MARK A. GONZALEZ

DS-1 Design Process Management: Performed Through Supply Chain Simulation Technology & The Lean Six

Sigma DMAIC Model

Presentation Overview Page

2

Introduction Overview

Lean Six Sigma DS-1 Outside Plant

Project Overview Define Measure Analyze Improve Control

Conclusion Q&A

Introduction Page

3

•Mark A. Gonzalez

•Joliet, Illinois

•8 years with XYZ Communications

•Large company approx 309,000 employees

•DS-1 Design Outside Plant Engineer

•Outstate Illinois Region

Lean Six Sigma Overview Page

4

• Business-driven multi-faceted approach to process improvement, cost reduction & increased profits

• Reduce defects – non-value added processes to improve customer satisfaction

Utilizes statistical thinking

Lean Six Sigma is a structured, data driven approach to process improvement, aimed at doing things BETTER, FASTER and at

LOWER COST.

Organizations contains processes

All processes have inherent variability

Use data to understand variability & drive process improvement decisions

The scope of the project is focused on the best opportunity for process improvement

What Makes Six Sigma Different? Page

5

Critical input X1

Critical input X2

Critical input X3

Critical input Xn

Manage

Project Output (Y)

“Correct”

(In-Specification)

Critical to

Quality

Voice of the

Customer

(VOC) –

Defect-Free!!!!

Critical to Satisfaction

1. Statistically Proven Relationships

Between Inputs (Xs) & Outputs (Ys)

Manage the INPUTS and good OUTPUTS will follow

Y = f(X1, X2, X3, … Xn)

2. Systematic

Control

Control

Control

Comparison 1 Sigma vs. 6 Sigma Page

6

Source: www.onesixsigma.com/node/7664

Lean Six Sigma Overview Page

7

DMAIC

Define the problem

Measure defects of the current process

Analyze data to discover causes of the problem

Improve the process to remove problem causes

Control the process so defects do not recur

Digital Service Grade – 1 (DS1) Overview

A North American Standard for the transmission of digital service at a transport speed of 1.544 Mbps.

Digital service can be any combination of voice, data, or video

Provided full-duplex transmission of serial, asynchronous digital signal

Provided over a physical link such as copper or fiber optic cable.

Page 8

Source: www.data-telinc.com/pub/local_data_ds1ds3.asp

Outside Plant Overview

• Central Office (CO)

• F1 main feed of cable leaving CO

• F2 distribution cable to serving terminal

• Cross Connect Box: connects F1 & F2 cable for continuity

• Serving Terminal feeds customers in geographical area

Page 9

Local Central Office

Customers!!

Source: www.ctekk.com/tele.htm

Project Overview – Business Case Page 10

Through August 2008: 21,669 DS-1 service orders received for the Illinois Outstate Region.

15,640 (72.18%) were Automated Designs (Flow-Through).

21.2% were P-status due to some field issues that arose.

6,028 (27.82%) E-Status orders created a RMA (requesting manual assistance) request.

Close to 49% of total orders require manual intervention.

From State Project Tracking Database (PTD): 1209 DS-1 projects issued to condition loop plant facilities for DS1 usage.

217 of these projects have at least one revision (36%).

Potential delay in providing on-time service to our customers.

Lost time – rework for Construction, Hicap Provisioning Center (HPC), Provisioning

Support Center (PSC), Special Services Installation & Maintenance (SSIM), and

Business Availability Unit (BAU).

Define Phase– Problem/Goal Statement D

Problem Statement: Year-to-date PTD results as of August 2008 indicate that 36% of all DS-1 projects required at least one revision.

Revisions add additional capital costs, rework, and delays in on-time provisioning for customer service orders.

Goal Statement: Reduce the number of DS-1 projects with at least one revision by 20%

A 20% reduction in revisions will yield a financial benefit of approximately $526,242

annually!

DEFINE

• CSTC

• TIRKS

• ARES

• DS1 Design Engineers

• BAU Design Engineers

• Drafter

• Construction

• Service Order

• RMA

• Project design

• ARES, LFACS, TIRKS

• SHOTS response

• Designed project

• SHOTS response

• RMA

• Time/Cost forecast

• Service order design

• Completed field work

• BAU Engineer

• DS1 Design Engineer

• Drafter

• Construction

• External Customer

• HPC

• SSTC/SSIM

• CPC

Suppliers Inputs Process Outputs

Customers

High-level Process Flow for Hi-cap Service Order

Projects Process

Step 1 Customer requests Hi-Cap service. Order is generated but cannot be auto assigned in TIRKS.

Step 2 RMA is generated to DS1 Design. Facilities are reviewed and determined unavailable.

Step 3 What is required to provide service? Simple project vs. Complex project.

Step 4 Simple Project: DS1 Design engineer creates & designs project and issues to drafting

Step 5 Drafting draws up the job & the project is issued. Work is scheduled for Construction.

Step 6 Construction completes work in the field & submits for turn up.

Step 7 Hi-Cap service order turn up completed by HPC, SSTC/SSIM.

SIPOC As-Is Process Description

Step 4 Complex Project: BAU Engineer creates & designs projects and issues to drafting

Measure Phase M

Key Process Input Variables (KPIVs) DS1 Process Variables

Volume

Flow-Through orders

Request Manual Assistance (P & E-Status) orders

Construction PTD-1

Undertakings

Designed Verified & Assigned (DVA)

Revisions

Draft Times

Key Process Output Variables (KPOVs) On-Time delivery (Due Date-DD)

MEASURE

DS1 ORDER LIFECYCLEIN

ST

AL

LA

TIO

N

/RE

PA

IRP

SC

BA

UE

NG

INE

ER

ING

AS

SIS

TA

NT

SC

ON

ST

RU

CT

ION

HP

C

Order received

from Business

Office with

standard interval

of critical dates

Can order be

assigned in

TIRKS?

RMA

generated

via Hicap

Out; sent to

RMA

mailbox

Log RMA

(DS1

screener

website)

Screeners analyze

RMA – check

TIRKS,LFACS for

facilities (E/P)

status

Are good spare

facilities avail?

Does facility

meet specs?

Build Hicap out

with spans in

TIRKS. Send back

to HPC via Hicap

out

Order flows

to HPC to

finish

design

Order gets issued

to field for

installation

no

yes

no

Are defective

facilities avail?

Submit to

DE via

SHOTS for

complex UT

no

yes

no

Is there a job in

progress?

Send response

back in SHOTSyes

Analyze ARES &

TIRKS to

determine work

required

no

Is job required?

no

Is cable

placement

required?

yes

UT logged

into project

tracker-date

received

forecasted

ECD and

assigned to

drafters

Job

drawn in

work

print.

Takes

job into

ARES/

AoTL

Input

steps

into

JAM.

Updates

project

requirem

ents

Sent back

to

engineering

for final

review

Shots

changed to

CS

(constructio

n)

Project

received

scheduler

assigns

standard

intervals

Techs dispatched

to follow work

prints provided by

engineering

Any changes to

design?

Order

received

from HPC

to be

installed

Determine

problem, defective

pairs, manhole,

plant issues &

contact engineer

for revision

yes

no

yes

Complete field

work & test. Move

SHOTS to

appropriate

engineer

Any changes to

design?

Complete test &

turn-up and refer

service to

customer

Notify HPC for

design resolution

by TFAS ticket

Was resolution

obtained?

yes

no

yes

Obtain TFAS ticket

and Jeop order to

appropriate work

group

no

Wait for

status

from

HPC

TFAS

ticket

received

from

field

tech

yes

BAU/PSC? BAU

BAU/PSC?

BAU

PSC

PSC

MEASURE

DS1 ORDER LIFECYCLE – CONTINUED PAGE 2IN

ST

AL

LA

TIO

N

/RE

PA

IRC

ON

ST

RU

CT

ION

EN

GIN

EE

RIN

G

AS

SIS

TA

NT

SB

AU

PS

CH

PC

Open SHOTS

ticket & issue

DPRO. Send to

CR/DR

Are facilities

recoverable?

joint decision

by I/M & PSC

Can simple UT

provide

service?

Generate a simple

UT for work

required and

submit to drafting

no

yes

Conduct field visit,

collect notes

required.

Build job in

TELCO, input mod

codes and

projected dollars

Review job from

drafting/assistants

Is project

accurate and

ready for

issue?

Submit to drafting

for final sendyes

yes

no

no

MEASURE

DS1 ORDER LIFECYCLE – CONTINUED PAGE 3IN

ST

AL

LA

TIO

N

/RE

PA

IRC

ON

ST

RU

CT

ION

EN

GIN

EE

RIN

G

AS

SIS

TA

NT

SB

AU

PS

CH

PC

Revision request

received from

construction, ,

update Telco with

rebaseline $$.

Generate

revision

and

submit to

drafting

Build Hicap out

with spans in

TIRKS. Send back

to HPC. Move

SHOTS to SS for

installation.

yesSubmit to drafting

for final send

Review job from

drafting/assistants

Is project

accurate and

ready for

issue?

no

Legend

: Electronic Communication

: Delay in Process

Colored Shape to

Reference off Page

Continuation

Measured Data Analysis of Ds1 Orders Received (Fallout)

State 2008

YTD Jan Feb Mar Apr May Jun Jul Aug

DS1 Volume

ILOS 21669 2735 2604 2710 2899 2663 2731 2588 2739

DS1 Due Date Misses

ILOS 322 39 34 34 75 42 31 32 35

RID Misses

ILOS 58 10 7 8 9 5 7 5 7

Flow-through

ILOS 15640 1999 1943 1941 2103 1917 1935 1738 2064

"E" Status to Total RMA

ILOS 6753 828 778 829 916 827 855 954 766

"P" Status to Total RMA

ILOS 1818 290 201 213 240 267 185 216 206 UT Issued Late - DVA

ILOS 55 4 12 7 7 3 3 2 17

Construction PTD - 1

ILOS 203 28 33 55 29 14 12 16 16

A

Measure – Analyze Phase

Analysis of Percentage of Orders

Flow Through 72.18

P-Status 21.21

E-Status 27.85

Pe

rc

en

tag

e

ANALYSIS

XYZ Communications

Cost Analysis of DS1 Lost Hours YTD August 2008

HPC PSC BAU Construction SSIM

Engineering

Assistants Total

Operations Analysis:

Number of Employees 40 13 61 154 100 18 386

Loaded Labor Rate $34.00 $117.14 $117.14 $61.06 $61.06 $34.00 424

Cost of Labor per Day at

Capacity $10,880.00 $12,182.56 $57,164.32 $75,225.92 $48,848.00 $4,896.00 $163,818.40

DS1 Order Analysis:

Number of DS1 Orders

received 21,669 8,571 601 1,209 21,669 1,209 54,928

Number of DS1 Fallout

(rework) 121,986 1,920 163 217 1,818 217 126,321

Total Amount of DS1 Work 143,655 10,491 764 1,426 23,487 1,426 181,249

Cost of DS1 Order Analysis:

Average Hours Spent on tasks 0.030 2 5.88 49.96 2.66 39.24 99.77

Total Hours Spent on DS1

Orders 650 17,142 3,534 60,402 57,640 47,441 186,808.29

Cost per Total DS1 orders received $22,102.38 $2,008,013.88 $413,958.70 $3,688,124.14 $3,519,470.31 $1,612,999.44 $11,264,668.85

Cost of Rework Analysis:

Average Hours Spent on tasks 0.030 2 5.88 49.96 2.66 14.96 75.49

Total Hours Spent on Rework 3,660 3,840 958 10,841 4,836 3,246 27,381.54

Cost of Total items Reworked $124,425.72 $449,817.60 $112,271.66 $661,971.00 $295,278.83 $110,374.88 $1,754,140

Total Ending Cost of DS1 Orders $146,528 $2,457,831 $526,230 $4,350,095 $3,814,749 $1,723,374 $13,018,809

Project Savings Analysis:

20% Reduction in Rework $24,885 $89,964 $22,454 $132,394 $59,056 $22,075 $350,828

Revenue per DS1 Order (not including Maintenance Costs)

Average Rate for DS1 Order Price Yearly Revenue

Average Cost of DS1 per

month $250.00 $3,000.00

Average Cost of DS1 per 1

year contract $190.00 $2,280.00

Average Cost of DS1 per 3

year contract $102.00 $1,224.00

Average Cost of DS1 per 5

year contract $90.00 $1,080.00

Revenue Received with No

Contract - YTD $43,338,000.00

Less Cost of Rework $30,319,191.45

A

Analyze

Regression Analysis The regression equation is

08 ILOS DD MISS = ( - 319 + 0.312 08 ILOS "E" STAT - 0.159 08 ILOS VOLUME

+ 0.269 08 ILOS Flow through)

Predictor Coef SE Coef T P

Constant -319.42 75.89 -4.21 0.014

08 ILOS "E" STAT 0.3120 0.1125 2.77 0.050

08 ILOS VOLUME -0.1587 0.1170 -1.36 0.246

08 ILOS Flow through 0.2691 0.1129 2.38 0.076

S = 6.79140 R-Sq = 87.5% R-Sq(adj) = 78.1%

Analysis of Variance

Source DF SS MS F p

Regression 3 1287.01 429.00 9.30 0.028

Residual Error 4 184.49 46.12

Total 7 1471.50

Source DF Seq SS

08 ILOS "E" STAT 1 201.08

08 ILOS VOLUME 1 824.09

08 ILOS Flow through 1 261.83

Multiple Regression Analysis:

Purpose is to represent a relationship between the variables X (Volume, E-Status, Flow-through) and Y (DD misses).

• Multiple coefficient of determination (R-Sq) = 87.5% indicate the variation in Y is determined by Xs in model.

•ANOVA, used to test for significance at 95% confidence level. P-value = .028 < .05 therefore model is significant.

A

Analyze

Matrix Plot

Linear relationships:

DD Misses vs Flow-through

DD Misses vs DS-1 Volume

DD Misses vs E-status

10.0

7.5

5.0

2100

1950

1800

300

250

200

2900

2700

2500960

880

800

806040

60

40

20

10.07.55.0 210019501800 300250200 285027502650 960880800

DD MISS

RID

Flowthrough

"P" ST A T

DS1 VOLUME

"E" ST A T

CONST PT D-1

Matrix Plot of 08 ILOS Metrics

ANALYZE

Fishbone C&E Diagram

Project Y: DS-1

Project Revision

Rate

Field Conditions

Defective pairs, DPRO required

Load coils – dead count

System

Manpower Methods

Measurements Materials

Accountability

Revisions not accurately tracked

Revision Type and Cause not defined

Productivity

Accuracy

JAM

Hicap Out

Resources vs. Workload

Drafting Design Engineer (BAU & DS1)

Resources vs. Workload

Construction Tech

Span does not run after turn up

Do not match records

Design M&P’s

Planning handoff

Design Output

Drafting/JAM M&P’s

Lack of Standards Data/Records Validation

Field/Site Visit

Missing information from field visit

Work steps (splices, tasks)

Rework

SHOTS

Simple Project – not always done

Are Hicaps required? (New build)

Incorrect address

Loaded/non loaded pairs

Communication – I&M & Engineering

Analyze

A Prioritization Matrix of KPIVs (X) and associated KPOVs (Y) was created with weighted values placed on factors having relative importance of critical-to-quality

1. System Accuracy (software systems used)

2. Field Discrepancies

3. Facilities Defective

A

Ch

ar

ac

ter

isti

c I

mp

or

tan

ce

(%

) Input Characteristic

Characteristic Selection Matrix Results

A B C D E F G H I J K L M N O P Q R S

A. Defective pairs required B. Span doesn’t run after installed C. Field conditions vs. records D. Data records validation E. Site visit conducted F. New building – needs unknown G. Different local practices H. Work steps quantity and accuracy I. Engineer

training/headcount/experience J. Engineer

Assistant/headcount/experience K. Construction/headcount/experience L. Design methods and procedures

(M&P) M. Drafting/JAM M&P N. Design/Planning referral –

clarity/info O. Revision need process flow & tracking P. Revision Work accountability Q. Productivity-departments R. Incorrect information –

order/address S. System Accuracy – TIRKS, ARES,

JAM, LFACS

A

Analyze

Project Tracking Database (PTD)

1. Reviewed all projects issued.

2. Reviewed reason for revision

1. Defective facilities (defective pair recovery order (DPRO)

2. System Discrepancies

3. Invalid Prints

4. Change in task & steps

3. Pareto Chart created to determine critical variables.

Revisions 180 116 26 16

Percent 53.3 34.3 7.7 4.7

Cum % 53.3 87.6 95.3 100.0

Reason

DPR

O

Inva

lid Prin

t

System Discrep

ancies

Chan

ge Tas

k St

ep (CT

S)

350

300

250

200

150

100

50

0

100

80

60

40

20

0

Re

vis

ion

s

Pe

rce

nt

Pareto Chart of Reasons for Revisions

Simulation Data Simulation View

Work group

Hours per task

# of Emp.

# of Hours per Shift

Max # of Task per shift

# of Orders in YTD Aug 08

# of Rewrk YTD Aug 08

HPC 0.03 40 8 10666.67 21669 121986

PSC 2 13 8 52.00 8571 1920

BAU 5.88 61 8 82.99 601 163

Const. 49.96 154 8 24.66 1209 217

SSIM 2.66 100 8 300.75 21669 1818

Eng Assist. 14.96 18 8 9.63 1209 217

I

Analyze – Improve Phase

Simulation Model I

Base, Increased Staff, & Minimized Revisions Scenario Results

I

Name

Total

Changes

Avg Time

Per Change

(HR)

Maximum

Value

Current

Value Avg Value

vCompleted 20902.2 0.28 20902.2 20902.2 10500.26223

vReworked

HPC 4999.2 1.16 4999.2 4999.2 2525.148123

vWIP 42617.2 0.14 886 812.8 357.4337634

vDesign Inbox 21715 0.27 21715 21715 10857.69599

Name

Total

Changes

Avg Time

Per Change

(HR)

Maximum

Value

Current

Value Avg Value

vCompleted 21465 0.27 21465 21465 10724.71912

vReworked

HPC 5113.4 1.13 5113.4 5113.4 2560.204707

vWIP 43180 0.14 327.6 250 132.976869

vDesign Inbox 21715 0.27 21715 21715 10857.69599

Name

Total

Changes

Avg Time

Per Change

(HR)

Maximum

Value

Current

Value Avg Value

vCompleted 21491.4 0.27 21491.4 21491.4 10754.88969

vReworked

HPC 5168.2 1.12 5168.2 5168.2 2587.714768

vWIP 43206.4 0.14 300 223.6 102.806297

vDesign Inbox 21715 0.27 21715 21715 10857.69599

Base Scenario Results:

Inc Staff Scenario Results: Revisions Scenario Results:

Control

Revision Survey created:

Track revision rate

Accountability

Information for training and re-evaluation

Track changes made – electronically for minimized discrepancies

C

Conclusion Page 28

Lean Six Sigma Concepts (DMAIC) model

Supply Chain Simulation Technology (Pro Model)

Demonstrated that utilizing a structured, data driven approach to process improvement, aimed at doing things BETTER, FASTER and at a LOWER COST is a resourceful method for deploying a variety of process improvements prior to implementation to minimize the impact to all customers in the supply chain.

Acknowledgement Page 29

1. Patricia Saunders – Former Area Manager – DS-1 Design 2. Mark Gonzalez – DS-1 Design Outside Plant Engineer 3. Lash Mapa – Committee Chair 4. Susan Scachitti – Committee member 5. Mohammad Zahraee – Committee member 6. Juan Salinas – Pro Model Assistance

Questions???