In the previous topic, you created a tree diagram. Key issues identified must also be sorted in the order of their importance. A prioritization matrix helps determine the order for dealing with different issues or selecting solutions according to their relative importance. In this topic, you will create a prioritization matrix to identify crucial issues that require immediate attention.
You must prioritize key issues identified according to their importance to determine which issues or solutions are the most critical and need to be addressed first. Using a prioritization matrix, you can determine such crucial areas where Six Sigma projects need be implemented to improve your business processes.
A prioritization matrix is a tool used for determining the most important issues or solutions. This tool can be used for any prioritization activity. In a Six Sigma project, it can be used for filtering or prioritizing either causes or solutions. For example, the cause-and-effect matrix is a prioritization matrix used for prioritizing causes, while the criteria-based matrix is used for prioritizing solutions.
Whatever the matrix, the procedure used for prioritization is the same. The Six Sigma team identifies different criteria to be used for measuring different solutions. The relative importance of each criterion is determined and a numerical value indicating the weight of each criterion is entered in a column. Ratings are then assigned to the solutions against different criteria. The different solutions are scored against the identified criteria. Each rating is then multiplied by the criteria weights to obtain the weighted scores. The weighted scores are then added to find the cumulative value. The option with the highest total value is regarded as the option with the highest priority.
The metrics of a Six Sigma project reflect customer needs and ensure that the internal metrics of the organization are achieved. The selection of project metrics is one of the crucial elements in the Define phase of the Six Sigma methodology.
A primary metric, also called a project CTQ, is a CTQ measure that is used to monitor project progression and success. It is the reference point throughout the Six Sigma project. Ideally, project CTQs should have direct impact on customers. For any Six Sigma project, the primary metrics should be:
A secondary metric, also known as a consequential metric, is a project metric that you do not want to sacrifice at the expense of primary improvements in a process. These metrics ensure that the process is improving and not shifting one metric at the expense of another. It means that the secondary metrics have a relationship with the primary metrics of a Six Sigma project. Therefore, the primary goal of a Six Sigma project will be to move the primary metrics, but ensure that secondary metrics do not deteriorate or stay constant. Some of the secondary metrics include cycle time, volume shipped, inspection data, and rework hours. These metrics should not be sacrificed to achieve the primary metrics such as customer satisfaction, on-time delivery of products, and final product quality.
It uses a planning matrix to define the relationship between customer requirements and the capability of the product and the company to satisfy these requirements. Because this matrix looks like a house, where customer requirements and product attributes resemble the main living quarters, competitive analysis resembles the porch, and the correlation matrix resembles the roof, it is called House of Quality.
It starts with customer requirements. The customers for a product or service are identified and their requirements from the product or service are gathered using different tools such as focus groups, surveys, and customer experiences. A structured list of customer requirements is then drawn by analyzing and organizing this data using tools such as affinity diagrams and tree diagrams.
Importance ratings are used for quantify the customer requirements and rated according to their importance on a scale of 1 to 5. This rating will be used in the relationship matrix at a later stage.
Another element is the Competitive analysis where customers views about the competition are gathered through research to provide a better understanding of the market. Here, the customers rate an organization’s products or services against competitors’ products or services. Also, Technical requirements that are not known to customers are identified and documented. These requirements generally stem from management or regulatory standards that a product must meet.
Relationship matrix defines the relationship between customer requirements and an organization’s ability to meet those requirements is determined. The relationship between the two factors is classified as weak, moderate, or strong and given the values of 1, 3, and 9, respectively. Even, in Importance weighting rating, Customer requirements are weighted according to their importance for defining and prioritizing key criteria. The relative importance of customer needs and the company’s and competitor’s performance are taken into account while calculating this. Target values for each product or service attributes, known as technical descriptors, that can be used as benchmarks against competitors’ target values are established. These target values are the “how much” of these product or service attributes.
The technical descriptors are compared with the competitors’ technical descriptors using scientific analytical techniques to assess their properties is called Engineering analysis. This also includes reverse engineering competitors’ products or services to determine the values for their technical descriptors. Correlation matrix is the relationship among customer requirements are analyzed to identify correlated requirements. The relationships are then ranked for determining areas of improvement that need to be focused upon.
The voice of the customer (VOC) is gathered and converted into technical requirements in this phase. A business case is then established and a project charter is prepared along with milestones. A team is also formed to carry out the project. Roles and responsibilities of the team members are also set during this phase. These activities are accomplished using tools such as Quality Function Deployment (QFD); Failure Modes and Effects Analysis (FMEA); the Suppliers, Inputs, Process, Outputs, and Customers (SIPOC) diagram; the Integrated Product Delivery System (IDPS); target costing; and benchmarking.
In this phase, the concept design is developed by formulating alternative concepts and choosing the best concept after evaluating the alternatives. Risks associated with the chosen concept design are also determined. The functional requirements and their Critical to Quality (CTQ) attributes are identified by the Six Sigma team. The CTQ attributes are deployed after assessing their effect on functional requirements. Raw materials and their procurement plan with the related manufacturing plan are created during this phase. In addition, the Sigma capability is predicted. These activities are accomplished using tools such as smart simple design, risk assessment, FMEA, engineering analysis, materials selection software, simulation, DOE, systems engineering, and the capability of the process is evaluated to verify if the CTQs can be met.
The design is optimized for reliability and performance by developing detailed design elements. This helps optimize the Sigma capability and cost. These activities are accomplished through manufacturing database and flowback tools, a design for manufacturability, process capability models, a robust design, Monte Carlo methods, tolerancing, and Six Sigma tools.
The prototype is tested using formal tools to validate the design. After evaluating the performance, failure modes, and risks of the design, new requirements to be met are sent to manufacturing and sourcing units. The design is iterated until it meets the requirements of the customer. A final phase review to assess the reliability is also carried out to validate the design. The term Verify is also used interchangeably for this phase. These activities are accomplished through accelerated testing, reliability engineering, FMEA, and disciplined New Product Introduction (NPI).
Organizations strive to eliminate three basic categories of waste in their business processes.
Basic Waste Category are:
Among these three basic categories of wastes, Lean focuses on eliminating activities that do not add any value. These activities are further classified into seven types of wastes: transport, inventory, motion, waiting, overproduction, over processing, and defects.
A Balanced Scorecard (BSC) is a strategic performance management framework for measuring the impact of strategic decisions across all organizational drivers of an organization. A BSC provides a wider perspective on strategic decisions made by an organization by measuring the impact on key business drivers such as finance, customer requirements, internal processes, innovation, and growth perspectives.
The BSC was conceived with the intent to overcome the limitations of traditional performance measurement tools. At the basic level, managers utilize it to track the activities of their direct reports and monitor the impact of their actions. At the decision-making level, a BSC is used both as a tool that facilitates strategic decision-making and as one that provides an insight into future performances.
Example of Balanced Scorecard?
An automobile manufacturer embraced BSC as a way to remain competitive in a rapidly evolving sector. The ensuing benchmarks show how BSC permeated into each department to coordinate the delivery of quality products and the ability to offer diverse models.
Six Sigma is a customer-focused approach to business process improvement and performance management which encompasses a statistical and method-driven process. In order to effectively deploy the process in your organization, it is necessary to identify the basic elements that drive the Six Sigma methodology. Knowledge of the Six Sigma fundamentals is the first step toward a successful Six Sigma implementation. Before applying any business strategy in an organization, you must identify the goals and benefits of the strategy. You must also recognize the need for such a business strategy in the organization.
Surviving in a business world that is full of competition is crucial to any organization. Six Sigma provides the means to handle declining product prices in the market, which helps any organization compete with the best companies in business. It targets zero defects by setting a common performance goal for the entire organization. Six Sigma helps an organization achieve increased profitability and quality improvement rates, ahead of any of its competitors. Reduced scrap-related costs, rework, improved yield, and increased customer satisfaction are identified in companies striving to achieve Six Sigma.
A Six Sigma initiative differs from other quality improvement methodologies because it ensures that the costs involved in implementation are offset by the gains received from improvements.
The primary goal of Six Sigma is to implement a measurement-based strategy in an organization that concentrates on process improvement and reducing variation. In addition to this, the other important goals of Six Sigma include:
Whatever is the nature of your business, innovation is critical today. In order to survive competition and be the customers’ choice, you need to come up with really new products and services. All it means is that your ability to manage the change is a direct measure of your success. In other words, timely launch of new products/services in desired quality and price are going to determine your success, apart from cultural change aspect. So whether you want it or not, good project management skills are essential in today’s business to survive and win. Without digressing on other pre-requisites of good project management, let’s focus on one of most important but rarely focused area.
There are several project management techniques and tools available such CPM, PERT and Critical Chain. Immaterial of the base on which these models are structured, out of my experience, everything finally boils to predicting time duration for a task and the delivering as predicted. In small organizations(less than 10 employees), it is more of coordination, multi-tasking and communication that will determine if a task can be completed as predicted. But with organizations involving a few tens of employees, it is all about how resources and efforts are synchronized. There may be lack of knowledge of what is to be done next, on who owns which piece, how & when to escalate lack of clarity on authority and decision making. Additionally unlike bigger organizations, smaller companies will have to manage with inexperienced and understaffed scenarios.
So to make life easy for everyone, if processes associated with project management such as supply chain management processes, finance processes, clearly defined inter-department service levels and authorities, etc., are established well, that will help the organization deliver projects in time. Isn’t this what ‘Process Management’ is all about! Mathematically also it makes sense to focus on process management. For instance, consider the PERT model in which the PERT Time (Task duration) is a function of Optimistic Time (OT), Most Likely Time (MLT) and Pessimistic Time (PT). When OT and PT are wide apart, it means that it is not possible to predict the task duration accurately. In other words, the process on which the task is dependent has high variation. Such a process leads to higher PERT Time. When all the tasks of the project have widely spread OTs and PTs, the overall project duration itself will be high and unpredictable.
In order to have closely defined OTs and PTs, we should have confidence that our processes will consistently deliver on-time. In other words, our process should be statistically under control and stable. Again, it’s Process Management!
In a Continuous improvement journey, improvement projects are nothing but the lifeline. In this series of articles, we covered on the Need for Project Selection and the Criteria for project. Now we’ll answer the big question – Where can I get my projects from? Essentially various sources of the project!
All the above can serve as a good source for Continuous Improvement or Lean Six Sigma projects.
We talked about the need for Lean Six Sigma project selection in detail in the earlier articles, in this one we’ll cover the criteria for selection and the in the following article, we’ll move on to talk about the tools used for selection and how to engage the stakeholders in the process.
I have found that while leaders agree on the need for project selection, their views on the criteria is quite divergent. Most of them see this as a process to sway the process in favor of their priorities and interests.
There is nothing wrong in doing so, as long as the process is not biased.
Through this article, we draw consensus on the criteria and its relevance to the whole process.
The real good news is that the criteria for getting the project selection right are not too complicated.
What does project selection countdown look it? We’re going to start with the least of the top 5 criteria and find our way to the top most criteria.
Here you go:
Not all the projects will be successful in any company. Hence, while selecting the project, most project leaders consider the contingencies which might come up and use that as a yardstick to select the project. Sponsors want their project leaders to be successful equally as projects leaders’ desire success. Well, sounds like a good approach. But doesn’t this approach make it very orthodox? Unlike other implementation projects in technology, improvement projects are bound to have ups and downs; and it is quite natural that not all projects achieve their goals. That is what continuous improvement is all about.
Thus choosing to play it safe isn’t the best criteria to select projects, though unfortunately, it is very popular criteria in use. That is why Probability of Success is the last in our countdown list! One of the organizations flips these criteria to select the project which has failed in the past or have a low probability of success as Black Belt project. That is certainly a best practice to emulate.
Is data readily available for the project? If not, can it be easily gathered? While most project leaders and sponsors know that rarely will all the data needed for a project is waiting around to be analyzed. But they use the availability of data criteria to select projects because the unreasonable expenditure of time, resources and effort can be avoided. Yes, data is needed for analysis. But making it a criterion reduces the scope Continuous Improvement deployment.
Improvement projects are expected to venture into unchartered territories of the process and present root cause and opportunities. Getting people to measure something that is not being reported till now, in it is a feat. Having vanilla project can hardly be a criterion for project selection. That is why the availability of data comes second last in our countdown!
Any project implemented, is implemented with an intention to gain any kind of tangible or say monetary benefits. But along with monetary benefits, there are other benefits like customer satisfaction, increased efficiency, total company involvement; increases workspace and much more. While it is absolutely apt to select projects which have savings to the organization, it is misleading to make saving potential a primal purpose of projects. I have seen many times, project leaders come up with simple ideas or improvements with a huge saving potential to the organization, but virtually no complexity involved. Such projects hardly qualify for Black Belt projects.
They best serve as Just Do It project. Giving undue importance to saving potential in project selection also sends the wrong message across the organization. That is why I not really excited about having this as a top item in the countdown. That’s why Saving Potential is only Number 5 in our countdown.
There is always a perfect timing to initiate a project. Relevance is contextual. By apt timing, I mean both the time to commence, and the closure as per plan. An important project has to close on time. It has to be first of all, planned to close on time. It has to be scoped to close on time. That is why Apt Time is No.4 in our countdown.
I don’t know if this has to do with the culture. Most organizations, if not all, end up with a laundry list of projects because everything seems to be Business or Customer priority. Even the biggest and richest of the organizations have limited resources. Either resource is depleted, busy elsewhere or simply not committed to deliver. The best person is often leading many projects, making everything he/she does venerable to failure. Project selection is about de-selection and not selected. Ruthlessly put ideas into a parking list for which right resources are not available; and if it is so important that it has to be executed now, then pull the right resource into this project rather than sharing.
While I have largely kept this point around manpower, it equally applies to money & time. I say with conviction that organizations that ensure that the leader of the Lean Six Sigma project is a dedicated resource, either full time or handling only one project even if it means he is part time on it are surely successful. This is why Availability of Resource is No.3 on our countdown!
Ask yourself “will the results of the project bring any difference in the life of the customer? Will it improve the perception of the customers about the quality of your product or services?” Quite often this answer to this question is yes. Unfortunately, it’s motherhood in apple pie question. So insist on quantifying the impact.
If you can pin a number to the impact, then go ahead. And if you’re not able to do so, then there’s no point in wasting your time on the project. Consider Voice of the Customer in your organization as a starting point. Why don’t you start with complaints and alleviate customer pain? Thus Customer Impact is Number 2 in the countdown.
Selection of projects is based on the need or priority of the business. Project leaders need to understand that the tail can’t wag the dog. Often, people package their ideas into a project and fuel it as an organizational priority. Scanning of the external and internal environment will give first-hand insight on what is the organizational priority, NOW? Go for it. Well, that may put you out of your comfort zone, competency or expertise, but remember that’s what the organization needs.
Without a real need, do you think any leader would offer sponsorship to your project or will it at all help anyone – NO.? That is why Business Priority is Number 1 in our countdown.
Project Selection and implementation of Lean Six Sigma is easy and at the same time should be handled delicately by keeping all the above aspects in mind otherwise it might turn into a big disaster. An effective diagnostic study is required before selecting projects and with the undivided involvement of the top management are pre-requisites for project selection.
As a business analyst you are often expected to act as a bridge between a functional domain and the business stakeholders. Business analysts must be great verbal and written communicators, tactful diplomats, problem solvers, thinkers and analyzers. Though you have been extensive training in project management and related areas, using systematic business and management tools such as graphical analysis, data distribution & visualization, statistical discovery, etc are considered to be difficult by many Business Analysts.
Fortunately Lean Six Sigma, which is process improvement methodology provides many of the tools that can be handy for Business Analysts at one place. It comprises of statistical tools and techniques along with visualization tools. There are many tools such as Visual Analysis & Data Discovery tools like Fish-bone, 5 why, in scope-Out scope, Box plots and analytical tools like MSA, Descriptive Statistics, Variation, Correlation and Regression. They are explained in brief as under:
There are many tools which a business analyst will learn from Lean Six Sigma Green Belt Certification. We’ll talk about few Visual analysis tools from Lean Six Sigma in brief as under:
Here are few examples of data discovery analytical tools that a Business Analyst will learn from Six Sigma.
A business analyst having Green Belt Certification shall have a comprehensive understanding of Lean six sigma and shall be able to apply its tenets to their daily work. The principles of Six Sigma are so widely applicable that employees getting trained are highly valued and aggressively sought after. Lean Six Sigma Certification will be a stepping stone for professionals to a higher level as you avail expertise in different problem solving tools and techniques of Lean Six Sigma.
Six Sigma has evolved as a management discipline for improving processes, and providing customer delight. Some organizations like GE had adopted Six Sigma as their management philosophy.
So, Why Six Sigma? Why not follow other approaches like TQM, SCM, COPC, ISO, etc.
Let’s understand why many organizations choose Six Sigma over other approaches; and how they benefited.
There are 3 key salient features of Six Sigma that are noteworthy:
While the emphasis on building business processes to meet customer requirements was first proposed by Joseph Juran & Edward Deming (fathers of modern Quality movement); it was taken seriously only with the advent of Six Sigma. Gathering the Voice of Customer and translating these requirements into product features, aka Quality Function Deployment (QFD), were loosely used in TQM. Whereas, in Six Sigma Voice of Customers (VOC) is the starting point.
Operational measures and performance measures (KPIs) are built based on VOC. These measures are called as CTQ (Critical To Quality). Customers’ needs constantly change. Such changing needs mean that processes also need to adapt and evolve. Six Sigma enables achieving this adaptation. While creating a new product or service line; the entire system is built to meet customer requirements. Such an approach is called as Design for Six Sigma (DFSS).
Six Sigma builds strong process orientation within the organization. In Six Sigma, virtually every department, activity, or task is perceived as a process in itself or process step. What does that mean? It means a lot!
Every process produces few outputs, and in turn; requires few inputs. Outputs are consumed by Customers (internal or external); and inputs are provided by Suppliers. Such visualization is called as SIPOC in Six Sigma. This helps organizations to move away from the mind-set of fixing people when things don’t work; to fixing processes. In order to improve the outputs of any process or department, its process steps and inputs needs to be improved, and sometimes suppliers need to be educated. People are never penalized in Six Sigma!
Traditionally many industries & functions are regarded as ‘people’ driven. For instance, industries such as Hospitality, Entertainment & most service lines and functions such as HR, Marketing, Sales, Admin. Six Sigma organizations treat these as just another process. As a result, the dependency on individuals is also reduced. Organizational silos are challenged and processes are simplified.
Driving strong process orientation across the organization has resulted in unbelievable tangible and intangible benefits to customers and organizations. GE is a pioneer in driving process orientation in its Financial Service businesses.
Once organizations establish process orientation; access to data and factual information will increase. This presents the next big opportunity for organizations. Across levels, organizations are dependent on their managers to take right decisions. Most often, these decisions are punctuated by decision maker’s bias and personal intuition. Wrong decisions are costly and usually borne by the organization.
Six Sigma’s bouquet of tools enables data or fact based decision making. This means the overall management is much more efficient and accurate. DMAIC, an acronym for Define, Measure, Analyze, Improve and Control, is a method used for solving problems. There are over 50 qualitative and quantitative tools which are part of DMAIC. These tools can be applied in several stand-alone situations too. These tools enable data or fact based decision making.
At a personal level, an individual practicing Six Sigma over a period time is more efficient and effective than her peers. This has direct impact on career and growth prospects.
Thus Six Sigma is a powerful approach which is not only beneficial to organizations; but also to individuals.
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