This is a general question asked especially when Six Sigma approach is used for Improvement is what is supposed to be my improvement goal for Six Sigma Project. In cases where the project is taken up for Problem Solving, the goal setting is straight forward. In this case the goal is to solve the problem. (or Meet the Requirements)
However, it is very tough in case of Improvement Projects. Various methods are available for setting the goal. However, there is some pre work to be done in this case.
1. Collect all the metrics which are generated f
rom the process you want to improve, (Example – Delivery rate, Quality, Defects, Customer Satisfaction, Effort ……)
2. Prioritize and identify the Primary Metric. Primary could be anything where you can improve upon. (Start with what is important to customer)
3. Baseline the Primary Metric and its relation with the secondary metrics. (This is needed to know what will happen when your primary metric moves and optimize the goal setting.)
Now the billion dollar question ” How much we should set the target” “How much we can Improve” ” How much improvement we Need”. There are no standard set of rules for setting improvement goals. However, below are few guidelines.
As a minimum, the goal shall be set in such a way that the difference between the current performance and the goal is statistically significant.
The goal must be in line with the business expectations and the improvement shall be a breakthrough one instead of incremental one. a 5% improvement is incremental but 50% improvement is Breakthrough
The goal shall take you towards the benchmark for the same process performance. Ideally the benchmark need to be considered is the industry best practice.
The goal need to cover the gap between the entitlement and the current performance by atleast 70%. Entitlement is the performance which is expected for the investments already made or the best capability of the process internally.
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We have discussed the General Ideas and Ideas from Issues earlier. Here is another trigger for you to look into ideas for Six Sigma Projects by function. If you are new in the continual Improvement Journey, these various classifications help you project identification and selection. Classifying ideas for Six Sigma Projects by function will help you to ignite those who have less time to look at general issues. Few years back it was generally believed that the six sigma method is used for Manufacturing Industry is only. How ever, Many service and IT organizations have adopted this and saved tons of money. Even this method can be used to increase the process speed and lean out the process. You may take up the improvements in a step by step approach which can give you better clarity and improve the system. Project Selection Ideas By Function Six Sigma Project Ideas for Finance/Accounting function Reduce the time taken to close the accounting books (cycle time) Improve the forecast accuracy Spending control Reduce balance sheet risk Eliminate unstable customers and associated risks Improve processing of payment to vendors/suppliers Improve Days Sales Outstanding (DSO) — the average time taken by a company to collect payment from its customers Reduce payroll process cycle time Improve cash management processes Improve payment/collection processes Reduce electronic financial transaction costs Reduce the cycle time of reconciliation Reduce the procure to pay cycle Standardize the accrual and deferral processes Cycle time reduction in processing of Invoice generation Reduction of cycle time in Purchase order generation Six Sigma Project Ideas for Human Resources function Reduce the turn around time to hire an employee Reduce the time to process an insurance claim Improve employee on-boarding and orientation processes Reduce expenditures for recruiting firms Improve hit-rate for successful hiring Reduce Attrition Improve timeliness and the value of employee performance reviews Reduce absenteeism Improve training efficiency Improve employee satisfaction Identify and correct retention issues Six Sigma Project Ideas for Sales function Improve cross-sell opportunities Reduce time required to enter sales orders Reduce errors and rework associated with sales orders Reduce customer credit worthiness cycle time Reduce the number of “bad deals” that are processed Improve the cycle time of the entire sales order to cash process Increase repeat orders/customers Six Sigma Project Ideas for Shipping/Receiving function Improve on-time delivery of products to customers Improve on-time delivery of goods to our facility from vendors Improve documentation accuracy Reduce line downtime due to shipping/receiving Improve inventory control/rotation Improve inspection processes Reduce the space occupied by the inventory Now for some of the ideas by Industry. This section can be used by linking the ideas to specific industry Sis sigma Project Ideas for Information Technology Industry Reduce network/server/application downtime Improve process of logging-in to network from remote locations Improve system reliability/uptime Standardize computer loads for configuration and support productivity improvement Six Sigma Project Ideas for Product/Service Design industry Reduce time required to design a product or service Reduce errors in design Reduce production time Reduce testing time Optimize Inventory Six Sigma Project Ideas for Call CenterIndustry Increase/decrease (depending on your business needs) average talk time Reduce abandon calls Improve employee knowledge Reduce number of times customer is put on hold Reduce Call drops Improve resolution of queries You may start resolving problems and one at a time. do not attempt a great improvement at once. In case you have to then pilot the solution and deploy horizontally.