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Regal’s
road to Six Sigma
Regal-Beloit
got more than business units when it acquired General
Electric’s commercial AC and HVAC motors divisions; it got
the tools to transform the entire company.
by Tom
Hammel
On January
3, 2005, Regal-Beloit Corporation finalized a year-long
drive that functionally doubled its size. With two major
acquisitions, first of General Electric’s Commercial AC
motor business in August 2004, followed by GE’s HVAC
motors and capacitors division in late December,
Regal-Beloit became the largest producer of
commercial/industrial motors in the United States.
In addition
to adding about $500 million in sales to its ledger, the
deal brings GE products and technologies, a well-placed
handful of global facilities and thousands of former GE
employees. Add these up and you have immense market
potential dampened only by the challenge of integrating
them.
Lean
before “Lean”
Regal-Beloit had been pursuing continuous improvement
programs for many years before they became known as
“Lean,” but a bonus of the acquisition was that, in
addition to other top GE managers, Regal-Beloit could also
acquire some of GE’s famed Six Sigma talent. One name that
kept popping up was that of Vivek Bhargava, a 15-year GE
veteran who had worked in and led Lean Six Sigma programs
and projects for several divisions.
Starting in
January 2005, Vivek began meeting with Regal-Beloit leaders,
touring facilities and meeting key managers in preparation
for the launch of a wholesale Lean Six Sigma program.
News of the
acquisition was announced January 3, 2005. Three weeks
later, in its annual planning meeting, as company President
Henry Knueppel rolled out Regal-Beloit’s major goals for
the year, creating a Lean Six Sigma program was one of them.
“Henry
was an advocate of Six Sigma before the acquisition,”
Bhargava says. “He saw the GE acquisition as a
defining moment for Regal-Beloit and he believed the time
was right to launch Six Sigma across the company. This was
very important: from the very beginning, the entire
Regal-Beloit management was committed to doing it.”
With
commitment from the top, Vivek next set about spreading the
word to upper management. First, he facilitated a two-day
orientation for business unit leaders to teach them the
fundamentals of Six Sigma.
“Almost
every Regal-Beloit leader came to that two-day orientation
— between 40 and 50 general managers, plant managers,
function managers, finance, IT — everyone who had major
segments of people reporting to them,” Bhargava explains.
These
leaders were then charged with going through their own
areas, applying what they had learned, and identifying
projects to tackle first.
“Next we
asked them to tee up their best people to go into black belt
training, one person for every major business and
location,” Bhargava says.
This posed
a major challenge to many leaders, as they were charged with
pulling their best people, not merely those who could be
most easily reassigned.
The logic
was two-fold. First, these black belts would be charged with
directing all future Six Sigma projects in their areas for
the next 18 months to two years. Secondly, the disciplines,
statistical analysis and leadership skills required of black
belts make them natural candidates for future leadership
roles. After their time as black belts, these emerging
company leaders will move into positions of greater
responsibility, and new black belts will be brought up to
replace them.
The first
group black belt training program began April 11 in Beloit.
The program consisted of a one-week-on, three-weeks-off
rotation; one week of intense classroom training followed by
three weeks of “take-home tests,” homework and work on
the projects identified by their leadership.
There was
one more reason for this training schedule.
“Black
belt training has been described as drinking from a fire
hose,” Bhargava says. “Each week of training could
easily be a semester’s classwork in any grad school.”
After the
first wave of black belts completed their training in early
June, green belt training began. Regal green belts will keep
their existing day jobs but will also receive some training
so they can, with help from their black belts, drive
projects.
“We’ve
started to drive a culture where green belts can identify
weaknesses in their processes and begin to apply improvement
tools with guidance from their black belts,” Bhargava
explains.
As of early
September 2005, Regal-Beloit had trained more than 150
leaders, green and black belts and had 97 projects underway
in every area from manufacturing, MRO and indirect
purchasing to finance, human resources and IT.
The MRO
project
Because of the GE acquisition, MRO procurement was quickly
identified as an area having a major impact on the business.
Specifically, the MRO processes in the acquired GE
businesses differed significantly from those in their
Regal-Beloit counterparts, which also varied between
themselves.
“We had
several businesses before the GE acquisition, and now we had
the opportunity to leverage the entire MRO system for all of
Regal-Beloit and make it more efficient,” Bhargava says.
“Applying Six Sigma tools to this, we asked, ‘What are
our Critical to Quality (CTQ) parameters for running our
indirect materials program?’
“Clearly,
maximum uptime is one of these. Uptime is driven by
maintenance, so this leads you to drive that CTQ function
down into stocking levels, scheduling, job time and so
on.”
To identify
all the CTQs, a cross-functional team, led by black belt
Barb Tesch, was created of people from both within the MRO
function and outside it, including finance.
“That’s
where our MRO project is now, with the cross-functional
team,” he continues. “They’ve walked through the
process map, arrived at their current state, identified
their CTQs and how each is affecting the process and now
they are working to design an improved process that will
best meet each of those CTQs.”
Because the
MRO project spans two different major businesses that are
coming together, the MRO team has had to map the process
from both the acquired GE side and the Regal-Beloit side.
Vivek is quick to caution that such projects typically take
several months of discovery, metrics and analysis before any
implementation can begin.
Hardware
and software
At the beginning of their training, each of the first wave
of 30 black belts was given a new IBM ThinkPad laptop loaded
with JMP, the statistical analysis package that Regal-Beloit
has chosen for its Six Sigma programs.
“You
don’t need to be a statistics major to be a good black
belt,” Bhargava says. “JMP performs all the
math-intensive statistical functions for you, so it’s easy
to calculate results and apply them to your problem.”
Black belts
trained on their new computers, using the JMP programs from
day one.
Regal-Beloit’s
green belts, because they would return to their existing
workstations, were loaded with JMP licenses at those
locations. Every green or black belt company-wide was given
a license.
An
additional 15 “traveling” laptops were purchased for
training green belts at other Regal-Beloit locations.
“We gave
them the tools they need to be successful,” Bhargava says.
“When you pick your best people and charge them with a
task but don’t give them the tools they need, you’ve
shot yourself in the foot. This also sent a strong message
to the entire corporation about how committed the business
is to this program.”
The
investment in people, travel, scheduling and hard- and
software has been significant, and the expectation of
results is correspondingly high. To justify it all, Vivek,
Henry Knueppel and several black belts presented a one-day
program to the company’s board of directors in mid-August
to educate them in the fundamentals of Six Sigma and its
potential, report their progress so far and show where the
company is headed with it.
A black
belt’s perspective
Henry Klein, a senior manufacturing engineer with the Leeson
Electric division, was among the first wave of black belts
trained. He has implemented Lean tools including 5S,
progressive assembly lines and point of view storage at R-B
locations for more than five years. Now, having
“survived” the intensive Six Sigma black belt program,
he expects it to have a major impact across the entire
company. Having some Lean tools in place is better than
having none, but he now sees any Lean program without Six
Sigma as incomplete.
“You can
do Lean without Six Sigma but it won’t be the complete
package,” he says. “Lean lets you choose the tools you
want to use depending on the problem you want to address,
but that’s not as disciplined as using Six Sigma, going
through the DMAIC steps and applying the metrics to
determine a solution.”
Lean tools,
he says, eliminate waste, but Six Sigma eliminates process
variations. Lean will lower the water level of your
processes, but what is left over is often related to process
variations.
Vivek
agrees. “Six Sigma and other tools like 5S are very
complementary,” he says. “5S is a great program but when
you find an area that’s messy, it usually coincides with
an operation that’s out of control. Six Sigma forces you
to make sure you have the best metrics identified for
applying the process so when you are finished, the controls
are in place and things you’ve improved will stay that
way.”
A
committed leadership
Henry Knueppel, Regal-Beloit president and chief operating
officer, is excited about the gains the fledgling Six Sigma
program is already bringing to the company, but he is
determined not to push the process too hard or too fast.
“One
thing we’re trying to be very rigid about is to not short
circuit the process,” he says. “You can do that,
especially when you’re trying to get people accustomed to
performing the process. We want them to use all the tools,
follow the process and maintain the disciplines. We won’t
rush to close a project just to say it’s closed.”
The
momentum to charge ahead is strong: Regal-Beloit doubled its
size with the GE acquisitions and busness has never been
better. Six Sigma will enable these entities to come
together as one perfectly aligned machine.
“This a
one of the few times in a business lifetime when you get a
triple win,” Knueppel notes. “It makes us a better
company to do business with from a customer perspective, a
better company to work for from an employee perspective and
a better company to invest in from a shareholder
perspective.”
His
enthusiasm is contagious.
“We’ve
been using Lean tools for a lot of years, but adding the
formalization and commitment of Six Sigma is going to pay
huge dividends,” he says. “This is really an exciting
time for us.”
GE is a
registered trademark of General Electric Company and is used
under license to Regal-Beloit Corporation.
This article appeared in
the October/November 2005 issue of MRO
Today magazine. Copyright, 2005.
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