Bb Wk1 170 Project ID Select

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Copyright © 2001-2005Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license.

Project

Identification, Selection, Scoping,

And Definition




Project Identificat ion, Selection, And Scoping Pg 1

The Breakthrough Strategy® – Project Scoping And Definition

1. Select Output Characteristic

2. Define Performance Standards

3. Validate Measurement System

4. Establish Baseline Process Capability

5. Define Performance Objectives

6. Identify Variation Sources

7. Screen Potential Causes

8. Discover Variable Relationships

9. Establish Operating Tolerances –

Implement Improvements

10.Validate Measurement System

11.Determine Final Process Capability

12.Implement Process Controls





Module Objectives

By the end of this module, the participant will be able to:

• Explain how projects are identified, selected, scoped, and defined

• Use Performance to Plan method or Bubble up Organic ideas toidentify projects

• Prioritize project opportunities

• Create a SIPOC

• Prepare a concise project definition including problem statement,objectives, and linkage to top-level goals





Why Project Identification – Definition Is So Critical

• Management should only apply resources to

activities that support the business objectives

• Management should only spend time onactivities that support the business objectives

• Poor project selection/definition is the #1

reason for poor Six Sigma results• Project success is the true validation of your

Six Sigma endeavor

Maintaining a project pipeline is theengine for Six Sigma success!





Project Road Map

• Identify opportunities in organization

to select projects from.

• Select projects based onprioritization criteria.

• Scope project to ensure successfuland timely results.

• Define project for measurableobjectives and responsibilities.

Project Identification

Project Selection

Project Scoping

Project Definition

RecognizeOpportunities

ImplementBTS







Project Selection

Project Scoping

Project Definition


ImplementBTS





Project Identification Continuum

• Discrete projects are identified and chosen by Black Belts

• Management brainstorms and identifies projects

• Projects are selected from a brainstormed list and mappedback to the strategic goals of the firm

• Strategic goals are determined and projects Flow Down fromthese goals based on available data

• Strategic goals are determined and a statistical relationshipis used to describe how the strategic goal is improved bycompleting the project

Least

Desirable

Most

Desirable




Assessment Overview Pg 8

Diagnosis – 5 Assessment Pathways

• Balanced Scorecard/Strategic Goal Flow Down

- Purpose: Get senior executive involvement to ensure a plan isfollowed to meet strategic objectives

• Operational Assessment

- Purpose: Assess the value stream for opportunities

• Financial Analysis- Look at financial indicators for project opportunities

• Performance to Plan

- Identify weaknesses in forecasting and execution of budgetsand schedules

• Organic Project Pathway- Capture people‟s project ideas at all levels of the organization

Focus of this module

Focus of the„Utilizing 6-Sigma to

Deliver the Business

Plan‟ module





Project Identification Approaches

Project Identificationa. Performance-to-Plan

b. Organic bubble up ideas

Based on the Project Selection Continuum, choice “a” by itself is themore desirable method because there is direct line of sight to a

performance metric.

Either way, these projects must still support the Business Plan!

a. A project may be identified based on the organizational goals; as theactual performance is measured against the plan, or

b. It may not be strategic in nature, but is a good idea and will save moneyor improve customer/employee satisfaction.



Copyright © 2001-2005

Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license.


Using Graphs To IdentifyProject Opportunities

• See the following 3 pages

• Data was plotted on a run from pages out of the monthly operationsreview. The review had a back up slide showing causes.

• Make sure you capture the persons name who identified the opportunityso you can refer to them when questions arise

• The project was entered in the “project portfolio spreadsheet”

• A Project Charter was written to improve the process

- The following pages were printed and stapled to the charter for reference






With the current underlying processes, the company can expect to runapproximately 10% and 25% off schedule. The likelihood of being on time is low.

Data Source; include data source for future reference.

Example Of A Project OpportunityIdentified Using Run Charts

The Run Chart

indicates the

performance is not

acceptable to the

customer

Written by John Doe

Note:

Person who created

the charter 0

5

10

15

20

25

30

1 2 3 4 5 6 7 8 9 10 11 12

The goal is < 5%

Month

%






Several reasons for „Off Schedule‟. Need to work top 9 areas to reduce

„Off Schedule‟ to acceptable level.

Data source: 03 Scheduling Compliance Report.xls

Example(Cont‟d)







Several areas responsible for „Off Schedule‟. Need to work all 11 areas to

reduce „Off Schedule‟ to acceptable level.

Percentage of Batches Completed for 2003

8 7 . 5

%

7 7 . 0

%

9 0 . 4

%

8 8 . 8

%

8 5 . 7

%

7 6 . 9

%

8 7 . 6

%

8 3 . 6

%

8 2 . 6

% 8 9 . 2

%

8 8 . 2

%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

Q C R a w

M a t e r i a l

( 6 7 3

)

C e n t r

a l W

e i g h ( 2

0 2 9 )

G r a n

u l a t i o n ( 1

1 4 4 )

B l e n

d i n g ( 1

1 3 1 )

C o m p

r e s s i o n ( 1

2 5 4 )

E n c a

p s u l a

t i o n ( 1 3 4 )

C o a t i n g

( 3 1 4 )

M R F -

F l u i

d B e d ( 5 9

0 )

M R F - E n

c a p s

u l a t e ( 3 2 8 )

P a c k a g i n g

( 9 0 9 )

F G R e l e

a s e ( 1

2 1 0 )

Example(Cont‟d)







Historical Data Pitfalls

• History does not always repeat itself so be aware that some of the ideas

you find may not yield a project

• Be sensitive to the Process Owners. We may be pointing outmanagement issues, e.g., failure to meet budget or perform to a givenschedule. Choose your words carefully!

• Data integrity issues- There is not enough time to do an analysis of the measurement system

(MSA) used to collect the data. You may think you hit a big processproblem when, in fact, their process is good and their data is bad.




Project Selection






Project Road Map


Project Selection

Project Scoping

Project Definition


ImplementBTS






Project Candidate 1

Project Candidate 2

Project Candidate 3Project Candidate 5

. . . etc.

PROJECT FUNNEL

Project Ranking

Identified projectsare added to theProject Funnel

Prioritized Projects






Black Belt Training Projects

• 70% reduction in defects is a typical goal

• Projects, especially first projects, should:

- Have high priority

- Include opportunities to learn and apply the appropriate tools

- Have a high probability of success, but solution is unknown- Have commitment of resources

- Focus on processes with frequent units and defects

- Have a measurement system in place

- Be executable in 4-6 months

- Be tightly focused with a precise defect definition






A Project Selection Tool

7 5 4 8 9 3 6

R e v e n u e

G r o w t h

E a s e o f

c o m p l e t i o n

C u s t o m e r

s a t i s f a c t i o n

S a v i n g s

C y c l e t i m e

C a s h f l o w

Core

Process

Sub

Process Project Title

1 A 1 Bridgeport Efficiency 3 8 8 3 8 10 2 231

2 A 2 Spur Gear Defects 4 4 4 10 10 2 2 252

3 B 1 Chemical Waste Costs 1 1 1 1 9 1 9 162

4 B 2 Plating Adhesion 2 1 1 8 4 5 2 150

5 C 1 Lost Sales Bids 10 10 2 4 6 1 8 265

Rating of Importance to Project Desirability

Overall

Project

ValueRatings

Project Selection

Factors

Pro ect Selection Matrix - Desirabilit

• A Rating Matrix may be used to select individual projects

• Select the Factors that are of importance to your organization and rate howimportant they are in defining the desirability of a project. These desirabilityratings may be modified as times and conditions require.

• The individual projects are then rated against the Factors, these values aremultiplied by the desirability ratings and then summed for each project






P r

o j e c t S e l e c t i o

n C h e c k l i s t

Project Selection

11. Is data collection relatively easy?

8. Can starting and end points for the process be defined?

2. Is there a pre-determined solution to the project goals?

3. Does this project conflict with other projects?

4. Does this project have a high probability of success?

5. Is project linked/aligned to goals of the business?

6. Does the cost reduction opportunity meet the goals of the business?

14. Can you define the defects in the process?

13. Are resources available and supportive for this project?

12. Is there a “good” measurement system in place?

10. Are metrics available or could they be developed quickly at low cost?

9. Does the Champion have functional control of the impacted process?

7. Has the project been properly scoped?

1. Has the project been done already (or in progress)?

NoYesProject Selection Criteria






Another Method Of Project Selection

Increasing Value from Project Selection Matrix (No EOC)

I n c r e a s i n g E a s e





Project Scoping






Project Road Map


Project Selection

Project Scoping

Project Definition


ImplementBTS






Project Scoping

• At the end of the project selection process we frequently have a Project

“Cluster” or “Area” as apposed to a precisely scoped project

• In these cases, Project Scoping is the process that takes us from thegeneric to the specific

• Project Scoping minimizes the risks associated with improperly

scoped projects

Project Scoping is an intermediate step between theselection of a general project and the formal

“definition” of the project to be physically worked.






Project Scoping

• The scope of a project refers to boundaries of the process and/or

the problem

• It is primarily the Project Sponsor‟s responsibility to define the initial scope

but the Black Belt and the Process Owner may be involved due to their closer involvement with the actual processes

Guidelines:• Brainstorm the start and end points of the process

- What will and will not be addressed?

• Evaluate potential issues vs. sphere of influence

- Are the boundaries within your control (organizationally)?

• Avoid scope creep

C C S S






A Critical Component To Success – Scope

• If we have too large a scope (boi l the ocean o r end world hung er) we

wi l l fai l to accom pl ish the pro ject on t ime

• If we have too small a sco pe the Return On Investm ent (ROI) may no t

jus t ify the pro jec t

• Examples of poor scoping:

- Reduce total Work In Progress (WIP) inventory (what if sales volume

goes up?)

- Increase overall efficiency of General Merchandise Warehouse Flow(Labor or design issue or invoicing issue or Cycle Time or defects or…)

• Better scope:

- Reduce excess WIP inventory on list of high volume/high cost product asdetermined by weekly deltas between actual inventory and plannedinventory, e.g., adjusted for volume, time of year

- Reduce fulfillment rework of General Merchandise due to defects onthe invoices

S i Th P j






Scoping The Project

Having quantified or estimated the baseline performance and compared it

against our goals/needs (a gap analysis):• Which gaps/issues should be addressed first?

• Should the project consist of resolving all of the gaps?

- If we have 5 characteristics in a process, is the project focused

on the one with the most defects, or the most costly defects, or ALLof them?

• Can/should the project be phased into 2 or more projects?

- For the same Black Belt?

- Should additional Black Belt resources be assigned?

• If the project can logically be broken into several complete integralstand-alone projects, the scope is probably too large

Note that Selecting and Scoping are closely related.Consider Scoping to be the fine tuning of the selection process.

S i P j t G l






Scoping Projects – General

• These slides provide guidelines for scoping projects

• Much of your knowledge will develop as you obtain and analyze the data – This is critical

• SIPOC will be introduced

• Let‟s get started . . .





SIPOCA High-level Process Mapping Tool

A Pi t I W th 1 000 W d






A Picture Is Worth 1,000 Words

• Once we have selected our general project, it is highly recommended

that we create a Process Map to assist in our scoping and later our definition of the final project

- There are many types of charts, some of which are taught inother modules

- We will introduce 1 chart here, the SIPOC

- It is meant to be a high-level Process Map

- It clearly defines the customer (needed for definition)

- It helps identify the gaps between the process outputs and thecustomer requirements (scoping and focusing the project)

- It breaks the process down into macro steps which assists in scopingand focusing the project

• The SIPOC is useful throughout the early phases of the project, e.g., itidentifies suppliers of the process inputs

L l Of A P






Levels Of A Process

Core

FunctionalDepartments

Sub-process

DetailedSub-process

BusinessProcess

(“Strategic”)

BusinessProcesses

High-level

Process Map

(SIPOC)

DetailedSub-process Map

BusinessDevelopment

Sales Underwriting ContractingCustomer

Service

Terms Docs Negotiate Close

Underwriters(external)Customers(internal)Customer Service Dept.

Customer

Tasks Procedures

Supplier

B i St t Of SIPOC






Basic Structure Of SIPOC

S I P O C

Requirements Requirements

Suppliers Inputs Outputs CustomersInput Boundary Output Boundary

Process

High-level Process Map also known as SIPOC.

Projectcomes from

VOC

Eliminating Gap betweenOutput quality and Customer

Requirements is focus of project

SIPOC F G id E l V i






Suppliers Inputs Process Outputs Customers(Providers of the requiredresources)

(Resourcesrequired bythe process)

(Top-level description of activity)

(Deliverablesfrom theprocess)

(Anyone who receives adeliverable from the

process)

Requirements Requirements7

Who is the

supplier of eachinput?

6What

Inputs arerequired toenable thisprocess to

occur?

8

Whatdoes theprocessexpect

from eachinput?

1What is

the

process?

3

What arethe

outputsfrom theprocess?

5

Whatdoes eachcustomer

expectfrom eachoutput?

4Who is thecustomer of each

output?

2When does

the Processstart?

Boundary

Boundary

S I P O C

SIPOC Form Guide – Excel Version

File: 140_SIPOC.xls

2When doesthe Process

end?

SIPOC E ample Widget Man fact ring






SIPOC Example – Widget Manufacturing

Widget, Model A – Manufacturing Process

1. Load part # 23 “blank with pre-machinedchamfer” into fixture AA

2. Insert 3/8” drill bit into chuck 3. Drill 3/8” through hole 4. Remove and Inspect for Hole Location,

Diameter and Surface Finish5. Deburr and stack part

0.5”

2.5”

0.5”

0.5”

1.0”

1.5” 0.9”

MoveableJaw

Solid Jaw

PositiveStop

Fixture AA Drill attached

to solid jawPart #23

.375” dia

SIPOC Example Widget






SIPOC Example – Widget

Suppliers Inputs Outputs(Providers of

the required

resources)

(Resources

required by

the process)

(Deliverables

from the

process)


3/8 Diameter 3/8" +/-.005 Buyer

118 deg point angle

Sharp

Gashed Deburred

Tool Crib Fixture Fixture AA RMS<64 Buyer

1 HP Stacked Next Operator

Fixture cleaned Tool Room

Fixture put away Tool Room

Adjust Coolant

etc. etc. etc.

Operator Load Part Correct Orientation

etc. etc. etc.

Supervisor

Teardown

Parts

Hole Assembly

Operator

Production

Control

Supervisor Operator

Location per

Blueprint

Paperwork

complete

Chips brought toRecycle

Machine

cleaned

DrillTool Crib

Vice to hold Fixture

AA

Drill Area Drill press

Start with

Operator

receiving a

production

order for

Widgets

Process is to

set up, run,

clean,

inspect,and

stack parts

Ends with

Stacked parts

ready for

Material

Handler & set-

up dismantled

Adjust RPM and

feed rate

Run & check proof

part

Install & align

Fixture AA

Setup

Process Customers

(Top level description of the

activity)

(Anyone who receives a

deliverable from the process)

SIPOC Example: Airline Reservation






SIPOC Example: Airline Reservation

Suppliers(Providers of the

required resources)

Inputs

(Resources requiredby the process)

Process

(Top level description of activity)

Outputs

(Deliverables fromthe process)

Customers

(Anyone who receives a deliverable fromthe process)


Client Request for Travel Dates ServiceProfessional and

Courteous

Business/CorporateTraveler

Company

Company Travel

Authorization

Travel Approval

Code

Customer

Request For Travel

Time to Process

Less Than 10

Minutes

Business/

CorporateTraveler

Traveler AvailabilityInitiates

ReservationCost

Low to ModerateCost

Biggest Client

Company Travel Agency

Request For Reservation

Company Profile,Traveler Profile, Author. Code

Booking aBusiness Airline

ReservationCarrying Cost

Low to ModerateCost

Company

Traveler Travel InformationDeparture and Arrival Cities,Date, Times

Travel ItineraryMail/email, carrier,times, dates, seat,special requests


Traveler Payment MethodCurrent Credit

Card w/availablecredit limit

Airline Reservat ion Ticket or E-ticket Zero Defects


Traveler Address; mailand/or email

Correct Revenue Profit MarginTravel Agent and

Carrier

BillingsElectronic

CommunicationDaily

Company AcctRec, Credit Card

Company

Occurs before process starts After process ends





Project Definition

Project Road Map






Project Road Map


Project Selection

Project Scoping

Project Definition


ImplementBTS

Background Information






Background Information

• Why work on this project?

- Resolves a difficult business problem for the last time

- This business problem has clear linkage to the goals of the business

This is the link between Project Selection and Project Definition:We need to know for whom we are doing the project, why we

are doing the project, i.e., what is important.Then we may proceed to define the project in detail.

Project Definition 1 View




Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 40

Problem Statement

• Clear and concise description of the problem

• Quantified with a metric thatincludes units

Metric

• Units of measure, significant digitsCTSs

• Why is it important to our customer:Quality, delivery, cost, other?

Defect Definition

• Describe the defect. What is it thatwe are attempting to correct? Whatmakes something good or bad?

Objective

• Where do we wish to be and when?

Project Definition – 1 View

Current/Goal/Stretch Goalxxx,xxx current DPMO (defectsper million opportunities)xx,xxx goalx,xxx stretch goal

Projected Benefits Turn the reduction in DPMO into $

for upper management

Let us discuss these one at a time.

Typical Issues With Problem Statements





Typical Issues With Problem Statements

• Problem does not link to Voice Of Customer (no CTS link)

• Scope of problem too large/too small(refer back to criticality of proper scoping)

• Problem poorly defined or not quantifiable/vague

• Quantification based on anecdotal information

• Includes $ as the defect

- Save $250K on assembly line 1

• Stated as predetermined solution instead of as problem

- $250K on assembly line 1 by replacing old equipment

Problem Statement Drill Down





Problem Statement Drill Down(Example 1)

Problem Statement: The Winding Operation Functional Test defect rateas based on specification AA-21 and as measured for the quarter ending

Dec. 02 is 12% (120,000 DPMO). Benchmark is 1% (10,000 DPMO).

Winding operation AA1 has too high afallout rate, i.e., too low a yield.

Over the last quarter, defects on the“Operation Functional Test” (Spec AA-21) has been 12% compared

to best-in-class of 1%.

Note that all products in this area arefrom the same family and use thesame processes.







We are receiving customer complaints over late shipments.

The average XYZ order shipped during thisperiod was 6.5 days late with a standarddeviation of 4.5 days.

Our internal benchmark/allowance is 5% late.

Problem Statement: Product XYZ orders for the past 6 months (1st and2nd quarter 02), have shipped an average of 6.5 days late with a StDev of

4.5 days = 925,700 DPMO vs. standard of 50,000 DPMO.

Most of the complaints about late shipments over the last 6 months have involved Product XYZ.







Customers take too long to pay us.

Of those who do not pay on time, 68% claim it is dueto a discrepancy between the work order andthe invoice.

Data that was gathered over the last 3 quartersending Sep 02 showed 55 days on the average.

Problem Statement: Over the last 3 quarters ending Sept 02, of the 45%of our XYZ customers that take more than 65 days to pay, 68% of them

delay due to a discrepancy between the work order and the invoice.

45% of our XYZ customers take more than 65 daysfrom the final billing date to pay us.

Problem Statement





Problem StatementScope Discussion (1)

• Note that this defect is an amalgamation of 3 separate defects

• We may consider this 1 project or 3• If we cannot collect data on the defects by characteristic, we have only

1 project

- This implies a less than perfect relationship between a root causeand the measured output (defect)

- Example: If a fix is put in that entirely eliminated the surface finishdefects, but at the same time diameter defects increased significantly(for whatever reasons), the improvement to surface finish or theoverall defect reduction will not be seen

Problem Statement: The B hole in the Large Widget product family has

for the year ended Dec 02 exhibited a defect rate of 10% (100,000DPMO) based on inspection of the 3 key characteristics

(location, diameter, and surface finish).

Problem Statement





Problem StatementScope Discussion (2)

• If the list of potential Xs for each of the 3 key outputs are essentially thesame, it may be beneficial to consider this as 1 project, e.g.,

- Quality of part material, drill, and drill grind affect all

- Speeds and feeds of tool affect all

- Rigidity and quality of machine tool and holding fixture affect all

• Even if we consider this as 1 project and therefore have only 1 projectDPMO, it is still highly advisable to collect defect data by characteristic

• Note also the use of the word “defect”. We are not trying to reduce scrap,

we are trying to reduce scrap AND rework (may be a hidden factory)

Problem Statement: The B hole in the Large Widget product family has

for the year ended Dec 02 exhibited a defect rate of 10% (100,000 DPMO)based on inspection of 3 key characteristics

(location, diameter, and surface finish).

Project Metrics





Project Metrics

• Include Units of Measure

• Indicate where collected

• MUST BE DIRECTLY RELATED TO THE PROJECT DEFECT

• The measurement system capability will be verified as part of the project

• Recall, our process outputs are our customers inputs

• Ask the customer to provide an “operational definition” for their metrics - A common understanding of when and how metrics are measured is

often needed to eliminate ambiguities

- Example: Delivery of product to customers

• We measure when the product leaves shipping• Customer measures

- When it arrives on their dock or

- They may not measure delivery until product is in their inventory

The CTSs And The Defect Definitions





The CTSs And The Defect Definitions

CTS

• The Problem Definition needs to include the CTSs that you areaddressing (providing a CT Tree or matrix as an attached reference isgenerally of value)

Defect Definition

• The project needs to have its Defect Definition CLEARLY established- It must be aligned to the CTSs

- It must be CONCISE

- It must clearly establish what makes the result good or bad, asdefined by the customer

-It is what will define our DPMO

• DMAIC is a FIND-and-FIX approach- If you do not have defects (DPMO), you cannot reduce them

• If you do not have a Defect Definition, you don‟t have defects

Project Objective





Project Objective

• End goal or target

• Perfectly aligned with problem statement

• Same units as problem statement

• Timeframe or estimated completion date

Example Project Objective





Example Project Objective

• On a previous slide an example Problem Statement was:

- Over the last 3 quarters ending Sept 02, of the 45% of our XYZcustomers that take more than 65 days to pay, 68% of them delay dueto a discrepancy between the work order and the invoice

• The appropriate Project Objective would be:

- Of the 45% of our XYZ customers that take more than 65 days to pay,our objective is to reduce the number of delays due to a discrepancybetween the work order and the invoice to pay from 68% to 10% byFebruary 2003

Projected Benefits




Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license.Project Identificat ion, Selection, And Scoping Pg 51

Projected Benefits

• This is where the language of defects is turned into the language

of Quality, Hard Savings, Revenue Generation, etc.• Include all potential savings in an abbreviated form

- Note which are hard and which are soft

- Indicate if it is an early estimate or a firm number

• Savings are generally based on the remainder of the calendar year or 12months net savings

• Have detailed backup to support numbers

Project Definition





Problem Statement

Assembly alignment defects on line 1 onall products have been averaging 121,000DPMO for the last 4 months. Best inclass benchmark is 20,000 DPMO

Metric

Alignment measured in inches/inch

CTSsCTQ = quality defectsCTC = Cost of rework/scrap

Defect Definition

Alignment of assembly not to spec per Blueprint AA-23

Objective

Reduce assembly alignment defects online 1 for all products from an average of 121,000 DPMO to 36,000 DPMO, areduction of 70%, by July 1, 2000

Project DefinitionEuropean Example

Current/Goal/Stretch Goal

121,000 current DPMO36,000 goal by July 2000

9,000 stretch goal by Dec. 2000

Projected Benefits

Material Savings: Reducing defectsfrom 121,000 to 36,000 DPMO willsave £306,000 annuallyOvertime Savings: £8,160savings annuallyTotal Savings: £314,160 Approved by Finance

Objectives Review





Objectives Review

The participant should be able to:

• Explain how projects are identified, selected, scoped, and defined

• Use Performance to Plan method or Bubble up Organic ideas toidentify projects

• Prioritize project opportunities

• Create a SIPOC

• Prepare a concise project definition including problem statement,objectives, and linkage to top-level goals




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Bb Wk1 170 Project ID Select

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