Lean and Mean Profit Machines
Lean and Mean Profit Machines – OC METRO – July 21, 2005
http://www.ocmetro.com/metro072105/business072105.html
UC Irvine Extension teaches corporations how to compete
Lean Six Sigma. It sounds like the quirky name of some college fraternity. But the term is not geared to callow youths learning sophomoric life lessons in campus dormitories.
No, Lean Six Sigma is a popular business methodology aimed at giving companies an edge in the rough-and-tumble, ever-more-competitive global marketplace. And for the past three years, the strategies have been taught in a UC Irvine extension course that is winning praise from Southland companies that are using the approach to boost their bottom lines.
“The four (company) projects we completed during our course work netted us an estimated annual savings of $112,000,” says Claudia Dwyer, chief executive officer of Healthcare Management Partners
in Irvine.
Other marquee companies that have enrolled employees in the UCI program include Southern California Edison, Experian, Toshiba, Boeing Co. and AT&T Wireless.
International reach
It's not just Southland companies that are seeking out the strategies taught on the Irvine campus. The university's extension program scored a coup last year when Volkswagen's operations in Mexico the employer of 20,000 people signed up for Lean Six Sigma training, an approach that emphasizes making all business processes as consistent as possible ("Remove Variations" is the mantra), and eliminating excessive, unnecessary steps in operations procedures.
The instructor, Hank Rogers, who speaks fluent Spanish, traveled to Volkswagen’s manufacturing plant in Pueblo, Mexico, where he worked onsite, conducting regular sessions with dozens of employees, and studying the company’s production processes stamping, painting and assembling automotive parts.
Volkswagen subsequently made a series of changes to its business operations and manufacturing processes. The company says those steps led to a savings of about $600,000 over a few months and likely much more than that by now, Rogers notes.
Volkswagen was so pleased with the results that it has already enlisted Rogers and his UCI cohorts to return to Pueblo for three more sessions.
“To me, what shows this program is a success is when we’re getting return business,” says Brian Breen, manager of UCI Extension’s corporate training program, which offers the Lean Six Sigma class.
It’s a good thing the companies do reap financial benefits from what they learn in the class, because they certainly shell out a pretty penny for enrollment fees: $12,000 for 80 hours of training, $6,000 for 40 hours.
The class is offered at the school’s Irvine campus and its satellite campus in the city of Orange. Companies typically pay the fees for one or a few of its employees to attend. UCI will also teach the class at the company’s worksite, as it did with Healthcare Management Partners, as long as there is a minimum number of employees signed up for the sessions.
Rogers has taught the class since its inception in the spring of 2002. A professor at the UC Riverside since 1992 and the founder of Riverside’s Center for Applied Competitive Technologies, Rogers formerly worked for Hughes Aircraft Company for a number of years and also ran his own consulting business.
Combining ideas
Lean Six Sigma combines elements of the Lean philosophy with the principles of Six Sigma, which was pioneered by industrial powerhouses such as General Electric and Motorola. Rooted in Japanese concepts, the Lean methodology promotes the removal of waste from a process in other words, cutting costs in business by figuring out what steps are not truly needed. Maximizing speed and efficiency by tightening up and streamlining operations.
While the Lean approach stresses ridding a business of additional steps that are superfluous to the process, Six Sigma emphasizes executing those remaining steps in the right way a standard, consistent way without variation, time after time after time.
An example? The Golden Arches.
“When you go to McDonald’s, you’re going to have the exact same experience every time,” Rogers notes. “You may not like the product, but when you go in there and order a Big Mac and fries, you know exactly what you’re going to get.”
And, as everyone knows, McDonald’s restaurants have a very high rate of success.
Another central tenet of the Lean Six Sigma strategy is to draw heavily on data and statistics to make decisions.
Professional certification
The UCI course, which is offered in conjunction with Dallas-based George Group, the leading consulting firm in Lean Six Sigma services and curriculum materials, offers professional certification. Classes typically are held on Thursdays, Fridays and Saturdays every week during the academic quarter. Those who fulfill the requirements receive either a Black Belt (160 hours) or a Green Belt (80 hours).
The martial arts lingo serves as a metaphor for the Lean Six Sigma philosophy: The idea of a “warrior” approach to corporate cost-cutting aggressively going in and stripping the fat from the operation, paring the whole thing down to a lean, mean business machine, tailor-made for production and profit.
Fast payoff
The extension program offers a multitude of practical tools to its participants, say Rogers and Breen, adding that the course is meant to be applicable to a student’s job from day one.
Consistent with that, those in the class perform projects that are developed from their own work environment. They apply Lean Six Sigma concepts to the real-life project, with the ultimate goal of helping their company.
Stephen Bach, who works for Southern California Edison, attended the Lean Six Sigma program in the fall of 2003, at the Orange campus. For his project, he used flow diagrams to examine each of 44 steps in the existing manual process for the company’s Environmental Permits and Safety Department.
Drawing on Lean Six Sigma strategies, Bach was able to reduce the process to 32 steps. As a result of that more streamlined approach, the project is expected to save Southern California Edison $329,000 over the next three years, Bach says.
“It was actually a pretty intense program it was not some light thing,” he says of the extension course. “It’s quite challenging. We would meet on our own on weeknights and have study groups.
“You learn a lot from your classmates. We had people in there who had their master’s degrees, and one or two who had doctorates. You get some great students from all different walks of life.”
Bach believes his recent promotion from project manager to senior project analyst was largely influenced by his work on that extension class project.
James Braggs, a variability reduction specialist for the Boeing Company in Long Beach, also took the UCI course. He went through the program at the Orange campus, with just one other person an industrial engineer.
Braggs, who works in Boeing’s C-17 Airlift and Tanker Program, says he learned a great deal from the Lean Six Sigma tools he applied to his work. Although he says he can’t discuss specifics, he stresses that the project he worked on started out small, targeting a basic manufacturing process, but has now grown into a project for “enterprise-wide application.”
He adds that the projected ROI (return on investment) on the project “greatly exceeded requirements.”
In addition, Braggs says he’s now applying the Lean Six Sigma model to all of his work. “And I now have several projects with similar, or higher, ROI,” he notes.
That, he says, is the biggest benefit from his experience in the UCI extension course: He will now be able to use this new approach to drive all sorts of positive change at Boeing in the coming years.
In fact, Braggs has become such a strong advocate of Lean Six Sigma and so knowledgeable about its methods that UCI has signed him up to teach Lean Six Sigma classes at Boeing.
“I am slated to teach my first course this summer, and as you can imagine, I am quite excited about it,” he says.
Keeping an edge
With today’s corporate landscape more crowded and competitive as ever, companies need every advantage they can get, Rogers says.
Even companies that are flourishing are smart to participate in the Lean Six Sigma program, in order to guard against future vulnerabilities.
“Big companies, especially, recognize that you have to continue to get better,” Rogers says, “because the market doesn’t wait for you.”
The next Lean Six Sigma course offered at UCI Extension will be in September. For more information, go to call (949) 824-5414 or go to Lean Six Sigma. OCM
Paul Sterman, a longtime journalist and editor, lives in Orange. |
