATA BASE CORRECTED
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6 IMPROVE
SAP MASTER DATA BASE CORRECTED
6
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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 asper the quote submitted.
Method is channelized
6 CONTROL
IMPLEMENTATION AND CONTROL
6
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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 improvedQuotation generation becomes easy and fool proof
Less paper work and better utilization of time and resource
6
BENEFITS OF THE IMPROVED SYSTEM
CONTROL
6
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Saving
26 hours per operator per monthsRs.800 per hourFor 3 projects (at least)For 2 operators (at least)Total saving = 26x12x800x3= Rs.7,48,800
CONTROL
6
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