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May 08 101 initiatives had no strategic direction, until the decision was made to outline an operating system, creating a framework that allowed improvement to be viewed more systematically. The concept of six sigma had arrived with a vice president who came from GE. His success began to attract attention and other business units began to use it. Schulist arrived to help drive a lean six sigma approach in the electric distribution and customer service business units. Improvement happened, but it was not hitting the bottom line quickly enough. It’s a familiar story. If you flirt with lean, she’ll kiss you on the cheek every now and then, but a long term relationship requires a concerted approach, and that requires the commitment of senior leadership. Jeffrey Liker’s book, The Toyota Way, was a valuable reference at the time, and Schulist recalls what he said about the characteristics of companies that are successful with lean DTEEnergy Lean manufacturing has been around a good while in the automotive industry, but recent years have seen some migration into other industry sectors, partly due to the migration of executives with lean experience taking it with them in their career moves. One such executive is Jason Schulist, director of continuous improvement at DTE Energy, a Detroitbased, diversified energy company whose largest operating units are Detroit Edison, an electric utility serving 2.2 million customers in Southeastern Michigan, and MichCon, a natural gas utility serving 1.3 million customers in the state. Schulist worked in automotive from 1989 to 2002, and joined DTE Energy four years ago, becoming director of continuous improvement last year. DTE had been flirting with lean for a few years before Schulist came on board, and had conducted some successful (and some unsuccessful) kaizen events, but its improvement Jason Schulist, director of continuous improvement, tells Martin Ashcroft how this Detroit, Michigan-based utility is taking the philosophy of lean sigma to the next level leansigma Sustainable

Although continuous improvement is still in its early stages, Schulist talks about savings in the hundreds of millions of dollars. At a time when high energy prices are front page news, what effect can consumers expect this to have on the price of electricity and gas? “It is unlikely that many companies will be reducing their energy prices,” he admits. “Our real issue is, if you look at what is forecasted for price increases in the United States in the next 20 or 30 years, the actual rate of increases expected will be higher than infl ation. Our ratepayers cannot bear the anticipated cost that is forecasted nationwide for energy increases, so our goal is to make sure that our processes and methods are so good that our increases will be at a lower rate. That’s our commitment to our community.” DTE’s approach to this is to take lean sigma to another level to incorporate environmental and social goals. “It’s still in the development stage, but we have worked on something called sustainable lean sigma,” says Schulist, “which is something that we have gone to patent on— using lean six sigma approaches in sustainability. There is a set of tools from the environmental side and social side, and a set of tools from lean six sigma which we have combined into what we call sustainable lean sigma—applying business rigor to triple bottom line issues. Schulist says the lean sigma approach defi nitely works in a non-manufacturing setting, and he is excited about working on the social, environmental and economic sustainability of the communities which DTE is tied to. But what is he personally most proud of over the last year? “That we now have a leadership team that is fully engaged in driving us, and that is going to be the key to our future success. That’s what I’m most proud of, and it took the most work!” implementations. Three questions, in particular, stood out. Are top executives committed to a long term vision of adding value? Are executives committed to developing and improving teams and people? Will there be a continuity of philosophy at leadership level? “Liker is local to us,” says Schulist. “He’s from Michigan. So we invited him in and we talked, and we decided that if we were really going to do this, we needed to have these three things aligned. So we spent most of last year working with executive leadership to develop a deployment vision for 2008 and the future. “From the people side, we have been working with Steven Spear at MIT,” continues Schulist, “with the support of Toyota’s supplier network (BAMA) and Dana Corporation, to help teach executives how to become leaders in continuous improvement.” A fi ve day course has been developed, using Spear’s work on the capabilities of the operationally excellent company, and their relevance to the utility industry. “What it comes down to,” Schulist continues, “is how do you design your processes to see problems? When you fi nd a problem, how do you rapidly swarm that problem to solve it at its root cause so that it doesn’t come again? And how do leaders ensure that learning is shared across the company, so local lessons are shared globally and implemented appropriately, and how do leaders become the people who can do those fi rst three things?” DTE has around 90 people doing full-time continuous improvement, across both gas and electric utilities, including customer service, fl eet and warehouse, legal and HR, as well as operations. Despite the obvious operational differences between a slow moving assembly plant and the high velocity continuous fl ow environment in a process industry, the tools and philosophy of lean and six sigma are indeed transferrable, and Schulist found his automotive experience valuable, but he has found his approach to the deployment of lean tools has altered slightly, because of these differences. Instead of starting with the tool and deciding where to apply it, he’s now more focused on identifying a problem and deciding which tool to use, so the tools become counter-measures for solving problems. “I was much more tool focused before, and now I’m much more process focused. It’s not about applying a tool for the tool’s sake.” DTEEnergy 102 May 08 H Hansen Industries enjoys a good working relationship with DTE Engineering, WSC, and all of the power plants. When we repair or replace heat exchangers, air compressors, vacuum pumps, and machining or in fi eld maintenance, working with the knowledgeable Edison personnel brings much satisfaction to the end result. We look forward to our continued relationship as a partner with DTE Energy. H Hansen Industries “I was much more tool focused before, and now I’m much more process focused. It’s not about applying a tool for the tool’s sake”