How To Identify The Best Lean Six Sigma Opportunities

six-sigma-logoWhen you have a team of highly skilled Six Sigma pros; Black, Green and Yellow Belts, it is important to make sure you identify and run worthwhile projects. It is therefore crucial to know how to identify these project opportunities.

There are 5 project identification methods and these are detailed below:

Value Stream Mapping

This method is usually the preferred way to identify projects and is one of the classic Lean tools. It can be used at any level and completed relatively quickly (within 1 week). This method informs you through a process map; this map details material and information flow. In addition to this, it also contains information concerning inventories and lead times.

Click for large example

The map shows clearly where there might be blockages in the process, i.e. where the inventory and lead times lie within the process. This enables you to fully understand the project and plan appropriately. Also usually included on this map are additional pieces of information that may impact your key process steps, for instance yields, change-over times and scrap-rates. All of which helps your team to identify any problems that may arise within the project.

A common part of this method is to produce two maps; the first showing the current state of the process and then the second to show the future (desired) state. The team would then need to consider what LSS projects are needed to move from the current state to the future state and if it’s worth doing.

Critical To Success (CTS) Flow Down

CTS Flow Down is the second most preferred method following Value Stream Mapping. This method focuses on pre-existing metrics and indicators within a business and uncovers project opportunities by identifying where there are any noteworthy gaps existing between the current and desired performance of a process.

This method also draws attention to where other projects and action plans have not taken these gaps into account and so will not be able to solve the issues. This is a particularly handy method to reference when trying to alleviate some of the concern your executives might have about the gaps.

There are 3 key ‘Critical’ factors to consider:

  1. Critical to Cost (CTC) – This factor focuses on budgets and variances; enabling you to see where the most money is being spent and if there are any discrepancies; if you can identify these then you have a project opportunity.
  2. Critical to Quality – This factor identifies project opportunities in the same manner as CTC but focuses on quality metrics instead, taking into account things such as final test rejects, customer complaints and any warranty issues that have occurred.
  3. Critical to Delivery – As with CTQ, project opportunities are also identified by focusing on metrics but obviously delivery metrics in this case, taking into account things such as lead time, fill rate or on time delivery (OTD) metrics.

Cost of Quality

This method assigns a financial metric to every single aspect of process quality. This enables your organisation to prioritise according to the financial information depicted. This makes it easier to gain support and buy-in from executives since they are able to see what the financial benefits of improving a process might be.

There are 4 general areas making up the Cost of Quality method:

  1. The cost of internal failure (i.e. waste and rework within your organisation)
  2. The cost of external failure (i.e. customer complaints, warranty issues and legal action)
  3. The cost of inspection (i.e. testing all your equipment and quality control employees)
  4. The cost of prevention (i.e. risk management, internal audits, quality control employees and your process improvement activities)

It can be difficult to obtain an exact figure; however, provided you have assigned the right team, they should be able to come up with a pretty accurate estimate and be able to see if a project is worth taking on or not.

Customer Journey

This method is a very popular method with customer-facing organisations. This is because it is based on customer focus group activity. Customers in the focus group are asked to map out their customer journey with an organisation and then describe what they feel is most important about each step within that journey.

Next the customers within the focus group are asked to rate the organisation against other similar organisations that they have had interactions with; where your organisation scores are low is where the project opportunities are going to be.

Rolled Throughput Yield

This method is linked to the ‘Right First Time‘ principle. It basically takes into account the probability of any unit within the specifically identified procedure flowing through an entire process without there being the need for reworking or remaking it.

The probability is worked out by multiplying the right first time proportions for each step within the process. This is a very useful method for identifying and highlighting the steps within a process that produces the highest number of issues (defects). It makes it easier to focus your executives on fixing those particular steps.

‘Right First Time’ proportions are estimated by counting up the number of successes (first time) and then dividing this number by the number of process opportunities. The result is the throughput yield, which is then multiplied, resulting in the Rolled Throughput Yield. The step with the worst ‘Right First Time’ yield provides you with your project opportunity.

About the Author

James writes for Sigma Pro. When not writing, he can often be found maximizing all sorts of opportunities for his team.

Photo credit: jlcwalker, Wikipedia