Project Organization, Selection, and Definition 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 management – all activities associated with planning, scheduling and controlling projects.

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

Project Management for Six Sigma 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. The ability to manage a large portfolio of projects, as is typically found in Six Sigma environments, is vital to organizational success.

Project Life Cycle Initiation - Define directions, priorities, limitations, and constraints. 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. 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.

Project Life Cycle Accountability Matrix

Project Life Cycle Accountability Matrix

Project 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

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

People Skills Technical skills Soft skills Shared vision Behavioral skills

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

Skills for Team Members Communication Meetings Shared decision making

Team Dynamics 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.

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

Six Sigma Project Selection 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

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

Process Analysis for Project Identification Define the process Describe the process Describe the players Define customer expectations Determine available data Describe the perceived problems associated with the process

Six Sigma Project Levels “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 3” projects directly affect operations by avoiding expenditures or increasing the chances of obtaining higher future revenues.

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

Example Project Selection Matrix

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

Quality Cost Classification Prevention Appraisal Internal failure External failure

COQ Analysis Tools Cost indexes Pareto analysis 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.

Pareto Diagram of Customer Calls

Pareto Diagram Helps a team focus on causes that have the greatest impact 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

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

Project Charter Template

SIPOC Diagrams 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 Process Suppliers Inputs Outputs Customers

Example

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

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

Customer Requirements - Services Reliability Assurance Tangibles Empathy Responsiveness

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

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

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

Critical-to-Quality (CTQ) 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

The Seven Management and Planning Tools Affinity diagrams Interrelationship digraphs Tree diagrams Matrix diagrams Matrix data analysis Process decision program charts Arrow diagrams 38

Affinity Diagram

Interrelationship Digraph

Tree Diagram

Matrix Diagram

Matrix Data Analysis

Process Decision Program Chart

Arrow Diagram

Project Review – Define (1 of 2) 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 team understands the strategic and financial impact of the project 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 The right mix of people are on the team

Project Review – Define (2 of 2) Key stakeholders outside of the team have been identified All team members have consistent expectations Team members have received any necessary “just-in-time” training 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 team has developed a high-level process map. Key performance measures have been identified for measuring success of the project