PRINCIPLES OF MANAGEMENT-JNTUK-UNIT-5-2016-2018 BATCH

sanjaykanagala,rimsmba,kakinada

PRINCIPLES OF MANAGEMENT

UNIT-5


Contemporary issues in Management

MBO Management By

Walking Around Out of the Box

Thinking Balanced Score Card Time Management

BPOs Stress

Management causes and remedies

JIT TQM Six Sigma CMM levels

LEARNING OBJECTIVES


Contemporary Management Issues examines the way of thinking that is needed to address issues as they emerge. Contemporary issues have arisen as a result of past, and current, thinking and practices. Similarly, future issues will emerge as a result of current thinking and practices.

CONTEMPORARY ISSUES IN MANAGEMENT


One of the dominant themes in quality management literature is the degree of complexity that the contemporary manager must be able to take into account in making decisions that shape the response to current issues and the future of their organizations.

CONTEMPORARY ISSUES IN MANAGEMENT continue…


Contemporary Management Issues invites re-evaluation of traditional management practices. Beyond that, the subject focuses on developing thinking tools and practices that facilitate more adaptive responses to novel issues as they emerge. A key focus is the response to complexity in society and how issues of leadership, ethics, and social responsibility are interconnected with all business decisions.

CONTEMPORARY ISSUES IN MANAGEMENT continue…


An effective management goes a long way in extracting the best out of employees and make them work as a single unit towards a common goal.

The term Management by Objectives was coined by Peter Drucker in 1954.

Management by Objectives


The process of setting objectives in the organization to give a sense of direction to the employees is called as Management by Objectives.

It refers to the process of setting goals for the employees so that they know what they are supposed to do at the workplace.

Management by Objectives defines roles and responsibilities for the employees and help them chalk out their future course of action in the organization.

Management by objectives guides the employees to deliver their level best and achieve the targets within the stipulated time frame.

Management by ObjectivesCONTINUES..


OBJECTIVE SETTING

S specific

M measurable

A achievable

R result oriented

T time-related

WORK HAVE

SUCCESS

In an MBO, good goals are SMART goals:


Peter Drucker, (1954, “The Practice of Management”)

• Is a systematic and organized approach that allows management to focus on achievable goals and attain the best possible results from available resources

• Aims to increase individual and organizational effectiveness by aligning organizational goals and subordinate objectives

• Clarifies and quantifies objectives to allow for monitoring, evaluation, and feedback throughout the hierarchy of objectives

WHAT IS MBO ?


• MBO emphasises the importance of objectives as a tool to be used by managers in fulfilling their managerial roles (accomplish their tasks)• Divide problem into manageable, “bite-size” chunks

IN SIMPLE WORDS, MBO IS…


MBO; PLAN VIEW

Vision


MBO; CROSS SECTION

Vision

Mission

TacticalPlans

Managementby

Objectives

OperationalPlans

StandingPlans

Single-UsePlans

TopManagers

MiddleManagers

First-LevelManagers


Single-use Plans are developed to achieve objectives that are not likely to be repeated in the future. Single-use plans include both programs and projects.

Standing Plans are used to provide guidance for tasks performed repeatedly within the organization. The primary standing plans are organizational policies, rules, and procedures.

Operational Plans are used to identifies specific results to be accomplished within a given short term time period. Contain detailed information used in the lower levels in an organization.


Peter Drucker also stated that:For the business to succeed, the managers and employees must work towards a common goal

Managers must identify and agree targets for achievement with subordinates

Managers must negotiate the support needed to achieve the targets with subordinates

Evaluate the objectives over time

FEATURES OF MBO


MBO AIM Short and long-term planning

Optymalization of organization structure Better work and collaboration quality

Appraisal based on objective results

BONUSES


MBO PRINCIPLES1.Cascading of organizational goals and

objectives

2.Specific objectives for each team member

3.Participative decision making

4.Explicit time period

5.Performance evaluation & feedback


CASCADING OF OBJECTIVES


Improves employee motivation Improves communication in the organisation

Flags up and highlights training needs required to achieve objectives

Improves overall performance and efficiency

Attainment of goals can lead to the satisfaction of Maslow’s higher order needs

ADVANTAGES OF MBO


MASLOW’S NEEDS THEORY“We each have a hierarchy of needs that ranges from "lower" to "higher." As lower needs are fulfilled there is a tendency for other, higher needs to emerge.” Daniels, 2004

Maslow’s theory maintains that a person does not feel a higher need until the needs of the current level have been satisfied. Maslow's basic needs are as follows:


Esteem Needs

Self-Actualization

Safety

Social Needs (Love & Belonging)

Basic Human Needs (Physiological)

• Food, Air, Water, Sex, Clothing

• Protection, Stability, Pain Avoidance, Routine/Order

• Affection, Acceptance, Inclusion

• Self-Respect, Self-Esteem, Respected by Others

• Achieve full potential, Fulfillment

MASLOW’S NEEDS THEORY


DISADVANTAGES OF MBO May demotivate staff if targets are too high

and unrealistic, also if imposed rather than agreed

Requires the cooperation of all employees to succeed

Can be bureaucratic and time consuming (meetings, feedback)

Can encourage short-term rather a more focused long-term growth

Objectives may go out of date and can restrict staff initiative and creativity

Setting targets for certain specialised employees may be difficult


IS MBO SUITABLE FOR EVERY BUSINESS? MBO could be suitable for a

medium to large business, using a democratic approach to management and operating in a stable market

The overriding issues therefore are size of the business, the leadership style it uses and the rate of change in the market it operates.


HOW MBO WORKS Jointly identify common goals. Define major areas of responsibility in terms of results expected.

Use measurements as guides for operating and assessing contributions of members.


UNDERLYING PURPOSES OF MBO

1. Clarify organization’s goals and plans at all levels.

2. Gain better motivation and participation from organization’s members.


MBO; FRAMEWORK CONCEPT

Jointly plan

• Setting objectives• Setting standards• Choosing actions

Individually act

• Performing tasks (subordinate)• Providing support (supervisor)

Jointly control

• Reviewing results• Discussing implications• Renewing MBO cycle

Supervisor

Subordinate

and


PHASES OF MBO1. Top management team

studies system.2. Team sets up methods of

measuring performance.3. Goal-setting sessions are held

at all levels of organization.


STEPS FOR MBO

Appraise Performance

•Corporate Strategic goals•Departmental goals•Individual goals

STEP 1: SET GOALS

STEP 4: APPRAISE OVERALL

PERFORMANCE

Action Plans

Review Progress &

Take Corrective Action

STEP 2: DEVELOP PLANS

STEP 3: REVIEW PROGRESS


ESSENTIAL STEPS FOR MBO Set Goals (The most difficult

step)◦What are we trying to

accomplish? Develop Action Plans

◦“What do we need to do to get there?”

◦Groups and individuals Review Progress

◦“How are we doing?”◦Periodically (How Often?)◦Does plan need to be tweaked?

Appraise Performance◦Rewards?


e.g. HOW TO SET CORPORATE OBJECTIVES

Mission statement

Corporate objectives

Departmental objectives

Individuals and team targets

To become the leading supplier of computers in London

To increase sales in London by 10% in the next 5 years

e.g. (marketing department) to achieve a 10% share of the computer market in London within the next 5 years

e.g. to design questionnaires as part of market research


SOURCES OF MBO FAILURES1. Lack of top management commitment and

follow through on MBO.

2. Employees’ negative beliefs about management’s sincerity in its efforts to include them in the decision-making process.


MANAGEMENT BY WALKING

AROUND


Unstructured approach to hands-on, direct participation by the managers in the work-related affairs of their subordinates, in contrast to rigid and distant management.

In MBWA practice, managers spend a significant amount of their time making informal visits to work area and listening to the employees.

The purpose of this exercise is to collect qualitative information, listen to suggestions and complaints, and keep a finger on the pulse of the organization.

Also called management by wandering around.

Management By Walking Around


“Management by walking around emphasizes the importance of interpersonal contact, open appreciation, and recognition. It is one of the most important ways to build civility and performance in the workplace.”

Management by walking around (MBWA) is based on the concept that a manager needs to actually understand what is really going on - not just view reports in an office.

Management By Walking Around continue..


By seeing the actual state of affairs they can better understand what management improvements are actually doing where work is being done.

Managers getting away from their desks and starting to talk to individual employees. The idea is that they should learn about problems and concerns at first hand.

At the same time they should teach employees new methods to manage particular problems. The communication goes both ways.

Management By Walking Around continue..


Managers consistently reserving time to walk through their departments and/or to be available for impromptu discussions. (MBWA frequently goes together with an open-door management policy.)

Individuals forming networks of acquaintances throughout their organisations.

Lots of opportunities for chatting over coffee or lunch, or in the corridors.

MBWA usually involves the following:


Managing by walking around was popularized by Tom Peters and Robert Waterman in the early 1980s because it was (already then) felt that managers were becoming isolated from their subordinates.

At Hewlett-Packard, where the approach was practiced from 1973, executives were encouraged to know their people, understand their work, and make themselves more visible and accessible.

Bill Hewlett and Dave Packard's business philosophy, centered on deep respect for people and acknowledgment of their built-in desire to do a good job, had evolved into informal, decentralized management and relaxed, collegial communication styles. Theirs was the opposite of drive-by management.

Background:


The basic principle is that command-and-control is ineffective in modern organizations. Nothing is more instructive than seeing what actually transpires in the real world and learning from that.

Management by walking around is a leadership technique that has stood the test of time and can be used by any manager.

Rationale:


Except for virtual organizations —and most of us still do not work through these even if we interface variously with them—face-to-face interaction remains a sure way to receive and give feedback wherever managers see staff regularly. Why? Because it is staff, not managers, who create an organization's products and deliver its services, and appreciation of that can only come from knowing what happens on the ground.

Because people live to be part of something, and being intimately in touch opens up more lines of informal communication and produces stronger team dynamics and performance. The human touch still works best.

Rationalecontinue..


Managing by walking around requires: Personal involvement, good listening skills,

and the recognition that most people in an organization want to contribute to its success.

It should not be forced and cannot be a charade.

It works if you display sincerity and civility and are genuinely interested in staff and their work.

Approach


1. Wander about as often as you can, but recurrently and preferably daily.

2. Relax as you make your rounds.3. Share and invite good news.4. Talk about family, hobbies, vacations, and sports.5. Watch and listen without judgment.6. Invite ideas and opinions to improve operations, products, services,

etc.7. Be responsive to problems and concerns.8. Look out for staff doing something right, and give them public

recognition.9. Project the image of a coach and mentor, not that an inspector.10. Give people on-the-spot help.11. Use the opportunity to transmit the organization’s values.12. Swap value and legacy stories.13. Share your dreams.14. Have fun.

Approach


Managing by walking around does not just cut through vertical lines of communication. It also

1. Builds trust and relationships. 2. Motivates staff by suggesting that management

takes an active interest in people. 3. Encourages staff to achieve individual and

collective goals. 4. Strengthens ability to drive cultural change for

higher organizational performance. 5. Refreshes organizational values. 6. Makes work less formal. 7. Creates a healthy organization

Benefits:


Accountability. You will feel uncomfortable facing the person again if you haven't addressed their concerns.

Increased efficiency. One of the main benefits of MBWA was

recognised by W. Edwards Deming, who once wrote: “If you wait for people to come to you, you’ll only get small problems. You must go and find them. The big problems are where people don’t realise they have one in the first place.”


MBWA has been found to be particularly helpful when an organisation is under exceptional stress; for instance, after a significant corporate reorganisation has been announced or when a takeover is about to take place. It is no good practising MBWA for the first time on such occasions, however. It has to have become a regular practice before the stress arises.

The difficulty with MBWA is that (certainly at first) employees suspect it is an excuse for managers to spy and interfere unnecessarily.

This suspicion usually falls away if the walkabouts occur regularly, and if everyone can see their benefits.


1. Do it to everyone.2. Do it as often as you can.3. Go by yourself.4. Don’t circumvent subordinate managers.5. Ask questions.6. Watch and listen.7. Share your dreams with them.8. Try out their work.9. Bring good news.

10. Have fun.11. Catch them in the act of doing something right.12. Don’t be critical.

Twelve Guidelines for Managing By Walking Around:


Visit everyone Stay positive Be genuine Make sure it’s not all business Don’t expect results right away

If the twelve guidelines above seem overwhelming try these five:


Out of the Box Thinking


‘Think outside the box’ is one of the biggest creativity cliches. The basic idea is that to be creative you need to challenge your own assumptions and look at things from a fresh angle. You need to break out of conventional thinking and take off the blinkers formed by past experience.

Out of the Box Thinking


Lung and Dominowski’s strategy instructions plus dot-to-dot. training facilitated solution of the nine-dot problem, but still only a little more than half of the subjects solved the problem, and they did so not smoothly in a sudden burst of insight, but only after a number of tries. This study provides particularly graphic evidence that insightful behavior, contrary to the Gestalt view, is the result of expertise.

-Robert Weisberg, The Myth of Genius. The phrase is generally held to have originated with

the classic ‘nine-dot’ creativity puzzle. If you haven’t seen this problem before, try to solve it before scrolling down and reading the rest.

dot-to-dot.


Get a pen and some paper and copy the nine dots arranged in a square below. To solve the problem, you need to join all nine dots by drawing no more than four straight lines. The straight lines must be continuous – i.e. you must not lift your pen from the paper once you start drawing. Don’t read any further until you’ve tried to solve the problem.


How did you get on? If you managed to solve it, give yourself a pat on the back and read on. If you’re not there yet, here’s a clue to help you. If you’re like most people, you will have tried to solve the problem by keeping your lines inside the ‘box’ created by the dots. But if you look at the instructions, there is no requirement to do this. So have another go at solving the problem, allowing yourself to draw outside the box. Again, don’t read any further until you’ve either solved it or given up.

OK if you’ve either solved it or had enough, click on the image below to see two of the usual solutions. Each time you click, a new solution will be revealed.


What did you make of that? Could you solve the problem the first time? Did it make any difference when I said you could go outside the box?

answers


The usual way of presenting this problem is for a creativity trainer to only give the first set of instructions – i.e. without mentioning the fact that you allow to go outside the box. And nearly everybody (including me, when I first saw it) completely fails to solve the problem. But most creativity trainers don’t bother with the second stage – they simply reveal the solution to cast of astonishment and protest from the audience: “that’s not fair! You didn’t tell us we could go outside the box!” To which the trainer typically responds “Aha! But I didn’t tell you you couldn’t go outside the box!”.

The Conventional Explanation


The trainer then trots out the conventional explanation of the puzzle: we can’t solve the problem as long as we are thinking ‘inside the box’ created by our assumptions. Once we start to think ‘outside the box’ we open up many more possibilities and it becomes easy to solve the problem. This is true in so many areas of life – our education, past experience and habitual thinking patterns keep us trapped in limiting assumptions. It takes a real effort to challenge the assumptions and think outside the box. Most of us are very poor at doing this and have to work hard at it – unlike creative geniuses to whom this kind of thinking comes naturally.

In case you think I’m having a go at creativity trainers I’ll confess that a few years ago, on a couple of occasions, I was that trainer. Never again.


The trouble with the usual way of presenting the nine-dot problem is that it contains (ahem) an unexamined assumption. I.e. that all we have to do is tell people they can go outside the box and they will find it easy to solve the problem. But most of the time people are not given the chance to find out – they are simply given the solution and told that the problem was their limited thinking. They are usually so astonished to discover that they are allowed to draw outside the box that they readily accept this explanation.

Challenging Creative Convention


A few researchers have been sceptical and curious enough to test this assumption. InCreativity – Beyond the Myth of Genius Robert Weisberg describes two experiments in which people were told that the only way to solve the problem was to draw lines outside the square. Contrary to the ‘outside the box’ school of thought, this did not make problem easy to solve. In fact, only 20-25% of subjects were able to solve the problem, even though all of them allowed themselves to draw outside the box. And even the ones who did solve the problem took a long time to do so, and used trial and error, making many different drawings, rather than any special form of ‘creative thinking’.

http://www.amazon.com/Creativity-Beyond-Genius-Books-Psychology/dp/0716723654/ref=sr_1_2?ie=UTF8&s=books&qid=1226923247&sr=1-2

http://www.amazon.com/Creativity-Beyond-Genius-Books-Psychology/dp/0716723654/ref=sr_1_2?ie=UTF8&s=books&qid=1226923247&sr=1-2


Researchers went on to show that the success rate could be improved by giving subjects prior training in solving simpler line-and-dot problems, and also by giving them “detailed strategy instructions” about how to solve the problem:

So the research evidence suggests that thinking outside the box fails to produce the expected creative solution. And far from being a hindrance, past experience and training can actually be the key to creative problem-solving.


'A strategic planning and management system used to align business activities to the vision statement of an organization'. More cynically, and in some cases realistically, a Balanced Scorecard attempts to translate the sometimes vague, pious hopes of a company's vision/mission statement into the practicalities of managing the business better at every level.

BALANCE SCORE CARD


Department Areas Finance Return On Investment

Cash Flow Return on Capital Employed Financial Results (Quarterly/Yearly)

Internal Business Processes

Number of activities per function Duplicate activities across functions Process alignment (is the right process in the right department?) Process bottlenecks Process automation

Learning & Growth Is there the correct level of expertise for the job? Employee turnover Job satisfaction Training/Learning opportunities

Customer Delivery performance to customer Quality performance for customer satisfaction rate Customer percentage of market Customer retention rate

balanced scorecard - factors examples


Balance scorecard implementation Implementing the Balanced Scorecard system

company-wide should be the key to the successful realization of the strategic plan/vision.

A Balanced Scorecard should result in: Improved processes Motivated/educated employees Enhanced information systems Monitored progress Greater customer satisfaction Increased financial usage


There are many software packages on the market that claim to support the usage of Balanced Scorecard system.For any software to work effectively it should be:

Compliant with your current technology platform Always accessible to everyone - everywhere Easy to understand/update/communicate It is of no use to anyone if only the top management keep

the objectives in their drawers/cupboards and guard them like the Holy Grail.

Feedback is essential and should be ongoing and contributed to by everyone within the organization.And it should be borne in mind that Balanced Scorecards do not necessarily enable better decision-making!

Balance scorecard implementation


TIME MANAGEMENT


Time Management Time management is straightforwardly defined as the management of time in order to make the most out of it.


Time Management But in a 2001 interview, David Allen observed:

You can't manage time, it just is. So "time management" is a mislabeled problem, which has little chance of being an effective approach. What you really manage is your activity during time, and defining outcomes and physical actions required is the core process required to manage what you do.


Time Management Time - the measured or measurable period during

which an action, process, or condition exists or continues.

Management - the act or art of managing : the conducting or supervising of something (as a business).

Managing - to handle or direct with a degree of skill.


Time Management Questions? How much time do you have? What are your goals? Does free time really mean free time? Do you have a schedule? Do you use a planner? Do you procrastinate? Are you equipped with Time Management

Tips?


How much time do you have? There are 24 hours in a day. 7 days in a week ( 168 hours). 365 days in a year. An extra day during leap year.

◦ Make a list of everything you have to do.◦ Figure out how much time you can devote to each

task. By analyzing your time, you will know what time of the day

you do your best work. You will discover how much time your wasting with telephone

calls, interruptions, or just hanging out with friends. ◦ Make sure you include class and study time.


What are your goals? Make your goals specific and

concrete. Set long-term and short-term

goals? Set a deadline for your goals. Monitor your goals. Change goals if needed.


Do you have a schedule? Set up your semester calendar.

◦ Review Syllabus for class schedules.◦ Block all class and lab times◦ Highlight exams and project due dates.◦ Identify routine homework.◦ Incorporate break time.

Divide study time into 50-minute blocks. Use spare time to review. Don’t forget to reward yourself when you do

something right.

“Work smarter, not harder.” – Alan Lakein


Set Priorities Which goals are important to you? Which goals are urgent?

◦ Assignments due at the ends of the semester can be completed in a series of steps and need not be completed immediately.

It is important to work on one task at a time. Plan time to begin the process, i.e. visiting the library on several

occasions to gather research data for a paper that is due. Try to plan at least two hours of study time to per day to review

class notes from your courses and to work on assignments that are due.

Faithfully using your student planner/calendar will help you to prioritize your work.

◦ How can you establish priorities? “to-do list” – Cross off each task as you complete them.


Most of the time we struggle to create a balance between: 1. Our Needs

Eating, sleeping, personal hygiene, etc. 2. Our Desires

Socializing, concerts, vacations, reading, exercising, shopping, TV/video games.

3. Our Obligations Fulfilling the expectations of others. Hanging out with friends instead of doing homework or

preparing for an exam. Arriving late or missing class will send a negative

message to faculty about what you value. Constant stress and anxiety of accompany ineffective

time management. An awareness of how you balance your time is good.


Finding Balance Find balance between:

◦Academic schedule◦Social life ◦Time alone


Procrastination Procrastination is a major obstacle that can

prevent you from practicing good time management skills.

It is the constant pushing aside of tasks that need to be completed and is the archenemy of all students.


Ways of overcoming Procrastination 1. Make the Task Meaningful

◦ Ask yourself why the task is important to you and what it has to do with your long-term goal.

2. Take the task apart◦ Sometime an assignment can appear to be overwhelming. Breaking large

assignments into manageable parts will help. Set dates to work on each of the pieces.

3. Keep yourself organized◦ Having everything you need right at your fingertips will save a lot of time

when starting a project. 4. Be positive

◦ Avoid speaking negatively about the task and your ability to move toward completion. Instead, by positive. Tell yourself, “I know that I can finish this work.”

5. Plan a reward◦ Do something for yourself that you would not normally no, but withhold the

reward if the task remains incomplete. 6. Just do it – Complete the task

◦ The moment you find yourself procrastinating, complete the task; then, you won’t have to think about it anymore.


Time Management Tips Write things down.

◦ Don’t rely on memory Prioritize your list Plan your week.

◦ Spend some time at the beginning of each week to plan your schedule.

Carry a notebook.◦ Write down those great ideas and brilliant

insights (capture your thoughts). Learn to say no.

◦ Say no to low priority requests.


Food for Thought Students who control and monitor their time

give themselves the ability to be flexible. They understand that TIME can be used as

an important resource.


BPO Business process outsourcing


Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider.

WHAT IS BPO


What is BPOBPO is the process of hiring another company to handle business activities for you.

Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions(or processes) such as payroll, customer service, accounting, data recording and much more to a third-party service provider.


Why does a company outsource ?

Not all companies, especially the smaller one, have the cost expertise needed to manage a complex network of the activity they need. For eg. many bank don’t have expertise to manage a complex network of ATMs.

Outsourcing enables an enterprises to concentrate its time and efforts on its key function.

Companies need not invest money in creating and maintaining system non core activities.

When the predictability of the process/service is not important.

When there is limited opportunity for the firm to distinguish itself competitively through a particular process/service.


BPO Categories

It is often divided into two categories :

◦Back Office Outsourcing which includes internal business functions such as billing or purchasing.

◦ Front Office Outsourcing which includes customer-related services such as marketing or tech support.


Key Terms of BPO

OffshoreBPO that is contracted outside a company's own country.

OnshoreBPO that is contracted with the company's own country.

NearshoreBPO that is contracted to a company's neighboring country.


Different types of BPO Services


BPO Service Examples 1. Customer Support Services

1

2. Technical Support Services

››› Customers calling to check on their order status.››› Customers calling to check for information on products and services.››› Customers calling to verify their account status.››› Customers calling to check their reservation status etc.

››› Customers calling to resolve a problem with their home PC.››› Customers calling to understand how to dial up to their ISP.››› Customers calling with a problem with their software or hardware.››› Customers calling to resolve other problems with their products.


BPO Service Examples 3. Telemarketing Services

1

4. Employee IT Help-desk Services

››› Outbound calling to sell wireless services for a telecom provider.››› Outbound calling to retail households to sell leisure holidays.››› outbound calling to existing customers to sell a new rate card for a mobile service provider.››› outbound calling to sell credit or debit cards etc.

››› System problem resolutions related to desktop››› Notebooks, OS, connectivity etc.››› Office productivity tools support including browsers and mail.››› New service requests.››› IT operational issues.››› product usage queries etc.


BPO Service Examples 5. Insurance Processing

1

6. Data Entry Services / Data Processing Services

››› New Business / Promotion: Inbound/outbound sales, Initial Setup, Case Management, Underwriting, Risk assessment, Policy issuance etc.››› Policy Maintenance / Management: Record Changes like Name, Beneficiary, Nominee, Address; Collateral verification,Surrender Audits Accounts Receivable, Accounting, Claim Overpayment,Customer care service via voice/email etc.

››› Data entry from Paper/Books with highest accuracy and quick.››› Data entry from Image file in any format .››› Business Transaction Data entry like sales / purchase / payroll.

››› Data entry of E-Books / Electronic Books. ››› Receipt and Bill Data Entry etc.


BPO Service Examples 7. Book Keeping and Accounting Services

1

8. Internet / Online / Web Research

››› General Ledger ››› Accounts Receivables and Accounts Payable ››› Financial Statements ››› Bank Reconciliation ››› Assets / Equipment Ledgers etc.

››› Internet Search. ››› Product Research & Market Research.››› Survey, Analysis. ››› Web and Mailing list research etc.


BPO Almost EverywhereBPO appears to be an all inclusive term that covers everything:

››› Medical transcription››› Animation››› Power point presentations››› Equity research››› Contract research››› Call centres››› Collections››› IT Help desk››› Internet chat››› Customer service››› Transaction processing››› Travel bookings››› Accounting››› etc. etc. etc.


BPO- Industry SegmentEveryone industry is into outsourcing:

››› Banks

››› Insurance

››› Asset management

››› Manufacturing

››› Healthcare and Pharma

››› IT

››› Telecom

››› Travel agencies

››› Airlines

››› Governments


Advantages

•Productivity Improvements •Cost Savings•Improved HR•Focus on Core Business Competency•Improve Service Level•Reengineer Business Process• Access to world class capabilities•Higher level of service with lower cost

Disadvantages

•Knowledge Disappears and is Transferred to the Outsourcing Partner•Poor Quality Control•Restoring Operations is Complicated•Lack of Loyal Employees•Reduction in Strategic Alignment •Political and religious instability

Advantage and Disadvantage of BPO


Outsourcing in India

Knowledge Process Outsourcing

Information technology Enabled service

Business Process Outsourcing

BPO ITES KPO


BPO in IndiaBusiness process outsourcing is progressing fast in India.

As of 2008, around 0.7 million people work in outsourcing sector.

During the years 2003-04, the ITES-BPO segment achieved a 54 percent growth in revenues as compared to the previous years.

The number of Indians working for the ITES sector jumped to 245,500 in the year 2004.


ITES, Information Technology Enabled Service

ITES, Information Technology Enabled Service, is defined as outsourcing of processes that can be enabled with information technology and covers diverse Areas like finance, HR, administration, health care, telecommunication, anufacturing etc. Armed with technology and manpower, these services areprovided from e-enabled locations. This radically reduces costs and improve service standards. In short, this Internet service provider aims in providing B2B e-commerce solutions.

The main objectives of ITES are :

» Enabling business strategy» Achieving an organization's business goals


KPO,Knowledge Process Outsourcing

Knowledge process outsourcing (KPO) is a form of outsourcing, in which knowledge related and information-related work is carried out by workers in a different company.

KPO services include the following:>> Investment research services (equity, fixed income and credit, and quantitative research)>> Business research services>> Data Analytics>> Market research services>> Valuation and fairness opinions>> Legal process outsourcing>> Patent research services>> Business operations support, analytics & management>> Editorial process outsourcing


Current Top Indian RankersGenpact

WNS

Wipro BPO

HCL Technologies BPO

ICICI OneSource

IBM Daksh

Progeon (Infosys)

Aegis BPO Service

EXL Service Holding

Convergys

Zenta

Mphasis

Tracmail

GTL Ltd.

VCustomer

HTMT

24/7 Customer

Sutherland Technologies

Why People Leave

1. Did not get a better job.

2. Find nothing better to do.

3. Education level doesn't matter

4. Good work environment

5. Good Benefits 6. Flexibility of time 7. Attractive life style

Why People Prefer

Why people prefer Join and Leave BPO

In general a person with any graduation can join any of the BPO. Some BPO's liketo take people with MBA but then again the specialization are of an individual hardly makes any difference. Again, this is the industry, where there is no reference checks and very often people don't even specify there exact age. Lets me share with you some of the reasons as why people prefer to join and leave a BPO:

1. No growth opportunity/lack of promotion

2. For higher Salary 3. For Higher education 4. Misguidance by the

company 5. Policies and procedures

are not conducive 6. No personal life 7. Physical strains 8. Uneasy relationship

with peers or managers


Strengths

•Large no. of talented graduates•Affordable and quality education as compared to developed countries•English language benefit•Strong customer base of well known companies•Powerful venture capital interest in investing in growth opportunity

S W

TO

SWOT Analysis for BPO in India

Weakness

•Scarce foreign language skills other than English.•Lack of customer service culture•Expensive and poor quality telecom infrastructure•Poor electricity supply•Cultural differences

Opportunities

•Horizontal and vertical expansion of existing customer base into new markets

•Time zone difference between India and target markets

Threats

•High Billing rates

•Political instability

•India's competitors in Eastern Europe, Latin America and the Asia


Managing Stress

Presenter Name(s)Date

E-mail

12 March 2014 Version 1


Advanced Learning Workshop – Status (14 June 2013) Stress and its Effects

Do you personally suffer from excessive stress?

What are the signs of excessive stress?

What can you do to help alleviate your stress?


Advanced Learning Workshop – Status (14 June 2013)

Common Physical symptoms of stress can include:

Rapid heartbeat. Headache. Stiff neck and/or tight shoulders. Backache. Rapid breathing. Sweating and sweaty palms. Upset stomach, nausea, or diarrhea. Sleep trouble. Weakening of the immune system

Determining if you suffer from excessive stress Signs of stress can be physical and/or mental



Common Mental symptoms of stress include:

Irritability Intolerance Short Temper Exhaustion Lack of concentration Frustration over minor challenges

Symptoms Continued…



Using the handout for reference, rate how often on a scale of 1 to 10 (1 being never, 10 being more than 5-6 times a week) you experience the below mentioned symptoms:

HeadachesBack/neck pain

Chest pain or discomfortProblems with digestion/nausea

Dizziness, numbness or tingling in your fingers or toesIrritabilityFrustration

Emotional FatigueConcentration/Memory Problems

Determine YOUR Personal Level of Stress



If you’ve rated 6 or more of the symptoms on the handout with a 5 or higher, you should consider reviewing your stress level and possibly taking some action to reduce it. If you have rated 6 or more of the above with a 4 or less, it shows you manage your stressful situations well.

It can’t hurt to get some ideas on different ways of coping with stress regardless of your personal score. So, let’s take a look.

Where Do You Fall With Your Results?

If you determine that you are experiencing excessive stress, what can you do?

◦ Find out what is causing stress in your life and determine ways to reduce or eliminate the cause.

◦ Change your response to the stress by using old and new coping techniques

◦ Learn healthy ways to prevent stress and reduce its harmful effects.

Options to Alleviate Your Stress




Some of these may include: Being fired Being Promoted or Demoted Moving/Relocation Marriage/Divorce Pregnancy Death of family or friends

These are just examples of major life changes that can have a serious impact on our lives and cause our bodies to react with stress. Often times, the most common and stressful things happen on a daily basis.

Major Causes of Stress


Major Causes of Stress for University Students Adjustments to your daily routine Sleeping and eating habits Time-management due to additional academic

work loads, finding the balance of studying, free time and deadlines

Missing your social support network of high school friends and family

Learning new navigations such as getting around campus, living on your own, choosing your classes, choosing new friends, choosing your life’s direction and career path for your future



Using the handout, take a few minutes to honestly consider what causes your daily stresses

Family?School?Friends?Work? Etc…

List the top 10 on your worksheet

Where does YOUR stress start?



1) Time Management can be a huge cause for stress in many peoples’ lives. Consider taking a class or course or reading information available online or in magazines or books on how to better manage your time and tasks.

2) Schedule - You may get more done with less stress if you make a schedule. Think about which things are most important, and put those at the top of your schedule/list to do those things first.

3) Take good care of yourself. Exercise, get plenty of rest, try to eat well, don't smoke and limit how much alcohol you drink.

How Can You Cope With Stress?



4) Stop negative thoughts. Easier said then done right? Well, it’s a skill that would be beneficial to develop. Try writing down your worries and work on letting go of things you cannot change. Don’t worry about things that have past. Focus on the positives and the future that you can still impact.

5) Speak up. Assertive communication can help you express how you feel in a thoughtful, tactful way.

How Can You Cope With Stress (2)



6) Ask for help. People who have a strong network of family and friends manage stress better.

7) Do something you enjoy. A hobby, a bath, meditation, walking, or volunteering are good, helpful ways to help you feel better and relieve stress. Listen to relaxing music.

8) Keep a journal. Try including dates, time of day, time of year, current events in your life, even your food intake and exercise routine (if any).

How Can You Cope With Stress (3)


Advanced Learning Workshop – Status (14 June 2013) 9) Focus on the present. Try meditation, imagery exercises, or

self-hypnosis. Don’t keep thinking back to your mistakes and reliving the negative things that happened. There is nothing you can do about it. Let it go and look ahead, not behind.

10) Laugh it up! Try to look for the humor in life. Don’t take yourself so seriously. Everything will pass eventually and keeping a sense of humor will help lighten the load. Laughter really can be the best medicine!

How Can You Cope With Stress(4)


Advanced Learning Workshop – Status (14 June 2013) From Exercise 2, select your top two factors of stress in your

life from Handout BFor each of these two, ask yourself the following questions:

1) Can this situation be changed or improved? If so, how?(As an example: Relationship stress - assertive communication training, setting boundaries, resolving conflict Over commitment stress - setting boundaries, saying no, eliminating some things from your schedule Grief and loss stress - seeking support, journaling, finding enjoyable activities to fill your day)

Make and Action Plan



2) What coping mechanisms (old or new) may help me to better handle the current stressful situation in my life? (As an example: Meditation, Exercise, Engaging with friends, Listen

to relaxing music, write down in a journal what things you want to let go)

3) Is there anything I can do to prevent or avoid having this situation reoccur in the future? (As an example: Implement a schedule to better manage my time,

ask for help if there are too many actions on my to-do list, go to bed earlier to have a better night’s sleep and more productive day)

Make an Action Plan (2)



There are times you might need external help in dealing with your stress

If it becomes too much to handle reach out . . . The university offers several resources to help:◦ Student Services Center

◦ Moderators

◦ Department Heads

◦ Health Counselors

◦ Upper Classman Associations

On Campus Contacts



In Conclusion, make a commitment to yourself to change the situation(s) causing you stress, seek new and different ways to cope with the daily stresses and attempt to become more efficient so that you may foresee what stresses may arise and possibly, avoid or alleviate them.

Conclusion



Questions



NameE-mail Phone

Campus Student Life contact(s):Ombudsman, Dean of Students, etc.

Contact Information


JIT


Just-in-Time

JIT philosophy means getting the right quantity of goods at the right place and the right time

JIT exceeds the concept of inventory reduction; it is an all-encompassing philosophy geared to eliminate waste, anything that does not add value

A broad JIT view – or lean production/lean systems - is one that encompasses the entire organization


Philosophy of Just-in-Time

JIT originated in Japan at Toyota Motor Co, fueled by a need to survive the devastation post WWII

JIT gained worldwide prominence in the 1970s

Often termed “Lean Production” or “Lean Systems”

Broad view that entire organization has the same goal - to serve customers


The Philosophy of JIT con’t

JIT is built on simplicity - simpler is better Continuous improvement – often using kaizen

blitz Visibility – all waste must be visible to be

identified and eliminated Flexibility - to adapt to changes in environment


Three Elements of JIT


Three Elements of JIT con’t JIT manufacturing focuses on production

system to achieve value-added manufacturing

TQM is an integrated effort designed to improve quality performance at every level

Respect for people rests on the philosophy that human resources are an essential part of JIT philosophy


Elements of JIT Manufacturing JIT Manufacturing is a philosophy of value-

added manufacturing Achieved by focusing on these elements:

◦ Inventory reduction - exposes problems◦ Kanbans & pull production systems◦ Small lots & quick setups◦ Uniform plant loading◦ Flexible resources◦ Efficient facility layouts

Role of Inventory Reduction

Inventory = Lead Time (less is better) Inventory hides problems



JIT Manufacturing: The Pull System

down?or up round:Question

containers kanban 4.425

10(200)(.5)C

SDTN

bottles 10.5)0.10(200)(d)(T)0.10(deman Scontainerper bottles 25Chour .5minutes 30Thourper bottles 200D

:Solution

Computing the Number of Kanbans: an aspirin manufacturer has converted to JIT manufacturing using kanban containers. They must determine the number of containers at the bottle filling operation which fills at a rate of 200 per hour. Each container holds 25 bottles, it takes 30 minutes to receive more bottles, safety stock is 10% of demand during LT.


Number of Kanbans Required

N = number of containersD = demand rate at the withdraw stationT = lead time from supply station C = container sizeS = safety stock

CSDT

N



Variations on Kanban Production

Kanban boxes – space on factory floor for storing supplies

Flags – used to indicate when supplies need to be ordered

Supplier kanbans – brings filled containers to point of usage in factory/picks up empty containers


Small Lot Sizes & Quick Setups

Small lots mean less average inventory and shorten manufacturing lead time

Small lots with shorter setup times increase flexibility to respond to demand changes

Strive for single digit setups- < 10 minutes Setup reduction process is well-documented

◦ External tasks- do as much preparation while present job is still running

◦ Internal tasks- simplify, eliminate, shorten steps involved with location, clamping, & adjustments

Ultimate goal is single unit lot sizes

Uniform Plant Loading

A “level” schedule is developed so that the same mix of products is made every day in small quantities

Leveling the schedule can have big impact along whole supply chain

Monday Tuesday Wednesday Thursday FridayAAAAA BBBBB BBBBB DDDDD EEEEEAAAAA BBBBB BBBBB CCCCC EEEEE

Monday Tuesday Wednesday Thursday FridayAABBBB AABBBB AABBBB AABBBB AABBBBCDEE CDEE CDEE CDEE CDEE

5 units5 units10 units

Weekly Production Required

Traditional Production Plan

JIT Plan with Level Scheduling

ABCDE

10 units20 units



Flexible Resources Moveable, general purpose

equipment:◦ Portable equipment with plug in power/air◦ Drills, lathes, printer-fax-copiers, etc.◦ Capable of being setup to do many different

things with minimal setup time Multifunctional workers:

◦ Workers assume considerable responsibility◦ Cross-trained to perform several different duties◦ Trained to also be problem solvers


Effective Facility Layouts

Workstations in close physical proximity to reduce transport & movement

Streamlined flow of material Often use:

◦Cellular Manufacturing (instead of process focus)

◦U-shaped lines: (allows material handler to quickly drop off materials & pick up finished work)


Respect for People: The Role of Employees

Associates gather performance data

Team approaches used for problem-solving

Decisions made from bottom-upEveryone is responsible for preventive maintenance


JIT and TQM Integrate quality into all processes

◦ Focus on continuous improvement - Kaizen Quality at the source - sequential

inspection◦ Jidoka - authority to stop line◦Poka-yoke - fail-safe all processes

Preventive maintenance - scheduled Work environment - everything in its

place, a place for everything


Respect for People

The Role of Employees:◦ Genuine and meaningful respect for associates◦ Willingness to develop cross-functional skills◦ Bottom-round management – consensus

management by committees or teams◦ Quality circles – small volunteer teams that solve

quality problems


Respect for People

Lifetime Employment:◦Everyone feels secure/is empowered

◦Everyone is responsible for quality: understand both internal and external customer needs


Respect for People

The Role of Management: Responsible for culture of mutual trust Serve as coaches & facilitators

◦ Responsible for developing workers◦ Provide multi-functional training◦ Facilitate teamwork

Support culture with appropriate incentive system including non-monetary


Respect for People

Supplier Relationships Single-source suppliers

◦ Can supply entire family of parts Build long-term relationships with small

number of suppliers◦ Fewer contracts◦ Cost and information sharing◦ Work together to certify processes


Benefits of JIT

Reduction in inventories Improved quality Reduced space requirements Shorter lead times Lower production costs Increased productivity Increased machine utilization Greater flexibility


Implementing JIT

Starts with a company shared vision of where it is and where it wants to go

Management needs to create the right atmosphere

Implementation needs a designated “Champion”


Implementing JIT – con’t

Implement the sequence of seven steps:1. Make quality improvements2. Reorganize workplace 3. Reduce setup times4. Reduce lot sizes & lead times 5. Implement layout changes 6. Switch to pull production7. Develop relationship with suppliers


JIT in Services

Many JIT concepts also apply to Service companies Improved quality such as timeliness, service

consistency, and courtesy Uniform facility loading to provide better service

responsiveness Use of multifunction workers Reduction in cycle time Minimizing setup times and parallel processing Workplace organization


JIT & Lean Systems:How it all Fits Together

JIT: an overriding philosophy that affects all other business decisions

Quality Improvements (chs 5 & 6) Partnering with suppliers (ch 4) Changing job designs (ch 11) Facility layout (ch 10) Changes in production process (ch 3) Changes in inventory (ch 12)


JIT Across the Organization

JIT eliminates organizational barriers and improves communications◦ Accounting changes or relies on activity-based

costing◦ Marketing by interfacing with the customers◦ Finance approves and evaluates financial

investments◦ Information systems create the network of

information necessary for JIT to function


Chapter 7 Highlights

JIT is a philosophy that was developed by the Toyota Motor Company in the mid-1970s. It has become the standard for many industries by focusing on simplicity, eliminating waste, taking a broad view of operations, visibility, and flexibility. Three key elements of this philosophy are JIT manufacturing, total quality management, and respect for people.

JIT views waste as anything that does not add value.


Highlights

Traditional manufacturing systems use “push” production; JIT uses “pull” production. Push systems anticipate future demand and produce in advance in order to have products in place when demand occurs. Pull systems work backwards. The last workstation in the production line requests the precise amounts of materials required.


Highlights con’t

JIT manufacturing is a coordinated production system that enables the right quantities of parts to arrive when/where they are needed. Key elements of JIT manufacturing are the pull system and kanban production, small lot sizes and quick setups, uniform plant loading, flexible resources, and streamlined layout.


Highlights con’t

TQM creates an organizational culture that defines quality as seen by the customer. The concepts of continuous improvement and quality at the source are integral to allowing for continual growth and the goal of identifying the causes of quality problems.


Highlights con’t

JIT considers people to be the organization’s most important resource.

JIT is equally applicable in service organizations, particularly with the push toward time-based competition and the need to cut costs.

JIT success is dependent on interfunctional coordination and effort.


Homework Hints

◦ (a) Time must be consistent (e.g.; everything in minutes or hours or days). Safety stock is omitted if not stated. Number of containers must be a whole number—round up, not down.

◦ (b) Ignore demand changes, just think about the affect on the formula if the system were improved.


TQM


INTRODUCTION TO TQM

What is TQM?TQM is the integration of all functions and processes within

an organization in order to achieve continuous improvement of the quality of goods and services. The goal is customer satisfaction.

“ No doubt , humans are always deficient”(Al-Quran)


The Three Quality Gurus

Deming: the best known of the “early” pioneers, is credited with popularizing quality control in Japan in early 1950s.Today, he is regarded as a national hero in that country and is the father of the world famous Deming prize for quality.


JURAN Juran, like Deming was invited to Japan in 1954 by the

union of Japanese Scientists and engineers.

Juran defines quality as fitness for use in terms of design, conformance, availability, safety and field use. He focuses on top-down management and technical methods rather than worker pride and satisfaction.


Philip Crosby: author of popular book Quality is Free. His absolutes of quality are:

Quality is defined as conformance to requirements, not “goodness”

The system for achieving quality is prevention, not appraisal.

The performance standard is zero defects, not “that’s close enough”

The measurement of quality is the price of non-conformance, not indexes.


Commonality of Themes of Quality Gurus

Inspection is never the answer to quality improvement, nor is “policing”.

Involvement of leadership and top management is essential to the necessary culture of commitment to quality.

A program for quality requires organization-wide efforts and long term commitment, accompanied by the necessary investment in training.

Quality is first and schedules are second.


DIFINITION OF QUALITY

The concept and vocabulary of quality are elusive. Different people interpret quality differently. Few can define quality in measurable terms that can be proved operationalized. When asked what differentiates their product or service;

The banker will answer” service” The healthcare worker will answer “quality health care” The hotel employee will answer “customer satisfaction” The manufacturer will simply answer “quality product”


Five Approaches of Defining Quality

Harvard professor David Garvin, in his book Managing Quality summarized five principal approaches to define quality.

Transcendent Product based User based Manufacturing based Value based


Transcendental view

Those who hold the transcendental view would say “I can’t define it, but I know it when I see it”

Advertisers are fond of promoting products in these terms. “ Where shopping is a pleasure” (supermarket). “We love to

fly and it shows" (airline).Television and print media are awash with such indefinable claims and therein lies the problem:

Quality is difficult to define or to operationalize. It thus becomes elusive when using the approach as basis for competitive advantage. Moreover, the functions of design, production and service may find it difficult to use the definition as a basis for quality management.


PRODUCT BASED

Quality is viewed as a quantifiable or measurable characteristic or attribute. For example durability or reliability can be measured and the engineer can design to that benchmark.

Quality is determined objectively. Although this approach has many benefits, it has limitation

as well. Where quality is based on individual taste or preference, the benchmark for measurement may be misleading.


USER BASED

It is based on idea that quality is an individual matter and products that best satisfy their preferences are those with the highest quality. This is rational approach but leads to two problems;

Consumer preference vary widely and it is difficult to aggregate these preferences into products with wide appeal. This leads to the choice between a niche strategy or a market aggregation approach which tries to identify those product attributes that meet the needs of the largest number of consumers.

Another problem concerns the answer to the question “Are quality and customer satisfaction the same?” the answer is probably not. One may admit that a Lincoln continental has many quality attribute, but satisfaction may be better achieved with an Escort.


MANUFACTURING BASED

Manufacturing-based definitions are concerned primarily with engineering and manufacturing practices and use the universal definition of “conformance to requirements”. Requirements or specifications are established by design and any deviation implies a reduction in quality. The concept applies to services as well as product. Excellence in quality is not necessarily in the eye of the beholder but rather in the standards set by the organization.

This approach has the serious weakness. The consumer’s perception of quality is equated with conformance and hence is internally focused.


Value Based

It is defined in term of costs and prices as well as number of other attributes. Thus, the consumer’s purchased decision is based on quality at an acceptable price. This approach is reflected in the popular Consumer Reports magazine which ranks products and services based on two criteria: Quality and Value.

The highest quality is not usually the best value. That designation is assigned to the “best- buy” product or service.


MANAGEMENT OF PROCESS

QUALITY

HUMAN RESOURCE

DEVELOPMENT AND

MANAGEMENTSTRATEGIC QUALITY

PLANNING

INFORMATION AND ANALYSIS

CUSTOMER FOCUS AND

SATISFACTION

QUALITY AND

OPERATIONAL RESULTS

SENIOREXECUTIVE

LEADERSHIP

System Approach for TQM

Driver

System


TOWTriangle of wisdom

LM

DM KM


Characteristics of TQM Leader

Visible, Committed and Knowledgeable A Missionary Zeal Aggressive Targets Strong Drivers Communication of Values Organization Customers Contact


TQO HRM

Five Principles are: Quality Work the First Time Focus on the Customer Strategic Holistic Approach to Improvement CI as a Way of Life Mutual Respect and Teamwork


Customer Satisfaction Three Part System

Human Resource Management

Customer Expectations

Company Operations(Processes)

Customer Satisfaction


Indicators for Customer Satisfaction

Frontline empowerment Excellent hiring, training, attitude and morale for front line

employees Proactive customer service system Proactive management of relationship with customers Use of all listening posts Quality requirements of market segment Commitment to customers Understanding customer requirements Service standards meeting customers requirements


Cost of Quality Three Views of quality Costs

Higher quality means higher cost. Quality attributes such as performance and features cost more in

terms of labor, material, design and other costly resources. The additional benefits from improved quality do not compensate

for additional expense.The cost of improving quality is less than the resulting savings.

The saving result from less rework, scrap and other direct expenses related defects.

This is said to account for the focus on continuous improvement of processes in Japanese firms.


Three Views of quality Costs

Quality costs are those incurred in excess of those that would have been incurred if the product were built or the service performed exactly right the first time.

This view is held by adherents of TQM philosophy. Costs include not only those that are direct, but also

those resulting from lost customers, lost market share and the many hidden costs and foregone opportunities not identified by modern cost accounting systems.


Quality Costs

COST OF QUALITY IS THE COST OF NON QUALITY

1: 10:100 Rule“A stitch in time saves nine”


Types of Quality CostsThe cost of quality is generally classified into four categories

1. Cost of Prevention2. Cost of Appraisal3. Cost of Internal Failure4. Cost of External Failure


Quality Costs

Cost of Prevention Prevention costs include those activities which remove and

prevent defects from occurring in the production process. Included are such activities as quality planning, production

reviews, training, and engineering analysis, which are incurred to ensure that poor quality is not produced. Appraisal

Those costs incurred to identify poor quality products after they occur but before shipment to customers. e.g. Inspection activity.


Quality Costs

Internal Failure Those incurred during the production process. Include such items as machine downtime, poor quality

materials, scrap, and rework.External Failure Those incurred after the product is shipped. External failure costs include returns and allowances,

warranty costs, and hidden costs of customer dissatisfaction and lost market share.


Benefits of TQM

Greater customer loyalty Market share improvement Higher stock prices Reduced service calls Higher prices Greater productivity


SIX SIGMAEvolving Process to

Achieve Better Quality


What is Six Sigma? A metric, methodology and philosophy. 3.4 defects per million opportunities or being

99.9997% defect free in process and product. Measure how many "defects" are in a process

then systematically figure out how to eliminate them and get as close to "zero defects" as possible.

Should be in in everything we do and in every product we design.


99.9997%?!?!? 3.4 million defects per opportunity What’s the difference between 99% and

99.9997% 7 lost mail per hour instead 20000 per hour. Unsafe drinking water for 2 minutes per year

instead of 15 minutes per day. 1 plane crash every 5 years instead 2 plane

crashes annually.


SIX SIGMA METHODS


Elements of Six Sigma The Customer The Process The Employee


The Customer Customers are the center of

any company’s universe: they define quality. They expect performance, reliability, competitive prices, on-time delivery, service, clear and correct transaction processing and more. Our customers’ satisfaction is priority number 1. If we don't keep them happy, someone else will.


The Process Outside-In Thinking By understanding the

transaction lifecycle from the customer's needs and processes, we can discover what they are seeing and feeling. With this knowledge, we can identify areas where we can add significant value or improvement from their perspective


The Employee Employees must focus their talents and

energies on satisfying customers. Employees are trained in the strategy,

statistical tools and techniques of Six Sigma quality. Training courses are offered at various levels:

Quality Overview Seminars: basic Six Sigma awareness.

Team Training: basic tool introduction to equip employees to participate on Six Sigma teams.

Master Black Belt, Black Belt and Green Belt Training: in-depth quality training that includes high-level statistical tools, basic quality control tools, Change Acceleration Process and Flow technology tools.

Design for Six Sigma (DFSS) Training: prepares teams for the use of statistical tools to design it right the first time.


Black Belt Champion DMAIC(Define, Measure, Analyze, Improve

and Control) Master Black Belt Root Cause Yellow Belt

SIX SIGMA LINGO


BLACK BELT Someone who has undergone intensive Six Sigma

training, passed a certification exam, becomes a full-time Six Sigma project leader and successfully implements Six Sigma projects with defined business results within a certain time period. People who are taken out of their current roles, participate in intense training, take the certification exam and lead two to four Six Sigma projects each year. At the end of a two-year rotation, Black Belts will return to their business unit and continue to use their skills in new assignments.


Business leaders and senior managers who identify Six Sigma projects and work with Black Belts to promote successful implementation of Six Sigma methodology in their respective areas of responsibility.

CHAMPION


A Six Sigma methodology that involves five phases: Define, Measure, Analyze, Improve and Control. Black Belts use DMAIC to improve processes, products and programs.

DMAIC


Unlike Black Belts, they do not leave their current work assignments or spend 100% of their time on Six Sigma initiatives. Instead, they are trained in Six Sigma and then incorporate it into the way work gets done in their current area of responsibility.

Green Belt


Someone who works with senior leaders to define Six Sigma projects, objectives, goals and plans. Then, he/she works with Black Belts to track progress, continue training and coordinate efforts.

Root Cause - The fundamental cause of errors, which, if eliminated, would prevent recurrence of errors. Six Sigma methodology strives to identify root causes of quality problems and implement plans to permanently correct them.

MASTER BLACK BELT


Someone who typically has a basic knowledge of Six Sigma, but does not lead projects on their own, like a Black Belt or Green Belt. A Yellow Belt often supports different phases of a Black Belt’s or Green Belt’s project plan.

Yellow Belt


Six Sigma Strategy To achieve Six Sigma quality, a process must produce no more than

3.4 defects per million opportunities.

Critical to Quality (CTQ):Attributes most important to the customer Defect:Failing to deliver what the customer wants Process Capability:What your process can deliver Variation:What the customer sees and feels Stable Operations:Ensuring consistent, predictable processes to improve what the

customer sees and feels Design for Six Sigma:Designing to meet customer needs and process capability Customers don't judge us on averages, they feel the variance in each transaction,

each product we ship. Six Sigma focuses first on reducing process variation and then on improving the process capability.

Customers value consistent, predictable business processes that deliver world-class levels of quality.


DMAIC

Define Measure Analyze Improve Control


Define Define the Customer, their Critical to

Quality (CTQ) issues, and the Core Business Process involved.

Define who customers are, what their requirements are for products and services, and what their expectations are

Define project boundaries (scope) the stop and start of the process

Define the process to be improved by mapping the process flow


Measure Measure the performance of the Core

Business Process involved. Develop a data collection plan for the

process Collect data from many sources to

determine types of defects and metrics Compare to customer survey results to

determine shortfall


Analyze Analyze the data collected and process

map to determine root causes of defects and opportunities for improvement.

Identify gaps between current performance and goal performance

Prioritize opportunities to improve Identify sources of variation


Improve Improve the target process by designing

creative solutions to fix and prevent problems.

Create innovate solutions using technology and discipline

Develop and deploy implementation plan


Control Control the improvements to keep the

process on the new course. Prevent reverting back to the "old way" Require the development, documentation

and implementation of an ongoing monitoring plan

Institutionalize the improvements through the modification of systems and structures (staffing, training, incentives)


SIPOCR


Case Study: PB Why customers place calls to our customer care centers? The company found that over 12,000 calls related to an inquiry or dispute about sales

and property taxes. Another audit revealed that the same issue was costing the company more than $500,000 annually in uncollected taxes, interest and fines. A cross-enterprise team was assembled to resolve the problem, using a Six Sigma methodology (DMAIC).

The team included: Bob Rosenblum, who championed the project, Janet Garner, Sandy Pfannkuch and Charlie Elms, who owned the processes related to the project, Alan Daniels, the project’s Six Sigma Black Belt, Alan Carlo and Bill Gowrie, the project’s Six Sigma Green Belts, (Yellow Belts) Pat Nissley and Dianne Askew, from our call center operations, Lynne Vidal and John McKenna from Voyager, Dawn Hallaman, Kirti Bhardwaj and Mike Wilk from IT/Systems, Alesia Pratcher and Kathy Cracas from Tax

***Define The team defined the problem and scope of the project: inaccurate sales and tax exemption records resulted in over $500,000 in uncollected taxes, interest and fines paid by Pitney Bowes in 2002. To resolve the issue, the team would look at the corporate, GMS and IBS sales tax exemption processes and recommend changes/solutions that would permanently address the issue.

***Measure The team collected one month of data from the daily processes performed at the corporate and IBS tax departments. They also took a random sampling of 200 customers who were coded as “tax exempt” in our databases to check if we had valid certificates that proved their status. The team also looked at how many times we approved or rejected customers’ requests for tax exempt status.

***Analyze· 83% of exemption requests rejected because no certificate was received · When certificates are received, 78% of accepted result in a billing adjustment for taxes that billed on the first invoice · 71% of IBS customers that require a certificate had one on file · 24% of other customers that required a certificate had one on file · No process existed to identify expired certificates and request new certificates from customers The team also analyzed what actions were critical to ensure a new process would permanently resolve the problem. They identified

items like timely submission and delivery of certificates, prompt reviews of customers’ requests, closed loop communications with customers and PB departments and more.

***Improve After all of this analysis, the team implemented a simpler, more disciplined process for managing tax exempt requests. Now, the direct sales force and customers fax a tax exempt certificate directly to the Tax Department for review and imaging, rather than sending it inter-office mail -- which caused a tremendous time and control delay. As a result, the process for handling tax exempt requests takes just two days – that’s compared to 25 days under the old process.

***Control To ensure the improvements would work and be maintained, the team assigned clear accountabilities for each part of the process, implemented metrics to measure results and identified what the company should do to keep the process in check, should certain issues arise.

The Results: The number of customer calls related to tax exempt issues has decreased. The number of billing adjustments that have to be made as a result of the tax departments not receiving certificates has decreased. The number of customer complaint letters about this issue has decreased. And the new process is expected to save the company over $500,000 in 2004 and beyond.


Capability Maturity

Model


What is CMM? CMM: Capability Maturity Model Developed by the Software Engineering

Institute of the Carnegie Mellon University Framework that describes the key elements

of an effective software process.


Describes an evolutionary improvement path for software organizations from an ad hoc, immature process to a mature, disciplined one.

Provides guidance on how to gain control of processes for developing and maintaining software and how to evolve toward a culture of software engineering and management excellence.

What is CMM?


Process Maturity Concepts

Software Process◦ set of activities, methods, practices, and

transformations that people use to develop and maintain software and the associated products (e.g., project plans, design documents, code, test cases, user manuals)

Software Process Capability◦ describes the range of expected results that

can be achieved by following a software process

◦ means of predicting the most likely outcomes to be expected from the next software project the organization undertakes


Process Maturity Concepts Software Process Performance

◦ actual results achieved by following a software process

Software Process Maturity◦ extent to which a specific process is explicitly

defined, managed, measured, controlled and effective

◦ implies potential growth in capability◦ indicates richness of process and consistency

with which it is applied in projects throughout the organization


What are the CMM Levels?(The five levels of software process maturity)

Maturity level indicates level of process capability:

Initial Repeatable Defined Managed Optimizing


Level 1: Initial Initial : The software process is

characterized as ad hoc, and occasionally even chaotic. Few processes are defined, and success depends on individual effort.At this level, frequently have difficulty making

commitments that the staff can meet with an orderly process

Products developed are often over budget and schedule

Wide variations in cost, schedule, functionality and quality targets

Capability is a characteristic of the individuals, not of the organization


Level 2: RepeatableBasic process management processes

are established to track cost, schedule, and functionality. The necessary process discipline is in place to repeat earlier successes on projects with similar applications.Realistic project commitments based on

results observed on previous projectsSoftware project standards are defined and

faithfully followedProcesses may differ between projectsProcess is disciplined earlier successes can be repeated


Level 3: DefinedThe software process for both management

and engineering activities is documented, standardized, and integrated into a standard software process for the organization. All projects use an approved, tailored version of the organization’s standard software process for developing an maintaining software.


Level 4: Managed

Detailed measures of the software process and product quality are collected. Both the software process and products are quantitatively understood and controlled.Narrowing the variation in process performance

to fall within acceptable quantitative boundsWhen known limits are exceeded, corrective

action can be takenQuantifiable and predictable

predict trends in process and product quality


Level 5: OptimizingContinuous process improvement is

enabled by quantitative feedback from the process and from piloting innovative ideas and technologies.

Goal is to prevent the occurrence of defectsCausal analysis

Data on process effectiveness used for cost benefit analysis of new technologies and proposed process changes


Internal Structure to Maturity Levels Except for level 1, each level is

decomposed into key process areas (KPA) Each KPA identifies a cluster of related

activities that, when performed collectively, achieve a set of goals considered important for enhancing software capability.◦ commitment◦ ability◦ activity◦ measurement◦ verification


Level 2 KPAs Requirements Management

◦ Establish common understanding of customer requirements between the customer and the software project

◦ Requirements is basis for planning and managing the software project

◦ Not working backwards from a given release date!

Software Project Planning◦ Establish reasonable plans for performing the

software engineering activities and for managing the software project


Level 2 KPAs Software Project Tracking and Oversight

◦ Establish adequate visibility into actual progress◦ Take effective actions when project’s

performance deviates significantly from planned Software Subcontract Management

◦ Manage projects outsourced to subcontractors Software Quality Assurance

◦ Provide management with appropriate visibility into process being used by the software projects work products


Level 2 KPAs Software Configuration Management

◦ Establish and maintain the integrity of work products

◦ Product baseline◦ Baseline authority


Level 3 KPAs Organization Process Focus

◦ Establish organizational responsibility for software process activities that improve the organization’s overall software process capability

Organization Process Definition◦ Develop and maintain a usable set of software

process assets stable foundation that can be institutionalized basis for defining meaningful data for quantitative

process management


Level 3 KPAs Training Program

◦ Develop skills and knowledge so that individual can perform their roles effectively and efficiently

◦ Organizational responsibility◦ Needs identified by project

Integrated Software Management◦ Integrated engineering and management

activities◦ Engineering and management processes are

tailored from the organizational standard processes

◦ Tailoring based on business environment and project needs


Level 3 KPAs Software Product Engineering

◦ technical activities of the project are well defined (SDLC)

◦correct, consistent work products Intergroup Coordination

◦Software engineering groups participate actively with other groups

Peer Reviews◦early defect detection and removal◦better understanding of the products◦ implemented with inspections, walkthroughs,

etc


Level 4 KPAs

Quantitative Process Management◦ control process performance quantitatively◦ actual results from following a software

process◦ focus on identifying and correcting special

causes of variation with respect to a baseline process

Software Quality Management◦ quantitative understanding of software

quality products process


Level 5 KPAs Process Change Management

◦ continuous process improvement to improve quality, increase productivity, decrease cycle time

Technology Change Management◦ identify and transfer beneficial new

technologies tools methods processes

Defect Prevention◦ causal analysis of defects to prevent recurrence


What are the benefits ? Helps forge a shared vision of what

software process improvement means for the organization

Defines set of priorities for addressing software problems

Supports measurement of process by providing framework for performing reliable and consistent appraisals

Provides framework for consistency of processes and product


Why measure software and software process?Obtain data that helps us to better control schedule cost quality of software products


Consistent measurement provide data for: Quantitatively expressing requirements,

goals, and acceptance criteria Monitoring progress and anticipating

problems Quantifying tradeoffs used in allocating

resources Predicting schedule, cost and quality


Measurements Historical Plan Actual Projections


SEI Core Measures

Unit of Measure Characteristics AddressedPhysical source lines of codeLogical source lines of code

Size, reuse, rework

Staff hours Effort, cost, resource allocationsCalendar dates for processmilestonesCalendar dates for deliverables

Schedule, progress

Problems and defects Quality, improvement trends,rework, readiness for delivery


Examples of measurements for size of work products Estimated number of requirements Actual number of requirements Estimated source lines of code (SLOC) Actual SLOC Estimated number of test cases Actual number of test cases


Example of measurements of effort Estimated man-hours to design/code a

given module Actual man-hours expended for

designing/coding the module Estimated number of hours to run builds for

a given release Actual number of hours spent running builds

for the release


Examples of measurements of quality of the work product Number of issues raised at requirements

inspection Number of requirements issues open Number of requirements issues closed Number of issues raised during code

inspection Number of defects opened during unit

testing


Examples of measurements of quality of the work product Number of defects opened during system

testing Number of defects opened during UAT Number of defects still open Number of defects closed Defect age


Examples of measurements of quality of the work product Total number of build failures Total number of defects fixed for a given

release Total number of defects verified and

accepted Total number of defects verified and

rejected


QUESTIONS


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PRINCIPLES OF MANAGEMENT-JNTUK-UNIT-5-2016-2018 BATCH

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