Evaluating Performance of Projects Using Six Sigma Approach

Researchers have attempted to improve the project performance using principles like lean, just-in-time, total quality management, etc. However, little research is done to quantitatively assess project performance by using six sigma metrics. In this article, we present weighted rolled throughput yield (RTY), and hence six sigma, based methodology to evaluate the performance of projects, considering multiple criteria. Here, we consider a project decomposed into work breakdown structure of multiple levels. This approach considers seven criteria, classified under five groups namely, quality, cost, time, safety, and environmental sustainability for evaluating the performance. Analytical hierarchy process is used to assign weights to the criteria. RTY obtained is converted into a sigma value. The results are relevant from practical point of view since we consider various elements for performance evaluation, namely, 1) complex series–parallel structure of processes in a project; 2) hierarchical structure of the project; 3) multiple criteria for sigma level computation; 4) performance based on “correct first time” concept; and 5) flexible approach enabling the manager to add/delete the criteria depending on the need. We explain the developed methodology using two practical case studies. This is the first time that the particular six sigma metric is applied to assess the performance of construction and innovation projects. This approach is simple, lucid, yet effective, and we hope it will be useful to researchers and practicing managers alike.