How do you calculate the benefits of a Six Sigma Project?

These are the notes from March 12th (2009) Cincinnati User Group Meeting in where 22 members broke out into 5 groups and discussed "Calculating the benefits of a Six Sigma Project". We then reconvened and came up with the following notes....

Project charter needs to be created with business case then:
· justify by the urgency,
· justify the cost of the project

Categories in which to look for justification:
· Defect reduction (cost of reduction * delta of defects)
· Cost of rework
· Waste reduction
· Efficiency gain
· Safety
· Regulatory requirements
· Cost of doing nothing vs cost of project
· Resources needed
· Expertise available
· Complexity of the project
· Likelihood of success
· **Urgency (what kind of lead time do we have to address this issue – is the problem big for small)
-- Market conditions, regulations, 1st to market, driven by VOC

Then --
** figure out how to tie to the bottom line
** tie to... measure success of which you’re in control


Other notes (on flip board)

Create your baseline of today
Develop category of the benefit
Anything intangible, tie back to the tangible.
Don’t measure beyond of what you can control (author's note: this was a recurring thought, only measure what is within your control scope)

Benefits – save money, risk, revenue
Hard dollars

Soft dollars
Capacity
Competitive advantage

Customer Satisfaction
Reputation (i.e. stay away from WSJ - Sting test for financial MKT)
Quality compliance
Time to market
Synergy (Padu)
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The Cincinnati User Group meets the second Thursday of every month at the ISSSC offices in the Blue Ash area. For more information, please visit: http://www.isssc3.com/cincinnati_six_sigma_user_group.asp