Sr Analyst – Apps Prog

Job Description (Overview of Role)

A vacancy exists for an experienced ITIL Service Manager within the Global Wholesale Banking Technology (GWBTO) line of business. The Service Manager will be responsible for the hands on execution of ITIL aligned Incident Management process as part of a specialist Service Management team. The successful candidate must be able to work with multiple technical groups and business units and must have strong operational experience in the processes specified. The candidate will need to be an experienced ITIL practitioner (preferably V3) and previous experience of complex payments systems would be a distinct advantage. The role entails exposure to senior business management and as such good communications and stakeholder management skills are a pre-requisite.

Responsibilities

  • Management of incidents in conjunction with multiple IT teams to ensure that all incidents are managed to speedy and satisfactory conclusion with minimal business impact.
  • Ensure Incident and Problem Management processes continue to meet ITIL best practice standards, Service Level Agreements and the needs of the organization.
  • Work collaboratively with other areas of the organization to continuously improve the management of IT Incidents and Problems.
  • Manage Problem investigations through to conclusion, ensuring that root cause is identified, documented and resolved.
  • Communicate effectively with management and stakeholder on the status and remediation of incidents.
  • Manage known errors and ensure that operational workarounds are fully documented.
  • Act as a Subject Matter Expert in Incident Management.
  • Close liaison with other corporate Change, Incident and Problem Management teams to adopt and define operational service levels and reporting standards and metrics.
  • Establish and implement effective analytical practices to provide critical MI and reports on operational performance.
  • Production and publication of critical management information.
  • Manage technology change control processes, change metrics communications and reporting.
  • Drive change success-rates and ensure improving trend in change impact.
  • Work to define, document and implement operational standards, policies and service levels.
  • Participate in meetings with Senior Management and provide appropriate input and feedback.
  • Record and update Risks and Issues in line with internal banking standards
  • The successful candidate will need to come up to speed on a number of existing systems and processes quickly and to be able to identify gaps between their output and business requirements.
  • Proactively track and report on activities and actions to ensure that work is prioritized and any conflicts are forecasted.
  • Increase personal knowledge and understanding of the technical and functional aspects of supported applications and processes by reviewing, creating, and maintaining documentation; performing related tasks; and interacting with peers and internal customers.

 Required Skills

  • Education: Bachelor’s Degree
  • Experience – 6 to 8 years
  • Experience of performing roles in Incident Management
  • ITIL V3 Foundation Certification
  • IT Support Background
  • Service Support experience
  • Experience in developing documentation materials for processes
  • Integrates best practices with process design to ensure continuous process improvement.
  • Excellent communication skills both verbal and written; must be able to appropriately convey ideas, concerns and opinions across differing levels of management
  • Must be pro-active, enthusiastic, flexible, results driven with attention to detail
  • A team player who must be able to work under pressure, juggle multiple priorities, using initiative to meet deadlines without close supervision
  • A disciplined thinker and capable of working across organizational boundaries in a very demanding, high-output environment
  • A flexible  ‘hands-on’ ‘can do’ attitude.

Desired Skills:

  • Good communication skills
  • Experience of process design & process improvement tools
  • Experience of SIX SIGMA / DMAIC phases
  • Experience of working in a large enterprise IT organizations.
  • Experience in the financial sector
  • Recognized project management training/certification; e.g. Prince 2, PMI
  • Knowledge of software development methodologies
  • Exposure to Risk management standards and practices would be an advantage.

Posting Date: 27/05/2016

Location: Mumbai – India

prnc

Project Management -AM (PMP or Six Sigma -trained or Certified)gurgaon

Job Description

  •  Job holder will be responsible for Creating the Scope, Project Charter & Milestones for the Project & manage Progressive elaborates throughout the Project Lifecycle.
  •  Call Cross Functional Meetings, Documenting Minutes, Tracking Actionable and Report progress in various forums, define and/ or creating hard and soft Measures of Success (MOS)
  •  Manage Project Risks , Issues & escalations for quick resolution
  •  Performance of the Job holder will be Measured basis Project Deliverables within Quality ,Time, budget compliance , and degree of the stated Objectives are met
  • The profile requires the Project manager to Build strong working relationship with multiple stakeholders in various departments or function within company, Develop a keen understanding of the business along with upstream, downstream effects of process
Key Roles & Responsibilities:

  • Project Management
  • Analytical and communication skills
  • Manage stakeholder relationships
  • Evaluate and improve project performance

Salary: Not Disclosed by Recruiter
Industry: Insurance
Functional Area: Other
Role Category: Other
Role: Other
Keyskills: Project Management ,PMP ,Six Sigma.

Desired Profile

  • Graduate / Post Graduate in any discipline (IT/Computer Science preferred)
  • PMP Trained and/or Six sigma certified
  • Experience in managing Quality Projects & initiatives in an organization
  • Prior Experience in Leading Projects ( Technology enabled Projects /Business Continuity Plan (BCP) experience will be preferred )
  • Prior experience in Insurance Industry preferred
  • Good verbal and written Skills
  • Proficient user of Microsoft Office packages (Excel, Word, PowerPoint, Outlook)
  • Should have experience of 4 to 5 years in project management

man

Six Sigma JOB- Quality Analyst

Designation Quality Analyst (green belt Certified)-insurance – 1 Opening(s)
Job Description We are looking for a passionate Quality Analyst who can turn data into information, information into insight and insight into business decisions.
The incumbent should be adept at importing, cleaning, transforming, validating or modeling data, with the purpose of understanding trends & deriving conclusions for decision making purposes. The Quality Analyst is expected to accomplish business objectives by identifying and addressing gaps in operational processes.
This profile provides an opportunity to engage across various internal teams, with a challenging & dynamic work environment. Quality accreditations ( Six Sigma Green Belt+) are must. Preference will be given to candidates who are cognizant of the health insurance industry in India.
Responsibilities:
Mapping business processes, Value stream mapping (categorize activities as VA, VE & NVE), identifying process gaps & waste
Developing solutions by describing requirements in a work-flowchart, studying system capabilities & analyzing alternative solutions.
Driving quality initiatives across functions through regular key parameter tracking
Designing & conducting training modules for improving process efficiency
Verifying results & publishing regular QA reports
Work on large corporate data sets to analyse health insurance coverage and utilization
Develop and implement data collection systems and other strategies that optimize statistical efficiency and data quality
Acquire data from primary or secondary data sources and maintain databases
Identify, analyze, and interpret trends or patterns in complex data sets
Work closely with management to prioritize business and information needs
Requirements:
Proven work experience as a quality analyst between 3 to 5 years
Six sigma Green belt certification (not just a training certificate)
Technical expertise regarding data modeling, data mining and segmentation techniques
Knowledge of statistics and experience using statistical packages for analysing large datasets (MS Excel, SPSS, SAS, etc.)
Knowledge regarding group health insurance in India & various policy designs
Adept at report writing and presenting findings

Office Address:

United Health Care India pvt ltd
3B, 3rd Floor, Gundecha Onclave,
Kherani Road, Saki Naka, (7 mins walking distance from Saki Naka Metro Station)
Andheri east, Mumbai 400072

Desired Profile Please refer to the Job description above
Experience 3 – 8 Years
Industry Type Insurance
Role Business Analyst
Functional Area Analytics & Business Intelligence
Education UG – Any Graduate – Any Specialization

PG – Any Postgraduate – Any Specialization, Post Graduation Not Required

Doctorate – Any Doctorate – Any Specialization, Doctorate Not Required

Compensation:  4,00,000 – 9,00,000 P.A. Candidates from Insurance / Healthcare will be preferred
Location Mumbai
Keywords Six Sigma, Excel ,QA Statistics, Quality Analysis, Operations ,Quality Management ,business solution group.
Contact UnitedHealth Group Information Services Pvt Ltd
Email arpita_choudhary@uhg.com

 

aasaa

Six Sigma Green/Black Belt JOB- Manager

Job Responsibilities:

  • Demonstrates superior collaboration skills and techniques to define alternate solutions and resolve conflicts as necessary.
  • Negotiates and influences cross-functional teams to ensure appropriate resourcing levels are engaged and maintained throughout the project life cycle.

Required Skills

  • 5+ years experience leading large/complex projects and associated change management activities.
  • Strong project management skills with a proven track record of delivering quality projects on time and within budget.
  • Excellent communication & presentation skills (written & verbal) across multiple audiences.
  • Experience collaborating across multiple functional groups and with operational SME’s.
  • Ability to influence, lead and communicate at all levels and across multiple lines of business.
  • Highly motivated, enthusiastic and results driven.
  • Ability to work in a fast paced matrix environment including managing across multiple geographies, functions & organizations often outside ‘standard’ working hours.
  • Strong proficiency with Visio, Microsoft Office, specifically MS Project, Excel, and PowerPoint required.

Preferred Skills

  • Background in Business Travel Operations process would be a plus.
  • Six sigma Green/ Black belt certification
  • Certification in Business Process Improvement and/or setting up operating standards for large organizations/operations

1427216_orig

 

 

Lean Six Sigma JOB- Manager

Job Description:

This role involves coaching teams on Agile / Lean / SAFe across line of business in the bank. As a senior member he/she will apply proven industry practices like platform based Agile / Lean / SAFe Capability based development to enable reuse integrate and simplify the transformation.

Responsibilities

  • Apply the Continuous Improvement / Lean methodology and recommend solutions to specific business case issues with the specific aim to deliver the improvement projects on schedule, with benefits realized and competencies and culture embedded at all levels of the organization.
  • Support and coach 4-5 leaders /project owners with their associated projects so they achieve their LEAN certification.
  • Lead projects as a project manager, advisor, coach or trainer, playing a Q/A role where needed. It is anticipated this will include Kaizen workshops, facilitated sessions, and Kaizen events.
  • Develop own and others Lean Leadership Behaviours and in doing so support and develop a sustainable continuous improvement culture at all levels of the organization
  • Continuously improve your LEAN and CI skills and coach managers, work process owners, focal points and performers in Lean methodologies, tools and behaviours
  • Support the local LEAN organization to establish the Improvement agenda. This includes understanding the current situation and future vision, establishing relevant benchmarks/metrics and framing improvement programs to close the gaps
  • Help set Continuous Improvement / Lean goals for the area and assist in leading the effort to achieve them.
  • Develop the thinking and decision making of lean implementers, increasing their knowledge and skills for executing the immediate changes
  • Understand the approaches to coaching and recognize how the perspective and techniques contribute to successfully implementing and sustaining lean
  • Assess your own effectiveness as a lean coach and set goals for developing your skills
  • Look at the common image of the coach and examine the myths and realities of the role
  • Describe the work of a coach and how to tell if it is effective
  • Consider the special requirements and challenges of coaching the implementers of lean improvements
  • Recognize the role of lean thinking in lean implementation
  • Examine the approach to coaching and its value in lean implementation and recognize you do not have to be a lean expert to coach
  • Recognize the four essential practices of the lean coach:
    • Giving the lean implementers the task or project as their own responsibility
    • Letting them think & practice on their own
    • Helping them see results vs. processes, plan vs. actual
    • Forcing reflection and learning from it

Requirements

Mandatory Skills

  • Having 5+ Years of coaching expertise, implementing, leading, executing projects in Agile delivery, Good exposure on transforming Waterfall to Agile, working with distributed Agile teams.
  • Lean project leaders, lean coordinators, lean change agents, continuous improvement executives, six sigma black belts, staff experts (SAFe is desirable)
  • Leaders and change agents who have faced the challenges of project completion and implementation of changes and improvements who have experience with Agile, Scrum Lean & SAFe in organizations
  • Has multiple years of Agile project experience
  • Balances delivery of project with making new agile team self-sufficient within 3 to 6 months
  • Enables the Lean, Scrum & SAFe Agile Team’s ability to deliver on their commitment
  • Capable to support many projects concurrently.
  • Transitions leadership to team’s SM & PO (Scrum Master and Product Owner)
  • One or more Agile certifications Scrum/Lean/SAFe desirable.
  • Experience with several agile Project Management tools.

Soft skills

  • Excellent communication skills, inter-personal skills, client-facing abilities and international exposures
  • Set self-development goals based on review of your own skills and aspirations as a lean coach
  • Excellent facilitation, written, verbal & presentation skills.
  • Willing to Travel to other locations on need basis
  • Demonstrated capability to apply Lean/Lean Sigma Philosophy and Tools in a manufacturing / operational organization or similar environment.
  • Accreditation as a Scrum, Agile Lean Black Belt and Kaizen Facilitation experience would be a significant plus, but not essential.
  • Motivated, independent self-starter who feels comfortable working in ambiguous work environments with strong ability to structure problems towards executable solutions
  • Practical Lean experience in applying process improvement and Lean tools (i.e value stream mapping; identifying and eliminating waste, 5s, kaizen facilitation, etc.)
  • Demonstrated ability to learn and apply new approaches (i.e. lean, causal reasoning, DMAIC).
  • Affinity towards engaging with frontline workers in problem solving, demonstrating a supportive style of leadership, and good inquiry/analytical skills.
  • A clear bias for action and results delivery.
  • Demonstrated ability to professionally interact with all levels of the organization (critical for effective coaching).
  • Courage and drive to challenge the status quo (‘the way its always been done’).
  • Ability to connect longer-term strategy to shorter-term actions – and be able to help others do the same.

Education: B.E/B.Tech/ M.C.A/M.Sc

Experience: 10+ Years of total IT experience. Played different roles in delivery highly desirable.

Posting Date: 25/05/2016

Location: Chennai – India

Full / Part-time: Full time

6

The Case for Supplier Development

Twenty-five years ago supplier development was the hot topic in supply management. Corporations were starting to staff-up and offer assistance in improving supplier manufacturing efficiency. It wasn’t unusual for large original equipment manufacturers (OEMs) to have dozens of supplier development personnel assigned to support supplier improvement efforts. The OEM I worked for had—at its height—almost 100 such resources. Today, not so much. So what happened?

It’s not so hard to understand. Remember, in the 1990s the concept of supplier development had to go up against the tide of sourcing to low-price countries. I can remember very vividly as a newly-minted manager having been charged with rolling out the supplier development initiative within my division, presenting my plans for its development to a group of executives—and, as it happened, a couple of Brooks Brothers-clad consultants who were at the time reviewing our supply management function. One of those “suits,” in fact, interrupted me in mid-presentation by saying he had never heard anything more stupid (his words). He went on to say there was really no need to expend resources on incumbent suppliers when “what was needed was to start sourcing in China and India” to get lower prices. I didn’t even get to finish my presentation. Did I mention that the “suits” were also wearing wing-tips?

Fortunately, after the meeting, one of the attending executives told me to continue on with my efforts and, as they say, the rest is history. (If you’re interested in reading about what supplier development eventually ended up delivering to my corporation, please refer to the article from Industrial Engineer magazine.)

Unfortunately, in the end, what the consultants were calling for won out. Large corporations heeded the call to source overseas in almost a lemming-like way, in the end deciding that lower piece-prices were the primary goal of supply management and they would best be obtained by sourcing to low-price (note, not necessarily lowest total cost) countries. Supplier development—where it continued at all—was for the most part delegated to minor functions.

The overriding goal of Next Generation Supply Management is development of a world-class supply base. As discussed above, most procurement executives of my generation translated that goal to a pursuit of world-wide supply chain with the singular goal of improving material variance. I don’t think that too many people today will argue that overseas sourcing hasn’t yielded the world-class performance we were after in our suppliers.

For instance, overseas sources have inherently lengthy Manufacturing Critical-path Times (MCTs). Building to demand (or otherwise changing schedule on short notice) is pretty difficult when suppliers have MCTs (true lead-times) of (at best) two to three months. In fact, I’ve seen plenty of contracts with overseas sources that required a “90-days firm” schedule commitment. Add to that four to six weeks of transportation and you’ve got an almost six-month period of supplier order fulfillment inflexibility.

The only way to make this arrangement support varying market demand is to have pre-built purchased inventory “on hand” which, of course, is an indicator of anything but a world-class source. So perhaps supplier development deserves another look as a vehicle for achieving that world-class supply base goal. But let’s first look at what most companies that do maintain a supplier development function are using it for.

 

Small/Disadvantaged Supplier Support

Small/disadvantaged suppliers typically are those whose majority ownership is represented by protected classes, such as veterans, women and minorities. To promote economic participation by these classes the federal (and some state) purchasing agencies require OEMs to acquire a minimum percent of their purchased content from them for the products they wish to sell under governmental contracts.

My experience is that small/disadvantaged suppliers are often short on money and/or technical expertise and because of this finding enough competent ones to support this sourcing requirement can be difficult. For many companies, the role of supplier development is to make sure that enough of such capable suppliers exist such that the OEM’s product can qualify for government contracts.

This role is not a bad one but it certainly can’t be called significant in the big-picture scheme of company procurement.

Supplier Order Fulfillment Failures

When a supplier cannot support orders due to quality problems, lack of capacity, etc., and that negatively affects an OEM customer’s product schedule, we used to refer to that as a “drop everything” situation. In these instances, many corporations offer supplier development support to help get the supplier back to a position where they are able to support the schedule. In other words, supplier development takes on the role of a fire-fighter.

Again, it is difficult to argue for the need of this but (hopefully) it can’t be called significant in the big-picture scheme of company procurement.

 

Supplier Price Reduction Shortfalls

Many OEMs have annual price-reduction expectations. When suppliers can’t meet them, OEMs often offer supplier development assistance. In these situations the sole goal of this support is to find ways a supplier can reduce their prices. I won’t argue with this role either but I know first-hand that it puts the supplier development in the position of needing to look for quick-hit improvements rather than sustainable fixes that are in the best interests of the supplier’s overall business since these normally take a longer effort.

I’ll add that in this role supplier development personnel are typically looked upon as anything but benevolent by suppliers who more often than not see their support as looking for ways to cut margins. I once overheard a supplier discussing their supplier development experience as “a Gestapo-type interrogation.” I don’t think this reaction is rare. How collaborative do you think suppliers with this perspective will be in working with their supplier development “white knights”?

 

thinkstockphotos-465075905

Six Sigma Black Belt JOB- Quality Assurance/Quality Control Manager

Job Description

Post Graduate/ MBA
“6- 9 years of relevant experience
11 yrs of minimum overall experience

“Six Sigma BB/ Master Black Belt with good knowledge of Lean practices
Strong Knowledge of Quality Principles and Techniques essential
Needs to have worked in a BPO Operational Excellence (or similar) function / operations
Certification in Lean and other quality practices added advantage
Strong ability to influence”
“1. Drive Improvement projects on processes to improve
a. Productivity
b. Improve SLA performance
2. Be responsible for the Operatioinal excellence Framework for one/ multiple deals or a towers/ Site
3. Interact with client/ internal stakeholders to drive and influence improvement objectives
4. lead global projects in OE
5. People manager for a team
6. Acts as a mentor to Six Sigma and Lean projects for his influence”

Salary: Not Disclosed by Recruiter
Industry: IT-Software / Software Services
Functional Area: ITES, BPO, KPO, LPO, Customer Service, Operations
Role Category: Quality Assurance/Quality Control Manager
Role: Quality Assurance/Quality Control Manager
Keyskills: operations ,bpo ,mba ,six sigma ,operational excellence ,opex ,oe ,experience ,master black belt.

Lean Six Sigma Black Belt

Six Sigma Black Belt JOB- Assistant Manager

Job Description

Qualification Essential
Certified Lean Six Sigma Black Belt
Should have 3 -5 years of Lean Six Sigma deployment post completion of BB certification
Good knowledge of various process improvement tools and techniques

Desirable
BE / MBA from reputed institute
Exposure to QMS and CMMi
Experience in Bank/Other Financial Institution/BFSI
Business Unit/Function Delivery Excellence Group
Location of Job / Building Pune
Position Description Identify improvement opportunities and develop account level PI-Xn roadmap
Facilitate to execute process improvement projects and deliver value to internal & external customers
Support new transitions
Lead critical enterprise/client facing projects
Ensure timely reporting of project progress
Conduct Lean Six Sigma trainings GB / Lean / Kaizen
Liaise with technology team for tech enhancements
Showcase CI projects to clients
Deploy KM practices
Create a culture of continuous improvement in business units

Salary: Not Disclosed by Recruiter
Industry: BPO / Call Centre / ITES
Functional Area: ITES, BPO, KPO, LPO, Customer Service, Operations
Role Category: Assistant Manager/Manager -(NonTechnical)
Role: Assistant Manager/Manager -(NonTechnical)
Keyskills:

Lean Six Sigma Black Belt ,Kaizen ,CMMI ,Process Improvement ,Banking ,Continuous Improvement ,QMS ,Delivery Excellence.

6Ms-of-Six-Sigma

Memorial Day: Our Remembrance & Honor

What Are Your Plans?

Memorial Day. It’s a four day weekend! Time to hang out by the water with friends, light the BBQ grill and cook some meat. Whatever you like, it typically evokes thoughts of fun in the sun, travel, friends and welcoming in summer! Before heading out on that road trip or stocking up for the people party, maybe you can spend a few minutes reflecting on what it is really all about. For most Americans, we have lost the meaning and the honor bestowed on this national holiday.

Will We Remember Them on Memorial Day?

Originally called “Decoration Day,” this remembrance began following one of the most poignant eras in our country’s history. Between 1864 and 1866, just after the end of the American Civil War, community leaders established a date upon which we could honor both Union and Confederate war dead. To remember those who had died in the service of their country, these leaders established observances that enabled Americans to engage in activities of unity and spiritual healing. Traditional observance of Memorial Day has diminished over the years and many Americans have forgotten the meaning and traditions of the day. At many cemeteries, the graves of the fallen are increasingly ignored or neglected. Most people no longer remember the proper flag etiquette for the day. While there are towns and cities that still hold Memorial Day parades, many have not held a parade in decades.

Honoring the Heroes

Take a few minutes this weekend and reflect on the courageous men and women who have made the ultimate sacrifice in the service of their country. These heroes have shaped the course of history with their courage, bravery and their ultimate sacrifice. As you read this, those heroes continue to serve our country and sacrifice their life in an honorable manner befitting our remembrance and respect. Fact is, today, less than 1% of eligible men and women in our country serve in the Armed Forces. We should be honored and humbled by their willingness to go into harm’s way and pay the ultimate sacrifice for their country. Those heroes are our sons and daughters, brothers and sisters, friends, neighbors, classmates and hometown heroes. Before lighting the grill or jumping into the water this weekend, take a few minutes to pay your respects to our lost heroes and honor their sacrifice.

memorial-day-1

Assessing Forecast Accuracy: Be Prepared, Rain or Shine

ust as people follow weather predictions to know if they should carry an umbrella, organizations use forecasting to predict and prepare for future events. Across industries, companies attempt to determine what will happen – they forecast for product or raw material prices, market demand, exchange rates, and numerous other key metrics. Based on these forecasts, production sites are built, new products are launched and business entities are re-scaled.

While such forecasts are crucial to making significant business decisions, they may not be as accurate as people think. Organizations often assess the accuracy of forecasts in an elementary way. They monitor, for example, the last available forecast in comparison to the current actual values. Or they may compare the current to the last forecast for a given business quarter.

In his book The Black Swan: The Impact of the Highly Improbable (Random House, 2007), Nassim Nicholas Taleb points out the shortcomings of forecasting in light of the randomness involved in business processes. To address this randomness, practitioners can assess the accuracy of forecasts using control charting and analysis of variance (ANOVA). Screening a corporation’s forecasts with these two tools will reveal the evolution of forecast bias and consistency over time.

Forecasting Basics

In corporations, there are typically two methods for compiling a forecast. In one way, past performance is extrapolated into the future. This approach assumes that the underlying mechanisms remain the same. For example, hotels might forecast their occupancy rate across seasons and plan accordingly for hiring temporary staff. Or, an organization might aggregate multiple individual anticipations of what will happen into one system. For example, predictions from sales agents are consolidated in one database.

To analyze properly the accuracy of forecasts provided by either method, practitioners must understand the following terms:

Forecast horizon describes how far into the future a metric is forecast. For example, weather forecasts typically have a horizon of up to 10 days.

Forecast bias measures how much, on average, forecasts overestimate or underestimate future values. For example, a sales forecast may have a positive (optimistic) or a negative (pessimistic) bias. A positively biased sales forecast, on average, predicts higher sales than what is later achieved. Such a bias can occur when business units get allocated production capacity according to their forecasts and thus have an incentive to be optimistic.

Forecast consistency quantifies the spread of forecasts. People expect a forecast with a short horizon (e.g., the high temperature provided in a one-day weather forecast) to be more consistent than a forecast with a long horizon (high temperature 10 days from now). The reason is that for longer horizons, unknown or non-understood influences typically play a more important role, and the high temperature 10 days ahead may deviate significantly in either direction from what is forecast today.

Forecast bias and consistency are two important elements of forecast accuracy. Notice that bias and consistency are aggregated quantities based on multiple offsets between forecasted and actual values. In other words, they usually are determined using predictions and actual data over a period of time. The offset typically is measured in one of two ways:

1. Forecast – Actual
When a time series, or a sequence of data points, can be considered stationary

2. Forecast – Actual
Actual for a time series with a long-term trend

A prominent example of a long-term trend can be seen in computer memory capacity, which has, over the past 50 years or so, followed a trend first observed by Intel co-founder Gordon Moore. As Moore’s Law predicts, about every two years there is a doubling of the number of transistors that can be placed on an integrated circuit, allowing for a consistent increase in memory.

Figure 1: Factors Influencing Forecast Bias and Consistency

Figure 1: Factors Influencing Forecast Bias and Consistency

The fishbone diagrams in Figure 1 introduce the two independent parameters, time and forecast horizon, that influence forecast bias and consistency. Also shown are the tools used to analyze them.

Case Study: Forecasting Price of a Subassembly Component

As an example, consider the price forecast data over 20 months of a component used for a subassembly (Figure 2). Price forecasts were made over a horizon of one to six months in advance. For instance, a three-month forecast (3mFC) for the price in Month 9 is actually made in Month 6. This data is derived from a supply-and-demand based model, which considers production capacity to determine future supply and demand, and derive sales prices.

Figure 2: Actual Component Price Data vs. Forecasts for Different Horizons

Figure 2: Actual Component Price Data vs. Forecasts for Different Horizons

Using control charts, it is possible to confirm that the dip of the actual price from Months 8 through 10 is significant across the time frame explored here (Figure 3). Until Month 10, forecasts are for the most part positively biased, whereas later they display a significant negative bias (Figure 4). In Figure 4, the time section “Before” the dip displays a lower control limit of about zero, which means that the average of forecasts minus actuals is significantly larger than zero, and thus positively biased. For the time section “After” the dip, the upper control limit is about zero, which shows that forecasts are now negatively biased.

Figure 3: Individuals Control Chart of Actual Prices

Figure 3: Individuals Control Chart of Actual Prices

Figure 4: X-Bar Chart of Forecasts Minus the Actual Values of Horizons of One to Six Months in the Future

Figure 4: X-Bar Chart of Forecasts Minus the Actual Values of Horizons of One to Six Months in the Future

 

The relation of the price forecasts to the actual price of the component can be understood from a business context. The company’s purchasing and production departments celebrated the price reduction after Month 8 as a permanent breakthrough, and simply brushed off the idea of prices regaining their previous levels. Forecasters, who received most of their information from the purchasing department, were thus induced to adapt parameters in their models according to this general belief.

Unfortunately, such occurrences appear to be commonplace; because a “think positive” attitude is often rewarded in the corporate world, experts with an understanding of complex market mechanisms may be listened to too late. To avoid this, organizations should ask the experts to quantify the likelihood of the perceived risk, assess its potential impact and prepare a contingency plan accordingly.

Setting the Time Period

Is a one-month forecast any better than a six-month forecast? Translated into mathematical terms, this question is asking: “Do one-month forecasts spread around the actual values significantly less than six-month forecasts?” Using the forecast-minus-actual metric, practitioners can perform an ANOVA test for equal variances to answer this question. For the data above, when the time frame of the studied 20 months is considered, forecast bias does not significantly depend on the forecast horizon (Figure 5). The dots indicate the standard deviations and the lines their 95 percent confidence intervals.

Figure 5: Test for Equal Variances of the Forecast Minus Actual Data

Figure 5: Test for Equal Variances of the Forecast Minus Actual Data

Determining Confidence Limits

The analysis of the forecast-minus-actual price data can be used to estimate forecast confidence limits based on past forecast performance. Assuming that the forecast process delivers results with the same performance as before, consistency (Figure 6) and bias (found not to be significantly different from zero) from the previous ANOVA assessment can be used to display confidence limits around the forecasted values.

Figure 6: 1-sigma Confidence Limits Around Forecasted Values

Figure 6: 1-sigma Confidence Limits Around Forecasted Values

There is a roughly 30 percent chance that the actual price values will land outside these 1-sigma confidence limits (15.9 percent chance for a value above the upper 1-sigma confidence limit and 15.9 percent for a value below the lower 1-sigma confidence limit). Typically, decisions are based on a 95 percent or higher confidence interval with far wider limits; here, only a 70 percent confidence interval is considered. The price three months in the future could either be at $3.90 or at $2.90, with a 30 percent chance it would be beyond these two values. The actions that would need to be taken for either of the two cases are of a completely different nature.

From the practical point of view for managing the subassembly business, forecasts with such accuracy at this confidence level are considered virtually worthless. A useful forecast is one in which the upper and lower confidence limits, at a reasonably high confidence level, lead to about the same practical consequence.

Considering Models

While a supply-and-demand-based model of forecasting is applied in the case study example, there are many potential forecasting models. The more elaborate a model, the more the forecasts of such models tend to be taken for granted. The methods discussed in this article can gauge the validity of forecasts at any level of sophistication.

Addressing Inaccurate Forecasts

Faced with a forecast that does not provide useful data, a team is left with two alternatives:

1. Significantly improve the forecasting process and its accuracy

2. Improve the reaction time of the process such that less forecast accuracy is needed

The impossibility of the first in many business contexts led Taleb to write that “we simply cannot forecast.” But not forecasting is not an option in today’s business world. Because of the resulting necessity of the second alternative, Six Sigma teams may find forecasting accuracy a tremendous source for improvement projects. For example, if a product mix forecast is inaccurate, a Six Sigma team could launch a project to reduce lead times in order to improve reaction time to changing demands. Or, if forecasts for product and raw material prices are inaccurate, a team could lead a project to decrease waste in the supply chain. As Taleb describes eloquently, the hardest part may not be to assess the accuracy of forecasts but rather to make the results generally accepted throughout the organization and to translate them into a consistent approach for improving and managing business processes.