Objectives
Understand the importance of project selectionExplain the project selection process Understand the various sources for project identification- Voice of the customer- Voice of the business- Voice of the process
Effective project selection is one of the key factors in determining the success of your Lean Six Sigma efforts.If effective projects are not selected the organization will not realize any value.Projects require time, resources, and money. It makes sense to select ones that will give you the best return.
Importance of Project Selection
Keys to Lean Six Sigma Deployment
Successfuldeployment
ManagementCommitment
Project Facilitators
Effective projects
Roles in Project Selection
• The leadership team has the main responsibility in regards to ensuring that the correct projects are selected for the organization.
• The role of the Lean Six Sigma team is to guide the leadership team through the selection process and to educate them on the project selection process.
• The role of the project leaders is to help scope the project and create a project charter for the leadership team to review.
Solutions in search of problemsProjects that are outside the teams controlSelecting projects based on anecdotal data.Focusing on issues that improve the internal operation of a business but have no effect on the customer.Making the scope of the project too broad. “World hunger” projects tend to not be completed.Not using a systematic approach to project selection.
Project Selection Pitfalls
• There shouldn’t be only one source for project selection. Projects should be sought out from all areas of the organization.
• The projects that will have the highest probability of success are those with high impact and high feasibility .
• A limited number of well thought-out projects will have greater chance of success than a lot of poorly defined ones.
• Projects need to be scoped to a point that is manageable by the project team.
Major business improvements can not be made with one project . Improvements take place project by project.
Project Selection Basics
Identify potential projects
Prioritize projects
Properly scope broad projects
Select projects
Project Selection Process
•The leadership team should have a queue of available projects as people in the organization become trained in Lean Six Sigma concepts.
• The projects with the greatest potential for success should be given the highest priority.
• Potential project information needs to be documented in a database that is accessible to the leadership team.
Project Queue
Sources for Projects
VOC VOPVOB
BusinessStrategy
BusinessMetrics
Employee ideas
ReactiveSources
Proactive Project spin-offsVSM
Voice of the Customer
Reactive Sources of VOC
Information is gathered by the customer
Proactive Sources of VOC
Information is gathered by the business
Reactive Sources of VOC
Calls to customer service or salesFormal customer complaints Claims and disputed paymentsProduct returns and related informationWarranty claimsComplaints on web pages
Customer surveysCustomer InterviewsFocus groupsObservation of customer processQuality scorecards
Proactive Sources of VOC
VOP – Employee Driven Ideas
• Manufacturing Processes
– Too many defects
– Low production rates
– High downtime
• Maintenance Processes
– High failure rates
– High maintenance costs
– Long down-time
Use brainstorming techniques to develop project ideas.
• Service Processes- Errors in the process- Long service wait time
• Transportation Processes- Long delivery time- Damaged goods
VOP- Value Stream Map
Process 2Process 1 Process 3
SUPPLIER Customer
Upstream Downstream
Information Flow
Material Flow
VSM Example
5%
54x Daily
CSML
14% PFR
Part/advice accuracy 14 sec
queue time34% SRS Utilization
Technical Support
44% SVA
31 sec queue time
80% EC2 < 120 min
64% ETA accuracy
Dispatch field service
58% FVFR
2% CSE phone fix
89% onsite response time
Field service troubleshooting
RSC Troubleshooting
95% Parts Availability
90% On-time delivery
Order Parts
1% Dropped events
Complete notification
7 days - close to invoice
90% contracts book correctly
98% accurate debit memo
4% revenue disputed
Invoicing
40 Min 12Min 30 Min
120 Min
60 Min 30 Min 10 Min 270 min
Repair Equipment
5 Min
15 hr
1200 orders/month
Hospital
86%20%
Customer initiated
notification
GuardianField Service
100 notifications/
month
400 hours/month
requests
Applications support
Customer service support
Total Cycle Time – 8 days, 1.5 hours Value Added Time – 6.7 hours
Takt Time – 6.3 Minutes/Notification
15%
% parts from TSE
10 Min
40 %85%85% 10%14%
# notif.&OSR in 5 days
4 Min
40 %
25%
75%
2400 notifications/month
CSE initiated
Notification
1% RTS
44% SVA
2% CSE phone fix
80%
20%
TravelTravel
7 days0 hr
Reduce CSE opened notifications
Increase PFR
Reduce % calls requiring tech support
10 Min
Decrease days to invoice
39 sec queue time
Reduce Dispatch time
Decrease dropped events
Increase proactive monitoring
APPS
Tech
67%
30%
Increase APPS transfer rate
86%
14%
27%
73%
Increase transfer accuracy
VOB – Business Strategy
The strategy is the blueprint for how you intend for your business to succeed. This includes developing policies and plans, often in terms of projects, which are designed to achieve these objectives.The existence and level of detail in strategic plans vary widely
among organizations. But most companies have an idea of where their business should be headed.
Projects should be selected based on their ability to advance the business strategy.
A business strategy is about charting a path from a current state to desired state.
Business metrics are high level measures that access the overallperformance of the organization.
Examples:Revenue
Accounts receivable days
Service Quality
Productivity
Labor costs
Overhead costs
VOB- Business Metrics
Although business metrics measure the strength of the organization but the are usually not effective for measuring the effectiveness of a Lean Six Sigma project.
Business metrics are usually affected by many factors, some of which are not controllable by the organization.
It is difficult to find a single project that significantly affects one business metric. It typically requires multiple projects.
Improving Business Metrics
Identify potential projects
Prioritize projects
Properly scope broad projects
Select projects
Project Selection Process
Prioritizing projects ensures that the organizations resources are being used effectively.If you have identified a small list of projects you can probably prioritize easily.If the number of potential improvement opportunities is greater than what you can initiate, prioritizing opportunities is necessary.
Prioritizing Projects
The Impact/Feasibility Matrix is a simple graphical tool that helps you choose which projects to prioritize to make the most of your time and resources.
•Impact: How much will this project positively affect the business based on specified criteria.
•Feasibility: How likely will it be to implement this project based on the organizational constraints.
Impact/Feasibility Matrix
Scope of project: How large is the project?
How complex is the process?
Is there Process Ownership (one owner, multiple owners)
Is there a qualified individual to lead the project?
Is the time frame to complete too long?
There is a way to measure the problem?
Can you identify the customers who will receive the output of the process?
Can you identify the defect and measure its occurrence?
Feasibility Filtering Criteria
Financial impact to revenue
Problem related to key business issue
Financial impact to EBIT
Improves service/product quality
Improves delivery reliability
Regulatory/compliance
Improves customer satisfaction
Improvements can be applied across the business
Impact Filtering Criteria
• A project’s connection to the company’s finances, or bottom line is the most important screening criteria.
• If you can effectively establish and communicate a project’s positive impact on an organizations profit, people will be able to understand the benefits.
Return on Investment
• Projects will result in savings that have a direct or indirect impact on the bottom line of your business.
• It is important to determine an estimate of the savings in the project selection process.
• After the project is implemented the actual savings needs to be measured.
Your project savings must be verified by the financial representative
Quantifying Project Savings
Impact/Feasibility Matrix
0
20
40
60
80
100
120
140
160
0 20 40 60 80 100 120 140
Feasibility
Impa
ct
Project 1Project 2Project 3Project 4Project 5Project 6
Impact / Feasibility Matrix
Impact = 50
Feasibility = 62
Bubble size - ROI
Identify potential projects
Prioritize projects
Properly scope broad projects
Select projects
Project Selection Process
Project Scoping
• Not all projects that are selected are ready to be handed to a project team. Some are too large in scope.
• A team could spend months trying to scale down an improperly scoped project to a something manageable.
• If the scope of these projects is too broad the team will have no clear direction.
Tree Diagram
Data Stratification and Pareto Chart
You may be refining the scope during the Define, Measure and Analyze phases of the project.
The following are the best tools for the first pass in determining the scope of your project. The scope can be further refined after the project is initiated.
Project Scoping
Tree diagrams are one of the most simple yet effective tools in the Lean Six Sigma toolbox.
Tool used to break down any broad goal or problem into increasing levels of detail.
Encourages the team to expand their thinking.
Tree Diagrams
Using Pareto to scope projectsAn initial data collection effort could determine that the initial, broad project could be made into multiple small projects.
Abandoned calls by Zone
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50
100
150
200
East Zone West Zone South Zone Central Zone North Zone Northeast Zone Southw est Zone
Zone
# A
band
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Cal
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Identify potential projects
Properly scope broad projects
Prioritize projects
Select projects
Project Selection Process
Describe project
Create a brief description of each brainstormed project idea. Document each one a project charter form. Include the following:
• What is the problem statement?• What is the goal of the project (in general terms).• What is the rationale for working on this project.
The project charter can be continually revised as the project progress through the different phases.
A Lean Sigma project is a project where Lean Sigma
tools have been used to make a documented
improvement in a process using the DMAIC or DFSS
methodology.
Lean Six Sigma Project
DMAIC, DFSS, Kaizens, JDIs?
• DMAIC Project: Uses DMAIC methodology to incrementally improve existing processes. Typically last 3-6 months.
• DFSS Project: Uses DFSS methodology to create new processes or improve existing processes that have reach entitlement, can not meet multiple customer requirements or require new technologies.Typically last 6 – 18 months.
• Kaizen: An accelerated improvement event that is typically conducted in 2-5 days. Improvements are made in the event itself. Perfection is not the goal, but rather continuous quality improvements.
• Just Do It! These are projects that have a known solution. Typically last 1-3 months.
A document that records important information about a project.An agreement between management and the project team to initiate the project.
What is a Project Charter?
The team’s objectives are clarified.The project scope is better refined.It keeps the team focused on the objectives.The project metrics are established.Transfers the project ownership from management to the project team.
Why Create a Charter?
Project InformationBusiness CaseProcess ImpactedProblem descriptionObjectiveMetricsProject scopeTeam membersBenefit to external customersAssumptions and Constraints
Charter Outline
Summary
– The project selection process takes direction from the organization's strategic objectives and current situation and uses data and a defined process to prioritize the opportunities
– Project selection involves three steps• Identification of potential projects• Properly scope broad projects• Prioritizing which opportunities will become projects• Select the projects for the organization to implement
Presenter Bio – Lucas Jerden
Lucas is a Lean Six Sigma practitioner and consultant. He owns his own consulting company as well as doing work for other consulting organizations.
He has 20 years of experience in process improvement in various industries including automotive, plastics, medical imaging equipment, and packaging. He has trained over 600 people in Lean and Six Sigma methodologies and has facilitated or mentored or 200 projects.
He is a Master Blackbelt in Lean Six Sigma with a bachelors degree in industrial engineering and a masters degree in project management.