Project selection is critical to project success.  To insure you have the right project let me give you nine areas that you should think about and if any you do not have then I’d find another that has all nine as they ALL are important.

1. Project Sponsorship – The project needs a High Level individual that is committed to seeing this project completed. Not just interested but a real need for him/her to see success.
2. Benefits – You need to make sure you have well defined and measurable benefits agreed upon by you your team and your sponsor.
3. Available Resources – You do not have a crystal ball so at this point you will not know all the resources that you will use but you do have an idea of some of the resource that it will take. Make sure that they will be available during the project when you need them.
4. Scope in terms of your (the black belt) effort – Do you have the time to do the project and will it return a big enough benefit for your level of expertise.  This is really asking will it take to much of your time and you will need other Black Belt help or is it something that is a “go do project” that really does not need your Six Sigma Expertise to accomplish.
5. Deliverables – Have the things that you need to accomplish well defined. This is not the benefits but the things you have to put in place to get the benefits. Think of this as the vision of the state you are trying to achieve.
6. Time to Complete defined – Usually for a Black Belt project it should take more than 3 months but less than 12. Like some else said if the project is to big, break into pieces and make your first project one piece. BUT avoid making the problem a “Job”. You have to complete hand off and move on.
7. Team – Do you have a true cross functional team? What I mean is do you have someone from every function that works the process you are trying to improve.
8. Project Charter – This is where you have the project well defined. As mentioned by other if you do not have this you will not succeed.
9. Approach Value – Like the Scope in terms of your effort ask yourself if this project really needs a Six Sigma approach to solve? Or can a group just go do it. Usually if the project has been suggested by someone who understands Six Sigma it will be and will need the DMAIC process to solve. But I have projects given to me to “Clean the lab”. In reality they just did not have time themselves to clean it. So hire someone to do that for less than you make and you use your talents on a project fitting them.

Well I hope that is help.

Good luck! Let me know if I can help any more.

Peter Bersbach

If your business is located anywhere in the World including the US, Tucson, Oro Valley , Oracle, Phoenix, Glendale, and Scottsdale, Marana, Green Valley Arizona or beyond and you would like to learn more about our Six Sigma training, coaching and support services please call  Bersbach Consulting LLC at 1-520-829-0090  Now!

Your employer, Peerless Systems, acquired Acme International for its technology. But your leaders want more than just Acme’s technology; they also want Acme to be successful in its own right. But Acme has problems. Acme, it seems, is still operated as a traditional three-sigma company. Peerless has long since moved to six sigma and beyond, and you played an important role in making that happen. Your new challenge is to lead Acme from three sigma to six sigma. It’s what you’ve been waiting for your entire career–welcome to senior leadership!

You bring your staff together to establish a baseline. Bob, the vice-president of marketing, says, “We’re losing customers due to poor quality, and our competitors are killing us on price.”

Ann, your director of quality, is next. “When Bob told us about the quality problems, we increased inspection and testing, ” she says. “Field failures dropped, but (of course) costs increased.”

Figure 1: Cost and Value of Quality

Lorraine, vice-president of finance, shows Figure 1. “My staff and I believe that the customer places a certain value on quality,” she states. “At first, our quality was too low, and the customer wouldn’t buy our products. When we improved our quality, we also increased our costs, but the customer wouldn’t pay the higher prices we had to charge. We’ve found that profitability is maximized when total cost of poor quality is about 25 percent of sales. The problem is that there is very little profit, even at that cost level.”

This all has a familiar ring to you. You know that the typical three-sigma company spends about 25 percent of each sales dollar on the cost of poor quality. Before starting the six sigma journey, Peerless was in similar shape. You’ve prepared the slide shown in Figure 2 to illustrate the difference between three-sigma and six-sigma quality for your staff.

Figure 2: Three Sigma Profits vs. Six Sigma Profits

“Right now, our business is only capable of operating at a level equivalent to about three-sigma quality,” you explain. “Trying to get better quality out of our existing systems only adds costs. We must develop new systems that deliver better quality and lower costs simultaneously. We need six sigma systems.”

You go on to describe the differences between six sigma systems and three sigma systems, and the importance of six sigma to Acme. You tell them that six sigma is not a destination, but a journey of continuous improvement. Of course, Acme won’t go from three sigma to six sigma in one big jump. Instead, overall performance will move from three sigma to four sigma, then to five sigma and so on as people are trained and systems redesigned and improved. Figure 3 illustrates the expected progress toward six sigma.

You summarize by telling your staff that six sigma is not about quality for the sake of quality; it is about providing better value to customers, investors and employees. Paraphrasing the Chinese philosopher Lao-tzu, you announce, “Six sigma is a journey of a thousand miles. Creating a roadmap that links customer satisfaction, quality and costs is the first step.”

Recently some prospective clients asked me for a demonstration project to help them determine if six sigma would be a good idea at their company. I advised them against it. Such a demonstration only shows management’s lack of commitment to the success of six sigma. Although philosophical issues are important, there are more concrete problems with such “toe in the water” projects. In particular, major quality improvements can sometimes yield little or no bottom-line cost impact. The result of such projects is to convince management that six sigma adds cost without adding value. This belief is, of course, totally wrong. But it’s also a logical result of the demonstration approach itself.

For example, Sam was a six sigma enthusiast. He’d studied its use at several major companies and was convinced that it would save his company, which we’ll call Acme, millions of dollars. The hype had also caught the attention of the senior leadership at Sam’s company. But before diving headlong into six sigma, they wanted Sam to conduct a demonstration project to see if the savings reported by the press could actually be obtained at Acme.

The company’s main product was a complex assembly, which Acme sold to a large aerospace customer. The assembly- manufacturing process was in statistical control and producing an average of 10 defects per assembly. With management’s support, Sam documented the cost of noncompliance to be about $1,000 per assembly. After months of diligent effort, Sam’s six sigma team was able to redesign the process. To their delight, they were able to reduce the number of defects per assembly by a full 50 percent, from 10 defects per assembly to five.

Management was also interested in the project. But the accounting department had carefully monitored the costs for the assemblies, and to everyone’s surprise, accounting found only a minuscule 0.7-percent cost savings.

Based on these results, leadership’s conclusion was simple: Quality doesn’t pay. The company won’t pursue six sigma any further.

Did accounting make a mistake? In a word, no. The problem arose because Sam measured quality as defects. The truth is that most costs are incurred because of defectives rather than because of defects. (Thanks to Mikel Harry of the Six Sigma Academy for this insight.) A defective is a unit of product or service that contains one or more defects. Whether a unit contains one defect or several is irrelevant. Customers generally react to defective units by returning them for warranty repair, refunds or other options. Internally, defective units must be identified through costly inspection and then routed through equally costly rework processes, or else scrapped entirely. A unit with one defect costs nearly as much as one with several.

Mathematically, the Poisson distribution describes the relationship between defects and defectives. The equation for the Poisson distribution is

In the equation, x represents the number of defects in the sample, and P(x) means the probability of finding x defects. For example, P(1) is the probability of finding one defect. The symbol μ is the average number of defects per unit of product or service. For Sam’s project, the average assembly had 10 defects before six sigma was applied, so μ = 10. The efforts of the six sigma team reduced the average number of defects per assembly to 5, for a 50 percent improvement in quality.

Let’s plug these numbers into the equation and see what happens. Because we are interested in the probability of an assembly being defect-free, we want to know P(0) for each of the two quality levels. Before six sigma, with μ = 10 we get

In other words, there were virtually no defect-free circuit assemblies before applying six sigma methodologies. After applying six sigma, the probability of getting a defect-free assembly at Acme was

Thus, a 50-percent improvement in the quality level as measured in defects produces only a 0.7-percent improvement in the number of defect-free circuit assemblies. A complete graph of this relationship is shown in Figure 1.

Figure 1-Quality Improvement vs. Cost Savings

The real cost-reduction benefits only start to appear when quality reaches very high levels. This relationship explains the commonly observed phenomenon of quality programs not paying off in the short term. Only when companies stick with it long enough to begin to approach six sigma quality levels do they get the desired results. Too often, “toe in the water” projects scare companies out of the pool before they even start to swim.

In this phase you will select a good project and describe it in detail. A good project is one that will have an impact on something important to the organization, requires the Six Sigma skill set, and has a good chance of succeeding. To determine this you need to link your project to the goals of your leadership; make sure the project isn’t too large to be manageable or too small to be meaningful; is authorized by an appropriate sponsor; and is well planned. You will form a team to work with you. (From this point on whenever the word “you” is used, it refers to your team.) To describe your project you will draw a picture of the process your project will address, identify the customers for your project and determine what they want from the project, and qualitatively determine what will drive the project’s results.
Validate the measurement system and get the baseline

In this phase you will make sure that you can measure the process and the project outcomes. You will operationally define the drivers by identifying how to measure them and you will gather data to determine the process baseline. The baseline is how the key project outcome metrics and drivers have performed in the past and are performing now. You will link the driver data to the outcomes to help you determine which drivers are likely to be the most important (this is called stratifying the data.) You will look at how well other organizations do on your project outcome measures and you will use this information to set goals for the outcomes.

Identify key levers (Xs) that drive outcomes

You will sharpen your focus by drawing a detailed picture of the process. Using the map and the information from the previous phase you will think about what causes the outcomes and the drivers to vary. You will convert your ideas into hypotheses that can be tested scientifically. You will collect data and analyze the data to test your hypotheses and to create mathematical models of cause and effect. You will use the models to determine which drivers need to change to achieve your goals for the outcomes. You will analyze the cost of changing the drivers.

Determine improvement strategy

Using the cost analysis and performance the models you will set goals for the drivers. You will come up with creative ways to achieve these goals and create plans for implementing these changes. You will look at how the plans could fail and take action to reduce the risk of failure. You will try your plan on a small scale to test your plan. For the risks that can’t be eliminated, you will develop contingency plans.

Make permanent improvements

You will create standard operating procedures for the new process and you will work with the process owner to implement the changes. You will create a set of measurements that the new owner will use to monitor the new process. You will hand the process over to the owner. Periodically you will check back with the owner to provide assistance and to confirm that the project’s goals continue to be met.

1. The Six Sigma Black Belt should be able to excite leadership about the need for change
2. The Six Sigma Black Belt should have an intuitive sense for which projects are right for their organization
3. The Six Sigma Black Belt should know how to assess a project’s likelihood for success
4. The Six Sigma Black Belt should be able to recruit sponsors for their change activities
5. The Six Sigma Black Belt should know who to turn for when they need a mentor
6. The Six Sigma Black Belt should understand the mix of personality attributes needed to make a team successful
7. The Six Sigma Black Belt should understand the team development stages and how to guide a team through these stages
8. The Six Sigma Black Belt should be able to resolve conflicts between team members
9. The Six Sigma Black Belt should know when to exercise control and when to release control in a team situation
10. The Six Sigma Black Belt should know how to plan and facilitate effective meetings
11. The Six Sigma Black Belt should be an effective public speaker
12. The Six Sigma Black Belt should be able to facilitate brainstorming sessions
13. The Six Sigma Black Belt Should know how to achieve consensus
14. The Six Sigma Black Belt should know what to do when consensus isn’t possible (e.g., nominal group technique.)
15. The Six Sigma Black Belt should be able to create a stakeholder communication plan
16. The Six Sigma Black Belt should know how to gain the cooperation of cross-functional stakeholders
17. The Six Sigma Black Belt should know how to assess restrainers and drivers relative to a goal
18. The Six Sigma Black Belt should know how to obtain the voice of the customer
19. The Six Sigma Black Belt should know how to learn about customer needs that customers may not be able to vocalize (e.g., Gemba, Follow-Me-Home)
20. The Six Sigma Black Belt should know how to determine the relative importance of different customer demands
21. The Six Sigma Black Belt should understand Kano analysis

This is all I have time for at the moment. I’m sure there are many other skills not on this list. Can we come up with a full 101 things? Your input is required!

October 12, 2008

We all want leadership support, right? But if you’re not careful to specify precisely what you want your leaders to do for you, you may find yourself worse off than before. 10:19.