SixSigmaCompanies.com

Federated Department Stores - Six Sigma

Federated Department Stores announced their plans today to acquire May Department Stores.  You can read all about it in the February 28, 2004 Press Release.  Both companies are currently involved in Six Sigma initiatives.  Although I don't know much about May's Six Sigma ways, Federated is very proud of what they have done, and they love to talk about it.

Overview    

Federated began their Six Sigma initiative in 2001 in the Federated Logistics & Operations (FLO) division. They used an outside consulting firm for their initial training, and now have a team of internal trainers.  They follow the traditional deployment model where Black Belts lead projects full-time and Green Belts assist the Black Belts on a part-time basis. 

Every person in our division has been trained on Six Sigma; from our senior leaders to all of our hourly associates. FLO Website

Although FLO has trained members of other Federated divisions, and even a few suppliers, Six Sigma has yet to make its way through the entire company.  But the momentum is there.  According to the FLO Website:

...we were able to meet the goal of training every executive in FLO. We also trained approximately 50 executives from other Federated divisions and from some of our vendors and suppliers. 

As most Six Sigma companies do during their deployment, Federated too has made Six Sigma their own by adding their own flavor to the mix.  They have what are called Fast Track projects that take 2-3 weeks to complete.  In 2003 FLO also began to apply GE's Change Acceleration Process (CAP) and they are currently using Process Management Teams (PMTs) to identify projects that can be leveraged across the business. 

It will be interesting to see if FLO can leverage their processes across the great divide we call "culture" that awaits them in May.  I suspect they will be so tied up in the merger that integrating their Six Sigma programs will have to wait for a season. 

Links/Articles

FLO Six Sigma - Description of the program

3M - Six Sigma

Overview

3M’s corporate Six Sigma journey began shortly after James McNerney took over at the helm in January 2001.  Prior to his arrival, there was some Six Sigma activity taking place in parts of the company, but not at all like 3M would see with McNerney's corporate driven approach.  Now, more than 4 years later, the progress is remarkable, and the company continues to innovate new products as well as new business processes. 

3M is in the midst of a transformation, McNerney said. Six Sigma, 3M Acceleration and our other corporate initiatives are now integrated into every business, every function and every subsidiary of 3M, and we expect they will generate both productivity improvements and revenue growth for years to come.  Press Release, February 18, 2005

3M's growth strategy encompasses a broad set of corporate initiatives: Six Sigma, Global Sourcing, 3M Acceleration, eProductivity and Indirect Cost Control. 

Today, we have more than 30,000 employees trained, with plans to complete Green Belt training for all salaried employees by the end of 2004 — including, of course, the entire Industrial Business sales force and technical teams. Globally, over 11,000 projects have closed and more than 12,000 projects are currently underway. Website

Savings and Benefits

The 2003 Annual Report states that 3M’s initiatives increased operating income by more than $500 million in 2002, and by an additional $400 million in 2003.  The annual report projected $400 million in the year 2004.  Patrick Campbell, CFO, stated in the Prudential Financial Conference on September 24, 2004, that indeed they did meet that projection.

The tell-tale sign of a mature Six Sigma program is one that spreads Six Sigma to customers and suppliers.  GE masterminded a program called  "At the Customer For the Customer" (ACFC).  They send their own team out to their customers to help them solve their business problems.  3M is following suit as well with a similar program,  "Six Sigma with our Customers". To date, they have partnered on more than 250 projects, with customers such as Grainger, DuPont, Ford, Estee Lauder, The Home Depot, Motorola, Procter & Gamble, Land Rover, Toyota, and Wal-Mart.

Articles/Links

Corporate Website Overview of Six Sigma

3M's Rising Star - Business Week Online, April 12, 2004

Employees file age discrimination suit against 3M - Discrimination charges include selection of employees for Six Sigma training.

3M Six Sigma - Excellent overview of Six Sigma at 3M.  2004. PDF

3M Foundation supports Six Sigma Program at Mississippi State

CFO.com - Back to Basics, January, 2001 article predicting Six Sigma deployment at 3M.

Financial Services Industry - Six Sigma

Six Sigma has really taken hold in the financial services industry.  Early pioneers included GE Capital, Sun Trust Banks, Citigroup, and J.P. Morgan Chase & Co.  Below are the Fortune 500 companies in the Financial Services industry that are using Six Sigma to some degree.  The Financial Services industry includes the sub-industries: Diversified Financials, Commercial Banks, Savings Institutions, Insurance, and Securities.

Allstate Corporation
American Express
American Intl. Group
Aon
Bank of America Corp.
Bank One Corp. (J.P. Morgan)
Capital One Financial
Citigroup
Conseco
Countrywide Financial
Fannie Mae
FleetBoston (Bank of America)
General Electric
J.P. Morgan Chase & Co.
KeyCorp
Lincoln National
Mellon Financial Corp.
Merrill Lynch
Northwestern Mutual
Principal Financial
Prudential Financial
State St. Corp.
SunTrust Banks
U.S. Bancorp
USAA
Wachovia Corp.
Washington Mutual
Wells Fargo

Bank of America - Hoshin Kanri & Six Sigma

Bank of America is one of the most prominent financial services company with a corporate-wide Six Sigma initiative, and they're not afraid to talk about it.  Their unique blend of Hoshin planning, Kanri management and Six Sigma separates them from the pack.

Bank of America began their Six Sigma journey in 2001 as a corporate initiative supported by CEO Ken Lewis. Their deployment model was a blend of external hiring and internal training.

When the program was first introduced, some employees were skeptical. But resistance subsided, officials said, when Lewis and his top lieutenants earned green belts. Now Bank of America has certified about 3,000 green and black belts and has tallied $2 billion in either cost savings or added revenues. - Miami Herald

Milton H. Jones, Chief Quality & Productivity Executive for Bank of America, said on October 26, 2004 at the International Society of Six Sigma Practitioners Symposium in Charlotte:

Ken's enthusiasm for quality and Six Sigma are infectious, so he didn't need to talk me into taking the job. I share Ken's belief that quality and Six Sigma are disciplines that are contributing to an ongoing revolution in American business.

We now have more than 10,000 associates trained at different levels, as Black Belts, Green Belts, in DFSS, Lean and Champions.

For the last two years, we've even been requiring that our key vendors use Six Sigma methods, and we're now making sure that they participate in our own Six Sigma training programs.

Project Examples
In 2004, American Banker featured several articles about Bank of America, most notable was a cover story detailing how Six Sigma helped Bank of America decrease robberies in the LA area.

Seven months later it found that robberies and associated dollar losses were down 69% compared with those months a year earlier. Robberies in the FBI's L.A. region in that period fell just 7%, Mr. Slaton said.

Below is a list of other projects and savings/revenue generation results. 

$1.3 M Savings: Reduce Cost of Relocating New Hires
$5 M Revenue:  Improve Lockbox Deposit Availability 
$30 M Revenue/$1.5 M Savings:  Measure Return on Sponsored Events 
$7.8 M Revenue:  Retain Customers Who Move Within Footprint 
$950,000 Savings:  Complete Federal Tax Return Faster 
$6.6 M Loss Reduction:  Reduce ID Theft Through “Account Takeover” 
$2 M Revenue:  Improve Results From New Sales Hires 
$10.7 M Revenue:  Improve Customer Referrals From Tellers 
$3.6 M Revenue:  Improve Credit Card Sales
Increase Customer Satisfaction:  Online Banking Customers View Intraday Activity 

Articles/Links

An excellent overview of Bank of America’s Six Sigma program can be found in the November 2003 e-Zsigma Newsletter. Joseph Valasquez of Bank of America was the Six Sigma Spotlight.

SixSigmaZone.com is a brand new Six Sigma information resource that has presentations from conferences including this Bank of America presentation given at a June 2004 Six Sigma in Financial Services Conference.

Quality Progress, February 2005, Driving Organic Growth at Bank of America. Excellent article by Daniel Cox and James Bossert.  ASQ membership required to read.

Bank of America - FleetBoston Merger - 2003 Annual Report Supplement

Computers & Electronics - Six Sigma

The Computers & Electronics sector consists of the following Fortune 500 industries: Computers, Office Equiptment;  Computer Software;  Computer Peripherals;  Computer and Data Services;  Semiconductors and Other Electronic Components;  Electronics, Electrical Equipment

Early Six Sigma pioneers were Texas Instruments, IBM, Solectron, and Sun Microsystems. 

Below is a list of Computers & Electronics companies that are using Six Sigma:

Advanced Micro Devices
Apple Computer
Applied Materials
Computer Sciences
Dell
Eaton
Electronic Data Systems
Emerson Electric
First Data
Gateway
Hewlett-Packard
Intel
Intl. Business Machines
Jabil Circuit
Lexmark International
Maxtor
Maytag
Microsoft
NCR
Oracle
Pitney Bowes
Rockwell Automation
Solectron
SPX
Sun Microsystems
Texas Instruments
Whirlpool
Xerox

Dell Inc. - Six Sigma, the Enabler

Michael Dell has built a successful business model that scores of companies are trying to emulate.  Dell Inc. is the perfect example of a company that is using Six Sigma not as an end in itself but as an enabler to achieve results. Early in 2000 they started a corporate initiative called Business Process Improvement (BPI).  Nearly five years later the program, which includes Six Sigma, Lean, and Hoshin Planning, is still growing strong, becoming yet another model that other companies are trying to follow. 

BPI Overview:

Marie Moynihan, Human Resources Director, Dell EMEA – Home and Small Business, gave the following description of BPI at The LRC Symposium "Meeting the Challenge of Change - Irish Labour Market Issues in a Global Economy"  on November 11, 2004:

• BPI is a set of tools and skills used to understand, investigate and improve business processes.
• BPI Mission: To empower employees with the knowledge, skill and tools in order to make Dell more efficient through reduced cycle time, improved quality or lower costs.
• Why has Dell made BPI a priority? Because of its inherent benefits:

BUSINESS:  Quality, cost savings (more than $1.55B during FY04)
EMPLOYEES:  Effective teams, empowerment, career enhancing
CUSTOMERS:  Better Customer Experience through cost, quality and cycle time improvements

In a roundtable discussion with CNET News.com's Editorial Board in November , 2003, Michael Dell spoke about many aspects of the company including BPI:

We have a process called BPI, business process improvement, which any employee can be involved in. If five workers on the production line see something that isn't working, instead of complaining about it, they have BPI. They form a team, they go solve it and it becomes a BPI project in a global database. We're saving $1.8 billion with this kind of process.

Additional Savings Quotes:

At the end of July, we had over 375 million in annualized BPI savings dollars. We’ve completed almost 600 BPI projects worldwide and we still have more than 2600 projects in progress worldwide with a projected annualized savings of over $600 million. - September 10, 2003, Town Hall Los Angeles.

Since implementing BPI, over seven hundred and fifty people have been certified across Dell EMEA, resulting in savings exceeding $300M. - November 18, 2004, INBITE '04: Intelligent Business IT

Dell is very public about their BPI program.  Ian McMorrough, Executive Champion EMEA - BPI and Lean Programs will be speaking at Six Sigma IQs 6th Annual European Six Sigma Summit in April.  He is also speaking at the Six Sigma for Service and Transaction Excellence in March.

Plain and simple, Dell is a leader in just about everything they do.  From supply chain to customer service to marketing, Dell is harnessing the power of their employees to achieve great things.  It's no wonder that Dell is #1 in Fortune's America's Most Admired Companies list, they have earned it. 

Articles/Links:

Decker Marketing - Sam Decker, a Marketing Executive at Dell, has an excellent Blog where he occasionally posts his thoughts on Six Sigma, and gives insight into Dell's unique way of using it.  "7 tips for "Getting Six Sigma in Marketing" and "Six Sigma Marketing...Made Simple"

Dancing With Elephants, Fortune Small Business, October 14, 2004

Customer focus keeps Dell productive, Network World, April 21, 2003

Feds May Unleash Six Sigma on Terrorism, USA Today, October 30, 2002

About SixSigmaCompanies.com

SixSigmaCompanies.com is dedicated to providing information about the Six Sigma initiatives at Fortune 500 companies.  The author is a Market Research professional currently working in the Six Sigma Consulting Industry.  He has nearly 4 years experience tracking the evolution of Six Sigma in companies throughout the world.

Currently, over 40 percent of the Fortune 500 are using Six Sigma to some degree.  Over the course of the next year SixSigmaCompanies.com will provide an overview of each company's Six Sigma program, details on the benefits they are achieving, and relevant articles and links for further reading.

First a few definitions:  Each company is defined within a deployment scope.  One of the beauties of Six Sigma is that it can be tailored to the individual needs and strategy of a company.  This facet has led to many different levels of deployment.  Not all companies have followed the GE way - a corporate-driven, top-down approach.  Some companies prefer to start out smaller and work their way up to a full scale deployment.  The following definitions are used classify the current deployment scope of each company:

• Corporate - The Six Sigma program is a corporate-wide initiative, fully supported by the CEO and executive team.
• Business Unit - One or more Business Units are using Six Sigma.
• Black Belt - This level of deployment simply means that the company is involved in Six Sigma at a fairly small level.  They have either trained or hired a small number of Black Belts to work on projects.