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Tracking Actual Savings

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  • #53860

    Toros
    Participant

    We are in the process of implementing Six Sigma in my organization and we have completed the first two pilot projects. I work at a large organization and we will soon have lots of initiatives to kick off.

    As the financial guy, I was asked to keep track of hard and soft savings we will realized through the projects. I believe calculating these savings is the easy part but collecting consistent and verifiable data from the teams seems like the challenge.

    I did google search but I have not been able to find any resources regarding this issue. I would appreciate all tips, guidelines or resources that you can point me to.

    Best Regards,

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    #191664

    Strayer
    Participant

    When some of the big early adopters of SS claimed millions or billions in savings their numbers were called into question. Critics in the financial press argued that it couldn’t be seen in their financial statements and questioned why they were not leaders in their industries if these savings were real. Some of us required finance to verify the savings before an SS project could be declared successful and the project leader could earn certification as a green belt of black belt. Even then, the numbers were sometimes called into question.

    All I can say is that, as a finance guy, it’s your job to obtain the before and after numbers. You can’t depend on the project leader or champion. What’s really needed is to measure the baseline at the start of the project. To do that, you need to be told about the project when it begins, not just asked to review and sign off later. And you must demand identification of the baselines that the project hopes to improve. This should be in the project charter. You should be able to review and approve the charter and you should help the project leader to determine the baseline if necessary. I’ve seen far too many charters that define metrics to measure success but lack baselines.

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    #191668

    Toros
    Participant

    I had no idea whether I should have been one of the project charter approvers so your comment surely helped me understand how to involve myself with the upcoming projects.

    I can design my own form templates to collect the post-project results (actual savings) but I was also wondering if you are aware of a six sigma template that can do the work. That way, I can also avoid some resistance by saying “look, this is a six sigma template”. I searched the Internet but could not find anything.

    Thank you so much for your time and wisdom Straydog.

    Regards,

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