page 1
page 2
page 3
page 4
page 5
page 6
page 7
page 8
page 9
page 10
page 11
page 12
page 13
page 14
page 15
page 16
page 17
page 18
page 19
page 20
page 21
page 22
page 23
page 24
page 25
page 26
page 27
page 28
page 29
page 30
page 31
page 32
page 33
page 34
page 35
page 36
page 37
page 38
page 39
page 40
page 41
page 42
page 43
page 44
page 45
page 46
page 47
page 48
page 49
page 50
page 51
page 52
page 53
page 54
page 55
page 56
page 57
page 58
page 59
page 60
page 61
page 62
page 63
page 64
page 65
page 66
page 67
page 68
page 69
page 70
page 71
page 72
page 73
page 74
page 75
page 76
page 77
page 78
page 79
page 80
page 81
page 82
page 83
page 84
page 85
page 86
page 87
page 88
page 89
page 90
page 91
page 92
page 93
page 94
page 95
page 96
page 97
page 98
page 99
page 100
page 101
page 102
page 103
page 104
page 105
page 106
page 107
page 108
page 109
page 110
page 111
page 112
page 113
page 114
page 115
page 116
page 117
page 118
page 119
page 120
page 121
page 122
page 123
page 124
page 125
page 126
page 127
page 128
page 129
page 130
page 131
page 132
page 133
page 134

May 08 www.bus-ex.com 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 www.bus-ex.com 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”