Selection of six sigma projects

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Selection of six sigma projectsin the UK

Ricardo Banuelas, Charles Tennant, Ian Tuersley and Shao TangWarwick Manufacturing Group, School of Engineering,

University of Warwick, Coventry, UK

Abstract

Purpose – The literature suggests that a key ingredient for the successful six sigma implementationis project prioritisation and selection. The purpose of this paper is to identify what criteria areconsidered for selecting six sigma projects and how six sigma projects are selected in organisations inthe UK.

Design/methodology/approach – Using a survey as a method of investigation, respondents wereasked what criteria are considered to select projects and how potential projects are identified,

prioritised, selected and evaluated.Findings – The results of the survey indicate that UK organisations tend to select projects based oncriteria such as customer satisfaction, financial benefits, top management commitment and thoseprojects integrated with the company’s strategy. Several tools and techniques such as cost benefitanalysis, cause and effect matrix, brainstorming, Pareto analysis are employed to identify andprioritise projects.

Research limitations/implications – This paper is limited to the selection of six sigma in the UK.Further, empirical studies using larger sample sizes and greater geographical diversity may be helpfulin validating the results of this study.

Practical implications – The identification of the most commonly used criteria to select six sigmaprojects can aid practitioners to select projects based on multiple criteria and using tools andtechniques identified in this survey.

Originality/value – The provision of empirical data on the criteria used to select six sigma projects

and how six sigma projects are selected.

Keywords Six sigma, Project management, Surveys, United Kingdom

Paper type Research paper

IntroductionSix sigma has evolved into a statistical oriented project driven approach to process andproduct quality improvement. Since projects are the means by which six sigmaconverts quality improvements into bottom-line financial benefits, multinationalorganisations such as Ford report completing as many as 10,000 projects (Ford, 2005).However, not all six sigma projects produce bottom-line benefits; many produce onlylocal improvements (Pyzdek, 2000) and about 20 per cent of projects are cancelled

(Eckes, 2001). The literature proposes that a key ingredient for successful six sigmaimplementation is project prioritisation and selection (Pande et al., 2000; Banuelas andAntony, 2002). In addition, since different potential areas of improvement compete forscare resources, organisation should select six sigma projects in such as way that theyare closely tied to the business goals and strategy (Ingle and Roe, 2001).

Project selection is the process of evaluating individual projects or groups of projects, and then choosing to implement some set of them so that the objectives of theorganisation will be achieved (Meredith and Mantel, 2003). Selecting a project that is

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too large will cause valuable time to be lost during the define phase, as Black Beltsstruggle to scope their projects and develop project charters that can be addressedusing six sigma. In addition, projects should be linked to the right goals and impact atleast one of the major stakeholders’ issues, e.g. growth acceleration, cost reduction or

cash flow improvement. Good project selection is itself a process; if it is properlycarried out the potential benefits of six sigma can improve substantially (Pande et al.,2000). Authors and consultants have proposed the project selection process models andtools, and key elements in six sigma project selection producing a variety of models(Breyfogle et al., 2001; Adams et al., 2003; Pyzdek, 2003).

This papers aims at identifying what models and tools are currently used in UKindustry, what criteria is considering for selecting six sigma projects and how and whoselect six sigma projects in organisations. Consequently, this survey investigates thecurrent status of the selection of six sigma projects in UK industry and identifies the maincriteria used for project selection. The first part of this paper presents an overview of theresearch methodology employed. The second part of the paper discusses the results of thesurvey and compares them against the literature.This paper culminates by offering a brief

summary of the research and directions for further research.

Research methodologyThe research questions for this survey were:

RQ1. What is the status of selection of six sigma projects in the UK organisations?

RQ2. What are key criteria for project selection in the UK organisations?

SampleThe data for this study was gathered using a questionnaire. A national sample of UKorganisations was selected from financial analysis made easy (FAME) database, which

contains detailed company information on a large number of UK companies. Thesample was constrained to companies with more than 300 employees since six sigma ismore likely to be adopted by large organisations (Antony et al., 2005). Postal and e-mailsurvey was used for gathering data due to the advantage that the designedquestionnaire could be sent to a large number of organisations in a limited time. A totalof 300 postal and 813 e-mail questionnaires were sent out to the selected sample.The survey was targeted to quality directors, managing directors, quality managers orBlack Belts, since they are directly involved in the process and have first-handknowledge and experience of six sigma projects.

Survey instrument The questionnaire used in this study consisted of three main sections: the background of the company, the project selection process and the key criteria considered for projectselection. The first section was intended to determine fundamental issues such as thecompanies’ industry sector, the maturity of six sigma in the companies investigated interms of the number of projects carried out and the number of years since six sigma waslaunched. The third section consisted of six criteria for six sigma project selection,derived mainly from the literature. Respondents were asked to rank the criteria in termsof importance for project selection on a five-point Likert scale from 1 “not important” to 5“crucial”, with the middle denoted as “important”. It was hoped that this would give an

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indication of the critical criteria for the successful project selection. Moreover, the use of a Likert scale rather than a simple yes/no type of question in the questionnaire wouldprovide a better perspective of the current six sigma practices in the UK industry.

The questionnaire was pre-tested by submitting the “final” questionnaire to three

types of people: colleagues, industry experts and target respondents. This testedwhether the questionnaire would accomplish the study objectives, prevent theinclusion of some obvious errors and provide feedback on sample the answers ahead of the targeted respondents (Gillham, 2000).

Results and discussionCharacteristic of the sampleA total of 95 respondents, out of 1,113, returned completed, usable questionnaires foran overall response rate of about 8.5 per cent. However, the response rate for the surveysent electronically was lower than that of the posted one (24.3 versus 2.3 per cent).Typically, the response rate of online survey is lower than those for postal surveys

(Bryman, 2004). The possible reasons which result in low response rate of online/e-mailsurvey may be assigned to the fact that invitations to participate in research may beseen as another spam e-mail. In addition, the confidentiality of replies may beconcerned by recipients in order to avoid being hacked or involved in frauds.

Of those 95 responding companies, 25 were implementing six sigma and providedinformation which could be used for further analysis. In terms of industrial sectors,12 of the companies pertain to the service sector whereas 13 of them weremanufacturing companies. The number of the respondent companies which haveimplemented six sigma for more than three years is around half the companiescurrently running six sigma programme (Table I).

In this research, the survey was answered by black belts (32 per cent), master blackbelts (20 per cent), quality managers (12 per cent), champions (8 per cent), green belts

(8 per cent) and other quality related positions (20 per cent). Almost half of thecompanies implementing six sigma (48 per cent) have completed over 100 six sigmaprojects. About 24 per cent of them have completed between 10 and 100 six sigmaprojects and 28 per cent of them ten projects or less.

People involved in the selection of six sigma projectsAccording to Davis (2003) the first step of six sigma project selection is theestablishment of a cross-functional team including the top management. Theresponsibility of the team or steering committee is to identify, prioritise, select, monitorand evaluate six sigma projects. The involvement of the top management helps tocascade down the company strategy into specific six sigma projects. In addition, itremoves the obstacles and barriers more effectively (Kelly, 2002). Accordingly, in this

survey respondents were asked about the people involved in the six sigma selectionprocess. About 56 per cent involve senior managers and the “champion” in theselection of projects. In addition, 48 per cent of the companies indicated that finaldecision is normally made by top management. This top-bottom approach to selectprojects has three main advantages. Firstly, the projects would be aligned with thecorporate strategy. Secondly, it is more structural and managerial and finally, it isbeneficial to six sigma projects with management support (Harry and Schroeder, 2000;Lynch and Soloy, 2003).

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In contrast, none of 25 companies employs a bottom-up approach to select projects.In this approach, potential projects are proposed from the operational level of thecorporation (Lynch and Soloy, 2003). Although this approach has the main advantageof identifying every improvement opportunity from the lower levels of the organisation(Harry and Schroeder, 2000), it has also been criticised in the literature (Klefsjo et al.,2001; Lynch and Soloy, 2003). For Klefsjo et al. (2001), six sigma methodology is atop-down, rather than bottom-up approach. In addition, adopting the bottom-topapproach can result in lack of management commitment, selection of “pet” projects, anfailure in incorporate both the external customer satisfaction and the business strategy(Lynch and Soloy, 2003). Nevertheless, 64 per cent indicated involving relevant process

owners and heads of related departments in the selection process, but the final projectselection is the responsibility of project selection committee (36 per cent), processowners or head of related department (36 per cent), quality managers (16 per cent),team members (16 per cent) and CEO (12 per cent).

Identification of potential six sigma projectsAs is in any process, inputs are critical for a satisfactory outcome. The importance of selecting adequate sources and identifying the useful information to identify six sigma

Number Percentage

SamplePost 300 26.95

E-mail 813 73.05Total 1,113Response post 76 25.33Response e-mail 19 2.34Total response 95 8.53Companies implementing six sigmaImplementing it 19 20Partially implementing it 6 6No implemented 70 74Time since six sigma adoptionLess than 1 year 4 16Between 1 and 3 years 9 36More than 3 years 12 48

Industrial sector Manufacturing 13 52Service 12 48

Position of respondents in the company implementing six sigmaQuality manager 3 12Champion 2 8Mater black belts 5 20Black belts 8 32Green Belts 2 8Other 5 20

Projects implemented within the companyLess than 10 6 23Between 10 and 100 7 29More than 100 12 48

Table I.Characteristics of the

sample


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projects is seen as key step in project selection. Adams et al. (2003) propose seven main

sources for identification of potential six sigma projects, including customers,

suppliers, employees, benchmarking, developments in technology, extension of other

six sigma projects and waste. In this survey, respondents were asked whether they

identified projects based on this classification.Six sigma projects often begin with the determination of customer requirements and

it is essential to set project goals based on reducing the gap between the company’s

deliverables such as quality, delivery time, reliability and customer expectations. The

understanding of markets, operations, measures used and creativity to maximise value

and performance are the core elements of six sigma approach (Pande et al., 2000).

Consequently, the “voice of customer” (VOC) should be used to identify potential

six sigma projects (Martens, 2001; Johnson, 2002; Man, 2002; Starbord, 2002). During

this survey companies were asked if they identify projects from customer

requirements. About 60 per cent of the companies identify potential projects from

their customers. This result shows the alignment with the thinking that six sigma

should internalise customers need into improvement projects (Pande et al., 2000).Of the surveyed companies implementing six sigma, 60 per cent identify potential

six sigma projects from their employees. Voice from employees or internal customers

can sometimes identify fundamental issues rather than from top management. The top

management view of the organisation has its advantages. However, it suffers from the

disadvantage of not being able to recognize the details of operational problems (Adams

et al., 2003). Identifying projects from employees also has the advantage of selecting

areas of opportunities which can improve quality in a short period of time.

According to Adams et al. (2003), it is not unusual for a project team to find new

areas of improvement after the completion of a six sigma project. Nearly, half of

companies surveyed have reported finding potential six sigma projects from the

extension of other projects. In this survey, 24 per cent of respondents identify projectsfrom their suppliers. Suppliers play an important role in the quality of products and

services, for Crosby (1979) suppliers account for 50 per cent of product-related quality

problems. Other source of identifying six sigma projects is through the comparison of

the organisation’s performance to that of world-class organisations, in order to

investigate the adoption of new methods, technology and processes using six sigma

(Adams et al., 2003). Benchmarking is used as a tool to drive performance of the

company in all aspects of doing business In this survey, 44 per cent of the companies

surveyed indicate using benchmarking to identify potential projects. Another source of

potential projects is new developments in science, technology, and applications.

However, only five of the twenty five companies identify six sigma projects from new

developments in technology.Waste and quality are closely linked. By reducing wasteful practices such as

re-work, extra inspection, defects and all the activities associated with not creating

value, quality and productivity will improve. Accordingly, for Adams et al. (2003),

activities that do not add value for the customer can be regarded as poor quality

and six sigma can be employed to reduce waste. The results indicate that

32 per cent of the companies identify six sigma projects by detecting waste which

can be reduced.

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Tools used to identify potential six sigma projectsSix Sigma teams employ different tools to identify potential projects from severalsources, i.e. customers, waste, employees, suppliers, technology or extension of projects. Respondents were asked which tools they six sigma currently employ to this

end. The majority of them (76 per cent) use brainstorming (Figure 1). Critical-to-quality(CTQ) tree, focus group, interview are employed by around one third of the surveyedcompanies. Customer visits, quality function deployment (QFD), Kano analysis,surveys are used for 20 to 30 per cent of surveyed companies. A small number of respondents implement value stream mapping, balance scorecard and Hoshin Kanri asan aid in the identification of projects. It was also noticed that most of the companies,80 per cent, employ more than one tool to identify potential projects.

Criteria for six sigma project selectionEffective project selection is based on identifying the projects that best match the currentneeds, capabilities and objectives of organisations (Pande et al., 2000). Different authorshave proposed measurements, rules and standards that guide the six sigma project

selection in the form of generic criteria. During this survey the criteria found in theliterature were grouped into six main criteria as is shown in Table II. Respondents wereasked to rank the sixcritical criteria for six sigma project selection according to Likert ninepoint scale (1 ¼ not important, . . . , 5 ¼ relatively important, . . . , 9 ¼ very important).

The Cronbach’s a test was carried out to determine the level of internal reliabilityfor a set of questions related to the criteria for project selection. Generally, a Cronbach’sa factor of 0.60 or higher is though to indicate an acceptance level of internalconsistency (Black and Porter, 1996). All the criteria in this survey have an a

coefficient above 0.60, showing a good internal reliability.

Figure 1.Tools and methods used toidentify potential projects


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C r i t i c a l c r i t e r i a

H a r r y a n d

S c h r o e d e r ( 2 0 0 0 )

P a n d e e t

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( 2 0

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S n e e

( 2 0 0 1 )

G o l d s t e i n

( 2 0 0 1 )

B r e y f o g

l e e t a l .

( 2 0 0 1 )

P y z d e k

( 2 0 0 0 ,

2 0 0 3 )

L y n c h a n d

S o l o y ( 2 0 0 3 )

A n t o n y

( 2 0 0 4 )

C u s t o m e r i m p a c t

p

p

p

p

p

p

F i n a n c i a l i m p a c t

p

p

p

p

p

p

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T o p m a n a g e m e n t c o m m i t m e n t

p

M e a s u r a b l e a n d f e a s i b l e

p

p

p

p

p

p

p

L e a r n i n g a n d g r o w t h

p

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C o n n e c t e d t o b u s i n e s s s t r

a t e g y a n d

c o r e c o m p e t e n c e

p

p

p

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p

p

Table II.Criteria for selection of six sigma projects

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The scores of the criteria were averaged to determine the importance of each criterionin the project selection process. It can be seen from Figure 2 that four criteria,connected to business strategy, customers, finance and top management commitment,have a mean score higher than the important level of seven according to the scale

employed. This is aligned with previous studies of critical success factors for six sigmaimplementation, where customer focus, linkage to business strategy, top managementcommitment and financial benefits are considered as essential factors for the successfulimplementation of six sigma (Banuelas and Antony, 2002; Antony, 2004).

The results also revealed that companies who have been implementing six sigmafor more than six months tend to prioritise differently the criteria to select projects thanthose companies who embarked on six sigma for less than six months, as shown inFigure 3. In order to test if the differences between these groups of companies arestatistical significant, analysis of variance (ANOVA) was conducted. As a result, it wasconcluded criteria connected to business strategy and core competency and learningand growth, are statistically significant ( P , 0.05). Thus, it can be said that companiesimplementing six sigma for a short period of time tend to put less emphasis in learningand growth and the linkage between projects and business strategy. Instead, thesecompanies tend to base the project selection on financial benefits and the measurabilityand feasibility of the projects. This can be attributed to the fact that the first projects

Figure 2.Scores on each six key

criteria for six sigmaproject selection


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tend to be pilot projects, which are characterised by initial or small-scale effort

designed to test the applicability of six sigma. Pilot projects are usually undertakenwith the intention of replicating or widening the scale of implementation at a laterstage or further projects. In addition, they tend to focus on quick wins with a highprobability of success.

The selection of six sigma projects is considered a multi-criteria decision where mostof the information relevant to the problem is complex and conflicting in nature. Selectioncriteria need to be prioritised so that those that are most critical to the overall success of the organisation will have the most impact on the project selection. Sometimes, aparticular criterion is a useful gauge of how well a project will deliver several outcomes.

Prioritisation of potential six sigma projectsTo help practitioners to deal with the complexity of the selection of six sigma projects,

different authors have proposed different techniques. These techniques aim atorganising and synthesising information in a manner that leads to the optimisation of amultiple and conflicting criteria to be handled at the same time over a set of feasibleprojects. These approaches seek to take explicit account of multiple criteria in helpingindividuals or groups explore decisions that matter and provide a focus to sharpen updiscussion and balance and challenge intuition, however, it does not replace judgmentsor experience. Accordingly, many six sigma authors have proposed one or several toolsthat can be used into project selection, as shown in Table III.

Figure 3.Progression of perceptionon key criteria for sixsigma project selection

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Respondents were asked to select the tools used for project prioritisation out of eighttools identified in the literature. The results are shown in Figure 4. The most used toolsare cost-benefit analysis, Pareto chart, and cause-effect matrix. The rest of them such of Pareto priority index (PPI), un-weighted scoring models, theory of constrains (TOC)

and non-numerical models, are adopted by 12 to 16 per cent of respondents. Analytichierarchy process (AHP) is used only by 8 per cent of companies. The results alsoindicate that more than 70 per cent of the companies that answered the questionnaireemploy more than two tools for prioritising projects.

Post-project evaluationPost-project evaluation is beneficial to six sigma due to four main reasons (Adams et al.,2003): save time for next six sigma projects, identification of new projects, share the

Author Proposed methods or tools to prioritise six sigma projects

Larson (2003) Pareto analysisDe Feo and Barnard (2004) Reviewing data on potential projects against specific

criteria for project selection six sigmaAdams et al. (2003) Project ranking matrixKelly (2002) Project selection matrixPande et al. (2002) QFDBreyfogle et al. (2001) Project assessment matrixPyzdek (2000, 2003) PPI, AHP, QFD, TOC

Table III.Methods to prioritise six

sigma projects

Figure 4.Tools and methods to

prioritise six sigmaprojects


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success and gain project experience. Accordingly, in this survey, 96 per cent of thecompanies that answered the questionnaire and are implementing six sigma have fullyor partially applied post-project evaluations. A key part of post project evaluation isthe establishment of metrics to monitor the project against the criteria used to select

them in the first place. Over half of the organisations that answered the questionnaireuse net cost savings, defects per million opportunities (DPMO), cost of poor quality(COPQ) and cycle time as main metrics to evaluate and monitor project success, refer toFigure 5. These metrics are aligned with the criteria to select projects, i.e. customer andfinancial focus. Learning and design effectiveness are embraced lower than 10 per centof the companies implementing six sigma, which aligns with the criteria regarded asless important.

The results also show that manufacturing companies put more emphasis on CTQ’ssuch as Scrape rate, FTY, COPQ, or capability index, whereas service-based companiesdue to their intrinsic characteristics put more emphasis on critical-to-service (CTS’s)such as cycle time. Nevertheless, manufacturing and service organisations tend toadopt net cost saving as the main metric used to evaluate six sigma projects. On the

other hand, metrics such as employees learning and design effectiveness are adoptedby a small number of companies neither in manufacturing sector or service sector.

ConclusionsIn the quality field projects are often perceived as a way to breakthrough performance.

Juran and Gyrna (1970) state that breakthroughs are achieved project by project, and

Figure 5.Metrics used to evaluatesix sigma projects

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in no other way. Accordingly, six sigma is a statistical oriented project drivenapproach to process and product quality improvement. Since, projects are the meansby which six sigma converts quality improvements into bottom-line financial benefits,project selection is seen as a key to success. A national UK survey was carried out

aimed at investigating the current status of the selection of six sigma projects andidentifying the main criteria used for project selection. The results of this surveyindicate that:

. Most of the companies that answered the questionnaire adopt a hybrid,top-bottom and bottom-up, approach for the identification of six sigma projects.

. The main sources to identify six sigma projects are customers (60 per cent),employees (60 per cent), extension of other projects (48 per cent), benchmarking(44 per cent), waste (32 per cent), suppliers (24 per cent), and inspired bydevelopments on technology (20 per cent).

. Most of the companies (80 per cent) employ more than one tool to identifypotential projects, including brainstorming, CTQ tree, focus group, interviews,

customer visits, QFD and Kano analysis, among others.. It was found that the main criteria to select six sigma projects are customer

satisfaction, financial benefits, linkage to business strategy and top managementcommitment. Companies implementing six sigma for short period of time tend toput less emphasis in the linkage between projects and business strategy and inlearning and growth.

. The most used tools to prioritise projects are cost-benefit analysis, Pareto chart,and cause-effect matrix.

. 96 per cent of the companies that answered the questionnaire applied post-projectevaluations.

This study was carried out with some boundaries such as the number of companies,available resources and it is also limited to UK organsations. An important limitationof this paper is the respondent rate, however, the response rate is similar to othersurveys on six sigma. For example, a survey on the benefits of six sigma carried out byDusharme (2006) had a response rate of 10 per cent. Antony et al. (2005) had a responserate of around 14 per cent for a survey on the implementation of six sigma in SMEs.Nevertheless, it is recommended that further empirical studies should use a largersample sizes and greater geographical diversity in order to validate the results of thisstudy. Another area of future research should be to expand on this study and includemore variables affecting the selection of six sigma projects.

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Corresponding authorRicardo Banuelas can be contacted at: [email protected]


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Selection of six sigma projects

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