Manufacturer invests in Green Belt training that leads to significant savings and payback

A manufacturer that does a mix of production and research and development expressed interest in a 2-week Six Sigma Green Belt training program. Their leadership had come from the automotive industry, and realized there was a lack of statistical rigor and knowledge in their highly educated team. They knew these skills were critical to their future success as a company.

I was asked to be the instructor for this course. We started with a 1-day White Belt course with top management, in order to get everyone on the same page, and explain their role in selecting and support the upcoming Green Belt projects.

During the session, we started brainstorming project ideas, and they were tasked with completing the Project Charters for the Green Belt candidates before the full training would begin.

The Green Belt course was conducted 5 days on-site at their facility for the first week, then I returned for the 2nd week of training about 6 weeks later.

Typically we teach this course with Minitab Statistical Software, but they wanted the course to be done with JMP. I was not as experienced with that software, but was able to update the training materials and learn the basic functionality of the software. Fortunately, many of these software programs are similar in nature.

There were 17 students in the course, with about 12 completing all the days of training, and others needing to take the make up courses through the online platform. Some teams paired up to conduct their project, so some projects were done alone or with 1-2 additional people from the course.

The cost of the training was approximately $40,000, which included slide preparation and customization for JMP software, as well as travel costs (food, hotel and airfare) for 3 separate trips (White Belt, Green Belt Week 1 and Green Belt Week 2). It also included coaching calls after the training. This averaged out to $2000 per person, which is a very good price for a 2-week (80 hour) Green Belt course.

We’re still trying to quantify all the project savings, but here are the results from just some of the projects launched.

• Lowered material usages from 5kg to 1kg a week (savings of $6000 per year) and reduced number of bottles consumed from 5-6/month to about 2 per month, which saved about $8000 per year, or $14K in annual savings. The biggest benefits were in lead time reduction from 3 weeks to 1 week, which reduced labor by $7000 per order, and if they could apply these learning to all our other products, it could result savings of over $700K.
• Reduced rework from 20% to 10% resulting in over 200 less failures per month. The savings is estimated to be $38K per month, or $450K per year.
• Increased production throughput from 10 to 35 per week by increasing test yields and reducing delays and repeat runs, which resulted in less labor hours and overtime, equating to almost 50% reduction in part cost (about $450K per year) and inventory reductions of $150K.
• Increased production by 350%, with annual savings of $12k in labor costs, and $16K per week in cost avoidance in the first year (much greater in future years as volumes increase), along with reduced energy costs of $500K per year at full rate production, and able to bring more production in-house.
• Reduced the time to complete data processing by researchers (high cost labor) from 6 minutes to under 10 seconds (98% reduction), saving over $10,000 in time savings (labor hours x hourly rate). This was accomplished by evaluating the steps, removing waste and adding automation. The number of errors were greatly reduced as well, from about 1 error per sample to 1 error every 50 samples.
• Reduced mixing time from 20 seconds to 12 seconds, which results in 182 hours of savings per year with about 1500 mixes per year, saving labor worth about $10,000 per year.
• Ran experiments to identify a more consistent (less variation) mix recipe, and evaluated the spec limits to show that they are too restrictive given the process and technology, leading to higher scrap and rework. Even without the spec limit change, the new process and updated SOP will save $17,000 per year.

The impact of the Green Belt program using only a few of these projects is less than a month payback period ($30,000 investment, $900,000 in annual savings, with much more in potential impact), or over 2800% ROI!

After one year, 15 of the 17 students completed their Green Belt project, which is outstanding (88% success rate). The total impact of the projects led to a payback on the training of a few weeks!

What allowed this company to achieve a high project completion rate and get the large cost savings is that the top management identified and launched these projects during our White Belt class. They did an excellent job as projet sponsor, and they wanted to see the change in the culture. They also had an excellent administrative assistant who worked with me on the course logistics, but more importantly helped set up the project cadence reviews, and kept the projects moving forward. Finally, they set project deadlines to require projects to be completed by a certain date, which is also needed to get people to complete their projects.

If you’d like to have us help you with a similar program conducted virtually, please check out our Lean Six Sigma Coaching Program for Organizations >>>

If you want something specific, then fill out the quote form and we can create a custom quote for your company, and help you achieve a similar return on investment.