Lean and Mean

Colonel Douglas Evans sits in his modest office at Red River Army Depot, tracking the dozens of war-battered humvees from Iraq that arrive every week to be repaired. Spread across 36,000 acres in Texarkana, Texas, the World War II--era Red River facility is one of the Army's oldest and most important maintenance and storage bases. But Evans, a 24-year Army vet with combat tours in the Balkans and Iraq, says what soldiers need to understand these days is not only bombs and bullets but also diapers.

Changing babies, Evans tells everyone at Red River, is the best model for thinking about how the facility can best help the Army. The faster you can fix a beat-up humvee, the sooner you can get it back into the fight. "You have to be organized," says Evans, who has an M.B.A. from Babson College. "You can't put the baby one place, the wipes another, the baby powder still another. If you fail to streamline the process, you might never get that clean diaper on. It's all about eliminating the 'waste' in the process." He smiles at his play on words.

Evans is the tip of the spear on what may be the most ambitious business effort in the 231-year history of the U.S. Army: an attempt to adopt a management theory, Lean Six Sigma, across the entire service. More comprehensive than the attempt in the 1960s by Defense Secretary Robert McNamara to introduce the highly quantitative "system analysis" to the Pentagon, this is an enormous experiment: the Army has an annual budget of $160 billion, with 1.1 million men and women in uniform, and it employs an additional 230,000 civilians. "This is the largest deployment of management science since the beginning of the discipline," says Mike Kirby, who holds the newly created position of deputy under secretary of the Army for business transformation.

Why shake up the Army now, in the midst of a difficult war? The U.S. defense budget has increased some 40% since 2001, to almost half a trillion dollars, but military experts expect the funding to slow. Secretary of the Army Francis Harvey, who signed the order last March to implement the effort, says the need for it is obvious: "We need to free up resources so we can apply them to the operating side of the Army. We need to equip our soldiers better and faster." Optimistic projections claim the Army could be saving billions of dollars each year in a decade.

The two concepts of Lean and Six Sigma have been around the private sector for decades, and some parts of the Army have been using them since 2002. Lean is an outgrowth of the Toyota production system, developed in the 1930s, which focuses on increasing efficiency and reducing cycle time by eliminating waste. Six Sigma was first used on a wide scale by Motorola in the 1980s as an approach to improving quality through statistical measurements and benchmarking, Evans explains. Six Sigma entered the U.S. business lexicon in a big way in the 1990s when CEO Jack Welch embraced it at General Electric.