Project Selection Process
description
Transcript of Project Selection Process
Six Sigma Executive SeriesSix Sigma Executive Series
Project Selection ProcessProject Selection Process
LaunchDefineRecognize
Project Selection Process Copyright OpenSourceSixSigma.com
The Project Roadmap
Management
“Belt”
“Belt”
“Belt”
“Belt”
Project Identification and Launch (support given from “Belt”).
Solution to the problem and a Final Report (support given from a Champion).
Implement solution and maintain ongoing benefits (support given from “Belt”).Realize
Control
Improve
Analyze
Measure
Define
Recognize
Management
Management
Fin
din
g t
he s
olu
tion
of
Y =
f(
X)
Management owns 80% of the responsibility here.
Project Selection Process Copyright OpenSourceSixSigma.com
The Six Sigma Project
Results
PracticalSolution
ControlPlan
StatisticalSolution
StatisticalProblem
Six SigmaProject
PracticalProblem
Generally a systemic or chronic problem which is impacting the success of a process or function.
A well defined effort that states the problem in quantifiable terms with known expectations.
Data oriented problem that is addressed with facts and data analysis methods.
Data driven solution with known confidence/risk levels versus an “I think” solution.
A method of assuring the long-term sustainability of the fix to the problem.
The solution is not complex, expensive or irrational and is readily implement-able.
Fin
din
g t
he s
olu
tion
of
Y =
f(X
) +
Tangible results measurable in metrics with quantifiable financial or strategic value.
Characteristics of a ProjectHas a financial impact to Earnings or a significant strategic valueThe problem is not easily or quickly solvable using traditional methodsIt is targeted to reduce the problem by >70% over existing performance levels
Focus is to solve a business problem that is:Affecting the success of the organizationAffecting costsAffecting employee satisfactionImpacting a Customer (external and/or internal)
Project Selection Process Copyright OpenSourceSixSigma.com
Project Difficulty Distribution
Solving“World Hunger,”“Boil the Ocean”Type Problems.
Solving “Fruit on the Ground,”“Logic & Intuition”Type Problems – Yellow and Green Belt.
Solving “Process Optimization”“Complex Interaction”“Process Entitlement”Black and Master Black Belt Projects.
Difficulty and Cost of
Problems
Qu
an
tity
of
Pro
ble
ms
Too Hard -Are Usually
Management or Market Caused
TooEasy
Six Sigma Projects
Project Selection Process Copyright OpenSourceSixSigma.com
The Following People Typically Identify Potential Projects:
• Champions• “Belts”• Process Leaders• Functional Managers/Process Owners
Any Employee Can Suggest a Project and Should Be Encouraged To Do So……However, It Should Be Considered and Sponsored by One of the Above
People
Any Employee Can Suggest a Project and Should Be Encouraged To Do So……However, It Should Be Considered and Sponsored by One of the Above
People
Project Originators
Project Selection Process Copyright OpenSourceSixSigma.com
The most common mistakes in defining a potential project are:• Scope is too broad (solving world hunger or boiling the ocean).
•Symptoms include: too many output Y’s, multiple goals, numerous Process Owners, multiple departments.
•Solution: Divide problem into several projects.• Problem is too easy.• Problem solution is known. • It is a “just do it”; no problem analysis required.• Problem is a management or market issue – not a good “Belt”
project.• Long term research or development project, not a problem to be
solved with Six Sigma tools.
Common Mistakes in Defining Projects
Project Selection Process Copyright OpenSourceSixSigma.com
Facts about Project Selection:
• Project Recognition & Definition are critical activities to the success of any project and to the Six Sigma improvement effort.
• Project Recognition & Definition are among the more important tasks a Champion performs.
• “When I seek a project, it usually stinks. But when the projects find me, they’re usually very good projects.”
Six Sigma Black BeltInternational Truck & Engine
Importance of Selection Process
RECOGNIZE PHASERECOGNIZE PHASE
Finding Areas Needing Improvement Finding Areas Needing Improvement ““Writing the Business Case”Writing the Business Case”
RECOGNIZE PHASERECOGNIZE PHASE
Finding Areas Needing Improvement Finding Areas Needing Improvement ““Writing the Business Case”Writing the Business Case”
Recognize
Project Selection Process Copyright OpenSourceSixSigma.com
Opportunity Definition
Strategic
Step 1
Opportunity Definition
Enabling Processes Core Processes Enabling Processes Core Processes
Structure of the Business Case
As a company, our__________ performance for the
___________ area is not meeting__________. Overall this is
causing____________ problems which are costing us a
much as$_______ per______.
Examples
1. As a company, our accounts receivablesperformance for the
finance invoicingarea is not meeting the goal of 47 DSO.
Overall this is causing cash flow and budgetproblems which
are costing us as much as $4Mper year.
Structure of the Business Case
As a company, our__________ performance for the
___________ area is not meeting__________. Overall this is
causing____________ problems which are costing us a
much as$_______ per______.
Examples
1. As a company, our accounts receivablesperformance for the
finance invoicingarea is not meeting the goal of 47 DSO.
Overall this is causing cash flow and budgetproblems which
are costing us as much as $4Mper year.
Structure of the Business Case
As a company, our__________ performance for the
___________ area is not meeting__________. Overall this is
causing____________ problems which are costing us a
much as$_______ per______.
Examples
1. As a company, our accounts receivablesperformance for the
finance invoicingarea is not meeting the goal of 47 DSO.
Overall this is causing cash flow and budgetproblems which
are costing us as much as $4Mper year.
Structure of the Business Case
As a company, our__________ performance for the
___________ area is not meeting__________. Overall this is
causing____________ problems which are costing us a
much as$_______ per______.
Examples
1. As a company, our accounts receivablesperformance for the
finance invoicingarea is not meeting the goal of 47 DSO.
Overall this is causing cash flow and budgetproblems which
are costing us as much as $4Mper year.
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
Receivables Warranty Cycle time Defects
Strategic
•Opportunity Identification
•Issues and Problems Matrix•Scope
•Statement of Work•Prioritized Business
Improvement Plan
•Opportunity Identification
•Issues and Problems Matrix•Scope
•Statement of Work•Prioritized Business
Improvement Plan
Opportunity Definition
Enabling Processes Core Processes Enabling Processes Core Processes Enabling Processes Core Processes Enabling Processes Core Processes
Structure of the Business Case
As a company, our__________ performance for the
___________ area is not meeting__________. Overall this is
causing____________ problems which are costing us a
much as$_______ per______.
Examples
1. As a company, our accounts receivablesperformance for the
finance invoicingarea is not meeting the goal of 47 DSO.
Overall this is causing cash flow and budgetproblems which
are costing us as much as $4Mper year.
Structure of the Business Case
As a company, our__________ performance for the
___________ area is not meeting__________. Overall this is
causing____________ problems which are costing us a
much as$_______ per______.
Examples
1. As a company, our accounts receivablesperformance for the
finance invoicingarea is not meeting the goal of 47 DSO.
Overall this is causing cash flow and budgetproblems which
are costing us as much as $4Mper year.
Structure of the Business Case
As a company, our__________ performance for the
___________ area is not meeting__________. Overall this is
causing____________ problems which are costing us a
much as$_______ per______.
Examples
1. As a company, our accounts receivablesperformance for the
finance invoicingarea is not meeting the goal of 47 DSO.
Overall this is causing cash flow and budgetproblems which
are costing us as much as $4Mper year.
Structure of the Business Case
As a company, our__________ performance for the
___________ area is not meeting__________. Overall this is
causing____________ problems which are costing us a
much as$_______ per______.
Examples
1. As a company, our accounts receivablesperformance for the
finance invoicingarea is not meeting the goal of 47 DSO.
Overall this is causing cash flow and budgetproblems which
are costing us as much as $4Mper year.
Finding Problematic Areas of the Business
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
As a company, our accounts receivables
performance for the finance invoicing area
is not meeting the goal of 47 DSO . Overall
this is causing cash flow and budget
problems which are costing us as much as
$4M per year .
Receivables Warranty Cycle time Defects
Creating Logical Grouping Using Affinity Diagramming
Objective StatementReduce the overall personnel recruiting time from an average
of 155 days to 75 days, with an upper limit of 110 days. This will meet the current maximum goal of 100 days greater than 95% of the time. The new goal which will be achieved by June 1, 2002, will support our Employer of Choice goal and achieve a savings of $145,000.
Problem StatementRecruiting time for Production Planners is missing the goal 81% of the time. The average time to fill a request is 155 days in the
Human Resources employee recruitment process over the past 15 months. This is costing us $145,000 per year of additional laborand
rework costs.
Improvement Plan
Objective StatementReduce the overall personnel recruiting time from an average
of 155 days to 75 days, with an upper limit of 110 days. This will meet the current maximum goal of 100 days greater than 95% of the time. The new goal which will be achieved by June 1, 2002, will support our Employer of Choice goal and achieve a savings of $145,000.
Problem StatementRecruiting time for Production Planners is missing the goal 81% of the time. The average time to fill a request is 155 days in the
Human Resources employee recruitment process over the past 15 months. This is costing us $145,000 per year of additional laborand
rework costs.
Improvement Plan
Statement of Work
Priority Business Case Owner
Financial
Impact Sponsor
1
As a company, our accounts receivables performance
for the finance invoicing area is not meeting the goal of
47 DSO. Overall this is causing cash flow and budget
problems which are costing us as much as $4M per
year. Bob Smith $4M Ellen West
2
As a company our product recall performance for the
ice cream market area is not meeting the budget of
1.5%. Overall this is causing logistics, materials and
cost problems which are costing us as much as $2M per
year. Mary Jones $2M Bill Jones
3
As a company our final process yield performance for
the culture area is not meeting the targeted 88% yield.
Overall this is causing Floor space, shipment and
resource problems which are costing us as much as
$900K per year.
Ken Parks $900K Kathy Shank
4
As a company our shipping logistics performance for the
Smith’s market segment is not meeting the scheduling
and cost requirements. Overall this is causing delivery
issues and customer dissatisfaction problems which are
costing us as much as $3M in lost revenues and $1.5M
in expenses per year. Jill Williams $1.5M Earl Johnson
Business Opportunity Analysis Summary
Project Selection Process Copyright OpenSourceSixSigma.com
Finding Areas Needing Improvement
RECOGNIZE Starts With the Highest Level View and Moves Downward Into More Specifics to Formulate Six Sigma Projects
•Start by assessing the higher level needs of the company; using any knowledge obtained from the Voice of the Customer (VOC) and/or the Voice of the Business (VOB).
•Identify gaps in achieving the higher level needs of the company, the critical success factors or key goals and objectives of the company.
• Achieving these goals should deliver customer satisfaction and business results
• Business areas or processes which are impacting your goals are identified
• Six Sigma projects are then selected with the goal of substantially improving these key processes
•Select those areas or functions of the business related to the gaps which are performing poorly based on expectations, competitive knowledge or known deficiencies in performance.
• Problems at this level usually are related to quality, cost or delivery
Project Selection Process Copyright OpenSourceSixSigma.com
Finding Areas Needing Improvement
Problem “themes” will then become visible, such as:
• Product returns/warranty costs• Customer complaints• Accounts receivable and invoicing issues• Cycle time/responsiveness• Inefficiencies of defective services• Yield and subsequent rework or scrap• Capacity constraints• Inventory levels
You have now recognized where problems exist which need to be resolved in order to achieve our objectives.
Project Selection Process Copyright OpenSourceSixSigma.com
Writing a Business Case identifies the problem area, a description/characterization of the high level problem and an estimate of the financial benefit if solved to expectations.
• When doing this the intent is not to define a Six Sigma project but to identify a problematic area.
• The description of the high level business problem does not have to be very detailed. The details come when defining the project(s) to resolve the Business Case. It can be as simple as:
• Warranty returns are excessive
• Accounts receivables are higher than target
• Product test yield and cost is not competitive
• Sales order responsiveness is causing customer complaints
• The potential financial benefit is our current best estimate given the data/knowledge we have. “Just get the number in the ballpark.”
Finding Areas Needing Improvement
Project Selection Process Copyright OpenSourceSixSigma.com
1. At the corporate level, the Opportunity Analysis Summary becomes a high-level road map for the Business Process Improvement Program.
– It identifies, with some specificity, which areas of the business and which metrics are to be improved and what impact such improvement will have.
2. It serves, then, as a tool to assure subsequent project selection criteria remain focused on issues pertinent to the corporate objectives.
– As management, you want projects to improve metrics relevant to the corporate strategy. Using the Opportunity Analysis Summary as a first-level qualifier for project selection keeps the program focused on that which is important to the business.
3. For those just beginning a Six Sigma or Business Improvement Program, it is also used to develop a training program.
– The complexity of the issues identified dictates the training mix of Champion, Black, Green and Yellow Belts. The time frame in which the issues will be addressed as desired by Management dictates the quantity of each.
Opportunity Analysis Summary
Project Selection Process Copyright OpenSourceSixSigma.com
• It begins by writing a Problem Statement which identifies: 1. A problem area. 2. A description/characterization summary. 3. An estimate of the financial benefit if solved to
expectations.
• When doing this, your intent is not to define a project, but to identify a problematic area which may later become an improvement project.
• The description of the business problem does not have to be overly detailed at this stage. The details come when defining the project(s) to resolve it.
• The potential financial benefit is your current best estimate given the data/knowledge you have. “Just get the number in the ballpark.”
Finding Problematic Areas of the Business
Problematic Areas
Project Selection Process Copyright OpenSourceSixSigma.com
Six Sigma Business Assessment Writer
Instructions:
1. Capture Business Cases for the entire business – not just your area.
2. Complete each Business Case with your best estimate of the data.
3. Continue writing Business Cases until you have exhausted all known problematic areas.
4. Cut each Business Case into a separate paper strip.
5. Tape each cut Business Case to the designated area of the wall.
6. After all students have completed the Business Case writer, the instructor will provide directions to perform an Affinity Diagram.
Business Opportunity Assessment Generator ----------------------------------------------------------------------------------------------------------- As a company, our__________________________________________ performance for the _____________________________________ (area) is not meeting ________________________ (Expectations). Overall, this is causing ___________________________ problems which are costing us as much as ______________ ($) per ______________ (Time Period). ------------------------------------------------------------------------------------------------------------ As a company, our__________________________________________ performance for the _____________________________________ (area) is not meeting ________________________ (Expectations). Overall, this is causing ___________________________ problems which are costing us as much as ______________ ($) per ______________ (Time Period). ------------------------------------------------------------------------------------------------------------ As a company, our__________________________________________ performance for the _____________________________________ (area) is not meeting ________________________ (Expectations). Overall, this is causing ___________________________ problems which are costing us as much as ______________ ($) per ______________ (Time Period). ------------------------------------------------------------------------------------------------------------ As a company, our__________________________________________ performance for the _____________________________________ (area) is not meeting ________________________ (Expectations). Overall, this is causing ___________________________ problems which are costing us as much as ______________ ($) per ______________ (Time Period). ------------------------------------------------------------------------------------------------------------ As a company, our__________________________________________ performance for the _____________________________________ (area) is not meeting ________________________ (Expectations). Overall, this is causing ___________________________ problems which are costing us as much as ______________ ($) per ______________ (Time Period). ------------------------------------------------------------------------------------------------------------
Project Selection Process Copyright OpenSourceSixSigma.com
Writing the Problem Statement
Structure of the Problem Statement
As a company, we are experiencing a problem with:
. The area where this problem is
occurring is: . The problem has existed
for at least: . The magnitude of the
problem is: and the expected
performance is: . The effect
this problem is having on our business is:
. This is costing us a much as $ per
.
Project Selection Process Copyright OpenSourceSixSigma.com
Good Problem Statement Examples
As a company, we are experiencing a problem with: Employee
Turnover. The area where this problem is occurring is: All Stores.
The problem has existed for at least: 2 years. The magnitude of
the problem is: currently 88%, and the expected performance is:
< 85%. The effect this problem is having on our business is:
increased hiring and training costs and a lower than desired level
of customer service. This is costing us a much as $400K in costs
and $500K in Revenue per Year.
As a company, we are experiencing a problem with: Credit
Processing Equipment Uptime. The area where this problem is
occurring is: All Stores. The problem has existed for at least: one
year. The magnitude of the problem is: Uptime at 91%, and the
expected performance is: >95% Uptime. The effect this problem is
having on our business is: Service Turnaround Time and Lost
Sales. This is costing us a much as $300K per Year .
Writing the Problem Statement
Project Selection Process Copyright OpenSourceSixSigma.com
Good Problem Statement Examples
As a company, we are experiencing a problem with: Merchandise
Shortages. The area where this problem is occurring is: Various
Stores. The problem has existed for at least: 180 days. The
magnitude of the problem is: unknown, and the expected
performance is: No Shortages. The effect this problem is having on
our business is: Lost Sales & Expedited Delivery Costs This is costing
us a much as $25K per Month.
As a company, we are experiencing a problem with: Open
Maintenance Calls. The area where this problem is occurring is:
Companywide. The problem has existed for at least: 2 Years. The
magnitude of the problem is: average of 1.6 OMC per store, the
expected performance is: <1.2 OPC per store. The effect this
problem is having on our business is: systems inoperative causing
lost sales. This is costing us a much as $35K and per Month.
Writing the Problem Statement
Project Selection Process Copyright OpenSourceSixSigma.com
POOR PROBLEM STATEMENT:As a company, we are experiencing a problem with: employee turnover. The area where this problem is occurring is: in all stores. The problem has existed for at least: always. The magnitude of the problem is: really bad, the expected performance is: no turnover. The effect this problem is having on our business is: high hiring & training costs . This is costing us a much as a lot of money per month..
A POOR Problem Statement is ambiguous and subjective. It does not quantify the metrics descriptive of the challenge. While accuracy is not expected at this point, good guess-timates are necessary.
Writing the Problem Statement
Project Selection Process Copyright OpenSourceSixSigma.com
1. Capture ideas for the entire business – not just your area.
2. Complete each with your best estimate of the data.
3. Continue writing until you’ve exhausted all known problematic areas.
4. Provide completed sheets of to the Facilitator.
5. Facilitator will tape each to the designated area of the wall.
6. After all participants have completed these steps, the instructor will provide directions to perform an Affinity Diagram.
Problem Statement Instructions
Project Selection Process Copyright OpenSourceSixSigma.com
Affinity Diagrams for Opportunity Analysis
• Allows an effective gathering and grouping of ideas– Allows a team to creatively generate a large number of
ideas / issues and then organize and summarize natural groupings among them to understand the essence of a problem and breakthrough solutions.
• Overcome “team paralysis”
• Encourages creativity by everyone on the team at all phases– Gain quick team consensus
• Typically has 40 - 60 items---not unusual to generate over 100 Problem Statements
becomes
Project Selection Process Copyright OpenSourceSixSigma.com
Affinity Diagram Steps
Sort Into Groups
Tack Post-its to a
Wall
4 5
Generate Ideas
Describe the Issue
Driver gets lost
Oven temperature fluctuates10 percent of
pizzas are remade due to
burnt crust
Driver gets lost
Oven temperature fluctuates10 percent of
pizzas are remade due to
burnt crust
Form a Team
1 2 3
Project Selection Process Copyright OpenSourceSixSigma.com
Load into Excel
Add Additional
Info
Create Header Cards
Order Form Pizza Oven Driver Schedule OtherOrder Form Pizza Oven Driver Schedule OtherOrder Form Pizza Oven Driver Schedule OtherOrder Form Pizza Oven Driver Schedule Other
1. Responsibility2. Cost3. Strategic Linkage
1. Responsibility2. Cost3. Strategic Linkage
6 7 8
Take Action
Sort into a Usable Format
Objective StatementReduce the overall personnel recruiting time from an averageof 155 days to 75 days, with an upper limit of 110 days. This will meet the current maximum goal of 100 days greater than 95% of the time. The new goal which will be achieved by June 1, 2002, will support our Employer of Choice goal and achieve a savings of $145,000.
Problem StatementRecruiting time for Production Planners is missing the goal 81% of the time. The average time to fill a request is 155 days in the Human Resources employee recruitment process over the past 15 months. This is costing us $145,000 per year of additional labor and rework costs.
Improvement Plan
Objective StatementReduce the overall personnel recruiting time from an averageof 155 days to 75 days, with an upper limit of 110 days. This will meet the current maximum goal of 100 days greater than 95% of the time. The new goal which will be achieved by June 1, 2002, will support our Employer of Choice goal and achieve a savings of $145,000.
Problem StatementRecruiting time for Production Planners is missing the goal 81% of the time. The average time to fill a request is 155 days in the Human Resources employee recruitment process over the past 15 months. This is costing us $145,000 per year of additional labor and rework costs.
Improvement Plan
9 10
Priority Business Case OwnerFinancial
Impact Sponsor
1
As a company, we are experiencing a problem with our accounts receivables
performance. This problem has existed for at least: 90 days. The magnitude
of the problem is DSO > 47 and the expected performance is DSO < 38. The
effect this problem is having on our business is restricted cash flow and
cost of money. This is costing us as much as $45K per month. Bob Smith $540K Ellen West
2 Mary Jones $350K Bill Jones
3 Ken Parks $750K Kathy Shank
4 Jill Williams $600K Earl Johnson
As a company, we are experiencing a problem with our product recall
performance. This problem has existed for at least: 60 days. The magnitude
of the problem is Recall > 1.5% and the expected performance is < 1.2%. The
effect this problem is having on our business is cost and material handling
delays. This is costing us as much as $350K per year.
As a company, we are experiencing a problem with our final process yield
performance. This problem has existed for at least: 1 years. The magnitude
of the problem is Yield < 88% and the expected performance is Yield > 93%.
The effect this problem is having on our business is greater storage space and
higher resource costs. This is costing us as much as $750K per year.
As a company, we are experiencing a problem with our shipping logistics
performance. This problem has existed for at least: 240 days. The magnitude
of the problem is schedule met < 89% and the expected performance is >96%. The
effect this problem is having on our business is restricted delivery issues and
customer satisfaction. This is costing us as much as $600K per year.
Priority Business Case OwnerFinancial
Impact Sponsor
1
As a company, we are experiencing a problem with our accounts receivables
performance. This problem has existed for at least: 90 days. The magnitude
of the problem is DSO > 47 and the expected performance is DSO < 38. The
effect this problem is having on our business is restricted cash flow and
cost of money. This is costing us as much as $45K per month. Bob Smith $540K Ellen West
2 Mary Jones $350K Bill Jones
3 Ken Parks $750K Kathy Shank
4 Jill Williams $600K Earl Johnson
As a company, we are experiencing a problem with our product recall
performance. This problem has existed for at least: 60 days. The magnitude
of the problem is Recall > 1.5% and the expected performance is < 1.2%. The
effect this problem is having on our business is cost and material handling
delays. This is costing us as much as $350K per year.
As a company, we are experiencing a problem with our final process yield
performance. This problem has existed for at least: 1 years. The magnitude
of the problem is Yield < 88% and the expected performance is Yield > 93%.
The effect this problem is having on our business is greater storage space and
higher resource costs. This is costing us as much as $750K per year.
As a company, we are experiencing a problem with our shipping logistics
performance. This problem has existed for at least: 240 days. The magnitude
of the problem is schedule met < 89% and the expected performance is >96%. The
effect this problem is having on our business is restricted delivery issues and
customer satisfaction. This is costing us as much as $600K per year.
OK, start affinitying!!
Affinity Diagram Steps
Project Selection Process Copyright OpenSourceSixSigma.com
Headings:• Project No.• Function• Function Owner• Problem/Opportunity• Dept./Division• Problem Owner• Expectation• Impact• Financial Impact• Project in Process• Key Goal/Objective
Upon finalization of the Business Opportunity Analysis groupings, the information is entered into the Opportunity Analysis Matrix.
This becomes a high-level road map to Project Selection.
Organizing the Knowledge
Project Selection Process Copyright OpenSourceSixSigma.com
Opportunity Analysis Matrix
Opportunity Analysis - XYZ Dairy
Project No. Function
Function Owner Problem Area
Problem Owner Expectation Effect
Annual Financial Impact
Project in Process
1 Total Plant Neal Changeover Times Plant Monte Best in Class Reliability 60,000$
2 Total Plant Neal Reliability Plant Monte >85% currently <85% 3,000,000$
3 Total Plant Neal CIP Systems Plant Gordon Time/Tracking Scheduling/Chemical Costs
4 Total Plant Neal Process Mntnce/Production Curtis Performance Downtime 1,200,000$
5 Total Plant Neal Sanitation WO Completion Plant Nikki/Lee/Ed 100% less than expected sanitation
6 Total Plant Neal Shrinkage IC Plant Lee Standards Financial Performance 3,000,000$
7 Total Plant Neal Shrink - filler to palletizing Culture & IC Lee/Ed Inventory Reporting
8 Total Plant Neal Shrink - obsolete inventories Culture & IC Alan/Mary
9 Total Plant Neal Milk & other ingredients Plant Lee/Ed Standards Loss 480,000$
10 Total Plant Neal Overproduction Plant Mary/Alan Plant Shrinkage 300,000$
11 Total Plant Neal Shrink - production problems Culture & IC Ed/Lee Below 2% Out of Spec 730,000$
12 Total Plant Neal Material Variance/Shrinkage Plant Ed/Lee Below 1.5% Out of Spec - Financial 1,500,000$
13 Total Plant Neal WIP or Spoilage Plant Ed/Lee Target Shrinkage/Service Level 600,000$
14 Total Plant Neal Product Recovery Air Blows Plant Curt/Grant Targets Product Loss
Total for Total Plant = 10,870,000$
15 Training Scott Employee Skill Level plant Melissa prod demand service & financial 200,000$
16 Training Scott Training I/C Plant Melissa I-85 Dept equipment failure 50,000$
17 Training Scott Skills & Training Assessment plant Scott OKEA performance 1,000,000$
18 Training Scott Training Maintenance Scott work completion 120,000$
19 Training Scott Enrollment Reduction Goals Plant Scott reduce by 10% Operations Staffing 60,000$
20 Frozen PR Lee/Monte Freezer Ice Cream Plant Lee prod demand lost production 400,000$
21 Frozen PR Lee/Monte Shrinkwrapper Sqround Line Lee prod demand lost production 200,000$
22 Frozen PR Lee/Monte Sqround Filler Sqround Line Lee prod demand lost production 500,000$
23 Frozen PR Lee/Monte IC Lines process reliability Plant Lee 85% Reliability currently running <85% 180,000$
24 Frozen PR Lee/Monte Novelty Process Reliability Plant Lee 85% Reliability currently running <85% 120,000$
25 Fluid PR Ed/Monte Culture Filler Process Reli Plant Ed 85% Reliability currently running <85% 120,000$
26 Fluid PR Ed/Monte Process Reliability Culture Dept Ed 85% Reliability currently running <85% 120,000$
27 Fluid PR Ed/Monte Skim Herring to Vats Culture Vat Ed Temp/Time time/scheduling 100,000$
28 Fluid PR Ed/Monte Vat Turning (?) Cheese Prod Ed Customer Service 250,000$
29 Fluid PR Ed/Monte I-85 1X6 Filler Ed/Monte Kroger Service Level
30 Fluid PR Ed/Monte Culture Production Wash/Water Cooling Grant Cooling Quality/Time
31 Whey Grant Outside Drain Service Dairy & IC Plant Grant/Ed Budget Quality/Lost Time 5,000$
32 Whey Grant Whey Concentration/Disposal Cottage Cheese Grant/Ed Lower Costs Lower Earnings 600,000$
33 Whey Grant Whey Disposal Cheese Prod Grant/Ed 50% Reduction Lower Earnings 604,000$
34 Finance Lisa Cost per Unit Price Culture Ed Kroger Financial Loss 150,000$
35 Finance Lisa Cost per Unit Price Fluid Ed Kroger Financial Loss 100,000$
36 Finance Lisa Service Level Culture Dept Mary 99% Confidence Problems
37 Reporting Ed/Lisa/Lee IC Tracking IC Plant Lee Reporting Needs Financial Tracking 200,000$
38 Reporting Ed/Lisa/Lee Exp Control of Trash Removal Plant Ed/Lee Exp Control Variance from Budget 375,000$
39 Reporting Ed/Lisa/Lee Finished Inventory Culture Ed/Lee Acctg Challenges 1,500,000$
40 Reporting Ed/Lisa/Lee Reporting Accuracy Prod/Whlse Invtry Ed/Lee 100% Accurate Less than expected
41 Reporting Ed/Lisa/Lee Production Reporting Culture Ed 100% Accurate Less than expected 600,000$
42 Reporting Ed/Lisa/Lee Warehouse Inventory Prod/Fin Ed/Lee Budget/Closing Problems 2,400,000$
43 Reporting Ed/Lisa/Lee Raw Ingredient Inventory Culture/IC Ed Allowed Variance Large Variance 1,200,000$
44 Fluid/Cult Michelle/Ed Product with Good Seals Plant Ed 100% Quality problems
45 Fluid/Cult Michelle/Ed Consistent Cottage Cheese Plant Ed Comment Free Quality problems
46 Fluid/Cult Michelle/Ed Mold Culture Products Lab/Ed Kroger Customer 150,000$
47 Fluid/Cult Michelle/Ed Cup Cheese Consistency Culture Ed Kroger Customer 150,000$
48 Fluid/Cult Michelle/Ed Mold Free Culture Products Plant Lab/Ed Mold Free Quality
49 Fluid/Cult Michelle/Ed Chocolate Delivery System IC Plant Lee Production Levels Shrinkage/Quality 50,000$
50 Frozen Michelle/Ed Flat Bar Quality Plant Lee Zero Comments Quality
51 Frozen Michelle/Ed Flat Bar Quality IC Plant Lee Customer Sat Consumer Comments 200,000$
52 Frozen Michelle/Ed Quality Assurance IC Novelty Lee Customer Sat Numerous Complaints 144,000$
53 Frozen Michelle/Ed IC Sandwich Quality IC Plant Lee Customer Sat Numerous Complaints 50,000$
54 Frozen Michelle/Ed Fruit Feeder IC Plant Lee Customer Sat Customer Complaints 100,000$
55 Fluid Shelf Michelle/Ed Fluid Milk Shelf Life Plant Lab 15 days Inefficient runs
56 Fluid Shelf Michelle/Ed Fluid Shelf Life Fluid Plant Lab 95% at Code Inaccurate Production Planning 100,000$
57 Fluid Shelf Michelle/Ed Air Quality Dairy Plant Lab Mfg Standards Quality/Shelf Life 240,000$
58 Consumer Michelle Quality - comments per million IC Plant Lee/Michelle Company Std Too many 1,000,000$
59 Parts Aaron/Curtis Stock Out Maint/Production Jenny Cycle Counts Down Time 600,000$
60 Parts Aaron/Curtis Parts flow to Control Area Maint Planners 97% Lost Time 60,000$
61 Reliability Aaron/Curtis Fire Fighting Maint All Mgrs Supervisors Quality of Work 1,200,000$
62 Reliability Aaron/Curtis Maint Dept IC Plant Aaron Reliability Startup Delays 120,000$
63 Reliability Aaron/Curtis Maint Planner/Scheduler SS Class Brad/Larry Neal's Productivity
64 FAC Curtis/Grant Electrical Power Factor Power Distribution Grant Set Target Below Power Factor Target 10,000$
65 FAC Curtis/Grant Back Stage Culture Grant Prod Needs Not enough capacity 1,200,000$
66 FAC Curtis/Grant Air System IC Plant Grant/Curtis Prod Targets Not enough capacity 400,000$
67 Ice Cream Lee Rework in the Freezer IC Plant Lee Target Lost Inventory 600,000$
68 Ice Cream Lee Production Loss IC/Novelty Lee 2% Shrinkage Above Target - inventory loss 900,000$
69 Ice Cream Lee IC Production Sqround Line Lee/Monte 85% Proficiency Shrinkage
70 Culture Ed Cottege Cheese/Starter Prod Culture Ed Prod Needs Losing Vats 1,662,273$
71 Culture Ed Production Loss Culture/Fluid Ed <2% Shrinkage Not at Target - Financial 240,000$
72 Culture Ed Inventory Control Culture Ed Target Inventory Adjustments 1,200,000$
73 Culture Ed Milk Shrinkage Fluid/Milk Ed <2% Shrinkage Shrinkage 650,000$
74 Culture Ed Production Spoils Ed Target Shrinkage - Financial 500,000$
75 Safety Scott Overall Safety IC Plant Jan Target Safety Issue 50,000$
Total Project Potential = 22,730,273$