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1. Six Sigma in Action:
Demonstrating Customer Value
A Six Sigma in Action summary offers an example of the
value a Six Sigma project can bring to a customer.
Master Black Belt: Steven Bonacorsi

2. Six Sigma in Action:
System Lease Cost Reduction
Customer Profile – 27,000 seat network equipment company based in San Jose, CA
Business Problem & Impact
Currently the average monthly buyout rate of un-recovered
Root Cause Analysis
leased systems is at 37%, which results in the client having to Buyouts
spend money for lost or outdated technology. This is well 100%
above the industry standard of 10 -15%. In addition, 50% of 80%
200
the clients systems required a lease extension for added cost. ge
r
60%
l on av
e
no th
er yed no
Measure & Analyze 100
Us plo
em
f re
Re se
No spon
sh
er
d
Us tem
oe
s
40%
s
Re sy
Initially, lease buyout and extension baseline process sigma 20%
was about 1.8. Primary root causes were identified to be users Ot
he
rs
0 0%
no longer with the company, users who did not respond, and Count 94 80 79 6
users who said they no longer had the equipment. Percent 36.3 30.9 30.5 2.3
Improve & Control Buyout Run Rate
In close coordination with the client and the lease vendor, the 60%
GE team updated the termination process to include explicit 50%
51%
38%
instructions on equipment returns, automatic notifications and 40% 36%
Buyout Rate
36%
29%
30%
follow up reminders. The streamlined process was 30%
20%
23%
16%
20%
documented and training provided to key participants 10%
19%
14%
14% 15%
Results/Benefits 00%
Jan- Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-
Buyout/extension rate was reduced to 12%, and the outdated 01 EOL Month 02
systems that the client needed to extend or purchase from the
leasing company was cut by over 50%, saving over $2.3M
An annual savings of US$2.3 million to the customer!