Six Sigma Project Management: A Pocket Guide€ {HHH Table of Contents Preface « SECTION I_SETTING A FOUNDATION Organizations and the Need for Change . . What Is an Organization? Factors That Influence Organizations. Understanding Change ‘A Need for Change: Continuous Improvement Quality, Reliability, and Six Sigma ‘What Is Quality? ‘What Is Reliability? ‘The Voice of the Customer . ‘Six Sigma and Reliability SECTION TWO KEY SIX SIGMA PROJECT RESOURCES The Six Sigma Blackbelt - ‘Skill Sets of a Blackbelt A Blackbolt’s Tasks Blackbelt Traits 13 ” 7 20 22 24 3” 32 35 36vili_Table of Contents Table of Contents _ix “The Six Sigma Champion Characteristics of the Champion Key Tasks of the Sigma Champion Summary SECTION INTHE CRITICAL SIK Aron Six Sigma Mathodology » The Critical Six Step 1 Klentify the Symptom or Issue Stop 1.1—Identy and Select Potential Issues or Problems: - Step 1.2—Solect the Blackbelt - Step 1.8—Conduct @ Preliminary Situational Analysis Step 1.4—Determine the Scope of the Project Step 1.5—Select Team Members Step 2: Establish a Foundation . Step 2.1—Otlent the Team Step 2.2—Identify Key Processes Step 2.3—Conduct Research Stop 2.4—Determine Potential Root Causes Step 2.5—Develop Fact Packs Step 3: MECE . Step 3.1—Review Fact Packs Step 3.2—Determine the Initial Hypotheses Stop 3.3—Identily the Key Drivers Step 3.4~Develop an Issue Tree 5 Stops 8.5 and 3.6—MECE, Mutually Exclusive and Collectively Exhaustive : Step 8.7—Determine the Study Hypothesis, 7 37 38 a1 46 31 55 60 69 75 n 7 79 79 91 92 93 93 95 95 96 ‘step 4: Sell the Solution to Management .......-. 105 ‘Step 4.1—Create Prosontation Logic 105 Step 4.2—Create Supporting Charts 107 ‘Step 4.3—Prewire the Presentation 107 Stop 44—Present Findings to All Stakeholders . 108 Step 5: Design the Six Sigma Project .--..+-.+++++ 109 Phase One: Design the Study... 110 Phase Two: Verification : 113 Phase Three: Implementation 116 wa Step 6: Close the Study Stops 6.1 and 6,2--Create Presentation Logic and llustrative Material «eee... ++ ral Step 6.3—Prewira the Presentation . .. . 123 Step 6.4—Present Findings to Al Stakeholders 123 Step 6.5—Thank the Team Members - 123 ‘summary .. cere 25 How This Methodology Was Developed .......... 127 INeX ee ceeeveceeeeeserecsteeseeseeerseees 129Section | SETTING A FOUNDATION{HHH Organizations and the Need for Change ntuitively, we all seem to know what we mean when We talk about an “organization.” But the word often is Not as clear as we might think. f we were to ask a line manager, a senior executive, and a worker on tho line to define the word, we would likely get three very different answers. One of the two main purposes of this, section is to provide a working definition for the concept organization. The other is to explore the factors that ‘affect organizations and require them to change. WHAT IS AN ORGANIZATION? From an internal viewpoint, organizations are collec tions of individuals. But not just any collection. Organi zations are collections of individuals whose activities are coordinated. A school, for example, is more than teachers in classrooms with books and supplies. In a School, the actions of both students and teachers must be regulated and harmonized, and there must be coor- dination in the use of facilities, supplies, transportation,4._section (Setting a Foundation product, education, cannot be produced ne ‘Which brings us to tho external viewpoint. Organi g zations exist within a larger environmentitrom which Ml thoy receive inputs, They also-typically create outplts to the larger world since they generaily come into exis: tence to fulfil eoclety's needs, serving as intervening tloments betwoen what society desires and the satls- faction of those dosires. We need organizations to do this for us because of our individual limitations, No mat- tor how inteligent, imaginative, or capable an individ- al may be, itis impossible, working entirely alone; provide much more than the bare necessities for one: Soir Countloss objects and tasks require the purpose {ul association of individuals to enable their creation or accomplishment itis thus characteristic of organizations to produce @ product that is desired and consumed by some portion &feociety beyond the organization. That product may be 8 concrete object, such as a toy, or a spocific service, uch as medical care. it also might be something less tangible, such as the education of our children produced by an elomentary school of the regulation of business behavior produced by the Securities and Exchange Commission “To complicate matters the primary products of some cexganizations are not consumed by the outside world ‘An example of this type of organization is the Volume Mailrs Ascociation (VMA), a group of fetter shop owners tno moot regularly to discuss trends and new tochnol- gy availabo to letter shops. The organization's major products are meetings, seminars, and a newsletter for es its members. The consumer of these products is the Organizations and the Need for change _5 VA iso Stl he actions of he organization are not ‘oly divorced from the world beyond te order, Society hasan intrest in how tho ganization opertes, Fer example, federal an eae iat here boro cola botation fre purposoe of price thing in suey oe zal, 2 VMA mambo cn dsc cong heres ew mathods in operating tel busievecs Pricing of services. ut net the ‘uch ogenizations are tho exception, however, 0 by combining and etegratng te ntorel and exer vio, poms lt us et dow te flowing at teonacls te Ion fan tpanztion 2 collection of individuals whose actvit activites are coor: inated so as to produce objects and services that society or portions of it desire and could not other: wise easily obiain FACTORS THAT INFLUENCE ORGANIZATIONS The factors that influence organizations manifest them- solves internally and externally. Internal factors that affect business organizations include such items as range of products, centralization or decentralization of ‘operations, and divestiture or acquisition of ther busi- nesses. Exlernal factors include increased competition Government regulations, and changing economie con. tons. Generally speaking, all factors, whether inter. nal or external, are interdependent. in the following Sections trl and enteral at greater detail. cise a6 Section K-Setting a Foundation Internal Factors: Anticipating Change “very organization has two general categories ott fanagement, and upward prossures arising fom the feeds and demande ofthe members of he organization. Downward prssures ae derived from now Noa bout workplace relations and business opportiniés, Sharples ot downward proseures include managerent Gectives for contralzation or restructuring of @ Work: place and the impact of a new product on an. existing production line. Upward pressures include trade union Gr empioyeo demands for more money and better work- ing conditions and the internal onforcement of both fe: tal and state employment labor laws internal factors of organizational change present @ paradox. Though the need for chango may be generated Stary level ofthe organization, the responsibilty for ink {ating change teste primary with management. But at the seme timo, management is often the guardian of Established practice and the enemy of change, since henge may confit with managerial prerogatives. The role of manager a ators of charge i less aradowieal than it seems, Only managers are equippe Betate responsi for change, ar they must take hat responsibilty forthe following reasons: 4. Senior managers are based at two knowledge levels: + They see the company as a whole and in its environment «+ They have a wider range of possible models for change and have access to expert resources incide and outside the company to assist them. Organizations and the Need for Change _7 2, Managers have the power to marshal resources and apply them to what they belleve will benefit the company. 3. The managers role is to make the decisions that will secure the company's well-being. 4. If changes in the company's social and poitical environment carry Implications for the organization, itis the job of management to identity those implications and, if possible, anticipate the changes, Managers must learn to consciously scan the inter- nal_environment for factors indicating change. Internal factors are not as readily visible as external factors, pri- marily because internal factors usually do not manifest themselves in a structured fashion, For example, it may fot be obvious at first that there has been a shift in the educational level of employees or that thero is wide- spread dissatisfaction among department employoes concerning some key process. That is why managers must learn a special skill to deal with internal factors of ‘change—that of consciously and purposefully scanning the internal environment for the elements of change that can be significant for the organization. External Factors External factors that influence organizations center on the organization's role in society. Generally, external fac: tors are more intense and visible than internal ones and receive a more immediate response fram management. Here; too, managers should consciously scan the exter nal environment for indicators of change.Section Setting a Foundation Organizations respond to external factors.tomaintain their internal stability. There are two general categories of external factors: government and consumerism... Government pressures are usually less a source ¢ anxiety to companies than is the prospect of con: pressures. Government factors are normally steady, or at least predictable. Stability often results from the close’ relationship industry builds with government. The history cf relations between government and industry is marked by a sequence of actions that have made the:govern- ment an important player in corporate decision making Regulations and legislation such as antitrust laws, food and packaging laws, drug safety laws, environmental laws, and automobile safety standards all represent restrictions on industry's freedom of action. They’ algo ‘mark points at which private industry has been made to answer to society's needs. The process of integratirg ‘government and industry will continue as society's awareness increases. ‘Consumerism, on the other hand, is often antagohis- tic toward business and provides a greater source ‘of Lncertainly, Direct actions by groups of activists to change aspects of corporate policy provide a significant new pres ‘sure for change within organizations. Such pressures rep- resent a unique way to hold corporations accountable for the social consequences of their actions, The result has been, and will continue to be, a greater corporate sensi tivity toward public concerns. For example, corporate ‘America has incroased its sensitivity to several highly vis- le and often politically based issues such as corporate involvement in defenso industries. Even more significant is the development of consumer activist groups (for exam- ple, citizen watchdogs, community organizations, and Organizations and the Need for Change 9 neighborhood associations) that judge companies in ‘areas of traditionally internal decision making. Examples of corporate scrutiny include product design and safety, ‘as well as plant location and operation, both of which for. ‘meriy have bean the sacred prerogative of industry. Con- ‘sumerism makes organizations more responsive to {governmental and consumer influences, which shifts the role of organizations in society. Regardless of which factor is pushing the change, the responsibilty for identifying the need for change and lead- ing the orgenization through it belongs to management It'is management, particularly top management, that must be sensitive to manifestations of changing cond tions inside the organization and that also must scan the ‘external environment for indicators of the need for change. Management must interpret the indicators correctly and Understand where they may lead. They must then: be ready to lead the organization through whatever changes are found to be necessary, UNDERSTANDING CHANGE Historically, change has been a slow, often painful process. In the past, whole populations that know about Certain inventions and their applications have ignored them for years, decades, even centuries. Three exam- ples illustrate this point: gunpowder and rifle develop- ‘ment, the printing press, and the facsimile (fax) machine. Five hundred years passed betweon the first known luse of gunpowder and the development of the earliest rifles in Europe. n fact, over the following three hundred years, so litle progress was made in rifle development40 _ Section t~Setting a Foundation that Benjamin Franklin suggested to: the Continental’ | Congress that the new American army be equippedwith= the. longbow because rifles were Inaccurate: andgui powder was hard to obtain. (‘Don't shoot until'you'ses ‘the whites of their eyes was the rule to ensure: that no” ‘gunpowder was wasted and that every musket'shot prov duced a kill) Franklin would not have had to make his: recommendation if gunpowder had not been so siow in making the transition from discovery to application: ~ “The second historical example is the printing press: ‘Although the Arabs wore aware of the technologyzot printing from the books of Jewish scholars and thos® of biher religious communities under Arab rule, they made ‘no use of the printing press until three centuries after Gutenderg's invention. Closer to the present, the:fac- simile machine, an indispensable tool in most organiza tions today, is another example of an invention whose widespread application was slow to happen. Though fax machines were invented in the 1850s, itwas not until the 4980s that they became widely accepted. In the past, change took place occasionally and reg, ularly. It might occur in respect to some activity in a fow locations while leaving other locations untouched for long periods. Change might affect a few peopie in vari- ‘ous places or large numbers In one place, but never ‘everyone everywhere. Further, often the changes that occutred were so siow as to be virtually Imperceptibi. When change occurred at a faster pace, typically it was due to massive social upheavals such as foreign inva- sions or the overthrow of a regime. ‘This pattern was profoundly altered with the coming of the Industrial Revolution. The rate of change quick tened in countries that became industrialized, and as Organizations and the Need far Change _11 time passed, more ané mre counties became in Mfaed. nthe Une Sates today, a8 much othe ‘othe former slow pace of charge hae csaarted tothe pot wher n usiness, very sige shanes in protucts and the way buinese i tenuate cecur within afew yars 6” even month Many changes are-due tothe Tap appaton of such recon ventions a8 global communicatone, the mitoprocessr new pasts, and aer syne sae tals. Word of row technloges and prt travels Auicky va protessionl meting, ho polterton sok enti oral, o trough tho mor rch vision, alot whieh speed upto ato change, We me Geting cer and couche dy when we wil nace the capabity ot communicating simutancous th italy every porecn onthe pare! Cart an ints es ting the al of change conus sccarte jo understand change, we need on ft ate wo baste hnd of change cuca and ha Structural Change Stuetural chang ea fundamenal transformation ofan acivty or insti rom a pros site, se, {ural change, the now state le considershy erat (ether arse ora decino, n some respec remit vious state), Structural change is not roversibo, and Pawel permanent adjustment. ° rusia change sften impli radical change, For eiample the speed of communications neseace on Slight as messengers on horcoback replaced huinan ‘unmet However the telegraph an elophone cacced 4° damatc change inthe speed of sommuniations42 _ section Setting 2 Foundation Today, we have instantaneous communication: :In. th future, communications will continue to change, in 38664) as well as amount and format. : ‘Again, structural change is irreversible: that changes undergoes a permanent transformation: and attains a new state. There may be stability-inahe” fj new stato, or there may be a continuing evolutionso yet. fnother new state. But there is no going back to:the prior state 128 “The discovery of new knowledge and the creation of new technology and equipment make old knowledge Dbsolete. Permanent adjustment is required-—if an orga nization doos nol respond, it wil fal behind and: bo ‘wept under by its competitors. zaiteg ‘Structural change may require the dismanting of old institutions, relationships, and procedures and replaco- ment of those institutions with new ones. That this must Occur is understandable, as It is difficult to.move'suc- Gossfully ito the future burdened with the baggage of the past Cyclical Change ‘Cyclical change, on the other hand, is the temporary change of something from a level or state to which itis likely to return later. Over time, cyclical change tends.to follow a discernible fluctuating pattern by returning reg ularly to a prior state. An example of cyctical change can 'be found in the retail industry. Every year, beginning in about late August, retailers hire additional personnel to help with the winter holiday season. This increase:In hiring typically requires changes in hiting policy, train ing, and other administrative tasks. However, after the Organizations and the Need for Change _13 season is complet, the personnel roster ‘ypialy Tetuns to po- hold season lol. Cyelcal changes vovaly do rot cause any ie: verse atrtions in he stvtue ofthe rstutons or Settles which thoy are occuring. Gylalehanges are theefore repeating, notrcuns, and ited and the roqured ashstments ere temporary. ‘ihe chango fsa is ve noteasin, acorn et les and fit, each ype of change has fs on otern, wih a eaceribie decton, amour, pace, and duration ‘A NEED FOR CHANGE: CONTINUOUS IMPROVEMENT Prysics teachos us thal fora place of wood to burn It Ie ead fo a temperate a ich tates, en burns by salt. The hl heating requires ene but nce he wed ge, te tame sustains tse” tnd gives off mach more energy than was required fo start the fire. ae retuned ts "A more inlense fe than from burning wood can bo had by lgnting a cure of eluminum powder and metal tide By sl, the micure ls cold and eles; but when heated to ignion temperture, h becomes sol: Bustaning source of ian ight and ininse hoat that cannot be put out by ordinary moans. Tho mixture wil burn undewatar orn any oler environment hat would étingush an ordinary fame, The fe s sel sustaning And docs not dopond on is suroundings for suppor. Unforunataly organizations do nt operat ko oor af these examples ftom the physical world, as they are hot totaly selsustaring bu Instead must rely on both