Performance Variation Reduction (PVR)

Performance Variation Reduction (PVR)

What is Variation?

•       Variation means that a process does not produce the same result (the “Y”) every time.

•       Some variation will exist in all processes.

•       Variation directly affects customer experiences.

What is PVR?

PVR (Process Variation Reduction) means to focus on variation than on mean and work together to reduce variation.

Difference between Mean & Variation?

a)      Manager A tracks the performance of his team with the help of mean score and is very satisfied in meeting the target (TARGET = 60 and MEAN = 60)

b)      Next month the Top performer leaves the team and the score fell down to 50 (TARGET = 60 and MEAN = 50)

c)       Now the Manager started focusing on the variation of the team and started working on low performers , finally the scores again moved to 60% (TARGET = 60 and MEAN = 60)

Why PVR is required?

·         Not meeting a performance target means loss of business opportunities, with a high input cost and a increased cost of  rework

·         PVR will help us to understand various sources of variation.

·         PVR will help us identify the root causes of variation and help us stabilize the output.

How PVR works?

·         PVR works on an approach which is almost similar to DMAIC

·         We use simple Six Sigma tools to identify and stabilize overall variation.

PVR Framework

·         Identify key performance metric with highest variation – Metric “Y”

·         Slice &dice metric “Y” data w.r.t LOB / Circle / HUB / Team / Partner / Day / Week / Month

·         Prepare Project Charter for metric “Y”

·         Prepare Metric “Y” trend charts  (e.g. control chart ) and Compare Metric “Y” Mean & Standard  Deviation of  High performing  (HP) and  Low  performing  (LP) - LOB / Circle / HUB / Team / Partner / Day / Week / Month

·         Identify the BEST PRACTICE by  preparing Process  Maps and  Identifying  the key ENABLERS including KPIV’s and  Data Source where the metric is High performing

·         Identify further Root Causes (if any) using basic Quality tool ( e.g. 5 Why Analysis , Pareto , Cause & Effect ) for Low performance

·         Prepare Action Plan &Dashboard and trackers to monitor the KM replication and implementation

·         Verify and Validate the results 

·         Prepare Post PVR Process Map  and  post PVR trend charts  (e.g. control chart ) for sustainability  ensure processes are standardized and uploaded in the Process Portal

·         Calculate Savings & Benefits

Scoring Methodology for the PVR Index...

A) Calculation of Score on Mean ( Target ) Performance :

Achievement on Performance = Current Performance – Baseline Performance/Target – Baseline Performance   Road Travelled/Total Distance

Maximum weight age for Achievement on performance is 5

A = Score on mean achievement = % Achievement on performance X  5

B) Calculation of Score on Variation Performance:

First calculate Variation from the TARGET

Variation = Distances of each entity from the target/ Total No of Entities                                                                                                                                                             

(If the Entity has achieved Target, then distance (variation will be considered as zero, but this entity will still be in denominator. This gives advantage in variation calculation)

%Achievement on variation = Baseline Variation – Current Variation/ Baseline Variation

Maximum weight age for achievement on variation is 5

B =Score on Variation = % Achievement on variation X 5

Total Score = Score on mean performance + Score on Variation = A + B

 PVR Index = Total Score / 10 (This is a percentage Value)