RESOURCE AND PROJECT SELECTION

Dr.R.Raju
Professor & Head
Department of Indl., Engg.,
Anna University,
Chennai 25.

RESOURCE
The people whoSELECTION
will be a part of the new infrastructure and
the high-potential projects they will work on- are the
important aspects for successful implementation of lean six
sigma.

The black belts are to be groomed to become leaders in the

organization.

Black belts represent a more significant investment than the

projects selected for implementation.

At the same time, it must be ensured that black belts and

other resources are delivering value.

The projects and the training have to be designed in such a

way that the projects are completed with very high efficiency.

SELECTION OF BLACK
BELTS

Black belts are the largest group of people in an organization who

are working on lean six sigma.

Black belts selection is the major action for the organization

which implements lean six sigma.

Some recommended criteria, in priority order include:

Team leadership skills.
Project management experience.
Problem-solving training and experience.
Communication skills.
Interest in a process view beyond his or her unit.
Ability to learn financial analysis (ROIC, NPV, etc.)
Computer and technical skills, ability to master tools.

SELECTION OF BLACK
The criteria need to be appropriately weighted-often,
BELTS
leadership and human skills have a higher weighting.

Plan for 10% - 20% fall out rate prior to certification.

The roles, responsibilities, interactions, and financial

results expected of a black belt must be articulated.

Candidates must understand the personal investment

they will be making in training, travel, and the usual
Long hours it takes to achieve the results.

Describe clearly how accepting the position will help

candidates propel their careers upward with in the
business.

BLACK BELT TRAINING

Five to six weeks of class room training ,

including one weeks of leadership training,

four weeks of lean six sigma and an optimal
week to go in to deeper detail on lean/six
sigma tools.
Expert coaching to increase the socialization
process and accelerate internalization
Individual testing to provide feedback on the
effectiveness of learning.
Application of new methods on real projects
so participants can internalize new skills.
Access to training materials, case studies, and
other resources through both printed and
electronics means.

CHAMPION TRAINING
The champions are the liaison between lean six

sigma program and the P&L management of the

company.
They will receive between four and eight weeks of
training in the first year of the program and may
assist with the training of others beyond this.
The champion must learn how to both manage the
new lean six sigma infrastructure and productively
interact with traditional line management.
There is a heavier emphasis on strategic issues
rather than tactical.
The champions focus on top-down analysis abilities
in order to better direct black belts at key
improvement needs.

CHAMPION TRAINING
Champions are trained thoroughly on application

of financial and NPV analysis.

Champions need to be trained to comprehend the
tools and techniques of lean six sigma, but only
to a depth sufficient to manage black belt teams
and know what results to demand.
The champions will attend all the six sigma tools
session along with the black belts, but in most
cases they can be adequately prepared one to
two weeks of lean six sigma DMAIC training.
Champions also attend the leadership
effectiveness course to enhance their
interpersonal capabilities.
A key element of effective champion training is to
ensure that they are capable of delivering of
awareness training to the broader organization.

PROJECT SELECTION
IDENTIFYING POTENTIAL PROJECTS
Project selection is the first and foremost
responsibility of the management team within a
company.
The role of LSS champion is to help guide them
through the selection process and its decision
making criteria and to educate them on the types
of projects that tend themselves to LSS solutions.
The management team of the business unit must
provide input on opportunities through the process.

Continued..
Supply chain accelerators can identify the time

traps, each of which can be addressed by one or

more LSS projects.
The ultimate project selection decisions are in the
hands of the P&L manager, group president or
CEO.
Projects that do not align with the business
strategy will not receive adequate management
attention or support to succeed.
Project identification and selection is a process by
which champions identify the key value streams
and develop projects within those value streams..

PROCESS FOR PROJECT

A good process will generate a healthy mix of
opportunities ; the challenge is to convert as many
IDENTIFICATION
of them into worthy projects as possible.
To compile initial list of ideas, we can use Top-down

and bottom up techniques in seeking out ideas

from every corner of the organization.
Top- down:
Idea generation and development start from
corporate priorities and a high level assessments
of the business and its value streams.
Bottom-up:
Idea generation from existing projects and
employees.

COMPARISON BETWEEN
TOP-DOWN AND BOTTOM
-UP
TOP DOWN

BOTTOM- UP

Intrinsically linked to strategy/

goals: yields a high NPV.

Good mix up of quick hits and

projects.

Involves a fresh eyes

approach, gets you outside
the departmental box by
design.

Allows a wide audience to

contribute.

New insight gained from a

fresh look at markets and
customers.

Self generating.

Requires a new diagnostic

process that champions must
learn, execute and educate
others on .

Bias towards what you already

know.

Requires a cross functional

team.

Tends to surface pet projects.

Typically not driven or supported

by data.

TOP DOWN PROJECT

IDENTIFICATION

The structure of top down project

identification combines traditional decision

making elements (creative thinking and
rating) with elements unique to LSS (assembly
potential contribution to process cycle
efficiency)

BALANCED SCORE-CARD FOR

PROJECT IDENTIFICATION

A.EXISTING STRATEGY
Examine your existing strategy and look for
LENS
high potential-NPV value streams or business
segments.
For the absence of strategy, understand
through interviews with the management
group.
Analyze strategy-keep it simple determine
current ROIC and the weighted average cost
of capital(WACC).
Conduct analysis between market
attractiveness and competitive position .

Continued

 Unattractive market destroys value-Attractive

market creates value .

Continued

The terms value creating and value destroying

can be summed up by asking whether sufficient
returns are generated by an investment (ROIC) to
compensate for the risk undertaken (WACC).
Within an unattractive market , executing a low
cost strategy can create shareholder value.
A is an unattractive segment . The company
may desire either to exit that business entirely or
to harvest its returns and invest them elsewhere.
Segment B is fairly attractive market and
perhaps benefit from more investment .

Continued.
The focus is usually placed on how to improve

cost competiveness of the current business or

shift into an adjacent market that is more
attractive .
Above analysis can identify the key value
streams within the business and help the
champions, the P&L managers, and the CEO
drive the direction of LSS implementation.
The analysis also indicate whether a segment
of business is worth retaining or devoting
resources.

B.THE FINANCIAL
Assessing financial
ANALYSIS
LENS:
is a two stage approach
-find the big buckets of money from the
financial statements
-Decide which of those we can reasonably
hope to influence.
Identify the largest value levers and then
assembly how much we can move each lever.

By examining the income statement, balance

sheet, and cash flow statements , we can

quickly isolate the highest impact line items.
(cost levers)
Impact of sales price on profitability(price
lever).
Determine the overall size of the opportunity
pools:
.

Continued
Size of lever x Percent improvement = Size of pool.
For example
Rs 50,00,000 in raw
materials x 5%reduction = Rs 2,50,000/potential
The estimates of improvement potential in each
value lever are based on a combination of statistical
data (e.g. from value stream map analysis) and
structural team discussions and judgment.
The result of this simplified financial analysis is to
establish a list of opportunities , each with its own
pool of potential savings.

Continued
Ensure that let us not tire ourselves out tyring to

move an immovable lever or waste time pulling

on lots of lower-value levers.
C.THE VOICE OF CUSTOMER LENS:
Listening to the voice of the customer plays a
central role in project identification and selection.
VOC analysis yields the greatest new insights
into the business and may surface project ideas
that radically impact the business.
Key buying factor analysis identify performance
gaps that would spawn projects-unfortunately it
consumes lot of time.
Another tool often used is QFD- Impractical for
initial project selection. Ok for maturity stage.

Continued..
Another approach-with in the company there

are numerous sources of customer preference

data: warranty logs, satisfaction surveys , call
centre logs, etc..
Everyone who interfaces with the customers
directly can contribute pieces to puzzle.
All of these data sources can be used to create
a list of customer requirements and establish
relative importance among them.
Then validate this information through
discussions with the P&L managers and
marketing people.
This quick analysis can be systematized by
plotting the data on kano chart.

KANO CHART

Continued

The first lesson to learn from a kano analysis is to

take care of customers expectations in sequence from

expected
Companies must understood the need to address
normal quality sufficiently before embarking on
search for new exciting quality.
Customer expectations change: quality that is first
exciting becomes normal and then expected.
Applying kano analysis to project identification allows
us to understand in a structural manner what
influences the customers behavior and buying
decisions.
Finally we can focus on projects that are most critical
influencers of customer satisfactory and retention.

D.THE PROCESS ANALYSIS

The final lens for top-down generation of project
ideas
LENS
is to look at core processes.
What a process is and is not? . The tendency is to

define process in functional terms such as

engineering or sales.
We must first abandon these functional definitions in
favor of descriptors that more closely portray what
the customer perceives(value stream concepts).
Identifying processes instead of functions is the first
step in applying a process lens.
The real goal is to identify the business processes
that
-are most critical to our success
-can be most readily improved by LSS tool sets

Continued

Survive by eliminating processes that destroy value,

then thrive by building processes that create value.
Processes that enhance or protect a franchise or a
differentiated product are the greatest value
creators in a business. They are the key value
streams.
We can determine whether a process is creating or
destroying value via value stream mapping.
We can also use process cycle efficiency as a good
indicator of whether a process is efficient or not.
Once identified, we can enhance the value of a
process via differentiation or by harvesting hidden
value.

BOTTOM-UP-PROJECT
IDENTIFICATION

Top-down project identification is always

worth it, because the project ideas are clearly
linked to strategic priorities.
Bottom up approaches are usually simpler to
understand and more accessible to people
throughout the organization.
Many of the projects that arise from a bottomup method will reflect projects that existed
before LSS.

Continued
There are two resource groups in the organization: Senior

management and the broader organization.

SELECTING IDEAS FROM SENIOR MANAGEMENT
Some existing projects will tend themselves better to the
DMAIC methodology than the prevailing approaches and
therefore be pulled into LSS .
The projects identified through bottom-up are typically
aimed at solving a specific problem, not contributing to an
important stream.
Management is also in a unique position to have a birds eye
view of business and can often contribute ideas on where to
link to solve the persistent ills of a company.
Canvassing the management groups with in the
organization will not only generate numerous ideas for
improvement projects but also ensure that organizational
commitment and buy in are widespread.

SELECITING IDEAS FROM

THE
BROADER
The detailed process knowledge of any company is
embedded at a much lower level than the
ORGANIZATION
management ranks, and many good ideas can

surface from the grass-roots level.

The problem is, the broader organization will not be
aware of the goals, methods, and constraints of the
not yet launched LSS programs and therefore may
not propose projects well suited to LSS.
For these reasons, the broader organization be
involved initially on an adhoc basis and once the
program is established, they can be effectively
tapped to augment the structured project
identification process.

SELECTION OF PROJECTS
As a result of both the top-down and bottom-

up approaches, several ideas are generated.

These ideas will take the form of high
potential NPV value streams , opportunities,
and projects largely will be undefined or
scraped.
Our task now is to isolate the projects
suitable for LSS implementation and to select
the most promising ones for further definition
and scoping.

Continued
STEP 1: convert opportunities into specific projects.
It is likely that some of the original ideas from the
four-lens diagnostic or bottom up approaches
describe opportunity areas rather than specific
projects.
Develop each opportunity into one or more projects.
Focused brainstorming exercises, often yield good
results.
STEP 2: Sort the ideas
Assemble a complete list of project ideas.
Keep the project descriptions short at this stage.

STEP 3 : Apply screening criteria

There are a number of valid screening criteria that can
be used to winnow our list of project ideas down to our
goal.
Depending on the initial priorities of the business, some
combination of the following benefit/effort criteria will
likely be used
BENEFITS:
EFFORTS:
Financial(NPV).
Resource requirements.
Customer satisfaction.
Duration of projects.
Potential to leverage.
Risks.
across the business.
Capital required.
Strategic fit (bottom up ideas).
Special skills\tools
required.

Continued.
Regardless of the exact criteria employed, it is

often useful to classify each project into high

medium and low for both benefit and effort .
Graph the results on a benefit/effort matrix.
Concentrate the efforts on the highestpotential projects.
STEP 4: Identifying the top candidates.
Ideally, at this point a number of high
benefit project ideas will leap.
Initially the project that require low effort may
be selected(quick hits).

CHECK LIST FOR PROJECT

Does this project address CTQ issues ?
SELECTION
Does this project address revenue growth?
Does this project address cost reduction?
Can it be completed within three to six

months?
Is there sufficient value creation at stake?
The obvious answer to all the above
questions is YES, for a LSS project.

METHODS OF SELECTING
Effective project selection is a key factor in
PROJECTS
determining the effectiveness of the lean six sigma
effort.
The projects must be selected based on a trade-off

decision comparing value delivered with effort

expended.
One of the most powerful tools for this purpose is the

benefit/effort graph

1. BENEFIT / EFFORT
GRAGH

2. PROCESS MAPPING
Activities
Sales forecast

Production

Material

process
Quality control
Supply chain
Stores and
despatch

planning
Material
procurement
Production
planning

CONSTRUCTING
PROCESS
Determine the MAP
Finalize the process
boundaries
List the steps
Sequence the steps
Draw appropriate
symbols
Draw process map
using a computer
Check for
completeness

map
Analyze the process
map to identify the
waste
Prepare a revised
process map
Calculate the
savings and publish

SYMBOLS USED IN PROCESS MAPPING

Symbol

Process
Start/End of activity

Activity
Decision

Delay
Document

3. Value Stream Mapping

Displaying potential projects provides an easy way to make first

cut at deciding which projects have the greatest potential benefit.

Value stream mapping is ideally best suited to select the highestimpact projects.

Value stream mapping allows the accurate identification of time

traps and the ultimate elimination of the biggest sources of
waste.

Project identification and selection is a process by which

champions identify the key value streams and develop projects
within those value streams selecting those projects that concrete
the most value for the amount of resources applied.

Value Stream Mapping

Value Stream Mapping (VSM) is a

visualization tool oriented to the Toyota

version of Lean Manufacturing (Toyota
Production System). It helps to understand
and streamline work processes using the
tools and techniques of Lean Manufacturing

The purpose of the value stream map is to

understand the value flow.

A VSM graphically shows the following

Each process or activity
Inventory or queues between steps
Setup times , cycle time, etc.
Time line for the whole value stream
Information flow from customer through the

production process
Picture of the complete process
Changes needed to be implemented

VALUE STREAM MAPPING

Identify the kinds of waste (20%) available in the process

using value stream mapping for eliminating or reducing
them.

The set of activities that convert customer needs into

delivered products and services is known as value stream.

Value stream mapping depicts the process steps that are

associated with turning a customer need into a delivered
product or service and indicates how much value each of
the steps adds to the product.

Any activity that creates a form, feature, or function of

value to the customer is termed value added; those that
dont are called non-value added.

VALUE STREAM MAPPING

Value stream mapping provides a clear understanding of the process

by:
Visualizing multiple process levels.
Highlighting waste and its resources
Making hidden decision points apparent.

Value stream map starts with a pencil-and-paper sketch of the process

to understand the flow of material and information needed to produce a
product or service.

The diagram visually presents the flow of product from customer to

supplier and presents both the current-state map and future-state
vision.

Value stream mapping typically classifies each activity by asking a

series of questions:

VALUE STREAM MAPPING

Customer value-added(CVA) questions:

Does the task add a form or feature to the

product or service?

Does the task enable a competitive advantage

price, faster delivery, fewer

defects)?

Would the customer be willing to pay extra or

the competition if he or she

(reduced
prefer us over

knew we were doing the task?

Business Value Added(BVA) Questions:

Is this task required by law or regulation?
Does this task reduce the financial risk of the

owner(s)?

Does this task support financial reporting

requirements?

Would the process break down if this task

were removed?

VALUE
STREAM
MAPPING

Non value-added (NAV) Questions:

Does the task include any of the following activities:
counting, handling, inspecting, transporting, moving,
delaying, storing, all rework loops, expediting, and
multiple

signatures?

In an improvement project, non-value added tasks

are attacked first. Business value added tasks are
challenged next, followed by customer value added
tasks.

GUIDELINES FOR VALUE

STREAM
The process MAP
only works defining and solving the
following problems
What are non-value added steps(rework, move,
count, etc)?
What are the time traps in priority order?
What improvement methods are required to end
time trap?
How much improvement is needed?
What is smaller batch size that can now be run?
What is the shorter delay time at both the workstation and the whole process?

Various Symbol used in Value Stream

Mapping

cell

Communicatio
n arrows

Customer/SUP
PLIER

FIFO

Data

INSPEC
T

INVENTORY

MRP

KAIZEN
(Continuous
Improvement
)

Operator

Kanban
(Post)

OTHERS

Load
Level

PITCH

Production
Control

PROCESS
PROCESS SHARED
DEDICATED

Production
Kanban

Raw Materials

Pull

Safety Stock

Push

Sequenced Pull

shipment

Truck

Signal
Kanban

Verbal

Supermar
ket

Withdrawal
Kanban

Present Value stream

mapping
STEPS:
1.Draw Customer, Supplier and Production

control icons.
2.Enter customer requirements.
3.Calculate daily production required.

STEPS (contd..)
4. Draw outbound shipping icon and truck with
delivery frequency
5. Draw inbound shipping icon, truck and
delivery frequency

STEPS (contd..)
6. Add process boxes, in sequence, left to right.
7. Add data boxes below.

STEPS (contd..)
8. Add communication arrows. Note methods

and frequencies
9. Obtain process attributes. Add to data boxes
10. Add operator symbols.

STEPS (contd..)
11. Add inventory locations and lands in days of

demand and graph at bottom.

12. Add push, pull and FIFO icons.
13. Add other useful information.
C/O time= Change over time

It is a non value added time required to

convert a setup for one product line to a set
up for another product line.

It is a time required to complete one

manufacturing process in the value stream.

14. Add working hours

15. Add cycle time and lead time
16. Calculate total cycle and lead time

Step 0
Review Present State Map and Transfer
Information
Some information remains unchanged
between the Present State map and possible
Future State maps. Transfer this information
such as customer requirements, supplier and
customer to the Future State map

Step 1
Calculate Takt Time
Takt timeis the average time between
production units necessary to meet customer
demand. We use the available time divided by
the required number of units from the
previous example.

Step 2
Identify Bottleneck Process
The bottleneck process is the operation with
the longest cycle time. In the example, this is
machining at 44 seconds. The bottleneck is
important because it: Determines total system
output. Becomes the primary scheduling point
A work balance chart (above) is helpful for
steps 2 and 3. Cycle time is plotted on the
vertical axis for each operation.

Step 3
Identify Lot Sizing/Setup Opportunities
Present lot size is 1000 pieces, about two day's
production. This requires at least 3-6 days finished
goods and prevents daily adjustments to mix or
demand.
If the lot size were simply cut, it would allow faster
response but additional setup time in machining would
use available time. Machining could not meet the
average customer requirements.
However, if a focusedsetup reduction is made on
machining and setup becomes 20-30 minutes, abatch
sizeof 500, or even 250 is feasible. The mapping team
established this as a goal, noted by aKaizenBurst.

Step 4
Identify Potential Workcells
The balance chart shows cycle time for each of the five process steps.
Machining and honing operations are closely balanced. Cycle times for
clean/deburr, inspection and packaging are quite short in comparison.
The very short cycle times for clean/deburr and packaging indicate low
utilization in a cell. However, inspection and packaging are manual
operations that require little more than a workbench and hand tools.
High equipment utilization is not critical.
Clean/deburr process is run on specialized equipment in a central area.
If clean/deburr can be scaled down as a manual or semi-manual
operation, it can go in the cell. This seems feasible and the team
accepts that, somehow, it will be done.
It appears that three operators can run the cell. This is not a precise
calculation. It only considers present cycle times and ignores setup.
Work cells are more involved than suggested here. However, our
purpose is not to finalize details but make reasonable guesses about the
general configuration. A Kaizen Burst identifies a need for more work.

Step 5
DetermineKanbanLocations
With a work cell for five processes, scheduling
between them becomes a trivial case. They will be
directly linked with continuous or small-batch flow.
Kanban, internal to the cell, is unnecessary or
becomes part of the detailed cell design.
Kanban does apply at two other locations:
Between cell and supplier
Between cell and customer
The detailed design of the kanban system is shown
as a Kaizen burst. Inventory levels are current best
estimates.

Step 6
Establish Scheduling Methods
Kanban and direct links now schedule all
operations short term. Both the workcell and the
supplier, however, need forecasts to plan staffing
and possible changes in inventory levels. The
map shows this monthly information flow.
Purchasing must arrange for payment. They
intend to do so with monthly blanket orders, also
shown.

Step 7
Calculate Lead and Cycle Time.
The final step in the Future State Map is to
complete the timeline at bottom, and calculate
Lead Time, Cycle Time and Work Time.
Results
In this example, the mapping team estimates a
Lead Time reduction of 85% and a productivity
increase of 25%. Inventory will decrease about
85%. Many additional, but unpredictable benefits
are also likely.