Newell Rubbermaid Operational Excellence, Six Sigma

Newell Rubbermaid, famous for their storage containers and Sharpie pens, launched the Newell Operational Excellence program in 2002 to reduce costs, inventory and lead times, and to improve service and quality levels. The 2004 Annual Report sums up the Newell Operational Excellence program to date:

“It is critical to have a process for achieving cost savings on an ongoing basis in facilities we continue to operate. Newell Operational Excellence (NWL OPEX) is the process we have developed using best practices from methodologies such as Six Sigma, Kaizen, Kanban and other lean manufacturing principles. Our rollout of this program in 2002 introduced a new mindset of continuous improvement in manufacturing. In 2004, we further improved our prospects for this program with the in-depth training of more than 5,000 employees in our processes, metrics and targets, and by dedicating additional resources to drive accountability at all levels of the organization. This further implementation of NWL OPEX allowed us to realize $123 million in productivity savings.”

2004 Annual Report

On September 22, 2005, Joseph Galli, Jr., CEO Newell Rubbermaid, spoke to analysts about the company strategy and included an overview of the OPEX program. Below is a transcription excerpt from the archived webcast:

“We have to, once we complete our restructuring initiative part of our supply chain, we have to be relentless about becoming world class when it comes to what we call Newell Operational Excellence. Very simply this is our version of GE Six Sigma. This is our quest to reduce/eliminate scrap/waste/the cost of failure, and to improve productivity in our manufacturing facilities throughout our supply chain, our distribution network, and our sourcing network worldwide. We have an internal target, (it’s not in the model we are sharing today), we have an internal target of reducing our cost 5 percent every year in our manufacturing facilities and in our sourcing operations worldwide. That is an end result of a successful deployment of Newell OPEX.

“This chart shows you that we started this program in Jim Roberts’ group, the Rubbermaid/IRWIN group, where it was very successfully deployed. We’ve now expanded it throughout the rest of the company, in our Home & Family group, and in our Sanford brands group, and in fact we’ve appointed a czar of Operational Excellence, Ray Johnson, who launched this program together with Jim in the IRWIN/Rubbermaid group and now Ray is taking this program corporate-wide.

“There is a lot of potential here for the company, long term. We have to recognize that over the next three years we will be though quite busy on the restructuring process. We will achieve progress in OPEX and it’s a priority for us, but we’ve got to get the restructuring behind us, and then zero back in on OPEX. That’s what Ray Johnson’s focus is in his role.”

Strategy Review Presentation, Joe Galli, 2005 Newell Rubbermaid Analyst Day, September 22, 2005