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Lean Six Sigma Leads Xerox
Lean Six Sigma Leads Xerox
Lean Six Sigma Leads Xerox
Lean Six Sigma Leads Xerox
Lean Six Sigma Leads Xerox
Lean Six Sigma Leads Xerox
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Lean Six Sigma Leads Xerox


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  • 1. LEAN Lean Six Sigma Leads Xerox T he origin of Xerox Corp.’s lean Six Sigma program can be traced SINCE 2003, back to the company’s initial “leadership through quality” initia- XEROX HAS tive in the early ’80s. Improvement processes, tools and tech- niques were deployed across the corporation and centered on improving FOCUSED ON business processes to create higher levels of customer satisfaction, quality and productivity. INTEGRATING As improvement processes evolved through the ’80s and ’90s, Xerox LEAN SIX SIGMA explored various approaches to improving its business results. In the late ’90s, Six Sigma and lean concepts were adopted locally by Xerox manu- CORPORATEWIDE. facturing and supply chain opera- tions. While these efforts improved the overall efficiency and effective- ness of specific processes, they were very focused and limited in scope. In mid-2002, Xerox leaders By Arthur Fornari, decided to integrate lean and Six Sigma across the corporation by Xerox Lean Six committing the resources required Sigma, and George to enable a robust deployment. They agreed to identify projects Maszle, Xerox Lean based on value creation and eco- nomic profit impact and engage Six Sigma and every function and value chain. Key deployment management positions Business Support were staffed in every major organi- zation, full-time Black Belt (BB) candidates were identified based on the individuals’ performance records and leadership potential, Anne Mulcahy, chairman and CEO, and intense training began in visits with Teamwork Day partici- January 2003. pants. Xerox’s annual Teamwork Since then, Xerox Lean Six Day celebrates the accomplish- Sigma, as it is called, has gained ments of teams in a science fair increasing momentum. More than atmosphere. 400 BBs have been trained, more than 700 high business impact projects have been executed, and signifi- cant financial benefits have been delivered. Additionally, 2,000 leaders have participated in two-day workshops, another 2,500 employees are in some phase of the Green Belt (GB) certification process, and more than 10,000 employees have been through Yellow Belt (YB) awareness training. Leaders at all levels are working to integrate lean and Six Sigma principles into all business processes, including product design and development, integrated supply chain, marketing and sales, customer service, infrastructure, governance and strategy deployment. Plans are S I X S I G M A F O R U M M A G A Z I N E I A U G U S T 2 0 0 4 I 11
  • 2. Lean Six Sigma Leads Xerox in place to continue this momentum into 2005 to assignment to the next available BB. The BB uses drive even higher levels of customer value and the define, measure, analyze, improve and con- financial benefits across Xerox. trol (DMAIC) improvement process or one of the design for lean Six Sigma processes to identify Selecting Xerox Lean Six Sigma Projects and deploy the best solution for the defined busi- ness problem. The management teams identify Xerox Lean Six Lean Six Sigma projects at Xerox address every leg Sigma projects based on customer experience of the value lever tree (see Figure 2), and the results improvement opportunities, alignment of strategic of these projects directly support the Xerox business plans, ability to close business gaps and key areas for goals. process improvement. As shown in Figure 1, Xerox views the lean Six Sigma process in two distinctly dif- Management Stirs Up Lean Six Sigma Success ferent stages: 1. The first phase focuses on project selection and Dedicated and committed leaders have been critical prioritization. Potential projects are assessed to the success of lean Six Sigma at Xerox. The world- based on their potential business impact and esti- wide deployment was the direct result of Xerox chair- mated effort. The business unit deployment man- man and CEO Anne Mulcahy, who believed in the ager works with the leadership team to identify approach and asked her leadership team, “Is it time the next best opportunity based on various busi- Xerox got serious about deploying Six Sigma world- ness factors. To ensure alignment with Xerox wide?” goals, the leader of the operation is held account- After conducting preliminary presentations address- able for the projects selected. ing that question, the team participated in a leader- 2. Once the project is selected and the appropriate ship workshop to better understand the concepts, sponsor confirmed, the project is queued up for experience the approach and agree on a recommend- Figure 1. Lean Six Sigma Processes at Xerox • Customer issues and opportunities. • Business strategy. • Goals and objectives. • Priorities. Project candidates Prioritized by Assign project Sponsor Results are management to belt and inspects captured and team. sponsor. progress. sustained. Structured approach to project selection. DMAIC is the project management framework. Low Medium High Define Measure Analyze Improve Control Benefit Define project purpose and scope. Sponsor inspects Measure current per formance. deliverables and Analyze causes and confirm with data. checkpoints for Improve by removing variation and nonvalue added activities. Effort each phase. Control gains by standardizing. Low Medium High 12 I A U G U S T 2 0 0 4 I W W W . A S Q . O R G
  • 3. Lean Six Sigma Leads Xerox ed deployment recipe. The workshop enabled the decisions required to aggressively launch Xerox Lean Six Sigma across all organizations worldwide in 2003. Lean Six Sigma Communication Channels Starting with Mulcahy, Xerox Lean Six Sigma is a key part of nearly every employee communication. It is communicated as a key enabler in the quest to improve Xerox. During the first leadership workshop, Mulcahy stated, “What I worry most about is how to Several of the showcased projects at Teamwork Day in June 2003 involved lean Six Sigma. Figure 2. Xerox’s Value Lever Tree Price Revenue Project goals: Volume Revenue Labor Expenses Cost of Material Projects support all value levers and customer facing processes. goods sold Assets Operating Fixed cost profit Labor R&D Nonlabor Sales and Net operating Sales, manufacturing profit after tax administrative and general General and expenses administrative Economic expenses profit Operating Economic profit profit is the Income tax income X Cash generated Tax rate relative to all Receivables resources required, Total assets Inventory including capital costs Invested Land, building from the capital and equipment balance sheet. Cash Capital Other assets charge X Payables Weight average Current Current debt cost of capital liabilities Other current liabilities S I X S I G M A F O R U M M A G A Z I N E I A U G U S T 2 0 0 4 I 13
  • 4. Lean Six Sigma Leads Xerox return Xerox to greatness. Lean Six Sigma is not the people providing value to the customer, as defined by only answer, but it’s a significant part of the equation. the voice of the customer, leading to improved busi- Lean Six Sigma is incredibly different.” ness results. The cycle is never-ending because contin- In addition to having leaders communicate via uous improvement is never-ending. The tools and speeches, meetings and newsletters, Xerox established processes for sustaining this perpetual, customer cen- an extensive intranet site that provides reference tric cycle are contained within each of the four com- information, deployment details, project successes ponents that surround the customer focus circle. They and answers to frequently asked questions. Formal include the performance excellence process, the curriculum also plays a key role in communicating DMAIC improvement process, market trends and Xerox Lean Six Sigma to all employees. benchmarking, and behaviors and leadership. To supplement the standard BB and GB courses, an The performance excellence process supports the online YB awareness program was launched in 2003. It alignment of strategies and performance objectives, is accessible to all employees and provides a basic while the DMAIC improvement process provides the understanding of core processes, tools and expecta- basic principles and tools for process improvement. tions. Benchmarking and market trends provide the refer- Customer focus is at the heart of Xerox Lean Six ence points and best practices for setting aggressive Sigma (see Figure 3). The outer ring represents Xerox performance targets and finding better ways to From the Top: Xerox’s Leadership Commitment By A. Blanton Godfrey, editor Recently I interviewed the authors actually cover in the two-day training customer experience with Xerox. of this article, both key members of you mention? the Xerox executive team, about SSFM: You mentioned 10,000 their involvement in Six Sigma. Art Xerox: In the first four hours, sen- Yellow Belts (YBs) have been Fornari and George Maszle expand- ior leaders receive an introduction to through awareness training. What ed on their company’s implementa- Xerox Lean Six Sigma and the bene- does that consist of? tion of the methodology and its inte- fits of lean and Six Sigma. Then we gration with lean principles. do an eight-hour simulation working Xerox: The YB training is a 16- with customers called “Sigma hour online training experience. It Six Sigma Forum Magazine Station” in which the trainees process comprises the first three modules of (SSFM): What are the key differ- advertising requests. When they our Green Belt (GB) training. We ences in today’s Six Sigma at Xerox start it takes more than 20 minutes have partnered with MoreSteam for and the well-known approach to to book a request. After two or three this training.1 We have been using business management you had iterations they can do it in 30 to 45 this approach for four years and before, Xerox’s leadership through seconds. This simulation gives them offer the training in five languages. quality? a way to experience the real world and use the tools of lean and Six SSFM: Are all Black Belts (BBs) Xerox: The primary differences in Sigma. This really hits home since it trained in design for Six Sigma our approach now are dedicated is a nonmanufacturing example. (DFSS) as well as in design, meas- resources, pinpointed projects We are finding the leadership by ure, analyze, improve and control aligned with strategic goals, an eco- senior management is making all (DMAIC)? nomic profit, bottom-line focus and the difference. Before, we never a standard set of methods and made a business out of business Xerox: No, all BBs are trained in processes. improvement. People are now DMAIC, and 10% are also trained in accountable for the economic bene- design for lean Six Sigma (the SSFM: What training do the sen- fits of their projects. We are also define, measure, explore, develop ior leaders receive? What do you focusing more than before on the and implement process). We have 14 I A U G U S T 2 0 0 4 I W W W . A S Q . O R G
  • 5. Lean Six Sigma Leads Xerox improve processes. The behaviors and lead- Figure 3. Xerox Lean Six Sigma Framework ership component is critical in supporting all components of the framework. Customer valu Management processes, at all levels, are e Deploying being modified to inspect project progress direction and ensure projects focus on the key busi- Performance Delivering ness gaps and strategies critical to the busi- Setting excellence and inspecting direction process ness success of each operation. From a serv- results ices and solutions perspective, many cus- Control Define tomer offerings are now based on sound Customer X er ox p Market trends lean Six Sigma principles. Additionally, and benchmarking focus Customer Improve value Measure many of the projects completed or in Analyze eop process address key customer issues or pain DMAIC le points. Many other projects provide oppor- Behaviors and ts tunities to partner with customers and help ul leadership s s re them achieve higher levels of performance. es in Helping customers find better ways to do B us separate courses for design (R&D) SSFM: What do you think is Xerox: Getting managers to give and transactional DFSS. These unique about Xerox’s approach? If up their best people, getting proj- courses are two-week add-ons to someone came to study you now, ects aligned with business needs, the basic five-week BB course. what would they learn? understanding our gaps and oppor- tunities for project selection and try- SSFM: General Electric (GE), Xerox: We believe we have made ing to break these projects down Motorola, Honeywell, 3M, Samsung an excellent integration of Six Sigma into smaller bites than world and others have been frequently and lean. We have used economic hunger. cited as the creators of today’s Six profit for project selection and built Sigma. Is your approach more simi- a value based solid infrastructure. SSFM: What advice do you have lar to one of these companies than We are using Six Sigma and lean to for other companies that have been the others? develop our people and train them leaders in their fields, true quality for future leadership positions. We leaders, and are now considering Xerox: No, we are not similar to expect to pick our future leaders in Six Sigma? GE, and we believe Honeywell all aspects of the business from keeps lean and Six Sigma separate. people trained as BBs or at least as Xerox: You have to have a rea- We believe we are more like GBs. Most of our people stay son—a convincing argument from Caterpillar and ITT. We see four evo- two years as a BB. To be certified the top. A burning platform like lutions of Six Sigma: they must complete two or three Caterpillar had helps. We had made 1. Motorola was the creator. projects, create an additional a significant turnaround at Xerox; 2. GE brought the philosophy of $500,000 in economic profit and we knew we could be a very good dedicated resources and a have leadership endorsement. company. But with Six Sigma we strong business focus. thought we could be outstanding— 3. ITT added a value based SSFM: What has been most diffi- we could truly go from good to great. approach. cult in the past 18 months of imple- 4. Caterpillar has done a good inte- mentation? Reference gration of lean and Six Sigma. 1. See S I X S I G M A F O R U M M A G A Z I N E I A U G U S T 2 0 0 4 I 15
  • 6. Lean Six Sigma Leads Xerox great work and improving their overall expe- rience with Xerox are two important consid- erations in identifying Xerox Lean Six Sigma projects. The Path to Continued Progress Transformation The Xerox Lean Six Sigma deployment To enable a successful implementation, has three dimensions: Xerox deployed a proven recipe recommend- 1. Projects and results. ed by the George Group. Even though minor 2. Cultural change. variations have occurred, this recipe has 3. Leadership development. clearly guided Xerox’s deployment over the To continue its progress, Xerox must bal- past 18 months: ance all three dimensions. While the eco- 1. Select projects based on value creation nomic benefits from the hundreds of BB opportunity such as return on invested and GB projects are positively impacting capital and economic profit, with the financial results, if Xerox fails to change the culture or develop the BBs into future lead- number of projects in process controlled. ers, the business results will be short lived. 2. Use a consistent financial results track- Xerox also realizes many Six Sigma ing approach established by the deploy- deployment efforts do not achieve their full ment team and financial organization. potential. Leadership believes the key differ- 3. Consistently deploy and train full-time entiators of success and their ability to con- BBs, full-time deployment managers, tinue to make progress in Xerox include: sponsors and GBs. • The ability to achieve full integration into the business and how Xerox 4. Assign demonstrated top performers to employees work. the full-time roles. • Project selection linked to business 5. Adopt the defined organizational struc- strategies and customer value. ture to enable success. • The ability to change culture and lead- 6. Engage operations leadership in the ership behavior. process and integrate lean Six Sigma • Engaging the full value chain in all into daily business operations. geographies and operations. 7. Achieve critical mass toward the Xerox • Ability to track results using a robust transformation of at least 0.5% of the project tracking system. employee population as BBs in 2003 and Xerox leadership also believes the basic another 0.5% in 2004. elements of the deployment recipe are sound and are active across the organization (see sidebar “The Path to Transformation”). Even so, it still has a way to go to fully inte- grate the concepts and establish Xerox Lean Six Sigma as “how we run the business.” As project successes continue to stack up and gain increased visibility, the momentum will continue to build. Xerox Lean Six Sigma will WHAT DO YOU THINK OF THIS ARTICLE? Please share be a significant part of the equation for mov- your comments and thoughts with the editor by e-mailing ing Xerox from a good company to a great company. Reprinted with permission from Six Sigma Forum Magazine. 16 © 2004 American Society for Quality. I A U G U S T 2 0 0 4 I W W W . A S Q . O R G