Page 165 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

138 Chapter Seven

improvement. Consider the factors involved, and set a goal for
achievement that will provide a profitable position. The target should
indicate a 30 to 100 percent cost reduction to be practical. It may seem
improbable that this can be achieved; however, it is a target to work
toward. A check against this target will be made at the completion of the
information phase.
Example 7.1: A Cost-Visibility Work Sheet of a Youth Assistance Program
David Reeve (1975) did a value-engineering study on the youth assistance
program for Oakland County, Michigan. This was one of the very first case studies
of value engineering for a government or service organization. The purpose of the
youth assistance program was to help troubled teenagers so they would not
become problems for society. There are two major activities in the youth assistance
program, prevention and rehabilitation. Each activity was to be accomplished
through various meetings, contacts, field visits, and office activities.
Tables 7.3 and 7.4 provide cost-visibility sections of the cost-function work
sheets for rehabilitation and prevention, respectively. In these cost-visibility
calculations, the labor cost is computed based on labor hour times labor rate.
The labor hours are determined based on the historical records of meeting
length, interview time duration, and so on.
Example 7.2: A Cost-Visibility Work Sheet of an Automobile Hood Latch
Table 7.5 gives a hardware cost-visibility worksheet for an automobile hood latch.

Project Scope
It is now possible to make a preliminary determination of the project scope.
By considering the new project as outlined on the project identification
sheet, the present cost and target for improvement, and the time available
for the study, we can define the scope of the project. Limiting or expanding
the scope of a study depends on the objective and the time allowed for the
study. In project work, the analysis of function should first be performed
upon the total process. If the objectives of the value-engineering study are
not achieved at that level, the next lower level should be studied and so on
down to the lowest level of indenture. The lower the level of indenture, the
more detailed and complex the study might become. This may require
additional time in the present study or future studies to consider segments
identified by function analysis.

7.2.2 Function Determination
The information on hand, together with an analysis of costs, can be used to
define the initial scope of the project. The product or process has been defined