Defining a Six Sigma project is 50% of the overall improvement process. By properly defining the project we can increase the chances of project success and make business improvements that a poorly defined project may not achieve.
The first step in any project, Six Sigma or otherwise, is to recognise the problems that we need to fix. This gives us a clear direction so that we can work towards problem resolution.
The Voice of the Customer (VOC) and Voice of the Business (VOB) should help us build a needs and expectations matrix of the customer and the business. From this, we can start to identify problems – the things that don’t meet customer / business expectations.
Problems can include: inventory levels (excessive or too little); capacity constraints; customer feedback’ invoicing / accounts receivable issues; excessive product returns; excessive warranty costs or excessive levels of re-work.
So, in this define stage, 80% of the responsibilities lie with management and 20% with Six Sigma practitioners. It’s their responsibility to work together and define the problems, priorities and focus of the project.
When we hit the measure, analyse and improve stages, the split is reversed. 80% of responsibilities sit with the Six Sigma practitioners & 20% with management. The final stage of ‘control’ is managed by the process owner.
All SS projects should aim to deliver some kind of financial benefit (customer retention, balance sheet, income, costs) to enable us to quantify its impact & ‘sell’ the initiative to the business.
Steps to define your Six Sigma project:
- Define the Y that requires improvement (max 2 Y’s for the project).
- Identify associated processes with the Y.
- Determine the baseline performance of Y.
- Calculate the cost / impact of the problem. The quantified value can be referred to as the defect level. We can quantify impact in hours, feedback rating, percent late etc…
- Write a problem statement.
- Recruit a project team (from internal/external).
- Obtain project approvals and launch.
We can model potential improvements using a timeline graph as below. It shows the historic data in blue & objective data in orange. The Y axis shows the count of the number of defects.
Orange = objective; Blue = historic; Y axis = number of defects
Kicking off your project
We define the scope and goals of our DMAIC project in two statements. The problem statement and the objective statement.
A problem statement should include:
- The problem.
- Severity / size / magnitude of the problem.
- Financial impact of the problem.
- The process name in which the problem resides.
- Timeframes over which the issue occurs / has occurred.
The objective statement should include:
- The metric to be improved.
- The baseline for that metric.
- The goal performance for the metric.
- Time to implement changes.
- Impact of the change.
- Corporate goals or objectives that support this change.
The baseline for the metric should be the average performance over a period of time. The goal should be the entitlement level of the process (that is, the highest level of performance that the current process can achieve when all variables align). This answers the ‘how much can we improve?’ question.
Remember: hidden factories are huge areas for improvement. Hidden factory refers to all the back end stuff that happens out of sight. So, it could include returns, re-work or scrapping a product. Anywhere that there is a validation step or an approval step in the process is an opportunity for a hidden factory to arrive as it could be rejected and require re-work. This adds cost and time to the process, making it overall more costly and inefficient. Clearly, we cannot remove the validation step, but wherever we see that step in a process, it should raise a flag that further investigation is required to find the hidden factory.
Content based on study of the Six Sigma Black Belt course and Six Sigma for Dummies