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The Intersection between Project Management and
The Intersection between Project Management and
The Intersection between Project Management and
The Intersection between Project Management and
The Intersection between Project Management and
The Intersection between Project Management and
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The Intersection between Project Management and

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  • 1. TECHNOLGY MANAGEMENT ASSOCIATES Healthcare The Intersection between Project Management and Six sigma C-2003, 2004. The information contained in this document is proprietary intellectual property of Technology Management Associates and other copyright holders. Author: Jay Ress, Principal - Technology Management Associates November 30, 2003 Introduction: The Intersection between Six sigma and Project Management Six sigma is moving beyond the Fortune 100, and beyond the large scale-manufacturing sector, to a growing array of healthcare and information technology companies. These new entrants in the six sigma sweepstakes are gambling that an aggressive and comprehensive quality program will score a trifecta of lower costs, greater profitability, and increased customer satisfaction. As new six sigma initiatives roll out, an obvious question area of interest is the intersection between six sigma and project management. The six sigma approach is noteworthy both for its’ very high quality standard -- 99.997% compliance -- and for its use of statistical analysis to both identify problem areas and to then monitor progress once solutions are put into effect. It is also noteworthy for the stunning financial results that have been reported for those companies who have successfully moved up the “sigma” scale and secured the corresponding quality improvements. Performance metrics and statistical analysis are featured in the six sigma approach, but look past the number crunching and one finds a common sense, practical approach to business. No matter how much effort one might put into metrics, at some point a plan must be developed and put into action. When we move into planning and execution, when we speak of quality management, when we seek improvement in the time - cost - scope paradigm that drives ROI, when we unify an organization toward the accomplishment of shared objectives, we are in the realm of project management. This essay explores the intersection of six sigma and classical project management, comparing the DMAIC method (as described by Thomas Pyzdek below) with the Project Management Institute Body of Knowledge. It also recommends strategies for project managers who find themselves working in a six sigma environment. Background: What is Six sigma? Six sigma uses a five-step model to attain its’ goal of 3.4 problems per million opportunities. The model is Define - Measure - Analyze - Improve - Control, or “DMAIC”. Thomas Pyzdek, a leading author and consultant in the field, introduces six sigma as follows: TECHNOLOGY MANAGEMENT ASSOCIATES www.tmgmt.net info@tmgmt.net (615) 269-9094
  • 2. The Intersection between Project Management and Six sigma C-2003, 2004. The information contained in this document is proprietary intellectual property of Technology Management Associates and other copyright holders. Page 2 of 2 Reproduced with permission from the author Copyright © 2000 by Thomas Pyzdek, all rights reserved “What is Six sigma?” “Six sigma is a rigorous, focused and highly effective implementation of proven quality principles and techniques. Incorporating elements from the work of many quality pioneers, six sigma aims for virtually error free business performance. Sigma, s, is a letter in the Greek alphabet used by statisticians to measure the variability in any process. A company's performance is measured by the sigma level of their business processes. Traditionally companies accepted three or four sigma performance levels as the norm, despite the fact that these processes created between 6,200 and 67,000 problems per million opportunities! The six sigma standard of 3.4 problems per million opportunities is a response to the increasing expectations of customers and the increased complexity of modern products and processes. If you're looking for new techniques, don't bother. Six sigma's magic isn't in statistical or high-tech razzle-dazzle. Six sigma relies on tried and true methods that have been around for decades. In fact, six sigma discards a great deal of the complexity that characterized Total Quality Management (TQM). By one expert's count, there were over 400 TQM tools and techniques. Six sigma takes a handful of proven methods and trains a small cadre of in-house technical leaders, known as six sigma Black Belts, to a high level of proficiency in the application of these techniques. To be sure, some of the methods used by Black Belts use are highly advanced; including the use of up-to-date computer technology. But the tools are applied within a simple performance improvement model known as DMAIC, or Define- Measure-Analyze-Improve-Control. DMAIC can be described as follows: D Define the goals of the improvement activity. At the top level the goals will be the strategic objectives of the organization, such as a higher ROI or market share. At the operations level, a goal might be to increase the throughput of a production department. At the project level goals might be to reduce the defect level and increase throughput. Apply data mining methods to identify potential improvement opportunities. M Measure the existing system. Establish valid and reliable metrics to help monitor progress towards the goal(s) defined at the previous step. Begin by determining the current baseline. Use exploratory and descriptive data analysis to help you understand the data. A Analyze the system to identify ways to eliminate the gap between the current performance of the system or process and the desired goal. Apply statistical tools to guide the analysis. I Improve the system. Be creative in finding new ways to do things better, cheaper, or faster. Use project management and other planning and management tools to implement the new approach. Use statistical methods to validate the improvement. C Control the new system. Institutionalize the improved system by modifying compensation and incentive systems, policies, procedures, MRP, budgets, operating instructions and other management systems. You may wish to utilize systems such as ISO 9000 to assure that documentation is correct.” Copyright © 2000 by Thomas Pyzdek, all rights reserved Six sigma and the PMI PMBOK The PMI Project Management Body of Knowledge (PMBOK) is a widely used standard that describes and delineates the field of project management. The PMBOK views quality management as a core process of project management, and states that quality “requires the participation of all members of the team, but it remains the responsibility of management...” It is therefore not surprising to find that many of the tools and terms used in the quality-obsessed six sigma method also appear in the PMBOK. In terms of vocabulary and focus, there is broad overlap between six sigma and project management. TECHNOLOGY MANAGEMENT ASSOCIATES www.tmgmt.net tmgmt@bellsouth.net (615) 269-9094 The entire contents of this document are proprietary and confidential.
  • 3. The Intersection between Project Management and Six sigma C-2003, 2004. The information contained in this document is proprietary intellectual property of Technology Management Associates and other copyright holders. Page 3 of 3 The PMBOK groups the processes of Quality Planning, Quality Assurance, and Quality Control to delineate the core process of Quality Management. This section of the PMBOK lays out high-level quality standards that are identical to those of six sigma, such as “fitness for use” and “customer satisfaction”. One also finds a preference for process control and quality audits instead of inspection, references to Total Quality Management, Continuous Improvement, Deming, plan-do-check-act, and ISO 9000 (all shared by both disciplines). There is also a broad overlap in analytic tools. The PMBOK employs cost/benefit analysis, benchmarking, system and process flowcharting, cause/effect diagrams, design of experiments, cost of quality, operational definitions, metrics, checklists, attribute sampling, variables sampling, special and random causes, tolerances and control limits, control charts, Pareto diagrams, statistical sampling and probability, trend analysis, process adjustments, earned value analysis and lessons learned. So, one might ask, with the PMBOK’s robust approach to quality, what is the need for six sigma? The answer is this: While project management employs quality as a means to fulfill well-defined project objectives, six sigma focuses the standard concepts and tools of quality management toward one single-minded purpose: improve compliance to 3.4 problems per million (one instance of non-compliance for every 294,118 opportunities). As such, six sigma represents a tightly focused quality movement that will naturally find expression in project management quality planning, quality assurance, and quality control. Veteran project managers often find that very little of their world changes when six sigma is introduced. Rather than a sea change, six sigma represents a more rigorous standard -- and an opportunity to flex one’s skills -- in the realm of quality management. Recommendations for Project Managers Project managers can expect to interact with any of the five six sigma steps. As efforts move from the analytical phases to the implementation (Improve and Control) phases, the intersection between six sigma and project management grows, and the potential contribution of the project manager increases. For each step of the D.M.A.I.C. process, this paper will highlight the interaction between six sigma and project management, and then make recommendations for project managers who are working in a six sigma environment. 1) Define the Goals of the Improvement Activity. Intersection Six sigma goal definition starts with the strategic level, and then moves through operational definitions to eventually be applied to specific projects. At this goal definition stage (prior to implementation), the project manager’s main focus is to understand the goals of the improvement activity and to make sure they are clearly defined in the context of the specific project. Keep in mind that, whether they have had formal six sigma training or not, project managers will be asked to align project activities with the expectations of six sigma sponsors. Recommendation The project manager can bring an element of realism to defining the goals of the improvement activity, which will translate into more attainable project objectives later on. Project managers should look for opportunities to collaborate with six sigma champions, especially to verify that six sigma quality targets are clearly expressed in the project charter and in the quality management plan. This should include a careful TECHNOLOGY MANAGEMENT ASSOCIATES www.tmgmt.net tmgmt@bellsouth.net (615) 269-9094 The entire contents of this document are proprietary and confidential.
  • 4. The Intersection between Project Management and Six sigma C-2003, 2004. The information contained in this document is proprietary intellectual property of Technology Management Associates and other copyright holders. Page 4 of 4 assessment of project deliverables, and the quality standards that will apply, focusing on issues of time, resources, logistics, dependencies, and cost that pertain to the quality process. 2) Measure the Existing System. Intersection Six sigma roots system improvement decisions in hard data, then takes practical steps to implement the selected improvements, and then evaluates progress with more hard data. The “system” may initially be defined as a macro-level process or initiative, but eventually it will boil down to specific projects. Enter the project manager, who welcomes reliable metrics for their contribution to more accurate and effective planning, execution, and control. Recommendation Project managers should be aware of the six sigma metrics that shape the project charter, influence the quality management plan, define quality control, and determine project acceptance. It is less important to understand the details of the methods applied. Instead, the project manager should focus on the interpretation that is applied to the data, in order to understand how metrics will be applied to project performance. Without getting too deeply into the statistical aspects, one can develop an understanding of the relevant six sigma metrics that define success, and manage accordingly. 3) Analyze the System to Identify Ways to Attain the Desired Goal Intersection Six sigma draws upon a powerful analytical toolbox to identify the gap between quality targets and current performance. The six sigma black belt will probably take the lead in data gathering and statistical analysis, but project managers are often called upon to assist with creating the action plan that is intended to reduce the “quality gap”. Recommendation First, project managers should be conversant with the results of system analysis, and should be involved in planning that flows from that analysis. Then, when appropriate, project managers should team up with six sigma resources to periodically analyze the project’s progress toward eliminating the “quality gap”. There may be important adjustments to the project plan or the quality management plan that will be indicated by the analysis, or there may be statistical validation of the path the project is on. Project managers need not relegate themselves to the sideline when a six sigma champion steps into the planning process or evaluates project performance. At a minimum, the project manager can be a knowledge resource that contributes to the generation of more complete, and better understood, data. 4) Improve the System Intersection When one speaks of doing things “cheaper, better, or faster”, that is the language of project management. Project managers are often the lynchpin, the essential interface through which six sigma plans and objectives are realized. Interdependence between six sigma and project management in this phase is deep: Realization of six sigma goals will largely hinge on the project manager’s performance, not only in the pursuit of six sigma objectives but in the larger context of overall management of the project. TECHNOLOGY MANAGEMENT ASSOCIATES www.tmgmt.net tmgmt@bellsouth.net (615) 269-9094 The entire contents of this document are proprietary and confidential.
  • 5. The Intersection between Project Management and Six sigma C-2003, 2004. The information contained in this document is proprietary intellectual property of Technology Management Associates and other copyright holders. Page 5 of 5 Recommendation The recommendations in preceding phases lay the groundwork for the project manager to secure the real- world improvements envisioned in this phase. It is the project manager’s first responsibility to understand the six sigma elements of his or her project, and to then make sure that the controlling quality documents (project charter, quality management plan, quality assurance plan, quality control procedures, customer acceptance requirements) reflect these elements. With this framework in place, all concerned parties should be aware that statistics and plans are secondary to the project manager’s ability to make things happen. As Pyzdek states: “Use project management and other planning and management tools to implement the new approach.” This means that best practices in project management should be fully leveraged by the project manager in pursuit of six sigma objectives. 5) Control the New System Intersection As improved processes are put in place, functional managers are encouraged to adopt them. Employees are trained, supported and given incentives to make adjustments. Responding to improvements, a new organizational structure evolves. “The repeated, disciplined application of the master strategy on project after project, is what drives...increased profit margins and impressive return on investment...” (Harold Kerzner, PhD “Project Management: A Systems Approach to Planning, Scheduling and Controlling” 7th edition, John Wiley and Sons, New York) Recommendation There are two primary ways that project managers help institutionalize improvements. The first comes directly from the PMBOK, which emphasizes the importance of documenting “lessons learned” for the benefit of future projects and the organization at large. The project manager is tasked with spearheading the lessons learned process (usually with major team involvement). As such, project managers should be prepared to play a central role in documenting successful six sigma initiatives and moving them into the core policies, procedures, and processes of the organization. Second, as project managers grow and thrive in the six sigma environment, they will take ownership of the success. They will advocate the new processes and find ways to motivate compliance on the part of project stakeholders. The result is that the internal six sigma movement penetrates deeper and gains reinforcement as project managers move up the learning curve and find more innovative ways to pursue six sigma improvements. Summary Selection for six sigma training is a mark of distinction, and is particularly valuable for project managers who are asked for the first time to achieve results in a six sigma environment. However, project managers do not require advanced training to be proactive in pursuing six sigma objectives. We have shown the broad and sometimes deep intersection between six sigma and classical project management. With this in mind, project managers can be expected to actively participate in the six sigma movement, through the course of their regular duties and responsibilities. It is a win-win-win-win situation that benefits six sigma champions, project managers, customers, and the organization as a whole. TECHNOLOGY MANAGEMENT ASSOCIATES www.tmgmt.net tmgmt@bellsouth.net (615) 269-9094 The entire contents of this document are proprietary and confidential.
  • 6. The Intersection between Project Management and Six sigma C-2003, 2004. The information contained in this document is proprietary intellectual property of Technology Management Associates and other copyright holders. Page 6 of 6 There is another benefit for project mangers who participate in the six sigma process: Project results will correspond more closely to applicable performance metrics, increasing the chances of recognition for a job well done. "Our basic nature is to act, and not be acted upon.” Steven Covey Communication “…provides the critical links among people, ideas, and information that are necessary for success…” Project Management Institute Body of Knowledge TECHNOLOGY MANAGEMENT ASSOCIATES www.tmgmt.net tmgmt@bellsouth.net (615) 269-9094 The entire contents of this document are proprietary and confidential.

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