To recognize the project opportunity, we should go by Corporate CTQ drill down tree. This tree helps us to understand the hierarchy of the importance of the business down to the lowest importance for the business.
Though we consider the end user as the most important customer, however in the corporate world the business owner or stakeholders are the most important customers.
Every business has a different process and every process will have some issues or drawbacks, we need to prioritize, by the CTQ drill down, in which we need to work and improve the process.
It gives the whole CTQ drill down info. Then how does it work? It is segregated into 3 Levels:
Level 1 is the categorized the department for the corporate.
Level 2 indicates the sub-department of the department.
Level 3, here we get the actual issues.
The other way of finding the project by IPO FAT tool or Gemba. In these two methods, we do the brainstorming sessions. Once we receive all the ideas, we can segregate into the Lean or Six Sigma projects.
Once we decide the Project area, next we need to find the scope of the project, which is a very important part before starting the Six Sigma project. It gives the boundaries to the project and mentions which are the things that will be “out of scope”.
As a matter of fact, we cannot improve the whole process at once, we need to make project boundaries so that in a small way, we could improve the whole process.
A project scope is defined by the consultant along with the sponsor. Also defining the scope creep, during the course of the action we could find the lack of people support while doing the creep, we can take the approval to extend the number of people.
Before presenting in front of the Senior management, the process valuation is required in three areas:
· What is the issue?
· What are the supports?
· What are the financial benefits of the project?
· What is the issue/problem?
What is actually the process facing issues in the system, before that, we need to provide the whole business scenario. The problem scope needs to be framed properly and what are the areas which would be covered by the project.
In Six Sigma projects, the support from whole operation team is very important at all levels. We need the support from Stakeholders to the associates, who are working in the process.
We need to see the KPI (Key Performance Indicators) and what all are the things which will impact our process.
The financial benefits we can see in different ways. ROI, Max-Min analysis, NPV, and IRR. The financial benefits can be seen, direct and indirect. Direct benefits mean the cash flow we receive, which has a direct impact on our project.
The direct benefits impact on the cash flow, or we can see the financial benefits. The indirect benefits, which will not be directly impacting to the cash, however which impact other things.
ROI- Return on investment, how much would be the return on investment. If we run the project, some cost would be involved, we see in return, how much we receive after the project.
By the Min-Max analysis, we check, if we involve the money in the project, a minimum of how much we will receive by this. If the project’s minimum benefits are substantial, then the project opportunity could be worthwhile. And if the maximum benefits are not substantial, we can avoid running the project.
We need to check the net present value to run the Six Sigma project. It is the method by which we calculate the net present gain as per future cash flows.
Future Value = present value (1+r)^t
The IRR is defined as the rate of return which equates the present value of future cash flows with the cost of the investment. In Excel, we can calculate the IRR value by “=Irr”.
The Six Sigma team formulates into 4 steps i.e. Forming, Storming, Norming and Performing which are given as below:
1. Forming
2. Storming
3. Norming
4. Performing
In the forming stage, the Six Sigma team depends upon the leadership guidance and their directions. The whole team work, their purpose, and the scope of the work clearly depends upon the leader. Here their roles and responsibilities get divided, so everyone should know what all the expectations and the team are tries to keep up with them.
Here, leaders must try to find answers for all the queries which lie on each and every team member ’s mind and make them satisfied.
Here the internal Six Sigma team gets formulated, and they try to adjust with each other and understand the roles and responsibilities. Here the team actually focuses on how to accomplish the project goals. The major focus is on the team bonding. At this stage, we need to deal with everyone’s emotions and their experiences and make them satisfied.
In the norming stage, group identity and cohesiveness among members is established. Members achieve a sense of belonging and become comfortable sharing ideas and feelings and giving or receiving the feedback. At this stage, the team discusses the working style.
The Six Sigma team becomes an interpersonal force of interlocked roles and shared commitments. The performing team deals with the obstacles, challenges and any setbacks. They try their level best to achieve over the given target.
After forming the team of the Six Sigma project, the next step is to create the milestone for each phase (DMAIC) of Six Sigma project. Try to put the milestone clear, so that there is not much confusion in this respect.
And if we complete any phase before the given time frame, try to utilize the time left in another phase.
The general milestone dates should be as below:
Define – 1 Month
Measure – 1 Month
Analyse – 1 Month
Improve – 1-2 Months
Control – 1 Month
We should not make a project plan beyond 6 months time frame. The Define phase could take more time.
The project schedule can be done of two types –
· Gantt Chart
· PERT CPM Diagram
A Gantt chart shows the relationships among the project tasks, along with the project task time. The horizontal axis shows the units of time, and the vertical axis shows the project milestones.
The PERT CPM consists of 4 basic phases, i.e. Planning, scheduling, improvement and controlling. While using the PERT CPM for a given activity, the Cost per unit of time saved is found by the formula as (Crash Cost – Normal cost)/(Normal time – Crash Time)
So here we can see, the Six Sigma project is not only the statically approach, it is beyond the statistics and techniques since we not only use the techniques, but we need to focus more on the management side as well to understand the clients and customers needs. So before starting any project, we first need to work upon these things and keep in the mind how to make the changes and make people accept the changes. Since the best solution cannot solely bring in the project success, their acceptance and utilization are also essential for the process members.