There are many tools and methods available to clearly define the VOC and the VOB. These range from financial, operational, and value stream mapping to the application of marketing research methods. Some of these methods were discussed in earlier chapters. Our assumption is that a project has been created and it can be solved using an application of the DMAIC methodology. In other words, the hypothetical project is going to address a chronic process problem that has no known solution. In Table 9.5, three tools help a team define the project more clearly from VOC and VOB perspectives: a high-level process map called a Supplier- Input-Process-Output-Customer (SIPOC) chart, a project charter, and a quality improvement team. A SIPOC is used to clearly define the project scope (i.e., where it starts and ends). A project charter describes a project from several perspectives including the problem it must eliminate, the impact to customers and the business, estimated business benefits, and the resources required to move it forward. This enables the selection of a team consisting of suppliers to the process, customers receiving its output,
Basic Tools in the Design Phase
Six Sigma Project Deliverables
and others that work in the process. A projects team members are selected based on where the project is focused (i.e., its scope) and specific knowledge of the process.
Once formed, the team led by a Black Belt works to complete the project’s key deliverables by DMAIC phase as listed in Tables 9.6. A Black Belt is the Six Sigma expert and project lead for the team. This person has been trained in the tools and methods of the initiative. Project definition requires identifying customer requirements, business benefits, and their strategic alignment. As data are collected, a project’s objective should become focused to ensure it remains within the defined scope and can be executed according to the project’s schedule. The project’s definition also requires a baseline of CT or KPOV metrics. Figure 9.5 lists operational
Project definition: How to select projects.
areas where projects have been successively deployed within organizations. There are in fact thousands of project applications across different industries. If an existing process is not achieving its designed performance levels, there may be an opportunity to create a DMAIC improvement project.
A SIPOC describes a process at a high level. It may also help identify new projects. An example is shown in Figure 9.6. This version is quantified and helps identify new projects. It helps refine the scope of a project to a part of the process and on a single or several metrics. There are four business metrics in Figure 9.6 for each of the four operations. Depending on priorities, sixteen integrated projects can be deployed within this process. They could reduce cycle times, defect rates, or costs, or they could improve yields. Using this concept, a team can be assigned to improve any of these metrics. If a SIPOC does not currently exist, then a team can use the questions listed in Figure 9.6 to begin constructing a SIPOC and quantify it in a similar manner.
How to build a SIPOC.
A project charter is a formal document that communicates the problem a team is investigating. The charter has several important components that were discussed in Chapter 7 and are shown in Figure 7.9. A charter describes the process where a project is deployed, its starting and ending dates, as well as its project leader, champion, and process owner. These terms were discussed in Chapter 2. In this chapter, we want to focus on metric definitions. Metrics need to be carefully defined and have the characteristics shown in Figure 9.7. At a project level, there are two categories of metrics: primary and secondary. The team is focused on improving primary metrics but does not want to inadvertently induce a deterioration of the secondary metrics. The secondary metrics balance the primary metrics. An example would be maintaining customer service levels if inventory investment is reduced. The primary metric may initially be at a higher level and represented as a business metric. A business metric is linear and can be aggregated across an organization. An example is the inventory turnover statistic that can be calculated for any product, aggregated by product family and across facilities. Recall that an inventory turnover ratio is calculated as the cost of goods sold divided by the average inventory investment needed to support it. The higher the ratio, the lower the required inventory investment that is needed. If the initial primary metric is inventory turnover, then eventually lower-level metrics will be added to
Project definition: Business metrics.
the project if a root-cause analysis shows they impact the inventory turnover ratio. A financial metric is in monetary units. In the inventory turnover example, inventory investment would be a financial metric used to measure a project’s success as its level is reduced.
As a team works through a root-cause analysis, the reasons or root causes for low inventory turnover or high inventory investment will be identified and eventually eliminated. Root causes could be of different types. These are the operational factors such as lead time, large lot sizes, delivery issues, poor forecasting and inventory models, or other issues. At this point in a project, the business and financial metrics may be augmented with project specific metrics such as reducing lead time or improving forecasting accuracy, etc. In fact, a root-cause analysis could lead to several other projects, each having a different operational metric or “project metric” tied to a project’s business, financial, secondary, and operational metrics from the root-cause analysis.
As a project charter is updated its problem statement, goal, or other information are refined. Table 9.7 shows attributes of good versus poor problem statements. A good problem statement communicates a complete description of a problem and strategically links it to leadership’s goals and objectives. It does not contain solutions that are not based on a root-cause
Project Definition: Good Problem Statements
analysis. Figure 9.8 shows that a poor problem statement can be improved. Once it is refined, several smaller projects may be identified that narrow the scope of the initial project. The reasons for a high inventory investment might be due to several different root causes as described above, with each cause requiring a separate project.
Team members have different roles and responsibilities as shown in Table 9.8. Some are directly related to project execution, and others are
Project definition: Writing a problem statement and objective.
Roles and Responsibilities
indirectly related. They may also have other names depending on the context of the discussion. In some organizations, a project manager is also called a Black Belt. A project manager or Black Belt leads their team through the DMAIC methodology. The Black Belt has been highly trained to apply tools and methods to work through a project definition, root-cause analysis and solution. These tools and methods the focus of this chapter. A project champion secures the resources and stakeholder support to help accelerate project completion. The champion will coordinate the work of several Black Belts and liaison with the process owners and leadership. The role of the process owner is to work with a DMAIC team to ensure that it remains on track, to provide resources, and to implement solutions. The process owner will own the solution and has a special interest in ensuring the solutions are effective and sustainable. The improvement team may also have ad hoc members from finance, information technology, and other functional teams.