Project Risk Management in Six Sigma

The main limitation for any business activity when it comes to improving efficiency is time. A project typically has a definite start and end date, which means any improvement initiative has to be focused within that limited time period. This translates to working in parallel with the activities of a project as they actually happen.  The second limitation is budget. Besides completing the project on time, can we do it on budget?

As defined by the Project Management Institute, “Project management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements”.

The DMAIC and DFSS approaches tend to focus on controls for the improvements, process and product development, not the control of the project management process.  This division between Project management and project improvement/development is fine if the project has a Project Manager, preferably a PMP, and a Black Belt, DFSS or DMAIC. But the reality is we are positioning our Black Belts as project leaders, and most times both roles are performed by the Black Belt. This approach is acceptable only if the BB is apt at both.  In both DMAIC and DFSS training classes the focus is typically on the tools used to complete the project. Little (if any) time is spent on project duration or cost predication and management.  Critical decisions must be made based on the probability of completing on-time and on-budget. If these probabilities are too low, the project may need to be redefined or even scraped

One excellent tool the certified PMPs use is @RISK for Project, which uses Monte Carlo simulation to show you many possible outcomes in your project – and tells you how likely they are to occur. This means that you finally have, if not perfect information, the most complete picture possible. You can determine which tasks are most important, and then manage those risks appropriately. It can help you choose the best strategy based on the available information, which is why many PMPs and large companies with in-house training programs are standardizing on Palisade Corporation’s @RISK for Project for project management.

A good article to read to learn more about Integrating Project Management into a Six Sigma System is located in iSixSIgma’s Library and was authored by Daniel Zucker

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s