Reprinted with permission by The News Journal, Wilmington, Delaware
DuPont's New Mantra: Six Sigma
September 18, 2000
By Seth Agulnick, Staff Reporter
The DuPont Co. is on a five-step program to become a leaner, more customer-friendly corporate giant.
Define. Measure. Analyze. Improve. Control.
That's the mantra of Six Sigma, the cost-cutting strategy that DuPont is counting on to help it deliver double-digit profit growth this year.
"We're doing this for a competitive advantage," said Don Linsenmann, leader of DuPont's Six Sigma program, which involves analyzing and improving every process in the company. "It's so different from how work gets done, but so rationally arguable about how work should be done."
Employees, though, are worried that Six Sigma will mean lost jobs. The definitive book on the topic suggests that Six Sigma companies can cut their work forces by as much as 12 percent.
That would translate into more than 11,000 job cuts worldwide for DuPont, which is Delaware's largest private employer.
"There's going to be a reduction in work force," said Ed Dent, president of a union that represents 1,500 DuPont workers in Richmond, Va. "The question is, how big a fight is there going to be getting there?"
DuPont executives called it "quite possible" that the company would hit the 12 percent target, but they said if that happens, it could take 10 to 20 years to get there.
"It clearly is a journey … to build and fine-tune and improve your culture," Linsenmann said.
Six Sigma has been adopted by some of the world's biggest companies. Neither General Electric nor Motorola would answer questions about the impact of Six Sigma on jobs, but both credit the program with saving them billions of dollars.
Independent management consultants, however, warn that Six Sigma, while potentially lucrative, is no cure-all.
DuPont is thrilled with its progress since beginning Six Sigma in January 1999.
For a $25 million investment in training and equipment, DuPont executives said they have completed about 250 Six Sigma projects that will save the company $100 million per year.
Cutting costs and improving productivity are more crucial for DuPont now than ever, analysts said, as raw-material costs soar and interest rates rise.
"I think it's a good move on DuPont's part to adopt [Six Sigma]. I wish they had adopted it sooner," said Patrick Dunkerley, vice president of research for the brokerage firm Securities Corp. of Iowa. "Having said that, no management program is a silver bullet, and I doubt if Six Sigma is either."
By the end of the year, DuPont will have 5,000 Six Sigma projects in progress, each targeting at least $175,000 in savings.
"I believe we've just scratched the surface," Linsenmann said.
But quality-control experts said improvement efforts like Six Sigma can backfire if not implemented properly.
"Six Sigma can be an extremely powerful tool," said Terry Wall, a New Jersey-based management consultant. "When not used properly, however, the results can be disastrous, leaving an organization worse than before the Six Sigma effort began."
The key is to have top executives who believe in the program and are willing to be patient, he said.
"If you intend to use it as a quick fix, it will most assuredly fail," Wall said. "This is true of any effort at changing an organization's culture. And make no mistake, Six Sigma requires changing the culture."
At DuPont, support from the top for Six Sigma has been plentiful.
For almost two years, Chief Executive Charles O. Holliday Jr. has been telling anyone who will listen that Six Sigma will make DuPont a more efficient, more profitable company. "It's a mechanism to organize people's efforts, a method to put tools in people's hands," Holliday said.
(If you
like this article, check out the other articles on the Special Edition!
page.)
More Articles in Special Edition!
(Also, discover startling new secrets of leadership by
checking out past editions of
Leadership Unlimited, my monthly column on leadership.)
The Leadership Unlimited Archive
Visit the Special Edition! page often, so that
you'll have the latest articles about leadership, communication,
organizational culture, presentation skills, and other important topics. |
