Best Practices Advisory, llc
Within 3 months of arriving at Nielsen in 2006, incoming CEO, Dave Calhoun launched “a business improvement program” that incorporated the fundamentals of Six Sigma and LEAN to drive growth and operational excellence at the company. Fast forward 7 years later, and Nielsen had more than doubled its operating profit to over $1.7BN.
Corporate Boards and Shareholders want CEOs to maximize value creation which is at the heart of LEAN and Six Sigma. LEAN is not only for manufacturing businesses or production lines, it is just if not more effective and powerful for service-driven businesses.
Both Six Sigma and LEAN deliver results. Each example below is from a former client or business portfolio company. In every instance, top line growth, bottom-line earnings and cash flow all improved significantly.
Case Study #1: US-based School Bus Manufacturing Client: $10MM improvement in organic growth and earnings in 18 months. 100% increase in daily through-put from 8 to 16 busses. Work-in-Process Bus reduction from 110 to 78 and 35% reduction in inventory. 84% reduction in wasted movement and 92% reduction in workforce operator motion.
Case Study #2: Healthcare – MRI Business Client: $60MM+ improvement in organic growth. From 8 month customer inquiry-to-order process and 70% order error rates to same meeting sale orders and 100% accuracy. From 200 product configuration options and models and unclear market product positioning to only 8 base models positioned against competitors. Product installs from 6 weeks to 1 week.
Case Study #3: Industrials – Aircraft Component Repair: $50MM in organic growth & productivity. On time customer deliveries from 42% to over 96%. 154 day lead time reduced to 60 days. Turn-around time from 76 days to 60 days. Reduction in customer spares inventory and 60% cost savings. 15% improvement in inventory turns.
Case Study #4: Industrials – Plastics Business: $60MM in organic growth. Customer approval simplification from 69 days to 10 days. Improved W2W customer delivery from 25 days to 6 days. Order entry from 6 days to 20 minutes via Web-based orders direct to line. 30% freed-up capacity, 20%+ more orders, 10% increase in price.
Case Study #5: Financial Services – Mortgage Lending Client: $30MM in organic growth. 15% increase in mortgage funding and approvals. 65% increase in employee processing capacity. Market share increase from 10% to 30%. Improvement from average player to fastest in the market, resulting from standardized work, balanced work sequencing, and paperless processes.
As icing on the cake when employees were asked if they saw a benefit to using the LEAN methodology and principles - more than 85% agreed that LEAN helped the business grow and improve customer focus.
So if you aspire to someday to have the top position within your business or keep it, why not start the LEAN improvement program within your business and show how bold customer-facing improvements can deliver real and significant benefits simultaneously to customers, shareholders, and employees.