But we’re not going to talk about Lean Six Sigma in the narrow way it’s typically defined; that is as a set of methods and tool to improve quality and efficiency in manufacturing environments. Instead, we’re going to explore how implementing our particular recipe for Lean Six Sigma has helped Xerox address a wide variety of business challenges – and more importantly, how we’re beginning to use our experience with Lean Six Sigma to help customers address the challenges they face.
As the world continues to shrink, the business environment is more competitive and less forgiving than ever before. No matter what business you’re in, you face fundamental challenges that don’t have any easy answer. If they did, we would have all squashed all of our competitors by now. The challenges on this list aren’t new. In fact, I think you’d agree that all of us have been working on them for years. But finding ways to continually improve in all these areas, to push our performance to the next level, is critical to long-term success. Satisfied, loyal customers are obviously the lifeblood of any business. Capturing and retaining them are the keys to growing top-line revenue. Managing cost by reducing waste is another universal goal, whether you’re trying to avoid wasting hours or parts or energy. Increasing overall productivity is a related goal that looks at getting more value from a given set of resources. And finally, we all know that no company can succeed without the efforts of loyal, talented and committed employees.
Xerox today is a different company than we were even a few years ago. We’re now a smaller, leaner company operating world wide but using an evolved set of business models and strategies which has us focused on delivering what we call Smarter Document Management solutions for our customers. That’s all about using the right combination of technology, process knowledge and industry application expertise to bring new value to the information technology investments that virtually every industry and organization has made in the past few years. And our implementation of Xerox Lean Six Sigma is a key enabler to the success of our mission.
DuPont has undergone three transformations in our nearly 202-year history. We are now in our third transformation, which began in 1998. Since then we have made major changes in our portfolio (e.g. Pioneer, Chemfirst, electronics, Griffin acquisitions; Conoco, DTI, DuPont Merck divestitures). We have also made changes in how we work, adopting Six Sigma methodology across the company. We need to accelerate the rate of transformation. The changes that are part of the launch of the “new” DuPont are designed to do that.
Xerox Lean Six Sigma is, in many ways, the natural next step in the evolution of our quality strategy. For decades, Xerox has built a substantial legacy of quality and business process improvement. In fact, the origin of our current Lean Six Sigma initiative can be traced back to the “Leadership Through Quality” programs of the early ‘80s, which were designed to address our first real competitive threats. Over the succeeding years, we earned numerous quality awards, culminating with two Malcolm Baldridge National Quality Awards. Equally significant are the continuing stream of industry awards for technology leadership. By the late ‘90s, lean and Six Sigma tools were adopted by our manufacturing and supply chain operations, sowing the seeds for our current full-blown adoption of Lean Six Sigma. And this year, Design for Lean Six Sigma is being launched across our product design and delivery value chain. While many of our fundamental quality concepts remain the same, our adoption of Lean Six Sigma does entail some notable changes. These include an infrastructure of dedicated resources; formal, inspected requirements for Green Belt, Black Belt and Master Black Belt competencies; explicit leadership commitment, alignment with the DMAIC and DMEDI industry standards, plus disciplined project selection and measurement. All make our current approach stronger and more business relevant than ever before.
In September of 2002, after much internal discussion, Anne and Xerox’s Senior leadership team approved implementing Xerox Lean Six Sigma as our company-wide business improvement approach. There were a number of objectives that were identified and are summarized here. (READ BULLET POINTS) Our leadership also decided that this would not be a narrow initiative, focused on just a few specific processes. Instead, it would truly define and shape our Xerox culture and, from the boardroom to every division, team and function, it would become an integral part of the Xerox business fabric, in other words, the way we work .
Okay. So just what is Xerox Lean Six Sigma? Like other companies, we’ve developed our version by integrating two powerful, industry-recognized business improvement approaches that, when combined, are even more powerful than when used separately. Anyone who has a basic understanding of the two approaches knows that Lean, affects process speed and cost while Six Sigma is employed to improve quality and consistency.. But only a few companies on the leading edge, including Xerox, have discovered that to get the greatest impact you must attack speed and quality simultaneously. One feeds off the other. Lean speed enables faster cycles of learning and innovation. And Six Sigma quality accelerates processes by minimizing time lost to rework. Used together, the two disciplines can help Xerox and our customers generate the greatest possible amount of improvement in a given process.
A key factor in any large scale program is leadership and commitment. Our commitment to Lean Six Sigma starts with Anne Mulcahy. From the beginning, Anne has seen the value of the substance and discipline that are at the heart of Lean Six Sigma. Working closely with GE Capital to form our joint venture, Xerox Capital Services, Anne has seen first hand the value of such an approach to business management and culture change. Her emphasis on measurable business results has served Xerox well during our turnaround and is the foundation for our Xerox Lean Six Sigma initiative.
In our view the potential of Lean Six Sigma isn’t limited to any one area of an enterprise. In fact, our growing experience implementing the disciplined, results-focused, data-driven Lean Six Sigma methodology is helping drive real improvements throughout Xerox. For example,as I mentioned earlier, this year we’ve launched Design for Lean Six Sigma across our entire design and product delivery value chain. That will drive even greater quality and innovation and speed delivery of the industry-leading solutions customers expect from Xerox . That’s the latest step in infusing Lean Six Sigma everywhere from the way we design our products to the way we build them to the way we ship them and service them and even the way we bill our customers. Other projects are improving our HR planning processes, improving Parts utilization in our customer service operations, and improving the cycle time of our contract reviews. From manufacturing to finance, from marketing to IT , we’re using Lean Six Sigma to improve the way we work and measure the results.
Since launching our initiative in 2002, we’ve made great strides toward our goal of making Lean Six Sigma “the way we work” at Xerox. If one key to success is measurement, we’ve got some pretty good numbers. The company doesn’t release financial data but we do say the our targets for economic profit from projects have been met or exceeded to date, with ever more aggressive targets set each successive year. Today there are 30 full-time deployment managers leading our Lean Six Sigma efforts worldwide. These Deployment Managers manage groups of Black Belts and are responsible for working with a business unit’s senior leadership to identify and charter projects that close gaps, address shortfalls or address longer-term strategically significant opportunities. 1,100 projects both internally-focused and on behalf of customers contributed to Xerox’s profitability and customer success in 2004. Our long-term commitment to training is also starting to pay off. Our ranks include more than 600 Black Belts. 2,000 executives and managers have completed leadership workshops. We’ve trained more than 2,500 Green Belts. And at the entry level, the level that will feed our pipeline for the future, we’ve trained more than 18,000 Yellow Belts.
The scope of our Lean Six Sigma program has grown significantly since our decision to embrace it as a core business strategy. Now we’re taking the knowledge and capability we’ve gained and are continuing to build to help benefit our customers. I’ll give you some specific examples of how we’re doing that in just a couple minutes.
I said in the beginning that using our Xerox Lean Six Sigma capability is ultimately about delivering real value to customers so they can better meet the challenges we just looked at. What do we mean by real value? In almost every case, it refers to what we call “hard metrics”, specific business improvements that can be readily measured. Many of those improvements relate to economic profit: revenue, cost, productivity, and other efficiencies.. But there is another aspect of “real value”. We refer to it as “soft metrics”, and it refers to improvements that are less obviously tangible but no less real, definitely measurable and no less important to the growth and success of any company. Things like customer satisfaction and employee development, motivation and engagement. This impact of this last point can’t be overemphasized. Employees gaining confidence and career advancement through acquiring skills, atmosphere of a workplace, the culture of a company, the feeling of empowerment that using Lean Six Sigma methodology can create. All those things impact your financial spreadsheet.
These metrics are what customers, not just Xerox, are using to judge the outcomes of projects where use of Lean Six Sigma is a critical component. I’d like to share just a couple examples, from two different types of organizations that have now experienced the value of Lean Six Sigma.
Intercontinental Hotel Group, or IHG, is a leader in the travel and hospitality business, managing household-name brands such as Holiday Inn. When they engaged us, the challenge they faced was simple: They needed to reduce costs to allow them to survive in the wake of the 9/11 tragedy when the tourism business was on it’s knees. The kicker was that they also wanted improve customer satisfaction with the IT support services Xerox was providing. Cut costs and improve service simultaneously. A seemingly impossible task, but a perfect challenge for Lean Six Sigma. The Measure and Analyze phases of the Lean Six Sigma engagement yielded key insights that led to our solution. (add insights from video) The solution involved implementing remote control service, which helped minimize the cost of deskside visits; migrating to a standard, more current operating system; moving administration offsite and eliminating redundancy among vendors that had caused inefficiency. By the end of the project, IHG had achieved their $1.2 million savings goal and actually improved customer satisfaction according to 5 key metrics. Again, this case is a testament to Lean Six Sigma’s power to simultaneously achieve multiple, seemingly contradictory, goals.
The Brooklyn Public Library is the fifth largest in the US, with a Central Library, Business Library and 58 neighborhood branches. It serves more than 2.4 million patrons each year. The Library offers thousands of public programs, millions of books and the use of more than 1,000 free Internet-accessible computers. The Library management team engaged Xerox in a Lean Six Sigma-based project to help reduce costs, capture revenue, and free up professional resources. The initial challenge was to find a way to recover revenue lost to over 9 million pages a year worth of free printing. But, with the help of Xerox Global Services, the library uncovered another significant challenge: To stop the drain on productivity caused by the labor-intensive manual process for reserving PCs used by library patrons. In fact, librarians were spending approximately 135,000 hours each year playing the role of “computer cop”. The solution developed and being delivered by Xerox includes an automated Patron Access Management solution which integrates the library's computers, 74 Xerox digital library copier-printers, 68 self-service kiosks, and ultimately, Snapple vending machines. With the swipe of a patron's Access Brooklyn Card, library patrons can now check out books, videos and other media. What’s more, they can reserve computer time up to two days in advance — without librarian involvement. The results? The library estimates savings of approximately $1.2 million due to new pay-for-print processes and reallocation of labor to more productive tasks. It has also created the potential for new revenue streams from marketing partnerships. And, in addition to achieving financial objectives, the solution has helped the library improve the patron experience by increasing convenience and efficiency and improved job satisfaction among it’s highly trained librarians. Now let's hear from the customers themselves.
Here’s another example. The Monroe County Sheriff’s Office is New York State’s largest sheriff’s office. They sought out Xerox, based on our reputation as the leader in smarter document management, to help them address challenges that are common in the public sector: A need to balance a tight budget, while at the same time improving service and freeing employees (in this case deputies) from the burden of excessive paperwork. You’re probably starting to see a theme here. Again, the customer had multiple challenges that seemed to be at odds with each other. After initial consultation and analysis, the team decided to focus on Accident Report Records Management as a key opportunity for improvement. Instead of adding labor to deal with the huge backlog of records, the Xerox team devised a solution for digitizing the entire Records Management process and providing easy access to documents via a web-based repository. The measurable results of the project exceeded the customers’ expectations. Costs, cycle time, and wasted labor were all reduced dramatically, service to the office’s insurance company customers was improved -- and the solution also created a new revenue stream in the bargain. Harder to measure, but no less important, was the impact of having deputies spend less time on paper work and more time on the street.
Speaking of the future, let’s take a minute to share some information we’ve gathered from extensive benchmarking we’ve done and continue to do as part of Xerox Lean Six Sigma. This chart is adapted from a book on best practices in Six Sigma. It shows the relationship between achieving a high level of economic results from such a major initiative over years from the initial launch. It reflects sustained leadership and investment over time. The A curve is where every company aims: by the end of three years to be hitting a high level that is then sustained into the future. Leaders like GE and Honeywell have demonstrated that’s possible. The methods take hold, become part of the culture. The C curve is where some companies level off due to factors such as diminished leadership commitment, reduced resources or other reasons. Results are good but not optimized. And finally the “F” curve is where as many as 50% of companies fall. That’s after just 2 years in deployment with results that are positive, but leadership decommits, moves on to some other methodology or program. That often gets “the flavor of the month” response from employees. What are the critical success factors that differentiate the A curve results from the F curve? There are a number of contributing factors but we’ve learned that probably the three most critical are: READ THE BULLET POINTS. Oh… are you wondering where Xerox is on this chart? (Advance to show the Xerox “dot”).We’re here, aiming to follow the “A” curve. Entering our third year of Lean Six Sigma implementation. we’re hitting some pretty aggressive results targets and setting even more aggressive new ones. Our leadership commitment is undiminished, in fact growing. Anne Mulcahy herself is a Green Belt candidate and other senior people are doing the same. For example, the president of our largest customer operation is a certified Green Belt.
We’ve just begun to see the potential of Lean Six Sigma, both internally at Xerox and in delivering real value for our customers. We hope that you’ll embrace this exciting opportunity and benefit from our experience as we continue our quality journey.
Smarter…Quicker…Better Using Xerox Lean Six Sigma to create real value for customers Donna Dunlap Vice President North American Solutions Group Sales & Marketing Lean Six Sigma Deployment
The critical challenge: How to accomplish all four in a sustainable way
Transforming Our Company 1949-1960 1960- 1990 1990-2000 2002 and beyond Birth Birth Growth Maturity Birth Growth Maturity LTQ Lean New Quality Lean Six Sigma Birth Growth Xerography Knowledge- intensive Solutions & Services Laser Printing, Faxing,Ethernet Color Copying/ Printing, Production Publishing, Digital technologies
Xerox Organization Structure Production Systems Group Xerox Office Group Paper, Supplies & Supply Chain Operations Xerox Europe Xerox Lean Six Sigma Fuji Xerox Global Accounts and Marketing Ops. Corporate Strategy & Alliances Business Operations Research & Technology Customer Operations Operations Support Fuji Xerox Xerox Global Services Xerox Innovations Group Business Group Operations Xerox North America Developing Markets Operations Chief Financial Officer Chief Staff & Ethics Officer External & Legal Affairs, Gen. Counsel Chairman and CEO
Xerox’s quality leadership journey 1994 The Xerox Management Model The Xerox Mgmt. Model is introduced as part of Leadership Through Quality. 1996 The Xerox Management Model The “evergreen” model is continuously assessed & improved. 1997 Xerox 2005 Senior Mgmt documents the Xerox 2005 Leadership Through Quality strategy. All major Xerox manufacturing sites worldwide receive ISO 14001 certification 1997 Xerox ISO 1998 Xerox Six Sigma Six Sigma deployed in mfg. ops. New quality policy, and procedures refreshed to be focused/faster 2002 Xerox Lean Six Sigma 2000 Xerox new quality Lean Six Sigma concepts & principles become corporate standard 2004 Xerox Lean Six Sigma Launch of design for Lean Six Sigma
Meeting our challenges through Xerox Lean Six Sigma
Understanding what customers truly value and need
Transforming our culture
Positioning us for growth
Improving processes through fact-based, disciplined decision-making and measurable outcomes
Focus – Identify non-value add steps and causes of delay
Method – Value Stream Tools, Kaizen events
Lean Speed + Low Cost
Goal – Improve performance on customer CTQs (Critical To Quality)
Focus – Use DMAIC process with various tools to eliminate variation
Method – Management engagement, 1% - 3% dedicated as Deployment Champions and Black Belts
Six Sigma Culture + Quality Six Sigma QUALITY Enables Lean Speed (fewer defects means less time spent on rework) Lean SPEED Enables Six Sigma Quality (faster cycles of experimentation/learning) Combining two powerful approaches
“ I’m convinced that Xerox Lean Six Sigma is a way to rebuild value in our company because it is about substance , not form; it’s about discipline and infrastructure so projects can produce business results .”
— Anne Mulcahy Chairman & CEO
Enterprise-wide deployment Our view: Not just a tool for operational efficiency, but an enterprise-wide business strategy for creating real value Sales and Marketing Xerox Administration Information Technologies Facilities Customer Communications Operations Finance Manufacturing Engineering Human Resources
Majority of Xerox Lean Six Sigma Resources Integrated Into the Business Operations Anne Mulcahy Chairman / CEO Business Leader Business Leader Business Leader Deployment Manager Deployment Manager Deployment Manager Deployment Managers Business Leader Business Leader Business Leader Deployment Managers VP, Corporate Lean Six Sigma Deployment BBs BBs Deployment Team Sponsors Sponsors Chief Financial Officer Note: VP, Corporate Lean Six Sigma Deployment reported to CEO at initial launch of Lean Six Sigma BBs BBs BBs MBB / BBs BBs BBs BBs MBB / BBs BBs BBs BBs BBs BBs BBs BBs BBs BBs BBs BBs Master BBs
1500 projects underway or completed worldwide contributing to Xerox profitability
Over 600 Master Black Belts and Black Belts have achieved certification, completed, or started training.
2,000 executives and managers have completed leadership workshops
2,500 Green Belts trained/500 certified
22,000 Yellow Belts trained and many other on-line courses
Successful Lean Six Sigma Deployment Requires Company-Wide Involvement All Employees
Minimum Yellow Belt
Apply concepts to their job and work area
Owns vision, direction, integration, business results
Owns financial results
Part time as part of job
Leads Lean Six Sigma projects
Trains and coaches Project Teams
Participate on Black Belt teams and/or lead projects
Part time on projects
Provide project-specific support
Can be yellow or green belt
Part time on projects
Leads business unit performance improvement
Full time position
Deployment Managers Project Sponsors Project Team Members Operations Leadership Green Belts Black Belts Centralized Coordination & Training
Trains Black Belts / Green Belts
Coaches Black Belts / Green Belts
Leads Lean Six Sigma projects
Master Black Belts
Phased Xerox Deployment Plan Nov02 Seeding Xerox Lean Six Sigma
Articulate Burning Platform
Create Deployment Team
Establish Goals/Success Metrics
Process Management Approach
Define “Recipe” based on Lean Six Sigma Deployment Principles
Develop Deployment Plan using Lean Six Sigma Planner
Executive Launch Leadership Training Deployment Design & Launch
Select Deployment Leaders, Black Belts and/or Green Belts
Define Project Selection/Prioritization Process based on ROIC and Benefit/Effort Matrix
Establish Project Tracking Process
Identify/Select Initial Projects and Project Champions/Sponsors
Deployment Execution & Sustainability
Deploy Resources on Highest Priority Projects
Lean Six Sigma
Manage the Effort
Build Self Perpetuating Capability
Leverage Best Practices
Integrate with Suppliers/Customers
Communicate to Stakeholders
Sponsor Training Jan03 Feb03 BB Training Jun03 Nov03 GB Training MBB Training DFLSS May04 Aug05
Lean Six Sigma: The next phase in our journey Internal Operations Methodology & Tools Internal Manufacturing Quality Methodology & Tools External and Internal Methodology and Tools: Creating real value for our customers Xerox customer
Top Line Growth requires developing Lean Six Sigma competency and culture before starting… Capable, Disciplined Processes Accountability Bottom Line Results Focus on inputs Sense of Urgency Commitment to Training & Development for all employees Fact-based, Data- driven decisions Management Passion Values CUSTOMERS Communications Leadership Industry Competencies
Top Line Growth: Customer Centric use of Lean Six Sigma-based Processes Define the Problem Characterize Requirements & Performance Identify & Characterize Key Elements in the Solution Determine the Best Solution Validate & Implement the Solution Design New Develop Implement Define Measure Explore Define Measure Analyze Improve Control Improve Existing Customer Engagement Define Measure Analyze ‘ Recommend’ ‘ Close’ DFLSS Validate Identify Develop Optimize
Sales and Marketing Deployment - the Infrastructure
Donna Dunlap, VP LSS NASG Sales & Marketing 585-423-5572 / 8*223-5572, XRX2-029 Linda Hatch, Administrative Assistant 585-423-1237 / 8*223-1237, XRX2-028 2005 Xerox Lean Six Sigma Sue Coia-Ahlman MBB - 14 8*223-2475 585-423-2475 XRX2-019 Al Ryan MBB - 15 8*221-2431 585-231-2431 XRX2-008 Bob Labanowski MBB - 13 8*223-6932 585-423-6932 XRX2-011 Marty Duffy MBB - 12 8*223-3204 585-423-3204 XRX2-009 Ragni Mehta MBB - 8 8*223-2087 585-423-2087 XRX2-028 Robert C. Brasser – IP Clare Browning-Tuch – IP William M. Flom – IP Katrina Lamphier – IP Karen Loughlin - IP Shari Mann – IP Fernando Martinez – IP Nancy Nam – IP Jason Rider - IP Larry Scheerschmidt – IP James Wagner – IP Michael P. Wiseman – IP Sue Comer – FT Kelly Lindenmayer – IP Jon D. Allen – IP Mark Burris – IP Kay Carroll – IP Bruce Collier – IP Sara DeMuzio – IP Kristen Eisenman – IP Helen Fong – IP Raj Garg – IP Dan Holahan – IP Kevin Horey – IP Silvia Neves – IP Michele Russell – IP Ilona Smith - IP Barry Barnes – FT Butch Bland – FT Kevin Groff – IP Todd Lester – FT Susan McGlinchey – IP Dierdre Scott – IP Shawn Whipple – IP Jeff Whisler - QTC Tony Hampton – FT Laura Norris – IP Terri Yamauchi – FT Mike Jones - FT Wanda Droz – IP Bernie Durman – IP Anita Fonseca – FT Charles Gallagher – IP Mike Knox - IP Tim Kray – IP Tyrone Scott – IP Kevin Zielinski – IP David Beckerle – FT Diane Burley – FT Linda Fosdick – IP Rebecca Futral-Anderson – IP Terry Garigen – IP Chris G. Graham – FT Deborah Hall – FT John Kenney – FT Anthony Mason – FT Patrick Porter – IP Bonnie Stramer – IP Matt Stusick – FT Eric Whyte – FT Frank Licata – FT Jasper Richardson - IP Certification Required HR Loretha McCullough – RM BGO Anne Thorne – Certified 6/05 MAO Terry Kochanski – Certified 8/10 Chris Tipton – PB PSO Warren Losey – AR East Scarla Gilbert – AR Aaron Monke – AR Jasper Richardon - AR West Bo Beslach – MD Jeannette Monachello – MD Corporate MBBs Cheryl Adas 02/01/12
PEP Expectations: Individual Objectives Measures Good Better Best Improve Customer Experience Support customers through projects, events and presentations 1 2 3 Grow Revenue and Improve Profitability Deliver Economic Profit 610 800 1000 Great Employee Experience Achieve Certification Mentor/Certify Green Belts on your teams 18 3 15 5 <=12 >5 Live our Values Deliver DMAIC Projects-2 nd yr BB FT BB-HQ Project Involvement Deliver DMAIC projects –1 st Yr BB + IP 2 3 4 1 2 3 1 2 3 Targets 2005 PEP Update Analyze Control Improve Measure Define
Financial Services Healthcare High Tech and Communications Manufacturing and Energy Public Sector Retail and Consumer Goods
Substitute Other Technology FSMA Losses Customers Not satisfied Customer Equipment Trades / Upgrades New Customers Process Changes Economy/ Bankruptcy All Others Moves to Competition Customer FSMA / Services Renewals Added Business With Current Customers Revenue Revenue Growth Most LSS Projects
Match the tools & methodology to the problem Low Sigma 1 - 2 Sigma 3 - 4 Sigma 5 - 6 Sigma Climbing the Benefit Tree Design for Lean Six Sigma (DMEDI & IDOV) DMAIC Kaizen Improvement Projects Workshops Flashes Courtesy Bombardier
Digitized and streamlined accident report process in Records Management Division
Created Web-based document access system
Integrated existing customer systems
New York State’s largest sheriff’s office
Case Study: Monroe County Sheriff’s Office Play video Measurable Results Client Challenges
Balance $100M budget
Improve quality of service to the community
Free deputies from paperwork, so they can spend more time ensuring public safety
Eliminate backlog of more than 3,000 records and over four months of data entry
Lessons Learned Right Tools Rigorously applied Right People Dedicated 100% Right Business Opportunities Right Results Hold people accountable for business results validated to the bottom line VOC , marketing, DfLSS, data analysis, process improvement, etc
The most strategically important projects (growth, for the customer, retain share, increase price, improve profitability, improve effectiveness, etc)
Projects with financial impact
Key factors differentiating “A” curve from “F” curve
Ability to change Culture & Leadership Behavior
Project selection link to business strategies
Project selection link to Customer Value
* Chart adapted from Strategic Six Sigma: Best Practices from the Executive Suite by Dick Smith and Jerry Blakeslee Profit ($) 1 2 3 4 Year Initial Leadership Commitment 0 C * Long Term Goal – Sustained Commitment & Results Sustained Commitment A F As many as 50% end up here at “F” Xerox