Over at Seeking Alpha, executives of Louisiana-Pacific Corporation are talking about how the company is weathering the financial crisis and posting good second quarter results.
They attribute their good performance to Lean Six Sigma.
According to Rick Frost, the CEO:
Our sales force racked up 780 wins in Q2, a win as you remember, is defined by us a product placement with a new customer or an additional product placement with an existing customer. And our sense of this, when activity eventually does pick up, it will board well for us in both volume and revenue.
Quite obviously, we are, what I would call, top line revenue challenged with new starts being down 46% year-over-year. So besides our efforts on sales wins, our measurable efforts are felt most on the cost reduction side. Our lean six sigma efforts continue to payoff for us on a morale and involvement standpoint, but also from a financial one.
At mid-year, we are at over 6:1 return level from lean six sigma, well above our internal goal of 3:1, and we are on track for our $15 million to $20 million improvement range. Many of these efforts were focused on the lean aspects of the discipline as our team set about reducing inventories across all aspects of the business, while still meeting our customer needs. Cost-out products made up the rest of these efforts many supporting LP’s Power Forward initiative.
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