CRAYOLA: CREATING A

DATA DRIVEN CULTURE

Richard Titus

2

Everyday Crayola

• Makes 13 million crayons

• Makes 2 million markers

• Makes 500,000 jars of paint

• Makes 22,000 Silly Putty eggs

• Makes 170,000 pounds of modeling compounds

• Sources 6 million sticks from suppliers

• Sources 20 trailers and two railcars of raw materials

• Ships 70,000 cases

Crayola’s Easton Facilities

Crayola’s Bethlehem Mfg. Facility

Crayola’s Bethlehem Distribution Center

13.9%15.2%

22.7%22.9%

27.6%

17.7%18.8%

13.0%

2.7%5.1%

8.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

New Products - % of Business

Innovation

53 skus

21 skus

61 skus

152 skus 94 skus

138 skus 152 skus

191 skus

6

158 skus 163 skus

178 skus

Since 2006: EBIT is Greatly Enhanced from Cost

Management

Six Sigma

Lean Logistics

Product

Changes

Competitive

Sourcing

Supply Chain

Design

Negotiations

What a

Great Idea!

Cost Management

Productivity Fuels

Innovation

8

Supply Chain Leadership

Stick Handling/Logistics Continuous Improvement Negotiations/Supply Base Segmentation

Speed to Market Supply Base Capability Engineering Talent

Renewable Energy (Groundwater, Solar) Recycling Colored Pencils Recycled Resin in Products

Delighting the Consumer Minimize Critical Defects/Consumer Complaints Supply Base Code of Conduct

Supply Recovery after Business Interruption Meeting Unforecasted Demand Supporting International Expansion

Agility

Quality/EthicalResponsibility

Cost

Innovation

Sustainability

9

Leadership: Building the Data Driven Culture

Pete Ruggiero, Executive Vice President, Global

Operations is the Program Sponsor

Sponsored Wave I of Green Belt Training in 2007 as

a Pilot Program

Participated in the 80 hours of Training, Passed the

Green Belt Exam and Completed his Certification

Project in the Procurement Area

Project continues to Yield Substantial Financial

Benefits to Crayola

Requires that all of his Direct Reports earn Green Belt

Certification

“You may think you know what the problem is- but

you can’t run your business on intuition. So we

look at the data in Minitab.”

-Pete Ruggiero, Executive Vice President, Global

Operations and Information Technology

10

201620152014201320122011201020092007

90

80

70

60

50

40

30

20

10

0

Year Trained

To

tal

Nu

mb

er

of

Tra

ined

Belt

s

Time Series Plot of Total Number of Trained Belts

Training: Building the Data Driven Culture

Not a “Belt’ Counting Contest

Training Program is focused on adding Value and

Organizational Capability

Program is part of Crayola’s Talent Management

Process

Champion and Yellow Belt Training included in Program

Nearly 90 Green and

Black Belts Trained

67, 76.1%

Green Belt

21, 23.9%

Black Belt

Pie Chart of Six Sigma Training

4 of 21

Black

Belts had

prior

Statistical

or GB

Training

11

Project Execution: Building the Data Driven Culture

Majority (80+%) of Projects Operations Focused

93% Project Completion Rate

3, 3.1%

R&D

83, 86.5%

Operations

2, 2.1%

Mktg

2, 2.1%

IT

2, 2.1%

HR2, 2.1%

Fin/Mktg/Ops

2, 2.1%

Fin

Pie Chart of Project Types: Operations Dominated

4, 4.8%

Other

3, 3.6%

Supplier Scrap/Rework Reduction

15, 18.1%

Scrap /Rework Reduction

2, 2.4%

Quality

10, 12.0%

Product Cost

3, 3.6%

Procurement

3, 3.6%

Overhead Reduction

21, 25.3%

Machine Efficiency

8, 9.6%

Logistics

8, 9.6%

Inventory Management

6, 7.2%

Facilitating

Pie Chart of Operations Project Focus

12

Project Management and Review: Building the Data Driven Culture

Project Leaders are Required

to Present Current Status,

Results, Issues, etc. to Mgt.

Team and Project Champions

Project Reviews are

Completed on Regular

Intervals

Projects Savings are Verified

and “Booked” by Finance

Projects are Managed using

Project Mgt. Software

13

Coaching and Support: Building the Data Driven Culture

On-site Project Coaching is

included as Part of Training

Program

Experienced Black Belts help

Coach and Mentor Green and

Yellow Belts

Master Black Belt in Training

and Black Belts assist in

Delivering Yellow Belt and

Champion Training

14

Speaking Statistics: Building the Data Driven Culture

Many Departments are

Populated by Lean Six Sigma

Active Practitioners. These

Areas include:

Facilities Engineering

Process Engineering

Continuous Improvement

Operations Management

Active Practitioners in these

Areas Utilize Statistics to

Describe, Analyze, Determine

and Solve the Root Cause of

Problems. Understanding and

Applying Statistical Tools and

Interpreting Results is a Job

Requirement

Comment puis-je calculer le score Z?

Project Benefits Presentations to Senior Leadership including: Operating

Committee Leadership Council

Projects included: Server Efficiency New Product

Process Crayon Strength

Execute the projects and ‘Book’ the Benefits

Champion and Yellow Belt Training 15

Socializing, Booking the Results and Expand the Program: Building the Data Driven Culture

Program Mgt.: A Look Back

Current active Green Belt and Black Belt Training waves include: 4 Team Leaders/Operations

Managers Quality Coordinators Molding Technicians R&D Personnel Facilities Engr. Process Engr. Continuous Improvement

Six Sigma and Lean are being more closely Coordinated and Integrated into Crayola Operating Systems

Team Leaders doing their own Process Measurement and Analysis (with Coaching…)

Yellow Belt Training Enhanced Emphasizing Detailed Tool Usage (speaking “Statistics”)

16

Reaching Critical Mass and Integrating into Daily Operations: Building the Data Driven Culture

Enhanced Yellow Belt

Team Leader Project Report Out Example:DEFINE/MEASURE

Goal:

Achieve material variance in cost system

Scope:

Reduce negative material variance at LVIP facility for the

empty paint pot strip SKU, while maintaining or improving

efficiency on the J6 production line.

Risk:

Unable to maintain consistent fill levels without capital

investment.

Assumptions:

Adjustments can be made to the pump system to

consistently accommodate fill volume.

All pump systems are different.

Team Leader Project Report Out Example:MEASURE- 35+ Hour Time Study (includes WIP)

% of faults

frequency by

machine

section

ZED = Pick and Place and Vacuum Handoff Machine Areas

% of faults

total time by

machine

section

Team Leader Project Report Out Example:MEASURE- Total Runtime by Machine Section including Line Running

Team Leader Project Report Out Example:MEASURE- 2nd Level Pareto of Filler Events

• Dust/Foreign Material on Suction Cup Handoff Area causes Mishandling of Strips and Downtime

• Dust/Foreign Material on Capper

causes Capper Faults and Downtime

Team Leader Project Report Out Example:MEASURE: Short Term Improvements via additional A3 Focus Area (Integrating Lean and Six Sigma Tool Sets)

Team Leader Project Report Out Example:MEASURE- Measurement System Analysis (MSA)

•Successfully Completed and Passed MSA on Analytic

Scale with Key Personnel.

•Analytic Scale to be Utilized to Measure Paint Fills and

Individual Paint Pots

Given the Level of Knowledge and Application of the Six Sigma and Lean Tools/Processes throughout the Organization, it is easy to Fall into some Traps. These include: Having the Answer(s) and Trying to

find Data to fit the Answer(s) Not involving a Team and Working

as the “Lone Ranger” Trying to Optimize an Unstable

Process (Stabilize First) Not doing the Hard work of Mapping

and Measuring the Process Not having a Primary Metric that

indicates if you are Winning or Losing

Searching for the Silver Bullet Trying to Outsmart the Process (“No

one is smarter that the process.”)

Not following the DMAIC Process

23

The Dark Side of the Force: Building the Data Driven Culture

24

It Starts and Ends with Leadership: Building the Data Driven Culture

"We've moved our culture from 'When you have a

problem, bury it,' to 'We have a problem and we

need to make it visible so we can solve it.”

-Pete Ruggiero, Executive Vice President, Global

Operations and Information Technology

"We start with the assumption that everything we do, we

can do better. And that's why Minitab is key—it helps us

understand the statistical analysis and lets the data

reveal where we need to go.“

Gary Wapinski, Vice President of Logistics and

Continuous Improvement

In God we trust.

All others bring data.