How to Identify and Select Lean Six Sigma Projects

Lean Six Sigma is a powerful method for improving existing products, processes and
services. Six Sigma was developed by Motorola in 1987. Motorolas Six Sigma
yielded significant financial results and became popular with many other
companies, even though Six Sigma was practiced without the benefit of the define,
measure, analyze, improve and control (DMAIC) strategy, Black Belts (BBs), or a
defined project selection process.
In the mid-1990s, consultants introduced the method to Allied Signal and General
Electric (GE), tying improvement to bottom-line financial performance. GE and other
organizations refined the Six Sigma method and focused on identifying and
selecting key projects, as well as adapting operations-based Six Sigma to service
and transactional processes.
One way to improve the deployment of lean Six Sigma is to improve how lean Six
Sigma projects are identified and selected. The typical approach to lean Six Sigma
project identification and selection is heavy on selection techniques but light on
identification techniques. There are four prerequisites to a well-executed lean Six
Sigma project identification and selection process.
Prerequisite One: Understand The Strategic Plan
The first step in understanding how to identify and select lean Six Sigma projects is
to ensure you are completely familiar with your organizations strategic plan. A
typical strategic planning process will involve the following steps:

Planning to plan: Create a roadmap to accomplish the strategic plan.

Values scan: Assess the interests of the stakeholders.
Mission formulation: Use the stakeholders input to formulate a mission
statement.
Business modeling: Create a viable business model, including cultural
considerations and funding related to the restructuring or divestiture of existing
business lines, as well as the addition of new business lines.
Performance audit: Perform an assessment of the organization in terms of
capabilities and financial strength.
Gap analysis: Compare the current performance with the desired state to
create a list of gaps.
Integrating action plans: Create and implement a detailed plan to accomplish
the strategies of the organization and close any gaps.

Contingency planning: Develop contingency plans to account for potential

market changes, competitive pressures and other scenarios that might affect the
strategic plan and the organizations ability to execute it.
Implementation: Deploy the plan throughout the organization via cascaded
goals, quantifiable performance measures and clearly identified owners and
timeframes.

As part of action planning, organizations should launch strategic thrusts to close

perceived gaps. Typically, strategic thrusts are initiatives with clear charters and
budgets, led by senior executives and involve clear accountability. Strategic thrusts
might be broad or specific, depending on the perceived gaps. Lean Six Sigma, Six
Sigma, design for Six Sigma and their various permutations are all strategic thrusts.
Prerequisite Two: Align, Improve Efforts With Strategy
The second step is to understand how improvement activities should be aligned
with the action plans found in the strategic plan. As part of business modeling in the
strategic planning step, an analysis likely will have identified where the line of
business (LOB) falls with respect to market growth and competitive position. The
intent is to determine an effective strategy for a particular LOB based on the rate of
market growth and the competitive position for the LOB.
For example, if a particular LOB has a strong competitive position in a fast growing
market, the management team for the LOB might emphasize product development
over operations improvement. On the other hand, a particular LOB with a weak
competitive position in a slow market might require extensive focus on improving
the cost structure through lean Six Sigma. For other scenarios, the improvement
strategy should be suited to the optimization of each specific LOB relative to its
strategic goals.
Prerequisite Three: Understand The Policy Deployment System
The third step is to integrate the action plans into the policy deployment system.
Policy deployment is a general reference to goal based plans cascaded throughout
the various levels of the organization. Hoshin planning, management by objective
and other terms are varied implementations of policy deployment.

Successful implementation of policy deployment involves:

Setting high-level goals, targets, timeframes and owners based on the action
plans from the strategic plan.
Setting functional and departmental goals, targets, timeframes and owners
based on cascading the high-level goals to the local level.
Integrating the local goals into performance plans for individuals and teams.
Doing regular performance re-views for high-level and local goal
achievement.
Integrating performance to goals in the bonus structure for management.

Prerequisite Four: Understand Core Business Processes

Every organization operates in some form as a system that converts inputs
(transactions, information or raw materials) into outputs desired by customers (a
product or service). The organization will attempt to define processes to create the
desired outcome for customers and ostensibly document those processes.
To clarify how to look at process performance for opportunities for improvement, the
following terms apply:

Level one (L1) process: A core business process that corresponds to a

business function and has accounting traceability.
Level two (L2) process: A subprocess of an L1 process that involves a
distinctly related sequence of process steps.
Work steps: A logical work unit of an L2 process that involves a sequence of
work tasks and is performed by a person or a small team.

Figure 1 shows an example of the use of the terms.

The typical approach to identifying opportunities for improvement is to first
understand what the key L1 processes are within the organization. Then the key L1
processes will be broken down so key L2 processes can be identified. A typical lean
Six Sigma project then will address a sequence of work steps within one or more L2
processes.

Project Identification and Selection Process

Champions, Master Black Belts (MBBs) and BBs can and should follow a structured
method for identifying, prioritizing and selecting lean Six Sigma projects. Initially,
the responsibility of a Champion in the project identification and selection process is
to assist a trained MBB to execute the following steps:

Review the strategic plan.

Understand the high-level goals and targets for the organization.
Compare desired performance with actual performance for the organization.
Understand the local or departmental goals and targets for all business
functions.
Compare the desired performance with the actual performance for each
business function.
Identify key L1 processes based on risk/return/goal analysis.
Understand key L2 processes based on risk/return/goal analysis.
Brainstorm all potential improvement opportunities.
Rank and prioritize all potential improvement opportunities based on
risk/return/goals.
Communicate the results of the ranking activity and seek consensus.
Launch lean Six Sigma projects based on the priorities.

After becoming familiar with the process, the Champion is expected to lead these
steps for the organization on a regular basis.

Figure 1: Process Performance Decomposition Example

Champions Role Is Integral

The role of a lean Six Sigma Cham-pion is varied and diverse depending on the size
of the organization and the scope of the lean Six Sigma deployment. The DMAIC
method does not come without the risk of failure, but it is a very successful and
proven approach to solving problems and optimizing process performance. The
success of lean Six Sigma projects often hinges on the Champions ability to resolve
organizational issues and manage risks to the project, including:

Funding.
Time.
Staffing.
Customer relations.
Project size and complexity.
Overall structure.
External factors.
Dependencies among projects.

Most of these risks can be addressedand possibly alleviatedby having a well-run

project identification process, communicating the priorities of the organization,
communicating the potential lean Six Sigma projects, and building consensus
among the key stakeholders.
Champion responsibilities do not end after projects have been selected. The
Champion is also responsible for ensuring that each lean Six Sigma project has a
solid plan, buy-in for the required resources, and effective management. The
Champion is also re-sponsible for running effective project reviews at the end of
each phase of the DMAIC process. Project reviews should not only look back at
preceding activities, but also look ahead for the successful execution of upcoming
phases.
A well-trained MBB should assist the Champion before and during the project
reviews. The BB will be well versed in the technical tools, but it is the responsibility
of the Champion to enable sufficient resources and remove organizational
roadblocks that might stall the project.