(Mt) – SEU Management DMAIC Six Sigma Project Question

The Define stage includes the following objectives (Keller, 2011a): • Project definition. Define the project’s scope, goals, and objectives; its team members and sponsors; and its schedule and deliverables. • Top-level process definition. Define the stakeholders, inputs and out­ puts, and broad functions. • Team formation. Assemble highly capable team from the key stake­ holder groups; create common understanding of issues and bene­ fits for project. Project Definition When applied at the business level, the project scope pertains to key busi­ ness practices and customer interactions. Thus, the definition requires an understanding of the business, as well as the contribution of the business to its shareholders and customers. GE used its concept of “stretch goals” in defining projects, particularly busi­ness-level projects. Stretch goals were those that went beyond what was fore­seeable with the current corporate structure, resources, and/or technology. The idea was to expand beyond incremental improvements, to rethink the busi­ness, operation, or process to a point where orders of magnitude improvements could be achieved. Bear in mind that an organi­ zation going from 4 sigma to 6 sigma needs to reduce defects per million opportunities (DPMO) from 6210 to 3.4 (a 99.95 percent reduction). A general guideline adopted by GE involved setting the project goal relative to the existing level of performance: • If the process currently operates at or below a 3 sigma level of per­ formance (an error rate of approximately 6.7 percent or larger), then the project should seek a 10 times reduction in errors. For example, reduce an 10 percent error rate to a 1 percent error rate. • If the process currently operates better than 3 sigma, reduce the error rate by 50 percent. For example, reduce the error rate from 4 percent to 2 percent. 267 13_Pyzdek_Ch13_p265-292.indd 267 11/9/12 5:14 PM 268 Continuous Improvement However, particularly at the process level, you’ll need to balance stretch goals with a reasonable project completion time. In some cases, stretch goals can be divided into several projects assigned to several proj­ ect teams. A work breakdown structure is often effective at identifying useful scope limiting statements. Work Breakdown Structure The work breakdown structure is a special-purpose tree diagram used to break down problems or projects into their components. An example is shown in Fig. 13.1. It reduces “big and complex” down to “tiny and manageable.” By breaking the process into its components, subprocesses are exposed that might serve as logical break-points for separate improve­ ment efforts. Limiting the project to one or only a few closely related cat­ egories will lead to a better chance of project success. The potential deliverables (in financial terms) for each of these subprocesses is the preferred means of justifying a given project proposal. Figure 13.1 13_Pyzdek_Ch13_p265-292.indd 268 Example work breakdown structure (Pyzdek and Keller, 2010). 11/9/12 5:14 PM Define Stage 269 Pareto Diagrams A Pareto diagram is another useful tool for focusing the project scope, particularly as applied to the unique categories obtained using the work breakdown structures. Pareto analysis is the process of ranking opportunities to deter­ mine which of many potential opportunities should be pursued first. It is also known as “separating the vital few from the trivial many.” Pareto analysis should be used at various stages in quality improve­ ment to determine the next step. Pareto analysis is used to answer such questions as “What department should have the next project improve­ ment team?” or “On what type of defect should we concentrate our efforts?” The following steps are recommended to perform a Pareto analysis: 1. Determine the classifications (Pareto categories) for the graph. If the desired information does not exist, obtain it by designing check sheets and log sheets. 2. Select a time interval for analysis. The interval should be long enough to be representative of typical performance. 3. Determine the total occurrences (i.e., cost, defect counts, etc.) for each category. Also determine the grand total. If there are several categories that account for only a small part of the total, group these into a category called “other.” 4. Compute the percentage for each category by dividing the cate­ gory total by the grand total and multiplying by 100. 5. Rank order the categories from the largest total occurrences to the smallest. 6. Compute the “cumulative percentage” by adding the percentage for each category to that of any preceding categories. 7. Construct a chart with the left vertical axis scaled from 0 to at least the grand total. Put an appropriate label on the axis. Scale the right vertical axis from 0 to 100 percent, with 100 percent on the right side being the same height as the grand total on the left side. 8. Label the horizontal axis with the category names. The leftmost category should be the largest, the next category the second largest, and so on. 9. Draw in bars representing the amount of each category. The height of the bar is determined by the left vertical axis. 10. Draw a line that shows the cumulative percentage column of the Pareto analysis table. The cumulative percentage line is determined by the right vertical axis. 13_Pyzdek_Ch13_p265-292.indd 269 11/9/12 5:14 PM 270 Continuous Improvement Category Peaches Lost Bruised 100 Undersized 87 Rotten 235 Under-ripe 9 Wrong variety 7 Wormy 3 Table 13.1 Raw Data for Pareto Analysis For example, the data in Table 13.1 have been recorded for peaches arriving at Super Duper Market during August. The completed Pareto diagram is shown in Fig. 13.2. Project Charters The project goals, objectives, deliverables, and so forth are documented on a project charter, which serves as a contract between the project team and its sponsors. Project charters typically have several key elements, answering the what, who, why, and when of the team’s planned activities. (It’s important that how be left to the team, as discussed in Chap. 10). A sample charter is shown in Fig. 13.3. One or more project sponsors in mid- to upper-level managerial posi­ tions will sponsor a given project. Sponsors fund the project, allocate resources, and develop the initial charter (which is then managed by the assigned project team leader, who is usually either a black belt and/or 450 96% 98% 99% Count 53% 235 60 40 150 87 9 7 3 Wrong variety Wormy Undersized Bruised Rotten 0 20 Under-ripe 100 Percent 80 76% 300 100 0 Figure 13.2 Example Pareto analysis constructed using Green Belt XL software (www.qualityamerica.com). 13_Pyzdek_Ch13_p265-292.indd 270 11/9/12 5:14 PM Define Stage 271 Figure 13.3 Sample project charter (Keller, 2011a). green belt). As a member of management, the sponsor builds support for the project in the managerial ranks of the organization. The sponsor’s managerial position in the functional area that is the subject of the improvement project helps to build awareness and support for the project in the operational ranks, as well as to clear roadblocks that might inhibit the timely progress of the project. When stakeholders are from different functional areas, the sponsor may be the level above the functional area management, so that resource allocation and departmental commitment are achieved. To avoid having top levels of the organization sponsor too many projects, co-sponsors from the top ranks of the affected functional areas may also be used. 13_Pyzdek_Ch13_p265-292.indd 271 11/9/12 5:14 PM 272 Continuous Improvement The team leader is responsible for regular updates to the sponsor and all other stakeholder groups. This helps prevent undesirable surprises during the later stages of the project. Project Scheduling There is a wide variety of tools and techniques available to help the pro­ ject manager develop a realistic project timetable to allocate resources, and to track progress during the implementation of the project plan. These systems are used to: · Aid in planning and control of projects. · Determine the feasibility of meeting specified deadlines. · Identify the most likely bottlenecks in a project. · Evaluate the effects of changes in the project requirements or schedule. · Evaluate the effects of deviating from schedule. · Evaluate the effect of diverting resources from the project, or redi­ recting additional resources to the project. A modern version of a Gantt chart for a 4-month DMAIC improve­ ment project, developed using MS Project, is shown in Fig. 13.4. Tradi­ tional Gantt charts were developed to show the relationships among the project tasks, along with time constraints. The horizontal axis of a Gantt Figure 13.4 Example Gantt chart for a DMAIC improvement project (Keller, 2011a). 13_Pyzdek_Ch13_p265-292.indd 272 11/9/12 5:14 PM Define Stage 273 chart shows the units of time (days, weeks, months, etc.). The vertical axis shows the activ­ities to be completed. Bars show the estimated start time and duration of the various activities. Modern Gantt charts usually include designation of milestones (events that take zero time), as well as the individual responsible for each task. The completed chart clearly shows the task dependencies (i.e., which activities must be completed before any given activity may be started), and is often labeled with the critical path. (Historically, CPM [Critical Path Method] was considered an alternative to Gantt. Similarly, PERT [Program Evaluation and Review Technique] was developed to evaluate scheduling based on probabilistic activity times. Today, PERT, CPM, and Gantt actu­ ally comprise one technique.) Project scheduling consists of four basic phases: planning, scheduling, improvement, and controlling. The planning phase involves breaking the project into distinct activities. The time estimates for these activities are then determined and a network (or arrow) diagram is constructed, with each activity being represented by an arrow. The ultimate objective of the scheduling phase is to construct a time chart showing the start and finish times for each activity as well as its relationship to other activities in the project. The schedule must identify activities that are “critical” in the sense that they must be completed on time to keep the project on schedule. It is vital not to merely accept the schedule as a given. The information obtained in preparing the schedule can be used to improve the project schedule. Activities that the analysis indicates to be critical are candidates for improvement. Pareto analysis can be used to identify those critical ele­ ments that are most likely to lead to significant improvement in overall proj­ ect completion time. Cost data can be used to supplement the time data, and the combined time/cost information can be analyzed using Pareto analysis. The final phase in project management is project control. This includes the use of the network diagram and time chart for making periodic prog­ ress assessments. Constructing Network Charts A common means of evaluating a project schedule is to graphically por­ tray the interrelationships among the elements of a project. This network representation of the project plan shows all the precedence relationships, that is, the order in which the tasks must be completed. Arrows in the network chart represent activities, while boxes or circles represent events; in preparing and understanding this technique, it is very important to keep these two terms distinct. An arrow goes from one event to another only if the first event is the immediate predecessor of the second. If more than one activity must be completed before an event can occur, then there will be several arrows entering the box corresponding to that event. Some­ times one event must wait for another event, but no activity intervenes 13_Pyzdek_Ch13_p265-292.indd 273 11/9/12 5:14 PM 274 Continuous Improvement Event #1 Actual activity that occurs between event #1 and event #2 Event #2 Event #1 Dummy activity: Event #1 preceeds event #2, but no activity occurs between them Event #2 Figure 13.5 Network diagram terms and drawing conventions. between the two events. In this case, the two events are joined with a dotted arrow, representing a dummy activity. Dummy activities take no time to complete; they merely show precedence relationships. These drawing conventions are illustrated in Fig. 13.5. The node toward which all activities lead, the final completion of the project, is called the sink of the network. Taha (1976) offers the following rules for constructing the arrow diagram: Rule 1: Each activity is represented by one and only one arrow in the network. No single activity can be represented twice in the network. This does not mean that one activity cannot be broken down into segments. Rule 2: No two activities can be identified by the same head-and-tail events. This situation may arise when two activities can be performed concur­ rently. The proper way to deal with this situation is to introduce dummy events and activities, as shown in Fig. 13.6. This rule facilitates the analy­ sis of network diagrams with computer programs for project analysis. Rule 3: In order to ensure the correct precedence relationship in the arrow diagram, the following questions must be answered as each activity is added to the network: a. What activities must be completed immediately before this activity can start? b. What activities immediately follow this activity? c. What activities must occur concurrently with this activity? 13_Pyzdek_Ch13_p265-292.indd 274 11/9/12 5:14 PM Define Stage 275 Incorrect: Violates rule #2 Activity #1 Head event Tail event Activity #2 Solution: Add dummy event and activity Activity #1 Dummy event Dummy activity Head event Activity #2 Tail event Figure 13.6 Parallel activities: network representation. The data shown in Table 13.2 consist of the activities and their esti­ mated completion times for constructing a house. Now, it is important that certain of these activities be done in a par­ ticular order. For example, one cannot put on the roof until the walls are built. This is called a precedence relationship; that is, the walls must Activity Excavate Time to Complete (days) 2 Foundation 4 Rough wall 10 Rough electrical work 7 Rough exterior plumbing 4 Rough interior plumbing 5 Wall board 5 Flooring 4 Interior painting 5 Interior fixtures 6 Roof 6 Exterior siding 7 Exterior painting 9 Exterior fixtures 2 From Hillier and Lieberman (1980) Table 13.2 Activities Involved in Constructing a House 13_Pyzdek_Ch13_p265-292.indd 275 11/9/12 5:14 PM 276 Continuous Improvement 1 Start Excavate (2 days) 2 Foundation (4 days) 3 Rough wall (10 days) 4 Roof (6 days) Rough exterior plumbing (4 days) Rough electrical work (7 days) 5 6 Dummy (0 days) Rough interior plumbing (5 days) Exterior siding (7 days) 8 7 Exterior painting (9 days) Wall board (8 days) Flooring (4 days) 9 Interior painting (5 days) 10 Exterior fixtures (2 days) 11 Dummy (0 days) 12 Interior fixtures (6 days) 13 Figure 13.7 Network diagram for constructing a house. precede the roof. The network diagram graphically displays the prece­ dence relationships involved in constructing a house. A PERT network for constructing a house is shown in Fig. 13.7. (Incidentally, the figure is also an arrow diagram.) Finding the Critical Path There are two time-values of interest for each event: its earliest time of com­ pletion and its latest time of completion. The earliest time for a given event is the estimated time at which the event will occur if the preceding activ­ ities are started as early as possible. The latest time for an event is the 13_Pyzdek_Ch13_p265-292.indd 276 11/9/12 5:14 PM Define Stage Event Immediately Preceding Event Earliest Time + Activity Time — 277 Maximum = Earliest Completion Time 1 — 2 1 0+2 2 0 3 2 2+4 6 4 3 6 + 10 16 5 4 16 + 4 20 6 4 16 + 6 22 7 4 5 16 + 7 20 + 5 * 25 8 5 6 20 + 0 22 + 7 * 29 9 7 25 + 8 33 10 8 29 + 9 38 11 9 33 + 4 37 12 9 11 33 + 5 37 + 0 38 * 13 10 12 38 + 2 38 + 6 * 44 Table 13.3 Calculation of Earliest Completion Times for House Construction Example estimated latest time the event can occur without delaying the comple­ tion of the project beyond its earliest time. Earliest times of events are found by starting at the initial event and working forward, successively calculating the time at which each event will occur if each immediately preceding event occurs at its earliest time and each intervening activity uses only its estimated time. Table 13.3 shows the process of finding the earliest completion time for the house construction example. (Event numbers refer to the network diagram in Fig. 13.7.) The reader is advised to work through the results in Table 13.3, line-by-line, using Fig. 13.7. Thus, for example, the earliest time event #8 can be completed is 29 days. (Note that the asterisks in Table 13.3 denote calculations that resulted in the non-maximum condition. For example, event #8 occurs when both events #5 and #6 have been completed, so the maximum time calculation is used). Latest times are found by starting at the final event and working back­ ward, calculating the latest time an event will occur if each immediately following event occurs at its latest time. Table 13.4 displays the calculated latest completion times for the house construction example. 13_Pyzdek_Ch13_p265-292.indd 277 11/9/12 5:14 PM 278 Continuous Improvement Event Immediately Following Event Latest Time – Activity Time Minimum = Latest Time 13 — — 44 12 13 44 – 6 38 11 12 38 – 0 38 10 13 44 – 2 42 9 12 38 – 5 33 11 38 – 4 * 10 42 – 9 33 8 7 9 33 – 8 25 6 8 33 – 7 26 5 8 33 – 0 7 25 – 5 4 3 20 7 25 – 7 6 26 – 6 5 20 – 4 16 4 16 – 10 6 2 3 6-4 2 1 2 2-2 0 Table 13.4 Calculation of Latest Completion Times for House Construction Example Slack time for an event is the difference between the latest and earliest times for a given event. Thus, assuming everything else remains on schedule, the slack for an event indicates how much delay in reaching the event can be tolerated without delaying the project completion. Slack times for the events in the house construction project are shown in Table 13.5. Event Slack Event Slack 1 0-0=0 7 25 – 25 = 0 2 2-2=0 8 33 – 29 = 4 3 6-6=0 9 33 – 33 = 0 4 16 – 16 = 0 10 42 – 38 = 4 5 20 – 20 = 0 11 38 – 37 = 1 6 26 – 22 = 4 12 38 – 38 = 0 Continued … Continued … 13 44 – 44 = 0 Table 13.5 Calculation of Slack Times for House Construction Events 13_Pyzdek_Ch13_p265-292.indd 278 11/9/12 5:14 PM Define Stage 279 The slack time for an activity x,y is the difference between 1. The latest time of event y 2. The earliest time of event x plus the estimated activity time Slack time for an activity is the difference between the latest and earli­ est times for a given activity. Thus, assuming everything else remains on schedule, the slack for an activity indicates how much delay in reaching the activity can be tolerated without delaying the project completion. Slack times for the activities in the house construction project are shown in Table 13.6. Events and activities with slack times of zero are said to lie on the critical path for the project. Conversely, a critical path for a project is defined as a path through the network such that the activities on this path have zero slack. All activities and events having zero slack must lie on a critical path, but no others can. Figure 13.8 shows the activities on the critical path for the housing construction project as thi…

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