03 Project Selection

Project Selection
Grow &
Innovate
Eliminate Reduce
Waste Variability
© 2005 Textron Inc. Project Selection V5.0 [1/2005] 1

Module Learning Objectives
By the end of this module participant will be able to:

• Evaluate Six Sigma projects including—
- Strategic Alignment
- Sound Project Contract
- Need for Team and Resource Support

D M A I C Roadmap
Create Align Project/ Define Process/
Define Project Set Goals Preliminary
Definition FOV’s
Validate Y Establish Define

Identify Sources of
Measure Measurement Baseline Performance
Variation and Waste
System Capability Objectives
(Subjective)
Statistical
Graphical Analysis Analyze Process
Analysis
Analyze of Families of
of Families of Flow
Variation
Variation
Identify Validate Plan Implement

Improve Solution Solution Improvements Improvements
Implement Determine Final Monitor Project

Control Develop Control
Process Process Performance
Strategy
Controls Capability Over Time
Roadmap Define Phase
Define
Create Align Project/ Process/
Project Set Goals Preliminary
Definition
FOV’s
• Problem Statement • Customer • Process Map

• Objective Requirements (VOC) • SIPOC
• Benefits • GDP • Spaghetti
• Scope • Business Diagrams
Assessment • Data
• Process
Process (BAP) Collection
Owner/Stakeholder
• CT Flowdown Planning
• Gap Analysis
• Operational
• TAP
Definitions
• Team building
• Completed Contract • Show Linkage to GDP • Completed SIPOC

• Defined Project Y’s • Initial Data Collection Plan
and Goals • Complete Detailed Process
• Baseline Financial Map
Analysis
Project Selection & GBs
Green Belt Candidates Are Expected To Have a Completed Project

Contract in Hand Before Week 2 of Training Begins

Where Do Projects Come From?
CT Tree Cascaded Objectives Employee

& GDP X-Matrix Ideas
6-week Production Control 90/60/30/ day

Forecast Forecasts State Street
Michigan Assembly
Steel Co
weekly fax Daily
MRP Order
18,400 pcs/mo
500 ft coils Ð12,000 ÒLÓ
Ð6,400 ÒRÓ
Weekly Schedule
Tray = 20 pieces
2 Shifts
Daily Ship
Schedule
Tues +
Project Contract
Thurs 1 time
Daily
Stamping S. Weld #1 S. Weld #2 Assembly #1 Assembly #2 Shipping
200T Staging
Coils 4600 L 1100 L 1600 L 1200 L 2700 L
5 Days 1 2400 R 1 600 R 1 850 R 1 640 R 1 1440R 1
C/T = 1 second C/T = 39 seconds C/T = 46 seconds C/T = 62 seconds C/T = 40 seconds
C/O = 1 hour C/O = 10 minutes C/O = 10 minutes C/O = 0 C/O = 0
Uptime = 85% Uptime = 100% Uptime = 80% Uptime = 100% Uptime = 100%
27,600 sec. avail 2 Shifts 2 Shifts 2 Shifts 2 Shifts
EPT = 2 weeks 27,600 sec. avail 27,600 sec. avail 27,600 sec. avail 27,600 sec. avail
Production
= 23.6 days
Lead Time
PMP
5 days 7.6 days 1.8 days 2.7 days 2 days 4.5 days
1 second 39 second 46 second 62 second 40 second
Value Stream
Processing = 188 sec.
Lead Time
Map Objectives
Line of sight to key business objectives…linkage to Goal Deployment

Process or PMP is essential
Business Needs Drive Project Selection
VOC
Ford Performance Review
Operation
Dextech
Ford
Code
L8FDA
Q1
Y
Month End January 2004
Q1 Score
Incomplete
# of QRs
0
PPM
Month
0
12 Month
PPM
88
Stop
Shipments
0
Missed
PSW
0
Prod
Delivery
Mth
93
B&A
Delivery
Mth
N/A
Pwtr.
Delivery
Mth
N/A
FCSD
Delivery
Mth
N/A
Launch
Delay
0
GDP
Q1 at
Ring Division R447D Risk 750 1 0 110 0 0 N/A N/A N/A N/A 0
Q1 at
Fenton
Semco
R447E
R447F
Risk
Q1 at
Risk
750
750
0
1
0
0
Textron Fastening Systems Top Level Hardwire Matrix (31Mar04) 19
9
0
0
0
0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0
0
Q1 at     Energize Six Sigma (2L)            
Holly R447H Risk 750 0 13 62 0 2 36 N/A N/A N/A 0
Q1 at     Refine & Deploy FSP Model (2L)            
Titan R447J Risk 750 0 0 0  0Implement0"War-on-Working
N/A Capital" N/A
N/A (2L) N/A 0         
Q1 at
Shamrock R448C Risk 750 4 1,616 25  0Execute Phase
1 2 Restructuring
N/A N/A (AP) N/A N/A 0            
Q1 at  Dev & Imp TFS Rapid Cost Red. Process (2L)         
PFPD E474A Risk 750 4 980 151 0 0 N/A N/A N/A N/A 0
Q1 at  Implement SG&A and R&D Cost Reduction Plan (2L)            
Amsco T112A Risk 750 4 0   1  0Achieve Sales
0 Action
97 Plan (2L)
N/A N/A N/A 0       
RayCarl T116A Y Incomplete 0 0 0 0 0 N/A N/A N/A N/A 0
Q1 at
Decorah T116C Risk 750 0 0 3,043 0 0 Top Level
62
Process
N/A N/A 60 0
Hold '04 Non-Qualified Costs on Gnvl CAR to $6.43M by 12/31/04
Reduce Gnvl CAR Spending From $27.9M to $25.3M by 12/31/04
Q1 at Improvement
Achieve Integrated Supply Chain Benefit of $76.2 by 12/31/04
Achieve $300M FSP Booked Revenue Run Rate by 12/31/04
Taptite T116F Risk 750 0 0 83 0 0 N/A N/A N/A N/A 0

Priorities
Define "1" FSP Model by 4/30, Deploy by 12/31 100% PTP
Achieve $1.950 Revenue ($126 Incremental to AOP)
Reduce WC % to Sales From 21.5% to 17.0% by 12/31/04

Achieve $220M FSP Revenue ($30M Incremental to AOP)
Q1 at
Complete Greenville Restructure 100% to Plan by 8/31/04
Torx T120A Risk 750 0 0 0 0 0 N/A N/A N/A N/A 0

Reduce Gross SG&A and R&D to $252M by 12/31/04
Triad T125P Y 1200 0 0 0 0 0 100 N/A N/A N/A 0

Achieve $1.950B Sales (Shipments) by 12/31/04
Achieve $5.1M net positive on price by 12/31/04
Avdel Cherry T126M Q1 at Risk Incomplete 0 0 361 0 0 N/A N/A N/A N/A 0
Achieve Six Sigma Benefit of $30M by 12/31/04
PSD E475E 0 0
Book Net $80M Incremental FSP Business
Q1 at Risk 750 4 0 0 N/A N/A N/A N/A 0

Elco (Flemingsburg) E474P Y 1550 0 0 0 0
Annual00 100 N/A N/ATargets
100 to 0
Quality and Cust Service (Arun Kapoor)
Elco (Greensburg) E474Q Y 1325 1 5 7 0 84 N/A N/A 100 0

Verbindungstechnik Objectives Improve
Sales & Marketing (Marty Schnurr)
Deliver 8.5% ROIC (AOP = 7.4%)
(Neuwied) C9A6A Y 1325 1 1 8 0 0 N/A 64 75 50 0

Technology (Seshu Seshasai)
TFS LTD (Welwyn

Finance (Jon Samuelson)
Six Sigma (Carl Montalbine)
Communications (Tim Weir)
Garden City) X464A Y Incomplete 0 0 0 0 0 N/A N/A 100 N/A 0

Operations (Bob Simpson)
President (Rick Clayton)
VBF (Fourdies) A0BHE Y 750 0 0 0 0 0 N/A 55 N/A N/A 0

HR (Mike Wehrmeyer)
TFS LTD
(Warrington) BAGWU Y 1325 0 0 1 0 0 100 95 100 49 0
Legal (John Clark)
TFS Total FE86A N/A N/A 16 277 84 0 3 N/A N/A N/A N/A 0
IT (Bob Ratcliff)
3-5 Year
Breakthrough
Objectives
 Achieve 17% ROIC ('07)  Primary Responsibility

 Achieve $2.5B O/All Rev Organically (`07)  Secondary Responsibility
  Achieve $600M FSP Revenue (`07)
Organization
Alignment HEX
7%
DEAD
3%
OTHER
2% NYLON
1%
FLANGE
35%
RIVET
(Critical Y)
21%
KEP
31%
Identify Key
Owner: Date:
Annual Objective/Improvement Priority: Lean Accleration and Transformation Plan
Team: John Mayers, Ron Fardell, Bill Comeau, Carl Montalbine, Cub Marion, Dwayne Dehaven, Jeff Sinclair*, Stephen Ashford*, Stephen Corbett*, Arvind Korde, ISC – Eric Cardinali, Next Review:
Action Plan
HR – Rick Sassu
Environmental Situation Summary:
Core Objective:
Planned CY Annual $
Action Step/ Kaizen Events Owner Milestone Dates J F M A M J J A S O N D Impact Impact (if app)
Value Streams
BU Plan (2004)
Awareness and Training
- Conduct Block Change (BB) Dehaven, Fardell, 05/31/04
Comeau, Wiederecht x
- Conduct Champion's Japan Tour #1 Comeau 08/28/04 x
- Conduct TLT NA Tour Fardell, Comeau 08/30/04 x
- Conduct Lean Gemba Kaizen Japan Comeau 09/03/04 x
- Review TLT Pitch with BU SLT VP TSS 09/30/04 x
- Draft Communication Plan (Corporate) Fardell, Comeau 09/30/04 x
- Finish Communication Plan (Corporate) Fardell, Tardanico 10/01/04 x
- Conduct Champion's Japan Tour #2 Comeau 10/09/04 x
- Execute Corporate Communications Plan TBD (Corp. Comm.) 10/15/04 x
- Refine Organizational Awareness Training Plan SWAT Sub-team 10/15/04 x
- TSSC report-out SWAT Sub-team 10/18/04 x
- Conduct Management Committee Tour Fardell 10/28/04 x
- Create and Deploy BU Specific Communications VP TSS 10/31/04 x
- Conduct BAP II Train-the-Trainer Comeau, McKinsey 11/12/04 x
- Design TSS Lean Enterprise Training SWAT 12/31/04 x
- Conduct Block Change (GB) Dehaven 12/31/04 x
BAP I and BAP II
- LBC Buys-In Riley 09/06/04 x
- MC+ Buy-In of BAP I 2 Day Event Riley 09/07/04 x
- Assign SWAT Team Mayers 09/10/04 x
- Develop BAP I Process BAP I Sub-team 09/10/04 x
- Define BAP I Pre-Work BAP I Sub-team 09/10/04 x
- SWAT report-out BAP I Sub-team 09/17/04 x
- TSSC report-out BAP I Sub-team 09/20/04 x
- BU's Schedule BAP I VP TSS 09/22/04 x
- BU SLT Pre-Work for BAP I VP TSS 10/31/04 x
- Conduct BAP I with SLT BU SLT 10/31/04 x
- BU's Schedule 60-90 Day BAP II Workplan VP TSS 11/12/04 x
- Finalize BAP II Playbook and Process Comeau, Maguid, 11/12/04
Watton, Sanchez x
- Conduct BAP II Train-the-Trainer Comeau, McKinsey 11/12/04 x
- Conduct BAP II's Comeau, McKinsey on-going x x x x x x x x x x x x
- Manage Cross-BU BAP II Schedule Comeau on-going x x x x x x x x x x x x
Projects
- Define SME and Present to SWAT Marion 09/24/04 x
- Change BB Cert and PMP Requirements (2005+) Marion 10/31/04 x
- Finalize Kaizen Playbook and Template Comeau, Maguid, 10/31/04
Watton, Sanchez x
- BU's Submit Schedule for "Big Impact" Kaizen Event VP TSS 9/24/2004
for 2004 (External or Corporate Led) 10/31/2004
x x
- BU's Submit Schedule for "Big Impact" Kaizen Event VP TSS 9/24/2004
for 2005 (External or Corporate Led) 1/31/2005
x
- Staff Corporate Lean Office Fardell 9/24/2004
10/31/2004
x x
- Manage "Big Impact" Kaizen Event Schedule Comeau on-going
(External or Corporate Led) x x x x x x x x x x x x
- TSS Project Management (Execution & Tracking) VP TSS on-going x x x x x x x x x x x x
Diagnostic Assessment (TMA)

- Preliminary Textron Maturity Asessment TMM Sub-Team 09/24/04 x
- SWAT report-out TMM Sub-Team 09/24/04 x
- TSSC report-out TMM Sub-Team 09/27/04 x
- Complete Textron Maturity Asessment 10/01/04 x
- Conduct Baseline Maturity Assessment and Gap TMM Sub-Team 12/31/04
Analysis x
Metrics (KPI/TTIs)
- Standardize and Finalize TTI/KPI's (2004) Swat Team & TSSC 09/10/04 x
- Standardize and Finalize TTI/KPI's (2005) Swat Team & TSSC 10/10/04 x
Actionable Projects…Cluster for Impact

What Makes a Good Six Sigma Project?
• Project is supportive of key business objectives
• Project is focused on an ongoing process
• Process has a measurable “Y”; an indication of whether
or not the process is successful (may or may not be
currently measured)
• Process is creating defects or requires waste elimination
• Project is linked to customer satisfaction
• A need to reduce defects
• A need reduce inventory or lead time
• Process will continue to be used for some period of time
• Management agreement on project, the priority, and
Green Belt and team member assignments

PROJECT ELEMENTS
TIME

PROJECT ELEMENTS
•Strategic Alignment
•Correct Level
•Not a Solution in Disguise
•Proper Definition
TIME

PROJECT ELEMENTS
•Champion
•Process Owner
•Team
•MBB
•Other BB’s
TIME

PROJECT ELEMENTS
TIME
• 1 to 4 months for training project
Project Authorization/Contract
Problem Year to date October 2002, the tractor and boom plants have averaged 14.4 part shortages per work day. 30% of the part shortages
Statement: resulted in a line stoppage, causing decreased plant productivity. 36% of all part shortages are related to late delivery.
1. Problem
Statement Define Unit: Part Shortage
Define Defect: Part not available on manufacturing line when needed (line stop)
Upper Demand forecast approved through SIOP.

Boundary
(Start of
Process): 4. Project
Lower
Boundary
Component is used in production.
Scope
(End of
Process):
2. Define Metric: Primary = Part Shortages / Day Secondary = Raw Material Inventory Turns
Quantification Project Reduce part shortages to the line by 70% by February 2003.
Objective:
of Objectives Historical
Comments:
Constraints: Schedule changes due to changes in customer demand
ADVISORY TEAM MEMBERS APPROVAL METRICS

Name Role Phone E-mail Initial Date Goal Metric U/M
Stephen Light Segment CEO (262) 268-3130 slight@omniquip.textron.com
| Current 14.4 Shortages / Day
Jim Wisnoski Champion (262) 268-3747 jwisnoski@omniquip.textron.com

| Target 4.3 Shortages / Day
5. Metric
Larry Skaff Finance (262) 268-3102 lskaff@omniquip.textron.com
| Entitlement 6.6 Shortages / Day Defect
Todd Schneider Black Belt (262) 268-8922 tschneider@omniquip.textron.com
| Stretch 0.0 Shortages / Day
Rick Peiffer Process Owner (262) 268-8912 rpeiffer@omniquip.textron.com

|
3.
Stakeholders Name
WORKING TEAM MEMBERS
Role Phone E-mail
Projected Savings/Benefits *
and Team Bob Menzel Buyer (262) 268-8975 bmenzel@omniquip.textron.com

| Sales NOP
Kurt Opelt Engineering (262) 268-7157 kopelt@omniquip.textron.com

| Material ROIC
Randy Schmit Planner (262) 268-3289 rschmitt@omniquip.textron.com

| Labor Cash Flow
Tom Calder Matl Hdlr Supv (262) 268-3720 tcalder@omniquip.textron.com

| Overhead
Basis
Points
6. Financials
Voice of
Brian Koepsell Operator N/A N/A | SG&A
Customer
Working
Heidi Miller Matl Hndlr N/A N/A | Other-1
Capital
WACC 10% Other-2
Other Savings
One-time Other-3
TOTAL
$ - Other-4
SAVING
* Attach detailed analysis

WACC = Weighted Average Cost of Capital

1. Problem Problem Year to date October 2002, the tractor and boom plants have averaged 14.4 part shortages per work day. 30% of the part shortages
Statement
Define Unit: Part Shortage

Boundary
(Start of
Process):
Lower Component is used in production.

Boundary
(End of
Process):
Define Metric: Primary = Part Shortages / Day Secondary = Raw Material Inventory Turns
Project Reduce part shortages to the line by 70% by February 2003.

Objective:
Historical
Comments:



| Entitlement 6.6 Shortages / Day


|
WORKING TEAM MEMBERS Projected Savings/Benefits *

Name Role Phone E-mail

Typical Issues With Problem Statements
• Problems poorly defined or not quantifiable
• Measured problem does not link to voice of customer
• Quantification based on anecdotal information
• Measurement method not validated
• Stated as predetermined solution instead of as problem

Use 5 Why’s to Get to the Real Problem
Why?
Proposal
takes too
Why?
long Because Why?
don’t have all
the info Because we
Level A forget to get
Why?
Because the
from customer
Level B form isn’t
used correctly
Level C ???
Level D
Our project then becomes: Improving the percentage of RFQ’s

that the form is filled out correctly on.
© 2005 Textron Inc. Project Selection V5.0 [1/2005]


Boundary
(Start of
Process):

Boundary
(End of
Process):
2. Define Metric: Primary = Part Shortages / Day Secondary = Raw Material Inventory Turns
Quantification Project Reduce part shortages to the line by 70% by February 2003.
Objective:
of Objectives Historical
Comments:





|

Bob Menzel Buyer (262) 268-8975 bmenzel@omniquip.textron.com
| Sales NOP

| Material ROIC

| Labor Cash Flow
Basis
| Overhead
Points
Voice of
Customer
Working
Capital
WACC 10% Other-2
Other Savings
One-time Other-3
TOTAL
$ - Other-4
SAVING


Exercise - How Are These Objectives?
1) Reduce all sales claims by 75%
2) Improve Sales/Product Mktg launch process to reduce
quality issues and reduce cycle time
3) Fix the DSO process
4) Decrease claims for table damage from 20% to 10%
5) Revamp approved vendor list by placing controls
world-wide for introduction of new vendors and
assurances of supplier qualifications
6) Create virtual equipment lab for R&D to save
20% in capital equipment
7) Implement on-line ordering for POs to replace 70% of
orders that are under $1500


Boundary
(Start of
Process):

Boundary
(End of
Process):

Objective:
Historical
Comments:


3. Larry Skaff Finance (262) 268-3102 lskaff@omniquip.textron.com
Stakeholders Todd Schneider Black Belt (262) 268-8922 tschneider@omniquip.textron.com

and Team Rick Peiffer Process Owner (262) 268-8912 rpeiffer@omniquip.textron.com

|

| Sales NOP

| Material ROIC

| Labor Cash Flow
Basis
| Overhead
Points
Voice of
Customer
Working
Capital
WACC 10% Other-2
Other Savings
One-time Other-3
TOTAL
$ - Other-4
SAVING



Boundary
(Start of
Process): 4. Project
Lower
Boundary
Component is used in production.
Scope
(End of
Process):

Objective:
Historical
Comments:





|

| Sales NOP

| Material ROIC

| Labor Cash Flow
Basis
| Overhead
Points
Voice of
Customer
Working
Capital
WACC 10% Other-2
Other Savings
One-time Other-3
TOTAL
$ - Other-4
SAVING



Boundary
(Start of
Process):

Boundary
(End of
Process):

Objective:
Historical
Comments:
Constraints: Schedule changes due to changes in customer demand 5. Metric

Name
ADVISORY TEAM MEMBERS
Role Phone E-mail
APPROVAL
Initial Date Goal
METRICS
Metric U/M
Defect




|

| Sales NOP

| Material ROIC

| Labor Cash Flow
Basis
| Overhead
Points
Voice of
Customer
Working
Capital
WACC 10% Other-2
Other Savings
One-time Other-3
TOTAL
$ - Other-4
SAVING


Metrics
Typical metrics might include:

• Yield Metrics
 Final Yield (FY)
 Throughput Yield (TPY)
 Rolled Throughput Yield (RTY)
 Normalized Yield (NY)
• Defect Metrics
 Defects Per Unit (DPU)
 Defects Per Million Opportunities (DPMO)
 Short and Long-term Z or Sigma
• Lean Metrics

Application of Yield metrics
• Yield metrics should be used when:

- Process throughput is a Key Customer Process
Output variable.
- Analyzing a complex , multi step process.
- The “hidden factory” is perceived to be a
source of non value added work.

Application of Defect Metrics
• Defect metrics should be used when:

- Defect rate is a Key Customer Process Output
variable.
- You have only attribute data.
- Multiple opportunities exist per unit.

Defectives Versus Defects
• A Defect is a failure to conform to a customer

requirement.
• A Defective is an entire unit that fails to meet

acceptance criteria, regardless of the number of defects
within the unit

Lean Metrics
•Any metric that will reveal

7 Forms
the presence of one or
Of Waste more of the 7 forms of
waste is a good candidate
1. Overproduction
for a lean metric.
2. Transport
•Time (Cycle Time, Lead
3. Delay Time, Set-up Time, etc) is
4. Processing an excellent lean metric
5. Inventory – Waste in the process will
almost always impact
6. Motions time
7. Defects


Boundary
(Start of
Process):

Boundary
(End of
Process):

Objective:
Historical
Comments:





|

| Sales NOP

| Material ROIC

| Labor Cash Flow

| Overhead
Basis
Points
6. Financials
Voice of
Customer
Working
Capital
WACC 10% Other-2
Other Savings
One-time Other-3
TOTAL
$ - Other-4
SAVING


Financials
• Connects process improvement to financial benefits

• Role of Finance in TSS
• Financial definitions – Hard/Soft $
• Measuring our achievements – TSS Causals

Beware Of Project Pitfalls
• Boiling the ocean projects / Too many metrics
• Projects won’t get done in 4 to 6 months
• The belt could be working on too many issues
• Solutions known
• DMAIC methodology won’t apply
• You don’t need 6 Sigma for this…just do it
• Micro-focused
• Savings won’t be significant
• Project may not get appropriate level of support

Beware Of Project Pitfalls
• Timing
• Projects should be done in about 1 to 4 months
• There are exceptions, be prepared to defend them
• Measurable Y
• If the Y can’t be measured, the project can’t get
done
• Need a statement of “from ____ and to ____”

• General statements of reducing defects by ___%
don’t provide the detail necessary to understand
the problem
• State where the metric is today and where you
want it to move to

Special Considerations
for Training Projects
• Scoped for timely completion

• Good match with tools
• High probability of success
• Strong organizational support
• Focused on volume processes
with available data

for all Projects
• Safety:
– Continually examine the safety implications of your
project, including ergonomic factors. Add EHS
representation to the team if:
 The location, scope, nature of the project,
etc. is likely to have an impact on employee
or product safety
 Existing EHS issues are uncovered at any
phase of the project
 Proposed solutions may affect employee or
product safety
Add SME’s as necessary to address special considerations

for all Projects
• Legal:
– Your project work could become a legal record. Consider adding
Legal representation to the team if:
 The location, scope, nature of the project, etc. contains or
uncovers any potential legal ramifications during any stage of
the project life cycle (ex: impact on product safety or
reliability)
– Export controls are restrictions placed on what items may or may not
be exported, and under what circumstances. These restrictions apply
to technical data as well as goods and services
 Commercial items are covered by the Export Administration
Regulations (EAR), administered by the Bureau of Industry and
Security (BIS) at the U.S. Department of Commerce
 Defense items are covered by the International Traffic in Arms
Regulations (ITAR). The ITAR are administered by the U.S.
Department of State, Office of Defense Trade Controls (DTC).
Refer to Textron’s Compliance Resource Center for more

information on Export Controls
Module Learning Objectives Revisited
By the end of this module participant will be able to:

• Evaluate Six Sigma projects including—
- Strategic Alignment
- Sound Project Contract
- Need for Team and Resource Support

Key Learning Points
•
•
•
•

Appendix
Grow &
Innovate
Eliminate Reduce
Waste Variability

Project Contract Exercise
• Each belt should record their project’s problem

statement, objective and metric on the following
forms and tape to the wall.
• Using learning from this module, all belts should take

turns evaluating each other’s problem statement,
objective and metric and leave written feedback
(positive and constructive) on the forms using sticky
notes.

Your Project
Objective

Your Project
Problem
Statement

Your Project
Project
Metric (Y)

Your Project
Y=
_________
What are the tick marks ?

_______________

Project Selection TAP Exercise
• Break into teams and select one belt’s project contract

to perform an “In Scope/Out of Scope” analysis as
described in the TAP Tools module.
• Take 15 minutes and record results on a flip chart.
• Report out 2 minutes per team.

Scope
Scope
In Scope Out of Scope
In Scope Out of Scope
In Scope/Out of Scope
Purpose
Define and clarify project scope. You may also use this format to
document in frame/out frame to document scope for presentations.
Instructions
•Draw a “T” chart on a flipchart and write the headings “In Scope” and
“Out of Scope” on each side.
•Invite brainstorm using a facilitative question. For example…
Imagine we’ve accomplished our objective and are successful…
•What all have we done?
•Where did we have an impact or influence
•Write their answers on the flipchart
•Discuss & seek consensus
Outcome
Items to address as part of the project (initial scope). May use outcome
of this exercise to develop a 15-word statement to communicate the
scope.
Potential Uses
Project scoping
Input to communications plan
What Is The Scope?

In Scope/Out of Scope Example
Context: steering committee preparing to kick off a team to design new
organization define scope of a new organization
Scope of XWORX
Includes Exclude
Products One Of's; First Of's Production products
Adv Tech Dev; FAA DAS; Experimental Flt Certification/Pilot Flt Test; Certification; Build
Services Test; Mechanical test labs production parts
Modified Config Cntrl; Rapid procurement
system; Streamlined QA process; Move to Production Flt Test; Production planning
production data package; Rapid prototyping; system; EVMS process (important issue);
Processes high speed drawing; Production drawing system
Pilot tools & processes (e.g. PDM, etc.);
Resources unique systems
Customers All markets, niches and segments None
Others Provide CTS info for production
Aligning People Around Project Scope

Yield Metric Definitions
• Final Yield (FY)- the number of good units produced

divided by the number of total units going into the
process.
• Throughput Yield (TPY) – First time yield of a single

process step, excluding both scrap and rework.
• Rolled Throughput Yield (RTY)- the probability that a

single unit can pass through a series of process steps
free of defects
• Normalized Yield (NY) – the average yield per process

step in a multi-step process

Yield Metric Calculations
Final
Yield
FY = #Good units out
#Units submitted
Throughput
Yield
TPY = (#submitted - #scrap - #rework)
#submitted
Rolled
Throughput
Yield
RTY = TPYstep1 x TPYstep2 x TPYstep3 …x TPYstep n
Normalized
Yield
NY = (RTY)(1/k)

Final Yield (FY) - Result

#Units submitted
250 205
Step 1 Step 2 Step 3
Units Units
Scrap = Scrap = Scrap =

15 units 10 units 20 units
Calculate the Final Yield of this Process

Final Yield (FY) - Result

#Units submitted
250 205
Units Units
Scrap = Scrap = Scrap =

FY = #Good units out/#Units submitted

= 205/250
= 82%

Hidden Factory
S P
Operation Verify Product
Rework
Hidden Factory:
Defects and
Scrap Rework
Final Yield Ignores the Role of the “Hidden Factory”

Throughput Yield (TPY) - Example
#submitted
250 Hidden Factory

Step 1 YTP = ?
Units 35 units are
reworked and
25 units placed back into
lost as process
scrap
Calculate the TPY of this Process Step

Throughput Yield (TPY) - Result

#submitted
250 Hidden Factory

Step 1 YTP = ?
Units 35 units are
reworked and
25 units placed back into
lost as process
scrap
TPY = (250-25-35)/250
= 190/250
= 76%
Rolled Throughput Yield (RTY) - Exercise
RTY = TPYstep1 x TPYstep2 x TPYstep3 … x TPYstepn
35 Rework 20 Rework 35 Rework
250 185
Units Units

lost as lost as lost as
scrap scrap scrap
Calculate the RTY of this Process Step

Rolled Throughput Yield (RTY) - Result
• First, Calculate the

TPY for each
process Step
TPY1 = (250-25-35)/250 TPY2 = (225-20-20)/225 TPY3 = (205-20-35)/205

= 76% = 82.2% = 73.2%

Rolled Throughput Yield (RTY) - Result
• First, Calculate the

TPY for each
process Step
• Next, multiply the
step TPY’s to get
RTY
TPY1 = (250-25-35)/250 TPY2 = (225-20-20)/225 TPY3 = (205-20-35)/205

= 76% = 82.2% = 73.2%
RTY = 76% x 82.2% x 73.2%

= 45.7%
Defects Per Unit (DPU)
The ratio of defects to unit; defects per unit (DPU) is the

universal measure of quality. DPU is calculated as:
Total Number of Defects

DPU =
Total Population
Does not consider the number of opportunities for

defect in each unit
DPU Example
12 Late Orders
Example: = 0.12 DPU
100 Total Orders
• Calculated for single acceptance point or summed for an

overall acceptance stage or area
• When summed, DPU is referred to as Total Defects Per
Unit or TDU
• Count of all defects and not a measure of consequences
of defect

DPU Exercise
A company ships customer orders. Each order, contains

one item and is a complete unit.
100 orders are randomly selected prior to shipment and

inspected. Thirty one items are incorrect, five items are
damaged. Three other items have incorrect quantities
• How many units are being inspected? ____

• How many defects are there? ____
• Calculate DPU? ____
NOTE: DPU is not necessarily the same as quality impact

to customer - some defects are worse than others

DPU Exercise
A company ships customer orders. Each order, contains

one item and is a complete unit.
100 orders are randomly selected prior to shipment and

inspected. Thirty one items are incorrect, five items are
damaged. Three other items have incorrect quantities
100
• How many units are being inspected? ____
• How many defects are there? ____
39
• Calculate DPU? ____
0.39
NOTE: DPU is not necessarily the same as quality impact

to customer - some defects are worse than others

Defects Per Opportunity (DPO)
• Used to calculate probability of defects in a
process
D
DPO 
OPPtot
DPO: Defects per Opportunity

D: Number of defects
OPPtot: Total number of opportunities for each
characteristic (=Units x Opportunities per unit)
- A characteristic is a definable, measurable feature
of a product or process
- Only active or measurable opportunities are
considered

Opportunity Counting
Opportunities are the things which must go right to

satisfy the customer. It is not the number of things we
can imagine that can go wrong.
- Consider 100 orders each having 1 item (100 Units)

- Opportunity per item ordered:
• Correct item?
• Damaged?
• Billed Correctly?
- OPPtot = Units x Opportunities per unit = 100*3 = 300

Defects Per Million Opportunities
(DPMO)
• The DPMO considers total opportunities for defect
occurrence existing in a process
• DPMO or PPM, is considered long-term
DPMO =DPO x 1,000,000
Total Defects x 1,000,000

DPMO =
OPPtot

DPMO Example/Product
• An inspection of 500 components at an industrial facility

revealed a total of 20 defects
• Each component has 7 characteristics and each is
considered an opportunity
• What are DPU, OPPtot and DPO statistics?
• How do we convert these statistics into a DPMO statistic?
20 x 1,000,000
DPMO = = 5714
(500 x 7)

Relating Defect Levels to Sigma
• Defect levels, such as DPMO are directly related to the

sigma value for our processes.
• In “statistical language” a “Z” value is the same as a
“Sigma” value. (Z = Sigma).
• To obtain our Z value (sigma value), several methods
exist:
- Z table (standardized normal distribution
table)
- EXCEL
- Minitab
- other
• The instructor will explain the conversion of a defect
level (DPMO or PPM) to the corresponding Z (Sigma)
value.

Review:
Getting To Six Sigma
Process Defects per Million Long Term Yield
Capability Opportunities
σ st
2 308,537 69.15%
3 66,807 93.32%
4 6,210 99.38%
5 233 99.98%
6 3.4 99.99966%
GOAL

Some Example Metrics Of Lean
Business Processes
Consistency of Delivery Capacity to Handle New Work

- On-time arrivals of material - Higher transaction volume
- Predictable order times - More orders processed
- Prompt customer call response - Greater call volume handled
Process Cycle-Time Length of Process Queues
- Time from order to ship - Lead time for shipments
- Time from call to response - Waiting time for resources
- Time from arrival to stock - Delays in processing orders
Profit Margin on Sales Level of Employee Multi-tasking
- Reduced processing costs - Firefighting
- Faster customer response - Changing priorities/shifting tasks
- Increased value-added service - “Keeping the wolves at bay”
Productivity per Employee Return on Capital Investment
- Transactions per employee hour - Efficient use of computer networks
- Shipments per day - Increased benefit from productivity
tools
- Calls handled per shift
- Lower overhead per employee

Configuration Management
Revision Date Author Description of Change

5.0 1/2005 Judy Szidik and New green belt training module which
Howard Skinner combines BB modules 102A How do I know I
have a good project?, 111 Objective and
Primary Metrics and 116 Process Metrics.
Initial Release with GB Block Change 5.0

03 Project Selection

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Project Selection

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 1

By the end of this module participant will be able to:

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 2

Validate Y Establish Define

Identify Validate Plan Implement

Implement Determine Final Monitor Project

• Problem Statement • Customer • Process Map

• Completed Contract • Show Linkage to GDP • Completed SIPOC

Green Belt Candidates Are Expected To Have a Completed Project

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 5

CT Tree Cascaded Objectives Employee

6-week Production Control 90/60/30/ day

Stamping S. Weld #1 S. Weld #2 Assembly #1 Assembly #2 Shipping

Line of sight to key business objectives…linkage to Goal Deployment

Achieve $300M FSP Booked Revenue Run Rate by 12/31/04

Taptite T116F Risk 750 0 0 83 0 0 N/A N/A N/A N/A 0

Reduce WC % to Sales From 21.5% to 17.0% by 12/31/04

Torx T120A Risk 750 0 0 0 0 0 N/A N/A N/A N/A 0

Triad T125P Y 1200 0 0 0 0 0 100 N/A N/A N/A 0

Q1 at Risk 750 4 0 0 N/A N/A N/A N/A 0

Elco (Greensburg) E474Q Y 1325 1 5 7 0 84 N/A N/A 100 0

(Neuwied) C9A6A Y 1325 1 1 8 0 0 N/A 64 75 50 0

TFS LTD (Welwyn

Six Sigma (Carl Montalbine)

Communications (Tim Weir)

Garden City) X464A Y Incomplete 0 0 0 0 0 N/A N/A 100 N/A 0

President (Rick Clayton)

VBF (Fourdies) A0BHE Y 750 0 0 0 0 0 N/A 55 N/A N/A 0

 Achieve 17% ROIC ('07)  Primary Responsibility

Diagnostic Assessment (TMA)

Actionable Projects…Cluster for Impact

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 8

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 9

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 10

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 11

Upper Demand forecast approved through SIOP.

Constraints: Schedule changes due to changes in customer demand

ADVISORY TEAM MEMBERS APPROVAL METRICS

Jim Wisnoski Champion (262) 268-3747 jwisnoski@omniquip.textron.com

Rick Peiffer Process Owner (262) 268-8912 rpeiffer@omniquip.textron.com

and Team Bob Menzel Buyer (262) 268-8975 bmenzel@omniquip.textron.com

Kurt Opelt Engineering (262) 268-7157 kopelt@omniquip.textron.com

Randy Schmit Planner (262) 268-3289 rschmitt@omniquip.textron.com

Tom Calder Matl Hdlr Supv (262) 268-3720 tcalder@omniquip.textron.com

* Attach detailed analysis

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 13

Upper Demand forecast approved through SIOP.

Lower Component is used in production.

Project Reduce part shortages to the line by 70% by February 2003.

Constraints: Schedule changes due to changes in customer demand

ADVISORY TEAM MEMBERS APPROVAL METRICS

Jim Wisnoski Champion (262) 268-3747 jwisnoski@omniquip.textron.com

Larry Skaff Finance (262) 268-3102 lskaff@omniquip.textron.com

Todd Schneider Black Belt (262) 268-8922 tschneider@omniquip.textron.com

Rick Peiffer Process Owner (262) 268-8912 rpeiffer@omniquip.textron.com

WORKING TEAM MEMBERS Projected Savings/Benefits *

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 14

• Problems poorly defined or not quantifiable

• Measured problem does not link to voice of customer

• Quantification based on anecdotal information

• Measurement method not validated

• Stated as predetermined solution instead of as problem

© 2005 Textron Inc. Project Selection V5.0 [1/2005] 15