5 ways to identify your best Lean Six Sigma project

5 wa

5 wa

Choosing the right project is the main influencing factor in achieving success with Lean Six Sigma. In my career as Lean Six Sigma coach I have made many mistakes in choosing the right project using time pressure or learning as a fake excuse.

Starting with the wrong project will have several negative consequences. I am sure you’ll recognize some of them:

  • Low or insufficient project results
  • Project does not solve a major issue
  • Insufficient attention for the project from the management
  • Project team members having difficulties to stay motivated
  • Project lead time is 2 or 3 times longer than expected (and the costs higher!)
  • Project gets cancelled (if you are lucky)

It is better to spend more time on identifying your next best Lean Six Sigma project before you get started with the wrong one.

Here are 5 different ways to identify Lean Six Sigma projects. They are presented in the order of increasing difficulty as well as effectiveness for long-term process improvement efforts.

  1. Ask the people

This is the way I use most often when starting with a Lean Six Sigma program for the first time. It is handy to ask operators, employees of the work floor about their biggest problems, bottlenecks or irritations in their daily work and take those as the first improvement projects. It helps to strengthen employee involvement in the continuous improvement program.

Disadvantage is the lower level of project alignment resulting in a scattered effort of improvements. Local improvements will be achieved but the overall effect is low due to lack of focus.

Using this method for project identification, it is difficult to estimate the size of the problem: is it only a few employees having this problem or is it a major issue that needs to be solved.

You also need to be experienced in order to translate the problems people talk about into a SMART problem definition.

Lean Six Sigma project examples: Reducing workload, Improving accuracy and timeliness of time-registration, Reduction of administrative tasks of direct employees.

  1. Operational Performance Indicators

This is more of a structured, process driven approach to analyze indicators like lead times (too long), mistakes (too many), claims and irritations, incidents (injury, medical faults).

Identifying projects where indicators show bad performance helps creating alignment between Lean Six Sigma projects and gives them also their proper place in the company’s priority list.

Disadvantage of this approach is that employees feel unheard and not sufficiently involved in identifying improvement projects. Also the indicators are not always available and/or reliable due to unclear measurement processes and organizational inability to take countermeasures in the past when indicators show underperformance.

Project examples based on my experience: Reduction of fall incidents, Reduction of lead times of client onboarding, Improving claim handling.

  1. Performance to Plan

In this way you look at the monthly financial and operational reports to find areas with the biggest deviation from the plan or budget. Areas such as personnel costs, maintenance or IT investments are often higher than the budgeted.

This has the advantage that resulting projects are focused directly on measurable improvement of the results: when the project has success, you can see the result in the monthly reports.

The disadvantage of such an approach to find new projects is that you still have to analyze the root cause of the deviations: is it due to bad budgeting practices, is it underperformance of the management or wrong accounting; is it a temporary or a permanent excess of budgets?

Lean Six Sigma project examples: Lowering transportation costs, Improving resource planning, Reducing energy consumption.

  1. Benchmarking

You can compare your performance – operational and financial – to given industry norms – if they are available. In areas where you underperform you should start your next Lean Six Sigma project.

Think about projects like Reducing sickness rate, Increasing customer satisfaction rate or Reducing employee turnover rate.

The difficulty with this approach is that you don’t always know the benchmark and if you do, you can easily find several reasons (or excuses) why they do not apply in your specific situation. Besides, psychologists say you should not compare yourself with others but only with yourself 😉

  1. Strategic flow down

Finally, here is the 5th, most effective but most difficult way to find your best Lean Six Sigma projects.

In this case, you look at the vision, mission and the long-term (5 years) goals of the company. If you are responsible for a part (division, business unit, product group or department), you translate those to your area of responsibility.

You determine how those long-term goals are going to be measured and you express those goals in a measurable way.

For example: Increase customer satisfaction from 7.6 to 8.4

After that you determine what the short-term goals should be (for next year) to achieve those long-term goals.

Based on the short-term goals, you identify the obstacles and challenges you have to face to achieve those short-term goals.

For example: if you want to increase customer satisfaction with 10% in 5 years, you would like to achieve the first 4% increase already next year going from 7.6 to 7.9 on scale from 1 to 10.

You identify that the major challenge is that you want to have your own, continuous measurement of customer satisfaction instead of hiring an external company for 40.000 EUR once in 2 years, leaving a big pile of paper with nice colored graphs behind and a lot of questions from your managers not knowing where to start.

Shortly your challenge for next year is 1) to develop an own measurement system 2) to improve customer satisfaction at each department.

From these challenges (gaps between where you are now and where you want to be in the near future) you identify SMARTly defined (Lean Six Sigma or Just Do It) projects.

To provide insight in the strategic projects and their relationship to the strategic goals I use the X-matrix from the Hoshin-Kanri planning process.

You can download my example here.

The disadvantage of this process of project identification is that it can take several meetings with your colleagues to arrive at a smart definition of long-term goals based on the vision, mission and plans of the company.

Summary

There are several ways to identify opportunities for a Lean Six Sigma project. In many cases it is the combination of the above-mentioned 5 ways that will provide the best project. If employees are having daily problems with a process/step (#1), the operational indicator should also indicate poor performance (#2), that would lead to deviation from the plan (#3). The magnitude of this would impact the customer or employee satisfaction, causing deviation from the industry benchmark (#4). The company should have a strategic approach for this problem to improve the situation on the short- and long-term (#5).

Bonus

To combine the 5 above-mentioned ways when identifying Lean Six Sigma Green or Black Belt projects, I have developed a questionnaire. Click here if you want to get a copy.

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