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Auditing Six Sigma Projects

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  • #33219

    Kursty
    Participant

    I am currently looking at how to verify the reported savings/benefits from Six Sigma projects.  I am looking at implementing an audit process and would like to hear from anyone who has already done this, in particular how to ensure the benefits are reflected in the bottom line, and what procedure you used.

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    #89764

    Matt M
    Participant

    We audit the GB/BB project 3, 6 & 12 months after the project end date to ensure the changes made and controls are still in effect.  If they are not a Corrective Action is submitted to the process owner to explain their reasons.  We also use the BB (GB when savings are identified) primary metric to financially audit the project monthly to verify what the actual savings are compared to the estimated goal.
    Good luck, its not as easy as it sounds when you have numerous projects.

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    #89790

    Kursty
    Participant

    Thanks Matt!  You are definately right about it not being easy – I’m having the issue of actually verifing the $ savings – our projects are hitting the primary metric targets but it is hard to see where the savings are in our bottom line! 

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    #89839

    Ashman
    Member

    Kursty, you are absolutely right about needing to ensure that the benefits are reflected in the bottom-line. However, an often overlooked issue in many evaluation studies is the process by which the effects of an intervention are isoloated.  Because many factors will influence performance data, specific strategies are explored that determine the amount of output perofmance directly related to the program.  It will pinpoint the amount of improvement directly related to the program or project. The result is increased accuracy and crddibility of the ROI calculation.  Your next step would than be to convert the data into monetary values, if they are not already there.  Please contact me at [email protected] if you are interested in more specifics.
    Steve

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    #162166

    Dixon
    Participant

    We are currently looking at two issues, quantifying results ($) and auditing these stated results.
    About auditing, the control step should have the documented changes made in the process (standard operating procedures) which would audit the process and then the project metric and initial ROI calculations would give an indicator on how to establish the savings. This is more project specific and the actual calculations may get complicated if the understanding of where to get which information is not clear. At this step, the black belt would be of help and if a template is generated for future use then the task is simplified. I have a sample template for Fuel efficiency, Energy efficiency and a number of other six sigma projects.

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