definition and prioritization of problems and...

Definition and Prioritization of Problems and Projects

for Kick-Off

John Dennis PMP Lean Six Sigma Master Black Black Belt

Lean Six Sigma Training Ltd (UK)

2017 © Lean Six Sigma Training Ltd Problem Prioritization and Project Kick-off

Problems

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Every Lean Six Sigma Project starts with recognition of

a Business Problem

Or put another way…

If we didn’t have Business Problems then we would not need Lean Six Sigma !


The Gap

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A Business problem is ‘ The Gap’…

Between what SHOULD BE happening…

And what is ACTUALLY happening.

‘ The Gap ‘ Where we should be

Where we are now


The Gap

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‘ The Gap ‘ Approved Standard for Work

Actual Work


The Gap

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‘ The Gap ‘ What our Target is

Where we are now

2017 © Lean Six Sigma Training Ltd Problem Prioritization and Project Kick-off 6

Customer

Problemsncreasi

ng Value

through the

Process

Inputs Outputs Operations

Problems ? What Problems ?

Accidents

Equipment Maintenance Scrap

Unhappy Customers

Supplier Delivery

Unhappy Employees

Bad communications

Lost Sales

Reduced Profit


How do we decide what to do first ?

Not all Problems are created Equal !

• We need Tools ( Frameworks ) to help us to

give an ORDER to our problems.

• We need Tools ( Frameworks ) to decide

which problems need PROJECTS started

• We need to Kick-Off the right projects !

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How do we decide what to do first ?

Hierarchy of Problems

For example, if you are struggling to make payroll, then don’t focus on innovation

problems right now. Figure out how to make payroll consistently. What do you need to do

to pay the bills?

Virginia Ginsburg, founder at Swell Strategies

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9

0.06

Legal Compliance Safety of Workers Safety of Customers



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0.06

Brand Sales

Operations Product Financial

Safety and Legal

Legal Compliance Safety of Workers Safety of Customers



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0.06

Brand Sales

Operations Product

Payroll, Cashflow, - Legal Compliance - Safety of Workers - Safety of Customers


Another Way to Look at it

1. Health and Safety problems I. External Customers II. Internal Workers

2. External Customer Problems I. Warranty and Penalty Costs II. Delivery Times III. Image Reputation

3. Internal Worker and Process Problems I. Rework and Scrap II. Inventory III. Suppliers

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The Cost of Problems

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“In most companies the Costs of Poor Quality run at 20 to 40 percent... In other words, about 20 to 40 percent of the companies’ efforts are spent in doing things that went wrong because of poor quality”

(Joseph Juran on Planning for Quality, 1988, pg. 1) The COPQ range varies from less than 1 percent for

companies who have truly achieved "Six Sigma,” to about 15 to 25 percent for companies that are at the four sigma level and about 25 percent to 40 percent of revenue for companies that are at three sigma levels.

Success through Quality (ASQ Quality Process, 1st edition,

1998), Timothy J. Clark


Problem Categories

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External Failure Problems

• Health and Safety of Customers • Warranty costs • Customer Complaints • Negative media coverage • Legal problems • Customer Penalties / Fees

Internal Failure Problems • Health and Safety of Workers •Scrap • Defects and Rework • Rejects • Machine Failure and Repairs • Troubleshooting costs


What is the Scope of the Problem ?

•

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“ Does the problem effect other areas of the business ?“


Problems - Iceberg

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Rework Excess Inventory Warranty Costs

Rejects

Lost sales

Hidden Expenses

Hidden Problems

Visible Problems

Lost Customer Loyalty

Lost Employee Moral (less obvious)

Scrap

Hidden Rework

Penalties and Fees


DMAIC

Lean Six Sigma is about…

• Using a scientific Framework to assist in problem solving and implementation of projects.

• The Framework is called DMAIC

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Control Improve Analyze Measure Define


DMAIC - ( D-e-e-m-a-k-e)

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Define - the business problem ( or opportunity)

Measure - the process current state ( as-is) of the problem area

Analyze - determine Root Cause of the problem

Improve - Identify and Choose Best Solution then implement the solution

Control - Embed, Institutionalize and Control ( sustain ) the positive results

Define Phase

-Defining the PROBLEM

-Kicking Off the PROJECT


TAIICHI OHNO and the 5 Whys

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• ‘’By repeating why five times, the nature of the

problem as well as its solution becomes clear.’’

• “ Observe the production floor without

preconceptions,”

‘Keep the Mind of a Child’

“ Ask ‘why’ five times about every matter.” • Page 17 : Toyota Production System: Beyond Large-

Scale Production by Taiichi Ohno, 1978

http://www.amazon.com/gp/product/0915299143?ie=UTF8&tag=lessolearn01-20&link_code=as3&camp=211189&creative=373489&creativeASIN=0915299143

http://www.amazon.com/gp/product/0915299143?ie=UTF8&tag=lessolearn01-20&link_code=as3&camp=211189&creative=373489&creativeASIN=0915299143


The Funnel Model for Problem Solving and – 5 Whys

Initial Problem Perception

- Bring Team Together

- Clarify and agree on the Problem and Point of

Cause

Direct Cause

Grasp the Situation

Solution / Countermeasure

Monitor and Evaluate

Cause Cause

Root Cause

Cause Cause

POC

Root Cause Investigation Using 5-Why

Why? Why?

Why? Why? Why?

Containment of Problem / Stop

Bleeding


DEFINE : Problem and Project Definition

• The most important Phase of any DMAIC Project • Choose the right problem to tackle

• Define the PROBLEM

• Identify the key TEAM members and STAKEHOLDERS

• Understand the SCOPE

• Present a good BUSINESS CASE

• Develop a PROJECT CHARTER

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Define


A Structured Approach – A Starting Point

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• A consensus needs to be reached amongst the team and

stakeholders to decide on the prioritization of problems and projects to be started.

• Consensus Building is an important skill of any Green or Black Belt.

• Nemawashi (根回し) is the Japanese word for Consensus Building


Prioritization Tools

Prioritization tools are useful in to assist with Consensus Building 1. PICK Charts ( 2 by 2 charts ) 2. Pugh Matrix 3. General Selection Matrix

The PICK Chart was developed by Lockheed Martin ( Aerospace ). The 2x2 grid is normally drawn on a white board or large flip-chart. Ideas that were written on sticky notes by team members are then placed on the grid based on the payoff and difficulty level. • Possible (easy, low payoff), • Implement (easy, high payoff), • Challenge (hard, high payoff) • Kill (hard, low payoff).

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PICK charts / 2 x 2 matrix

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1. Is this a problem that we can realistically fix ?

2. How often is the problem occurring?

3. How large is the scope of problem ?

4. How painful or costly is the problem?

5. Do I have the resources to address the problem right now?

6. Is anyone else working on this problem? ( Is it a Competitor ?)

7. What is the business benefit of resolving the problem? 26


Pugh Matrix

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General Selection Matrix

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2 Documents to Kick Off Project

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1. Business Case

2. Project Charter


What is a Project Charter?

The Project Charter expands on the Business Case, it clarifies the project’s focus and the measures of project performance. The Project Charter completed by the Six Sigma Belt ( Green or Black).


Example Project Charter


Project Charter - Definitions

• Problem Statement - Articulates the nature of the problem.

• Objective Statement – States how much of an improvement is desired from the

project.

• Project Scope – Articulates the boundaries of the project. ( Use SIPOC diagram )

• Primary Metric – The actual measure of the defect or error in the process.

• Secondary Metric(s) – Measures of potential consequences (+ / -) as a result of changes in the process.

• Project Black Belt & Process Owner names

• Start date & desired End date

• Division or Business Unit name

• Team Members

• Stakeholder names


Other Activities for the Define Phase

• High Level Project Plan ( Schedule ) • Start of Project Documentation

– Issues Log – Communications Management Plan – Human Resources Plan – Stakeholder Management Plan ( hint : use RACI to

assist ) • Gate review involving Stakeholders before Measure Phase

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Compare with Prince2 / PMP / G8D / PDCA


PMP / Prince 2 / G8D / PDCA / A3

Prince2 PMP G8D PDCA Lean6Sigma • Starting up a project • Initiating a project • Directing a project • Controlling a stage • Managing stage

boundaries • Managing product

delivery • Closing a project

• Initiate • Plan • Execute • Control • Close

• Team • Problem • Contain • Root

Cause • Correct • Monitor • Celebrate

• Plan • Do • Check • Adjust

• Define • Measure • Analyze • Improve • Control

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A3 reporting : Used by some Lean Organizations to compliment PDCA , G8D or DMAIC


Lean Six Sigma Problem Identification tools

• Consensus Building ( Nemawashi ) tools • Facilitated workshops • Brainstorming Sessions • Pugh Matrix • Fishbone Diagram • Pareto Analysis • Is-Is-Not Analysis

• Visual Management

– Andon Lights – Type 2 Poka Yoke

• Daily Standup Meetings

– Scrum meetings ( Agile Project Management )

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Problem statement on a FIshbone

Problem or Condition

The Y

The X’s (Causes)

l Categories Material Measurement Environment

People Machine Method

The Problem

Cause and Effect Diagram

Problem or Condition

The Y

The X’s (Causes)

l Categories Material Measurement Environment

People Machine Method

The Problem

Cause and Effect Diagram


The Pareto Principle

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Pareto Chart –Example Pareto Chart tells us which problems to focus on


Is-Is Not Analysis

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• Is-Is Not Analysis is often used at the same time as The Fishbone diagram for helping to narrow down from the ‘Possible’ areas of concern to the ‘Probable’ areas of concern.

• Is-Is Not Analysis helps us to narrow down the scope of the root cause so we know what we should start to measure.

• Comparative Analysis listing differences and changes between “Is”

and “Is Not” ( Where, When, With-who ….the problem ‘is’ and ‘is-not’

Used extensively by FORD in their 8D program ( the 8 Disciplines )


Example Is-Is Not Analysis worksheet

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Conclusions

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By effectively prioritizing your business Problems…

… and Kicking-Off the correct Projects to solve them …

…you can make the most effective use of company

resources …

and make your business

EASIER, BETTER, FASTER and LOWER COST


Thank you for listening !

Any Questions ?

[email protected]

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