Project Selection Guidelines Updated

SIX SIGMA PROJECT SELECTION

Objectives To address the MOST IMPORTANT Phase in all SIX SIGMA projects & the difference between success & failure. To define the importance of selecting an appropriate SIX SIGMA project for Green / Black belts. To define the critical roles of Champions in the “recognize phase”

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Types of Project Black/Green Six Sigma Projects

“Save-the-World”, “Ocean Boiling” Projects or Management Problems Logic & intuition Types of Project

Too Easy

Difficult

Too Difficult

Types of Project “Too Easy” type of projects: Projects that take minimum afford or evaluations to derive a workable solutions. (Straight forward solutions) Usually less attractive saving. Example: Simple improvement of house keeping. Straight forward mistake proofing devices. Improvement of work flow arrangements.

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Types of Project “Difficult” type of projects: Project most suitable to assign to Green / Black Belts. It usually involved quite extensive & in-depth evaluations before arriving to a solution. Usually involved some Statistics or mathematical calculations to support findings. It usually takes Not More than 4 months to complete & with very attractive savings. Issues that are closely related to company’s business goals.

Types of Project “Difficult” type of projects: Examples: Low yield & utilization of machines. Long cycle time of machines/processes. High scrap, rework, reject, inventory, operating cost, maintenance & COPQ. Improvement of poor process capabilities. Unpredictable process performance. Etc.

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Types of Project “Too Difficult” type of projects: Projects that usually have a very large scope. It usually involved in “Executive Decisions” It usually involved inter-department or intercompany. Examples: Scrap reduction in the whole company. Consolidation of storage area in the company. Quality improvement in the company.

3-Typical Types of SS Projects 1. Operational Projects: Projects that deal with manufacturing of products and processes. E.g. Part assembly, degreasing, drilling, machining, metal stamping, plastic injection, forming, cutting, tapping, welding, delivery, packing, soldering, forging………….etc.

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3-Typical Types of SS Projects 2. Transactional Projects: Projects that deal with information flow, paper flow or human related processes in term of “Service” E.g. Order processing, planning process, shipping and receiving, procurement activities, payroll, documentation processes ……….et.

3-Typical Types of SS Projects 3. Engineering & Design Projects: Projects that deal with existing / new products design & development or process / line design. E.g. improvement of machines / lines, automation, …..etc.

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Project Selection Why do we need to emphasis the need for Project Selection?............. This is a Process of “Recognizing” & “Defining” a suitable Six Sigma project for undertaking by the Black / Green Belts. It is considered as the MOST CRITICAL step to the success of any projects.

“Bad” Choices of Project Low hanging “Fruits”, too simple for well trained staff. Should just do it! Cost saving through redesign & renegotiation with vendors or customers. Management problems or problems needed executive decisions. Inherent raw material defects. “SOLUTIONS LOOKING FOR A PROJECT”

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Source of Potential Projects “Reduction” Projects: Reduction of rejects. Reduction of scraps. Reduction of consumption. Reduction of inventory. Reduction of cost. Reduction of movement. Reduction in man hours.

Source of Potential Projects “Improvement” Projects: Improve process cycle time. Improve efficiency / yield. Improve response time. Improve process capability. Improve machine utilization. Improve production rate.

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Source of Potential Projects “Elimination” Projects: Elimination of redundancy. Elimination of extra process. Elimination of errors.

1. THE PROJECT CHARTER

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Project Charter Overview Business Case Communication Plan

Problem Statement

Project Charter Preliminary Project Plan

Goal Statement Project Scope

Key Elements of a Project Charter Business Case: The important of the project relative to the strategic goals of the company as well as the likely consequences if the project is not done. Problem Statement: The problem statement describes why the project needs to be done.

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Key Elements of a Project Charter Project Scope: It sets the boundaries of what is included and what is excluded. Preliminary Project Plan: it is critical to the success of a Six Sigma project. The targeted date to complete the 5 phases of the DMAIC. Communication Plan: A communication plan is the tool to ensure coordination.

2. Project Definition Phase

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Objectives To understand the importance of a good project definition. To define the methods of defining an Six Sigma Project.

Project Definition – How? Step 1 – Define problem statement Step 2 – Define scope of project. Step 3 - Define target / objectives. Step 4 – Define measure metrics. Step 5 – Define projected benefits. Prior to “definition”, there should be some study or data collected for the “problem”

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Step 1- Define Problem Statement Purpose: To define the problem & communicates the problem to others. Enables us to focus & link to our business or departmental goals. goals. A good problem statement consist of: 1. 2. 3. 4. 5.

What goes wrong? Where it happens? When it occurs? To what extent? How do we know?

On the other hand, it should NOT contain: 1. Cause of the problem 2. Solution to the problem.

Step 1- Define Problem Statement Example: “Customer in Japan is not satisfied with our last month acceptance performance, where the rate has decreased to 85 % and reject claims were also doubled” doubled” What? Customer…… is not satisfied with our ….. Customer……is Performance Where? ……in ……in Japan… Japan…. When? …….. .. Last month……… …… month……… To what extent?..... Has decreased to 85 % …. How do we know?..... Reject claims are also doubled.

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Step 1- Define Problem Statement More Examples: 1. “The production yield at the surface plate line is suffering since the re-location. The yield has dropped to only 70 %. Yield before the shift exceed 95 %” 2. “There is an increase of credit notes generate for oversea customer accounts since June 2006. it increased from 21 cases to 98 cases. The customer service also received compliant from these accounts"

Step 1- Define Problem Statement PROBLEM STATEMENT: ABC company is not satisfied with our delivery performance of our radio cover since the second last delivery. The “on-time score” has decreased to 85 % due to the two faulty aircylinder that delayed the production. They have requested for a thorough “preventive maintenance program” for the air cylinder. WHAT DO YOU THINK ABOUT THE STATEMENT?

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Step-2 Define scope of project Scope of project usually required some basic team activities with brain-storming, cause & effect studies, pareto charting or more tools.

Step-2 Define scope of project Common mistakes: Scope too board…. Due to poor data or communication we call it the…”solve world hunger” or “ocean boiling” projects. symptoms: many different outputs, vague goals, poorly defined problem statement, unmeasurable outputs,….etc. Solution: “Break” the problem into several projects instead on one.

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Step-2 Define scope of project Other mistakes: Too easy… “solution looking for problem” if solution is know…. Just fix it. Management issues Long term development project involved in large capital investment and time. Cost reduction by vendor. Process / product re-design.

Step 3 – Define target / objective Target / objective should be set at a realistic level. Avoid the “zero defect” goal, if possible. “everyone knows that there are variation in every process. We can minimize it … we can control it but we cannot totally eliminate it…. So acknowledge it and manage it!. On the other hand… A easy target will lead to ….”Success before work”

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Step 3 – Define target / objective Guidelines: Targets and objectives should be clearly defined and understood by the whole team. Target should aimed to have 50% to 70% improvement for black belt’s projects. We should know our “entitlement” – best that can be done with the existing process or technology. Avoid too lengthy time line. Set your “time limit” for the project below 4 months.

Step 3 – Define target / objective Examples: Increase the acceptance rate from 85 % to 95.5, a 70 % improvement from our entitlement of 100 %. Reduction of defect rate for: Process from 1 % to 0.5 % Process from 1.5% to 0.3%. • Reduce the lubricating usage by 70% from current rate. • Reduce paper consumption in the office from 300 rims to 100 rims.

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Step 4-Define measure metrics Why do we need a measurable metrics? To measure your success – Primary Metric. To prevent unintended consequences due to any process changes, i.e. avoiding problem “transferred” to other areas – Secondary Metric.

Step 4-Define measure metrics Primary Metric: Must be consistent with the problem statement. It use to track progress towards the project target & objective. Usually reported sing time-series charts or equivalent. Example: Process Cpk or Ppk Defect per unit. Cycle time. Yield (classical or roll throughput)

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Step 4-Define measure metrics Secondary Metric: Is used to keep one “honest” Preventing problem from passing from one area to another one. More than one secondary metric might be required to save guard our success.

Step 4-Define measure metrics Examples: 1. Cycle time reduction project Primary metric: Cycle time / production unit. Secondary metric: Man hours / production unit. 2.

Cost of usage project: Primary metric: machine downdown-time Secondary metric: overtime spend

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Defect reduction project: Primary metric: DPU. DPPM or reject rate Secondary metric: Cost / unit, cycle time / unit

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Step 4-Define measure metrics Examples: What could go wrong using overtime as the only metric?

Step 4-Define measure metrics Having “head count” as a secondary metric to safe guard the primary metric.

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Step 4-Define measure metrics Monitoring both the metrics at the same time.

Step 5 – Define projected benefit The main objective for a “projected benefits” is to quantify the effects of achieving the targets. From the primary & secondary metrics, potential project savings can be calculated in term of dollars & cents.

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Project Definition Problem statement Scope of project Target Measurable metrics. Projected business benefits.

Project Definition - Sample Problem statement The turnaround time for customer credit card approval is being exceeded from an acceptable time of 3 days, recorded by the customer service department from 1st Jun to 1st Sep 2006. this caused 254 customer complaints for inability to use their cards. 8 % of the customer cancelled their credit card and this translates to inefficiency can lost customer. Scope of Project: The scope of the project covers the newly issue “ Family Privileged Visa & Master” Master” cards only. Target: to decrease the approval cycle time to 1.5 days by Nov 2006, as measured by the time required for a new used to go from initial registration to receiving the approval from our ABC bank.

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Project Definition - Sample Measurable Metrics: Primary metric: Approval cycle time. Secondary metric: Head count & over time spend.

Projected Business Benefits The tangible benefits from the project estimated at $35,000 saving per year and with an intangible benefit of increased customer base.

Team member selection Critical point: Team member SHOULD contain staff from different disciplines and selecting the right person for the right job - production, quality, engineering, planning etc. Champions’ duty to discuss with their “Bosses” on releasing them for project involvement. Inform the process owner on project undertaking.

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Team member selection Consider the size of the team, “Maximize your resources” Recommend – Not > 5 Not to have too many members that are not actively contributing Release some resources for others. Ensuring member involved NOT MORE THAN ONE project, if possible. So to allow more to participate and ensuring focus to the team.

End of Lesson! Thank you for your time

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