Reduce CPU Cost for ISO Process

Overview of Six Sigma Project

Venkat Matsa

Objective Statement:


Reduce CPU utilization of running batch jobs for ISO Process and there by saving CPE money. Improve ISO Batch process by eliminating glitches.

What is ISO?


Insurance Services Office

What it does?
Provides Claim Search  Eliminates Fraud


What does our ISO Process do?



Sends
NOLs (Notice of loss) Updates

Gets Hits

What is the specific problem in the current process?



Process cost is high ($50,000.00 per year)

What do I want to do? (Objective statement)



Analyze the process

Reduce the cost by 20 30%

Customer: Internal Critical to customer: Cost Business metrics: CPU and Cost

Problem statement:
Process cost for ISO Batch process in Claims Vendor management found high from 20 to 30%. It was noticed while doing analysis for other project in Feb, 2005.

Team members:
      

Venkat Matsa Mike Williams Chakra Veerapuram Patricia Messmer Kathy Ware Scott Nanna Jason Maluf

Metrics taken for ISO batch process

Time Series Plot of Cost

1000

900

Cost

800

700

600 1 5 10 15 20 25 30 Index 35 40 45 50

Run Chart of Cost

1000

900 Cost

800 700

600 1 5 10 15
12 26.49020 19 0.00002 0.99998

20

25 30 Observation

35

40
32 33.66667 4 0.28651 0.71349

45

50

Number of runs about median: Expected number of runs: Longest run about median: Approx P-Value for Clustering: Approx P-Value for Mixtures:

Number of runs up or down: Expected number of runs: Longest run up or down: Approx P-Value for Trends: Approx P-Value for Oscillation:

Chart of Cost vs Week

1000

800

600 Cost 400 200 0

3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 k -ek -ek -ek -ek -ek -ek -k - 1k- 1k -1k - 1k -1k -1k - 1k -1k -1k -1k -2k -2k - 2k- 2k - 2k - 2k -2k -2k - 2k -2k -3k - 3k -3k -3k - 3k- 3k - 3k - 3k -3k -3k - 4k -4k -4k - 4k -4k -4k - 4k- 4k - 4k- 4k -5k -5k -5k -5 ee e e e e e e ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee W W W W W W WW W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W 0400400400400400400404 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 04 20 2 2 2 2 2 2 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

Week

Financial Estimates:


NI spends around $50,000.00 / year for ISO Batch process Estimated cost reduction is $15,000 to $20,000 / year

Deliverables:
CPU Reduction  Saving in ISO Batch process  Process improvement


ISO Batch Process

Cause-and-Effect Diagram
Measurements Material Personnel

P rogramming bugs

U nnecessary code execution

High CPU Cost

In efficient coding standards C ontinuing legacy env ironment High frequency of execution

Non v alue added activ ities

Mainframe P erformance

Environment

Methods

Machines

Metrics taken for ISO batch process

Normality Test (CPU usage from July 2004 Feb. 2005)

Probability Plot of CPU_Hours
Normal
99 Mean StDev N AD P-Value 13.08 0.8325 8 0.283 0.534

95 90 80

Percent

70 60 50 40 30 20 10 5

11

12

13 CPU_Hours

14

15

Normality Test (CPU usage from March 2005 June 2005) 2005
Probability Plot of CPU_Hours_1
Normal
99 Mean StDev N AD P-Value 17.22 2.277 4 0.194 0.718

95 90 80

Percent

70 60 50 40 30 20 10 5

12

14

16

18 CPU_Hours_1

20

22

24

Main Effects Plot (CPU usage from July 2004 June 2005)
Main Effects Plot (data means) for CPU_Hours
20 19 Mean of CPU_Hours 18 17 16 15 14 13 12 11

06 05 04 03 02 01 10 08 12 07 11 09 5555554444440 0 0 0 0 0 0 0 0 0 0 0 20 20 20 20 20 20 20 20 20 20 20 20 Year-Month

Residual Plots for CPU_Hours (CPU usage from July 2004 Feb. 2005)
Residual Plots for CPU_Hours
Normal Probabilit y Plot
99 90 Percent 50 10 1 -1 0 Residual 1
N AD P-Value 8 0.445 0.207

Residuals Versus t he Fit t ed Values

0.5 R esidual 0.0 -0.5 -1.0 -1.5 12.5 13.0 13.5 Fitted Value 14.0

Hist ogram of t he Residuals

3 Frequen cy R esidual

Residuals Versus t he Order of t he Dat a

0.5 0.0 -0.5 -1.0 -1.5

0
-1.25 -1.00 -0.75 -0.50 -0.25 0.00 0.25 0.50

Residual

3 4 5 6 Observation Order

Residuals look normal Almost random about zero with no trends It looks for trends in sample order or outliers

Regression Analysis: CPU_Hours versus No of ISO Records The regression equation is CPU_Hours = 8.511 + 0.000004 No of ISO Records S = 0.710521 R-Sq = 37.6% R-Sq(adj) = 27.2% Analysis of Variance Source Regression Error Total DF 1 6 7 SS 1.82201 3.02904 4.85105 MS 1.82201 0.50484 F 3.61 P 0.106

I-MR Chart of CPU_Hours (from July 2004 July 2005)

I-MR Chart of CPU_Hours
20.0 Individual Value 17.5 15.0 12.5 10.0 1 2 3 4 5 6 7 O bser v ation 8 9 10 11 12 _ X=14.46
1

U C L=19.25

LC L=9.67

8 6 4 2 0 1 2 3 4 5 6 7 O bser v ation 8

Moving Range

U C L=5.883

__ M R=1.801 LC L=0 9 10 11 12

XbarXbar-R Chart of CPU_Hours (CPU usage from July 2004 July 2005) Subgroup size =2
Xbar-R Chart of CPU_Hours
20
1

Sample Mean

18 U C L=16.677 16 14 12 1 2 3 Sample 4 3 2 1 0 1 2 3 Sample 4 5 6 _ R=1.180 4 5 6 _ _ X=14.459

LC L=12.241

U C L=3.854

Sample Range

LC L=0

Hypothesis Testing
Null Hypothesis (Ho): There is no difference in (Ho): average CPU time between the old and the new process Ho : new = old Alternate Hypothesis (Ha): The average CPU time of new system is less than the average CPU time of old system. Ha : new < old

Sample Size

Average CPU usage =30 seconds, Expected reduction is 30%, Difference =30*30/100 = 9

Sample Size

2-Sample t-test (Production Data) t-

Normality Test CPU Before for 10,000 records

Probability Plot of CPU Before for 10000 Records
Normal
99 Mean StDev N AD P-Value 32.13 4.472 7 0.420 0.227

95 90 80

Percent

70 60 50 40 30 20 10 5

20

25

30 35 CPU Before for 10000 Records

40

45

Normality Test CPU After for 10,000 records

Probability Plot of CPU After for 10000 records
Normal
99 Mean StDev N AD P-Value 16.98 5.319 7 0.567 0.088

95 90 80

Percent

70 60 50 40 30 20 10 5

10

15 20 CPU A fter for 10000 records

25

30

Stacked Data

Test for Equal Variances

Test for Equal Variances for Stack
F-Test C PU A fter for 10000 records Factor Test Statistic P-Value 1.41 0.684

Levene's Test Test Statistic P-Value 0.18 0.679

CPU Before for 10000 Records

4 6 8 10 12 14 95% Bonferroni Confidence Intervals for StDevs

C PU A fter for 10000 records Factor CPU Before for 10000 Records

10

15

20

25 Stack

30

35

40

Select F-Test (Levels of interest =2, Data is normal) F-

2-sample t-Test t(with Equal Variances)

Boxplot of CPU (Before vs. After)

Boxplot of CPU Before for 10000 Records, CPU After for 10000 records
40

35

30 Data

25

20

15

10 CPU Before for 10000 Records CPU After for 10000 records

Individual Value plot of CPU (Before vs. After)

Individual Value Plot of CPU Before for 10000 Records, CPU After for 10000 records

40

35

30 Data

25

20

15

10 CPU Before for 10000 Records CPU After for 10000 records

Minitab Results Since the p-value is < 0.05, reject the null phypothesis and accept the alternative hypothesis.

Alternate Hypothesis (Ha): The average CPU time of new system is less than the average CPU time of old system. Ha : new < old

Next steps
Continue Testing for other regions  Validate the test results  Present savings to Team members  Move changes to the Production  Monitor CPU usage


Questions.

Thank you