Good Enough Isn’t Good Enough Anymore

The Empire State Building in New York City, with its 103 stories, 73 elevators, 2,500,000 feet of electrical cable and 6,500 windows, was built in 405 days. The framework rose at a rate of four-and-a-half stories per week. That’s nearly a floor a day. Most impressive was that the project came in under budget and ahead of schedule. Today, it seems smaller-scale projects take longer than 410 days to complete, even having the technology available to do things faster than was possible 75 years ago. How did the project managers for the Empire State Building do it? Obviously, they had to have been the best project managers of the day. They applied the tenets of sound project management and used something beyond that. They used quality management concepts found in lean and Six Sigma.Lean has its origins in the teaching and writings of total quality management and just-in-time techniques, which espouse the idea of “delighting the customer through a continuous stream of value-adding activities.” The value stream defines the lean enterprise. The objectives of the lean enterprise are to identify and specify the value to the customer/consumer in all its products and services; to analyze and focus the value stream so that it does everything from product development and production to sales and service, so activities that don’t create value are removed; and to keep continuous flow to fulfill customer pull. From the time a customer need is recognized until it’s satisfied, the process and all its elements must add value for the value stream to be meaningful. The basic components of this lean system are waste elimination, continuous flow and customer pull.

Six Sigma refers to reduction of errors to six standard deviations from the mean value of a process output or task opportunities, or about one error in 300,000 opportunities. To put that into perspective, if you are fortunate enough to live through age 90, you would have one-third of one meal that would be defective. That’d be like getting cooked carrots that were served cold once in your entire lifetime. Simply put, Six Sigma is a philosophy of relentless efforts to continuously reduce process and product variation.

Today’s project managers have the skills to define scope, establish time estimates, provide detailed plans for task sequences, etc. They’re also skilled in budgeting, cost containment, constraint management and risk management. But do they have the tools and techniques to reduce variation and defects, and attack waste? Some project managers have these skills, others don’t. According to the project management body of knowledge (PMBOK®), control charts, cause-and-effect diagrams and design of experiments offer some help, but they’re only a few of the tools available to minimize variation. Conversely, Six Sigma offers histograms, capability studies, chi-square tests, T-tests, F-tests, analysis of variance (ANOVA), multivariant charts and scatter diagrams, just to mention a few. The PMBOK® doesn’t list value stream maps, 5-S, standard work, error-proofing, total productive maintenance, overall equipment effectiveness, TRIZ, kaizen or set-up time reductions. A project manager needs all of these tools and techniques and that’s where lean Six Sigma comes in.

Lean Six Sigma is just what the name would suggest: the marriage of lean principles and Six Sigma methodologies. The first principle of lean Six Sigma is to delight your customers with quality. The second principle says to improve process flow and speed. Lean Six Sigma emphasizes that speed is directly tied to excellence.

Are these skills really necessary?
Consider this: Forrester Research found 71 percent of respondents rated their offshore providers as achieving better quality and timeliness than their U.S. providers. That may be just a perception, but project managers need to understand that “good enough” isn’t good enough anymore. In fact, it hasn’t been good enough for the past decade as evidenced by massive outsourcing efforts, our shrinking manufacturing base and our service industry moving off shore. We need to change the outsourcing trend to “OURsourcing,” using the tools and techniques of lean and Six Sigma to regain our competitive edge.

Improvements need to be made in a triad consisting of quality, delivery and cost. Project managers must address defect rates for quality improvement and remove inefficiencies to get the job done faster. By adopting a philosophy of lean and Six Sigma, an enterprise can drastically reduce defects, deliver projects as much as 90 percent faster and reduce costs by 25 percent.

Suppose a project manager has to plan for building a bridge. The bridge needs to be completed in two years for $3 million or less. If the bridge takes 22 months to complete, it passes inspection and the final cost comes in under budget, the project would be deemed successful, right? Wrong. A project isn’t successful if a competitor could have completed the project more efficiently, with fewer defects and/or for less money—even though this project beat all of the projections. Let’s break down the 22 months it took to complete the bridge vs. the 24-month requirement. Through waste removal, perhaps the bridge could have been finished in half the time, or in a tenth of the time. Impossible? Consider this: NASCAR pit crews can top off the gas, wash the windshield and change all four tires faster than most can remove one hubcap.

Going back to the Empire State Building, it was erected in just 405 days so, to suggest that a relatively simple bridge requires 710 days (2 years) suggests a great deal of inefficiency. It should be noted that the Empire State Building project had such a good just-in-time inventory plan that many of the steel beams arrived from the forging plants to the building site too hot to touch with bare hands. That’s lean thinking. Lean and Six Sigma add the necessary tools and techniques to the project managers’ toolboxes so they can ask questions that are beyond what many project managers would ask. For example:

Was a value stream map developed prior to the bridge project to show information and material flow inefficiencies, areas of overproduction, inventory stockpiling, excessive motion and extra processing? Lean techniques use tools such as the value stream maps that help project managers to see waste that otherwise isn’t obvious.

Was a spaghetti diagram drawn to show the inefficiencies in the flow of iron and steel deliveries and cement truck routings? Were materials delivered just-in-time in a pull system fashion, or was costly inventory pushed onto the job site, sitting in skids for months? A spaghetti diagram is one more example of a lean Six Sigma tool that helps to show these inefficiencies.

Were time studies performed to help minimize the changeover processing (e.g., switching from a backhoe to a front-end loader to a plow or a crane, from one base position to another) to minimize the time waiting?

The project could’ve been finished more quickly and the cost of building the bridge could have also been drastically cut. Consider the costs associated with evaluating, inspecting, time spent deciding what to do with discrepant material, reworking, re-engineering, time wasted with trucks getting into position and machinery congestion. Add to that the nonvalue-added time associated with waiting, searching, sorting and stacking. Waste is evident when inventory is delivered too early or too late, or wherever there’s excessive motion. Lean and Six Sigma have the tools to minimize these wasteful activities.

In these wars on waste, variation and defects, the project manager needs to be able to answer tough questions—answers that lean and Six Sigma tools can provide. By adding lean and Six Sigma to a project manager’s toolbox, he or she is better equipped to ask the right questions, such as: How do you provide assurance that the bridge will be built right the first time? What is your plan for preventing defects? Is the process made mistake-proof using poka yoke designing? Are standard operating procedures established? If so, are the operating procedures consistently being followed by the operatives? How do you know? Are the processes for building the bridge in statistical control? How do you know? Is there a measurement system evaluation plan that assures that data collected is discriminate to detect variation, and that test results are repeatable and reproducible? Could the cement have been made stronger and more flexible? How do you know? Lean and Six Sigma are about asking questions and using the tools and techniques to get answers to those questions.

The project managers of today need lean and Six Sigma for balance. If asked, “Is the glass half full or half empty?” the project manager might say the glass is half full but it’s also half empty and the juice most likely is at the halfway point. The lean Six Sigma expert would probably say that the glass is twice as big as it needs to be, while the Six Sigma Black Belt would say, “There are 17 parts-per-million impurities in the liquid.” But the project manager who’s enlightened with lean and Six Sigma would say, “Quit wasting time with silly questions. It isn’t a matter of the fullness of the glass. It’s a matter of delivering a full glass of pure juice at the cheapest cost possible—quickly, before the competition beats us to the punch.”

Lean and Six Sigma have been successful in back offices, service industries, transactional processes and in enterprises that make tangible products. Lean Six Sigma has saved individual companies billions of dollars. If you’re not currently using Lean and Six Sigma, it’s time to get onboard, because “good enough” is no longer good enough.

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