Careful project selection is critical to the success of a Six Sigma initiative. The best selected projects are the ones with the greatest business impact, the least effort required and the highest probability of success. Good problem statements and objectives clearly communicate the scope, significance, and goals of a project. Primary and secondary metrics will be used to measure the success of a project. In many cases, there will be multiple projects from which to select, especially when a company’s Six Sigma deployment gains momentum. Using a defined method of prioritizing and selecting the best projects ensures measurable business impact, alignment to organizational goals and optimal use of team leader resources.
Six Sigma projects typically:
- Focus on reducing variation or eliminating waste, e.g., defects, resources, time.
- Target long-standing problems or a serious process limitation.
- Have causes that are complex and solutions that are not always clear, and usually are in need of process analysis.
- Require significant resource commitment.
- Deliver a meaningful payback for little or no capital.
For software, projects surrounding peer reviews and various phases of testing are often among the first projects chosen for Six Sigma initiatives. This is due to the critical impact of these process areas as well as the availability of data.
Project Selection Process Overview
There are six phases involved in a good Six Sigma project selection process:
- Defining the process
- Identifying potential projects
- Selecting potential projects
- Initiating projects
- Chartering projects
- Managing projects
Defining the Process
In order to see the process at different levels, selected tools help kick off the selection activities. Process maps, a SIPOC (suppliers, inputs, process, output, customers) diagram, value stream analysis, spaghetti diagrams and a failure mode and effects analysis can provide insight regarding process issues. Especially useful is the value stream analysis, which focuses on the value-added and non-value-added steps of the process. Most startling for those people new to this tool is the isolation of “wait” or dead time related to the process. In many cases, this factor is more problematic than actual non-value-added steps in a process. Software practitioners rarely consider dead time in their process planning, so there can be quick gains from focusing on this area.
Identifying Potential Projects
Two main approaches are employed in identifying potential projects – top-down and bottom-up. Top-down focuses on driving the project selection based on corporate or other high level business goals and initiatives. For example, a software development client recently imposed the rule that “…all Six Sigma projects must have a focus on defect improvement…” in order to be approved and resourced. More typically, there are four to seven focus areas to provide guidance in project selection, e.g., defect reduction, cost reduction or productivity improvement.
The bottom-up approach is driven by project/departmental issues or “firefighting.” In a software product organization, many customer complaints arose following product release. Management complained, “How did we miss these defects in system testing?” A Six Sigma project to investigate the problem was quickly commissioned.
Opportunity Statement – The opportunity statement communicates the need for the project in terms of meeting business objectives and should be co-authored by the Champion of the project. The components of a good opportunity statement are:
- Output unit (product/service) for external customer.
- Primary business measure of output unit for project (the critical Y).
- Baseline performance of the primary business measure.
- Gap in baseline performance of primary business measure from business objective.
For each area defined, an opportunity statement would be generated. An example using the software testing scenario noted above could be:
It is important that we reduce defects escaping system testing from 2 per KLOC to 1 per KLOC with a stretch goal of 0.5 per KLOC if the customer goals are to be achieved.
The best approach would be to combine the top-down and bottom-up approaches to select potential Six Sigma projects.
Selecting Potential Projects
Often the first pass at “projects” actually produces project clusters rather than individual projects. When this occurs, steps must be taken to separate these clusters into individual, workable projects. Once this is complete, projects can be prioritized using a scoring matrix in Figure 1. The matrix focuses on 1) business impact and alignment with business goals, 2) investment required and 3) probability of success versus risks.
The matrix can then be sorted in descending order by total. A cut line would then be chosen for the projects scored.
After the ranking and prioritization, a solid goal statement should be generated. The goal statement includes both primary and secondary measures. A primary metric is the Y for the process. Secondary metrics are selected to assure that the project does not pursue the primary metric at the expense of all other measures. Here is a goal statement template:
To [increase/decrease] primary metric [where?] [from existing level] to [target] by [when?]
And here is an example of a goal statement using the template as a guide:
Reduce development cycle time in the Concorde code base from 4 months to 2 months while reducing development/support costs by 20 percent. Define and pilot key improvements within 4 months.
Once projects have been selected, a charter would be completed. It must include (at a minimum) the goal statement, team roles and responsibilities, and project milestones. In addition, the problem statement, opportunity statement, scope and the business case are normally included (Table 1). A more detailed task level project plan also would be created from the milestones.
|Table 1: Template for a Team Charter|
As with any project, Six Sigma projects must be planned, tracked and managed to be successful, as illustrated in Figure 2.
Proper project selection is key to the success of a Six Sigma initiative. Using a defined method of prioritizing and selecting the best projects ensures measurable business impact, alignment to organizational goals and optimal application of resources.