The Lean Six Sigma Guide to Doing More With Less: Cut Costs, Reduce Waste, and Lower Your Overhead

Chapter 14. Establishing a Center of Excellence

With Stephen Elliott, Pam Altizer, and Matthew Peterson

Aglobal packaging manufacturer with more than 20,000 employees and about 100 plants and operating sites had grown significantly over two decades as the result of acquisitions. The company wanted to transition from its original holding company model (where each acquired business retained its individual processes and culture) to an operating company model (with more consistency worldwide) because key customers were consolidating and increasing their expectations of packaging suppliers.

As the same time, the CEO set goals of reducing costs by 2 percent of revenue on an annual basis and improving operational flexibility. Fast results were critical due to a downward trend in operating profit margins. The company selected Lean Six Sigma as the mechanism for driving down costs, and, because a rapid rollout was critical to achieve breakeven within one year, it chose to drive LSS implementation through a Center of Excellence (CoE):

• A small (three full-time employees) central office, the CoE focused on program design, methodology selection, building infrastructure, and performance measurement and reporting.

• The staff reported to the CEO.

• Representatives from different geographic regions (12 employees) had matrixed reporting relationship to the CoE and business units, with the goals of identifying personnel to become LSS leaders, selecting highimpact projects, and aligning with business units ...