Six Sigma Project Case Study Overview by Master Black Belt Steven Bonacorsi, International Standard for Lean Six Sigma (ISLSS). General Electic ACFC "At the Customer, for the Customer"

1. Six Sigma in Action:
Demonstrating Customer Value
A Six Sigma in Action summary offers an example of the
value a Six Sigma project can bring to a customer.
Master Black Belt: Steven Bonacorsi

2. Six Sigma in Action:
System Lease Cost Reduction
Customer Profile – 27,000 seat network equipment company based in San Jose, CA
Business Problem & Impact
Currently the average monthly buyout rate of un-recovered
Root Cause Analysis
leased systems is at 37%, which results in the client having to Buyouts
spend money for lost or outdated technology. This is well 100%
above the industry standard of 10 -15%. In addition, 50% of 80%
200
the clients systems required a lease extension for added cost. ge
r
60%
l on av
e
no th
er yed no
Measure & Analyze 100
Us plo
em
f re
Re se
No spon
sh
er
d
Us tem
oe
s
40%
s
Re sy
Initially, lease buyout and extension baseline process sigma 20%
was about 1.8. Primary root causes were identified to be users Ot
he
rs
0 0%
no longer with the company, users who did not respond, and Count 94 80 79 6
users who said they no longer had the equipment. Percent 36.3 30.9 30.5 2.3
Improve & Control Buyout Run Rate
In close coordination with the client and the lease vendor, the 60%
GE team updated the termination process to include explicit 50%
51%
38%
instructions on equipment returns, automatic notifications and 40% 36%
Buyout Rate
36%
29%
30%
follow up reminders. The streamlined process was 30%
20%
23%
16%
20%
documented and training provided to key participants 10%
19%
14%
14% 15%
Results/Benefits 00%
Jan- Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-
Buyout/extension rate was reduced to 12%, and the outdated 01 EOL Month 02
systems that the client needed to extend or purchase from the
leasing company was cut by over 50%, saving over $2.3M
An annual savings of US$2.3 million to the customer!