Lean Six Sigma Green Belt – Practice Project

1. Practice Project_Part 1

Hello everyone. Welcome to the practice project. Until now we have learned about the various techniques in bits and pieces we have discussed, about the various concepts. We have discussed about the various phases including define phase, measure phase, analyze phase improve and control phase. Now is the time to actually look into a practice project and see how to get started with the defined phase, what kind of techniques can be used from the Measure phase and what kind of techniques can be used in Analyze, Improve and Control phase. This is the opportunity for you all to explore your learnings by implementing your knowledge. Let us move on and understand about the project first. There is a company by name, ABC, with annual revenue of $1 billion, they have planned to start off Six Sigma initiative in the year 2006.

The company decided to implement Six Sigma to improve shop process, shop floor process and related support processes. The company CFO reviewed the data on pending customer payments and found that over the last twelve months they were not receiving the invoice payment within 60 days. So they had an SLA in place which was to receive the pending payments within 60 days. And over the past twelve months they weren’t seeing a good progress when it comes to the invoice payments within 60 days.

To avoid this crash crunch, because they were not getting the invoice payments, they ran into trouble. And to avoid this cash crunch, the company also had to borrow $9 million at the rate of 9% annual interest to fund for their operating expenses. The CFO wasn’t convinced with performance of Collections team in Finance Department and therefore initiated a Six Sigma project to reduce the delay in payment process. And then the CFO has went on to identify a potential project leader and his name was he and he apprised him about the project.

The project leader was excited. He wanted to identify a particular measure which relates to the characteristics of delayed payment and he wanted to thereby satisfy the critical to quality requirement that is CTQ all about and then post some initial data analysis by the CFO who showed that payments for 20% of the invoices weren’t received within 60 days. The moment CFO has showcased these details, the project leader he felt that the percentage of invoices for which payment is not received within 60 days should be considered as late payments or defectives.

And he wanted to reduce this from 20% to 5%. That was the goal of the project. If any of these goals are achieved, the company will not need the loan to fund their operating expenditure. And they also wanted to train the team on Six Sigma initiative because that is when there would be a good buy in for this project. And they also wanted to train them on the improved process, post the improvement and they budgeted for $30,000 for this training. Another $50,000 was budgeted towards CRM changes and the rest of the payment details are available here.

The cost that you see here for Project Champion or Project Leaders, so on and so forth, are the hourly billing values. The project leader would like to calculate the business benefits for the tenure of one year. Now, let us look into the underlying case study, let us look into the raw data and then try to come up with the business benefits for a tenure of one year.

Here we have the Excel sheet pertaining to the cost associated with each and every rule that would work on the project. Project Champion would work for 40 hours in total. That is the plan. And each hour of Project Champion’s effort would translate to $120. And for 40 hours, $120 per hour would translate to $4,800. And you have the cost of all these resources, the hours, total number of hours that each person is expected to spend on the project and the associated dollars cost per hour.

And if you add all these values, the summation would be $37,000, $37,400 for the training cost. The plan was to have at least $30,000. For the CRM application, customer Relationship Management application, the cost would be $50,000. So the total cost of the project, including the training cost, the CRM cost and the resource cost would be one one seven, $400. That’s the total cost of the project. However, this is the total cost that the project would incur.

What could interest on $9 million, $9 million at the rate of 9%, right? So it is at the rate 9% per annum. If you look into this cost, the cost is coming up to $810,000. This is the loss to the company and this is the cost of the overall project pose. This project, we will no longer require to take $9 million at 9% per annum interest rate. Hence, the subtraction of this minus the total cost project would give you the total savings, which happens to be $692,000 approximately. Let me put here that this is the cost of the resources. There we go.

So this happens to be the overall cost of the project. Once this cost is in place, we need to come up with a high level plan on the duration. We came up with the cost saving details, but we also need to come up with a high level timelines for the project. That is, when the project leader, he has come up with a project plan, he has listed down the high level tasks which needed to be accomplished as part of the project. And he has also provided the duration in days for each and every task. And if you look at the summation of these values, it happens to be 77. 77 days is what this project is going to take. If that is your final say, answer is no. We also need to look into those activities which might happen in parallel. And also we need to identify the critical tasks which have to be provided additional attention. If not, you would slip over your timelines.

You would exceed your duration of the project. How would I do that? In order to understand this, we need to go ahead and discuss about the time management processes. I’ll explain you all those posts which will come back to this and try to make sense on what would be the project duration. All right, let us discuss about sequencing the activities here.

Sequencing the Activities even before we proceed with the further discussion, we need to be aware of PDM. PDM is precedence diagramming method which uses the rectangles to represent activities and connects them using arrows. This tool is also called as activity Unknown. All right, let us now discuss about the four types of logical relationships. The first logical relationship is finished to start in finish to start kind of a relationship, the next activity would start only after the first activity completes.

And the arrow here says that we need to first finish A to be in a position to start B and the A here is called as predecessor and B is called as successor. If I were to draw another rectangle in this way and have another activity C, c is called a successor of B and A is called as predecessor for B, the next logical relationship would be start to Start. That is, we need to start both these activities at one go. Start to start, finish to Start you need to be in a position to finish activity A before you start activity B.

Finally, we have start to finish. We need to start activity A in order to finish activity B. Activity B cannot be finished unless activity A has started. That is what is start to finish relationship here most commonly used relationship would be finished to start. All right, there are also three more logical relationship possibilities which one should be aware of, the first one being mandatory or hard logic. You cannot send an email until unless you connect to internet. That’s mandatory or hard logic. You cannot start using your computer or laptop before you switched on.

 That’s mandatory or hard logic. We also have discretionary or soft logic or preferential logic. If you’re painting your home for example, you can either paint the inner walls and then the outer walls, or you can first paint the outer walls and then the inner walls. It is left up to your preference. It’s left up to your discretion. Finally, we have the external dependency, which is if you have an activity A and say you want to say you have purchased a plot and activity B happens to be building a house, once you purchase a plot, in order to build your house, you need to go get government approval. And this government approval here is called as external dependency.

These are the three dependencies that we have alongside. You also need to be aware of what is a lead and what is a lag. Let us understand that here lag is called as delay or the waiting time and lead is called as Advancement. For example, say have placed an order on Amazon. Say I’ve ordered iPhone Six S online on Amazon. But before you start using that which happens to be your activity B, that will start exploring the iPhone Six S features. Before doing that, you’ll have to wait for one or two days for the delivery to happen. Assume it’s a two day delivery process. After your activity A in order to start your activity B, you need to wait for two days that is called as lag.

Then what is a lead? Lead is also called as advancement. You sent an email to the customer for approval. Ideally speaking, you need to wait for the approval before you get started with your work. But if you assume that the approval is deemed or you would always receive approval after two days rather than waiting for two days. If you get started with the work, that is called as Lead or Advancement and it is represented using a minus sign there minus two days. That means ideally after your activity A to start your activity B, you should have waited for two days, but you just got started without waiting for those two days. Hence it is called advancement. These are the various things which you need to be aware of before we discuss about the critical path using an example.

All right, let us understand the critical path using a small toy example. Let us consider constructing house as a small project and the first activity assume happens to be assembling the bricks and the number of days that this activity would take would be five days. As part of identifying your critical path, we need to do three things. One is calculate the forward pass and then calculate the backward pass. Let me write it down and then calculate the total fluid. Here we are trying to first calculate the forward pass within forward pass, the date when you start off your first activity or any activity would be called as Earliest Start Date or Early Start Date or we were going to abbreviate it as es. The date when we are going to close an activity would be called as Earliest Finish or Early Finish or EF.

And when it comes to your backward pass, the day when you’re going to complete your project or rather activity or task would be called as Latest Finish or Late Finish or LF. And the date when you are going to start your project would be called as Later Start, Late Start or Ellis. You’ll try to understand this further and towards the end of this exercise you would be in a better position to calculate the critical path manually. Also, however, in the real world we would be using project management tools such as Microsoft Project or Oracle Prime Aware to be able to identify your critical path but let us try to solve this manually and get a gist on how we calculate the critical path.

When do you start the first activity on a project? Obviously we would start it on the very first day. And if this activity would take five days, how many days would you think it would take for us to complete this activity? Call us in. Lingbricks, think out aloud while I try to solve it for you. All right, if you’re going to start an activity on the first day, then if this activity would take five days, day two, day three, day four, and then you have day five. So we have five days now, right? Day one, day two, day three, four and five. That’s your five days. So you’re going to close this project on the fifth day, right? This is how you need to calculate. Now let me help you all enter a value here. It should be five. All right, so the early start for first activity called Assembling Bricks would be day one. The early finish for Assembling Bricks would be day five. Let me move on and try to explain this further.

So we have already calculated the start in the end for the first activity. For the second activity, which is cement wall. There is an arrow from this assembling brick to cementing wall. And this is in what format? This is in finish to start format. So you need to finish assembling bricks before you want to start cementing wall. If you finish this activity, call Assembling bricks on day five. When would you start the next activity? Obviously on the next day.

So it would be the 6th day. If you were to come up with the formula to calculate the early start for the successor activity, then early start would be equal to early finish of the predecessor plus one. So five plus one would be six. What would be the early finish? If I’m going to start this activity on 6th day, and if this activity takes ten days, then obviously the finished date would be 15. Why 15? Just think out a lot. Six plus ten, but you’re going to six plus ten would be 16, but then you’ll have to subtract one to know when exactly it’s going to finish.

Or you can do a manual calculation. Let me put it here. Six, then you have seven, then you have 89, 10, 11, 12, 13, 14 and 15. How many days is it if you’re starting a specific activity on the 6th day? 1234-5678, 910. So by then of 10th day you’ll be completing this activity which happens to be the 15th. This is how you need to calculate each time. Manually calculating would become a hence we are going to resort to this formula which says early finish for an activity is equal to early start which happens to be six plus the duration D which is six plus ten, which happens to be 16. And we’re going to subtract one from that which will take the total 15 here. All right, let us further solve this.

This assembling bricks and cementing wall. We already completed this. So day one, day five, six and 15. Watch it. Come here. If I’m going to complete this activity on day 15 or the previous activity, then obviously we need to start off painting wall activity on day 16. All right, if I complete this or if I start this activity on day 16, an activity called painting wall. And if this activity would take ten days, 16 plus ten is 26, minus one is 25. All I’m trying to do here is simply apply this formula which says early finish is equal to early start plus duration minus one. Early start happens to be 16, plus duration is 1026, minus one is 25 here. Also there is a finish to start arrow which says, I think, all right, that’s assembling bricks. After assembling breaks, we need to start off with prepare wallpaper, it is finished to start. So I need to start off with preparing wallpaper only after assembling bricks is complete.

So I’m going to start off this activity on day six. The reason being the formula as early start of the successor activity is equal to early finish of predecessor plus one. Five plus one happens to be six. If I were to come out with the early finish, it would be five plus six or six plus five minus one which would be ten. I am simply trying to apply this formula which is early finish of an activity is equal to early start six plus duration five minus one which happens to be ten. We have calculated until here, but look at this, there are two arrows to this activity called paste wall paper. One arrow is coming from cement wall activity, another is coming from prepare wallpaper. When two activities converge onto one activity in the forward path, you choose the highest number.

So we have a ten year and a 15 here. We need to choose the highest number even logically. Otherwise say you have prepared the wallpaper, but you would be able to paste the wallpaper only if the cementing of the wall is complete. Hence only after you complete the cementing wall can you get started with the painting wallpaper. If you are going to finish this activity on the 15th, then you’ll get started with this activity on day 16.

Right, if you start this activity on day 16, then early finish would be early start plus duration minus 116, plus five which is 21 minus one happens to be 20. Again, if two activities converge on to one activity in the forward pass, you choose the highest number and the highest number is with the painting wall activity which is 25 and 25 plus one is 26. Finish to start and in finish to start. Early start is equal to early finish plus one.

 Early finish is 25. 25 plus one is 26. Now, if this tank picture on walls, if this activity would take 26 days, then when would this finish? Formula is simple. Early finish is equal to early start plus duration minus one which happens to be 26, plus 1036 minus one which is 35. Thereby we completed the forward pass. Let us now look into the backward pass. There we go. When it comes to the backward pass, the formula would slightly change. All we need to do is for the last activity, we need to take 35 and replace it here. So I would take this 35 and put it there.

So the early finish of the last activity would also become your late finish. Now let us travel backwards. When you travel backwards, late start is equal to 26 and the formula is as follows late start for an activity is equal to late finish minus duration plus one. Late finish is 35. 35 minus ten is 25. 25 plus one is 26. There we go. If you want to find out the late finish in the backward path for an activity, it would be late start of the previous activity minus one which is 26 here, so the late finish would be 25 here.

Also it would be 25 because it’s the same thing which is coming as an input. FA is the common input to both C and E. Now let us try to calculate the late start. Late start is equal to late finish minus duration plus one. Late finishes 25, 25 minus ten is 15, plus one happens to be 16 there. If I were to calculate the late start for this activity, how would I calculate that? Late finish is equal to late start minus one, but late start is equal to late finish minus duration plus one. So 25 minus five happens to be 20, plus one is 21. In that way, if I continue to calculate, I’ll get the 15 and the six there. And if we continue to calculate for this activity, there is an input coming from activity E to D.

So 20 minus one is 21, minus one is 20. And then if you were to calculate late start formula is late finished minus duration plus 120, minus five is 1515, plus one is 16. If two activities converge on to one activity in the backward pass, you need to choose the least number. So backward pass is exactly opposite of the forward pass, so out of 21 and 1616 happens to be the least number. Hence you pick up 16 to calculate the late finish.

And late finish is equal to late start minus one, which is 16, minus one, which is 15 here. And when two activities converge onto one activity in the backward path, you need to choose the least number. The least number out of 16 and six is six. So I’m going to choose six to calculate the late finish. Late finish is equal to late start minus one, which is six minus one, which happens to be five and late start is equal to late finish minus duration plus one, which is five minus five plus one, which happens to be one. Wow.

We have just completed the forward pass and the backward pass. But our job is not done yet. We need to calculate the total fluid which is given by late start, minus early start or late finish minus early finish so late start minus early start would be zero. Late finish minus early finish would also be zero. Late start minus early start six minus six would be 00:15 -15 is also zero here also I’ll get a zero. Here also I’m going to get a zero.

But think about activity D and E total float here is late start, minus early start or late finish minus early finish which is 16 minus six r 20 minus ten, which happens to be ten and here it is 21 -16 which is five r 25 -20 which is once again five there we go. Now what is the critical path? Critical path is that path on which the total float of the activities would be zero. So given this pictorial representation, the critical path would be A, B CF. I’ll write it down here.

ABCF is my critical path. That means if I delay any of the steps or if I delay any of these activities which fall on the critical path, it is going to delay my overall project. Hence, I need to give more importance to activities A-B-C and F. Why did we discuss all of these things? Because we have a plan in place and we have the predecessors for each and every activity here. Now we need to solve this. Let us try to do that.

2. Practice Project_Part 2

Okay, I’ve tried to come up with a network diagram which is 1234-5678, 910, eleven and twelve. Because we have twelve tasks here, each task has associated duration. When I substituted the duration and when I’ve tried to calculate the early start and early finish for each and every activity, the total duration of the project turned out to be 63 days. You can do a try in calculating the forward pass and then the backward pass. However, if we simply take a summation of the duration of all tasks, it happens to be 77 days. Here however, we are doing a few of the activities in parallel. Hence the total duration of the project is 63 63 days. And when I’ve calculated the backward path in the total fluid, the critical path activities happen to be the activities which fall along 135678, 911 and twelve. What does that mean? What are the activities which do not fall on the critical path? Non critical path activities or tasks would be 2410. These three would fall on the non critical path. This is how we need to calculate the critical path and non critical path. You all can just try calculating the early start and early finish as part of the forward pass and late start and late finish as part of the backward pass.

Then you can calculate the total fluid and thereby identify what is your critical path. The representation would look like this I’ll just give you an example here if you look at activity two it says that the predecessor should be activity one. Hence for activity two I’ve given one as a predecessor. When it comes to activity three, predecessor is one once again, hence there is an input from one to three for activity four, predecessor happens to be activity three, hence for four here I’ve made three as a predecessor for activity Five.

Also three happens to be the predecessor. That is why there is a connection from three to five. And when it comes to activity six, there are two predecessors. Hence four and five convergent to six. For the 7th, activity Two and six happened to be the predecessors. Hence I placed seven. Here there are inputs coming in from two and six and activity eight has seven as a predecessor. Activity Nine has eight as a predecessor.

Activity Ten and eleven both have nine as a predecessor. Hence ten and eleven there are two inputs or nine is an input booth to ten and eleven. Finally we have activity twelve and Ten and eleven, both are inputs to twelve. This is in short about the network diagram. Now let us take the session further and try to discuss more about the project. Suppose the plan we need to come up with a project charter which happens to be the most critical output of the defined fees. You need to provide the details on who is the project leaders, sponsor, team members, what is the business process, so on and so forth.

We also need to identify what is the critical, the quality, et cetera, and the metrics goal. What is the business impact from the financial benefits which we have already calculated in the Excel sheet? What is the benefit to external customer? This is just a layout or a template on what are the mandatory things which are required to be mentioned in the project chatter those activities for which we have calculated the critical part. We can segregate those activities into activities pertaining to the defined phase, measure, analyze, improve and control phase.

Thereby we can mention the duration and then come up with the total duration of the project. These are a few things which one should bear in mind before creating a project charter. Here is the highlevel business process we need to come up with the business process of invoicing. Here are the various steps associated with the highlevel business process. You search for invoice for which payment is pending. You check whether the invoices have been correctly prioritized. Check for the comments from the sales team. If there are any open customer queries, call up the sales team and customer to resolve the issues.

Analyze the invoice and if there are any issues with invoice, place the invoice on hold and resolve the issues. Follow up with customer for payment, receive the payment, enter the payment details and records and close the invoice. This is high level business process and the collection team needs inputs from the sales team, auto management team, an invoice creation team to collect the invoice from customer. Once the invoice is closed, the information is sent to general ledger team and sales incentive team. Now, if you were to write a SIPOC or if you want to come up with SIPOC diagram, how do you come up with so let me write it here cyborg for each and every input you need to have a supplier. So for the collection team, inputs or the suppliers would be your sales team or a management team. Invoice creation team.

So these are the three suppliers which give input to your collections team. And then when it comes to our let me put it in this way. Input would be your collections team and these are all the process steps. And the output here would be the information which is sent to the general ledger team and sales incentive team. So invoice closure is output and the final customers who would consume that would be our general ledger team and the sales incentive team.

So you know who the suppliers are. These are your suppliers. Three suppliers are giving input to your collections team and thereby you follow this process which is P here and the output would be the closed invoice which is then sent to the customer which is or there are two teams in this scenario, general ledger and sends incentives.

This is how you need to come up with the SIPOC supplier input process, output and customer. Once you come up with the SIPOC flowchart. We need to actually get into the defined phase and do further analysis. CFO wants the project to be completed within three months, and we have looked at the overall duration of the project, which happens to be 63 days. Even if we consider 21 working days per month, we are pang on target. Three months multiplied by 21 days in a month would take the count to 63 days. The project leader prepared a project plan raft, and he filled that the project would be completed in three and a half months, which was 77 DS.

Right. That was a confusion. Now project leader wanted to identify the tasks that he should focus on to reduce the duration of the project. If you want to compress the schedule by any chance, all you need to do is focus on impacting your critical path. If you have a question on why do we need to identify critical path, there are two reasons. One is to monitor those tasks with a keen eye or observation. Another is to look into compressing the schedule so you can also compress.

We can compress the schedule using two ways. One is called as crashing, which is nothing but adding more resources to the critical path activities. Another is fast tracking. Fast tracking is nothing but doing things in parallel. Doing what? Activities in parallel? Critical path activities in parallel. All right. Please use suitable analysis to identify the tasks and the path that the project leader should focus on.

This is where we have spent a lot of time creating the critical path. And then we have come up with a plan. Right. And we know for a fact that the duration will be 63 days now, which is within three months. And thereby we have met the objectives. The critical to quality is reducing the number of defective items or invoices any item or any invoice payment which takes greater than 60 days is called as defective. Anything which takes less than 60 days is not defective. So one thing which is greater than or equal to 60 days, another which is less than 60 days. Given these values, how do we write the CTQ? CTQ here would be reduction of defective. Any invoice for which payment is not done within 60 days would be termed as defective. So we want to reduce the number of defectives.

Data type would be attribute data. Anything which doesn’t make sense. If we represent that in decimal format would be called as attribute data. For example, the number of defectives can be one, two, three, et cetera. I cannot say there would be one five defectives. Right? I cannot represent defectives in percentage terms. The number of defects also cannot be represented in decimal format. This aside, the unit of measure is the count number of defective products. Operational definition is clear. Any invoice which takes greater than or equal to 60 days for the payment is called as defective.

And what is the start and the end of this duration calculation should be clearly mentioned as part of your operational definition. What is the start date of the invoice and what is the end date of the invoice if the payment is done, that’s pivotal because everyone should be measuring the number of days for the invoice payment in a similar fashion. We cannot have different entries here. Lower specification limit is not specified. We only have the upper specification limit at 60 days. So this is now, and the target is we need to have the payments done within 60 days.

This is how you need to come up with the CTQ critical to quality performance characteristics. Now let us try to do attribute agreement analysis before we start collecting the data. We need to first take a sample of the collected data and then try to look into whether the measurement system is actually reliable or not. Only if the measurement system is reliable.

We go ahead and collect a lot of data and then proceed with the baselining, the performance on and so forth. So let me open that specific file and let us do attribute agreement analysis. All right, here is the case study which we need to solve. These are the various invoices, and if an invoice payment is done within 60 days, it is considered to be good. And if the duration of invoice payment exceeds 60 days, it is termed as defective. We have three appraisers, appraiser one, two and three. And each appraiser performs this particular analysis twice.

Hence, we have two trials for each appariser. And then we have a supervisor or standard. Supervisor or standard are always considered to be correct with their analysis. In order to perform attribute agreement analysis, we need to go to stat quality Tools attribute agreement analysis. Since we have the data in multiple columns, we select this radio option which says multiple columns. The moment you click on that, you would see all the column names here.

Let us select appraiser one until appraiser three, all trials and click on select. There we go. We have three appraisers and each person is conducting the trial twice. And we have a known standard or attribute which happens to be supervisor. Now, if I press an okay, we will be able to see the result. I’ll directly go to the session window and try to show you all these values. Any value here which is greater than 90 is extremely good. Anything in between 70 to 90 is acceptable. We need to cautiously accept.

However, there is an area of improvement for appraiser too, in that way, so that’s within appraiser I do not see any issues here. You can accept the measurement system. Let us look into between appraisers. It is greater than 70%, so this needs some improvement. You need to provide some kind of training to your appraisers and your standard. Against whom? Your supervisor, against whom we are measuring the other appraisers needs to provide some kind of knowledge transfer session. If you look into each appraiser was a standard, I see that appraiser two requires some additional attention. Also appraiser three, appraiser one is doing a great job. Now if you look into all appraisers was a standard, it is 73. 33%. So you cautiously access the measurement system.

Though there is area for improvement less than 70, you reject the measurement system. So we are going to proceed with this analysis here. We need to provide the repeatability and accuracy values for each and every appraiser. What is the repeatability? Repeatability is within appraisers it is 93. 33. For the second appraiser it is 86. 67, for the third appraiser it is 90. And then we need to get into accuracy. Let us look into individual accuracy. It’s again 93. 33 for the first appraiser.

For the second appraiser it is 83. 33 and for the third appraiser it is 86. 67. And finally we have the team accuracy, which is all appraisers was a standard. And the value happens to be 73. 33 here. There we go. So we have entered all these values also here. It’s taking a while for me to save the data. So that’s okay. Let us proceed further. So project leader wants to collect the data now because the measurement system is cautiously acceptable. So we need to collect the data based on all these parameters.

We have a data collection plan on where would you collect the data, how would you measure the duration of invoice payment? What is the data collection process? From which state and the wait state would the data be collected? Who would be the analysts or appraisers? Who would be collecting the data? Do we require any support? And what are the risks and issues associated with the data collection process? Post we collect the data, we need to baseline the performance. And in order to baseline the performance, we would be looking into a minitab file.

Before that, let us understand this. So project leader, he randomly selected a sample of 120 invoices and checked whether the invoices were closed within 60 days or not. Payment for an invoice not received within 30 or within 60 days was considered as late payment or defective. The project leader wants to find sigma level to assess the current process performance and also to baseline for comparison post project. So let me open that minitab file and let us try to calculate the Z short term and the Z long term.

So here we have the minitab file and we need to now baseline the performance. In order to baseline the performance, first let us try to understand this data. We have the invoice numbers. We have the data on whether a specific invoice has been categorized as defective or not. If invoice is closed within 60 days, then you give it a number zero. That means it is not defective.

If it takes more than 60 days, then you give it a number one, which means the invoice is termed as defective. And we have in total 120 entries. So the sample size happens to be 120 here. And if you want to calculate the count of defectives all of 120, all you can do is go to stat basic statistics, display descriptive statistics. And we are trying to find out the count of defective. So I’m going to select defectives here. And if I look at the summation of defective, since each defective is given the number one, if you look at the summation of this, it would give you the count.

So let me go to statistics here and select the option sum. Click on OK and let me click on OK. Once again, the sum happens to be 26. So there are 26 defectives out of 120 sample size. We can go to the sigma level calculator and then put these values within that and try to solve this once again while I pull out the sigma level calculator. So here we have the sigma level calculator.

The summation here happens to be 26. So there are 26 defectives. Let me go back to the sigma level calculator. Here we go. So we have 26 defectives and the sample size happens to be 120. If you substitute these two values, sigma levels short term and long term is given to you as 2. 28. And we have zero point 78 as sigma level longterms.

Let us put that into our PowerPoint presentation. Here we go. Z longterm happens to be 0. 78. MV, short term happens to be 2. 28. Now let us proceed with the further analysis. All right, so the project team brainstormed to identify the factors affecting the time to receive payments. The brainstorming sessions except is available in a worksheet.

I’m going to show you that in a moment. Please use the excerpts to plot it on an Ishikawa diagram and identify the potential inputs for which we should collect data to validate whether they critically affect the time taken to close an invoice. So let me take you to that particular worksheet. Here we go. So this is your Ishikava analysis. Already the details on what are your potential inputs are given here. Nevertheless, let us try to understand on how to come up with Kawa diagram, which is also called a fish and bone diagram.

With an fish and bone diagram, the head of the fish always represents the effect and the effect is time taken to collect the payment process. And we need to also draw the bones of the fish. Here are the bones which I’m trying to draw. And we also need to come up with some high level categories. I would come up with a category which includes operations manager, quality supervisor, training manager, and finally we have an executive. These are the four broad categories. Now we ask on what are the few issues because of which the payment process is getting delayed and what could be those inputs pertaining to operations manager and then we ask operations manager. We get to know all of these things pertaining to operations manager here.

Our analysts aren’t experienced to deal with all issues. So that would be one input here. I guess the priority of invoice FX, how much time we take to close the invoice, that’s going to be your second input. In that way, wherever we have operations manager here, all of those would be the inputs that you have thought about, which might affect the time taken to collect the payment. Let me move on to quality supervisor. He says I’ve even seen them not following up. That is kind of blaming the analysts. Hence we are going to probably not consider that as a potential input. In that way, wherever you have quality supervisor, all those would be your inputs in the fish bone.

And then we have the training manager. There is only one input for the training manager. We don’t even have a formal training for analysts. That’s more of complain. So we are not going to consider this as a critical input. And then we have two from the executive. Government customers need a million follow ups, major issue. So that would be a potential input executive.

Can we do something about the current payment process? Can we do something? That’s more of a question. So that would probably not be a potential input. In this way we need to do a fishbone diagram, list down all the costs or inputs which would affect the payment process and all of that. We need to shortlist the potential inputs. And in order to identify the potential inputs, there are multiple techniques available such as your pew matrix or nominal group technique or multivolting, so on and so forth.