Improvements X2 - Cummins

Sonia Munoz Moreno
Reduce Errors in FBU Mexico
Invoicing Process to Daimler
Vehiculos OEM from .2478 to .05
Avoiding the Increase of
Administrative Expenditures

2
BELT:
SPONSOR:
CBS 2008 Six Sigma Chairman’s Award
PROJECT NAME:
OBJECTIVE:
ANNUAL SAVINGS:
IMPROVEMENTS:
IMPACT ON CBS GOALS:
SPONSOR INVOLVEMENT:
DAYS TO CLOSE:
Reduce errors in FBU Mexico invoicing process to Daimler Vehiculos OEM.
Sonia Munoz Moreno
Georgina Gutierrez Noyola
To reduce errors in FBU Mexico invoicing process to Daimler Vehiculos OEM
from .2478 to .05 avoiding the increase of administrative expenditures.
0.00 USD. Customer Focus Project
1. Regarding price differences, our sales executive coordinates the update
of the price list in order to have a uniform Communication plan was
deployed to inform all the areas This process is applicable to Daimiler
Vehiculos and to the rest of OEMs customers.
2. A spin off project was identified in the shippments department to avoid
discrepancies in the invoiced items against material to be sent.
1. Improve Customer Support Experience/Through the Lens of the
Customer.
1. To promote 6S as a tool in the finance department.
2. Gave me the opportunity for taking the 6S training.
3. Helped me to go through barriers.
4. Orientation regarding the subject of the project
180 days

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CBS 2008 Six Sigma Chairman’s Award
LINK TO GOAL TREE:
GENERATED OTHER
PROJECTS:
TEAM INVOLVEMENT:
CREATIVE USE OF TOOLS:
USE OF TOOLS:
BUSINESS IMPACT:
ADDITIONAL INFORMATION:
Strategy: Operate as a customer focused global company.
Initiatives: Standardize and automate tools and process and improve
customer service experience.
A spin off project will be made by shipping department to avoid
discrepancies in the invoiced items against material to be sent.
Reviewing and establish the process flow from commercial agreement
to invoices collection.
Establishing an efficient price changing process.
Creation a lotus notes data base for claims and credit memos, helping
document control.
The last lotus notes data base is being used to record discrepancies, for
authorizing credit notes, helping us avoiding duplicate credit notes as
well as to keep history data and performing quick answers for customers.
Reduce administrative work, collecting on time, avoid quantity
discrepancies.
The six sigma methodology helped us to find the root causes and to
establish more efficient controls.
This process can be deploy in other areas.

4
Define Phase
These errors are causing administrative work for our customer (Daimler Vehiculos)
between purchasing and accounts payable departments. Due to discrepancies in
invoicing, the customer is unable to make payments according to the credit terms
established by FBU.
S
E
V
Causes O
C
C
9 Pricing list considered by the
customer is different
9 FBU does not check invoices
after submitted and material
9 Lack of communication between
marketing analyst and sales
executive
9 Lack of communication in the
actualization process between
customer and FBU
Current
Controls
D
E
T
R
P
N
8 None 10 720 Erik Chimal / Sales
Executive
8 None 10 720 Sonia Munoz / A R
CBS
8 None 10 720 Lili Zarate /
Marketing
8 None 10 720 Sales departament
/ Marketing
Departament
8 8 None 10 640 Fernando
González / Quality
8 8 None 10 640 Fernando
González / Quality
8 Lack of following from quality
and customer service process
8 None 10 640 Alejandra Martínez
/ Customer Service
Resp. Actions Taken S
E
V
In the final FMEA we can see the main causes and actions taken.
The sales executive
must review the price
list every year and
must notify about of
anychange in the price.
The account payables
departmant Daimler´s
must send every month
the detail statement
account ( first 10 days )
The sales executive
must review the price
list every year and
must notify about of
anychange in the price
to marketing
departament
The sales executive
must notify to Daimer
and AR CBS that the
new agrement was
acepted.
The qualiy engineer
must record inthe data
base the discrepancies
in quality
The qualiy engineer
must record inthe data
base the discrepancies
in quality
The customer service
executive must record
the discrepancies in
data base and must
close in next three
days
O
C
C
D
E
T
R
P
N
9 2 2 3
6
9 2 2 3
6
9 2 2 3
6
9 2 2 3
6
8 2 2 3
2
8 2 2 3
2
8 2 2 3
2

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Initial Control Chart
Scope: errors proportion in FBU Mexico invoicing process
to Daimler Vehiculos OEM

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Measure Phase (C&E matrix)
Rating of Importance to Customer 7 4 1 10 5 5 6 0
1 2 3 4 6 7 8 0
Process Step Process Inputs No. Of received
invoices
Days of delay in
invoice reception
No. Of lost
packages
Errors
proportion
No. Of credit
notes
No. Of cargo
notes
No. Of reinvoiced
documents
1 Credit / Debit memos submitted No. Invoices on hold 3 1 0 9 9 9 9 259
2 Credit / Debit memos submitted No. Of invoice by schedule difference 3 1 0 9 9 9 9 259
3 Credit / Debit memos submitted Ending balance reconciliation 0 0 0 9 9 9 9 234
4 Credit / Debit memos submitted No. Of invoice with quality error 0 0 0 9 9 9 9 234
5 Credit / Debit memos submitted No. Of invoice with price differences 0 0 0 9 9 9 9 234
6 Credit / Debit memos submitted No. Of invoice with tax error 0 0 0 9 9 9 9 234
7 Credit / Debit memos submitted No. Of invoice with quantity discrepancies 0 0 0 9 9 9 9 234
8 Credit / Debit memos submitted No. Of invoice by error in customer name 0 0 0 9 9 9 9 234
9 Collection No. Of invoice with error 3 1 0 9 0 0 0 115
10 Collection Reconciliation errors 3 1 0 9 0 0 0 115
11 Collection Account statement sent 1 0 0 9 0 0 0 97
The main causes are: pricing list differences, FBU does not check the
material invoiced against material to be sent, lack of communication
between all team and lack of reconciliation on time to statement account.

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Hypothesis
� Ho The invoices that are not paid are not related to the price
discrepancies, material quality problems or quantity discrepancies.
� Ha The invoices that are not paid are related to the price
discrepancies, material quality problems or quantity discrepancies.
Ha is accepted.

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Analysis Phase (initial and final capability)
Boxplot X´s from left to right: price difference, material quality problem,
quantity and error in customer name. The price difference is the principal
cause for the generation of errors in FBU Mexico invoicing process.

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Improve Phase
Improvements X1: Price Differences
The sales executive will review the price list each year ( January ) and will send it to the
account receivable department and price analyst a message via lotus notes to all team.
Improvements X2: Balance Reconciliation
Account payables department will send to Account Receivable department ) the detail
of invoices with discrepancies in the middle of each month.
Improvements X3: Quality Problems
Identifying the steps to be followed in order to deliver product according to customer’s
specification suggestion. The main corrective action was to review the measuring system.
Improvements X4: Discrepancies Quantity Shipped
While is lunch the charter spin derived of this project it is important shipment department
auditing invoiced against material to be sent and that customer service department review
the list packing in the system vs real packing in the store house.

10
Control Phase
Alongside control plan is using the lotus notes base development during this project
Y
X1
X2
X3
X4
Product: Service: collection Core Team: Date (Orig): 14-May-08
Process Owner: Erik Chimal Morales Sonia Munoz Moreno, Erik Chimal ( process owner ), Alejandra Martinez,
Phone: 42 (444) 8037870 Lilia Zarate , Fernando González , Margarita Huerta and Miguel Escobedo Date (Rev): 15-May-08
Process Process Step Output Input
Invoicing
Match invoice vs
PO
Error proportion
Process
Specifications
USL = .2478
LSL = 0 Target .05
Invoicing Collection Price Difference No difference PV = 0 May-12-08
Invoicing
Credit and Debit
memos
Balance Reconciliation No difference PV = 0 May-12-08
Capability /Date Measurement
Technique
Sigma calculator
Reconciliation
visual inspection
Reconciliation
visual inspection
MSA Result
95% There is no significant
difference between appraisers
95% There is no significant
difference between appraisers
95% There is no significant
difference between appraisers
Invoicing Collection Quality Problems No difference PV = 0 May-12-08
Reconciliation
visual inspection
95% There is no significant
difference between appraisers
Invoicing Collection
Discrepancies Quantity
Shipped
No difference PV = 0 May-12-08
Reconciliation
visual inspection
95% There is no significant
difference between appraisers
Sample
Size
Sample
Frequency
Control Method Responsible Person Reaction Plan
100% Monthly IM-R Chart Customer Service Manage
100% Monthly IM-R Chart Account Receivable Analyst
100% Monthly IM-R Chart Account Receivable Analyst
100% Monthly IM-R Chart Account Receivable Analyst
100% Monthly IM-R Chart Account Receivable Analyst
The process owner must receive from Account
Receivable Analyst the status reconciliation end
second week after end month
Give advise to the customer service analyst
through the lotus base.
The Account Receivable Analyst will give advise to
( MargaritaHuerta@Freightliner.com ) Finance
Manager Daimler´s if the analyst don´t receive
the detail payable account statement.
Give advise to the customer service analyst
through the lotus base.
Give advise to the customer service analyst
through the lotus base.
For the following to control
plan is necessary that the belt
informs to the process owner
the new results each week.
Communication, any change is
vital, all team must be informed.

11
Major Improvement:
Put the customer first, and provide real value because:
We have achieved the initiative of our goal tree: improving
the service to our client and automitize process. A lotus notes
base was developed. This base has the main objective since
April 2008 the record issues to derived of the reconciliation
for Daimler�s account and to all clients of Filtration Business
Unit, quickly we can get measures responding times, amount
authorization, statistics of discrepancies.
Without clients there is not business.

12
Lessons Learned:
1. To learn how Six Sigma Methodology can help to understand a
problem and how to resolve it and make improvements to avoid
future gaps.
2. To work with a diverse team is important. The belt can�t work alone,
is better to work togheter to find the better solution.
3. The Six Sigma is a way of reduce the probabily of failure.
4. This project was a exigent experience but satisfactory.