Hi, guys. Welcome back. I'm Katherine McKeever, and today we're gonna go over project benefits. So in the last couple of modules, we went over traditional project management tools. So the ones that you will see if you were to say, try to get sort of fighting Greenbelt, we went over the critical path technique.
pert or project evaluation and review technique and the risk register. So with that, even though these are traditional project management tools, they're certainly not tools that you shouldn't use in your greenbelt discipline. It's just lean and six Sigma can't take the credit for inventing them.
Today in our module, we're going to go over project benefits. So we're going to switch back into Lean and six Sigma mode out of
P. M. I or the Waterfall Project management and really focus on benefits from a lean and six Sigma perspective.
So when we talk about benefits from a lean and six Sigma perspective to kind of paint the picture when you're talking about benefits from, say, a project management perspective, you already know what your end outcome is going to look like. So you know that if your project is to implement a system at the end of the project,
you're going to have a system implemented if you're doing in agile or a product development project.
You know, at the end you're going tohave a product lean and six sigma is different from that in the respect that you know what your target is. You know that you want to improve these measures, but you don't know what the solution looks like. And depending on where you are
in your organizations maturity, you may not know what the target improvement measure is
at the outset, But with that being said from a lean and six Sigma perspective, there are really three areas that we measure. We measure our input measures, which are a measure of effectiveness.
So we're going to talk about quality or delivery. So things that go in as inputs for later on in the process remember your site. Bach.
We also talk about how good the inputs are. So this is when we're talking about our value streams. So the Cy Pox stacked on top of each other, what becomes an output for one process will become an input for another process or, at the end, what is the output of your organization. Is the in pope
input for your customer? So
that being said the next things up, that we look at it and really where lean six Sigma spends the majority of the time because it is fundamentally a process improvement discipline that tends to encompass that culture of kaizen is in process measures. These are measures of efficiency so different than effectiveness
in that we're talking about costs, cycle, time, capacity or labour value, which will talk about quite a bit more on our next slides.
But this is what the organization invests in completing the process, so you'll see quite a bit of our references come back to these items
because the process is really processing. Outputs are really where the organization has the most control. Unless we're looking at this from a value stream perspective, where then inputs become a factory as well?
Your last output measures from a measurement perspective is, how well do we satisfy our customers? How are customers needs and requirements met? How happy are they? How likely are they to come back? We talk a little bit about the Cano model, and how do we know that our outputs
delayed our customers
as we want it to continue forward these air the things that as you go through your lean six signal project, you're going to want to keep in mind. The next thing that's why it's so important to know about these things is these were going to be the benefits that you're gonna document in your charter, and you're gonna hold yourself in your organization
they will awful in one of these buckets, inputs, process or outputs, which should mirror a lot of what you remember from our yellow built. When we talk about what is a process, inputs, processes and outputs, that's where these concepts are all tying together.
So when we talk about lean six Sigma project benefits, there are three types of benefits. There is a hot, hard benefit, which is also our bottom line benefit. This is a dollar value associated with it. There is no discussion about the value of the benefit.
There is a soft benefit. This is where the majority of
your work is going to lie, and this is capacity or labour value. You can talk about opportunity costs and what do we lose when we're investing time in this process. If you remember back to our cost of poor quality but are soft and our capacity of benefits, this is gonna be our get down. For the most part,
andan the last one is tertiary or intangible benefits.
These are things that we can't measure or we can't completely a tribute to our project. So we'll talk a little bit more about it. Tertiary benefits can be a little bit seductive, so we need to be really careful when we consider them, so that we're not just throwing everything in the kitchen sink up under there.
For those of you who work in organizations that have lean and six Sigma people, or have some carry forward for some of the older quality terminology. The old school way of defining these were primary, secondary and tertiary. So we had primary was are hard benefits. Secondary was are soft benefits and, of course, church areas, Tertiary.
The reason why we have moved away from this is because
lean, lean, fund lean six sigma fundamentally lives quite a bit more in the what was considered secondary or the capacity land. There was this perceived value of ranking Of course, we still always want to decrease our costs. But lean six Sigma contributes to your organization's one and cultural
development to in decreasing overhead and three increasing capacity and increasing capacity is the easiest of those three. So keep that in mind, we prefer to use hard soft in tertiary because it doesn't give a presumption of ranking. So when we ask ourselves, why do we want to know about this?
We go back to when we're talking about why we have the domestic
way back in the beginning yellow boat and we talk about how we have We want to make sure that the work that we're doing in fact improves the targets that we want to improve. So we want to invest time in having baseline metrics.
So we know the work that we did was in fact an improvement. Or maybe it wasn't, and we need to go back to the drawing board.
But it is so vital that as you start down this you invest the time to ensure that you do capture your baseline metrics. So you know what your starting point is? No judgment writer. Wrong there.
So another thing to keep in mind as we're talking about project benefits is project benefits tend tohave an s shaped distribution. So what that means is early on in the project, you don't really have any benefits as you go through your pilot and your initial rollout
eso when you implement your solutions because you have
gone through the piloting process and you know that the solution is going to be one of the ones that's most impactful. You're going to see a very high spike in your project benefits. And it depends on the type of, um, the type of solution that you implement
some solutions you can see benefits immediately in. Some are compounding effects.
So my recommendation we're talking about benefits measurement, which is different than the data collections of the measure in the domestic process, is that you measure immediately 30 days, 90 days, six months and then depending on your organization. Ah, year later. So there are two reasons for that.
First, a shaped curve. You're going to see this dramatic increase in benefits
and then you'll see a tapering effect when your um when the process normalizes and you come up with your new baseline The second piece of that is remember, six months in is generally where our process improvements fall apart and people go back to doing
the way they think they were before. So we're gonna leverage the Hawthorne effect a little bit
and come back in and re measure. So we keep using the processes that we've improved on.
So with that a quick quiz for you, What type of benefit is reduced? Employee turnover?
I'm hoping you guys said, D all of the above. So when we talk about employee turnover, there is the cost associated with recruiting and retention, which is a hard benefit and lead turnover in and of itself. You have decreased capacity while you have
nobody in that role or when you are filling that role. So that's a soft benefit, and employee turnover does have a moral component to it,
which is a tertiary benefit.
So today we went over the types of benefits you'll see in lean six Sigma projects, and in our next module, we're going to go over how to develop them or how to measure them. So I will see you guys there