Page 75 - Six Sigma Demystified

56 Six SigMa DemystifieD

ers. Six Sigma projects must be clearly defined and managed for these improve-
ments to be realized.
Projects must be linked directly to the strategic goals of the organization. As
mentioned earlier, GE’s Jack Welch considered the best projects those which
solved customers’ problems.
What constitutes a Six Sigma project? Juran defines a project as “a problem
scheduled for solution” (Juran and Gryna, 1988). Snee (2002) defines a Six Sigma
project as “a problem scheduled for solution that has a set of metrics that can be
used to set project goals and monitor progress.” Snee further differentiates between
problems with known solutions, such as the deployment of a manufacturing
resource planning (MRP) system, and those with unknown solutions. Snee sug-
gests that projects with known solutions are best led by project managers, whereas
projects with unknown solutions are best defined as Six Sigma projects.
The Snee definition notably adds the concept of quantifiable metrics to proj-
ects, which is certainly a useful addition. Organizations need to track the progress
of a project, as well as to select projects that have the greatest potential for the
organization relative to the time and cost of deployment. Intrinsic to these met-
rics is a link to organizational performance. The metrics must provide a tangible
measure of benefit to the company, its customers, or its shareholders. Implement-
ing statistical process control (SPC) on a production line, for example, would not
offer this benefit directly. While deploying SPC would allow us to understand the
nature of the variations in the process, improvement may not be realized for the
customer or the organization unless, for example, the special causes of variation
were eliminated. Although an SPC analysis would provide a useful measure of
the before and after performance of a process undergoing a Six Sigma improve-
ment project, the analysis is a means to an end rather than the end itself.

Since most businesses beginning their Six Sigma programs are at the 3s or
4s level, spending 15 to 25 percent of their revenue on cost- of- quality issues,
they have ample opportunities for improvement. There are, however, limited
resources available for project deployment, as represented by their trained
black belts and green belts. Project selection thus takes on an important role in
determining the magnitude of success of a Six Sigma deployment.
Six Sigma projects should be selected based on a suitable cost- benefit analy-
sis. A simple yet effective metric for evaluating projects is the Pareto priority
index, or PPI (Pyzdek and Keller, 2009):

Pareto priority index (PPI) = savings × probability of success
cost × completion time