The D in the Six Sigma DMAIC process is about selecting high-payback projects and identifying the underlying metric(s) that will measure project success.
Leadership participation is essential
Six Sigma projects create incremental work, and leadership teams must be convinced that the payback will be worth the effort. Without senior leadership oversight and support, project leaders will typically be overwhelmed with resistance from the organization, and will make little progress. This situation can be prevented if senior leaders oversee the Define process and schedule project reviews at regular intervals. We recommend quarterly sessions to review opportunity areas and define new projects.
The Pareto Principle is alive and well
The Pareto Principle states that 20% of all potential projects will produce 80% of the potential benefits to the business. Of course these are not exact numbers, but we have yet to see a business where this concept does not apply. The important take-away is this: Focus your resources. It’s better to have five projects in the 20% high-impact category than thirty projects spread across the payback spectrum.
Connecting with the customer
Project teams will tend to focus on the opportunities they are familiar with on a day-to-day basis. Many of the projects in the 20% high-payback group will relate to customer satisfaction, and a cross-functional group of senior leaders will be keenly aware of the improvement opportunities in this area. As an agenda item on the quarterly Define sessions, we recommend that senior leaders from all functions (remember to include the sales and customer support team leaders) step back and list the biggest improvement opportunities in front of the business. Questions can include –
- where is inconsistent performance creating dissatisfied customers?
- do we have measurements in place to monitor performance in these areas?
- if we do not have a performance measure in place for a critical-to-customer area, how can we establish a metric, and what team will own the upkeep and publishing of the metric?
Take another look at the first bullet point above. Remember that Six Sigma is about reducing costly variation. While Six Sigma can be adapted to most any problem, it fits best in situations where undesirable variation creating waste or dissatisfied customers. There will be some areas where Six Sigma is not the answer. For example, a traditional Six Sigma project is probably not the best approach for improving a new-product innovation process – benchmarking against best-practices might be a much better approach to this problem. Remember, it’s all about improving business results, and tools like Six Sigma are a means to that end.
The Define stage deliverable – a clearly defined project, “Scoped for success”
With management leading the Define brainstorming sessions, project teams will have picked up high-payback opportunity areas. Prior to completing the Define stage, the project team must take time to understand the opportunity area it’s been assigned, along with the supporting metrics that will reflect process performance (in some cases, these metrics must be developed as part of the project).
It’s important that the project scope is sufficiently focused for success, and a first-pass pareto analysis is often required to select a specific opportunity area. Here is an example of general opportunity area that is translated into a specific project goal: “Warranty claims are costing the business $100M per year. Packaging damage represents 10% of all warranty claims, and equates to a 2,600 PPM claim rate. This project will identify and correct the underlying causes of packaging damage, reducing warranty claims in this area from 2,600 PPM to 1,600 PPM. ”
This Six Sigma team has done the up-front work to develop a clear project definition, and can now get to work with a clearly stated mission in front of them.
Adding structure with team charters
It’s helpful to develop a standard Team Charter that the project team presents to senior leadership as a final step in the Define stage. This is typically an Excel or PowerPoint document that helps the team think through the necessary steps to develop a clear team mission.