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TQM 18,5

Selection of six sigma projects in the UK


Ricardo Banuelas, Charles Tennant, Ian Tuersley and Shao Tang
Warwick Manufacturing Group, School of Engineering, University of Warwick, Coventry, UK
Abstract
Purpose The literature suggests that a key ingredient for the successful six sigma implementation is project prioritisation and selection. The purpose of this paper is to identify what criteria are considered for selecting six sigma projects and how six sigma projects are selected in organisations in the UK. Design/methodology/approach Using a survey as a method of investigation, respondents were asked what criteria are considered to select projects and how potential projects are identied, prioritised, selected and evaluated. Findings The results of the survey indicate that UK organisations tend to select projects based on criteria such as customer satisfaction, nancial benets, top management commitment and those projects integrated with the companys strategy. Several tools and techniques such as cost benet analysis, cause and effect matrix, brainstorming, Pareto analysis are employed to identify and prioritise projects. Research limitations/implications This paper is limited to the selection of six sigma in the UK. Further, empirical studies using larger sample sizes and greater geographical diversity may be helpful in validating the results of this study. Practical implications The identication of the most commonly used criteria to select six sigma projects can aid practitioners to select projects based on multiple criteria and using tools and techniques identied in this survey. Originality/value The provision of empirical data on the criteria used to select six sigma projects and how six sigma projects are selected. Keywords Six sigma, Project management, Surveys, United Kingdom Paper type Research paper

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The TQM Magazine Vol. 18 No. 5, 2006 pp. 514-527 q Emerald Group Publishing Limited 0954-478X DOI 10.1108/09544780610685485

Introduction Six sigma has evolved into a statistical oriented project driven approach to process and product quality improvement. Since projects are the means by which six sigma converts quality improvements into bottom-line nancial benets, multinational organisations such as Ford report completing as many as 10,000 projects (Ford, 2005). However, not all six sigma projects produce bottom-line benets; many produce only local improvements (Pyzdek, 2000) and about 20 per cent of projects are cancelled (Eckes, 2001). The literature proposes that a key ingredient for successful six sigma uelas and implementation is project prioritisation and selection (Pande et al., 2000; Ban Antony, 2002). In addition, since different potential areas of improvement compete for scare resources, organisation should select six sigma projects in such as way that they are closely tied to the business goals and strategy (Ingle and Roe, 2001). Project selection is the process of evaluating individual projects or groups of projects, and then choosing to implement some set of them so that the objectives of the organisation will be achieved (Meredith and Mantel, 2003). Selecting a project that is

too large will cause valuable time to be lost during the dene phase, as Black Belts struggle to scope their projects and develop project charters that can be addressed using six sigma. In addition, projects should be linked to the right goals and impact at least one of the major stakeholders issues, e.g. growth acceleration, cost reduction or cash ow improvement. Good project selection is itself a process; if it is properly carried out the potential benets of six sigma can improve substantially (Pande et al., 2000). Authors and consultants have proposed the project selection process models and tools, and key elements in six sigma project selection producing a variety of models (Breyfogle et al., 2001; Adams et al., 2003; Pyzdek, 2003). This papers aims at identifying what models and tools are currently used in UK industry, what criteria is considering for selecting six sigma projects and how and who select six sigma projects in organisations. Consequently, this survey investigates the current status of the selection of six sigma projects in UK industry and identies the main criteria used for project selection. The rst part of this paper presents an overview of the research methodology employed. The second part of the paper discusses the results of the survey and compares them against the literature. This paper culminates by offering a brief summary of the research and directions for further research. Research methodology The research questions for this survey were: RQ1. What is the status of selection of six sigma projects in the UK organisations? RQ2. What are key criteria for project selection in the UK organisations? Sample The data for this study was gathered using a questionnaire. A national sample of UK organisations was selected from nancial analysis made easy (FAME) database, which contains detailed company information on a large number of UK companies. The sample was constrained to companies with more than 300 employees since six sigma is more likely to be adopted by large organisations (Antony et al., 2005). Postal and e-mail survey was used for gathering data due to the advantage that the designed questionnaire could be sent to a large number of organisations in a limited time. A total of 300 postal and 813 e-mail questionnaires were sent out to the selected sample. The survey was targeted to quality directors, managing directors, quality managers or Black Belts, since they are directly involved in the process and have rst-hand knowledge and experience of six sigma projects. Survey instrument The questionnaire used in this study consisted of three main sections: the background of the company, the project selection process and the key criteria considered for project selection. The rst section was intended to determine fundamental issues such as the companies industry sector, the maturity of six sigma in the companies investigated in terms of the number of projects carried out and the number of years since six sigma was launched. The third section consisted of six criteria for six sigma project selection, derived mainly from the literature. Respondents were asked to rank the criteria in terms of importance for project selection on a ve-point Likert scale from 1 not important to 5 crucial, with the middle denoted as important. It was hoped that this would give an

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indication of the critical criteria for the successful project selection. Moreover, the use of a Likert scale rather than a simple yes/no type of question in the questionnaire would provide a better perspective of the current six sigma practices in the UK industry. The questionnaire was pre-tested by submitting the nal questionnaire to three types of people: colleagues, industry experts and target respondents. This tested whether the questionnaire would accomplish the study objectives, prevent the inclusion of some obvious errors and provide feedback on sample the answers ahead of the targeted respondents (Gillham, 2000). Results and discussion Characteristic of the sample A total of 95 respondents, out of 1,113, returned completed, usable questionnaires for an overall response rate of about 8.5 per cent. However, the response rate for the survey sent electronically was lower than that of the posted one (24.3 versus 2.3 per cent). Typically, the response rate of online survey is lower than those for postal surveys (Bryman, 2004). The possible reasons which result in low response rate of online/e-mail survey may be assigned to the fact that invitations to participate in research may be seen as another spam e-mail. In addition, the condentiality of replies may be concerned by recipients in order to avoid being hacked or involved in frauds. Of those 95 responding companies, 25 were implementing six sigma and provided information which could be used for further analysis. In terms of industrial sectors, 12 of the companies pertain to the service sector whereas 13 of them were manufacturing companies. The number of the respondent companies which have implemented six sigma for more than three years is around half the companies currently running six sigma programme (Table I). In this research, the survey was answered by black belts (32 per cent), master black belts (20 per cent), quality managers (12 per cent), champions (8 per cent), green belts (8 per cent) and other quality related positions (20 per cent). Almost half of the companies implementing six sigma (48 per cent) have completed over 100 six sigma projects. About 24 per cent of them have completed between 10 and 100 six sigma projects and 28 per cent of them ten projects or less. People involved in the selection of six sigma projects According to Davis (2003) the rst step of six sigma project selection is the establishment of a cross-functional team including the top management. The responsibility of the team or steering committee is to identify, prioritise, select, monitor and evaluate six sigma projects. The involvement of the top management helps to cascade down the company strategy into specic six sigma projects. In addition, it removes the obstacles and barriers more effectively (Kelly, 2002). Accordingly, in this survey respondents were asked about the people involved in the six sigma selection process. About 56 per cent involve senior managers and the champion in the selection of projects. In addition, 48 per cent of the companies indicated that nal decision is normally made by top management. This top-bottom approach to select projects has three main advantages. Firstly, the projects would be aligned with the corporate strategy. Secondly, it is more structural and managerial and nally, it is benecial to six sigma projects with management support (Harry and Schroeder, 2000; Lynch and Soloy, 2003).

Number Sample Post 300 E-mail 813 Total 1,113 Response post 76 Response e-mail 19 Total response 95 Companies implementing six sigma Implementing it 19 Partially implementing it 6 No implemented 70 Time since six sigma adoption Less than 1 year 4 Between 1 and 3 years 9 More than 3 years 12 Industrial sector Manufacturing 13 Service 12 Position of respondents in the company implementing six sigma Quality manager 3 Champion 2 Mater black belts 5 Black belts 8 Green Belts 2 Other 5 Projects implemented within the company Less than 10 6 Between 10 and 100 7 More than 100 12

Percentage 26.95 73.05 25.33 2.34 8.53 20 6 74 16 36 48 52 48 12 8 20 32 8 20 23 29 48

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Table I. Characteristics of the sample

In contrast, none of 25 companies employs a bottom-up approach to select projects. In this approach, potential projects are proposed from the operational level of the corporation (Lynch and Soloy, 2003). Although this approach has the main advantage of identifying every improvement opportunity from the lower levels of the organisation (Harry and Schroeder, 2000), it has also been criticised in the literature (Klefsjo et al., 2001; Lynch and Soloy, 2003). For Klefsjo et al. (2001), six sigma methodology is a top-down, rather than bottom-up approach. In addition, adopting the bottom-top approach can result in lack of management commitment, selection of pet projects, an failure in incorporate both the external customer satisfaction and the business strategy (Lynch and Soloy, 2003). Nevertheless, 64 per cent indicated involving relevant process owners and heads of related departments in the selection process, but the nal project selection is the responsibility of project selection committee (36 per cent), process owners or head of related department (36 per cent), quality managers (16 per cent), team members (16 per cent) and CEO (12 per cent). Identication of potential six sigma projects As is in any process, inputs are critical for a satisfactory outcome. The importance of selecting adequate sources and identifying the useful information to identify six sigma

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projects is seen as key step in project selection. Adams et al. (2003) propose seven main sources for identication of potential six sigma projects, including customers, suppliers, employees, benchmarking, developments in technology, extension of other six sigma projects and waste. In this survey, respondents were asked whether they identied projects based on this classication. Six sigma projects often begin with the determination of customer requirements and it is essential to set project goals based on reducing the gap between the companys deliverables such as quality, delivery time, reliability and customer expectations. The understanding of markets, operations, measures used and creativity to maximise value and performance are the core elements of six sigma approach (Pande et al., 2000). Consequently, the voice of customer (VOC) should be used to identify potential six sigma projects (Martens, 2001; Johnson, 2002; Man, 2002; Starbord, 2002). During this survey companies were asked if they identify projects from customer requirements. About 60 per cent of the companies identify potential projects from their customers. This result shows the alignment with the thinking that six sigma should internalise customers need into improvement projects (Pande et al., 2000). Of the surveyed companies implementing six sigma, 60 per cent identify potential six sigma projects from their employees. Voice from employees or internal customers can sometimes identify fundamental issues rather than from top management. The top management view of the organisation has its advantages. However, it suffers from the disadvantage of not being able to recognize the details of operational problems (Adams et al., 2003). Identifying projects from employees also has the advantage of selecting areas of opportunities which can improve quality in a short period of time. According to Adams et al. (2003), it is not unusual for a project team to nd new areas of improvement after the completion of a six sigma project. Nearly, half of companies surveyed have reported nding potential six sigma projects from the extension of other projects. In this survey, 24 per cent of respondents identify projects from their suppliers. Suppliers play an important role in the quality of products and services, for Crosby (1979) suppliers account for 50 per cent of product-related quality problems. Other source of identifying six sigma projects is through the comparison of the organisations performance to that of world-class organisations, in order to investigate the adoption of new methods, technology and processes using six sigma (Adams et al., 2003). Benchmarking is used as a tool to drive performance of the company in all aspects of doing business In this survey, 44 per cent of the companies surveyed indicate using benchmarking to identify potential projects. Another source of potential projects is new developments in science, technology, and applications. However, only ve of the twenty ve companies identify six sigma projects from new developments in technology. Waste and quality are closely linked. By reducing wasteful practices such as re-work, extra inspection, defects and all the activities associated with not creating value, quality and productivity will improve. Accordingly, for Adams et al. (2003), activities that do not add value for the customer can be regarded as poor quality and six sigma can be employed to reduce waste. The results indicate that 32 per cent of the companies identify six sigma projects by detecting waste which can be reduced.

Tools used to identify potential six sigma projects Six Sigma teams employ different tools to identify potential projects from several sources, i.e. customers, waste, employees, suppliers, technology or extension of projects. Respondents were asked which tools they six sigma currently employ to this end. The majority of them (76 per cent) use brainstorming (Figure 1). Critical-to-quality (CTQ) tree, focus group, interview are employed by around one third of the surveyed companies. Customer visits, quality function deployment (QFD), Kano analysis, surveys are used for 20 to 30 per cent of surveyed companies. A small number of respondents implement value stream mapping, balance scorecard and Hoshin Kanri as an aid in the identication of projects. It was also noticed that most of the companies, 80 per cent, employ more than one tool to identify potential projects. Criteria for six sigma project selection Effective project selection is based on identifying the projects that best match the current needs, capabilities and objectives of organisations (Pande et al., 2000). Different authors have proposed measurements, rules and standards that guide the six sigma project selection in the form of generic criteria. During this survey the criteria found in the literature were grouped into six main criteria as is shown in Table II. Respondents were asked to rank the six critical criteria for six sigma project selection according to Likert nine point scale (1 not important, . . . , 5 relatively important, . . . , 9 very important). The Cronbachs a test was carried out to determine the level of internal reliability for a set of questions related to the criteria for project selection. Generally, a Cronbachs a factor of 0.60 or higher is though to indicate an acceptance level of internal consistency (Black and Porter, 1996). All the criteria in this survey have an a coefcient above 0.60, showing a good internal reliability.

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Figure 1. Tools and methods used to identify potential projects

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Critical criteria p p p p

Customer impact Financial impact Top management commitment Measurable and feasible Learning and growth Connected to business strategy and core competence p p p

Table II. Criteria for selection of six sigma projects Harry and Schroeder (2000) p p p p Snee (2001) Goldstein Breyfogle et al. (2001) (2001) p p p Pyzdek (2000, 2003) p p p p Lynch and Soloy (2003) p p p p p Pande et al. (2000) p p p p p Antony (2004) p p

The scores of the criteria were averaged to determine the importance of each criterion in the project selection process. It can be seen from Figure 2 that four criteria, connected to business strategy, customers, nance and top management commitment, have a mean score higher than the important level of seven according to the scale employed. This is aligned with previous studies of critical success factors for six sigma implementation, where customer focus, linkage to business strategy, top management commitment and nancial benets are considered as essential factors for the successful uelas and Antony, 2002; Antony, 2004). implementation of six sigma (Ban The results also revealed that companies who have been implementing six sigma for more than six months tend to prioritise differently the criteria to select projects than those companies who embarked on six sigma for less than six months, as shown in Figure 3. In order to test if the differences between these groups of companies are statistical signicant, analysis of variance (ANOVA) was conducted. As a result, it was concluded criteria connected to business strategy and core competency and learning and growth, are statistically signicant (P , 0.05). Thus, it can be said that companies implementing six sigma for a short period of time tend to put less emphasis in learning and growth and the linkage between projects and business strategy. Instead, these companies tend to base the project selection on nancial benets and the measurability and feasibility of the projects. This can be attributed to the fact that the rst projects

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Figure 2. Scores on each six key criteria for six sigma project selection

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Figure 3. Progression of perception on key criteria for six sigma project selection

tend to be pilot projects, which are characterised by initial or small-scale effort designed to test the applicability of six sigma. Pilot projects are usually undertaken with the intention of replicating or widening the scale of implementation at a later stage or further projects. In addition, they tend to focus on quick wins with a high probability of success. The selection of six sigma projects is considered a multi-criteria decision where most of the information relevant to the problem is complex and conicting in nature. Selection criteria need to be prioritised so that those that are most critical to the overall success of the organisation will have the most impact on the project selection. Sometimes, a particular criterion is a useful gauge of how well a project will deliver several outcomes. Prioritisation of potential six sigma projects To help practitioners to deal with the complexity of the selection of six sigma projects, different authors have proposed different techniques. These techniques aim at organising and synthesising information in a manner that leads to the optimisation of a multiple and conicting criteria to be handled at the same time over a set of feasible projects. These approaches seek to take explicit account of multiple criteria in helping individuals or groups explore decisions that matter and provide a focus to sharpen up discussion and balance and challenge intuition, however, it does not replace judgments or experience. Accordingly, many six sigma authors have proposed one or several tools that can be used into project selection, as shown in Table III.

Respondents were asked to select the tools used for project prioritisation out of eight tools identied in the literature. The results are shown in Figure 4. The most used tools are cost-benet analysis, Pareto chart, and cause-effect matrix. The rest of them such of Pareto priority index (PPI), un-weighted scoring models, theory of constrains (TOC) and non-numerical models, are adopted by 12 to 16 per cent of respondents. Analytic hierarchy process (AHP) is used only by 8 per cent of companies. The results also indicate that more than 70 per cent of the companies that answered the questionnaire employ more than two tools for prioritising projects. Post-project evaluation Post-project evaluation is benecial to six sigma due to four main reasons (Adams et al., 2003): save time for next six sigma projects, identication of new projects, share the
Author Larson (2003) De Feo and Barnard (2004) Adams et al. (2003) Kelly (2002) Pande et al. (2002) Breyfogle et al. (2001) Pyzdek (2000, 2003) Proposed methods or tools to prioritise six sigma projects Pareto analysis Reviewing data on potential projects against specic criteria for project selection six sigma Project ranking matrix Project selection matrix QFD Project assessment matrix PPI, AHP, QFD, TOC

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Table III. Methods to prioritise six sigma projects

Figure 4. Tools and methods to prioritise six sigma projects

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success and gain project experience. Accordingly, in this survey, 96 per cent of the companies that answered the questionnaire and are implementing six sigma have fully or partially applied post-project evaluations. A key part of post project evaluation is the establishment of metrics to monitor the project against the criteria used to select them in the rst place. Over half of the organisations that answered the questionnaire use net cost savings, defects per million opportunities (DPMO), cost of poor quality (COPQ) and cycle time as main metrics to evaluate and monitor project success, refer to Figure 5. These metrics are aligned with the criteria to select projects, i.e. customer and nancial focus. Learning and design effectiveness are embraced lower than 10 per cent of the companies implementing six sigma, which aligns with the criteria regarded as less important. The results also show that manufacturing companies put more emphasis on CTQs such as Scrape rate, FTY, COPQ, or capability index, whereas service-based companies due to their intrinsic characteristics put more emphasis on critical-to-service (CTSs) such as cycle time. Nevertheless, manufacturing and service organisations tend to adopt net cost saving as the main metric used to evaluate six sigma projects. On the other hand, metrics such as employees learning and design effectiveness are adopted by a small number of companies neither in manufacturing sector or service sector. Conclusions In the quality eld projects are often perceived as a way to breakthrough performance. Juran and Gyrna (1970) state that breakthroughs are achieved project by project, and

Figure 5. Metrics used to evaluate six sigma projects

in no other way. Accordingly, six sigma is a statistical oriented project driven approach to process and product quality improvement. Since, projects are the means by which six sigma converts quality improvements into bottom-line nancial benets, project selection is seen as a key to success. A national UK survey was carried out aimed at investigating the current status of the selection of six sigma projects and identifying the main criteria used for project selection. The results of this survey indicate that: . Most of the companies that answered the questionnaire adopt a hybrid, top-bottom and bottom-up, approach for the identication of six sigma projects. . The main sources to identify six sigma projects are customers (60 per cent), employees (60 per cent), extension of other projects (48 per cent), benchmarking (44 per cent), waste (32 per cent), suppliers (24 per cent), and inspired by developments on technology (20 per cent). . Most of the companies (80 per cent) employ more than one tool to identify potential projects, including brainstorming, CTQ tree, focus group, interviews, customer visits, QFD and Kano analysis, among others. . It was found that the main criteria to select six sigma projects are customer satisfaction, nancial benets, linkage to business strategy and top management commitment. Companies implementing six sigma for short period of time tend to put less emphasis in the linkage between projects and business strategy and in learning and growth. . The most used tools to prioritise projects are cost-benet analysis, Pareto chart, and cause-effect matrix. . 96 per cent of the companies that answered the questionnaire applied post-project evaluations. This study was carried out with some boundaries such as the number of companies, available resources and it is also limited to UK organsations. An important limitation of this paper is the respondent rate, however, the response rate is similar to other surveys on six sigma. For example, a survey on the benets of six sigma carried out by Dusharme (2006) had a response rate of 10 per cent. Antony et al. (2005) had a response rate of around 14 per cent for a survey on the implementation of six sigma in SMEs. Nevertheless, it is recommended that further empirical studies should use a larger sample sizes and greater geographical diversity in order to validate the results of this study. Another area of future research should be to expand on this study and include more variables affecting the selection of six sigma projects.
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Snee, R. (2001), Dealing with the Achilles heel of six sigma initiatives, Quality Progress, Vol. 34 No. 3, pp. 66-9. Starbord, D. (2002), Business excellence: six sigma as a management system: a Dmaic approach to improving six sigma management processes, Quality Congress. ASQs Annual Quality Congress Proceedings, pp. 47-55. Corresponding author Ricardo Banuelas can be contacted at: banuelas@yahoo.com

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