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Six Sigma at Cardinal Health

Cardinal Health has been busy with Lean Six Sigma. Their second quarter earnings release highlighted their progress to date:

“Initiating more than 100 operational excellence projects, bringing the total number of ongoing projects to 200. The company is on-track to train nearly 300 “black belts” during 2006 to manage company-wide lean six-sigma initiatives within manufacturing, distribution, administration, sales and marketing.”

The 2005 Annual Report states: “Across more than 50 manufacturing locations, we’re gaining efficiency through the implementation of lean six-sigma processes, common quality systems and shared sourcing initiatives.”

Information Week recently published an article that describes how Cardinal’s operational excellence initiative (that includes Lean and Six Sigma) is transforming the Information Technology organization:

“These multiple requirements led us to an operational excellence initiative designed to build new skills among our 55,000 employees and improve quality and management practices across the business. They also resulted in a redesign and overhaul of our IT operations away from a business-unit focus and toward an integrated group servicing the entire company.

“Managing change wasn’t a foreign concept: Cardinal Health had grown enormously from just a decade earlier, when it was a regional pharmaceutical distributor with less than $8 billion in revenue. However, tackling operational excellence required different thinking and discipline– namely, an investment in black-belt leaders, a commitment to the principles of Lean and Six Sigma improvements, and new training for employees. We’re still early in this process, and like other managers, I’’ve taken several days of training in these practices to begin implementing them in IT. We’’ve also hired and trained black belts to roll out these practices enterprise wide.”

Articles and Links

Cardinal Health’s Second Quarter, January 26, 2006

Cardinal Health Revamps IT Organization, InformationWeek, May 22, 2006

2005 Summary Annual Report

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