Page 201 - Six Sigma Demystified

Chapter 8 co n t r o l S tag e 181

to the project implementation, such as described in the improve stage. Savings
are calculated based on methods agreed on in the define stage and may include
actual and predicted annualized estimates. The individual responsible for track-
ing the cost savings should be clearly identified in the control plan.

PROjeCT examPle: Measure bottom line Impact

No errors were experienced for the first four months; however, a new product was
added that subsequently was not correctly handled by the automated system.
This issue was added to the company's database of lessons learned (related to
ensuring that new products and services are correctly incorporated into the order
processing procedure).
Using the cost estimates form the improve stage, applied to the actual order
mix, the annualized six month savings was estimated as $32,000. after twelve
months the annual savings was estimated at $31,000.
The support renewal rate was analyzed for the pre- and post-project data using
separate control charts for each product. Product a had the most rigorous re-
newal marketing program prior to the project; its renewal rate showed a monthly
increase of 15 percent within the first four months of project completion. Prod-
ucts B and C had scant efforts at renewal marketing prior to the project. The au-
tomated data processing ensured the relevant data was included in the database,
allowing increased marketing efforts. Product B's monthly renewal rate grew by
35 percent over the first six months; Product C experienced a 23 percent increase.
The renewal revenue increased by $123,000 (annualized) over the first six
months. after twelve months the annual savings was estimated as $136,000.
The annualized benefits for the first six months reached $179,000. after twelve
months the annual savings was estimated as $191,000.
The cost of the project included $41,000 project labor costs and $16,000 iT
programming costs.

Document lessons learned

The results of the Six Sigma project should be documented in a project report.
The project report should include the following information:

• The project charter, as a key deliverable in the define stage, introducing
the reader to the project’s problem statement, objectives, and plan

• A summary result of each stage of the DMAIC cycle, including the main
objectives and results for each stage