Projects are at the heart of a Lean Six Sigma initiative. Projects are identified, prioritized, and implemented to improve a company's performance; ultimately it should yield financial benefits. The projects must be clearly defined for improvements to be realized. For maximum impact, projects should be linked to the strategic business objectives of the organization. A crucial distinction between any project and a Lean Six Sigma project is that the latter generally addresses problems whose solutions are not known. A simple and effective index, as suggested by Thomas Pyzdek, in the Six Sigma Handbook (McGraw-Hill, 2003), is the Pareto Priority Index (PPI).

The values of various terms in the formula would only be indicative and need not be very accurate. All the projects are selected based on PPI. The higher the PPI, the higher is the priority of the project...