Lean Six Sigma Xerox
The May 3, 2004 Business Week reported Xerox’s savings from using Lean Six Sigma:
- Reducing the loss of toner during production saved $240,000.
- Improving software for translating user manuals into foreign languages saved $1 million.
- Xerox helped Bank of America save $800,000 by consolidating document centers.
In 1999 the story was a little different. Customers started receiving incorrect bills that had incorrect prices and extra equipment they’d never ordered. As customers started to defect, Xerox turned to GE Capital to handle it’s billing. Using Lean Six Sigma, GE showed Xerox how to find and fix problems as well as eliminate steps from their processes to save time and boost profits.
In 2003, Xerox boasts a $6 million return on their investment with more expected for 2004.
And, while sales are down 20% from 1998 peaks, profits are up. 2003 net income was $366 million, up 50% from the previous year.
The Hard Work is Soft
While figuring out what to fix can be a “slog,” the biggest challenge is “getting employees to accept that how they’ve always done things may not be the best way.” Another soft challenge is tearing down the walls between divisions to implement some of the changes.
Lean Six Sigma
At its heart, Lean Six Sigma is simple: use data to reduce defects and delay.
- Remove the delays between steps (Toyota considers this to be the biggest waste.)
- Use smaller batches (ideally one)
- Eliminate steps whenever possible
- Find and fix the root causes of defects in mission-critical processes (billing, purchasing, and manufacturing/service).
In the Toyota Way, the author admits that most of the progress occurs through detailed, painstaking problem solving (i.e., a slog).
Like any change, the hardest part is getting the people involved to agree to the change. And the best way to do that is to involve them in the analysis of the problem and creation of the solution, because then they own the change.
How can Lean Six Sigma boost your profits?
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