Growth Through Six Sigma in Marketing & Sales

1Copyright © 2004 E. I. du Pont de Nemours and

CompanyAll rights reserved.

Growth Through Six Sigma in Marketing &

Sales

Gayle J. GibsonSix Sigma Champion

DuPont Electronic & Communication Technologies

WCBF Successfully Implementing Six Sigma in Sales & Marketing ConferenceSeptember 22-23, 2004



WCBF Successfully Implementing Six Sigma in Sales & Marketing Conference, Sept 2004Gayle J. Gibson, DuPont Electronic & Communication Technologies

“…There is only one valid definition of business purpose:

To create a customer….”

- Peter Drucker

Business & Growth




Marketing = process (to create the mix)

Value for all parties in the exchange

starts with understanding needs and wants (VOM, VOC)

“A social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others.”

- Philip Kotler

Marketing




The Work of Marketing….

• Gathering, analyzing, and communicating market place information

• Defining, selecting, and targeting segments

• Designing the market mix elements to create demand

• Guiding the production and delivery of offerings

• Action planning for marketing resources

• Auditing of market place performance against a marketing plan

VOC, DMA..

DMA..

DMAI.

DMAIC




• The Customer Advocate

• Assist customer to recognize needs

• Communicate the value proposition

• Executes the pricing strategy

• Develop new opportunities

• Validate marketing segmentation & strategies

Identify, grow, and retain profitable customers

Sales




Understand & Choose the value

Communicate the value

Provide & Capture the value

Marketing & Sales




To be the world’s most dynamic science

company, creating sustainable solutions

essential to a better, safer, healthier life

for people everywhere.




Revenue:

$27 billion (2003)

Global:

Operating in more than 70 countries worldwide

R&D:

>40 R&D/Customer Service labs in the U.S.,

>35 outside the U.S.

Employees:

55,000




Five Growth Platforms

DuPont Safety &

Protection

$3.5 B

$4.1 B

DuPont Electronic &

Communication Technologies

$2.5 B

$2.9 B

DuPont Coatings & Color

Technologies

$5.0 B

$5.5 B

DuPont Performance

Materials

$4.9 B

$5.3 B

DuPont Agriculture &

Nutrition

$4.5 B

$5.4 B

Market Leadership

Large Opportunities Strong Capabilities

Sales figures updated for 2003 actual. Original figures were 2002. Overall a 13% increase in 2003 vs. 2002

DuPont Textiles and

Interiors

$6.6 B

Sold April, 2004




Sustainable Growth

the Operational Drivers of Sustainable Growth:

SIX SIGMA LEVERAGING

OUR SCOPE & SCALE

Mission




Transforming DuPont…... to our next

Century

1802 1830 1850 1900 1925 1945 1990 2000 2050 2090

BirthBirth

GrowthGrowth

MaturityMaturity

Chemicals,Energy

Chemicals,Energy

BirthBirth

GrowthGrowth

MaturityMaturity

ExplosivesExplosives

BirthBirth

GrowthGrowth

Maturity

Chemistry,Biology,

Knowledge-Intensive Solutions

Chemistry,Biology,

Knowledge-Intensive Solutions




Voice of the Top Leader

“There is one way to execute growth strategies (do things the right way):

Six Sigma”

CEO

Chad Holliday




Voice of Top Leader: M&S

“The key to sales and marketing excellence... is the use of disciplined data-driven processes and Six Sigma is the toolkit of choice at DuPont based on our successful track record.”

CM&SO

Diane Gulyas




DuPont Six Sigma Journey

2000“The Way We Work” Cost, Capital

+ Growth2001“TLG” (Top-Line Growth)

Transformation•Marketing & Sales•Supply Chain•Innovation

2003“Processes”

2004“Transformation”

2002“At the Customer, For

the Customer”

Customer

1999 “Focus & Win” Cost and Capital




DuPont has been building a Six Sigma Foundation

Black Belts and MBBs- 1200 at the end of 20002120 BBs, 310 MBBs trained by year-end 2003

Green Belts- 6000 at the end of 200115,400 trained by year-end 2003

Top Line Growth, DfSS 2002$1.4Bn revenue TLG projects, 2550 projects by yr-end 03

>900 DfSS projects

Process Excellence 2003Identified corporate core processes

Transformation 2004Marketing & Sales EffectivenessOperations Supply Chain




Six Sigma at DuPont

Results: over $2.4 billion earnings (cummulative year-end 2003)

Approach: VP of Six Sigma leads effort through network of Champions

16 SBUs focused exclusively on TLG

6 Operations/supply chain, 9 functions, & 3 regions

Belts: 18,100 people trained

DMAIC is core, added DfSS to support TLG

Variants tailored to product development, marketing & sales

Key Measures: $ PTOI, # Projects, #BB/MBBs, #GBs (trained & certified), future leaders, cultural indicators

HR: Published policy requires certification of top leaders, and future leaders

Freshness: Each SBU does quarterly reviews, 3x/year corporate network leverages learnings & renewal




Process View of DuPont

Manage the Corporation & Business Portfolio

I.D. & Develop Markets & ChannelsDevelop New Technologies, Products & Services

Manage Physical Resources

Financials

Manage People Resources

Manage Information/ Knowledge

Govern/ Plan/ Report

Create/ Renew

Deliver Current Offering

Acquire/ Develop Enabling

Infrastructure and Assets

Develop Customer Solutions

Provide Solutions




Six Sigma for Growth……Evolution in

DuPont Full time, marketing experienced TLG champions

assigned in each SBU to extend the use of Six Sigma into development areas (market and product)

Each SBU set deployment goals in terms of resources (BBs, MBBs) and new revenue growth

Design for Six Sigma is a critical element of the Top Line Growth Deployment, particularly in product development




Six Sigma Projects at DuPont

84%

16%

TLG Operations

76%

24%

Revenue Cost or Cash




“Growth Equation”

New

PProducts

New

PProductsNew

AApplications

New AApplications

Develop

New Business

Model

New Business

Model

“Go Outsidethe Box”

+ +

Net Revenue GrowthNet Revenue Growth =

New

SServices

New

SServices +New

MMarkets

New

MMarkets

Develop

+

Create Create

“PAMS”

Economic-drivengrowth +

Actions to maintain share

Improve:•quality•customer services

•pricing•processes (delivery, ordering, etc)

•Changing role in the value chain

• Licensing•e-business•Alliances•Joint ventures

•Mergers•Acquisitions

Existing New

Exis

ting

New

Markets & Application

s

Products, Offerings, Technologies

Existing business

Existing business

Growth

Attrition

Maintain Share

Share & Improve

Loss or Gain

Share & Improve

Loss or Gain

Gain Share

+

Base Improve

+




What Types of Projects are “Top Line Growth”?

• Fighting “the fade”• At the Customer for the Customer• Sales and Marketing Processes

– Sales lead management– Pricing process improvement– Seller efficiency – Branding, advertising, MC effectiveness– Channel effectiveness

Share & Improve

Share & Improve “PAMS”PAMS”“PAMS”PAMS”

• Product development• Application development• New Market development• Services• Quality improvement• Acquisitions• New business model

New Business

Model

New Business

Model




Earnings Growth Model

ON TREND LINE GROWTH (TLG)

SIX SIGMA PRODUCTIVITY

RESTRUCTURING

INNOVATION

ACQUISITION

6

DfSS

Time

Earn

ing

s




Six Sigma and Development in DuPont

The data shows we are good at development of exciting new technologies, not good at understanding the real market opportunity

DfSS brought the potential to improve market understanding by better VOC data, now being embraced by development teams




Capable,Disciplined

Process

Accountability

Bottom LineResults

Focus on inputs

Sense of Urgency

Commitment toTraining & Development

for all employees

Fact based,Data driven

decisions

ManagementPassion

Values

CUSTOMERS

Communications

Before starting DfSS, need Six Sigma Competency & Culture




Improve an Existing Product or Process

Characterize Requirements &Performance

Identify &Characterize Key Elements in the Solution

Define the Problem

Phase 1 Phase 2 Phase 3

DefineDefine

Determine the BestSolution

Phase 4

Validate & Implement the Solution

Phase 5

MeasureMeasure AnalyzeAnalyze ImproveImprove ControlControl

Design a New Product or Process

DefineDefine MeasureMeasure AnalyzeAnalyze DesignDesign VerifyVerify

DfSS Introduction




Because of the customer intimacy required…

Development Projects are different Patience- DMAIC brings fast results…

Development and customer data takes time Measures of Success -

Failures are not defects# of Market DOE’sPhase deliverables met vs plan, time to first revenue,

cycle time, customer adoption, revenue from new products, etc

Full engagement of Technology and Marketing




DfSS found broad adoption with TLG...

Improved techniques for handling multiple Y’s Tools introduced with DfSS were more easily

applicable to sales & marketingDefine & Measure: wove in market research and

market segmentation (VOC, Kano, QFD, etc)Design & Verify: logical connection to market entry

strategy & marketing plans

Risk management tools helped manage high uncertainty of growth

Multigenerational project planning and hypothesis-driven approaches helped keep projects ‘bite-size’




DMAIC and DfSS- the right tools for the right projects

Extension

New

Existing

Process (Mfg, business)

Product, Service,Offering

Use, Market,Customer

All needed processes already

exists

Modifications needed to adapt existing process

New process or technology needed

New product, service or offering

Same basic offering adapted with new

technology

New end use, Target Mkt

or New Customers

Extend Target Mkt or Seek New Cust.

Same product, service, or offering

Design

Existing use,Target Market and Customers

IMPROVE DEVELOPDMAIC DfSSDMAIC DfSS




Governance/ Decision Processes are also Critical to

Success

Front-End

Opportunity Deposited

in Idea Bank

DepositDepositAccountAccount

Market Assessmen

tInvestmenInvestment Accountt Account

DMAIC orDfSS

Projects

DMAIC orDfSS

Projects

Ideas are Collected and Evaluated using a number of different tools

Tools like Rapid Value or Market Assessment have proven useful in evaluating potential ideas




TLG: Market Assessments

DesignNew

Define the Problem

Phase 1

DefineDefine MeasureMeasure Analyze

Analyze

ImproveImprove ControlControl

DesignDesign VerifyVerify

Characterize Requirements &Performance

Phase 2

Identify &Characterize Key Elements in the Solution

Phase 3

Determine the BestSolution

Phase 4

Validate & Implement the Solution

Phase 5

DefineDefine MeasureMeasure Analyze

Analyze

Improve Existing

Assess Market DefineDefine MeasureMeasure Analyz

e

Analyze

‘Recommend’‘Recommend’ ‘Close’‘Close’D r a f t




PACE OVERVIEW CHART- Model BPre-ProcessDevelopment

Activities PHASE I:IDEA

PHASE II:CONCEPT

PHASE IV:READINESS

A: Demonstration B: Development A: Commissioning B: Ramp-Up

PHASE III: DEVELOPMENT PHASE V: SCALE-UP

CommercialOperations

DEFINE

MEASURE

ANALYZE

DESIGN(IMPROVE)

VERIFY(CONTROL)

TechnologyPlanning

MarketResearch

PreliminaryIdeaScreening

StrategicDevelopmentPlanning

DEFINE

MEASURE

ANALYZE

DESIGN(IMPROVE)

VERIFY(CONTROL)

DEFINE

MEASURE

ANALYZE

DESIGN(IMPROVE)

VERIFY(CONTROL)

Business Development

Product/Market Development

Process/Technology Development

DuPont integrated DfSS with its phased development process

Decision BoardDecision Board

Strategy AProject 1Project 4etc...

Strategy BProject 3Project 6etc…

Strategy CProject 8Project 2etc…

Decision Processes evaluate the overall portfolio of projects, strategies, and available resources

Long Duration Projects require ongoing Assessment by Decision Boards or Stage Gate

Processes

Governance/ Decision Processes are also critical to

Success




More TLG for Marketing & Sales...

At The Customer, For the Customer Projects

• Projects benefit customers AND deliver validated $ to DuPont (we must get paid too!)

• Customers have been truly interested in DuPont Six Sigma, but projects must have a partnership

• High interest from customers helps projects get completed quickly

• Contribute significant hard financial benefits • Engages the selling organization and spreads

the culture of Six Sigma• Many GB projects for Marketing and Sales

professionals should be ATCFTC




Voice of Top Leader: M&S

“Data-driven disciplined processes are vital in every aspect of sales and marketing, from target selection to segmentation to pricing to channel management.

Everything starts with the Voice of the Customer and one role of the sales and marketing team is to ensure that we all hear that Voice and mobilize our resources to help solve our customers problems faster than competition, delivering the right solution at the right value .”

CM&SO

Diane Gulyas




Critical Success Factors

Leadership Commitment Resource Commitment Data/Technical Rigor Tracking Results to the Bottom Line Integrating all of the pieces

The Best but the Hardest Thing a Company May Ever

Do!




DuPont’s Learnings are Similar to Other Companies

Right ToolsRigorously applied

Right People Dedicated 100%

Right BusinessOpportunities

Right ResultsRight Results




DuPont’s Learnings are Similar to Other Companies

Right ToolsRigorously applied

Right People Dedicated 100%

Right BusinessOpportunities

Right ResultsRight Results Hold people accountable for business results validated to the bottom line

VOC, marketing, DfSS, data analysis, process improvement, etc

• The most strategically important projects (growth, for the customer, retain share, increase price, improve profitability, improve effectiveness, etc)

• Projects with financial impact

Marketing, Sales, technology people and make them special




My TLG Learnings...

It works! - Six Sigma applied to Growth with marketing, sales, but… everything is not and does not need to be a Six Sigma project

Need focused training…help “demystify” Six Sigma: show the value proposition of Six Sigma (success stories)

talk their language (must include examples from marketing/sales/growth)

heavy VOC training (including market research, Kano analysis, etc) is a must for all TLG Belts (MBB/BB/GB) and help Process Owners demand good VOC

show marketing & sales that they have processes (but typically have less operational discipline than manufacturing)

incorporate DfSS tools (QFD, risk assessment, etc)…DMAIC is not enough

provide financial analysts with examples of validation

Use dedicated resources (BB, MBB, Champions for Front-End) that are marketing, sales, or technology innovators with with hands-on experience (to help convince their peers)

Involve sales & marketing people in TLG projects early and often

Still difficult to get good baselining, CTQ flowdowns, and project definitions for “bite-size” projects, but improving

Control plans and maintaining process documentation through people turnover is still a challenge




Understand & Choose the value

Communicate the value

Provide & Capture the value

Marketing & Sales




Gayle J. GibsonSix Sigma ChampionElectronic & Communication TechnologiesDuPontChestnut Run Plaza, Bldg 711, Rm 2210FWilmington, DE 19805Email: [email protected]: 1-302-999-5040

Gayle recently led the growth, Six Sigma, and e-business efforts for the Fluoroproducts SBU in DuPont, a $1.4 billion revenue global business. This set of businesses had significant growth objectives that include new market development, knowledge intensity, new product development, acquisitions, as well as improvement and extensions of the current business. Over the past 3 years, Gayle installed a new growth process that incorporates Six Sigma and other development tools, deployed the use of Six Sigma applied to Top-Line-Growth, and sales and marketing, instituted the use of growth dashboards to track key metrics, improved growth portfolio management, increased resources applied to growth, and worked through the top leaders on cultural shifts required in the organization to support and accelerate growth.

Currently Gayle is the Six Sigma Champion for Electronics & Communication Technologies, a $2.9 billion revenue set of global businesses, where her focus is on the transformation of supply chain practices utilizing Six Sigma to improve responsiveness and reliability for customers.

Prior to the Six Sigma assignments , Gayle was the Global Product Manager and growth leader for the Teflon® coatings business. She has had a variety of other roles in her 21 years at DuPont ranging from business consultant in Europe for business strategy and market development, growth in developing countries, to market and product development, to manufacturing supervision, R&D, and process engineering. Gayle has an MBA and a B.S. in chemical engineering from Texas A&M University.

Bio for Gayle J. Gibson

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Growth Through Six Sigma in Marketing & Sales