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.
