Building Energy Cost Savings From Six-Sigma Process Improvement Methods

Abstract

Over the past several years, more and more companies have ad-
opted Six Sigma process improvement methods to manage their busi-
nesses. Six Sigma has gained credibility among business executives and
managers for its ability to reduce cycle time, eliminate product defects,
lower costs, and signifi cantly increase customer satisfaction. At General
Electric, Jack Welch (CEO) wrote in the 1997 annual report that in just
three years, Six Sigma had saved the company more than $2 billion.
In 2002, Armstrong World Industries adopted the Six Sigma busi-
ness initiative throughout the corporation. This article describes two
Six Sigma energy usage and cost reduction efforts initiated during
2003, both addressing the main sources of energy costs at the corporate
campus. These projects were process improvements, one a trailblazing
effort, the other a Green Belt project—both Six Sigma methodologies.
Together, these projects have resulted in significant energy usage reduc-
tions and cost savings. Aggregate annual savings are expected to be
about $230,000 or 12 percent of total campus energy costs, compared
to the 2003 base year period.