Chapter 3Lean Sigma Projects

What is the relationship of Six Sigma to Lean Sigma?

LEANTargets process

efficiency through waste

reductions

SIX SIGMATargets process

effectiveness through variation reduction

LEAN SIGMABoth strategic and

tactical management

system to produce quantum

improvements.

What is a Project?

• Are all Programs or activities Six Sigma projects?• Project is:

– Time-limited– Unique– Consists of interrelated activities – Undertaken for a purpose– Formal investigations guided by scientific knowledge– Success results from thoughtfully designed outcome– Carefully planned, resourced, manages and reviewed.

• Program is:– Larger effort than a project– Group of related projects coordinated together– Often will create synergies that could not be realized if all projects

were not done in concert.

Common Project Guidelines• Project Identification - Must provide money and/or time tangible value.• Project Returns - Improvement must be viable, visible and verifiable in

terms of $• Project Responsibilities - Champion and X-belt approval and

responsibility.• Project Scale - Capable of delivering hard benefits.• Project Criteria

– Proper scope, depth and timing– The DMAIC improvement process can be applied to realize its projected

benefits– The targeted process and forecasted benefits can be clearly defined and are

rationally measurable.• Project Activation – Prepare a project charter, receive management

approval and execute in accordance with plan.

Where do project ideas come from?

Top-DownWill align local needs with corporate

goals.

Identify major business issues and objectives, then assigns a

champion.

Team

identifies processes

and opportunities.

Assign tea

m to solv

e thes

e specific

problems

Managers’ identify areas of waste,

shortages, quality issues, unclear

requirements, etc..

Bottom-UpEnsure key opportunities are

addressed.

Balanced approach must be taken.

Project Selection MethodsSelection Method Strengths Weaknesses

Pareto Analysis • Warranty costs• Rework costs• Production costs• Defect measurements

•Easy to apply • Based on 1 or few criteria• PPI offers no insight of outcomes

Cost of Poor Quality • Based on cost only (excl. intangible)• Offers no insight of outcomes

Project Prioritization Matrix• Top-down approach • Based on CE matrix

•Align with strategies•Sr. mgmt involved

• Difficulty in setting up meetings

Project Clustering • Top-down approach

•Align with strategies•Sr. mgmt involved

• Difficulty in setting up meetings

Project Selection MethodsSelection Method Strengths Weaknesses

Value-based Mgmt • Mgmt sets project priorities

• Requires thorough assessment

• Justify projects with shareholder value only

Quality Function Deployment /Strategy Deployment Matrix • Top-down approach

• Align with strategies• Sr. mgmt involved

• Requires more training/ time/ experienced facilitator

Theory of Constraints (TOC)• Uses resource constraints

• Can identify projects at operation/process levels

• Analysts must be trained• Long analysis period

Political Choices • Lack objective• Low morale• Impedes team-based culture

What should a project do?Lean Sigma projects should focus on those processes and critical-to

quality characteristics that offer the greatest financial and customer satisfaction leverage.

Y=f(x) Not all (x) inputs exert the same leverage on the (Y) output… find the critical few.

Address at least one element of the organizations key business objectives.

FOCUS ON:• Process Quality Focus (i.e. critical manufacturing process)

Best method to attack root causes• Product Focus (i.e. iPhone, Droid….)• Project Cost Savings Focus• Problem Focus (What is the biggest fire to address?) Can be shortsighted

How do we apply DMAIC to Project Planning?

PHASE GOAL MILESTONES

Define Establish focus Identify problematic output

Review output history

Describe output process

Measure Create baseline

Evaluate process efficiency

Qualify measurement system

Establish output capability

Analyze Discover causes

Diagnose output variation

Identify possible causes

Isolate critical factors

Improve Devise solution

Examine factor effects

Optimize factor settings

Prescribe factor tolerances

Control Sustain benefits

Verify solution repeatability

Ensure process stability

Monitor output capability

Tabular representation of the DMAIC goals and related milestone activities (source: M. Harry and R. Schroeder, Six Sigma, Doubleday, 2000.)

What kind of things should be measured?

MEASURE• Defects per million

opportunities• Net Cost Savings• Cost of poor quality• Capacity• Cycle time

CREATEBASELINE

TO DETERMINE• How current process is working• How process should work• How much process can be

improved• Magnitude and direction of each

process improvement on CTS• How much impact will be in cost

savings.

Measure the critical YY=f(x)

Y could be CTQ, CTC, CTD, CTP, or CTS

What should NOT be a Lean Sigma Project

• A task that is simple and has an obvious solution. Should be a “Just Do it” task.

• No outcome characteristics critical to customer satisfaction.• Projects without available data to measure .• Project where resource limitation could affect ability to complete the

project (especially IT resources) or proposed project uses software that is not company-compliant.

• Save the world projects.• Project that will take much longer than 4-6 months (divide into

smaller projects).• Initial training project that is too large or complex.

Establishing a Project Charter

• Created to define project and set goals. Blueprint.

• Must be approved by leadership team

• May be revised over the life of the project.

• Six Sigma Process calls on a deployment champion to launch projects.

Typical Elements• Project Demographics• Problem Statement• Project Goals• Project Scope• Team Members• Team Leader• Project Sponsor• Process Description• Process Owner• Performance Measures• Project Timeline• Success Criteria• Project Milestones• DMAIC Tollgates

SAMPLE CHARTER

• Can vary across companies.

• Variety of samples can be found on web.

• This one is from: http://www.6sigma.us/.../Six%20Sigma%20Project%20Charter%20Template%20v1.doc

HW1: Find a published 6 charter on the web and identify the elements included. What is it missing? Do you think it is a good example? Why?

Other important 6 project documents

Formal Project Authorization– Signed by champion– Approved by Master Black

Belt– Local IT and Site controller

for review and approval– Business unit head/

executive manager should review and authorize.

– Becomes the basis for the Charter

DASHBOARD to summarize progress of projects – Activities of the week– Schedules– Project meetings– Financials– Hot IssuesCan take variety offorms

Class ProjectForm Team of 2-3 Choose a project where you can apply Lean Sigma tools and analysisDue to short time period you will focus on Define, Measure and

Analyze steps. A project could be

1. Any process that addresses wasted activities2. Any outputs that are not meeting their CTQs (Critical to Quality) goals.3. Any task that you must rework to get it right4. Assignments that normally take more than a week because you have not found a

solution yet

Consider opportunities for improvement in your jobs, dorm, or FIU departments. Key will be having sufficient access in our defined time period.

Class Project Deliverables• Project Charter (Due February 8, 2011)• Written summary of Define, Measure, Analyze results

and examples. (Due March 1, 2011)– Show all charts, graphs, etc… Use appropriate Lean Sigma

tools– What would a project dashboard look like for this project if

implemented.– What resources would be needed to implement, what are the

roadblocks?• 20 minute team presentation (focus on tools, and why

you used them.) (April 19/26, 2011)