Focusing Project

BB 1_D02
Contents

Where focusing projects is applicable

in DMAIC
Setting the scope of projects
– SIPOC
– Exercise
– Other scope considerations

Project chartering
– Elements of project charters
– Exercise

Summary

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Learning objectives

To be able to
– Understand the value of focusing the project scope
– Set the scope of a project and create a SIPOC
– Describe the main elements of a project charter
– Create a project charter

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Why is focusing projects necessary?

The VP of Sales announced at the quarterly employee meeting,

“The Customer is unhappy with our invoicing. Let’s get out

there and fix it !”

Excited by such a motivating speech, each of five employees thought to

themselves, “I know what the problem is!” and left the meeting to take
appropriate corrective actions.

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Sincere and diligent work
According The “Definition” of the problem was Measured Data
to . . in from

Accountant The Customer would like to do his closing Days Acct. Dept
sooner, and we send our invoice too late

I.T. Manager The Customer would like more time to pay, and Days Acct. Dept
we send the invoice too early

Admin. #1 The Customer is irritated by every mistake on Errors per Acct. Dept &
the invoice invoice customer

Admin. #2 The Customer considers the invoice either “Total” Acct. Dept &
“right” or “wrong” and is interested only in the right/wrong customer
bottom line

Salesperson The Customer would like lower prices Price Customer

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Sincere and diligent work
Here’s what they did:
– The Accountant went to Accounts Receivable and created a new
procedure which issued invoices 5 days earlier than normal
– The Information Technology Manager changed the code to prevent
invoices from being generated any earlier than 45 days from shipment - 15
days later than normal
– An Accounts Receivable Clerk #1 meticulously checked every field of
information on every invoice 3 times, correcting errors through re-work
which delayed processing several days
– Another Accounts Receivable Clerk #2 only checked the “Invoice Total”
field for mathematical accuracy
– The Salesperson responsible for the account went back to the customer
and lowered all of the prices

The scope of projects must be focused using

SIPOC’s and project charters
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What is a SIPOC? Project Title: Scope: Type scope here
Start: Type process start point here
Stop: Type process stop point here
Current As-Is Process

INPUTS OUTPUTS
Describe Start Step 1 1. Outputs
1. Input
SIPOC stands for 2. Input
Describe Step 2
2. Outputs

– Suppliers CUSTOMERS

– Inputs Describe Step 3 1.Customers

2.Customers

– Process SUPPLIERS

1. Supplier
Describe Step 4

– Outputs 2. Supplier
Describe Step 5

– Customers Describe Stop Step 6

It is a high-level map of the process being investigated

SIPOC’s are the foundations of project charters

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Why use the SIPOC?

To provide a high-level understanding of the process being

investigated
To identify the specific start and stop points of the process and
prevent scope creep
To identify an initial high-level list of
– Customers who receive an output from this process
– Outputs from the process
– Major steps of the process
– Inputs that are required to produce the outputs
– Those that supply the inputs to the process

SIPOC’s are used as inputs to project charters

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What does a SIPOC look like?

It is a document as shown below that can fit on one piece of paper

S I P O C
Suppliers Inputs Process Outputs Customers
Start point
The suppliers
who provide The
The The
the inputs of customers
measurable 3 - 7 high-level measurable
the process who use the
inputs of the process steps outputs of the
(customers outputs of the
process process
can be process
suppliers)
Stop point

The SIPOC is created by the project team

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SIPOC templates

Project Title: Scope: Type scope here

Start: Type process start point here
Stop: Type process stop point here
Current As-Is Process

INPUTS OUTPUTS
Describe Start Step 1 1. Outputs
1. Input
2. Input 2. Outputs
Describe Step 2
CUSTOMERS

Describe Step 3 1.Customers

2.Customers
SUPPLIERS
Describe Step 4
1. Supplier
2. Supplier
Describe Step 5

Describe Stop Step 6

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Method to create a SIPOC

Follow the steps in this order to create a SIPOC

– Under the “P” name the process
– Under the “P” identify the start and stop points
– Identify 3 – 7 high-level process steps
• The process step must begin with a verb
• Do not necessarily try to list the steps in the proper order
– Under “O” list the measurable outputs of the process
– Under “C” list the customers who receive the outputs
– Under “I” list the measurable inputs of the process
– Under “S” list the suppliers who supply the inputs

After creating the SIPOC, verify it with the team

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Example: Too late arrival at the office
Project Title: Too Late arrival at the office Scope: Getting from bed to the office
Start: Wake-up call
Stop: Entering office building
Current As-Is Process

INPUTS OUTPUTS
Wake up & get out of bed
1. Alarm clock 1. Wet shower

2. Hot water 2. Dirty dishes

3. Food & tea Take a shower and get dressed 3. Employee:

4. Car fuel - Clean & fresh

5. Traffic - Up-to-date
Make breakfast and lunch packet
- Well fed
4. Parked car
SUPPLIERS
Eat breakfast and read newspaper
1. (Food) suppliers CUSTOMERS
2. Gas station 1. Spouse & Children
Drive car to office
2. Boss
3. Colleagues
Park car and walk to office 4. Clients
5. Car park owner

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Exercise
As a team create a SIPOC for the launching of the Statapult, the
Courier simulation, or one of your own projects
Follow the steps listed earlier and document your work on your flip
charts
Select a spokesperson and be prepared to report back in 30
minutes
Project Title: Scope: Type scope here
Start: Type process start point here
Stop: Type process stop point here
Current As-Is Process

INPUTS OUTPUTS
Describe Start Step 1 1. Outputs
1. Input
2. Input 2. Outputs
Describe Step 2
CUSTOMERS

Describe Step 3 1.Customers

2.Customers
SUPPLIERS
Describe Step 4
1. Supplier
2. Supplier
Describe Step 5

Describe Stop Step 6

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Other scope considerations

What authority does the project team have?

What is “in scope” and “out of scope”?
– What products are in and out of scope?
– What geographical areas are in and out of scope?
– What businesses/departments are in and out of scope?
– What potential solutions are out of scope?

Focusing the scope helps protect the project team

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What’s necessary for a DMAIC project
A customer
A problem
– There is a gap between current & target performance
– The cause of the gap is unknown
– There is a need to determine the cause of the gap and fix the problem, because
the solution is not pre-determined and the issue is important
A spec that defines the problem in terms of a defect
A repeatable process
Data
Management support
Resources

These elements are described in a project charter

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What does a project charter accomplish?
A project charter
– Explicitly states in writing what the project team is to accomplish
and when
– Ensures a common understanding of the scope and goals of the
project since it was developed in collaboration with the Project
Champion
– Acts as a communication mechanism for those who are interested
in the project or who may support it
– Transfers ownership of the project from the Champion to the
project team

The project charter is one of the most important

parts of a successful project
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Characteristics of a good project charter

► Clearly bound with a well-defined goal

► Aligned with critical business issues and strategies
► Customer-focused
► Linked to an upper level strategy (such as one-page
strategy or business balanced scorecard)
► Actionable to enable improvements

Projects need to be measurable & manageable!

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Major elements of a project charter
► Business case (including VoC, link to upper level strategy,
and financials)
► Problem statement (in measurable terms)
► Goal statement (closely linked to problem)
► Primary metric (with an operational definition)
► Project scope (from SIPOC)
► Project plan
► Project team

Do not skip any project charter elements!

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Project charter elements
1. Business case
Why should we do this?
- Voice of the customer
- Financials
- Link to upper level strategy
3. Goal statement
What is to be accomplished and
when?
- Explicit link to problem statement
- List primary & secondary metrics
5. Project plan
How will the project proceed?
- Resources
- DMAIC phases
Make sure the project charter is S.M.A.R.T.
2. Problem statement
What is the problem in specific,
measurable terms?
- Just 1 or 2 sentences
4. Project scope
What is in & out of scope?
- Process (from SIPOC)
- Other considerations
6. Project team
Who will work on this project?
- Names and roles
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1. Business case

What is the customer issue?

Identify the customers and their CTQ’s?
What are the estimated financial benefits?
How is this issue linked to an upper level strategy (from the
problem definition tree)?

The business case is a high-level overview of

the current business situation that describes
the need to work on this project

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2. Problem statement

What is the specific quantified problem?

– What is the primary metric that describes the performance of the
process?
– What is the extent of the gap between the current and target
performance of the process?

When and where does the problem occur?

What data supports the answers to these questions?

It is required that data be used to define the

problem statement!

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3. Goal statement
What is the quantified project goal?
– Where, by how much, and by what time frame?
– What benchmark information was used to help determine the goal?

Metrics
– Primary metric (Project Y)
• What are the units of the primary metric?
• What is the operational definition of the defect?
– Secondary metrics
• What additional metrics need to be tracked to ensure that you do not
sub-optimize the business?

The goal statement must be directly aligned

with problem statement!

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4. Project scope

What are the boundaries of the process?

– The starting and ending steps of the process to be investigated,
which come from the SIPOC

What are the boundaries of the project team?

– What parts of the business are included?
– What parts of the business are excluded?

What, if anything, is outside the project team’s boundaries?

Prevent scope creep by clearly identifying the

start and stop points of the process
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5. Project plan
What are the key activities and milestones?
– Team kick-off
– High-level DMAIC steps and time to complete
– Project review dates
– Resource requirements – both personnel and non-personnel
– Project budget
– Training needs

Use available project planning tools to help

generate this plan – be as specific as possible

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6. Project team

Who are the team members and what are their roles?
– Project champion
– Process owner
– Team members
– Finance
– Master Black Belt
– Project leader (BB)
– Coach

Get commitment on team member resources

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The project review process
Management responsibilities
– Who is the process owner?
– Who does the project leader report to?
– How will the project team report?
• ProjX?
• Minutes?
– How often will formal reviews or presentations be held?
– How will the output of reviews be followed up?

It is recommended to review the project charter at the end of

the M phase

Project review process needs to be established

at the beginning of the project and maintained
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Example Project: Reduce time to install spare parts
Black Belt: xxx Start date: Feb 2005
Location: Andover End date: Jun 2005

Business case Problem statement

A strategic objective from the OPS is to improve Time to make an appointment with the five largest
customer service life cycle management. One customers in North America to install spare parts
aspect of this strategy is to improve spare parts averaged 40 hours in the period Jan-Dec 2004.
delivery to the five largest customers in North
America.
Initial financial forecast: Reducing the time to
install spare parts by 20 hours produces a
savings of $350,000.

Goal statement Scope

Reduce the time to make an appointment with Scope includes five largest customers in North
the five largest customers in North America to America. Process boundaries are from the start
install spare parts from an average of 40 hours to of the spare parts installation process to the
less than 20 hours by June 2005. successful installation of spare parts.
Primary metric: time to make an appointment,
which starts when the order is received and ends
when an appointment is booked (in hours).
Secondary metric: total time to install spare parts.

Project plan Project team

Phase Start date End date Process owner aaa
D
M Feb 1 Feb 28 Team member bbb
M
E Mar 1 Apr 15 Team member ccc
D
A Apr 15 Apr 30 Team member ddd
I May 1 May 15 Team member eee
C May 15 Jun 30 Team member fff
Notes: Team member ggg
May need IT resources depending on solution. Team member hhh
Coach/MBB yyy
Black Belt xxx
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Exercise

Objective: write a project charter

Procedure:
– Working in teams, create a project
charter starting from the SIPOC of the
Statapult, Courier, or your own project
– Select a spokesperson and be prepared
to report out in 30 minutes

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Summary
Focusing projects is essential to:
– set the direction for the process improvement effort
– inform stakeholders & prevent scope creep

SIPOC’s provide focus on the process boundaries

A project charter identifies:
– Business case
– Problem statement
– Goal statement
– Project scope
– Project plan
– Team members

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