1 Chapter 3 Project Organization, Selection, and Definition

Organizing for Six Sigma Project – a temporary work structure that starts up, produces some output or outcome, and then shuts down. Project – a temporary work structure that starts up, produces some output or outcome, and then shuts down. Project management – all activities associated with planning, scheduling and controlling projects. Project management – all activities associated with planning, scheduling and controlling projects. 2

Six Sigma Project Teams Champions - senior-level managers who promote and lead Six Sigma deployment Champions - senior-level managers who promote and lead Six Sigma deployment Master Black Belts – Full-time Six Sigma experts Master Black Belts – Full-time Six Sigma experts Black Belts – Six Sigma technical analysts Black Belts – Six Sigma technical analysts Green Belts – Functional employees who work on projects on a part-time basis Green Belts – Functional employees who work on projects on a part-time basis Team Members – Individuals from functional areas who support specific projects Team Members – Individuals from functional areas who support specific projects 3

Project Management for Six Sigma Project management involves all activities associated with planning, scheduling, and controlling projects. Project management involves all activities associated with planning, scheduling, and controlling projects. Six Sigma projects cut across organizational boundaries and require the coordination of many different departments and functions. Six Sigma projects cut across organizational boundaries and require the coordination of many different departments and functions. The ability to manage a large portfolio of projects, as is typically found in Six Sigma environments, is vital to organizational success. The ability to manage a large portfolio of projects, as is typically found in Six Sigma environments, is vital to organizational success. 4

Project Life Cycle Initiation - Define directions, priorities, limitations, and constraints. Initiation - Define directions, priorities, limitations, and constraints. Planning -Create a blueprint for the scope of the project and resources needed to accomplish it. Planning -Create a blueprint for the scope of the project and resources needed to accomplish it. Assurance - Use appropriate, qualified processes to meet technical project design specifications. Assurance - Use appropriate, qualified processes to meet technical project design specifications. Control - Use appropriate communication and management tools to ensure that managerial performance, process improvements, and customer satisfaction is tracked. Control - Use appropriate communication and management tools to ensure that managerial performance, process improvements, and customer satisfaction is tracked. Closure - Evaluate customer satisfaction with project deliverables and assess success and failures that provide learning for future projects and referrals from satisfied customers. Closure - Evaluate customer satisfaction with project deliverables and assess success and failures that provide learning for future projects and referrals from satisfied customers. 5

Project Life Cycle Accountability Matrix 6

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Project Reviews Project review – status check that serves to evaluate progress toward achieving the project plan. Good reviews: Project review – status check that serves to evaluate progress toward achieving the project plan. Good reviews: –Monitor progress –Provide guidance –Check focus and alignment –Display support –Knock down barriers –Share best practices –Recognize and reward 8

Project Review Agenda Introduction by project champion or sponsor Introduction by project champion or sponsor Project team presentation Project team presentation Evaluation Evaluation Closing by project champion or sponsor Closing by project champion or sponsor 9

People Skills Technical skills Technical skills Soft skills Soft skills –Shared vision –Behavioral skills 10

Skills for Team Leaders Conflict management and resolution Conflict management and resolution Team management Team management Leadership skills Leadership skills Decision making Decision making Communication Communication Negotiation Negotiation Cross-cultural training Cross-cultural training 11

Skills for Team Members Communication Communication Meetings Meetings Shared decision making Shared decision making Stopped on 11/08/16 12

Team Dynamics Team life cycle Team life cycle –Forming - the team is introduced, meets together, and explores their new assignment. –Storming - team members disagree on team roles and challenge the way that the team functions. –Norming - issues of the previous stage have been worked out, and team members agree on roles, ground rules, and acceptable behavior –Performing - the productive phase of the life cycle when team members cooperate to solve problems and complete the goals of their assigned work –Adjourning - the team wraps up the project, satisfactorily completes its goals, and prepares to disband or move on to another project. 13

Ingredients for Successful Teams Clarity in team goals Clarity in team goals Improvement plan Improvement plan Clearly defined roles Clearly defined roles Clear communication Clear communication Beneficial team behaviors Beneficial team behaviors Well-defined decision procedures Well-defined decision procedures Balanced participation Balanced participation Established ground rules Established ground rules Awareness of group process Awareness of group process Use of scientific approach Use of scientific approach 14

Six Sigma Project Selection Top Down: tied to business strategy and aligned with customer needs Top Down: tied to business strategy and aligned with customer needs Bottom Up: Black belts and master black belts choose projects suited to the capabilities of teams Bottom Up: Black belts and master black belts choose projects suited to the capabilities of teams 15

Mess Management Mess - a system of external conditions that produces dissatisfaction. Mess - a system of external conditions that produces dissatisfaction. –High costs –Excessive defects –Customer complaints –Low customer satisfaction 16

Process Analysis for Project Identification Define the process Define the process Describe the process Describe the process Describe the players Describe the players Define customer expectations Define customer expectations Determine available data Determine available data Describe the perceived problems associated with the process Describe the perceived problems associated with the process Stopped on 17 th August 2016 Stopped on 17 th August

Six Sigma Project Levels “Level 1” projects directly affect an organization’s profit margin (projects have a clear, hard dollar impact on profitability). “Level 1” projects directly affect an organization’s profit margin (projects have a clear, hard dollar impact on profitability). “Level 2” projects result in redeployment of resources inside an organization to increase operating efficiency or productivity. “Level 2” projects result in redeployment of resources inside an organization to increase operating efficiency or productivity. “Level 3” projects directly affect operations by avoiding expenditures or increasing the chances of obtaining higher future revenues. “Level 3” projects directly affect operations by avoiding expenditures or increasing the chances of obtaining higher future revenues. 18

Key Factors in Six Sigma Project Selection Impacts on customers and organizational effectiveness Probability of success Impact on employees Fit to strategy and competitive advantage Financial return, as measured by costs associated with quality and process performance, and impacts on revenues and market share 19

Example Project Selection Matrix 20

The Cost of Quality (COQ) COQ – the cost of avoiding poor quality, or incurred as a result of poor quality COQ – the cost of avoiding poor quality, or incurred as a result of poor quality Translates defects, errors, etc. into the “ language of management ” – $$$ Translates defects, errors, etc. into the “ language of management ” – $$$ Provides a basis for identifying improvement opportunities and success of improvement programs Provides a basis for identifying improvement opportunities and success of improvement programs 21

22 Quality Cost Classification Prevention Prevention Appraisal Appraisal Internal failure Internal failure External failure External failure

23 COQ Analysis Tools Cost indexes Cost indexes Pareto analysis Pareto analysis Sampling and work measurement Sampling and work measurement

Pareto Analysis Pareto analysis – technique to identify the “ vital few ” from the “ trivial many ” Pareto distribution – a frequency distribution in which the characteristics observed are ordered from largest frequency to smallest. Pareto diagram – a histogram of the data from the largest frequency to the smallest. 24

Pareto Diagram of Customer Calls 25

Pareto Diagram Helps a team focus on causes that have the greatest impact Helps a team focus on causes that have the greatest impact Displays the relative importance of problems in a simple visual format Displays the relative importance of problems in a simple visual format Helps prevent “ shifting the problem ” where the solution removes some causes but worsens others Helps prevent “ shifting the problem ” where the solution removes some causes but worsens others 26

Project Definition Project charter - formal mission statement that defines the project, its objectives, and deliverables. Project charter - formal mission statement that defines the project, its objectives, and deliverables. High-level process map (SIPOC) High-level process map (SIPOC) Customer requirements Customer requirements 27

Project Charter Template 28

SIPOC Diagrams SIPOC - Suppliers, Inputs, Process, Outputs, and Customers SIPOC - Suppliers, Inputs, Process, Outputs, and Customers Provides a broad view of a process and who is the process owner, how inputs are acquired, who the process serves, and how it adds value Provides a broad view of a process and who is the process owner, how inputs are acquired, who the process serves, and how it adds value Inputs Process Outputs SuppliersCustomers 29

Example 30

Identifying Customers What goods or services are produced by my work? What goods or services are produced by my work? Who uses these products and services? Who uses these products and services? Who do I call, write to, or answer questions for? Who do I call, write to, or answer questions for? Who supplies the inputs to my process? Who supplies the inputs to my process? 31

Customer Requirements – Manufactured Products Product characteristics Product characteristics –Performance –Features –Reliability –Conformance –Durability –Serviceability –Aesthetics 32

Customer Requirements - Services Reliability Reliability Assurance Assurance Tangibles Tangibles Empathy Empathy Responsiveness Responsiveness 33

34 Kano Model of Customer Needs Dissatisfiers (“must haves”): expected requirements Dissatisfiers (“must haves”): expected requirements Satisfiers (“wants”): expressed requirements Satisfiers (“wants”): expressed requirements Exciters/delighters (“never thought of”): unexpected features Exciters/delighters (“never thought of”): unexpected features

35 Customer Listening Posts Comment cards and formal surveys Comment cards and formal surveys Focus groups Focus groups Direct customer contact Direct customer contact Field intelligence Field intelligence Complaint analysis Complaint analysis Internet and social media monitoring Internet and social media monitoring

Performance-Importance Analysis Performance Importance Low High Low High Who cares?Overkill Vulnerable Strengths 36

Critical-to-Quality (CTQ) Characteristics Characteristics: Characteristics: –it is critical to a customer’s perception of quality; –It can be measured; –a specification can be defined so that it is easy to determine whether the characteristic is achieved 37

The Seven Management and Planning Tools Affinity diagrams Affinity diagrams Interrelationship digraphs Interrelationship digraphs Tree diagrams Tree diagrams Matrix diagrams Matrix diagrams Matrix data analysis Matrix data analysis Process decision program charts Process decision program charts Arrow diagrams Arrow diagrams 3838

Affinity Diagram 39

Interrelationship Digraph 40

Tree Diagram 41

Matrix Diagram 42

Matrix Data Analysis 43

Process Decision Program Chart 44

Arrow Diagram 45

Project Review – Define (1 of 2) The team has reached agreement on and has clearly defined the problem or opportunity to address The team has reached agreement on and has clearly defined the problem or opportunity to address The project charter is developed and agreed upon The project charter is developed and agreed upon The team understands the strategic and financial impact of the project The team understands the strategic and financial impact of the project The team agrees that the project can be completed successfully The team agrees that the project can be completed successfully A project plan and timeline have been developed to guide the entire Six Sigma project A project plan and timeline have been developed to guide the entire Six Sigma project The right mix of people are on the team The right mix of people are on the team 46

Project Review – Define (2 of 2) Key stakeholders outside of the team have been identified Key stakeholders outside of the team have been identified All team members have consistent expectations All team members have consistent expectations Team members have received any necessary “ just-in- time ” training Team members have received any necessary “ just-in- time ” training Appropriate resources – financial and human – have been committed to conduct the project Appropriate resources – financial and human – have been committed to conduct the project The voice of the customer and CTQs are fully understood and documented The voice of the customer and CTQs are fully understood and documented The team has developed a high-level process map. The team has developed a high-level process map. Key performance measures have been identified for measuring success of the project Key performance measures have been identified for measuring success of the project 47