Project Selection Six Sigma Foundations Continuous Improvement Training Six Sigma Foundations Continuous Improvement Training Six Sigma Simplicity

Key Learning Points  Ask yourself the Question:  Is the project VIABLE now?  Is the project SIGNIFICANT?  Is there a MOTIVATED Team?  Ask yourself the Question:  Is the project VIABLE now?  Is the project SIGNIFICANT?  Is there a MOTIVATED Team? Six Sigma Simplicity

Project Selection remains the single most important element of the process. Six Sigma Simplicity

Project Selection  Organizations must develop a process to define strategic focus area and then effectively scope them into manageable DMAIC improvement projects Six Sigma Simplicity

Process map on selecting CI projects Determine the needs of key customers and strategic business needs Identify project opportunities Prioritize projects opportunities Store project ideas for future reference Viable CI Project now ? Determine metrics and goals Determine a baseline and bottom line benefits Signifiant contribution to QMS? Scope the project Create a project charter and overall plan Motivated team? Project execution applying CI methodology Project reports- out to upper management Communicate and leverage success No Yes Six Sigma Simplicity

Example: Break out core processes FunctionHead count WIP BacklogCycle time 6SWasteFeedback Accounts320 days1 hourCWaiting, Motion Needs quicker data Dispatch21 day1 hourDScrapIncorrect paperwork, hockey sticks Assembly104 weeks1 weekEScrap, MotionNot enough parts Manufacture501 week BTransport, Rework, over production Tooling down Purchasing82 months1 weekCOver production, rework, transport, waiting Reducing cost Engineering204 months1 monthCRework, waiting, motion Unclean orders Applications/Order Entry105 days1 dayEScrapWorkload Determine the needs of key customers and strategic business needs Six Sigma Simplicity

Process/Activities Value added 2% - 15% Non-value added 85% - 98% EssentialNon-essential Eliminate Minimize Non- Value added / Value added work Now Categorize into the 7W’s! Identify project opportunities Six Sigma Simplicity

Cost7W’sThroughput WaitingX TransportationX MotionX XDefectsX XOverproduction XProcess, long cycles xInspection Identify project opportunities Combine 7W and TOC. Six Sigma Simplicity

The Six S’sCostThroughput SortSeparateMotion, Transport Waiting Straighteni.e.: Inventory – put in order Over production, Looking, Waiting ShineScrapDon’t impede flow StandardiseOver processing SafetyScrapWaiting SustainDisciplineEliminate waste (*Safety – 1 st in everything.) Identify project opportunities 6S is the foundation for CI. Target 6S at the worst areas. Six Sigma Simplicity

Prioritize project opportunities XY matrix - example example only Six Sigma Simplicity

Project Desirability Matrix The three attributes of a potential project can be visualized on the following matrix: LowMedHi EFFORT Low Med Hi IMPACT Low Med Hi Probability of Success Six Sigma Simplicity

Project Desirability Here are three Attributes for evaluating Project Desirability:  Business impact  Effort required  Probability of success Here are three Attributes for evaluating Project Desirability:  Business impact  Effort required  Probability of success Meaningful & Manageable Six Sigma Simplicity

Business Impact Improve Corporate credit ratings 20% RONA / 15% Primary working capital to sales Implement and sustain Quality Mgm’t System 15% Operating Profit / 15% OP % Sales Acquisition growth of $X.X B Organic growth of $X.X B Top Level Goal Deployment (example) Six Sigma Simplicity

Examples of Little or No Business Impact  Creating or revising a report  Installing a measurement system  Quantifying the performance of a process  Improving a supplier’s performance without any arrangement to create benefits for the Organization  Reducing cycle time of a non-bottleneck operation  Creating or revising a report  Installing a measurement system  Quantifying the performance of a process  Improving a supplier’s performance without any arrangement to create benefits for the Organization  Reducing cycle time of a non-bottleneck operation Six Sigma Simplicity

Effort Required  Definition -  This includes not only Black Belt time, but also the time that will be required of the team members, and any expenditure of money.  Typical High Effort -  installing a new computer system  improving profitability of an entire product line or channel  “fixing” the annual planning process  Definition -  This includes not only Black Belt time, but also the time that will be required of the team members, and any expenditure of money.  Typical High Effort -  installing a new computer system  improving profitability of an entire product line or channel  “fixing” the annual planning process Six Sigma Simplicity

Definition of Probability of Success  An assessment that takes into account the various risk factors -  Time - uncertainty of the completion date  Effort - uncertainty of the investment required  Implementation - uncertainty of roadblocks  Typical Low Probability of Success -  won’t show the benefits within a year  depends upon completion of other risky projects  requires help from extremely busy people  is not aligned with your Company objectives (QMS)  An assessment that takes into account the various risk factors -  Time - uncertainty of the completion date  Effort - uncertainty of the investment required  Implementation - uncertainty of roadblocks  Typical Low Probability of Success -  won’t show the benefits within a year  depends upon completion of other risky projects  requires help from extremely busy people  is not aligned with your Company objectives (QMS) Six Sigma Simplicity

Project Desirability Matrix The desirability of a project increases as you move from the lower right to the upper left, and as the circle gets larger LowMedHi EFFORT Low Med Hi IMPACT Low Med Hi Probability of Success Increasing Desirability Six Sigma Simplicity

Scope the project  Project Selection  Aligned with Strategic Plan  Not solving world hunger (Scope)  Significant Business Impact  Supported by & with Data  Agreed to by:  Champion  Process Owner  Financial Controller  Project Selection  Aligned with Strategic Plan  Not solving world hunger (Scope)  Significant Business Impact  Supported by & with Data  Agreed to by:  Champion  Process Owner  Financial Controller Champions should "pick battles big enough to matter, small enough to win" Six Sigma Simplicity

Project Selection Six Sigma Foundations Continuous Improvement Training Six Sigma Foundations Continuous Improvement Training Six Sigma Simplicity