The main aim of any Lean Six Sigma project is the elimination of defects and variation in processes. The outcome of this effort is improved business efficiency and better quality of products or services delivered. This outcome can only be achieved when business processes have been streamlined and wasted resources and effort have been eliminated.
However, it is easy to lose sight of the fact that choosing a Lean Six Sigma project and maintaining it is essential to overall success. Many organizations can easily identify opportunities for process improvement, but find it difficult to isolate priorities and package them into meaningful and sustainable projects. In order to succeed, the project selection strategy should be organized and well-defined.
Establish a Project Selection Committee
The first step is to put together a team that will be involved in identifying project opportunities and prioritizing them. Known as a Lean Six Sigma project selection steering committee, this group should include managers who have sufficient training as Lean Six Sigma Champions so that they may bring in their expertise and experience when trying to determine the manageability and viability of the projects to be considered.
Pareto Priority Index
The committee may then carry out a cost-benefit analysis of each opportunity in order to determine the benefit that the organization stands to gain by implementing the project. Also known as the Pareto priority index (PPI), this analysis considers the following:
- Savings: Calculated by the accounting department and enumerated as a dollar amount, it is a reflection of savings arising from higher sales, lower labor costs, lower carrying costs and a reduction in materials and maintenance costs.
- Probability of success: This percentage is an indication of how likely a project is to achieve the stated goals.
- Cost: Yet another dollar amount that is determined by the company’s accounting department, it is the price of implementing the project.
- Completion time: This represents the amount of time that the project team needs to completely implement the Lean Six Sigma project.
When the factors above are aggregated, the result is a PPI index number. This number helps the committee to quickly compare several potential projects. Those that offer higher dollar savings while also having a higher probability of success have a higher PPI compared to those with higher costs and long completion times.
Although the cost-benefit analysis involved in coming up with the Pareto prioritization index number comes with the advantage of being based on quantitative and objective factors which can be used to compare potential projects, it lacks customer input. Since the ultimate goal is to provide effective solutions to the customer’s problem, it is necessary to balance the PPI with a prioritization matrix which will capture the needs of the customer.
To get this information, the project selection steering committee relies on interviews, focus groups and customer surveys to get the voice of the customer (VOC). All of the recommendations made by the customers with regard to a potential project are then put in a matrix which helps the team compare them to all the other potential projects. Each project is then rated, and the one offering the greatest benefit to the organization is selected.
Choosing the right Lean Six Sigma project can have a dramatic and positive effect on the performance of your business.
If project selection is carried out haphazardly, the result may be that a project is selected which lacks complete buy-in from the business. It may also experience resistance from employees or encounter roadblocks from management, and will eventually leave the team feeling ineffective. This is a situation where nobody wins, particularly the organization’s quality manager, who may need to engage these disillusioned people when another need arises.
If a process is selected on the basis of rigorous cost-benefit analysis that is combined with a prioritization matrix, the project will provide tangible benefits to both the consumer and the company.