The Lean Six Sigma Guide to Doing More With Less: Cut Costs, Reduce Waste, and Lower Your Overhead

Chapter 12. Create a Pipeline of Cost Improvement Projects

The Secret to Protecting the Heart of Your Business

With Claudio Noriega, Pam Altizer, and Sean Simoes

When a senior executive in a division of a large Fortune 500 office/consumer products company was asked how they had been selecting Lean Six Sigma projects for the past three years, he said it was "by committee," but couldn't provide any specifics. In fact, the division staff wasn't sure how it was done. People picked pet projects (not considering potential return) and were very risk-averse. "We measure our deployment based on the number of events/projects, not on dollar values," admitted the executive. When pushed further, it seemed that the focus on quantity of projects, instead of quality, came out of the company's need to find a project for all of its Green Belts.

The situation had once been marginally better. The executive went on to say, "Originally, financial needs drove the project selection. Since projects are championed at the site level, and since the plant manager controls the Black Belt resources, we let them choose which projects to work on."

Projects took anywhere from four to nine months to complete in this company. And management did launch another project each time one was completed, to keep the pipeline filled; but the metrics they tracked were very narrow. "The pros of focusing only on the site metrics meant we were attacking significant profitability issues," said the executive. "But we lost sight of payback ...