Best Practices in Lean Six Sigma Process Improvement: A Deeper Look

Chapter 18. Leanness Rankings for Thirty-Three Industrial Sectors

This chapter groups about 1,200 companies into 33 industrial sectors.^[368] Each company is included in as many as five industries. Although some of the companies (e.g., retailers) are represented in just one industry, more often it is two or three. For example, Canada-based Magna International is included in vehicular components, metal-working/machining, and light vehicles. It is in the latter because Magna has moved up the food chain from auto parts to contract assembly of cars for such customers as BMW and Chrysler. Large, diversified firms such as General Electric and Matsushita Electric Industrial are in up to five sectors.

In three cases, an industry sector large enough to stand alone is also an obvious component of a still larger sector: Semiconductors is treated separately and also included in electronics. Paper is both separate and within the wood (lumber)/paper sector. And apparel/sewn products is separate and also included with textiles.

THE INDUSTRY RANKINGS

Exhibit 18.1 lists the 33 industries in rank order, best to worst by long-term trend. (The scoring system, introduced in Chapter 2, is repeated below the exhibit.) Ranking first (leanest) is petroleum producers, with a 0.93 average score. The 43 companies making up the sector include 19 A-graded and only 2 D- and 1 F-graded. For the bottom-most industry, pharmaceuticals, the grading pattern is nearly the reverse: 21 pharma companies with D's and F's, and ...