Cummins always puts its customers first
Enabling offices to solve problems well is one of the key characteristics of Six Sigma
There is, indeed, no limit to what Six Sigma can do to positively impact a company’s success. It is, by-and-large, dependent on the willingness of the company’s leadership to actively engage and stick with it long enough to allow it to truly take root and work its way into every aspect of the company’s DNA. At Cummins, the leadership is committed to continue the journey after many years of and saving billions of dollars from pursuing Six Sigma (please see sidebar at bottom).
Prior to Six Sigma there was no relationship between revenue and profits. Cummins always lost money or broke even in a downturn. Market share in many of our markets was slipping. Product and service quality were inconsistent. But after $3+ billion in savings, 17,000+ projects and 11,000+ people trained as belts, Cummins is now a completely different company. The numbers, however, only tell part of the story.
As we approach the 10th year of practising Six Sigma at Cummins, it seems fitting to take a look at the future of this improvement methodology at our company. The way we apply Six Sigma will continue to change and grow. You don’t have to be a PhD or an engineer to apply Six Sigma. If you follow the process you will come up with a solution that works!
SOLVING PROBLEMS
One of the highlights we see from the Six Sigma programme at Cummins Middle East (CME) is how well the process works to enable anybody to solve problems. And one of the important areas of growth is for Six Sigma to continue to broaden across business units (BUs) and functional boundaries, improving the flow of information and materials through the company and its customers. The big issues often reside in the gaps between the BUs.
Over the next several years, cross-BU umbrella projects will become an ever greater aspect of Six Sigma at Cummins. Doing projects with customers is another area of real opportunity, as this keeps us in line with the first of the 10 practices under the Cummins Operating System (COS) – that is, is putting the customer first. The long-term goal is to have one-third of our projects with customers, onethird with suppliers and onethird focused on internal issues.
The COS practices grew out of work we have done and the lessons we have learned over the past 20 years. We described them first in what had been our production and technical systems, and have found that they apply across the organisation, regardless of the business or function. COS gives us a more organised way to collaborate and structure our approach. It also introduces us to some other tools we can use to improve our processes that we have at our disposal.
In essence, the COS is basically our method of operating and exceeding customer expectations. It is our language for continuous improvements. Together, the 10 practices establish the principles of any effective organisation, and are the basis for building a common approach that encompasses the entire corporation. The COS Practice 10-Six Sigma is our primary process improvement method.
TRANSFORMING COMPANIES
In 1999, the soon-to-be chairman and CEO of Cummins, Tim Solso, began developing his strategy for leading Cummins into the 21st century. As part of that effort, he visited PACCAR, a customer; Eaton, a supplier and GE, an outstanding company. He learned the same thing from each visit: Six Sigma was transforming these companies and their bottom-line performance.
With that, Solo made what would be one of the most critical decisions of his tenure as CEO: Cummins would pursue Six Sigma. Thus began a decade of historically unparalleled change and success for Cummins.
Cummins is a global power leader that designs, manufactures, sells and services diesel engines and related technology around the world. It serves its customers through a network of 500 company-owned and independent distributor facilities, and more than 5,200 dealer locations in over 190 countries and territories.
Over the years, we’ve been involved in different improvement efforts and projects with the objective of continuously improving our systems and processes, in order to exceed customer expectations. We’ve found ways to be more resourceful and helpful to our customers.
ECONOMIC DOWNTURN
The evidence of the value of Six Sigma at Cummins is best seen in our response to the economic downturn between 2008 and 2009. We increased our Six Sigma project load instead of reducing it. We identified the 50 biggest cost-saving projects to bring additional attention, and make them go faster to reap the benefits more quickly.
Cummins Generator Technologies’ AC Generators | Source: CME
We launched an Inventory War Room, which used Six Sigma projects to reduce inventory value by $500 million in four months. Many other efforts across the company accelerated Six Sigma projects, to help respond quickly to the economic realities that confronted us.
Then, in mid-2009, we began a series of Six Sigma projects focused on how we would prepare and respond to the eventual upturn to capture more markets, improve our customer responses and grow even faster than we had been prior to the downturn.
The biggest challenge is to keep Six Sigma from becoming mundane. We will aggressively develop new ways to apply data to our decision-making. Six Sigma applies to many areas of business; after doing something for a really long time it becomes easy to take it for granted. If Six Sigma is to continue to be useful, we have to keep it alive and growing.
The senior leadership of Cummins is committed to keep Six Sigma growing, maturing and changing without losing track of where we’ve been and what we’ve learned as well as our successes. The mechanism for doing this is the COS. As mentioned earlier, COS is the language of improvement at Cummins and Six Sigma provides the processes and tools we use to make the improvements. The understanding that Six Sigma is part of COS will help keep it from becoming stagnant.
DMAIC PROCESS
At CME we are currently applying the DMAIC methodology (see sidebar) to improve our processes and services to customers. We had our first Six Sigma local launch in 2009 and, the second, in 2010. (Prior to these we sent our belts to other Cummins offices abroad for training.) Conducting these local launches reinforces the commitment of the senior leadership at CME to Six Sigma.
Between 2003 and 2008 we closed a total of 12 projects, giving us savings close to $2.3 million. In 2008, the CME leadership decided to invest in our employees and train as many people as we could on Six Sigma going forward. Here are some other highlights from the progress made at CME:
It is rare that a decision of any magnitude is made today absent the use of data and analysis
The workforce now begins to see the importance of processes and the benefits of a process approach
Employees are beginning to see the benefits Six Sigma brings to them as process owners, and are willing to be part of Six Sigma
Almost all the employees here today have been part of Six Sigma, and are making active contributions either as belts undertaking a critical project or as team members in one of the projects doing their .
We have seen an increase in Customer- Focused Six Sigma (CFSS)
We at Cummins believe that CFSS is one of the ways to grow our business by building relationships with our customers. This helps us to understand and exceed customer requirements better. Our goal is to demonstrate to our customers that we care as much about their business success as they do, and we will provide them with Six Sigma improvement processes, tools, training and project leadership, to enhance both the quality of their business and results and the relationship between our two companies. It’s really a win-win situation for both Cummins as well as our customers.
Until 2009, we had not completed any projects that involved a customer directly. All this has changed, however, with the launch of the first last year. We did a couple of CFSS projects with two of our customers and, this year, we already have five active customer-focused projects. There are still a lot of improvements we can make in this area. The CME leadership is committed to this idea, and will ensure that this is one of the areas we focus on when selecting future Six Sigma projects.
The leadership and people development benefits are pretty amazing. Leading diverse teams, taking risks, developing and delivering different types of communication to groups, analysing data, making decisions and managing projects cover many of the elements of leadership. Hence, this is also one of the many development tools we use to develop our future leaders.
The author is Continuous Improvement and HSE Manager at Cummins Middle East.
 
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No rework processes, please! The Six Sigma approach demands to tackle problems at the rootcause level, instead of making a project undergo unnecessary inspection and rework processes over some defects. If a process does not produce more than 3.4 defects per million opportunities, then an organisation has achieved Six Sigma for a certain project or programme. These defects must be identified and eliminated using a structured problem-solving method of rigorous data-gathering and statistical analyses, stresses Six Sigma Qualtec, which helps companies worldwide to measure, manage and improve performance through consulting, training and technology. The three key characteristics of Six Sigma are leadership commitment, managing decisions with data and training and cultural change. It was Bill Smith who coined the term “Six Sigma” when Motorola realised that traditional quality levels were not enough to obtain critical information. As a measurement standard in product variation, the practice dates back to almost 100 years, says Qualtec, “when Walter Shewhart showed that three sigma from the mean is the point where a process requires correction”. It adds that engineers at Motorola, including Smith, decided in the early- to mid-1980s to measure defects per million opportunities instead of thousands. The effort paid off, as Motorola had documented savings of over $16 billion. A number of global companies, including General Electric, have since adopted Six Sigma to grow their businesses. It’s not easy to achieve improved performance, however. It is, therefore, important to have a methodology, such as the DMAIC process, in administering high-calibre personnel training and in instilling new ways of thinking and communicating within an organisation. An acronym for five interconnected phrases, DMAIC means define the project goals and deliverables for customers; measure the process to determine current performance; analyse and determine the root cause/s of the defects; improve the process by eliminating defects and control future process performance. – Jose Franco |
