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.
Fig: A sample prioritization matrix
To create a prioritization matrix for determining key areas where Six Sigma projects need be implemented first:
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.
Six Sigma project metrics can be categorized into primary metrics and secondary metrics.
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:
Some of the primary metrics of a Six Sigma project include customer satisfaction, on-time delivery of products, final product quality, and less costly products.
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.
The House of Quality (HOQ) is a diagram used by a product development team during the initial stage of the QFD process. (more…)
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.
The Six Sigma is an 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!
Customers Interactions: “Customers” are the biggest source for improvement projects. Classically, negative customer sentiments are good places to start. Your customers are unhappy, so it’s time to fix the issue. Mixed or ambiguous sentiments are also relevant places to start.
·Customer Complaints:If your organization has a list of customer complaints, then that is an apt place to commence. Complaints are not only sore for your customers, but for you too. Such complaints may cover a vast product or service attributes such as product or service quality, delivery time, responsiveness, people issues, pricing or areas of monetary impact including warranty claims,process & policy issues.
· Repeat Complaints: You can go one step further and target repeat complaints instead. Repetitive complaints from the same customer with the same tagging indicates high priority area for improvement.
·Enquiries & Requests: Few organizations target the need of customers to call or contact the organization and, reduce them. It might not be a complaint, instead just an enquiry or request. In other words, interactions with the organization that can be avoided. Looking at enquiries and requests serve as a proactive means to identify future problem areas.
·VoC Program output: If your organization conducts structured VoC surveys, then the outputs of such mechanism can be a good source of Continuous Improvement or Lean Six Sigma projects
·Customer Experience (CX) Dipstick: Customer Experience is usually hidden and not so obvious as customer feedback. Structured and unstructured mechanisms can be deployed to understand the customer experience. For example, many organizations now use mystery shopping to unearth issues in customer experience. Observation or Listening posts are also a good way to identify how customer experience can be improved.
First Time Right (FTR): If you closely have a look at your company’s process, you will find that there are many internal defects (work-in-progress) occurring, such as rework, repairs & in-process rejections. Such defects are silent killers because they drain organization’s efficiency and effectiveness silently. If your organization is measuring FTR, then its improvement can be an ideal project. More evolved organizations use RTY (Rolled Throughput Yield) as a metric which is also a good place to demonstrate Continuous Improvement.
However, most organizations have a simpler measure of success for quality – Defect Rate (% Defective). While there’s nothing wrong with this metric, is a bit holistic and hence factors leading to inefficiencies escape unnoticed with this metric. Nonetheless, it is good starting point for Continuous Improvement projects.
Reliability Data/Warranty data: Field failures are sometimes grave. It can cost you a lot and, the overall cost of ownership for customers might increase esp if the warranty is denied or the product is under breakdown. In broader terms, the principle of warranty is to institute accountability in the event of an untimely failure of an item or the inability of the item to perform its intended function. Experts consider reliability data analysis as a quality measure over time. This reliability analysis is done to analyze whether your product will survive for the time defined by the company in the normal conditions. Improving the reliability of a product can work both ways – organizations can lower its operational cost and provide longer warranty and customers would experience break down less often.
Process Performance Data: If your organization has a well-defined and structured reporting mechanism for process performance metrics, such as a dashboard or scorecard, then it would be a very good source to identify opportunities for continuous improvement projects. As leadership teams are consumers of such reports, such opportunities can easily gain sponsorship as well.
Competitive Benchmarking: Benchmarking is a continuous process of comparing your firm’s or company’s practice to those of the competitors or say most successful competitors. In certain cases, you might not be doing well. For example, having control over the delivery time to the customers. Then this can be taken as a project for improvement in our company. So, to generalize, competitive benchmarking results can also be a good source for Continuous Improvement projects.
Business Plans/Strategies: Gap between strategic plan and reality can be the cause of concern for leadership. Sometimes such problems may be because of supporting processes. They can hinder new business plans or strategies. Such process improvement opportunities are also a good source for projects, provided they are scoped well with well-defined objectives & goals.
Employee Feedback: While customers don’t see your process but only experience its outcomes, employees have an end to end visibility. They experience problems as customers and can associate inward aspects of such poor experience. Many organizations, pilot their products with employees, because employees are pseudo customers. If you can establish a structured process through which employees are encouraged to share their experience and enable them to take up such opportunities as Continuous Improvement or Lean Six Sigma projects, there’s nothing like it.
All the above can serve as a good source for Continuous Improvement or Lean Six Sigma projects.
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.