aligning six sigma projects with program goals
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©2008 Northrop Grumman Space and Mission Systems Corp. All Rights Reserved.
Aligning Six Sigma Projects with Program
Goals
October 15, 2008
Global Lean, Six Sigma, and Business Improvement Summit
Orlando, Florida
Mr. Donald CorpronLean Six Sigma Master Black Belt
ISRSD-2008-0067
2 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Introduction
3 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Preview
We’ll cover these topics…
• Decomposing high-level goals to specific project objectives
• Balancing Customers’ goals with organization’s goals using Quality Function Deployment
• Integrating Lean Six Sigma tools and CMMI® Levels 4 & 5 maturity
• Using Lean Six Sigma to monitor and sustain superior program performance
4 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
About Northrop Grumman – The Vision
Creating Value Through People and Technology
Be the most trusted provider of systems and technologies that ensure the security of our nation and its allies
• Customers’provider of choice
• Industry’s employer of choice
• Shareholders’ investment of choice
5 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
About Northrop Grumman
• $32 billion sales in 2007
– International sales approx. 5% of total
• 120,000 people, 50 states, 29 countries
• Leading capabilities in:
– Systems integration
– C4ISR and battle management
– Information technology and networks
– Defense electronics
– Naval shipbuilding
– Space and missile defense
Focus on Performance
6 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
About Northrop Grumman - The Business Areas
Command, Control & Communications
Intelligence, Surveillance &
Reconnaissance
Missile Systems
Enterprise Systems and
Security
IT/Network Outsourcing
Defense & Intelligence
Federal, State/Local & Commercial
ISR, Homeland Security & Health
Systems Support
Base and Infrastructure
Support
Range Operations
Training and Simulations
Technical and Operational Support
Live, Virtual and Constructive
Domains
Life Cycle Optimization
Performance Based Logistics
Lead Support Integrator (LSI)
Radar Systems
C4ISR
Electronic Warfare
Naval & Marine Systems
Navigation & Guidance
Military Space
Government Systems
Large Scale Systems
Integration
C4ISR
Unmanned Systems
Airborne Ground Surveillance / C2
Naval BMC2
Global / Theater Strike Systems
Electronic Combat
Operations
ISR Satellite Systems
Missile Defense Satellite Systems
MILSATCOM Systems
Environmental & Space Science
Satellite Systems
Software Defined Radios
Directed Energy Systems
Strategic Space Systems
INFORMATION & SERVICES ELECTRONICS AEROSPACE SHIPBUILDING
Mission Systems
Information Technology
Technical Services
Electronic Systems
Integrated Systems
Space Technology Shipbuilding
Naval Systems Integrator
Surface Combatants
Expeditionary Warfare Ships
Auxiliary Ships
Marine Composite Technology
Coast Guard Cutters
Commercial Ships
Nuclear Aircraft Carriers
Nuclear Submarines
Fleet Maintenance
Aircraft Carrier Overhaul
& Refueling
A Portfolio Positioned for the Future
7 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Our environment…
Program A
Program B
Program B
170 active projects
• Contracts with numerous government Customers
• Range from $K to $M annual sales
• Products of “one,” more like building bridges than widgets
• “On-time” is the Critical-to-Quality attribute
• Many individual instances of “standard” processes
• Program Managers are mini CEO’s
8 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Northrop Grumman has an infrastructure to improve the way it does business
Competitive Excellence Organization
Sector Six Sigma Program Office
Divisional Six Sigma Office
Six Sigma ChampionMaster Black Belt
Site Champions
Six Sigma Team
Six Sigma Team
Six Sigma Team
Co
rpor
ate
Se
cto
rD
ivis
ion
Op
era
tion
9 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
The opportunity
• How to get everyone in the company to pull in the same direction, towards clearly defined and delegated goals to move the performance meter?
• How to align the multiple tiers of goals in the enterprise?
• How to focus on improving the vital few things that are essential to goal achievement?
10 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
We use the strategic alignment cycle
Capture/ Integrate “Voice of
CEO” Map Future Reality
Assess Process Maturity
Assess Results
Charter Six Sigma
Projects
Measure Robustnes
s
Identify Vital Few
Processes
11 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
About “Voice of Customer (CEO)” analysis
• Similar to “Voice of Customer” analysis
• Portrays the CEO as the “Customer” who has needs to satisfy
• Captures the strategic intent (goals) of the business
• Weighs the goals
• Progressively translates the goals of the business down to and in the language of the people that must make things happen
12 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
The importance of Goals and Strategic Intent
• "Knowing where you want to go; knowing where you are now; knowing how you get to where you want to go and then doing it are the keys to success in the 21st Century “ - David Taylor (author The Naked Leader)
• Express the strategic intent to help individuals and organizations share the common intention to survive and continue or extend themselves through time and space
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“Voice of CEO” captures needs from several sources
• Flowed Down Operational Goals
• Long Range Strategic Plan
• Annual Operating Plan
• “Leadership 2.0” Vision
• Interviews
• Leadership Advisory Board
• SWOT sessions
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Several “tools” are used to align goals (learned in Lean Six Sigma Training)
• Capture goals and strategic intent with “Voice of Customer” Analysis
• Identify the system’s core drivers with Reality Tree
• Weight goals with Paired Comparison Analysis
• Identify relations with House of Quality
• Measure processes’ robustness with control charts and capability charts
• Assess process maturity using the CMMI and BD-CMM models
15 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Future reality trees use seven entity classes to uncover core drivers
• The Reality Tree is a tool to discover the system’s core drivers
• Based on the Theory of Constraints that all systems have physical, market, policy, or a combination of factors that govern the system’s performance
• The graphic approach facilitates the elicitation of factors from “Customers”
16 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Decompose high level goals to actions
Overarching Goal of Sales
growth and Return on
Sales
Goals
Cross Project Actions
Desirable
Effects
Intermediate Effects
*Produced with Flying Logic®
17 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Target to improve the two meta-processes that produce the value
PM&C
BAP PRP
Key
PM&C Project Management & ControlBAP Business Acquisition ProcessPRP Product Realization Process
Info Info
II
Info InfoCustomer
Customer
Assess using
BD-CMM™
Assess using CMMI®
18 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
About the BD-CMM
• Stewarded by the Business Development Institute
• Focused on Business Acquisition processes
• Based on a compilation of best practices to secure new business
• Used to assess the “maturity” of business acquisition processes
Pro
cess
Matu
rity
19 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
About the CMMI®
• Stewarded by the Software Engineering Institute
• Focused on Engineering processes
• Based on a compilation of best practices
• Used to gauge the “maturity” of engineering processes
Pro
cess
Matu
rity
20 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
CMMI specifically refers to goal flow down
Level 4 Specific Practice 1.1 (Establish the Project’s Objectives) states, “Establish traceability to the project’s quality and process performance objectives from their sources.”
® Capability Maturity Model and CMMI are registered in the U.S. Patent and Trademark Office by Carnegie Mellon University.
21 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
The relationship of CMMI to Six Sigma
Init
ial
Man
ag
ed
Defin
ed
Quan
tita
tively
M
an
ag
ed
Opti
miz
ing
• Six Sigma and CMMI are symbiotic
• Six Sigma is the improvement methodology
• CMMI is the gauge of maturity
• The engines of continuous improvement
Six Sigma is a catalyst
for high maturity
22 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
About the House of Quality
• Yoji Akao developed the House of Quality
• First implemented at the Mitsubishi Heavy Industries’ Kobe Shipyard in 1972
• John Hauser and Don Clausing popularized House of Quality in 1988 with an article in Harvard Business Review entitled, “The House of Quality”
• Helps deal with the “many to many” relationships problem
Customer Requirements
Customer
Importance
Our
Company
Company
A
Company
B
Improvement
Goal
Improvement
Factor
Sales
Point
Importance
Rating
Organizational Difficulty 5 1( =difficult, =easy)
Our Company
Company A
Company B
Target Benchmark
ProductRequirements
Correlation matrix
Interrelationship matrix
5Strong ( )
Relationship weighting factors:
( 3)
( 1)
Customer Rating LLL5 , 1 : 1 . 4
: 1 . 1
+ positive, supporting- negative, tradeoff
23 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
At least three houses usually needed to link goals and actions
1st House
2nd House
“Voice of CEO”
Vital Few Processes
3rd House
Measures
Kaizens, Projects, Actions, etc.
Vital Few Processes
Measures
24 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Mesh Sector and Divisional goals using a House of Quality
Voic
e o
f D
ivsi
on G
enera
l M
anager
B
uild a
Mark
et
Leadin
g ISR
Org
aniz
ati
on
A
chie
ve $
XB
in R
evenue b
y 2
010
L
ead N
GC
's ISR
Mark
et
Str
ate
gy
W
in T
ier
1 O
pport
unit
ies
P
erf
orm
on C
urr
ent
Back
log
P
enetr
ate
New
ISR
Mark
ets
D
eliver
Financi
al Pe
rform
ance
in 2
010
P
rovid
e W
hole
Pro
duct
(Solu
tions)
V
alu
e E
mplo
yees
as
Hum
an C
apit
al
1 2 3 4 5 6 7 8 9 10
Im
port
ance
1
35
25
10
10
10
10
Perc
ent
Import
ance
2
35
25
10
10
10
10
Max =
35.0
Perc
ent
Import
ance
Min
= 1
0.0
1
2
3
4
5
6
7
Voice of Sector President
Meet Commitments
Pursue New Business Smartly & Aggressively
Improve Quality and Processes
Collaborate Across Sectors
Compete & Perform as a Tier 1 Player
Execute with Excellence
1
2
3
4
5
6
7
Importance 1
345
255
90
315
345
325
345
125
315
Percent Importance 2
14
10
4 13
14
13
14
5 13
Max = 14.0
Percent Importance
Min = 3.7
1 2 3 4 5 6 7 8 9 10
Standard 9-3-1
Strong 9.0Moderate 3.0Weak 1.0
“Voice of General
Manager”
“Voice of Sector
President”
*Produced with QFD/Capture
25 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
And they input to Project’s specific goal formation
• Meet commitments
• Estimate software development accurately
• Maintain good rapport with Customer
• Deliver “It” right and on-time
• Catch defects early
• Modularize test suites
• Engage Customer in requirements earlier
• Expand Customer base
• Proactively refresh technology
• Protect/grow funding
• Protect core staff
26 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Use Paired Comparison Analysis to weigh the specific goals
n= 11 55 TRUEWorksheet r= 2 TRUE
Which is most important?Raw Normalized
Item 2 3 4 5 6 7 8 9 10 11 Score Score
1 Meet Milestones 1 3 4 5 1 1 1 1 1 11 6 11%2 Estimate Software Development Accurately 3 4 5 2 7 8 2 10 11 2 4%3 Maintain Good Rapport with Customer 4 5 3 3 3 3 3 11 7 13%4 Deliver It Right and On-Time 4 4 4 4 4 4 4 10 18%5 Catch Defects Early 5 7 8 5 10 11 5 9%6 Modularize Testing Suites 7 8 6 10 11 1 2%7 Engage Customers in Requirements Earlier 8 7 10 11 4 7%8 Expand Customer Base 8 10 11 5 9%9 Proactively Refresh Technology 10 11 0 0%10 Protect/Grow Funding 11 6 11%11 Protect Core Staff 9 16%
55 100%
• Compares each goal to every other goal
• Requires a consensus on which one is more important
• Forces crisp debate about relative importance
27 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
In turn, link goals to relevant processes with a House of Quality
• Match Program Goals to the corresponding processes whose outputs affect achievement of goals
• Encode the degree of “force” with a “full moon”, “half moon”, or “new moon” to represent a force multiplier of 9, 3, or 1
• Identifies the “vital few” processes
Im
port
ance
1
11
4
13
10
9
7
9
16
0
11
2
B
usi
ness
Acq
uis
itio
n P
roce
ss
O
pport
unit
y A
ssess
ment
C
aptu
re S
trate
gy D
evelo
pm
ent
Pre
pro
posa
l Pre
para
tion
Pro
posa
l D
evelo
pm
ent
Po
st S
ubm
itta
l A
ctiv
itie
s
Po
st A
ward
Pro
duct
Realiza
tion
Requir
em
ents
Develo
pm
ent
& M
anagem
ent
D
esi
gn
C
ode/B
uild
In
tegra
tion
Pe
er
Revie
w
Veri
fica
tion &
Validati
on
1 2 3 4 5 6 7 8 9 10
11
12
13
14
Perc
ent
Import
ance
1
12
4
14
11
10
8
10
17
0
12
2
Max =
17.4
Perc
ent
Import
ance
Min
= 0
.0
1
2
3
4
5
6
7
8
9
10
11
12
Program Goals
Meet Milestones
Maintain Good Rapport with Customer
Deliveries are Right and On-Time
Accurately Estimate Software Development
Catch Defects Early
Engage Customers in Requirements Earlier
Expand Customer Base
Protect/Grow Funding
Protect Core Staff
Proactively Refresh Technology
Modularize Testing Suites
1
2
3
4
5
6
7
8
9
10
11
12
Technical Importance 1
391
391
215
141
213
110
83
83
121
53
36
87
Percent Importance 2
20
20
11
7 11
6 4 4 6 32 5
Max = 20.3Percent Importance
Min = 1.9
1 2 3 4 5 6 7 8 9 10
11
12
13
14
Tradeoffs
Synergy 1.0Compromise -1.0
Standard 9-3-1
Strong 9.0Moderate 3.0Weak 1.0
Program Alignment Goals vs. Processes
28 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Desired end state is a set of “robust” processes
Robust processes are both stable and capable
Chaotic
On the brink
Robust
Stability
Cap
ab
ility
Ready
Where we would like to
be
Where we often start
29 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Evaluate robustness with Control Charts and Capability Charts
Data are from Sector Programs: https://sharecenter.myngc.com/livelink/llisapi.dll?func=ll&objId=16184610&objAction=browse&sort=-name
Measure:
Cycle Time
Performance specifications come from the Mission Systems’ 2008 Operational Goals
Specification Limit Value:
2 Weeks (10 working days)
Cycle time measures the time from start to completion of a Build
Process Name:
Code/Build
Corrective Actions: Six Sigma project originated to address cycle time capability
Impact of current performance: Current process misses target half the time.
Capability: Process is capable of performing at the goal 50% of the time. Process Sigma 1.50 0.00 1.50(should be around 3)
Stability: Process has a out-of-control point in Build 13 due to a Priority 1 DR
Build
13
Build
12
Build
11
Build
10
Build
9
Build
8
Build
7
Build
6
Build
5
Build
4
Build
3
Build
2
Build
1
13
12
11
10
9
8
Build
Work
ing D
ays
_X=9.995
UCL=12.151
LCL=7.839
1
121086420
35
30
25
20
15
10
5
0
35
30
25
20
15
10
5
0
Cycle Time (Days)
Per
cent
LB USL
LB 0Target *USL 10Sample Mean 9.99532Sample N 13StDev(Overall) 1.11005
Process DataZ.Bench 0.00Z.LB *Z.USL 0.00Ppk 0.00Cpm *
Overall Capability
% < LB 0.00% > USL 46.15% Total 46.15
Observed Performance% < LB *% > USL 49.83% Total 49.83
Exp. Overall Performance *Produced with Minitab®
30 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.
Summary
• The application of various Six Sigma tools together with CMMI help to integrate goals among organizational tiers Sector, Division, and Project
• Alignment focuses energy to exceed goals
31 © 2008 Northrop Grumman Space and Missions Corp. All Rights Reserved.