On the evaluation of Six Sigma projects

Most of the research on the success in implementing Six Sigma agrees upon the fact that one of the key success factors is the selection of profitable projects. This seems to be especially important for high‐risk, large‐scope and long‐term projects, as is mostly the case in the design for Six Sigma projects. The purpose of this paper is to outline Six Sigma project characteristics and to present a new model for evaluating Six Sigma projects. To design a Six Sigma project evaluation model, we utilized mathematical optimization modeling techniques and real options theory. The model allows for the quantification of not only the project's value prior to its start but also its progress and the consideration of possible decisions based on this progress. Copyright © 2009 John Wiley & Sons, Ltd.