How to Keep Your Lean Program on Track

Some years back I enjoyed a position at a manufacturing firm with a long history of success in applying Lean. My assignment was to improve throughput and quality in a specialized fabrication area, where pretty much every unit produced was a custom job. There was a lot of variation just in the product mix: the smallest unit could fit in one’s lap, while the largest sat on a fixture the size of a small car. Across the size ranges there was additional variation in the complexity of the units produced. As a result, a given unit could take anywhere from one hour to several days before it was ready for the next stage of production.

Some of the raw materials were prepared using automated equipment, but inevitably the work entailed people manually assembling everything. It was most educational, and rather intriguing, seeing low-technology fabrication techniques, combined with occasionally exquisite craftsmanship, turning out some seriously high-tech “stuff.”

Looking at Variation

It took virtually no time to confirm the obvious: a value stream map (VSM) was called for. However, given the wide range of processing times involved – time being, of course, the unifying and dominant measure throughout Lean – a one-time snapshot of the process couldn’t possibly provide the needed insight for cycle times, queues, etc. An accurate representation needed to include Six Sigma’s concept of variation on top of the Lean tools (subsequent data verified this assumption). My supervisor and peers supported me as I went about analyzing variation, even though doing so was a departure from their modus operandi.

Between my determination to understand the variation and my confessed status as an ultimate “Gemba nerd,” I spent many hours on the shop floor: measuring dimensions and distances, timing various tasks, counting units in queue at various times and locations, and listening to those who could and would talk to me. This included visiting the floor during the “off” shifts, because – at the risk of preaching to the Captain Obvious choir – those shifts can seem like entirely different worlds compared to first shift.

Unexpected Findings

Those off-shift walks led to the discovery of two utterly unexpected cultural phenomena given the company’s reputation as a Lean powerhouse.

1. The off-shift employees were unaccustomed to seeing an exempt (not subject to minimum wage laws or overtime regulations) associate in their midst, unless that visitor was imparting some manner of grief. It took a while before my arrival stopped eliciting eye rolls and nervous glances. I would have expected Gemba walks to be a regular occurrence, at all times and all locations, with the attendant give and take of improvement ideas.

2. Associates were surprised when they found me not just paying attention to their input, but acting on them where feasible – and sharing credit for their ideas. I became the go-to guy when any floor associate had input. It was flattering though sometimes distracting, given that I was made aware of many legitimate concerns far outside my purview. Again, a true Gemba culture would have made my “unusual” behaviors an inherent aspect of daily work life.

“We Were 5S-ed”

About halfway through the project, though, I received a shock that dwarfed both of those non-trivial inconsistencies.

It started as I was chatting with an operator pal. I think we were discussing some profound topic like a recent football game, when she excused herself and walked over to a supply cabinet.

She returned carrying a consumable item that I knew had been available to dispense directly from her workstation the day before. Why, I asked, was a new form of transport waste introduced abruptly?

I’ll never forget her choice of words.

“We were 5S-ed.”

I stood there, slack jawed, for easily 30 seconds, stunned by the implication.

The power of 5S comes from people endlessly finding ways to make their own work environments more productive, efficient and safe. But the operator’s visit to a supply cabinet was not remotely the result of the work force making their own decisions.

“We were 5S-ed.” It had been done to them, not by them.

The notion that some external committee swooped through and imposed their uninformed will upon the work force – and that in doing so they had increased transport waste, delivering the opposite outcome from what 5S seeks – was mind numbing.

The choice of words – “We were 5S-ed” – felt like some form of personal violation, and in some ways that was exactly the case. Clearly, somebody had confiscated decision-making authority from the folks who should have done the deciding, and the outcome had not been good.

What Went Wrong?

How did this happen in an organization with a strong track record delivering on the promises of Lean?

One bit of insight arises from a conference call I attended. Our site’s Lean practitioners were gathered in our conference room, and on the call were conference rooms full of Lean practitioners from perhaps 10 other sites nationwide. I recall representatives from one location asking elementary questions about Lean practice. Legitimate questions to be sure, but only when coming from students newly learning the ropes of Lean. For this team to be posing those questions felt akin to an alleged ace pilot peering into an airplane cockpit and asking, “What does that steering wheel looking thingy do?”

It must have been possible to gain a leadership position in Lean without truly having the chops for the task. Despite my site’s having a cadre of highly qualified Lean practitioners, some of their reporting structure must have included folks without adequate skills for those leadership responsibilities.

I further hypothesize that those less qualified managers had rolled out some manner of incentive-driven metrics to “prove” they were “doing” Lean, without comprehending the implications. Somebody likely was expected to “do” 5S, and “doing” 5S likely was interpreted to mean workstations becoming Leaner in the most easily countable way: reducing the number of items kept there.

Everywhere we go, we see the ramifications of badly thought-out metrics, driving behaviors that make things worse. In my experience, bad metrics have two universal root causes:

1. Inadequate respect for the people doing the work – both in terms of workers’ ability to contribute to the development of metrics, and those same workers’ ingenuity at delivering numbers with or without the underlying outcomes the numbers had sought to improve

2. Insufficient appreciation for the team effort and facilitator skills required to roll out metrics that stand a chance of being robust

These two causes wrap around one another like a caduceus. Unfortunately, the only thing more dangerous than a leader who doesn’t understand something is the leader refusing to acquire needed understanding.

Get It Right

David Pink’s book Drive shares solid research into the three elements of intrinsic motivation:

1. Mastery

2. Autonomy

3. Purpose

In this context it makes sense that the task of developing measurements must involve those whose performance is being measured: the person who knows the most about digging the ditch is the one holding the shovel. That comes with its own corollary: the top expert, therefore, is not the executive vice president of ditch digging.

If your leadership is willing to heed your advice about how to avoid “being 5S-ed,” follow these recommendations:

• Trust and respect the people at the bottom of the food chain. Given the chance, they can, and will, deliver superlative levels of passionate commitment and performance excellence. All the leaders need to do is listen to them and eliminate the obstacles management has created. (See the next bullet for specifics.)
• In order to listen most effectively, leaders need to go to Gemba.
• They should be trained in how to conduct a proper Gemba visit, preferably using a blend of classroom introduction and shop floor immersion.
• They should go to Gemba at all times of day, into all corners of the operation.
• Ideas should be acted on promptly; it’s crucial that lists of suggestions not become graveyards of ideas.
• Make sure the people coming up with the ideas get full credit for their contributions. If folks perceive that their ideas are being stolen, the next round of ideas will not see daylight.
• If one wants to track improvements, return to the first recommendation: trust the people being measured.
• Get them to buy into why the tracking is important.
• Formally and officially involve them – or at least some of them depending on the size of the work force – in figuring out how the tracking might be done.
• Layer in enough time and expert facilitation so that the resulting metrics are both robust and palatable to those folks.
• Enlist their commitment to garner acceptance and support from their peers.
• Recognize that not every idea will pan out.
• Don’t punish people for their mistakes but support them for trying.
• Use every single change as an opportunity to learn. Ask what worked, what didn’t, why and what might be done better in the next try. This applies no matter how much or little success resulted from an idea – debrief the home runs as much as the strikeouts.

If these recommendation sound like universal admonitions, you’re right. The things that make Lean successful are the things that have always worked. It’s not whether you use the tools associated with Lean, Six Sigma or Agile, or any of the alphabet soup of improvement initiatives like SPC, K-T, 8D, TQM, PDCA, etc. It’s the underlying approach to working with the people that differentiates whether an organization leaps forward or grinds along.

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The importance of planning in project management

When you begin a project, the temptation is to hit the ground running. It may be that you’re brimming with ideas, or perhaps the project is so similar to a previous one that you get going straight off the cuff. However, pressing the brakes and taking time to plan can be much more productive in the long term. Here, we look at why planning is paramount in project management.

An opportunity to collate ideas

Planning ahead of a project offers an opportunity to collect your thoughts, collate your ideas and put them in writing. This can help you later as it lets you consider a range of possibilities for each area of a project. Weighing up the pros and cons of your ideas at the planning stage means you can make well-informed decisions going forward.

What’s more, putting your ideas on paper will offer the opportunity to identify gaps in your knowledge and areas to research further. You may even delegate some of this research to an appropriate team member. Areas could include technical elements, or learning the industry better. Spending some time gaining knowledge at the planning stage is sure to be worthwhile in the long run.

Beyond your own ideas, it can be valuable to invite others’ opinions at the beginning of a project. Stakeholders, team members and clients alike may have ideas to input. This can be beneficial as they may well have an outlook you had not considered. There is always the risk that their viewpoints will conflict with one another, however, the decision making remains in your hands. It is often better to gather ideas early on, than have them cause bumps in the road further into the project.

Planning is a chance to reflect

Learn from the mistakes, failures or pitfalls of previous projects by taking the time to reflect. As the project manager, it is your responsibility to identify risks of project failures in advance. The sooner you spot the risks, the more time you have to mitigate or resolve them.

For example, if there was a lack of stakeholder interest last time, mitigate this with regular meetings to reiterate the importance of this project. Perhaps you’ve previously had communication issues amongst your team - integrate a communications plan this time around. This will minimise the risk of it being a pitfall further down the line. Or maybe you’ve had issues with scope creep in the past? Take steps to ensure there is good transparency this time around and that everyone is on the same page. A scope statement is ideal for ensuring this.

Reflection time during the planning stage offers you and the team a chance to change practices going forward in a new project. Learning from experience is one of the 7 Principles of the PRINCE2 model. The guidance is that project teams should take lessons from previous projects into account, and that a lessons log is kept updated for this purpose.

Drafting for success

A project manager’s role is to gain as much background information as possible to form comprehensive plans for a project going forward. This can avoid hiccups further down the line by preparing for and managing risk. An article published in 2012 on the PMI website found a positive correlation between planning and project success.

However, it was noted that this study had limitations and that it’s worthwhile considering how much planning is too much planning? Some of the literature studied suggested that over-planning came with dangers such as limiting creativity.

So what’s the alternative? There has been a recent rise in agile project management, which generally advocates less thorough planning and a more evolutionary process. It uses methodologies such as Kanban project management. Agile is said to be more efficient as it is less prescriptive and more flexible.

That doesn’t mean planning is less important with an agile approach. A plan should still be carefully considered, focusing on the timescale, budget, quality, use of resources and so on. It must still outline how targets will be achieved, but this should be with an adaptable draft, rather than a strict process. And initial project planning should be updated throughout the project.

Drafting a plan that allows for responsiveness is key for success. Take the time to reflect on past experiences to guide your processes. Also, collating ideas at the planning stage can be hugely beneficial. All round, effective planning at the beginning of a project is vitally important for achieving the best outcomes.

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Phased Deployment Model Helps Six Sigma Succeed in IT

Lean Six Sigma for information technology (IT) is still maturing and has not hit the critical mass to transform the industry to its next level, as it has in other industries in the past 10 years. This may be due in part to common myths about Lean Six Sigma for IT. These myths include:

◈ IT as a stand-alone department does not reap much from Lean Six Sigma.

◈ Every IT project is executed through Design for Six Sigma (DFSS).

◈ Only process-rich companies have successfully applied Lean Six Sigma to IT. Without a bureaucratic, top-down approach, it will not work.

◈ A majority of the DMAIC projects in software development companies are transactional in nature, focusing on defect reduction, testing and design process improvement.

◈ The DMAIC approach primarily provides a structured project flow with not many breakthrough improvements.

◈ Black Belts in IT firms are mere program managers, preachers or coaches instead of real practitioners.

These myths can be damaging to the prospects of using Lean Six Sigma in IT, and practitioners must learn the truth in order to improve the chances of success with the method.

Creating the Vision

Lean Six Sigma practitioners in the IT industry need to look inward to keep application of the method simple and relevant. Looking inward means focusing on the traditional principles of Lean Six Sigma:

◈ Structured, factual process thinking at all business levels

◈ The definition of organizational goals and strategic alignment of those goals with the key performance indicators

◈ An organization-wide focused and structured framework for development (DFSS) and continuous improvement projects (DMAIC)

These three characteristics should be the basis of the vision for a Lean Six Sigma deployment, irrespective of the target industry domains – and IT is no exception.

The Three-phased Deployment Model

There are quite a few variants in IT deployment areas, from technology and product innovators to custom software solution providers to the technology wing of a multinational operation. Hence there are many complex organizational parameters that need to be handled when it comes to deployment of Lean Six Sigma. Trying the right projects at the right organizational maturity level is the key to success.

Typically, Lean Six Sigma is deployed in one of three ways: top down, middle out or bottom up. Each approach has its own strengths and shortfalls. As the culture matures, the approach must mature along with it. Therefore, an effective phased deployment model is needed (see figure below).

Figure 1: Recommended Three-phased Deployment Model

The following are the three phases of this deployment model:

1. Middle out – This phase is driven by an individual or a small group of visionaries in the firm from middle management level. This group must keep the cost of the Lean Six Sigma program under check at all times. Projects may have a primarily bottom-line focus due to weak top leadership commitment.

2. Move to top – This phase the first step toward a long-term business process excellence approach. Balanced scorecards should be created for every business unit or department and they should align directly to the firm’s corporate vision and mission.

3. Top down – In this phase Lean Six Sigma benchmark practices and market performance should be discussed and an adoption decision should be made in the boardroom, with the CEO driving from the front. Champions, Master Black Belts, Black Belts and Green Belts should be developed to own and lead the Lean Six Sigma program. Projects should involve both top-line and bottom-line growth objectives, with a primary focus on customer satisfaction.

Selecting a Project Approach

Like deployment models, there are also various tactical project selection approaches for IT firms:

1. No Lean, Little Six Sigma

This approach is about reaping the lowest hanging fruit. Practitioners collect product performance and defect data, perform simple Pareto analysis and create fishbone diagrams. From a vital few x’s they move to a solution set and pilot an improvement. This lightweight DMAIC is best used during Phase 1 to win confidence and increase the comfort factor around Lean Six Sigma.

2. All Lean, Little Six Sigma

Here practitioners stress improvement of visible problems based on Lean thinking . With this approach, the seven types of Lean wastes are introduced. The quality issues addressed may relate to flow or speed, for example, in transactional software processes as well as software engineering.

A Lean thinker should ask basic questions, such as How many of the software design stages add real value to the customer? Where is the maximum lead time? Where is the weakest link in the chain? An FMEA can do wonders, surfacing hidden design issues and saving a business from enormous risk exposure. For that matter, practitioners should try applying Lean concepts to a simple C code by acquiring the high level design and the flow diagram, and asking value stream questions.

3. All Lean, All Six Sigma

This method involves leveraging Six Sigma to find hidden problems, applying core statistics and using design of experiments (DOE). The best thing about software is, without much cost, practitioners easily can experiment and find the optimum level of various controllable factors in computer programs. Today, in the age of object-oriented analysis and design service-oriented architecture, almost every product feature is configurable or tweakable. Hence, the more complicated Six Sigma tools are all applicable to software projects. Some sample project areas and the tools used are:

◈ Performance tuning of a batch process (DOE)

◈ Determining schedule slippage variation across large projects (ANOVA)

◈ Detecting service-level agreement variation for large clients (regression analysis)

◈ Setting up a customer service desk for optimum performance (DOE)

◈ Creating software defect prediction model (Monte Carlo simulation)

The table below is a recommended deployment matrix that has the highest probability of success, irrespective of organizational culture and environment.

Mix of Project Types Across Deployment Phases

Project Categories		Strategic Deployment Phases
Project selection	Practice or application	Middle out	Move to top	Top-down
No Lean, Little Six Sigma	Kaizen or root cause analysis workouts	80 percent	40 percent	30 percent
All Lean, Little Six Sigma	Development process and technology, Lean thinking	20 percent	50 percent	30 percent
All Lean, All Six Sigma	Advanced Lean Six Sigma to address hidden variation	N/A	10 percent	40 percent

Lean Six Sigma in IT Grows Up

Lean Six Sigma in IT should no longer be a myth. It can be as successful in the IT domain as in any other. Practitioners need to not only be careful about using the best fit deployment model alongside appropriate project selection, but also to come forward to share their success stories (and failures) with each other. This will help to transform the use of Lean Six Sigma in the IT world.

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Process Entitlement Analysis: Using This Novel Approach

When a Six Sigma project is unsuccessful, a common cause of the failure is a poor project selection process. Compounding the problem of project failure, incorrect and inappropriate projects transmit a negative message to the organization about Six Sigma and can lead to the impression that the methodology is not applicable to all types of industries.

To resolve project selection problems, organizations adopt various approaches such as comparison studies, brainstorming, policy deployment and benchmarking – external and internal – to determine process performance gaps and identify improvement opportunities. Unfortunately, most of these exercises fall short of reaching the overall objective due to their inherent conceptual background.

Total Opportunity Assessment

So what is the right course of action? Process entitlement analysis is a concept that provides an effective and robust process to conduct a total improvement opportunity assessment within any organization. Process entitlement represents the best performance possible from a process. For example, process entitlement for one round of golf (18 holes) is 18 strokes.

Similarly, process entitlement for:

◈ Cost of poor quality = 0
◈ Rolled throughput yield = 100%
◈ Efficiency = 100%

Process entitlement is a robust concept for understanding the true capability of the current operation. A process entitlement analysis enables organizations to extract the untapped value available in the current operation, business or system without any major investment.

A process entitlement study helps envision the scope for improvement, which assists in defining the improvement objectives. It focuses on short-term process capability, the actual capability of a process. In addition, the study identifies the performance gap.

Process Redesign or Improvement?

In a benchmarking exercise, the focus is a comparison of industry best performances or competitor performance levels. In an entitlement study, the focus is the ideal performance possible from the process (Figure 1). The outcome of the analysis also helps decide whether the initiative should involve process improvement (DMAIC) or process redesign (Design for Six Sigma).

Figure 1: Benchmarking and Process Entitlement

Scenario 1 (Figure 2): The current process performance is close to entitlement level and competitors are still far ahead.

In this case, the effort that an organization will expend to improve its process, will not exceed process performance beyond the competitor performance since the operation process has reached its saturation level. This situation requires a process redesign to achieve the business objectives.

Figure 2: The exceptionally small gap c is an indication of process saturation. On the other hand, the very wide gap b indicates a need for immediate process redesign (DFSS).

Scenario 2 (Figure 3): The organization is operating far below the process entitlement level. By focusing on process improvement, the organization can deliver better value to its stakeholders. Working toward process redesign is a waste at this time. 

Figure 3: The gap b between industry benchmark and and current process performance is moderate, and far below gap c between process entitlement and current process performance which suggests an approach of process improvement (DMAIC).

Why an Entitlement Study Works

Here is why the process entitlement analysis works: 

Independent process evaluation: The entitlement study is not dependent on any external information. It also is independent in terms of geographical location, people competency, product, technology, customers and suppliers. 

Internal reference: Since the entitlement value calculated by the internal team is based on an internal metrics management system, the information is more reliable and authentic compared to benchmarking, where the organization heavily depends on external information sources. 

Ideal still real: Though the process entitlement level calculation is based on ideal performance scenarios, it is considered as practically achievable since the entitlement value is based on proven scientific, empirical or technological principles. 

Long-term vision with short-term action: Entitlement can assist in setting long-term targets for process improvement or process redesign. If there is a huge gap between current performance and entitlement level, then the organization can use a short-term plan to reach immediate strategic milestones with the final goal targeted in the next two or three steps. 

How to Conduct an Entitlement Assessment

To achieve the best outcome from a process entitlement assessment, an organization must position it as a common business process improvement opportunity assessment for the organization or its business sub-unit(s). There is a three-step methodology for total opportunity assessment – align, assess, approve.

Step 1 – Align: Align the improvement opportunity assessment with the organizational vision, long-term and short-term strategic goals. Identify key processes to achieve business goals. 

Step 2 – Assess: Conduct an entitlement assessment for key identified processes. Identify performance gaps and define improvement opportunities (refer to the example below for a detailed illustration). 

While conducting the process entitlement assessment, adopt process metrics (first pass yield, rolled throughput yield, cycle time, cost of poor quality, capacity utilization and utility consumption) in place of traditional output performance metrics as they present less bias. Process metrics do create a new set of metrics for the organization, but that brings about a paradigm shift in realizing the current process performance level. 

An organization needs to pay critical attention to its answers to the following key questions: 

◈ Current performance baseline: How good is the current process?

◈ Best demonstration performance: How good has it ever been?

◈ Potential entitlement level: How good could it be?

Also evaluate and validate pain areas and rudimentary opportunities collected during the Align step. 

Step 3 – Approve: Prioritize improvement opportunities as per the short-term business plan, operational goal complexity and resource requirements. Finally, validate and approve the final list of opportunities as probable Six Sigma Black Belt and Green Belt projects and technical projects, and the appropriate road map – DMAIC (Define, Measure, Analyze, Improve, Control) or Design for Six Sigma (DFSS). 

An Entitlement Assessment Example

Organization profile: Neechem Inc. (a fictitious organization) is a 20-year-old specialty chemical manufacturer. Recently, the company management changed and the new management team wanted to baseline the current process performance and estimate potential opportunities. The management team formed a task force to conduct a total opportunity assessment. The task force, which had expertise in Six Sigma deployment and entitlement study assessment, decided to adopt the align-assess-approve approach. 

Step 1 – Align: The task force identified key business processes. Three key business processes were selected for process assessment based on organization vision, current market trends, industry benchmarks and customer feedback. These key processes were: 

1. Chemical A and Chemical B manufacturing process

2. Logistics process (purchase to pay)

3. Customer payment process (order to cash)

(Note: For this article, only the assessment of Chemical A and Chemical B manufacturing processes is elaborated.)

Step 2 – Assess: The task force started an assessment of the Chemical A and Chemical B manufacturing processes by mapping the current process and identifying all input/output and key sub-processes (Figure 4). The team identified the current process performance, best demonstrated performance and entitlement performance level for the process. They listed all performance gaps and defined improvement opportunities.

Figure 4: Inputs, Outputs and Key Sub-processes

Step 3 – Approve: The task force conducted a prioritization exercise by using the Pugh matrix. Prioritization criteria were selected based on the organization’s short-term goals as well as customer and market expectations. Key outcomes of the Approve step were as follows: 

◈ Sub-process 1.7 has a substantial performance gap but the project was not initiated due to lack of market demands for Product B. The current performance level is adequate to meet customer expectations (a future DMAIC project).

◈ Sub-process 1.4 has reached its entitlement level and requires immediate redesign to meet process requirements (a DFSS [Define for Six Sigma] project).

◈ Sub-processes 1.2 and 1.3 have large performance gaps between them but a moderate target was set. This is an example of gradual improvement.” 

The exercise estimated total potential savings from the prioritized projects. All projects received immediate management buy-in and approval.

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Six Sigma Trends: Upgrade for Supply Chains and Solution Providers

This is my second article from my series reflecting research on strategies and trends in deploying Six Sigma. Our research is performed not in an academic lab but with direct application in companies through advanced team-training concepts and relevant project coaching.

Although subjects vary, the structure of my articles will remain similar starting with

◈ What and how we are doing now,
◈ Insufficiencies and challenges, and
◈ Trends (and new results) in Six Sigma methodology evolution.

I am very thankful to all who have responded to my first article and look forward for future interaction and cooperation.

1. Six Sigma For The Single-Business

Historically, the Six Sigma methodology has been developed for manufacturing or transactional companies selling customers their in-house competence in the form of products and/or services. Although market and customer-relationship infrastructure has been changing dramatically, the methodology still focuses on measuring, analyzing and improving single-business processes (those processes operating entirely within your business).

Key performance indicators are mostly used for monitoring internal business processes and their continuous improvement and for keeping them under control. Such an approach certainly enables one to gather ongoing experience rather than summary experience, and concrete data rather than abstract data or assumptions.

Nevertheless the advantage of Six Sigma has to be used to the full extent related to the whole end-to-end business- and customer-relationship infrastructure. This infrastructure becomes worth more than the single company’s products, stores, factories – i.e. the infrastructure goes beyond any single-business.

Introduction and control of consistent, stable, replicable and capable channel business processes and procedures demand evolution of the Six Sigma methodology, starting from basic definitions and performance metrics.

2. How We Present and Measure Single-Business Processes

Traditionally we start with defining the

◈ Processes to be improved,
◈ Their boundaries, and
◈ The units, which result in the process performance and deliver the value to the process customers within a single-business company.

A set of indicators, which quantify one or several high-level process performance metrics and their targets, is then selected and prioritized. These performance metrics typically reflect the

◈ Number of different types of defects which arise during the process like defect per unit (DPU), defect per million opportunities (DPMO), etc., and/or

◈ Duration and/or costs of value-added (VA) versus non-value-added (NVA) process steps of developing and/or delivering one unit (i.e., so-called cost of poor quality [COPQ]).

A typical high level process map for a single business process, presented in a generic way, is shown in Figure 1. One unit could be a product, service or transaction, which consists of one or several unit components. Unit components come from suppliers and units are delivered to the process customers.

3. Obstacles: Redefinition of Value for Customers

Rapid market development radically changes the priorities of customers. Integrated solutions (products and/or services), which can be purchased from one solution- or product/service-provider, will become more desirable than separate components from multiple suppliers. Businesses of different sizes will more often have to turn towards collaboration and to join new supply and integration chains to meet end-customer expectations.

New collaboration and/or supply chain business processes may be presented as a complex dynamic nested structure of single-business processes, as exemplified in the Figure 2.

New business chains have to be very flexible and should be organized and maintained stable and capable to provide solutions which meet the end-customer requirements and expectations in quality, quantity and time.

4. Revisit Basic Six Sigma Categories and Project Scope: Six Sigma Meta-Concepts

When companies introduce single-business Six Sigma and deploy single-business oriented projects, they risk the following:

◈ Remaining product- and/or service- instead of customer-centric,

◈ Dramatically underestimating higher level market/customer demands and COPQ, and

◈ Overestimating their actual capability.

Hence, the following Six Sigma definitions have to be revisited and adopted to the multiple-business (supply chain) businesses:

◈ Unit: An integrated solution has to be regarded as one Unit within the chain.

◈ Process: Chain or end-to-end processes across businesses have to be defined and focused upon, especially at the business case-level. We have to broaden respective process boundaries under consideration for performance assessment and improvements.

◈ Supplier/Customer: Intermediate customers often play both roles of customer and supplier in the chain. The primary supplier and end-customer reflect and determine the means-ends relationships. All intermediate customers and/or suppliers may be considered as secondary ones or chain agents in this context. Nested structures have to be used for modelling the processes, particularly from organizational perspective.

◈ Defects: The chain works as an amplifier for any type of defect and/or life-cycle deficiencies in sub-processes (sub-businesses), in addition to the single-business process and product deficiencies and life-cycles. That is why by analogy the primary (or own) versus secondary (or inherited) defects and/or process life cycles with different orders of amplification may and should be distinguished.

◈ Opportunities: The concept of defects per million opportunities is theoretically applicable for the chain with necessary adaptation, but can be easily misused and therefore should be applied with special caution and consensus between business chain-members (if at all).

◈ Chain Cost of Poor Quality (CCOPQ): A solution provider who faces the end-customers and is liable for the quality, quantity and time of delivering the solutions has the highest COPQ. The common sense way of reacting to any end-customers claims is then to “back-track,” i.e. recalculate the end-claim into the claims towards the intermediate suppliers. It can and should be done using simulation tools.

The logic of accumulating COPQ and back-tracking them to the intermediate business agents in the chain is schematically shown in the Table 1 below.

One very simple (and optimistic) simulation example of a chain with 6 agents is shown in Figure 3. Each agent in the chain has 4 to 8 hours value-added working time per unit with one worker per shift, working in two shifts. Waiting (non value-added time) accumulates dramatically towards the end of the chain. Even when there are no holidays, lack-of-resources or single-agent down-time disturbances in this simulation snap-shot, we see that the chain waiting time accumulates in average into a minimum 64 hours per week at the solution provider site.

This means that in order to remain customer-centered and -capable, the solution providers have to organize and permanently measure, analyze, improve and control alternative chains of suppliers and intermediate agents. For single businesses (intermediate agents in the chain) it is therefore critical to maintain their chain-capability and to monitor, predict and control their incoming and outgoing performance indicators and COPQ.

5. Chain Voice Of Customers

Strategy, methods, and tools for considering, prioritizing and back- and forward-tracking the voice of the customer performance metrics and relevant critical-to-customer performance indicators have to become part of the Six Sigma definition phase for chain businesses.

Customers are going to require greater supply-chain integration in the future. This trend must be considered when launching and/or deploying Six Sigma. Today’s traditional effort in deploying Six Sigma projects should be restructured in order to balance addressing chain voice of the customer with solving internal, single-business process problems.

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Critical success factors in project management

While it’s obvious that some tasks have to pre-empt others, projects often have a web of tasks and goals. It can be difficult to focus the project team on key result areas. So how does documenting critical success factors (CSFs) keep everyone on track?

Definition of critical success factors

CSFs are defined as elements in a project that are critical to the project achieving its mission or goal. But for a project to be successful, every team member needs to understand the key success factors (KSFs).

So CSFs are the events or activities needed to make the project successful, and you can measure CSFs with KPIs.

The process can be set out as:

Deliverable: what the project will create → Critical Success Factor: what the deliverable requires → Critical Success Criteria (CSC): what will make the deliverable successful → Key Performance Indicator: proof that the CSC was achieved

Critical success factor examples

Relating this to a specific industry, such as a construction project, in its simplest form, it would look something like this:

Deliverable: a bridge → CSFs: building materials, contractor with specialist skills → CSC:  high weight limit → KPI: Federal Bridge Gross Weight Formula

Importance of critical success factors

Without CSFs, projects fail. CSFs can anticipate problems like a lack of support, poor scoping and unfeasible budgets. These success factors highlight what the project needs, which keeps the project manager pointed in the right direction.

Because every project is different, the project manager will need to identify specific CSFs. To do so, the PM needs to:

◈ Ensure consensus on project goals amongst stakeholders, clients and the project team

◈ Identify which goals are crucial and which are supporting

◈ Prioritise and prune the project goals

◈ Decide on the metrics of success

◈ Communicate these to all members and stakeholders

◈ Record and document every CSF

How to implement critical success factors

Implementing CSFs means:

1. Ensuring that the project brief lists high-level project requirements.

2. Ensuring that the product breakdown structure will list any necessary physical components.

3. Thinking through all dependencies and how to link all the CSFs together. This will identify the order the CSFs need to be completed in.

4. Completing a RAID Log so that internal and external CSFs are covered.

Projects make a huge difference to stakeholders. If you follow these steps, you’ll have well-informed critical success factors. Along with stakeholder engagement, CSFs keep everyone on track and focused on the goal.

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The Role of Human Resources (HR) in Six Sigma

Chances are you’ve heard of Six Sigma, perhaps in connection with General Electric, the company that made it popular in the 1990s. You may even know that Six Sigma uses statistical techniques to improve processes in both manufacturing and service industries. But did you know there is an important role for Human Resources (HR) in this sophisticated process improvement approach? Or that Six Sigma initiatives are unlikely to succeed without HR’s help?

HR professionals with the right skills can contribute to a Six Sigma initiative at both strategic and tactical levels. This article describes the areas in which HR should play a role in Six Sigma and discusses how HR professionals can increase their chances of being included in Six Sigma decision-making and implementation.

To appreciate the important role HR has in Six Sigma, it is important to begin this discussion by having an understanding of what Six Sigma is, all the roles played by others in a Six Sigma implementation, and the factors critical to a successful implementation.

Six Sigma Defined

The term “Six Sigma” is widely used to refer to all of the following:

◈ A structured method for improving business processes. This method, called DMAIC (Define, Measure, Analyze, Improve, Control), is supported by an assortment of statistical tools.

◈ A statistical measurement of how well a business process is performing. A process that performs at “Six Sigma” produces only 3.4 defects out of every million opportunities to produce a defect. Processes that perform at lower sigma levels (such as one sigma or four sigma) produce more defects per million opportunities. It is possible for a process to perform at an even higher level (and thus have even fewer defects), but Six Sigma has become popular as the standard for excellent process performance.

◈ An organizational mindset in which people make decisions based on data, look for root causes of problems, define defects based on customer rather than internal requirements, seek to control variation, track leading indicators of problems to prevent them from happening, etc.

Six Sigma Roles

Six Sigma has a martial arts convention for naming many of its professional roles. The chart below describes how these roles are typically defined.

Six Sigma Roles And Responsibilities

Sponsor	The senior executive who sponsors the overall Six Sigma Initiative.
Leader	The senior-level executive who is responsible for implementing Six Sigma within the business.
Champion	Middle- or senior-level executive who sponsors a specific Six Sigma project, ensuring that resources are available and cross-functional issues are resolved.
Black Belt	Full-time professional who acts as a team leader on Six Sigma projects. Typically has four to five weeks of classroom training in methods, statistical tools, and (sometimes) team skills.
Master Black Belt	Highly experienced and successful Black Belt who has managed several projects and is an expert in Six Sigma methods/tools. Responsible for coaching/mentoring/training Black Belts and for helping the Six Sigma leader and Champions keep the initiative on track.
Green Belt	Part-time professional who participates in a Black Belt project team or leads smaller projects. Typically has two weeks of classroom training in methods and basic statistical tools.
Team Member	Professional who has a general awareness of Six Sigma (through no formal training) and who brings relevant experience or expertise to a particular project.
Process Owner	Professional responsible for the business process that is the target of a Six Sigma project.

Leaders and Champions usually receive high-level training on the technical aspects of Six Sigma and specific training on how to lead an initiative. At the “Belt” level, each candidate is assigned an initial “training project” that he/she will work on during the formal training period. Candidates attend classroom training for a week, work on their projects for three weeks, return to class for another week, and so on until they have acquired all the skills appropriate to their role.

HR’s Role in Six Sigma

As with any major organizational initiative, many factors contribute to success. Some of these factors will fall within HR’s area of responsibility, such as those discussed below.

Black Belt Selection and Retention

Having the right people in the Black Belt role is critical to the success of a Six Sigma initiative. The training investment is substantial for this pivotal role. Further, Black Belts are the visible “face” of Six Sigma. They help shape the organization’s impression of Six Sigma, and, consequently, the willingness of many to embrace the initiative. Therefore, you want to pick Black Belts very carefully. (Some organizations only select Black Belts from among those who have already been identified as “high potentials.”)

HR professionals can help the Six Sigma Leader find the right people for Black Belt roles and ensure they remain in those positions for the typical two-year rotation. Potential HR contributions in this area include:

◈ Building a competency model that will help identify candidates with the right mix of technical, team, and leadership skills and abilities.

◈ Creating job descriptions that help candidates fully understand the position and expectations prior to signing on.

◈ Developing a retention strategy that will help ensure Black Belts complete their rotation and the organization recoups its investment in training and development.

Rewards and Recognition

Rewarding and recognizing Black Belts and Six Sigma teams is more complex than it may appear. Black Belts join the Six Sigma initiative from various places in the organization where they are likely to have been at different job levels with differing compensation arrangements. Determining whether and how to make appropriate adjustments in level and compensation now that all these individuals are in the same role is both tricky and critical.

Similar complexities are involved at the project team level. Six Sigma projects led by Black Belts typically result in savings in the hundreds of thousands of dollars. Deciding how the team should be rewarded and recognized and who should get credit for what is not easy. Yet ignoring these issues can result in resentment, reluctance to work on Six Sigma projects, and the potential failure of the overall initiative.

HR professionals can help the Six Sigma Leader tackle the challenge of establishing the right rewards/recognition. Potential HR contributions in this area include:

◈ Analyzing existing compensation arrangements to identify the extent to which those arrangements will support the Six Sigma initiative.

◈ Creating a strategic compensation plan that will better support Six Sigma.

◈ Developing a non-monetary reward program for Six Sigma teams.

Project Team Effectiveness

The work of Six Sigma is done mostly at the project team level by a Black Belt leading a small team through the steps of the DMAIC method. If the team itself does not function well or does not interact effectively with others in the organization who ultimately have to support and carry out the process changes, the project probably will not be successful. Given the typical project’s potential payback, failure can be expensive.

HR professionals can help the project teams work together more effectively. Potential HR contributions in this area include:

◈ Ensuring team leaders and members get training and/or coaching in teamwork, conflict management, communications, dealing with difficult team members, and other team effectiveness skills.

◈ Providing teams with tools that allow them to diagnose their own performance and identify when and where they need help.

◈ Acting as a resource for Black Belts who encounter team-related challenges they cannot surmount.

Creating a Six Sigma Culture

Many Sponsors, Champions, and Leaders look to Six Sigma as a way to change an organization’s culture to one that is more data-driven, proactive, decisive, and customer-oriented. But they often have little idea about how to achieve successful culture change.

HR professionals can help executives approach culture change in a way that addresses the underlying business goals without creating organizational resistance. Potential HR contributions in this area include:

◈ Working with Six Sigma Sponsors, Leaders, and Champions to identify elements of the culture that might hinder the achievement of Six Sigma goals.

◈ Advising on change plans that will target those specific cultural elements.

◈ Identifying how Six Sigma can be rolled out in a way that works with, rather than against, the current culture.

Change Management and Communications

Introducing Six Sigma into an organization is a major change that will have a profound effect on a broad group of stakeholders. Managers and employees at many levels of the organization will be asked to engage in new behaviors. In many cases, those leading other initiatives will see Six Sigma as a source of competition for resources, executive attention, and organizational power. Others may see it as an indictment of their past performance. Many will be confused about how Six Sigma fits with the large number of other ongoing organizational initiatives.

HR professionals can help reduce the uncertainty and anxiety surrounding Six Sigma and increase the levels of acceptance and cooperation in the organization. Potential HR contributions in this area include:

◈ Drafting a change management/ communications plan that addresses the people side of the Six Sigma rollout.

◈ Helping create a “case for change” that describes:

     ◈ The reasons for and benefits of Six Sigma.

     ◈ How the organization will help employees succeed in new ways of working.

     ◈ How Six Sigma fits with other ongoing initiatives.

◈ Counseling Six Sigma Leaders and Champions on how their behavior can help or hinder Six Sigma’s acceptance throughout the organization.

Being Included in Six Sigma

Just because HR professionals can play a role in the success of Six Sigma, it doesn’t automatically follow that they will be asked to participate. Unless you are in an organization that views HR as a partner in all business initiatives, you may have to push to be included in Six Sigma.

HR can greatly increase its chances of being included in the Six Sigma initiative by:

◈ Ensuring HR professionals have the right skills and knowledge.

◈ Marketing its potential contribution early in the initiative.

Gaining the Right Skills and Knowledge

In addition to HR/organizational development-related areas, HR professionals need a familiarity with Six Sigma itself. Without a basic knowledge of the DMAIC method, supporting tools, roles, jargon, and even simple statistical methods, HR will not have the credibility it needs to be considered a potential contributor to the initiative.

The time to get this knowledge is now. Even if your organization is not rolling out – or even considering – Six Sigma today, there are two reasons why it is worth a HR professional’s time to become familiar with the concepts now. If the organization does decide to implement Six Sigma, there won’t be enough time to catch up. HR has to be involved at the very beginning of the initiative. In addition, there are many applications of Six Sigma to HR’s processes themselves, e.g., the payroll process, benefits administration, selection, and recruiting. HR might even consider setting an example for the rest of the organization by adopting Six Sigma techniques to enhance its own processes.

Marketing HR’s Potential Contribution

The marketing challenge is twofold. First, senior executives may not believe that the people issues are just as critical to Six Sigma’s success as are its many technical components. In that case, HR will need to sell the importance of the people side. Second, executives must perceive HR as being able to make a significant contribution on the people side of Six Sigma. Besides ensuring that it has both the required skills and knowledge described above, HR can also meet these challenges by:

◈ Gathering data that supports the need for attention to the people side of Six Sigma. Potential sources include Six Sigma publications, case studies, conference sessions, and executives in companies that have already implemented Six Sigma.

◈ Deriving lessons from previous organizational initiatives in which people issues and/or HR actions played an acknowledged role in success or failure.

◈ Meeting with senior executives to discuss their business/Six Sigma goals and then identifying areas where HR could provide very specific and measurable help.

◈ Speaking to Six Sigma Leaders and Champions in the language of Six Sigma, not the language of HR. These executives are typically interested in improving efficiency (i.e., internal cost) and effectiveness (i.e., what the customer sees as “defects”). HR needs to understand what the executives care about and pitch HR’s services in relevant terms.

◈ Taking the lead and applying Six Sigma successfully within the HR function.

HR has a substantial role to play in the success of a Six Sigma initiative. But it will have the opportunity to contribute only if its professionals have the right skills and knowledge and are able to show Six Sigma executives the value they can add. Gain those skills now and make sure senior leadership knows how HR can help support the success of the initiative. Only then will they realize they just cannot do it without you!

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Successfully Achieved the PRINCE2 Foundation Certification and Its Key Benefits

About PRINCE2 Foundation Certification

The PRINCE2 Foundation is targeted at any project team member or team lead or product manager who needs to understand the basics of a structured project management methodology.

The principal objective of taking PRINCE2 Foundation Certification is to make sure that you are provided with skills to be a part of the team and have a precise knowledge of the terms, phrases and the method of operation of the PRINCE2 project management process.

The PRINCE2 Foundation certification eases a person to get an insight into understanding the method of working effectively on projects completed under the PRINCE2 framework.

It helps you get an understanding of the underlying methodology and terminology of the PRINCE2 method.

PRINCE2 Foundation Certification Requirements

• While there is no requirement for PRINCE2 Foundation level certification, it is better to have a basic knowledge of managing projects.

Who Should Attend PRINCE2 Foundation Certification Exam?

Individuals who will benefit from this PRINCE2 Foundation certification include:

• Managers

• Supervisors

• Leaders

• Team Members

• Individuals interested in project work and a controlled approach to managing projects.

PRINCE2 Foundation Level Certification Exam

• The time of the exam is One Hour.

• The number of questions is 60.

• The passing percentage is 55% (33/60).

• The types of questions asked in the PRINCE2 Foundation exam can be a multiple choice question with four answer options.

• There is no negative marking.

• Reference Book: Managing Successful Projects with PRINCE2 Publication, 2017 edition.

• You are not permitted to take the book to the exam since it is not an open book exam.

Benefits of PRINCE2 Certification

PRINCE2 gives you many benefits, some of which are outlined below:

Presents You with Methodology:

• It is the essential benefit of PRINCE2. PRINCE2 provides you with a methodology to do the project. This methodology has a theme and processes which guide you with thoughts to why, how, and whom. You can personalize the theme according to your project requirements.

• It also presents you with pre-made templates, which can be very useful for many project management-related activities.

• This is something that the PMBOK does not give you; it provides you with the framework or the “how” part of the project.

Universal Principles:

• The principles of PRINCE2 are universal so that you can apply them to whatever size or any project. It does not involve whether it is small or large, or whether it is an IT project, construction project, or a product development project.

Management by Exception:

• PRINCE2 uses management by exception. It means as long as the issue is below the tolerance limit, the project manager will manage it; however, as the subject meets the tolerance limit, it becomes an exception.

• In this case, higher management will occur.

Skill Improvement:

• PRINCE2 is globally known and developed by professionals throughout the world. You will be more positive and more likely to finish the project successfully.

• It brings you to a public platform and enables you to sync your knowledge with the best industry practices, and hence, you will be in control.

Employability:

• The PRINCE2 qualification is globally known, and having it on your resume will significantly increase its weight.

• For many UK government contracts, PRINCE2 is necessary, and you cannot apply for these jobs unless you are PRINCE2 qualified.

Salary Prospects

• An important factor in deciding if the PRINCE2 certification and the costs involved in getting PRINCE2 certified are the benefits of achieving the PRINCE2 certification. Most of the time, this means recognizing the average salaries of the jobs intended at PRINCE2 certified Project Managers.

• The average salary for PRINCE2 certified is approximately $98000. In terms of pay based on gender, we see that the payment for females who have completed the prince2 certification is around $49k - $147k. The average salary for males who have completed the prince2 certification is around $60k - $159k. Hence, you have a basis for comparing the PRINCE2 certification cost with resulting gains.

• Apart from average salaries on the achievement of the PRINCE2 certification, we also have to recognize other factors that go into the state of PRINCE2 certification cost as a whole.

Conclusion

PRINCE2 is one of the world’s leading qualifications for professionals involved in project management activities. Its principles are accepted and can be used on any project. It gives you with methodologies, templates, and everything that you will require to complete projects with better control. It even explains the roles of each team member as well.

So, if you are serious about your project management profession, you should think of becoming PRINCE2 certified.

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The Difference Between ITIL and ITSM

Many people get stuck on the distinction between ITIL and ITSM. In vague terms, the difference is that ITIL is a framework or set of practices for ITSM. To really understand that answer, we have to dig deeper into their definitions, history, and relationship.

ITSM and ITIL Definitions

ITSM stands for IT Service Management. It’s about how an organization manages IT services for customers. ITSM refers to all the activities involved in this process, which include planning, designing, delivering, operating, and controlling.

While IT Systems Management and Network Management are technology-focused, ITSM is more customer-focused. There’s a big emphasis on continual improvement. This involves consistently measuring and improving processes, IT services, and IT infrastructure. Doing so maximizes their efficiency, effectiveness, and cost effectiveness.

ITIL stands for IT Infrastructure Library. It’s a framework or a set of ITSM best practices. These processes, procedures, tasks, and checklists are not organization-specific. Instead, the idea is to integrate them with the organization’s strategy. ITIL is divided into a series of five core volumes, each covering a different ITSM lifecycle stage. These stages are:

1. Service Strategy

2. Service Design

3. Service Transition

4. Service Operation

5. Continual Service Improvement

ITIL and ITSM’s History

ITIL first came from the UK government. In the 1980s, there was a growing dependence on IT, but no standard practices. This lack of standard practices meant inconsistent service quality. The Central Computer and Telecommunications Agency (CCTA) had a set of recommendations. They wanted an ITSM framework that any organization could adapt to their needs. ITIL also had to deliver efficiency and value for money.

Meanwhile, standards were developing all over the world. Every developed nation had just as much of a need for IT Service Management. Different frameworks were developed around this time. While some of them crossed over with ITIL, none of them became more globally popular.

Relationship between ITIL and ITSM

ITIL’s popularity is part of the reason why it gets confused with ITSM. ITIL is the de facto ITSM framework. There may even be times where you can get away with using the two terms interchangeably. ITIL embodies everything in the ITSM definition above. However, ITSM defines the “what”, while ITIL defines the “how”.

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