Integration of Six Sigma and project management for organizational improvement

¶ … Quality, cost-competitiveness, customer service and first-to-market are all essential determinants to global commercial success. All sectors of the economic market are obliged to reduce costs and production times while increasing profits and market share. Ambitious organizations are turning to systems management programs such as Six Sigma or Total Quality Management to develop and maintain exceptional standards across the whole of an organization. This includes all aspects of production and manufacturing processes, as well as marketing, sales and distribution, financial considerations, employee motivation and customer service. Finally, product development in the form of a perennial portfolio of projects helps to ensure the viability of a company.

The incorporation of systems management programs has become integral to the renaissance and future of an organization. Often, enterprises will combine qualities from several methodologies such as integration aspects of Six Sigma with Project Management; the very topic of consideration for this essay that examines germane literature. The aim of the research review is to determine the manner in which businesses are able to achieve and sustain process improvement across the whole of an organization through the integration of Six Sigma procedures and Project Management best practices.

2. Methodology

A perusal of the research regarding the aforementioned blending of Six Sigma and Project Management attributes finds a number of resources that analyze the matter in-depth. Current available research addresses the concept in theory as well as offering the latest developments that include a combination of said perspectives. Parameters of resources referenced for this critique include the use of information specific to the assimilation of Six Sigma and Project Management program elements. In other words, all resources in the form of academic papers and journal articles are narrowly specific to the subject of this assignment and ancillary information such as risk analysis or experimental design is beyond our current scope and concern. The contents of the reviewed material will be synthesized and presented in a sensible order; but may be addressed multiple times according to the question under consideration.

The order of the development of this essay is as follows. I began by completing a preliminary analysis of related research in general. This was the first step in the process of amassing relevant resources including technical and academic resources as well as tomes of greater length. Keywords entered in search engines included "Six Sigma," "Project Management" and "Design for Six Sigma." Surprisingly, the amount of available information was much leaner than one might expect given the profusion of systems management models employed across the breadth of global organizations; and the particular popularity of Six Sigma and Project Management.

3. Six Sigma: concepts and definitions

Let us preface further discussion with an outline of the basic concepts for each methodology. This will aid the reader in grasping their principles of interaction as a vehicle for systems improvement across an organization. Kwak Y.H. And Anbari F.T. [4] provide an exceptional classification of the Six Sigma Methodology; stating that it has been a "project driven" business strategy, which permits an organization to concentrate on the growth and development of its procedures founded on a deep comprehension of its clientele's needs as well as the sustained reduction of shortcomings in each and every activity of the company." Organizational advancements are achieved one project at a time; thus giving Six Sigma its moniker as a 'project-driven methodology'. Specifically this means that each project has a problem solving component built into its design and completion that allows the organization to take advantage of an opportunity to realize improvement through the integration and execution of "knowledge of the entire business process, including statistics, engineering, as well as Project Management" [4]. Another expert on the topic of Six Sigma Management methodology, F.T. Anbari . [2, 3], created the following equation to breathe life into these advanced and sophisticated ideas.

Six Sigma = Total Quality Management (or Sustained Quality Improvement) + Added Tools of Data Analysis + Higher Customer Focus + Financial Outcome + Project Management

This can be framed dichotomously as a "statistical point-of-view or a Business point-of-view" [4]. Regarding the former, Six Sigma offers a strategy that allows an organization to increase their profitability and is applicable across a company's systems - able to improve process efficiency and generating increased value for all stakeholders. The Statistical view states there is a measure of quality that is equal to having less than 3.4 million defects per 1 million opportunities. The emphasis is on increased effort because current assessments find many organizations are currently performing at the 'three sigma level'.

3.1 DMAIC & DFSS Models

Upon execution of the Six Sigma methodology as the systems improvement tool requires the use of the "life cycle process model" [9]. The steps are shortened to the acronym DMAIC which stands for define, measure, analyze, implement and control. Each component of the acronym addresses the current and existent processes and/or products of an organization through Design for Six Sigma (DFSS); a systematic strategy aimed at developing new products and/or processes that combine to result in an outcome that exceeds customer expectations of high quality.

Moreover, the Design for Six Sigma strategy also establishes a process model that has been labeled via acronym as well. The DMAVD or define, measure, analyze, design and verify iteration of processes is yet another facet of Six Sigma that works in concert with all parts to incorporate systems management improvement across an organization. Kwak Y.H. And Anbari F.T. [4] provide extensive explanations of both methodologies in separate resources that themselves refer back to research from companies including Motorola as well as General Electric that are recognized for pioneering the Six Sigma model. The original work was available in classic books and journals - although the work has been enhanced in the last few years.

Here we will cease our consideration of this model; but shall return to this methodology later in the review of the literature when we will consider the processes developed to integrate DMAIC as a model with the strategies and tools of Project Management. Again, the goal remains always to improve the efficiency and effectiveness of organizations on a global scale. I will also interject that my research did not uncover information concerning the integration of Project Management and DSFF.

3.2 Advantages of the execution of Six Sigma

As noted previously, Six Sigma methodology was first introduced by General Electric and Motorola but has since expanded to organizations found around the world. It is vital to note that not all of the enterprises that have adopted Six Sigma are manufacturers. Other types of organizations that utilize Six Sigma can be found in the technology, financial, healthcare, R & D, construction and engineering sectors. This serves to confirm the effectiveness of the compilation of Six Sigma strategies as a means to improving profits, trimming expenses and ensuring customer satisfaction. Too, the research confirms that these companies have reported higher earnings which they relate directly to the implementation of Six Sigma. One article reviewed the savings of six major companies that utilized Six Sigma and in the case of Motorola the estimated benefits reached $15 billion over the course of eleven years while General Electric reported a savings of $2 billion in 1999 alone. Other companies that we will revisit regarding Six Sigma savings include Telefonica, DuPont and Dow [Anbari 1,5].

The successful implementation of this strategy is evident in several examples offered by Anbari [4]. For instance, Bechtel Corporation incorporated Six Sigma in their global engineering and construction businesses that resulted in preeminent financial savings. The objective of these changes was to prevent the need for modifications along the design to construction continuum. Bechtel invested $30 million dollars initially to implement the program; but saw a $200 million dollar return in the form of savings.

The greatest value of the Bechtel Corporation experience is that it serves as an exceptional example of the benefits that arise from the application of Six Sigma methodology. It underscores the practicality of its use in manufacturing that calls for repetitive processes; revealing the manner in which it can operate to correct untenable situations. Conversely, the DMADV model is most instrumental in a project-driven company in which non-repetitive behaviors - such as design processing, services and solutions - drive the organization. In this case as well quality and profits are key to performance.

4. Project Management: definition and main concepts

Ultimately, this project is intended to iterate the research available on the integration of Project Management together with Six Sigma. The advantages are expounded in a study conducted by Maximiano A.C along with Soler A.M [9] where they stated that "execution of Six Sigma attempts is basically a Project Management issue." It would appear that comprehension of Project Management procedures is a prerequisite to analyzing the assimilation of the dual methodologies as they apply to this research assignment. What follows is a succinct explanation of the necessary information regarding Project Management.

The Institute of Project Management defines a 'project' as a series of tasks and activities that have a specific objective with both start as well as end dates and the necessary resources to see the project through to completion. Projects require time, money, people and equipment for a predetermined time frame. Project Management, then, is the whole of the process that sets the parameters of what will be done and when with a written or unwritten codicil assuring desired results will be obtained. These procedures put in place are designed to ensure on-time delivery of the project that is within budget and meets the predetermined expectations and requirements of all stakeholders. The project should also be without reproach.

Six Sigma is a series of strategies implemented through the execution of what is termed as 'Business Process Optimization Projects'. They have nearly identical attributes as the 'Project Management Processes' with activities that overlap the parameters of traditional projects. According to Meyer L. And Scrima T [10] the business procedure optimization project is expected to adequately define the capacity of the procedure to ensure there is no confusion about any aspect of the project including its boundaries. Additionally, process improvement goals are incorporated into the framework that identifies areas including (but not limited to) such concerns as customer service improvement, cycle time reduction, and cost reduction as well as the 'deliverables'. As well, allocated resources are identified; and a development and execution timetable is provided that explains the process optimization enhancements.

Additionally, Maximiano A.C and Soler A.M [9] offer a complete and understandable description of the process of Project Management as explained in the Project Management Body of Knowledge Guide (PMBOK Guide) published by the Institute of Project Management. The book examines five individual groups of processes that include "Initiating Procedures, Planning Procedures, Executing Procedures, Controlling Procedures, and Closing Procedures ." These will be aligned with their DMAIC model counterparts; at which time they will be investigated at length.

5. Integration of Project Management and Six Sigma

An investigation of the conceptual foundation of both the Project Management Procedures and the DMAIC Model confirms the agency of the methodologies. It is possible to posit that organizations that integrate each successfully will be rewarded with achievement of their predetermined strategic goals with optimum efficiency and effectiveness. Six Sigma projects are the epitome of those defined by the Project Management Institute. Each has been developed with the goal of creating singular services and products via a process change; and each can claim the like restrictions of cost, time and resources. This makes Project Management and Six Sigma Projects interchangeable through their similar processes. Each possesses components that can be applied simultaneously to guarantee a project is completed according to preordained costs, timeframe, technical performance and greater customer satisfaction, financial gains and even dependability.

By adopting the PMBOK Guide as well as the Six Sigma strategies; a symbiotic relationship is able to be developed within project-based firms that ensures continuous improvement of all aspects of an organization's efficiency including in the areas of planning, execution as well as control - all working in concert to add value to not only the customer experience but the accomplishment of strategic aims and objectives. But this naturally means that both approaches must be considered concurrently to maximize the applicability of each methodology - particularly in today's hypercompetitive global market.

Of greatest value is the approach to improvement utilizing the Project Management processes in organizations such as construction and consulting - implementing as well the Six Sigma DMAIC Model for problem solving and as a way to guard against project failures. The second addresses enhancement of the Six Sigma methodology with the incorporation of Project Management processes as a guarantee of greater effectiveness in implementing problem solving while enhancing the opportunity for improvement within the organizational environment.

The latter is the subject of much research as will be noted in this essay. Conversely, the former is mentioned only briefly in the research; probably due to the fact that organizations are moving towards the Quality Improvement methods - i.e. Six Sigma - despite positive responses and results found in the greater sized companies that are project driven. This study will not turn to a discussion of research related to this approach; followed by an extensive analysis of the frameworks connoted by varying authors regarding the achievement of integration of Project Management tools specific to the execution of Six Sigma Projects.

5.1 Utilizing Six Sigma to enhance Project Management Procedures

Project problems and failures are not uncommon fodder for review in project-driven companies despite the research that has been done regarding all aspects of project management. Two things can be stated for a fact. First, Project Management processes have reached a level of maturity and, secondly, project failure always equates to financial and customer losses. Maximiano A.C and Soler A.M [9] address this phenomenon by stating that "failure in Project Management should be treated as strategic challenges." The authors continue with the following reflection. The cause of failures in project-based companies can often be traced to the tendency of managers to adopt generic solutions and implement solutions that do not have a strong foundation. By opting for these obviously ineffective shortcuts to the process of project management; they are actually setting the stage for the project - and, therefore, the company - to fail. Maturity in the process of managing projects is essential. Otherwise, the same mistakes are likely to be committed and long-term and deep-rooted problems will result in failure time and again. Underlying problems and processes must be identified, addressed and improved to ensure the health of the organization over the long-term. This is a natural segue for justifying the implementation of Six Sigma in project-based organizations. Moreover, the DMAIC Model offers a comprehensive methodology complete with an evaluative piece that allows for the assessment and determination of organizational root problems as it relates to the specific 'forces' controlling the organization's competitive environment.

Project-driven organizations may draw upon professionally-trained personnel who are certified in the field with what is identified as a 'Black Belt' and indicative of expertise in the field should be made available to consider questions and delve for responses to such concerns as "in which corner of the 'magic triangle' - cost, time or scope - is the major problem emanating from"? Or perhaps the company is wondering what project management processes require attention first - or at all - and what are the best solutions that can be used to address the causes? Finally, what might be the impact of said solutions on the results of the projects?" [9]

Project-based companies that embrace the aforementioned 'Six Sigma' approach are advised to take full advantage of their experience in project management. This will allow for the optimization of each project as it has been developed by the resident expert - the 'Black Belt' - and objectives will then be met within the predetermined budget and timeframe. Additionally it will offer the organization a chance to adopt and internalize progressive statistical and analytical tools; thereby ensuring they have a reference by which they are able to find effective solutions to problems - all while establishing new control measures for preventing failures in the future.

Yet, the field remains unexplored both in Technical literature and practice. Research reveals Anbari [2] attempted to confirm a set of expectations in the form of authentic improvements to the application of Six Sigma were in existence. Referring to the "quadruple constraints of Project Management" - the concerns are headed towards three - cost, quality and time. Application of Six Sigma Project Management processes would serve to reinforce a variety of improvements including those to scheduling, project monitoring along the continuum from beginning to end, risk management assessments and resource management enhancements. However, chief among concerns is a comprehensive assessment of Project Management competencies and abilities that is realistic.

The important thing to note is the framework is generalized and provides only a synopsis of improvements achievable within project parameters. What is noticeably absent is directions in the way that Six Sigma tools are applicable in a manner that makes improvements achievable. This opens up an area for future research on the subject of elements that must be factored into for successful integration of both methodologies in companies that are project driven. For example, one might pursue the topic of what makes an acceptable organizational structure that would be able to support the dual methodologies or the growth and development relevant to Six Sigma optimization initiatives in subcontractor or outsourced projects.

5.2 Utilizing Project Management to Improve Six Sigma Projects

To reiterate, the methodology of Six Sigma is define, measure, analyze, improve and control - shortened to the acronym DMAIC. Six Sigma is an exceptional model that provides structure as well as discipline across the continuum of manufacturing and related processes with the aim of resolving business issues. Six Sigma utilizes tool that are designed specifically to name the basic causes of the process defects that prevent an organization from providing its customer base with continuous product quality and service including on-time delivery and reasonable costs. The methodology fails to address the handling of the project itself as it is conceived and realized. In other words, in this sense, "effectual Project Management is critical to the triumph of any Six Sigma project" [8].

There can be no argument that the Six Sigma methodology is effective as a problem solving tool that is able to apply process improvements through the use of its DMAIC model; but that is not to say there are not challenges that accompany Six Sigma as well. This is evident in companies that rely exclusively on Six Sigma to drive its project development. That is because the DMAICC approach focuses almost solely on the controls required for process improvement and not on the project management processes. One of the greatest selling points of Project Management as an approach to process improvements is that it uses a variety of tools and behaviors to complete its implementation including schedule development, risk analysis, work breakdown analysis, status reporting, cost budgeting and defining the project's scope. These individual components are applicable to transactional and manufacturing projects as well as are recognized as common processes employed by project managers to not only plan and execute but also control and close out projects.

Therefore, it is immediately obvious of the advantages for a company that can be realized with the application of both project management and Six Sigma. The former offers process control strength and the latter offers problem solving strength. The result is often organizational consistency, control, predictability and the ultimate in process improvement. On the one hand, Project Management provides those tools necessary to monitor and track the project's progress while adding controls to address the problem.

Anbari [3] offers a contrast of the roles of those who participated in Six Sigma Projects and those who worked in tradition projects. His intent was to demonstrate the similarities in organizational structure for both methodologies. The role of Project Manager is assumed by a Black Belt; Green Belts are Project Team Members. Also, the Master Black Belts represented the Project Management Office and the Champion is the Project Sponsor of traditional projects. One expert, Lynch D.P., Cloutier E.T., offered that the [8] function of the Champion can be much better illustrated as a Project Manager of the Six Sigma Execution Procedure, at the same time as each project has its own sponsor - often represented by the area manager where the project is being developed.

As well, the literature confirms that implementation of the Six Sigma methodology regarding the classification of an issue increases the statistical knowledge of such; reducing the opportunity for incorrect evaluation of an issue. The reason is that it defines customer concerns and translates them into scope documents using process mapping tools. Concurrently, budget, scheduling and resource management pieces are added from Project Management across the life cycle of the Six Sigma optimization project. Management is then able to make informed decisions at each phase of the project. Used collaboratively, the tools of Project Management and Six Sigma plan, act, do and check along the continuum of the process improvement project.

5.4 Further considerations

The elements discussed in the previous sections of this essay form a reasonable framework for further consideration of the topic while consolidating a highly structured approach to the combination of the best of the Project Management Body of Knowledge and the DMAIC Model strengths. However, it is necessary to examine the structural transformation as well as adjustments required by an organization to ensure it is able to maximize the benefit of both methodologies. This ensures its usefulness in practice and frames the authority and responsibility assigned according to culture and strategic goals. For example, it is incumbent upon an organization to establish a level of criteria for defining the responsibilities assigned to Project Managers and Black Belts as a way to guarantee the long-term sustainability of combined efforts towards achieving stated objectives. Maximiano A. And Soler A.M. [9] opine that Project Managers and Black Belts are the "names of roles, expressing precise guidance and experience that can be easily shared." Therein lies, both the strengths as well as weaknesses of the separate methodologies - particularly their ability to be balanced perfectly and the corresponding tools applied appropriately.

The principles that underlie "Phase Review Model" propose that a Black Belt with zero skills in Project Management is yet very well trained in the abilities of development and management regarding those activities of a project during stages 1 and 2. At the same time a Project Manager with no skills in DMAIC is very capable and prepared to assume control of activities that appear during stages 3, 4 and 5. The implication is that the training procedure of Six Sigma Black Belts is wanting. This premise is supported by Kwak Y.H., Anbari, F.T. In [4] as they note that the curriculum of the Black Belt program ought to include "both qualitative as well as quantitative assessments and standards, leadership, and Project Management practices and skills and should reflect the organization's needs and requirements."

Companies that are inclined to adopt the dual methodologies of Six Sigma and Project Management should be aware of the responsibilities of the Project Management Offices (PMO) as well. Maximiano A.C. And Soler A.M. [9] mention the PMO as the "most important infrastructure to support management by projects as well as support its responsibility of administering the Six Sigma Project Portfolio." They should be proactive in helping Black Belts to achieve management of time, resources and costs throughout the project execution. Implementing a PMO within an organization is key to supporting a company's successful attempt to achieve adequate integration of the entirety of project activities including strategic goals and priorities and resources that are thus essential to the realization of the company's future.

6. Conclusions

Perhaps the most valuable conclusion of this review of the literature is the realization and stated recognition that little academic research on this specific topic is available or has been published. By this I am referring specifically to the integration of Six Sigma and Project Management processes. The bulk of the material available on the subject has actually been prepared by consultants and companies that have actually been involved with or adopted the aforementioned methodologies. They have also developed their individual version of an integrated framework, which is optimal for the specific requirements and conditions. The literature references also allow for the conclusion that the different approaches which have been forged to confirm a correlation between Project Management and Six Sigma have several outcomes. First, they serve to support strategic movement of an organization. Next, there is a natural coexistence between the methodologies - symbiotic and supportive. The integration of the programs better defines the ways that an organization can recognize cost reductions, process enhancement, increased implementation times, and new product development.

Moreover, the implementation of "Phase Review Model" as a vehicle for implementation of integration frameworks will allow companies to actualize proven best practices of effective Project Management. Therefore, project optimization is possible when developed by a Black Belt. The intent is to accomplish particular objectives within the prearranged time frames and costs. Concurrently, the Six Sigma methodology provide organizations with the analytical and statistical tools to find efficient solutions to their problems while establishing strategies for control that will prevent occurrences of future failure.

During the course of this research it was not possible to information on the topic of integration of Project Management and the DFSS method in technical or peer-reviewed journals and the broader scope of literature. The assumption regarding this omission is that the approaches of DMAIC as well as DMADV models adequately address the subject and are applicable alternatives. There is nothing to support or reject said assumption but the conclusion can be made that this allows for an open research field should it capture the interest and imagination of other academics who wish to determine the following. Do the adjustments that are required for the existing approaches or as yet undiscovered ones have a chance of showing a better fit of the DFSS tools as to their specific characteristics with regard to managing product and/or process development projects? As well, this review reveals there is an unexplored field in the technical literature concerning the application of Six Sigma within Project-Based firms; thereby creating yet another area for further study. In other words, a more thorough examination would be called for concerning the elements that must be considered when attempting to attain a perfect amalgamation of the dual methods in Project-Based companies. One example of this might be whether or not there is sufficient organizational framework to assist the dual implementation of these methodologies as well as the development of Six Sigma optimization initiatives. This may be applied to instances that involve either the outsourcing of resources or the use of subcontractors.

In conclusion, the discussion elements accessed as a part of this research study and review of the literature serve to represent a reasonable framework that actually confirms the multiple benefits that can be derived from combing the strengths of the Project Management Body of Knowledge and the DMAIC Model. In practice the success of such integration lies in the accompanying structural changes adopted by an organization as a result of the adoption of the dual methodologies and the authentic acceptance and application therein.