iSixSigma

Control Charts and Employee Engagement Helped This Company Save Over $150,000 in One Year 

Providing the proper organizational environment for engaging people in your continuous improvement effort will provide large benefits for your organization. In this study, we look at how the combination of using control charts and providing an environment for people engagement helped one company achieve significant financial benefits.

Control charts are a powerful tool for understanding the Voice of the Process and distinguishing between common and special cause variation. Most companies realize that engaging employees in their continuous improvement process will result in more improvement than just relying on their Green, Black, or Master Black Belts for ideas. 

Today, we’re going to look at the process one organization used to discover they had a problem they weren’t aware of – and the importance of providing improvement tools such as the control chart to help engage employees in their improvement process.

This company didn’t even know they had a problem 

A mid-size steel company was starting down the path of implementing an ESOP (Employee Stock Ownership Plan) whereby employees’ retirement benefits will consist of owning company stock. Additionally, leadership wanted to embark upon a formalized continuous improvement effort to help the company improve and drive up the value of the stock.

They hired a Six Sigma consultant to come in and train and coach their senior leadership. But, they were concerned that if only senior leadership went off-site for two weeks of training at a nice hotel, the rumor mill might perceive that as something sneaky going on, given the uncertainty of the switch to the ESOP. So, to their credit, they decided to also invite five hourly workers to join the group since they were now technically going to be owners. Fred was one of these hourly workers.

The best way to describe Fred is, if you had a daughter, he would be your worst nightmare. Fred was tall and gaunt with scraggly long hair and missing a few teeth. While the executives wore more formal business attire, Fred wore his tattered t-shirts, jeans, and boots. He was a convicted felon (armed robbery) and former drug abuser who had overdosed in the past. 

Fred had a big Harley Davidson motorcycle that he preferred to park on the steps leading to the hotel rather than in the parking lot. While the rest of the group ate catered lunches at their table, Fred ordered pizza for delivery and sat the box on the table. Fred was uneducated but intelligent. 

The company’s thinking was if Fred bought into what was being taught, he could be a valuable ally and influencer for the rest of the organization. “If Fred likes this, everyone else should also.”

Fred’s data revealed a hidden problem

As in most Six Sigma training classes, the teaching of control charts is part of the Measure phase of DMAIC (Define, Measure, Analyze, Improve, Control) taught during the first week of training. All class participants, including Fred, were asked to bring some actual data from their process. 

After teaching the basic concepts and use of a control chart, each student was asked to construct the appropriate control chart based on the type of data they had. Fred’s data consisted of subgroups of continuous data, so he selected the Xbar and R chart as the one he should use. With a little help from the consultant, Fred used the provided statistical software to make his chart.

The consultant then selected Fred to come up and present his chart. When asked to describe what the data represented, Fred explained his job was “mold coater.” This consisted of spraying a thin coat of heat resistant product on the inside of the steel casting mold to act as a heat barrier when the mold was filled with molten steel. This was critical to keeping the molds from cracking and shutting down the line. Fred also explained the nominal value was targeted at 60 millimeters plus or minus 2.5 millimeters.

First, Fred put up his data sheet and then presented his control chart. The consultant was a bit concerned when Fred’s data was reported out as 60, 60, 60, 60, etc. All the data values were the same. His Xbar control chart was just a straight line at 60 millimeters and there were no calculated upper or lower control limits

When asked for an explanation, Fred explained that when a value was recorded that varied from the nominal, his supervisor would ask for an explanation and deride him for his incompetency. Fred and his fellow mold coaters realized it was best to just record the 60, 60, 60 to make their lives easier.

As the consultant looked around the room at the executives, he was not surprised to see the confusion and consternation on their faces. The consultant asked Fred if he would be willing to collect honest data for presentation during the second week of training. The consultant looked at the vice president of manufacturing and asked if it was OK for Fred to collect honest data. He replied, “Yes, he has my personal protection.” The consultant shook his head in disbelief that this actually had to be said in public.

By using actual data, Fred was able to improve his process

The week 2 training started with a review of the material from week one. When the review came to the topic of control charts, Fred was asked to come up and report on how his data collection and control charts went during the interim. 

Picture Fred, who wore a collared shirt and untorn jeans this time, standing up in front of the executives giving a lecture on control charts. Fred explained that he and his peers were a little nervous at first collecting honest data. But he trusted the vice president and went ahead and recorded the actual dimensions.

His control chart showed the average was not 60mm but 62.5mm. The control limits were wide, and values exceeded the specs, primarily on the high end. Since spraying too little on the mold could lead to cracking of the mold, their attitude was better to be safe than sorry. 

Knowing the material was expensive, Fred realized, as an owner, this was costing him, his peers, and the company more money than necessary. On their own, Fred and his peers experimented to find the optimal settings for the spray nozzle opening, spray pressure, and angle of application. After a few changes, they were able to get the average coating thickness to 60.3mm and narrowed the variation so all the data points were now within the specs of plus or minus 2.5mm. 

Saving over $150,000 was easy once the true process was known  

While Fred was finishing up his presentation, the consultant noticed Fred’s manager, Todd, vigorously working the calculator and writing down numbers. The consultant asked Todd if he wanted to add anything to Fred’s story. 

Todd said he had been calculating the savings from Fred’s simple improvements. It turned out that by providing Fred the tools, positive environment, and opportunity to engage, the company would have an annual savings of $156,000 in material costs alone. He didn’t even bother calculating the savings of improved quality of the product because of having to perform a finishing operation on the mold and steel casting caused by excess spray. 

The consultant finished up the discussion by asking the assembled executives, “How much do you think you can improve this business if you provided all the Freds and Freidas in the company with a positive environment conducive for honest data collection, the tools to look at their own processes, and engage them in a quest for continuous improvement?”

Following up a few years later, the consultant was gratified to learn the business was a huge success, and Fred was a millionaire driving a really decked-out new Harley.

3 best practices when implementing control charts and encouraging employee engagement

There were a number of lessons learned from having Fred in the training. Here are a few tips for replicating this company’s success. 

1. Ensure you have an environment that allows people to provide honest information about what is going on in your organization 

This company didn’t have a clue about their problem. Honest feedback should be encouraged and rewarded so if there is a problem, it can be resolved rather than waiting until it’s too late and the consequences are much worse. 

2. Provide people the tools they need to understand and improve their own processes 

Don’t underestimate the ability of your people to learn and apply the tools of Lean Six Sigma. There is a big difference between education and intelligence. Provide help where needed, but trust your people. 

3. People want to do a good job 

It is less stressful and frustrating when things go well when doing your job. Provide a positive environment and appropriate tools for improvement so people will want to manage and improve their own processes. 

Create an environment of trust, provide the right tools, and engage your people

The first lesson is don’t judge a book by its cover. It would have been very easy to dismiss Fred and the possibility of his contributions to the company. Most people are capable and desirous of learning new things and improving their work. Trust and respect your employees. 

The control chart is a powerful and fundamental tool for understanding how your process is performing. Use them frequently to monitor your key organizational metrics and KPIs (key performance indicators).

The synergy resulting from the engagement of your people will far exceed the outcomes derived just from your continuous improvement experts.

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