Lean Six Sigma projects are identified, planned, executed, reviewed and verified to achieve a predetermined value-centric benefit for the sponsoring organization and its customers. To this end, a Lean Six Sigma project must first be properly chartered and initialized. Next, it must flow smoothly through each step of the DMAIC problem solving process. This means that a project must pass through the Define, Measure, Analyze, Improve and Control (DMAIC) phases of improvement in order to realize a comprehensive, lasting solution.
In short, Lean Six Sigma projects are formal investigations guided by the hand of scientific knowledge, not a collection of loosely organized ad-hoc activities with an indeterminate outcome or a “let’s see what falls out” type of focus. Where Lean Six Sigma projects are concerned, success is the result of a thoughtfully designed outcome, not a chance or circumstantial set of events. This is what makes Lean Six Sigma projects so effective and efficient.
Given this, it is easy to understand why Lean Six Sigma projects must be carefully planned, resourced, managed and judiciously reviewed. Naturally, upon completion of such a project, the accounting function must verify its derived benefits and then management must officially sanction its closure.
In today’s world, corporations are questing for top line growth and constantly seek to reduce their total cost structure. The business leaders of such organizations want to increase capability and capacity without capital investment.
They also know that customer satisfaction must be continually monitored and improved. At the same time, they recognize the need to enhance investor relations. And the interconnected list of imperatives continues in a seemingly endless way.
Some of these business professionals have not been exposed to the huge gains made by companies such as General Electric, Honeywell, Sony, Ford Motor Company, and DuPont, just to mention a few. As many now know, these fine organizations found the “magic formula” in the chemistry of Lean Six Sigma. They discovered the power of highly focused, value-centric lean sigma projects.
Since its inception in the 80’s as a quality initiative at Motorola, Six Sigma has evolved into a world-class business management system. Over time, Six Sigma has been intelligently blended with many of the best practices commonly associated with Lean Manufacturing.
Thus, Lean Six Sigma provides a viable means for industrial and commercial organizations (through focused projects) to reach the control function of the business and positively alter the genetic code of its leadership.
The combination of Lean Six Sigma thinking and the DMAIC problem solving methodology offers the capacity and capability to rewire all of the critical processes of a business – in every corner and in everything it does. Thus, Lean Six Sigma forces an organization to reexamine the way in which it gets the work done and not simply modify or augment the existing system to realize some marginally acceptable level of improvement.
While the practice of Lean Methods targets process efficiency (i.e., waste reduction), Six Sigma targets process effectiveness (i.e., variation reduction). Taken together, the duo represents the proverbial one-two punch for waste and variation. Of course, this translates to an improvement in overall process efficacy.
Owing to this, Lean Six Sigma is more than a roadmap and statistics. It’s a way to identify, execute and manage many simultaneous improvement projects that are linked to a common set of unified business objectives. Of course, when such projects are deployed and implemented, their collective power suddenly and dramatically blips the radar screen of business.
In this sense, Lean Six Sigma is a strategic and tactical system for managing the total business enterprise. From this perspective, it is easy to see why Lean Six Sigma projects are so widely used to create business process improvements. In other words, the practice of Lean Six Sigma enables a business enterprise to breakthrough to new levels of performance.
Project Deployment Guidelines
Lean Six Sigma projects take on different faces in different organizations. Naturally, the overall goal of such improvement projects is to enhance some form of customer satisfaction or business performance. Thus, within the same enterprise, some projects will be focused on industrial processes while others will concentrate their efforts on commercial processes and activities.
Enterprise Linkages: Almost without saying, such improvement projects must be linked to the highest levels of strategy in the enterprise and be in direct support of specific value-centric objectives. Of course, all such improvement projects must be agreed upon by both business and operational leadership. After this, the project must be “chartered” by the project Champion and then executed by an X-Belt (i.e., Black Belt or Green Belt).
Business Level Focus: At the business level, projects should be selected based on the strategic goals and direction of the larger enterprise (e.g. corporation). Black Belt and Green Belt projects should be aimed at improving such things as customer satisfaction, cost, capacity, and top-end growth.
Operations Level Focus: At the operations level, Lean Six Sigma projects obviously will have a greater and more immediate impact at the local than they will have at the enterprise level. However, localized projects should still link to the overall strategic goals and direction and directly involve the local leadership.
Process Level Focus: Projects at this level should focus on key operational and technical problems that are process-centric. In addition, the focus (i.e., improvement objectives) must be ultimately connected to the strategic goals and objectives of the parent enterprise, but done so through the operational objectives. Naturally, this ensures hierarchical linkage, thereby creating synergistic improvements that can be meaningfully classified and subsequently “pooled” or otherwise aggregated to the enterprise level.
Deployment Strategy: Project selection can rely on a “top-down” or “bottom-up” approach; however, historically speaking, the top-down approach has proven more successful than the bottom-up approach.
The top-down approach considers a company’s major business issues and objectives and then assigns a Senior Champion. Following this, a Lean Six Sigma Project Champion identifies high-potential projects and then assigns an X-Belt to identify the corresponding processes and critical-to-quality characteristics, develop process baselines, and create specific improvement plans. This is the favored approach and the best way to align localized business needs with enterprise-level goals.
The bottom-up approach often results in projects being selected by local department-level managers under pressure to make budget reductions, resolve specific quality problems, or improve process flow and efficiency. These projects should be considered “targets of opportunity,” and don’t always integrate well with the company’s strategic business goals. In other words, such projects are difficult to unify or otherwise synergize toward a common goal
For example, managers may be asked to identify specific areas of waste, part-shortage problems, supplier quality issues, or unclear or impractical engineering requirements, and then a Black Belt is assigned to solve a specific problem. With this approach, it is easy for the operations-level focus to become diffused and disjointed in relationship to the higher strategic aims and directions of the parent business.
Resource Allocation: During deployment planning, an organization should consider how it will allocate resources between the two types of approaches. While the top-down approach has structural and managerial appeal, the bottom-up approach can ensure that key opportunities at lower levels of the organization are not lost.
Project Focus: At the process level, Lean Six Sigma projects should focus on those processes and critical-to-quality characteristics that offer the greatest financial and customer-satisfaction leverage. Each project should address at least one element of the organization’s key business objectives, and be properly planned. It is the Champion’s responsibility to gain the executive leadership’s support so that roadblocks are cleared and projects are successfully aligned and completed.
Project Benefit Guidelines
There is no substitute for the experience of on-the-job application. This is also true in the world of Lean Six Sigma. In this context, it can be said that an application project is the point where the proverbial rubber of training meets the road of reality, so to speak.
Through application projects, a Lean Six Sigma X-Belt (i.e., Black Belt or Green Belt) can demonstrate the value of his or her skills while concurrently ferreting out added value for the sponsoring organization, as well as themselves.
A valid application project must return some form of tangible, measurable and verifiable benefit (value) for the X-Belt’s employer or sponsoring organization. Of course, such a benefit must be substantial and meaningful to the sponsoring organization. By convention, the Champion takes ownership for assessing the viability of potential projects.
It is up to the Champion to determine if a potential project has the right scope and depth for a particular Green Belt or Black Belt and whether or not it can return bottom-line, measurable and verifiable benefits. Of course, this could mean that the Master Black Belt might need to be involved (to some extent) in order to reliably determine whether or not a project is technically feasible and viable.
In this context, cost-avoidance activities do not usually qualify as valid X-Belt projects. Generally speaking, only those activities that can deliver “hard” value to the bottom line should be considered as viable Lean Six Sigma projects. This means that only quantifiable problems should be project-ized and placed in the pool of assignable X-Belt projects.
Of course, this would naturally imply that each potential X-Belt project must be properly scaled or otherwise “sized” so that it has enough scope and depth to require application of the full DMAIC process, but yet narrow enough so that it can be done in a relatively short period of time (2 to 4 months).
Obviously, when “jumbo sized” projects are assigned to a single Black Belt, the outcome is usually unfavorable. Worse yet is the case where large projects are unwittingly assigned to a worker-level team led by a Green Belt.
As would be expected, lower ranked X-Belt projects have far less returns, but are usually smaller in scope and shallower in depth. For example, a Green Belt project should be scaled so that it can be completed in 4 to 8 weeks. While the returns of a Green Belt project are normally less than that of a Black Belt, they are greater in number.
Thus, for a typical large scale enterprise or mid-sized business, the total project impact of the Green Belt cadre is often greater than that reported by the Black Belt population of the same organization.
In general, Lean Six Sigma projects should be focused on persistent or chronic problems; the type of problems that have previously defied solution. Thus, a Lean Six Sigma organization is not focused on the types of problems that can be solved through “common sense.” However, they are focused on problematic issues and business goals that require some form of “extraordinary sense” to resolve.
This super-ordinate need represents a class of problems that require a data-centric, science-based mindset, like that offered by the discipline of Lean Six Sigma. This means that the typical Lean Six Sigma X-Belt project is more substantive and involved than a Just-Do-It (JDI) project or Kaizen event.
This also means that the expected project outcome and application methodology must be adequately mapped (i.e., planned) prior to execution, yet flexible enough in its design to take advantage of opportunities along the path, but not at the sacrifice of its super-ordinate business goals.
Project Selection Guidelines
Project Identification: Lean Six Sigma application projects must focus on business value, plain and simple. A valid on-the-job project must yield some form of tangible value for the sponsoring organization.
For example, hard cost savings, yield improvement, defect reduction, cycle time reduction, inventory reduction, headcount reduction, increased customer satisfaction, and so on. Of course, all such value-based improvements can and should be translated into the language of business – money and time.
Project Returns: Any true improvement, no matter how large or small, must be viable, visible and verifiable in terms of money. After all, money is what business is all about.
If a Lean Six Sigma practitioner cannot translate his or her efforts and outcomes into some form of economic benefit, then one would have to necessarily question the true value of that practitioner’s contribution. If this vital monetary translation cannot be made, it would be doubtful that the “improvement” was truly tangible or real.
Owing to this line of business-minded reasoning, Lean Six Sigma projects have traditionally been focused on high-impact value-centric problems and issues that are financially traceable and verifiable. More specifically, Lean Six Sigma projects must be concerned with creating measurable value for both the customer and provider – in every aspect of the business relationship.
Project Responsibilities: As would be expected, the X-Belt must take responsibility for learning the Lean Six Sigma tools and methods. On the flip side of things, the Champion must take responsibility for identifying, selecting, assigning, reviewing, approving and closing Lean Six Sigma projects. Only when these two conditions are realized and judiciously blended will mutual success prevail.
Project Scale: Naturally, a live on-the-job Lean Six Sigma project must have the right scope and depth for a Black Belt or Green Belt. Only those projects that are capable of delivering hard benefits should be considered. In other words, a Lean Six Sigma project should only be declared, activated and executed if it meets certain predefined decision criteria.
Project Criteria: The general criteria for selecting a Lean Six Sigma project are as follows:
1) The project has the proper mix of scope, depth and timing;
2) The project necessitates using the DMAIC improvement process to realize its projected benefits; and
3) The targeted performance characteristics and forecasted benefits can be clearly defined and are rationally measurable.
Generally speaking, a project can usually be considered “viable” and “feasible” when these three criteria can be reasonably satisfied (in both spirit and intent). Only then should that project be assigned to a qualified Lean Six Sigma practitioner, such as a Proficiency Certified Black Belt or Green Belt.
Project Charter Guidelines
The project charter is often drafted by the Project Champion or Master Black Belt and then refined by the Black Belt or Green Belt, as the case may be. Naturally, the charter must be approved by the leadership team. It is not uncommon for the charter to be revised several times as the focus and locus of the project is better understood and data becomes available.
At the onset of the Measure Phase, the original charter might need to be refined or otherwise modified to account for new knowledge about the problem or process under investigation. In other words, it may be necessary to amend the general scope or depth of work to accomplish the intended aims. In addition, a clear process definition is essential. This helps the X-Belt see where the work will focus and what needs to be accomplished.
Generally speaking, the scope and depth of a Black Belt Lean Six Sigma project should be clear and attainable in a four to six month period; otherwise, the project should be reclassified and elevated to a higher level (i.e., Master Black Belt or team of Black Belts). Furthermore, close attention should also be paid to the selection of process metrics. Such measures focus the X-Belt on the aspects of process performance that must be improved. Moreover, the process metrics are often used to calculate the financial impact of the project.
The baseline, goal, and entitlement values associated with each of the key process metrics is also important to document, as well as the overall business impact of the project. In general, the project team should be small and not have more than four to six members (identified by name within in the charter). Yet another key element of the charter is the work schedule. It is very important to employ and use well accepted project management methods and practices.
Project Execution Guidelines
Project Activation: By conventional practice, a Certified Black Belt (or Green Belt) must have completed at least one live Lean Six Sigma DMAIC project as a part of his or her professional development. Of course, such projects are primarily intended to reinforce certain aspects of the X-Belt’s training program, but at the same time, the project must also provide one or more benefits. In this context, the training project is very similar to post-training projects.
Regardless of the project’s nature, the scope and depth of a Lean Six Sigma project should always be consistent with the X-Belt’s rank and experience. Furthermore, it is recommended that the X-Belt prepare a Lean Six Sigma project charter, receive management approval and then execute the project in accordance to the defined plan. In this manner, the overall system of improvement remains measurable, manageable, and accountable.
Project Charter: Generally speaking, a project charter is the cornerstone of successful execution. More to the point, approval of a charter signals the activation of a Lean Six Sigma project.
Once a project charter has been created and sanctioned by the sponsoring organization, the key elements of execution must then be identified, prioritized, and committed to a timeline. In this sense, the project charter is a management tool and should be carefully and judiciously prepared.
This is not a simple “check the box” kind of activity – it is the first point where project responsibility and accountability are formally declared; therefore, judicious attention must be given to its formulation and use.
Project Execution: Holistically speaking, each Lean Six Sigma project will follow the DMAIC improvement strategy to realize its aims. The planning and execution of this strategy can involve a number of critical independent milestones that are usually interrelated in a progressive and interactive manner.
Project Reviews: It is firmly suggested that the X-Belt’s sponsoring organization manage their Lean Six Sigma projects through a formalized set of management tollgates. A tollgate is simply a set of success criteria that must be fully satisfied before a project is allowed to continue on the next scheduled phase of execution. Normally, a management tollgate review will coincide with the completion of each phase of the DMAIC improvement process. However, in some cases, it may be necessary to incorporate In-Phase reviews (i.e., management and technical) so as to ensure adequate oversight and governance.
In this case, the presiding Master Black Belt would assume responsibility for the planned technical reviews, while the Champion (and perhaps process owner) would have responsibility for the planned management reviews. It is also recommended that one or more of the organization’s executive management team join in on the management reviews. This should be done periodically so as to provide senior leadership visibility and encouragement.
Project Tollgates: As many are aware, tollgates ensure the timely and proper planning, approval, execution, review, verification, and closure of Lean Six Sigma projects. Naturally, the X-Belt’s sponsoring organization would seek to establish the success criteria associated with each tollgate – before the fact. Prevailing business needs, management philosophy, operational requirements and organizational policies can often influence the identification and adoption of certain success criteria.
As one might expect, such criteria will vary from organization-to-organization, depending on a host of business variables and constraining circumstances. Owing to the value-centric nature of such criteria, only the sponsoring organization’s management can definitively say what constitutes project success. Thus, the management would be concerned with the Quality of Business, not the Business of Quality.
Project Closure: After an X-Belt has successfully completed a Lean Six Sigma DMAIC project, that project must pass through a final management for purposes of authentication. In other words, the project activities and resulting benefits must be validated before it is formally closed.
Of course, the criteria for closure will vary organization-to-organization, but will normally revolve around satisfying one or more of the following needs: a) sustainable benefits; b) accounting verification; c) management approval; and d) technical validity, not necessarily in this order of priority. Generally speaking, a project can only be closed once the X-Belt’s sponsoring organization has officially declared that the success criteria have been reasonably satisfied.
Project Documentation: For purposes of organizational leadership, the sponsoring organization should want to provide the X-Belt with some type of document that confirms the successful completion and closure of a Lean Six Sigma project. Such a document can take the form of a formal letter, internal memorandum, or official certificate.
Personal Recognition: Generally speaking, a project completion document does not reveal specific details about the project (in the interests of business confidentiality), but does acknowledge the X-Belt’s contribution and accomplishments. Needless to say, such “artifacts of success” are quite important to the individual X-Belt.
Almost without saying, such credentials can greatly facilitate management’s efforts to provide meaningful recognition, job motivation and can even serve to support employee retention. They are also meaningful for the sponsoring organization when used to facilitate annual personnel reviews.
Authenticating Agent: Most normally, a successful project can only be authenticated or otherwise formally certified by a recognized member of the sponsoring organization’s management team. For example, such an individual might be the X-Belt’s immediate manager, the related process owner, or one of the organization’s senior Lean Six Sigma leaders (e.g., Champion or Master Black Belt). Only at this point can the X-Belt legitimately declare project success – in a verifiable way.
It should go without saying than an external consultancy or professional institution is not meaningfully positioned to authenticate, validate or otherwise certify the successful closure of an X-Belt project – for a wide array of business reasons. Such tasks are incumbent upon the sponsoring organization. Essentially, these matters are of a business nature and should only be decided by the management of that enterprise.
Project Case Study
Case Facts: The following discussion is related to a Black Belt project and represents how “low-hanging fruit” can be gathered using the DMIAC improvement strategy.
Our story takes place within General Electric’s Plastics Division. GE Plastics, by applying the DMAIC process to over 3,000 projects, saved $137 million in 1997. One of these projects took place in Polymerland- a division within GE Plastics (an organization that distributes thermoplastic resins). Polymerland ships plastic products to a variety of customers, including manufacturers of computers, CD-ROM’s compact discs, digital videodiscs, and automobiles.
Polymerland employees had already pulled together a Black Belt team to focus on a suspected problem. The team was in the midst of the Define phase of what they called their “Damage-Free Delivery Project” when one of their largest and most lucrative customers came to their sales force and said, “Look, we are ready to take our business elsewhere. Too many of the products you are sending us have been contaminated.”
The customer was frustrated by the fact that it was constantly receiving damaged products, and that it then had to use its own time and manpower to ship the defective product back to Polymerland for replacement. Between January 1, 1997, and June 30, 1997, Polymerland delivered 275,501,855 pounds of product to its customers.
During this period, 176,381 pounds of product was contaminated – meaning that the packaging had been damaged during shipping – and thus a damaged product was delivered to the customer. This resulted in a damage-free reported sigma of 4.72 and a DPMO (Defects Per Million Opportunities) of 640.
Realizing that one unhappy customer probably meant there were many more who were not voicing their unhappiness, and that lost customers meant lost sales, employees at Polymerland told the customer that they were aware of the problem and that they were pulling out every stop to find a solution.
Measure Phase: Polymerland’s Black Belt team decided to take a closer look at each of their ten warehouses from which the product was shipped, in an attempt to determine where the damages were occurring. Of the ten warehouses, two warehouses (Maumee and Piedmont) produced the highest number of defects.
The Black Belt team calculated that, between the 10 warehouse locations, the 50 different product lines, the 14 different types of packaging used, and the 100 transportation carriers used, there were nearly 700,000 combinations of variations that could be the source of the problem.
Analyze Phase: Black Belt team focused on the Maumee and Piedmont warehouses. They found that 95 percent of the damaged boxes had two punctures at the base of one side of the box, causing the product to leak. The Black Belts also found that 87 percent of the damage occurred when the boxes were moved by forklift onto stacks or into trucks.
It didn’t take long for the Black Belt team to decide that there was a strong correlation between the number of boxes damaged in-house – as opposed to being damaged during shipping – and the number of damaged products received by customers.
The team also discovered a relationship between how the product was packaged and the type of damage done. Bags were more likely to be damaged if they were scraped across the floor, whereas boxes were more likely to be damaged when being handled by a forklift operator.
Why, they asked, were the boxes handled by forklifts damaged while the bags were not? The answer turned out to be fairly simple. The forks on the forklift protruded six to nine inches out from under the box, so that as the fork was fully inserted under the box being retrieved, the box behind it was punctured. But if this was the case, why was the Brampton, Ontario, warehouse able to operate at Lean Six Sigma using the same forklift?
Several answers were offered, but the most tenable seemed to be the drivers’ experience and the control they wielded over the forklift operation. When a box was lifted, the forks were tilted back for load stabilization. But if the driver did not lower the fork tilt, the protruding fork, instead of sliding under the first box, would puncture the second box as the first box was placed next to it. Because drivers could not see over the lift, they were forced to blindly place the boxes onto the pallets.
Improve Phase: Now that the problem had been thoroughly analyzed, the Black Belt team was ready to begin the Improve phase. There were several possible solutions to this problem. More-experienced forklift operators could be hired into the Maumee and Piedmont plants at a significant cost to the company, assuming it was possible to find forklift operators with nearly twenty years of experience. A second option was more extensive training for the forklift operators in the Maumee and Piedmont warehouses – another expensive solution without a guaranteed outcome.
In the end, however, the team decided to install shorter forks, eliminating the fork protrusion altogether. In December 1997, the Piedmont plant replaced the forty-two inch forks with thirty-six inch forks at a relatively nominal cost of $350 per forklift truck. Within a short period of time, thirty-six inch forks had replaced the forty-two inch forks not only at the Piedmont warehouse but at the Maumee warehouse and other warehouses as well.
Control Phase: Now the Black Belt team was ready to move into the final phase, the Control phase, where steps are implemented to make sure the process stays fixed. GE has a mandate that before any Lean Six Sigma project is completed, it must pass through data points.
A data point shows intervals and can reflect how often an event occurs within a given time period. A data point might be weight, inches, the number of hospital deaths that fall within a specific time period, and so on.
In Polymerland’s case, a data point was a period of time, anywhere from two weeks to two months, during which Black Belts must show beyond a doubt that their projects have a workable and permanent solution.
Lean Six Sigma derives its power from the DMAIC application strategy – Define, Measure, Analyze, Improve, and Control. Through this strategy, it is possible to improve almost anything because we reduce the problem to its deterministic root. In other words, we apply the fundamental principle that says: Y = f (X).
Of course, this is to say that “Y” is the outcome and “X” represents all of the essential inputs, and “f” is the ways and means (process) by which the critical inputs ( Xs ) are transformed into an output ( Y ). So, for any given problem-centric situation, we must define, measure, and analyze the critical “Y” (i.e., the CTQ) and then improve and control the critical Xs (i.e., the CTP’s). Essentially, projects are built around this model, regardless of type, industry, product and so on.
In essence, Six Sigma is driven by a divide-and-conquer strategy that is focused on the idea of “effectiveness,” whereas Lean Practices support the concept “efficiency,” driven by the philosophy of continuous improvement. Owing to this, Lean Six Sigma projects are rolled out in accordance to a well-defined process, not according to a vague notion of improving everything we do forever, followed up by a sporadic and disconnected set of actions.
Rather, the practice of Lean Six Sigma divides the improvement into several comprehensible compartments. In turn, these islands of improvement opportunity are portioned into “application projects.” By design, these projects collectively form a vertical focus through all levels of the business enterprise.
By this point in time, it should be fairly clear why many noted industry (and governmental) leaders have taken up Lean Six Sigma: It is an enabler that allows an executive to reach the “control function” of an enterprise through highly focused, data-centric projects. The collective power of such projects unites management (and the workforce) in a pragmatic way. Lean Six Sigma indirectly forces everyone to synchronously raise their company above the limitations commonly associated with schizophrenic, disconnected, fire-fighting types of improvement activities.
Through a circumspect pattern of interrogation and action, the application of Lean Six Sigma arranges the alphabet soup of improvement initiatives (i.e., the various acronyms associated with corporate programs) into coherent words, sentences and paragraphs, so to speak. In doing so, Lean Six Sigma takes the idea of quality to a more execute-able level that is more closely aligned with the aims of business. It elevates quality to the boardroom, demanding the kind of executive attention and action that cascades to the lowest reaches of an enterprise.
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