Page 201 - The Six Sigma Project Planner

Shareholder Value Projects
Six Sigma provides a “double whammy” by addressing both efficiency and revenues.
Revenue is impacted by improving the customer value proposition, which allows
organizations to charge premium prices for superior quality or to keep prices
competitive and increase sales volume and market share. Improved efficiency is
achieved by reducing the cost of poor quality, reducing cycle time, or eliminating waste
in business processes. To determine which Six Sigma projects address the issue of
business process efficiency evaluate the high-level business process maps (including
SIPOCs) and flowcharts.
Other Six Sigma Projects

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Some Six Sigma projects address intangibles, such as employee morale, regulatory
concerns, or environmental issues. These projects can be just as important as those that
address customer or shareholder value.
Analyzing Project Candidates

You now have a list of candidate Six Sigma projects. The next task is to select a subset of
these projects to fund and staff. Projects cost money, take time, and disrupt normal
operations and standard routines. For these reasons, projects designed to improve
processes should be limited to processes that are important to the enterprise.
Furthermore, projects should be undertaken only when success is highly likely.
Feasibility is determined by considering the scope and cost of a project and the support
it receives from the process owner. In this section, a number of techniques and
approaches are presented to help identify those projects that will be chosen for Six
Sigma.

Other Methods of Identifying Promising Projects
Projects should be selected to support the organization’s overall strategy and mission.
Because of this global perspective, most projects involve the efforts of several different
functional areas. Not only do individual quality projects tend to cut across
organizational boundaries, different projects are often related to one another. To
effectively manage this complexity, it is necessary to integrate the planning and
execution of projects across the entire enterprise. One way to accomplish this is QFD,
which is discussed in detail above. In addition to QFD and the scoring method included
in the Planner (see Worksheet 3, Six Sigma Project Evaluation, p. 9) a number of other
procedures are presented here to help identify a project’s potential worth.

Using Pareto Analysis to Identify Six Sigma Project Candidates
The Pareto principle refers to the fact that a small percentage of processes cause a large
percentage of the problems. The Pareto principle is useful in narrowing a list of choices
to those few projects that offer the greatest potential. When using Pareto analysis, keep
in mind that there may be hidden “pain signals.” Initially, problems create pain signals
such as schedule disruptions and customer complaints. Often these symptoms are

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