Page 280 - The Handbook for Quality Management a Complete Guide to Operational Excellence

The Define stage includes the following objectives (Keller, 2011a):

• Project definition. Define the project’s scope, goals, and objectives;
its team members and sponsors; and its schedule and deliverables.
• Top-level process definition. Define the stakeholders, inputs and out­
puts, and broad functions.
• Team formation. Assemble highly capable team from the key stake­
holder groups; create common understanding of issues and bene­
fits for project.

Project Definition
When applied at the business level, the project scope pertains to key busi­
ness practices and customer interactions. Thus, the definition requires an
understanding of the business, as well as the contribution of the business
to its shareholders and customers.
GE used its concept of “stretch goals” in defining projects, particularly
busi ness­level projects. Stretch goals were those that went beyond what
was fore seeable with the current corporate structure, resources, and/or
technology. The idea was to expand beyond incremental improvements,
to rethink the busi ness, operation, or process to a point where orders of
magnitude improvements could be achieved. Bear in mind that an organi­
zation going from 4 sigma to 6 sigma needs to reduce defects per million
opportunities (DPMO) from 6210 to 3.4 (a 99.95 percent reduction).
A general guideline adopted by GE involved setting the project goal
relative to the existing level of performance:

• If the process currently operates at or below a 3 sigma level of per­
formance (an error rate of approximately 6.7 percent or larger),
then the project should seek a 10 times reduction in errors. For
example, reduce an 10 percent error rate to a 1 percent error rate.
• If the process currently operates better than 3 sigma, reduce the
error rate by 50 percent. For example, reduce the error rate from
4 percent to 2 percent.

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