CLIENT CASE STUDY


PolyOne: High performance through business transformation

Read how Accenture helped PolyOne use Lean Six Sigma to effect a business transformation and achieve high performance.

Overview

Accenture helped implement a far-reaching Lean Six Sigma program at PolyOne as part of an ambitious program to turn the company around and reverse the effects of the global downturn.

With Accenture’s help, PolyOne has achieved its goals and regained the confidence of Wall Street—and is well on its way to achieving high performance.

PolyOne Corp. is a premier global provider of specialized polymer materials, tailored services and end-to-end solutions. With more than 10,000 customers in 35 countries, the company offers more than 35,000 products to a wide range of industries, including building and construction, electrical and electronics, industrial, health care, packaging, textiles and transportation, and several others.

Headquartered in northeast Ohio, the corporation maintains operations in North America, South America, Europe and Asia, including more than 30 manufacturing facilities in 20 countries. Its 2010 revenues totaled US$2.6 billion, which is an increase of 27 percent over 2009.

 

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Opportunity

Facing unprecedented declines in demand due to the recent global economic downturn, PolyOne wanted to restructure its manufacturing footprint and implement cost-savings initiatives to remain competitive and mitigate the effects of the downturn. Senior Vice President of Process Improvement and Supply Chain Tom Kedrowski described the initiative by saying: “In the midst of the worst financial crisis in decades, we committed resources to improving our processes for the benefit of our customers and shareholders.”

Improving cash flow and seeking greater efficiencies were imperative, but the leadership team also wanted to expand PolyOne’s capabilities from manufacturing cyclical commodity chemicals to offering more specialized products. PolyOne’s leaders knew they needed to bring in greater Lean Six Sigma (LSS) expertise to achieve a successful business transformation and get the company back on the path to high performance.

Prior to the downturn, PolyOne had initiated a small number of Lean activities and kaizen (Japanese for “improvement”) events to improve efficiency. While these efforts created small incremental changes, they failed to achieve significant transformational process improvements, and the improvements were difficult to execute quickly.

Many company leaders had worked with Accenture in the past and knew our strong track record of delivering comprehensive solutions on a global scale and helping clients succeed with multinational Lean Six Sigma deployments. PolyOne sought guidance from the Accenture Process & Innovation Performance team.

Solution

Starting with the LSS turnaround strategy designed by Tom Kedrowski, Accenture worked with PolyOne to engage the leadership team, make key deployment decisions, build a project pipeline and deliver LSS training.

Undaunted, PolyOne’s leaders pressed on. In the first year, Accenture trained more than 600 employees in Lean Six Sigma. Accenture also provided training for leadership team members and project sponsors. By the end of 2010, PolyOne had trained more than 25 percent of its associates from around the globe in Lean Six Sigma.

In addition to the initial training, Accenture helped PolyOne execute important short-term kaizen events that yielded encouraging results and built momentum for further improvements. In addition, dedicated kaizen leaders were trained in the United States, Asia and Europe to leverage the fast results of kaizen events.

In the LSS deployment’s first year, PolyOne identified more than 400 project opportunities and chartered about 200 projects that affected all areas of the business all around the world. Focus areas included pricing, inventory management, manufacturing and distribution footprints and procurement functions. In addition, several global projects also focused on sales force effectiveness and manufacturing material efficiency.

Results

PolyOne achieved significant savings and began to see a return on investment much earlier than expected. The company realized significant hard benefits and working capital reductions of close to 40 percent (2008 to 2009) by the end of the project’s first year. In addition, on-time delivery has improved from 81 to 95 percent during the same period with customer complaints at a historical low in 2010. Operating income growth of PolyOne specialty platform products is also up by 50 percent compared to pre-recession periods (2007 to 2009).

The impact of the LSS projects has helped improve cash flow and renew credibility with Wall Street. PolyOne’s stock price and profits have increased significantly since the beginning of 2009, and shareholder value has increased as well. In early 2009, PolyOne’s share price was US$1.34. In the third year of the LSS transformation, the share price has increased more than 10-fold, rising to more than US$14.

According to Tom Kedrowski: “Our LSS success was a direct reflection of our ability to translate customer feedback into process improvement projects.”

Supporting its strategy execution with Lean Six Sigma training and deployment expertise, Accenture has been instrumental in helping PolyOne execute significant projects and achieve high performance.

PolyOne and Accenture remain in their third year of partnership and Lean Six Sigma deployment support. The longevity of the relationship is a direct result of Accenture’s significant contribution to the PolyOne business turnaround, and continued value from training and support through 2011.