SixSigmaCompanies.com

Circuit City - Six Sigma

Overview

Circuit City began their Six Sigma initiative early in 2001 as stated in their 2001 Annual Report:

Given the challenging retail climate, we will even more closely examine our operating practices. Specifically, we are undertaking initiatives to...apply the Six Sigma methodology to critical processes so that we measurably increase customer satisfaction while also reducing costs.

The initiative is corporate driven, but on a much smaller scale than an Albertsons or a 3M initiative.  In 2001 Carl Liebert III led their initial deployment and in 2003 left Circuit City to be the Senior Vice President of Operations for The Home Depot.  He held previous Six Sigma positions at GE and Black & Decker.

Projects

The Institute of Industrial Engineers held a meeting at Circuit City's Headquarters in May 2004 where Becky Kates, the Director of Six Sigma for Circuit City, presented an overview of the program and several example projects: 

The May IIE Meeting was held at Circuit City’s Corporate Headquarters and hosted by Becky Kates. Becky is the Director of Six Sigma, with a staff of fifteen Black Belts. The company has been working with Six Sigma for several years. Though they started with smaller projects, they are now using Six Sigma with very large and significant projects.

Some of the projects that they have undertaken involve streamlining the hiring process. In some instances, the hiring cycle took as long as 18 days! Using Six Sigma, the hiring cycle time was reduced to 8 days.

Other projects included determining the sales impact of markdown reductions, as well as determining the sales impact of bundling products with accessories.

Becky Kates and Master Black Belt, Bill Quinn, recently spoke at the 6th Annual Six Sigma Summit, January 25 - 26, 2005.  They showcased two Six Sigma projects aimed at growing retail revenues:

Open Box is a product that has been taken out of its original packaging and sold to the consumer as is. A project was put in place to manage the pricing of this product which produced millions in savings by designing algorithms to better control margins.

Consumers find ‘mail in rebates’ to be a difficult and stressful experience. A project was launched to mitigate consumer frustration and reduce cost. The project resulted in producing viable substitutes for mail in rebates with over $10 million spent in substitute promotions.

After four years of development it is surprising that their Six Sigma program has so few Black Belts.  Circuit City has over 40,000 employees and if only fifteen of them are devoted to improving critical processes they are leaving quite a bit of savings out on the table. 

Albertsons Inc. - Six Sigma

Larry Johnston, a seasoned General Electric executive, took over as CEO of Albertsons in April, 2001.  Unlike his colleagues, James McNerney and Bob Nardelli, Johnston did not immediately sing Six Sigma in the key of G & E.  He waited.  Instead, he quickly got to work restructuring the company and three years later announced it was time for Six Sigma at Albertsons. 

Overview

Larry Johnston sums up Albertsons Six Sigma initiative in their February 20, 2004 Press Release:

Six Sigma has the potential to move Albertsons to an all new level of productivity and customer service in our industry. We are excited to be the first food & drug retailer in the world to launch a company-wide Six Sigma effort.

Over the next 36 months we plan to deploy hundreds of Black Belts into every corner of the company as we re-engineer our major processes in every function and discipline. The world has witnessed how Six Sigma can transform industrial giants like GE, Allied Signal, 3M and others.....we believe it holds the same exciting potential in food and drug retailing.

Savings and Benefits

Only a year into their deployment no specific details about Six Sigma savings have been released.  Johnston's early cost savings initiatives have paid off well.  The 2004 Third Quarter Results Press Release states:

The Company remained ahead of plan in its cost savings program that was initiated in mid-2001. Through the third quarter of 2004, over $900 million in savings had been realized toward a cost-savings goal of $1 billion by year end 2005.

This $900 million in cost savings does not include Six Sigma.  I expect we will hear even greater savings from Albertsons by the end of this year as the Six Sigma initiative continues to mature and spread into the "major processes in every function and discipline".

Johnston has made quite a few other good moves since joining Albertsons: hiring Bob Dunst as CTO (former Safeway VP, Advanced Technology), offering the Preferred Savings Card and the best move of all, Patricia Heaton. 

Articles and Links

The Jack Welch of the Meat Aisle - Business Week Online, January 17, 2005

Albertsons will continue to cut prices - The Idaho Statesman, December 3, 2004

The Guru in the Vegetable Bin - Forbes, March 3, 2003

Bagging Profits - The Chief Executive, April, 2002

May Department Stores - Six Sigma

Overview

May Department Stores has not released very much public information about their Six Sigma program.  I have found job postings for positions at May and their brand stores that desire Black Belt certification, a "What is Six Sigma" presentation by the Divisional Controller for May Merchandising Company and the biography of a Six Sigma consultant who lists May Department Stores as one of his clients.

Rob’s clients have included May Department Stores, Fannie Mae, JP Morgan, State Street, DBS Bank of Singapore HSBC, Heller Financial, Liberty Insurance Services, Samsung – Living Division, Navistar, Libby-Owens Ford, Ingersol-Dresser Pumps, Merck-Medco, Crane Building Supply and ZF Lemforder.

Articles and Links

May Department Stores Company Press Release - Federated And May Announce Merger

IMA Six Sigma Presentation - Presented by Warren Sidosky, Nov. 7, 2003

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.

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

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