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How to Write a Six Sigma Business Case
You need to create a business case for any Lean Six Sigma application that you are considering the fundamental elements in technology tools, techniques, and solutions. The business case will help you characterize and describe the problems, as well as estimate the value of improvement initiatives. You are not looking to define the project at this stage but to determine its value.
Many managers are aware of the benefits of Six Sigma, but they don’t know how to present this information to their senior management. There are a number of proven steps that can be used to convince management of the benefits of Six Sigma. These are the steps pioneering quality professionals took to successfully sell management on the Six Sigma methodology and ultimately deploy an effective Six Sigma program.
Benchmarking
It is important to show the fundamental elements of Lean Six Sigma deployments in other organizations. If possible, focus on organizations of similar size within the same sector. It is important to demonstrate the performance improvement that can be achieved within a year or two of deployment. There are many success stories in quality management magazines or quality Internet sites. You can also find many examples by using a search engine for online or library periodicals. Find out what made the application of Lean Six Sigma successful for these companies, and then look for examples of messages that were gleaned from executive research in order to align your message with current viewpoints.
The success of Six Sigma has been proven by leading consulting firms through many years of Six Sigma launches. The factors are true leadership, a data-driven culture, proof-of-concept through a pilot project, and integration into the business environment. Refer to the articles that contain success stories for examples of these key factors. These critical factors should be a key takeaway from the meeting.
Generate a list of possible business cases
A business-case-writing exercise can be a very eye-opening, and even exhilarating, experience. Use 15 to 20 sticky notes to complete the template.
It is not necessary to describe a problem in detail. Details are added when you start the Measure phase in the DMAIC method. You’re now describing the business problem.
- Returns that are excessively high
- High receivables levels
- Customer sales orders are not being responded to
- Cost and yields of non-competitive products
Based on the information or knowledge that you had at the time, make your best estimation of the financial benefits from the improvements. To begin with, get an approximate number.
Here is the structure of a business case statement. You can use it as a model for your organization.
Our company’s (insert type) performance in the (name specific areas) area doesn’t meet (define goal, targets, or any other measure). This is causing us (name type) problems which are costing $ (list amount) per (insert period of time).
Here are some examples.
- Our accounts payable performance in the financial invoicing department is not meeting our goal of 47 outstanding days. This is causing budget and cash flow issues that cost us up to 4 million each year.
Each member of your group should brainstorm in silence. Ask them to think of as many case ideas as they can, and write the titles of the cases on sticky notes. Each business case written is an idea that defines a problem area. Once a member of the team has exhausted all possible ideas, they stick these notes to the wall. Each team member performs the same action.
Select the Business Case
The next step after you have drafted your business case candidate statements is to choose the one that will be the basis of your Lean Six Sigma project application in technology tools, techniques, and solutions. Sort the candidates in iterations, each team member reading the business case statements and moving them to common clusters. You can move ideas between clusters.
You will usually see five to ten clusters of problems. The team leader should write titles for each cluster, like “warranty returns,” or “accounts payable,” etc. Some ideas may be repeated, but this is okay. It shows the strength of a particular idea.
Your team will now be able to add more information and details to each of the five to ten problem areas. If necessary, they can even redefine certain categories to make the ideas more actionable. Then, determine the person who is most likely to be in charge of each area. This step is quick because the group usually makes the decision, and the choice of the person responsible for each area is obvious.
This is a fantastic way to build a platform of shared knowledge and collaboration, leading to widespread participation in improvement activities.
This exercise is based on the Six Sigma tool, affinity diagram. This modified technique of brainstorming has the benefit of allowing all team members to contribute without inhibition. This technique also encourages the emergence of natural groupings of ideas.
The fundamental elements of Lean Six Sigma application give you a team of experts and valuable data to help develop an improvement strategy. You have the knowledge of the most important improvements to make, an understanding of the types and scope of improvements that are needed, know who is responsible for each improvement, and a good sense of how much value can be generated by addressing problems effectively.
This process will help you define specific projects that can solve large problems. Now you’re ready to move on to the Define phase.
Deployment plan
Presenting a deployment strategy is to demonstrate the scope and timing of an undertaking. Include a stairway approach to deployment in order to address concerns over resource and training costs. This method uses tollgates for executive approval of the deployment before it is rolled out to a large group of employees. First, select a pilot project that involves one employee with an external consultant (Master Black Belt) or a Master Black Belt. The next step, if the project is successful, is Black Belt project management and training for a pilot team. This logic is repeated until 10 percent of employees in each functional area are trained as Black Belts, and 100 percent as Green Belts. The scalability of this system allows for the internal training of experienced Black Belts into Master Black Belts. This reduces the cost and needs for costly consultant-based training. This can be presented in a timeline of one page that shows the two-year anticipated benefits, goals for training, projected project savings, and the decreasing need for external consultants. Highlight a continuous line to represent ongoing executive support.
Pilot Project Idea
It is also important to connect the project concept to a “hot topic” that is known to the executives when selecting and presenting the idea for the pilot project. If you address a current challenge of your company, it will pique their interest. Be careful not to promise “world peace”. A project should have a small scope that allows for a real, measurable, and sustainable improvement in a realistic timeline.
The overview of the pilot outlines both the resources needed and the evaluation process. Review the objectives (improvement of a hot topic) and scope (one main contributor to poor performance). Review the resources required, and recommend an experienced employee who is quality-driven for Black Belt Training. Next, outline the expected needs for external consulting (a Master Black Belt), along with a range of costs. The next step would be to look at the timeline for the pilot project. This will help you understand the Master Black Belt cost over time, as well as the training and project supervision. The timeline should be based on the DMAIC steps, with signoff tollgates for each step to ensure that it passes both corporate and the fundamental elements of Lean Six Sigma business case application in technology tools, techniques, and solutions. The final evaluation is conducted a few weeks after the project has been completed to ensure that the improvements are sustained in accordance with the control plan implemented by the project.
Are you working on your Six Sigma Business Case?
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