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Project Identificat ion, Selection, And Scoping Pg 14
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.
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license.
Project Identificat ion, Selection, And Scoping Pg 19
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
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license.
Project Identificat ion, Selection, And Scoping Pg 26
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
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 $
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 41
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
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 42
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.
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 43
Problem Statement Drill Down(Example 2)
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.
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 44
Problem Statement Drill Down(Example 3)
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.
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 45
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
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 46
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
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 47
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
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 48
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
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 49
Six Sigma Academy International, LLC All rights reserved; for use only in compliance with SSA license. Project Identificat ion, Selection, And Scoping Pg 50
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
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
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