Chapter 3 Lean Sigma Projects

What is the relationship of Six Sigma to Lean Sigma? LEAN Targets process efficiency through waste reductions SIX SIGMA Targets process effectiveness through variation reduction LEAN SIGMA Both 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-Down Will align local needs with corporate goals. Identify major business issues and objectives, then assigns a champion. Team identifies processes and opportunities. Assign team to solve these specific problems Managers’ identify areas of waste, shortages, quality issues, unclear requirements, etc.. Bottom-Up Ensure key opportunities are addressed. Balanced approach must be taken.

Project Selection Methods Selection MethodStrengthsWeaknesses Pareto Analysis Warranty costs Rework costs Production costs Defect measurements Easy to applyBased 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 Methods Selection MethodStrengthsWeaknesses 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? 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 Y Y=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: ma%20Project%20Charter%20Temp late%20v1.doc ma%20Project%20Charter%20Temp late%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 Issues Can take variety of forms

Class Project Form Team of 2-3 Choose a project where you can apply Lean Sigma tools and analysis Due to short time period you will focus on Define, Measure and Analyze steps. A project could be 1.Any process that addresses wasted activities 2.Any outputs that are not meeting their CTQs (Critical to Quality) goals. 3.Any task that you must rework to get it right 4.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)