Six Sigma slashes IT costs by millions

CIO for engine maker Cummins on applying quality method to IT

Cummins, an engine manufacturer in Columbus, Ind., is firing on all cylinders as it hits $12 billion in revenues this year. The company attributes much of its recent success to Six Sigma, a quality management technique that involves applying statistical tools to measure, analyze and fix problems. Network World National Correspondent Carolyn Duffy Marsan interviewed Cummins CIO Gail Farnsley to learn more.

How have you applied Six Sigma techniques across the IT department?

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Cummins, an engine manufacturer in Columbus, Ind., is firing on all cylinders as it hits $12 billion in revenues this year. The company attributes much of its recent success to Six Sigma, a quality management technique that involves applying statistical tools to measure, analyze and fix problems. Network World National Correspondent Carolyn Duffy Marsan interviewed Cummins CIO Gail Farnsley to learn more.

Click to see: Click here for CIO Gail Farnsley's bio

How have you applied Six Sigma techniques across the IT department?

We are in the process of training all of our IT people to be Six Sigma green belts. To be a green belt means you have to successfully complete three projects. Each takes roughly six months. Realistically, it’s probably 25% of your time for six months.

By 2010, our expectation is that all IT people will be green belt certified. If they’re not, they can’t get promoted and they can’t change jobs. At this point, almost everybody has been trained except for people who started in the last year. Most of them are working on their first or second project. I’m working on my third project as a green belt. The argument I got from people is: I don’t have time to do Six Sigma projects in addition to my regular job. I figured one way to solve that problem is if I do three projects. It’s hard for them to say they don’t have time if I can gut it out. We’ve encouraged people to look at their jobs and figure out how to use Six Sigma to do the work they are already doing.

The reason we require all of our IT people to be trained in Six Sigma and to be Six Sigma green belts is that when we went to an outsourcing model, we stopped doing programming and technical training. In our three-week Six Sigma curriculum, you also get business analysis training. If you think about what IT people do in our model, they are project leads and business analysts. Six Sigma is about leading projects, doing analysis and process improvement.

Is every IT initiative at Cummins a Six Sigma project?

No. It’s not that every IT project is a Six Sigma project, but with everything we do we use the Six Sigma tools. The idea of a Six Sigma project is that it’s something you can do in six months and [that you don’t know the answer to ahead of time]. There’s a lot of IT stuff you can’t do in six months. But that doesn’t mean you can’t do multiple pieces of it as Six Sigma projects. We use Six Sigma for requirements gathering or to reduce the cost of support. Increasing the usage of a Web site is a common Six Sigma project.

So Six Sigma is how you communicate in the Cummins’ IT department?

Yes. That’s what’s important. The project itself is whatever is in your work plan. By doing [a project] through Six Sigma, you’ve got measures, control plans and a common language. Six Sigma is the way we speak and the tools we use. Everybody around the company knows how to use a cause and effect matrix. The tool we use to determine what software capital we’re going to spend is a cause and effect matrix. It would take me a lot longer to get that process done if everybody in the room didn’t already know what that was and how to use it.