Six Sigma/PM Integration Rules of Engagement

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1 Six Sigma/PM Integration Rules of Engagement Prepared By: Dr. Abhay V. Trivedi, Ph.D., PMP, CSSBB, PMI-RMP Phone: Dr. Trivedi and Associates October 20, 2011 Because Performance Matters

implementing technology solutions in multiple industries: automotive, oil & gas, transportation, consumer, electronics and manufacturing, government, banking and services.

2 Dr. Abhay Trivedi - Credentials Dr. Trivedi is a project management and systems engineering consultant with over 20 years of experience assessing project management needs for complex businesses, evaluating alternatives, and implementing technology solutions in multiple industries: automotive, oil & gas, transportation, consumer, electronics and manufacturing, government, banking and services. His clients have included BP, Xerox, BMW/MG Rover, Visteon, Ford, Intel, Siemens, ABB, and Motorola. He has the unique ability to combine multiple technologies and philosophies to implement cost reduction strategies for large corporations. Over the years Dr. Trivedi has also trained more than a 1000 senior project managers on obtaining certifications including PMP, RMP, and Six Sigma Green Belt and Black Belt. He is PMP certified by PMI; RMP certified by PMI; Certified Six Sigma Black Belt and holds a Professional Logistics/Supply Chain Certification from The Logistics Institute at Georgia Institute of Technology. Dr. Trivedi has also accomplished many awards including the SME s Educator of the Year. In addition he is a NASA Summer Research Fellow and Oak Ridge National Laboratories Visiting Scientist. 5 Because Performance Matters

3 Dilbert on Six Sigma

4 The Changing Project Management Scenario Today 72% projects fail Project profitability is low (ROI) Project managers are under pressure High degree of expectations Successfully manage Change Significant desire for Certified Project Managers New requirements -- Earned Value Management, Risk Management, Agile Scrum, Lean Six Sigma Skills in Program/Portfolio Management Tools

5 Lets look at some statistics 60% of the Global IT decision-makers ranked the project manager job role as critical What happened with the remaining 40%? 72% of all Projects fail to meet the objectives Should the team define the objectives? Many managers prefer transparency and awareness over hiding information No wonder we have an ethics problem Cost reduction projects should be accomplished with minimum personnel Yes it should be!!! Dr. Trivedi - All Rights Reserved

6 Top Reasons for Project Failure Inadequately trained and/or inexperienced project managers Failure to set and manage expectations Poor leadership at any and all levels Failure to adequately identify, document and track requirements Poor plans and planning processes Poor effort estimation Cultural and ethical misalignment Misalignment between the project team and the business or other organization it serves Inadequate or misused methods Inadequate communication, including progress tracking and reporting Author: Frank Winters retired PM after 40 years in IT industry

7 Translation Don t hire dummies Don t hire dummies specifically if you are a dummy Don t copy job requirements from the DICE advertisements Provide PMs with a case study to solve Don t threaten PMs with the 10% unemployment scenario they will leave Don t lead, just manage If the PM has experience with MS Project 98 transfer them to the PMO Don t hire PMs with a below proficient score on ethics on their PMP exam

8 The Decade of the Customer Old Model Cost + Profit = Selling Price New Model Selling Price = Customer s Wish What does this mean? Built in Efficiency Out of the box thinking Global reach Culture Adjustment Systems Integration New Technology New Processes

10 The New Dilemma Being politically correct Can t fire Can t not fire Can t outsource Can t not outsource Can t respect loyalty Can t not respect loyalty Can t respect long term employee commitment Can t not respect long term employee commitment Can t not forge partnerships Can t forge partnerships Can t change the culture Can t not change the culture

11 The New Buzz Words Earned Value Management Capital Reengineering Practical Innovation Continuous Effortless Change Selective Competitiveness Rule Based Leadership Voice of the Instance Experienced Interpretation Need Based Knowledge Highly Paid Underachiever

12 Dilbert on Project Management

13 Generic Product Development Process Product Portfolio and Pipeline Management Company/ Product Strategy Voice of the Marketplace Innovation Engine Technology Bookshelf Concurrent Applications Development and Engineering Voice of the Customer Voice of the Supplier Continuous Improvement

14 Benchmarking Implementing successful programs also can be a result of benchmarking processes and other attributes with the best in class. The following is a broader classification of benchmarking: Process Benchmarking: Works to implement the most effective work processes and operating systems. Performance Benchmarking: Generally used for product and service comparisons amongst peers. Project Benchmarking: Used for innovation in planning, execution and control of projects. Strategic Benchmarking: Benchmarking across multiple industries. Out of the box thinking to capture the very best out there.

15 Project Management Hierarchy Deliverables Stages/ Milestones (When) Artifact (What) Tasks (How) Resources (Who)

16 Typical Business Metrics Reduction in Time to Market (50%) Increase In Engineering Productivity (2.5x) Reduction in Product Development Costs (30%) Improvement in Product Quality (40% less COQ) Increased on-time Customer Deliveries (50%) Implement a Global Product Development Process Establish a Systems Engineering Capability

17 Defining Major Metrics What are Project Metrics? Project metrics are measurable indicators used to track the progress of the project versus some subset of the objectives and requirements outlined in the project scope. Within a project Metrics generally relate to Timing Cost Resources Risk Quality Business Level Metrics Financial, Employee Satisfaction, Growth Operations Level Metrics Cost, Cycle Time, Effectiveness, Efficiency Process Metrics Measurement data for people, machines, methods

18 The DMAIC Six Sigma process breakdown Define Measure Analyze Improve Control Lead Problem Lead Parameters Lead Issues Lead Processes Lead Problems Customer Demands Process Capability Motivation 18

Role of PM in Six Sigma Implementation Planning -

Execution & Control - Preventive Strategies - Roles

Value Market Based Cost Project Scope - Vision of

19 Role of PM in Six Sigma Implementation Planning - Voice of the Customer - Goal centered objectives Execution & Control - Preventive Strategies - Roles and Responsibilities Exceptional Quality Exceeding Value Market Based Cost Project Scope - Vision of Perfection - Team Buy In Review and Sign Off - Conformance - CQI Policy

20 Quality Function Deployment (QFD) An Important tool to capture the stated and unstated needs of the customer How many of you use this? The QFD Matrix Template Tip: A brainstorming technique Can also be an important tool to Generate ideas and come up with Solutions as a team effort 20

21 Product or Service Impacted Expected Project Savings ($) Black Belt or Green Belt Business Unit Champion Phone Number for Belt Master Black Belt for Belt Start Date Target Completion Date Element Description Team Charter 1. Process: The process in which opportunity exists. 2. Project Description: what is the Practical Problem Problem and goal statement (project s purpose) 3. Objective: Project Metrics Baseline GOAL The Statistical Problem - the measurable variable(s 4. Business Cases: Expected financial improvement, or other justification. 5. Team members: Names and roles of team members? SIGMA DPMO COPQ 6. Project Scope: Which part of the process will be investigated and excluded. 7. Benefit to External Customers: Who are the final customers, what are their key measures, and what benefits will they see? 8. Schedule: Give the key milestones/dates. Project Start M- Measurement M Completion A- Analysis A Completion I- Improvement I Completion C- Control C Completion Project Completion 9. Support Required: Will any special capabilities, hardware, trials, etc be needed?

Getting to the To-Be Process Map extended

Performance: Goals and Actual As-Is 70% of

22 Getting to the To-Be Process Map extended environment and select process It s Hard for an Insider to Challenge the System Model As-Is Process Challenge The Easy Part Define Performance: Goals and Actual As-Is 70% of the Work Define To-Be Process Plan and Do Implementation

23 Process Capability Process Capability LSL ± 6s USL USL

24 Process shift over time by 1.5 σ m T 3.4 ppm LSL USL 4.5s

25 Understanding the Flow How Does It Work? Program Manager Product Development Process Project Management Tools Team Leadership Honor the process Worship the schedule The power of many as one establishes discipline uses best practices leverages prior experience promotes corporate learning documents lessons learned communicates to all parties

27 Pareto Priority Index Example Project Saving Prob success Cost Time to Complete PPI PO Cycle Time $220k 90% $5k 3.5 months 11.3 Shipping Damage $400k 70% $9k 6 months 5.2 Design Change $770k 50% $30k 10 months 1.28

29 Cost of Quality (COQ)

30 140% 120% 100% 80% 60% 40% 20% 0% Project Planning Project Definition & Approach Deliverable Decomposition Logic Network Definition Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Resource Loading and Plan Tuning Week 13 Week 14 Week 15 Week 16 Week 17 Week 18 Week 19 Week 20 Week 21 Week 22 Risk Plan Development Core Processes Quality Planning Communications Planning Organizational Planning Facilitating Processes Procurement Planning

Project Management V Model Corporate Knowledge

Requirement s Project Assumptions Definition /

Target Setting and Timing Cascade Customer

Feasibility Feedback Project Goals System Plan

Milestones & Status Reports Technology Roadmaps

Planning Project Goals Subsystem Plan Execution

Setting and Timing Cascade Feasibility Feedback

Planning Templates Component Project Planning

31 Project Management V Model Corporate Knowledge Lessons Learned Product Roadmaps Customer Requirement s Project Assumptions Definition / Translation System Project Planning Attribute Target Setting and Timing Cascade Customer Focused Customer Experience & Feedback Feasibility Feedback Project Goals System Plan Execution Customer Satisfaction Integrate Milestones & Status Reports Technology Roadmaps Resource & Facility Planning Subsystem Project Planning Project Goals Subsystem Plan Execution Product Development Process Attribute Target Setting and Timing Cascade Feasibility Feedback Integrate Milestones & Status Reports Generic Planning Templates Component Project Planning Component Plan Execution Note: Applies to Functional and Modular Systems

32 Mapping of PM Phases to Concept Development Process Idea Generator Program Planning Review Decision on Customer Readiness Decision on Implementation Readiness VOC Technology Assessment Concept Gate 1 Evaluation Gate 2 Product Implementation Gate 3 VOS Bookshelf PM Team Set-Up Roles & Responsibilities Alternative Approaches Deliverable Decomposition Risk Plan Development Resource Loading Participants & Roles Go/No Go Decisions Overall Change Control - Cost Control - Schedule Control Performance Evaluation Project Profitability PM Team Set-Up Roles & Responsibilities Alternative Approaches Deliverable Decomposition Risk Plan Development Resource Loading Participants & Roles Go/No Go Decisions Overall Change Control - Cost Control - Schedule Control Performance Evaluation Project Profitability PM Team Set-Up Roles & Responsibilities Alternative Approaches Deliverable Decomposition Risk Plan Development Resource Loading Participants & Roles Go/No Go Decisions Overall Change Control - Cost Control - Schedule Control Performance Evaluation Project Profitability Critical PM Activities

33 Process - Project Planning Cycle Jack Star Project Manager Project Sponsor PROJECT INITIATION PHASE Initiate Project Build Execution Team PROJECT PLANNING PHASE PMO or Resource Managers Assign Real Resources Generic Resource Assignments Resource Assignments PMO Plan_name.mpp Create Execution WBS Execution Tasks Plan_name.mpp Project Manager Create New Project Plan from Template Phase Transition Assign Project Manager Resource/Task Assignment Execute Planning Tasks Plan Updates Plan Updates Execute Project Manager Next Phase Resource Assignments Plan_name.mpp Project Manager Assign Real Resources Create Initiation WBS Initiation Tasks Plan_name.mpp PMO or Resource Managers Assign Initiation Tasks Resource Assignments Build Planning Team Generic Resource Assignments Execute Initiation Tasks Plan Updates Plan_name.mpp Plan_name.mpp Phase is Baselined Phase Transition Create Planning WBS Dr. Trivedi - All Rights Reserved Planning Tasks RESOURCE ASSIGNMENT WORKFLOW

34 Process - Project Execution Cycle Jack Star Project Manager PROJECT EXECUTION PHASE Project Manager Execution Optimization Activity Project Manager Plan_name.mpp Publish Plan & Assignments Plan_name.mpp Baseline Track Progress NO Team Members Schedule Variance (KPI) Implement Filters Budget Variance (KPI) Analyze Schedule Analyze Resources Accept? YES Republish Plan On Target? YES NO Overload? NO YES Update Tasks Re- Scheduling Load Leveling Submit Time Sheet PMO or Resource Managers Critical Tasks Non-Critical Tasks Task Splits Success? NO NO Approve? Execution Optimization Activity PMO or Resource Managers Critical Tasks Resource Substitution External Resources Project Manager Baseline Revision? NO Approve? YES Update Tasks in Project Professional YES Set Revised Baseline Republish Plan Plan_name.mpp Dr. Trivedi - All Rights Reserved

35 Process - Project Update Cycle Jack Star Project Manager PROJECT EXECUTION PHASE Project Manager DAY 1 Week 1 Publish Plan & Assignments Plan_name.mpp NO Team Members Accept? Execution Optimization Activity YES Update Tasks Submit Time Sheet Monday Week 2 NO PMO or Resource Managers Approve? Update Tasks in Project Professional Friday Week 2 Wednesday Week 2 Project Manager YES Resource Manager Meeting Thursday Week 2 Approve? Dr. Trivedi - All Rights Reserved

36 Some of our clients Team Soaring Eagle We are delighted to be judged by the company we keep! 8 Because Performance Matters

PMO QUICK TIP GUIDE FOR ESTABLISHING, SUSTAINING, AND ADVANCING YOUR PMO. Quick Tip Guide compliments of PMO Symposium San Diego, California, USA

PMO QUICK TIP GUIDE FOR ESTABLISHING, SUSTAINING, AND ADVANCING YOUR PMO Quick Tip Guide compliments of PMO Symposium San Diego, California, USA 1 ESTABLISH A NEW PMO At some stage in your journey as a