Improving a Satellite Metric performance – Use Lean Six Sigma?

I teach the project based DMAIC process to many people, but I find that the process for executing a Lean Six Sigma project is not the best method to use when trying to improve a satellite metric.

Satellite metrics, such as profit, revenue and such, are the result of a huge number of business actions and decisions. They are the highest of the highest Y’s or output metrics possible. The satellite metrics are so high, it is difficult to clearly link actionable causes to adjust that will drive the satellite metric in the correct direction. In the Integrated Enterprise Excellence (IEE) system a different recommendation is provided. For the enterprise issues, it is an enterprise DMAIC (E-DMAIC) that is recommended.

When the satellite metric is baselined and found to be different from required, you should analyze the system that generates the metric. From this analysis, you should derive strategies to change the satellite metric, rather than charter a project. When the strategies are set, then document the linkage from the satellite metric goal, through the strategy, to the areas in the organization to apply the strategy, and finally to the projects that will be executed in that organizational area.

This method to generate projects based on a satellite metric issue limits the ability of the organization to jump onto popular projects, such as improve sales, that may suboptimize the organization. The IEE method will also allow the organization to balance the efforts so that they are connected and not competing.

An example of competing, not related to this discussion, is found when two projects are chartered by different parts of the organization. One is to reduce the working capital in inventory, while another is to improve on-time delivery to customers where late deliveries are driven by stock outs in inventory or other supply issue. The first group will want to shrink inventory, while the second group will want to increase inventory where ever a stock-out occurs. Both efforts are thinking properly but the conflict in goals will occur as long as the Strategies and EIP do not clearly connect the business issues to the projects.