Chapter 1. Introduction
1.9 Project Planning and Management
1.9.1 Project Proposal
A business determines how the project proposal form is developed. A sample for- mat is presented in Figure 1.6. A project proposal generally begins with identifi- cation of the project:
Project: ___________________________
Project #: ___________________________ Key sections in the proposal should include:
Problem Statement: Describe the problem/opportunity that is forcing the busi- ness to develop the proposal. Answer important questions such as:
• What is the problem?
• Under what conditions does the problem occur? • What are the extent and the impact of the problem?
Example: “In the past 2 years, 150 cases of customer complaints have occurred in the U.S. market: 65 of 100 printing through message packaging systems were installed that were more than 10 days after customers’ requested dates. Customer complaints and ad hoc attempts to resolve installation issues caused loss of pro- ductivity (i.e., wasted time and productivity), internal conflict among staff, and loss of potential revenues and repeated business.”
Objective Statement: State what is expected to be accomplished in specific, meas- urable, observable, and manageable terms once the project is completed, based on a given budget and time duration.
Example: “To reduce from 65 to 25 of 100 installations of printing through mes- sage packaging systems taking more than 10 days from the customer-requested date by improving the process capability from 1.1 sigma to 2.2 sigma in the next 6 months. This will provide a 2.7 times improvement in the process.”
Expected Benefits: Identify the importance of the project and its relationship to the company’s business strategy. State the financial benefits that are expected and how these benefits will be achieved.
Example: “Targeted savings: DPMO reduction (defects per million opportunities): • Reduction of system installation delays (from 65 to 25 of 100 system
installations that are completed beyond 10 days of the customer- requested date). Project: Project #: Problem Statement: Objective Statement: Expected Benefits: Project Scope: Project Criteria: Project Plan:
Project Team and Expertise: General Information: Business Strategy: Critical Quality Issue: Current Process Capability: Comments (Remarks):
Project Review Dates (Dates to Complete Each Phase)
Start Date: Define Date:
Measure Date: Analyze Date:
Improve Date: Control Date:
Closure Date: Approval Signatures:
Functional Manager Champion __________________ ______ _________________ ______
Date Date
Experts Team Leader __________________ ______ _________________ ______ Date Date Other Other __________________ _______ __________________ _______ Date Date
The team would expect total financial benefits of $100,000 before taxes in the next 12 months and an additional cost savings of $20,000. The qualitative benefits would be reduction in staff conflicts, reduced customer complaints, and improved customer satisfaction.”
Project Scope: Specifically identify what is included and what is excluded in the scope of this project.
Example: “The project team will focus on the process from order booking through system installation: starts once the customer signs the contract and ends when the system installation is complete. Customer credit check and payment days are excluded from the process.”
Project Criteria: State the relationship of this project to other projects as applica- ble. If this project is a part of a program (a program is made up of several proj- ects), identify and link to the program. Specify if ROI is required or if any specific person/group is to approve the activity/output.
Example: “Message printing through packaging system’s pricing policy will be updated based on the results (output) of this project.”
Project Plan: Identify key activities that would lead to the project objectives. • Develop material and process flow charts.
• Collect routing and volume data. • Collect material lead time.
• Develop area layout with assumed constraints.
• Develop hardware and software integration milestone activities.
Project Team and Expertise: State the responsibilities of individuals/groups. • Management team
• Project leader and his/her team—Core team members who have the strongest interest in the process improvement (These individuals are involved in day-to-day work on the project and devote a significant amount of their time to the project.)
• Core team members—Subject matter experts who will be called upon from time to time if specialized knowledge is required for the project
Note: Team leaders must define their responsibilities and provide a realistic
General Information: Any general information about the business strategy, crit- ical quality issues, current process capability, and comments (remarks). Review dates and approval signatures are also key areas in a project proposal.
Financial Benefits: Give special attention to financial benefits. Financial benefits should be estimated based on the business case language, which should come directly from the owner. If the business owners are not identified, the team will need to draft its own rationale. Financial benefits may change as the project pro- gresses from one stage to the next. Therefore, the following are critical to estimate financial benefits:
• Financial benefits should be estimated at the beginning of the project. They should be linked to business strategy.
• Financial benefits should be based on the project definition, best available data, assumptions, and auditable benefits. They should be adjusted as the project progresses through the different phases of the DMAIC process and reaches implementation stage.
• As process performance is measured against the baseline, any incre- mental improvement will be measured and recognized.
• As the project goes through the Analyze phase, the team determines the root causes of the problem and assesses the assumptions used in estimating the benefits. Financial estimates should be revised to incorporate the new data.
• As the best solution is selected to improve the process, a complete cost/benefit analysis should be done to incorporate the cost of imple- menting the selected solution and should be adjusted the bottom-line benefits of the improvement (projected benefits).
• As the project is implemented, measure and report the actual benefits.
Note: It is important to list all the assumptions made at the different stages of
the project.
1.9.2 Project Management
Project management can be described in simple terms:
• Project management is the business of securing the end objectives in the face of all risks and problems that are encountered from beginning to end of the project.
• Project success depends largely on carrying out the constituent tasks in a sensible sequence and deploying resources to best advantage.
Project Leader: As a minimum, the project charter must provide that the Project Leader will:
• Be accountable for accomplishing the project objective with the avail- able or anticipated resources and within the constraints of time, cost, and performance/technology.
• Clearly define the “deliverables” to be given to the sponsor (cham- pion) at the end of the project.
• Maintain prime customer liaison and contact.
• Be responsible for establishing the project organization and provide an effective orientation for the project staff at the beginning of the project.
• Provide for a well-balanced workload for the project team.
• Ensure that the best performers are assigned to work on the “critical path” activities of the project.
• Develop and maintain project plans (who does what, for how much, and when).
• Negotiate and contract with all functional disciplines to accomplish the necessary work packages within time, cost, and performance/ technology.
• Provide technical, financial, and schedule requirements direction. • Analyze and report project performance.
• Define and communicate security and safety requirements for the project as appropriate.
• Serve as an effective conductor in coordinating all-important aspects of the project.
• Get problems “out in the open” with all persons involved so that prob- lems can be resolved.
• Make a special effort to give recognition to each staff member for his/her individual accomplishments.
• Maintain a current milestone chart that displays planned milestones and actual achievement of milestones.
• Review the technical performance of the project on a continual basis. • Prepare a formal agreement if there is any scope change agreed to with
Project Activities: A project activities flow chart is presented in Figure 1.7. Project Success: Potential challenges to the project’s success include:
• Sponsor (Champion) is not actively involved.
• Project objectives are not clearly and precisely defined. • Results metrics is not clearly defined.
• Project team is large (ideal size is 8 ± 2).
• Team members do not have enough time to support the project. • Project does not support the business strategy.
• Very difficult to obtain the required data. • Team members do not have proper training.
Exercise 1.4: Project Activity
Develop project approval information to cover the first three sections of the sam- Sponsor Requirements Define Measure Analyze Improve Control Redefining Reporting
1.10 PROJECT CHARTER
Generally, a project charter is a one-page report, presenting business information about the project. A project charter is the easiest way to communicate informa- tion about the project to others in the company. It includes the following, but it is not limited to only to these items:
• Business Case—Briefly states how the project is related to the business (organization)
• Goal Statement—Primarily contains the mission statement with expected benefits
• Project Plan/Time Line—Provides the project schedule with some key milestone activities and sigma metrics (if possible) (The project schedule should include at least the time line for the different phases of the DMAIC process.)
• Opportunity Statement—Presents statements about the project that will provide qualitative and quantitative benefits to the business • Scope—Identifies the key issue areas
• Team Members—Identifies full-time and part-time participating team members
A sample project charter is presented in Figure 1.8.
1.11 SUMMARY
Overview information presented in this chapter includes:
• Recent past history of quality leading to the birth of the Six Sigma concept
• Discussion of how the business market has changed and its expectations • Statistical meaning of sigma
• Qualitative and quantitative meaning of Six Sigma
• Organizational commitments and responsibilities in a Six Sigma program • Quality and business loss relationship
• Road map for Six Sigma process (a brief definition of each step in the process)
• Impact of Six Sigma program on organizational structure • IPO analysis approach
• Problem ranking procedure • Problem characteristics
Project Charter
Manufacturing Cycle Time Reduction for Product XYZ
Business Case: Because the customer is expecting a quality product with on-time delivery at a competitive price, the company must produce the product with increased quality and reduced cycle time and business cost. This project will reduce manufacturing cycle time.
Goal Statement: Reduce the manufacturing cycle time
• For product XYZ1 from 45 calendar days to 30 calendar days,
33% cycle time reduction by Month Year
• For product XYZ2 from 95 calendar days to 70 calendar days,
26% cycle time reduction by Month Year
• Improve the inventory turns from 4 to 4.5 per year by Month Year
• Reduce inventory (Raw, WIP, and Finished) from $XX millions to $YY
millions by Month Year to provide $(XX – YY) freed-up capital Project Plan/Timeline: Based on Year XXXX objectives, Six Sigma goal metrics projections:
Six Sigma Metric
Product Jul XX Oct XX Dec XX
XYZ1 1.4 1.6 1.8
XYZ2 1.7 1.9 2.1
Opportunity Statement: Reducing the manufacturing cycle time will:
• Speed product delivery
• Reduce inventory
• Reduce manufacturing cost
• Improve customer satisfaction
Scope: Reduce the manufacturing cycle time of products XYZ1 and XYZ2 by resolving/minimizing the following issues:
• Product stability
• Engineering support on the manufacturing floor
• On-time delivery of quality material on the manufacturing floor
• Process reengineering the manufacturing activities
Team Members: John Smith – Black Belt (Team Leader); Dave Moore – Champion; Thomas Murphy – Master Black Belt; Robert Lynch – Green Belt: Ram Dosi – Green Belt;
Carol Perez – Financial Support; Brad Potter – Expert
• Description of problem and development of mission statement • Project team selection process
• Project proposal development • Project leader’s responsibilities • Potential challenges to project success • Project charter
The program implementation structure has been defined, the project mission has been stated, the project team has been selected, and the team has defined how to plan and manage the project. Think about answers to the following questions before moving on to the discussion in Chapter 2 (Define):
• Has the project team charter been defined clearly, including business case, problem and mission statement, project scope, milestones, roles and responsibilities, and communication plan?
• Who are the improvement project team members, including Project Leader/Black Belts, Master Black Belts/Coaches, Team Members, and Experts?
• Has each member of the team, including the Team Leader, been prop- erly trained in DMAIC?
• Will the team meet regularly?
• Do the team members regularly have 100% attendance at team meet- ings? If any team member is absent and appoints a substitute to attend the meeting, does the substitute preserve cross-functionality and full representation?
• Has the project work been fairly and/or equitably divided and dele- gated among team members who are qualified and capable of per- forming work? Is each member of the team contributing?
• Are there any known constraints that would limit the project work? How is the team addressing them?
• How is the team tracking and documenting their work?
• Has the team been adequately staffed with the required cross-func- tionality? If not, what additional resources are available to the team to minimize the gap?
REFERENCES
1. http:/www.hammerandco.com/PowerOfProcessFrames/Power OfFrames9.html.
2. Hammer, M. 1996. Beyond Reengineering, Harper Collins Publishers, New York, 1996, Part I (Work) and Part II (Management).
ADDITIONAL READING
Dean, J.W., Jr. and J.R. Evans. 1994. Total Quality, West Publishing, St. Paul, MN, Chapter 1.
2
DEFINE
Define means to establish the cause of a problem and to set the boundaries of the
problem. The Define phase helps the team to picture the process over time and provides insight for the team about where the focus of improvement efforts should be (e.g., on improving the door seal on a frost-free refrigerator). Define also applies to customers, customer needs, and customer requirements (known as critical to quality characteristics or CTQs) and to the core business processes involved.
CTQs are the key measurable performance characteristics of any product, process, or service that satisfy external (ultimate) customers. CTQs must be met. In the Define phase, it is critical define who the customers are, what their requirements for products and services are, and what their expectations are. It is
Define Measure Analyze Improve Control 6σ DMAIC
also important to define the project’s boundaries—where to start and where to stop the process. Additionally, there must be definitions of the process and what the team must improve. Process understanding can be obtained by mapping process flow. Sections include:
2.1 The Customer
2.2 The High-Level Process