iSixSigma

Week of a Black Belt Part 9: Challenges of Project Selection

Why are we struggling with selecting the “right” Six Sigma Black Belt projects? The “right” projects are the projects that are delivered on time, within the budget and generating or exceeding projected savings in a sustained manner. The “wrong” projects are by default all other.

Now think about your own organization. What’s the proportion of “right” and “wrong” projects in your Six Sigma project population? You may just have found a new project idea: “Decrease the number of wrong projects for my organization.”

It could be a nice to start a Six Sigma project out of this idea, but would it be a “right” Six Sigma Black Belt project candidate?

Let’s process this idea through a project selection filter, a series of 10 relatively simple questions that need to be answered before any more time and resources are spend . Forcing you to carefully think over the idea, a rule of thump is not to spend more then 2 man-hours on this exercise. A positive answer scores you +1 point, a negative answers scores -1 point, a neutral answer scores 0 points.

1. Does the idea fit to the company big Y?

What is the company’s big Y? What is your CEO’s and management team strategic agenda? Refer to internal communications, the company’s website, annual reports … or just ask them!

“Decrease the number of wrong projects for my organization” fits the big Y when you find statements similar to “improving business process using improvement methodologies like Lean or Six Sigma (or equivalent)” in any of the mentioned sources.

Score: +1

2. Is there direct Impact to the external Customer?

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The Customer (with capital C) is the one that your organization exists for. Customers are buying your product and thus paying your salary and annual bonuses! It may be difficult to estimate any direct impact “Decrease the number of wrong projects for my organization”, however you may expect by achieving this project the customer will indirectly benefit from this project. This is a neutral answer.

Score: 0

3. Is there impact to the internal customers?

Probably the same answer as for question n°2, although you may expect a higher impact on internal customers. If more projects succeed, processes will be more robust and with less waste, allowing your internal customer to work differently and become more effective.

Score: +1

4. Is data available or can it be gathered in a reasonable time?

Probably, there is some kind of project tracking system, which should be a fairly reliable source of data for our project idea.

Score: +1

5. What is the cost of poor quality?

If not identified score: -1.

What can you consider as cost of poor quality for our idea? What are the consequences of “wrong” projects?

Consider this memory jogger to reduce the risk of forgetting important cost drivers:

COPAFILT

Commercial: internal & external customers, marketing, external communication …

Organization: structure, decision authority, internal communication …

Personal: number of employees, education, motivation, remuneration …

Administrative organization: processes, tasks, activities, support logistics …

Finances: budget, investment cost, financial costs …

Information: information systems, communication, data management, documents, reporting …

Legal: legal aspects, contracts …

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Technology: computers, hardware, network, facilities, means of communication …

Consequences of “wrong” projects: decreasing motivation of the improvement teams (people may start to update their resumes and leave the organization: quantify the cost of replacement and training of newcomers), missed commercial opportunities (quantify missed revenue), failed cost reduction efforts (quantify missed savings) …

Score: +1

6. What are the potential cost savings?

Estimate the % the cost of poor quality will be reduced in achieving this project idea. What is the resulting estimated cost saving? What is the minimum potential savings your black belt projects should generate? Usually, depending on organizational decisions, it’s in the magnitude of 150.000 Euro/year.

Score: +1 if above the minimum required saving, -1 if below.

7. What are other consequences of doing this project?

Other improvements and benefits if this idea is achieved, but you can not attribute any cash flow improvement to them. Be reasonable, don’t start to make up.

Score: +1 if identified. 0 if not identified.

8. Is there an identified project sponsor?

Is the owner of the process the idea will impact identified? If no score: -1 and following questions not applicable. If yes, score: 0 and refer to following questions

Is he/she supporting the idea? Yes: +0.33. No:-0.33.

Is he/she willing to allocate resources? Yes: +0.33. No:-0.33.

Is he/she willing to invest personal time to review project progress? Yes: +0.33. No:-0.33.

9. Should we start Six Sigma Black Belt project, are team resources confirmed and sufficiently available?

Yes: +1

No: -1

10. Should we start Six Sigma Black Belt project, is there a project governance process available?

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How is project progress tracked? Is there a dedicated project progress meeting? Do you plan to have a regular meeting with your project champion and/or project sponsor? Are tollgate meetings planned with the team and your MBB at the end of each DMAIC phase?

If you recognize any of these elements: score +1. If you don’t: score -1

Now sum the individual scores to a total score, between -10 and +10. Total score > 7: this idea has high potential to become a “right” project! Total Score 0 => 6: be careful, risks for Six Sigma project failure, resulting in a potential “wrong” project! Total Score < 3: drop the idea and continue with more valuable work! If the minimum savings requirement (6.) for a black belt project is not met, but the total score for example still 6 or 7, consider if this could be a green belt project.

Are you interested in successfully closing more “right” black belt projects? Then start at the beginning assessing project ideas with the suggested project filter. It’s not an absolute guarantee for success, but will significantly increase your success chances. It’s about setting your Six Sigma project teams up for success by providing them with good and carefully thought over Six Sigma project ideas.

Comments 1

  1. Richard Thomas

    Project selection is vital for the sustainability of the Six Sigma & Lean culture change. A lot of initiatives fail because the senior management fail to see the intrinsic benefits with relation to the investment of resources.
    The key to overcome this is to understand your customer requirements -VOC.
    The next is to understand your processes, through value stream mapping and concentrating your improvement activity around achieving your customer requirement in the most efficient way.
    It’s only at this stage that you can confidently select the Six Sigma / Lean project to effectively improve your business.
    There is always too much emphasis on cost saving at the initial stages.
    This ethos should be replaced by “How can we achieve the best product flow to meet our customer requirement?”.
    Only then will the projects become glaringly obvious and you’ll have no problems or worries with selection and the true savings will be achieved!!!

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