Six Sigma Saves Nearly $1 Billion, Key Customers, & A Company
Making the Case for Quality
Six Sigma Saves Nearly $1 Billion,
Key Customers, and a Company
by Janet Jacobsen
The year is 2001 and the “perfect storm” of adverse business factors—tightening fuel emission stan-
dards, the September 11 attacks, Y2K expenses, and an oncoming recession—all converge and threaten
the future of Cummins Inc. The Columbus, Indiana, based diesel engine company was in jeopardy after
losing nearly 72% of its core business, heavy-duty trucks, in 2001.
Fortunately, under the direction of new CEO Tim Solso, Cummins had recently launched an all-
encompassing Six Sigma initiative in 2000, which ultimately, in Solso’s words, “saved the company.”
And, in the following years, Six Sigma has saved much more, as 5,000 Six Sigma projects completed
At a Glance . . . in all parts of the business across the world have resulted in nearly $1 billion in savings.
About Cummins Inc.
• Just months before severe
Founded in 1919, Cummins is a global power leader that designs, manufactures, sells, and services
threatened the company’s
diesel engines and related technology. Cummins serves its customers through a network of 550
economic future, Cummins
company-owned and independent distributor facilities and 5,000 dealer locations in more than 160
Inc. deployed an all-
countries and territories. Due in part to its far-reaching Six Sigma program, Cummins enjoyed its
encompassing Six Sigma
program. most profitable year in 2005 as it earned $550 million on sales of nearly $10 billion.
• Using three versions of Six
But the company’s financial picture wasn’t as positive when Solso took the reins as CEO in 2000. With
changing market conditions and tightening fuel emission standards—Solso knew that greater attention
Development for Six Sigma,
DMAIC, and Design for Six to detail was needed to improve the business. After speaking to other CEOs about Six Sigma and
Sigma) Cummins has saved studying the stunning results at General Electric, Solso and his team, including George Strodtbeck,
nearly $1 billion through the executive director of corporate quality at Cummins, launched the company’s first Six Sigma Black Belt
completion of nearly 5,000 projects in January 2000.
What is Six Sigma?
• While Six Sigma is
commonly used to improve
internal production • This fact-based, data-driven philosophy of quality improvement values defect prevention over
processes, Cummins extends defect detection.
this quality methodology to • Six Sigma quality performance means no more than 3.4 defects per million opportunities.
every facet of its business • It drives customer satisfaction and bottom-line results by reducing variation and waste, thereby
and beyond, to both promoting a competitive advantage.
customers and suppliers. • Six Sigma applies anywhere that variation and waste exist, so employees at all levels of a business
can play important roles in Six Sigma projects.
The American Society for Quality ■ www.asq.org Page 1 of 4
Common Six Sigma Themes of skepticism that Six Sigma was just another “quality program of
the month” that would eventually fade.
• Six Sigma places an emphasis on the DMAIC approach (define,
Paul Wiczynski, a Master Black Belt for the Design for Six Sigma
measure, analyze, improve, and control) to problem solving.
program in the heavy-duty engine division of the company, says that
• Organizations using Six Sigma often utilize teams that are
some employees jumped on board with Six Sigma right away, while
assigned well-defined projects with a direct impact on the
some decide to wait and watch before getting involved. “Some wait
a little longer and some don’t want to participate at all. That’s one of
• Upper management typically supports Six Sigma as a key
the things that you learn to deal with as a belt; you can’t slice out
the ones who don’t want to participate,” Wiczynski notes.
Cummins’ All-Encompassing Approach to Six Sigma
To encourage employees to support Six Sigma, Strodtbeck says that
beginning in 2008 Cummins employees working for promotions to
At Cummins, the scope of Six Sigma goes well beyond the manu-
critical positions that are identified as level 10 or higher must have
facturing floor—it extends to every facet of the company’s business,
earned Six Sigma certification at one of four classifications:
from the accounting and legal departments to manufacturing units to
human resources and now even to customers and suppliers. “From • Sponsor
the beginning we decided to implement Six Sigma across the com- • Green Belt
pany and use it as the process improvement methodology. We took a • Black Belt
leap of faith that it would apply every place,” notes Strodtbeck who • Master Black Belt
directs the company’s Six Sigma efforts.
Six Sigma Project Solves Production Issue
From day one, he explains, Cummins has adhered to a consistent
strategy with the direction for Six Sigma coming from the corpo- As employees began to fully embrace the Six Sigma methodol-
rate level and execution of that strategy happening locally, whether ogy at Cummins, they saw the results of improvement projects
the site is in Indiana or Australia. To ensure consistency of its Six firsthand. At one Cummins manufacturing facility, management
Sigma methodology, Cummins uses the same training for both detected that engine production was decreasing during shift
Green Belts and Black Belts throughout its worldwide operations. changes and before and after the production workers’ breaks, so
a Green Belt was assigned to address this issue.
To date, the company has:
The Green Belt, using various control charts, studied the production
• 3,700 employees who have completed Six Sigma training,
decreases during shift times and before and after breaks, explains
• 500 Black Belts, and
Megan Henry, a Master Black Belt working in the company’s
• 65 Master Black Belts.
engine business for midrange products. Using hard data gathered
by the Green Belt on production numbers, management was able to
This cadre of “belts,” as they are referred to at Cummins, are assigned to demonstrate to the union the real loss of engine production.
one of three “versions” of Six Sigma utilized by the company:
“It made it easier to negotiate new policies by using data to
• Technology Development for Six Sigma, demonstrate areas of concern; using Six Sigma took a lot of the
• DMAIC (Define, Measure, Analyze, Improve, and Control), and politics out of the issue,” explains Henry, who helped with the
• Design for Six Sigma. data analysis. Once new break policies were implemented and
the Six Sigma project was completed, Henry says that production
Cummins purposefully views Six Sigma as a tool for business at this facility increased by nine engines per day, an improvement
success as opposed to a training program. “We’ve kept the train- of nearly 1.4%.
ing very specific; if you are going to receive training to be a belt,
then you are going to work on (Six Sigma) projects for the Supporting Customers Through Six Sigma
business,” emphasizes Strodtbeck.
After nearly three years of using Six Sigma methodology,
A Six Sigma Culture Change Strodtbeck and his team felt confident enough to start working
on projects for customers. He identifies the basic criteria for sup-
For a companywide initiative such as Six Sigma to take root and porting customers with a Six Sigma improvement project:
flourish, a cultural change that persuades employees at all levels to
embrace that change is vital. Strodtbeck says that Cummins staff, • The customer must identify the problem; they come to
from senior leaders to line floor supervisors, use data for informed Cummins with the issue.
daily decisions using Six Sigma methodology. Of course, in an • Ideally, the problem was caused by Cummins or is an issue
organization with more than 29,000 employees, some resistance on which Cummins can have an impact.
and skepticism is expected. After various continuous improvement • The customer must be willing to share data concerning the
initiatives and training throughout the years, there was a high level problem.
The American Society for Quality ■ www.asq.org Page 2 of 4
Figure 1 Vibration Reduction Results for Dodge Ram
Interestingly, one of the biggest customer projects completed at
Cummins was for the benefit of a “customer” who hadn’t pur-
chased a single Cummins product. This company had recently
DCX Lift Pump Vibration Measurement
taken over a competitor that exclusively used Cummins engines. Truck #5989 – Chassis Dyno, Full Load, Sweep Up
When the customer brought an engine servicing issue to Overall Level – Accel Z-axis
Cummins’ attention, a Cummins Black Belt was sent in to work
through the issue. The company was so pleased with the proj- 10.000
Overall Level (Grms)
ect’s results that it truly became a top customer—placing a large
8.000 On-Engine Lift Pump
order followed by a second shortly thereafter.
“This is about making quality better for both customers and
suppliers and driving the total supply chain to a higher level of
performance. We’ll also be more competitive because we can do 2.000
things for customers that others won’t do,” says Strodtbeck of his In-Tank Lift Pump
company’s commitment to supporting customers through 500 1000 1500 2000 2500 3000 3500
Six Sigma. Engine speed (RPM)
Using the DMAIC Approach to Solving Lessons Learned
While Cummins has enjoyed outstanding results from its Six
Cummins frequently uses the DMAIC problem-solving approach Sigma program, Strodtbeck identifies two areas in which the
to tackle customer-related problems. The company uses the cus- company could have initially performed better.
tomer’s measures for a specific improvement and then holds the
1. Project Selection —“We underestimated the importance of
belts accountable to deliver that for the customer, explains
project selection—of having clear project selection processes
Henry. With their traditional before and after measurements,
tied to the goals and objectives of the business unit,”
DMAIC projects are well suited for customers because they can
Strodtbeck notes. He says that if he had to do it all again,
easily show the delivered improvement, she adds.
he’d spend six months working with leaders around the com-
One Cummins Six Sigma success story involves a major cus- pany developing project ideas that were critical to what those
tomer, Daimler Chrysler with its Dodge Ram pickup. Chrysler leaders were trying to achieve in their businesses and then
and Cummins each monitor warranty failures monthly and both drive the Six Sigma projects from there. Strodtbeck laments
companies detected a high number of warranty claims for faulty getting started with a brainstorming, random selection of the
fuel transfer pumps on this pickup model. problem-of-the-day approach, and wryly says he’s been in the
process of stopping this ineffective approach for five years!
A Six Sigma belt was tasked
to investigate and ultimately 2. Control Plans—Cummins, according to Strodtbeck, also
reduce the lift pump failures underemphasized the significance of the control plan follow-
in the Cummins diesel ing the project and the need to audit control plans after the
For a detailed account of another Six
engines supplied to Chrysler. belt completes the project. He recommends embedding
Sigma project for Daimler Chrysler,
The belt determined that tighter long-term audit control plans into the system right
see the case study “Cummins Six
vibrations were a key cause from the beginning.
Sigma Project Results in a Smoother
for the failure of the pumps.
Ride for Dodge Ram Pickup.”
Sustaining the Gains
The belt set up vibration
measurements to test alterna-
tive locations for the fuel pump. Eventually, an alternative It’s these long-term control plans that are helping the company to
location was determined, moving the fuel pump from the engine sustain the impressive gains made through thousands of Six
to the fuel tank. Sigma projects. As Henry explains, if it was important enough
for a Six Sigma project, then it must be tied to some sort of busi-
“It was about a 17% failure rate over the entire warranty period ness measure that should be monitored regularly—weekly,
[before the Six Sigma project]. It has essentially dropped to monthly, or quarterly. “We try to automate that business measure
nothing with the new pump location,” Henry reports. She says as much as we can, not taking away time for other improve-
that while total savings average $900,000 per year, it’s equally ments. It’s not the belt, but the process owner who is charged
important to note that the customer’s trucks are on the road more with this ongoing monitoring,” Henry emphasizes.
and in the shop less. This improvement project reduced peak
transfer pump vibration on the vehicles from more than 8.0 Grms As the Six Sigma program at Cummins has matured, the team
to less than 1.0 Grms, shown in Figure 1, without impacting has learned more effective ways of engaging process owners.
vehicle-starting performance (Grms represents root-mean-square Some facilities have a very formal signoff procedure after a Six
acceleration). Sigma project is completed and the process owners commit to
The American Society for Quality ■ www.asq.org Page 3 of 4
the ongoing monitoring required in the long-term control plan. Contributing to This Article
Others are more informal, where the belt and the process owner
simply sit down and discuss the control plan. According to Megan Henry is currently the Master Black Belt for Cummins’
Henry, the more formal signoff process tends to enjoy the most midrange engine business in southern Indiana supporting manu-
success at her organization. facturing, engineering, and marketing/sales. She has been a
Master Black Belt for two years. Previously she worked as a
The Future of Six Sigma at Cummins Black Belt at the Cummins’ Columbus midrange engine plant,
completing seven projects. Henry joined Cummins in 1998 after
In the next five years the goal at Cummins is to move into a graduating from the University of Michigan with a master’s
structure where one-third of the company’s Six Sigma projects degree in industrial and operations engineering.
are customer focused, one-third are internal projects, and the
final third are projects completed for suppliers. The real value George Strodtbeck has served as the executive director of cor-
and infinite source of opportunity is working on projects for porate quality at Cummins since May 2004. He’s led the
suppliers and customers, Strodtbeck notes. worldwide implementation of Six Sigma from the company’s
inception of the program in July 1999. A graduate of the U.S.
Noting that leading Cummins’ Six Sigma program is probably Military Academy at West Point, Strodtbeck served in the U.S.
the most challenging thing he’s ever done from a large company Army for 10 years where he also earned a master’s degree in
perspective, Strodtbeck advises other quality leaders to take on international relations. After six years at Pepsi as fleet mainte-
Six Sigma only if they are genuinely serious about it. He says nance and distribution area manager, he joined Cummins in 1992
that Cummins’ began Six Sigma just in time so that when the as a member of the corporate quality department.
critical events of 2001 converged, there was enough happening
with Six Sigma that it had an impact. “We were making a bet Paul Wiczynski is a Design for Six Sigma (DFSS) Master Black
that this (Six Sigma) was the right thing to do,” recalls Belt in the heavy-duty quality organization at Cummins. He has
Strodtbeck. By all accounts, that bet was a winner! been trained as a DFSS Green Belt and a DMAIC (Define,
Measure, Analyze, Improve, and Control) Black Belt. He is also
For More Information certified as an ASQ Black Belt. Wiczynski graduated from
Michigan Technological University in 1985 with his master’s
• Learn more about Cummins Inc. by visiting the company’s degree in mechanical engineering. He joined Cummins in 1986
Web site at www.cummins.com. after working for General Motors.
• Read the companion case studies to this piece:
About the Author
• Cummins Six Sigma Project Results in a Smoother Ride
for Dodge Ram Pickup
Janet Jacobsen is a freelance writer specializing in quality and
• Cummins Capitalizes on Six Sigma to Minimize Long-
compliance topics. A graduate of Drake University, she resides
Term Interest Rate Risk
in Cedar Rapids, Iowa.
• See the ASQ Web site at www.asq.org for more information
on Six Sigma.
The American Society for Quality ■ www.asq.org Page 4 of 4