successful corporate wide lean six sigma deployment

Slide 1

Successful Corporate Wide Lean Six Sigma DeploymentRobin Gates, VP Performance Improvement

WCBF Conference Discovering the Reality of Lean Six Sigma in Manufacturing, Services, and Transactional EnvironmentsDecember 2-3, 2004Dallas, Texas

OverviewBackgroundDeployment foundationDeployment executionNext steps

Alliant Energy CorporationBusinesses:Electric and gas distributionDiversified energy related businessesCustomers:1.4 million electric, natural gas and water customers.Total Assets: $7 billionOperating Revenues: $2.6 billionEmployees: 6,000 (~60% union represented)

Vision, Mission and ValuesOur Mission: To create shareowner value by meeting customers needs for comfort, security and productivityOur Vision: To be the customers first energy choiceEfficiencyDiversityEnvironmentSafetyEthicsOur Values:

Alliant Energys Aspirational GoalFor the period 2005 2009, we will build strength and value by providing: Above average total shareowner return compared to our peer group, and Compounded annual earnings per share growth of at least 5%

Deployment Timetable & HistoryDelivering Results committee recommends implementing Lean Six Sigma (Aug 2002)CEO Erroll Davis announces decision to deploy and appoints deployment leader (Sept 2002)Executive Summit (Jan 2, 2003)Wave 1 black belts (Feb-June 2003)Wave 2 black belts (July-Nov 2003)Wave 1-3 green belts (Nov 2003 Feb 2004)Wave 3 black belts (Mar-July 2004)

Deployment AccomplishmentsOver $23,000,000 in financially validated hard dollar benefits from January 1, 2003 to present3 waves of black belts trained (60 people)150 green belts trained 130+ closed projects300+ active projects9 Black Belts repatriatedSupporting infrastructure createdLean Six Sigma at Alliant Energy is well underway

Deployment FoundationCompelling business caseUnrelenting focus on what matters mostComprehensive deploymentTalent developmentChange management

Compelling Business CaseDelivering Results team commissionedNeed a reason to change

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table

DateOpenHighLowCloseVolumeAdj. Close*

2-Aug-0425.7925.8726.1625.325.7939435425.79

1-Jul-0425.9125.9527.425.2225.9132681425.91

1-Jun-0426.0825.126.0824.7226.0828242825.83

3-May-0424.9824.9825.623.524.9838255524.74

1-Apr-0424.8626.126.5524.7724.8631523324.62

1-Mar-0426.0625.7326.525.426.0628163025.56

2-Feb-0425.7525.8926.3925.3825.7524574225.25

2-Jan-0425.8924.9126.1124.5425.8933535025.39

1-Dec-0324.924.5225.092424.922906324.18

3-Nov-0324.4524.0524.7423.3924.4524975723.75

1-Oct-0324.062224.321.9424.0641388623.37

2-Sep-032220.9322.720.832226838021.14

1-Aug-0320.9320.3121.1620.0820.9333084220.11

1-Jul-0320.3118.9620.4218.6920.31100319019.51

2-Jun-0319.0320.0520.618.9619.0332553318.05

1-May-0319.9817.520.617.1219.9832068518.95

1-Apr-0317.5616.3217.8816.0317.5632041416.66

3-Mar-0316.0715.9816.215.0816.0726207615.02

3-Feb-0315.7616.116.4514.9815.7629865214.74

2-Jan-0316.1916.718.315.8716.1942837115.14

2-Dec-0216.5516.4516.814.7516.5544554215.24

1-Nov-0216.2815.8516.9414.2816.2852870514.99

1-Oct-0216.0219.2519.8915.616.0262344714.75

3-Sep-0219.2520.8521.218.4119.2526647017.19

1-Aug-0220.8519.1521.1117.8520.8532092718.62

1-Jul-0219.1325.525.7716.3519.1366536817.09

3-Jun-0225.727.327.3324.7525.732814022.34

1-May-0227.5228.2528.3527.0527.5222726323.92

1-Apr-0228.253030.852828.2532830924.55

1-Mar-0230.2229.0130.429.0130.2217898525.81

4-Feb-0229.01303028.6729.0118977224.78

2-Jan-0229.8130.3631.0129.4229.8142829525.46

3-Dec-0130.3628.130.9127.930.3627580525.5

1-Nov-0128.129.5529.8427.528.152682823.6

1-Oct-0129.431.332.2928.7529.430423924.7

4-Sep-0131.330.431.4929.531.316522625.85

1-Aug-0130.3828.830.8228.2930.3813840825.09

2-Jul-0128.5729.33027.928.5730674723.6

1-Jun-0129.1530.630.628.229.1513851423.66

1-May-0130.7531.231.629.8530.7513906324.96

2-Apr-0131.23232.6730.631.230213025.32

1-Mar-0131.823333.1830.231.8212813125.42

1-Feb-013330.533.230.033314816326.36

2-Jan-0130.53232.1228.7530.532191924.36

1-Dec-0031.8831.7532.122931.8815206525.06

1-Nov-0031.8830.531.8829.6931.8810188025.06

2-Oct-0030.3129.2530.6928.6230.3120140423.83

1-Sep-0029.3929.2531.2527.6229.399559022.72

1-Aug-0029.2526.2529.8126.2529.2511143322.61

3-Jul-0026.3126.527.4426.1226.3124712520.34

1-Jun-0026.0227.7529.9425.7526.0213907019.73

1-May-0027.6930.0630.4427.527.6911087721

3-Apr-003030.2531.8828.373011305222.75

1-Mar-0030.4428.2530.942730.4414413022.71

1-Feb-0028.1229.8131.442828.1217940520.98

3-Jan-0029.8126.5836.4825.5529.8125426022.24

1-Dec-9926.5826.0927.2424.8226.5810966819.49

1-Nov-9926.1526.4527.6624.3426.1512400419.18

1-Oct-9926.2726.0227.3224.9526.2718301419.27

1-Sep-9926.2627.527.9225.3726.266889518.88

2-Aug-9927.4427.3827.6225.6127.449427719.73

1-Jul-9927.3826.9828.0326.6327.3817359519.69

1-Jun-9926.4627.9728.7926.2826.4611056818.68

3-May-9928.1526.9328.526.4628.1511595519.88

1-Apr-9926.9824.6327.4524.2926.9824414719.05

1-Mar-9924.425.226.4624.1724.411527316.91

1-Feb-9925.2626.3526.5824.9725.2611184717.5

4-Jan-9926.5229.0729.1826.3526.5222695718.37

1-Dec-9829.0727.2729.1827.2729.077505919.77

2-Nov-9827.3827.7228.7927.3827.387657018.62

1-Oct-9827.8928.4430.1626.8227.8916420918.97

1-Sep-9828.4426.6728.4925.9428.446966119

3-Aug-9826.6725.7827.0524.8426.679871417.81

1-Jul-982627.9127.9125.612616516317.37

1-Jun-9828.3526.3928.3525.9528.3513963618.58

1-May-9826.2227.4227.9125.8426.2211768017.18

1-Apr-9827.5329.1130.426.9227.5318189018.04

2-Mar-9827.1229.1127.1228.955972718.64

2-Feb-9827.9828.3627.0727.3910058417.64

2-Jan-9827.8228.2426.7627.558375017.74

1-Dec-9725.8129.1425.3928.037278117.73

3-Nov-9724.8626.0224.0125.814315216.32

1-Oct-9723.8725.2723.7124.75386515.62

2-Sep-9722.9824.1322.9323.815080914.75

1-Aug-9723.2923.3522.4623.034711414.27

1-Jul-9722.7823.2922.3722.986833614.24

2-Jun-9722.6823.0822.0622.837317613.84

1-May-9722.2722.9822.0622.574021413.68

1-Apr-9721.8622.3621.7622.176648613.43

3-Mar-9722.2622.6621.9621.966078013

3-Feb-9722.5623.1622.0622.265773113.18

2-Jan-9722.1622.9621.7722.567163113.36

2-Dec-9622.2622.6621.6722.164995212.83

1-Nov-9622.1622.9522.1622.165362012.83

1-Oct-9622.6622.9521.8822.1611728212.83

3-Sep-9623.2423.4322.3722.563119012.78

1-Aug-9624.0124.8923.2423.633663113.38

1-Jul-9624.9725.0723.7324.022265413.32

3-Jun-9623.0725.0722.7825.075348513.91

1-May-9622.6923.7322.323.073144512.79

1-Apr-9623.0623.1521.8322.699084712.58

1-Mar-9623.3423.6222.423.155021412.56

1-Feb-9623.5323.9922.7823.244620512.61

2-Jan-9622.5223.7122.5223.623360912.81

1-Dec-9522.8923.2622.4222.613594012.01

1-Nov-9522.4223.0722.3322.893330912.15

2-Oct-9521.4423.0721.2622.525920411.96

1-Sep-9520.6221.3519.9821.073608010.95

1-Aug-9520.3520.9820.1720.713334710.76

3-Jul-9520.3620.992020.532098010.67

1-Jun-9520.5421.4320.0920.451967710.37

1-May-9520.4520.7219.6520.723700010.51

3-Apr-9520.0220.8119.8420.273314210.28

1-Mar-9521.2521.2519.7520.192406510

1-Feb-9520.7221.7720.3721.162790010.48

3-Jan-9518.920.6318.8120.555417110.17

1-Dec-9419.0719.4218.4718.9224859.13

1-Nov-9419.3319.8518.4719.07360199.21

3-Oct-9419.0919.618.4919.51602619.42

1-Sep-9420.1920.1918.3219.09172048.99

1-Aug-9419.0920.281920.28215179.54

1-Jul-9418.3419.3418.0119.17130109.03

1-Jun-9418.5119.617.5918.18166778.34

2-May-9420.4320.4318.2618.43201008.45

4-Apr-9419.1320.4318.7220.26331269.3

1-Mar-9419.1320.5218.8819.45173478.71

1-Feb-9420.3620.3618.2219.04228428.53

3-Jan-9421.2421.2418.3920.36231619.12

1-Dec-9320.4321.5620.3521.24160459.28

1-Nov-9322.4522.7820.1920.35206008.89

1-Oct-9322.7822.9421.6522.61108429.88

1-Sep-9322.8623.2622.5422.7135529.7

2-Aug-9322.4623.122.2222.94138869.8

1-Jul-9322.1622.7922.1622.54702049.63

1-Jun-9321.4622.3221.2222.24107639.3

3-May-9322.0922.2420.8321.54168609.01

1-Apr-9322.6422.821.8722.01282529.2

1-Mar-9321.5622.6421.422.64162179.27

1-Feb-9320.6321.6420.4721.64153638.86

4-Jan-9320.6420.7920.0320.71233008.47

1-Dec-9219.5720.7919.4920.71151048.28

2-Nov-9220.6420.7919.4919.57249807.82

1-Oct-9221.4921.7220.4320.71205598.28

1-Sep-9220.7421.7220.6621.49115338.4

3-Aug-9221.5621.6420.3620.74249528.1

1-Jul-9219.8721.6519.8721.56316688.42

1-Jun-9220.2420.6119.7220.09128277.68

1-May-9219.520.6119.520.32228907.76

1-Apr-9218.3419.518.0519.5234527.45

2-Mar-9218.4218.4217.8318.27121006.81

3-Feb-9217.7518.7817.7518.42171216.87

2-Jan-9218.7919.0817.3917.68257596.59

2-Dec-9117.4218.9417.218.94229906.88

1-Nov-9116.7717.5716.5517.35197556.3

1-Oct-9117.0817.2216.1916.77426696.09

3-Sep-9116.1517.2215.6517.08193356.04

1-Aug-9114.9416.4414.9416.01249045.66

1-Jul-9114.2715.1114.0615.09292905.33

3-Jun-9114.8314.8313.5714.41141354.94

1-May-9114.5515.0414.4814.83117135.08

1-Apr-9114.315.1314.114.41316224.94

1-Mar-9114.2414.5813.6914.44170404.8

1-Feb-9113.214.312.7914.1303574.68

2-Jan-9113.3113.6912.2213.2320404.39

3-Dec-9013.0413.6412.9713.24312354.25

1-Nov-9012.513.112.3613.1275334.21

1-Oct-9011.1312.5911.0712.43331213.99

4-Sep-9011.411.610.611195053.41

1-Aug-9011.6611.8610.611.27380913.49

2-Jul-9011.7611.7610.9811.6423953.59

1-Jun-9011.4312.0811.311.63133233.47

1-May-9011.5612.4111.511.5213043.43

2-Apr-9011.5911.9511.2411.76204253.51

1-Mar-9011.5911.9811.2111.66221183.34

1-Feb-9011.2811.9811.2111.59152523.32

2-Jan-9012.1212.4411.2111.28236363.23

1-Dec-8911.6212.1911.5612.19328903.36

1-Nov-8911.4412.1911.4411.5231043.17

2-Oct-8911.4111.611.0511.5158403.17

1-Sep-8911.4111.5411.0511.41181153.03

1-Aug-8911.6612.0311.3511.41164303.03

3-Jul-8911.1511.7210.8511.66191253.1

1-Jun-8911.0911.3310.9711.15189952.86

1-May-8910.7311.5710.5511.21220862.87

3-Apr-8910.4110.6710.4110.67126352.73

1-Mar-8910.6510.8210.4110.41168092.56

1-Feb-8910.5310.7110.3510.71229842.63

3-Jan-8910.6810.7710.3910.65304712.62

1-Dec-8810.4510.810.3410.68171572.52

1-Nov-8810.4510.9210.3410.45122472.47

3-Oct-8810.4910.8610.1510.57144572.5

1-Sep-8820.9921.0510.110.61129002.41

1-Aug-8820.4221.119.5620.8880912.37

1-Jul-8820.7821.0620.0820.4257052.32

1-Jun-882021.122020.8470132.18

2-May-8819.832019.2719.8971612.08

4-Apr-8820.1720.3919.119.9472552.08

1-Mar-8821.2321.420.0520.2878822.12

1-Feb-8820.5621.420.521.29106952.22

5-Jan-8819.5920.519.1520.583422.14

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Price Per Share

Focus On What Matters MostExecutive engagementVisible leadership within the organizationActive engagement in key deployment activitiesLean Six Sigma goal settingIdentify the most serious business problemsSet explicit Lean Six Sigma goalsLink to pay and job performance appraisalsUnderstand the business goals and the major business driversGet leaders to understand their customer requirementsY=f(x) is a powerful method for understanding the businessFix this problem quickly if it existsPut deployment accountability where it belongsExecutives and managers need to own Lean Six SigmaThe deployment strategy needs to get executive ownership quicklyMake Lean Six Sigma relevant to the leaders

Deployment Customer Requirements

Deployment Organizational StructureDeployment structure communicates accountability and focus

Comprehensive DeploymentAll or nothing approachThe whole organization must adopt Lean Six SigmaKey benefit is learning a common business language and problem solving methodCultural change occurs more quickly with a comprehensive approachThe legacy of corporate initiatives is a common barrier Many will wait it out if given a chanceSkepticism should be expectedGet to critical mass quicklyWindow for change is often very shortTake advantage of momentum, start-up good will and leadership enthusiasm

Talent ManagementLean Six Sigma is an outstanding management development experienceProblem identificationSystematic problem solvingManaging using dataLeadershipSelect your best and brightest for black beltsDont compromise on talentPlan repatriationMake Lean Six Sigma experience a requirement for advancement

Change ManagementManage change from the startThe biggest deployment barrier is not technicalCreate a formal change management planLean Six Sigma makes fundamental changes in how business is managedAnticipate the impact that Lean Six Sigma will haveAddress problems in the related management systemsThere is nothing more difficult to arrange, more doubtful of success, and more dangerous to carry through than initiating change. The innovator make enemies of all those who prospered under the old order and gets only lukewarm support from those who would prosper under the new.

Machiavelli, N; The Prince; 1514

Deployment Maturity Model Continuous improvement is everyones job Improvement driven by strategy & scorecard The Lean Six Sigma is the way we work Result: Value delivered to shareowners & customers Management team leads process improvement Opportunity-focused project clusters Managers applying the Lean Six Sigma methodology Result: Financial benefits & better strategy execution Black belts & Lean Six Sigma team drive deployment Ad hoc projects focused on financial benefits Learning the Lean Six Sigma tools Result: Financial benefitsTransformingOptimizingImprovingFive years to a Lean Six Sigma Culture

Communication You cant talk about Lean Six Sigma too muchWhat has workedIntranetPostersSix Sigma fairsLogoRecognition eventsBrown bag presentationsProject report-outs

Deployment ExecutionThe core processBlack Belts and Green BeltsDeployment infrastructureSuccessful project executionMetrics

The core processUnderstanding the core process helped focus the deployment

The Critical Ys for Deployment

Black Belts & Green Belts Drive Benefits

Chart2

4025

55150

Black Belts

Green Belts

Number of Black Belts and Green Belts

Sheet1

Black BeltsGreen Belts

20034025

200455150

Sheet1

00

00

Black Belts

Green Belts

Number of Black Belts and Green Belts

Sheet2

Sheet3

Supporting InfrastructureProjectsProject idea and charter development processProject financial validation processProject selection processProject management processAudit results processProject databaseTrainingCurriculumStatistical softwareLogisticsMaster Black Belt supportProject report outs

Supporting InfrastructurePeopleSelection processCertification processRepatriation for Black BeltsRewards and recognitionOrganizational structure

TRAININGPROJECTIDENTIFICATION, SELECTION &SCOPING1:1 MENTORING and PROJECT SUPPORTSUCCESSFUL PROJECTCOMPLETIONLEADERSHIP ENGAGEMENT

Project SelectionPoor project selection is a top reason for poor Lean Six Sigma results

Project ClustersSupply ChainAccounts PayableBudgeting / ForecastingFacilities/Property/Real EstateCommunications / External relationsIT relatedSales/MarketingEconomic DevelopmentAccounts receivableTrainingFleet Generation (coal, URGE, soot blowing, water, fly ash)Corporate Contract ManagementTravel SafetyHealth CareBillingTaxes

Focus on areas with large financial impact

Project Selection Lessons LearnedEngage managers and executives in project identification, scoping and selectionCharter development trainingHand holdingManagement needs to scope the project and define the problemTime wasted with poor problem statements and fuzzy objectivesBlack Belts often lack the perspective to define the business problem properlyEstablish Lean Six Sigma goals with managers and executivesManagers and executives must be accountable for Lean Six Sigma resultsGoal setting helps focus project identification on what matters most


TrainingTraining conductedKick-off deployment workshops for executives 1 dayCharter development training 4 hoursBlack Belt 25 daysGreen belt 10 daysKaizen trainingExecutive Lean Six Sigma 5 daysDeliverySix Sigma Academy delivered training for first 18 monthsMBBs picking up training starting with 5th Green Belt class

Training Lessons LearnedTop notch training is criticalTraining is what people see first and has a big impact on perceptionTraining can be successfully outsourced but it is costlyTraining with your own staff is hardDemands for more than Black Belt and Green Belt trainingDont forget about the people at the topProvide enough general training to avoid confusionHave chartered projects to work on during trainingFinancially validatedWell defined and scoped


Mentoring and Project SupportMonthly 1 : 1 between Master Black Belt and assigned Black Belts to review projectsBlack Belts and project sponsor monthly touch points to eliminate barriersWeekly study halls for project helpExecutive sponsors on projects with $500,000 annual savings and aboveBlack Belts assigned to mentor Green Belts

Mentoring and Project Support Lessons LearnedKeep process owners / sponsors involved in the projects communicate oftenHave discipline in conducting the monthly project reviewsIdentify and address issues earlyReview checklistProvide a forum for the Belts to get help when needed outside the 1 on 1s (study hall)Recognize the critical leadership development role the MBBs play


Leadership EngagementAnnual goal settingMonthly staff meeting agenda itemProject sponsorship / barrier removalTraining attendanceTraining kick off speeches Attendance at LSS functions

Leadership Engagement Lessons Learned Leadership wants to help but may not know how to help provide training and hand holding as necessaryCreate and re-enforce expectation that management must lead Lean Six SigmaIdentify projectsProvide resourcesRemove barriersThe CEO must drive Lean Six Sigma into the organization

Lean and Six SigmaA complete process improvement tool set is an advantageMaintain same rigor and discipline for all improvement projectsMatch projects requirements with appropriate toolsAvoid the religious warsTraining issues

MetricsOutcome measuresLean Six Sigma project financial benefitsCulture changeDeployment management measuresProjects completedProject cycle timeProjects on-trackProjects per Black BeltBenefits per projectBlack Belt successful repatriationCharters writtenCharter inventoryBlack Belts per employeeProjects per employee

Whats next?Expand executive ownership and engagementBetter integration with business model, accountability and performance contractsFurther decentralize deploymentExpand LSS to suppliers and customers

Questions?

successful corporate wide lean six sigma deployment

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