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The PIVOT Initiative at Midwest Bank, Part I 63-Ch. 7 Q8E
Midwest, a bank holding company, is located in Ohio. Its main subsidiary provides a diverse line
of banking and financial products and services regionally; and selected business activities are
conducted nationally. Consumer, small business, and investment products and services are
THE PIVOT INITIATIVE
The PIVOT initiative, the name that Midwest gave its Six Sigma process improvement approach,
started with the selection of three pilot projects, one of which was in the Commercial Processing
Department (CPD) that works as Midwest Bank’s cash vault. CPD already operated at a high
level of sigma (4.26) as found early in Yellow Belt Six Sigma training. CPD processes a high
dollar volume of transactions. One costly error in the previous year resulted in a loss of over a
quarter million dollars and brought the department to the forefront of change initiatives. Once the
project was chosen, the bank selected six associates to run the first PIVOT project.
A project coordinator working from the project office was selected as project manager for
the Six Sigma functions of the project. An operations financial manager was in charge of
DMAIC DEFINE STAGE
The senior vice president and vice president over CPD were the champions for this project and
initially worked to establish the problem definition statement. These champions were responsible
for the process every day and also held accountable for the errors in the department.
Because the two largest potential sources of errors (strapping and deposit processing) did
not influence each other in the process and had separate causes for creating errors, the champions
separated them. The problem statement defined the number of errors the department was
accountable for during the previous year and the dollar losses of these errors. In this case study,
the number of errors and the actual dollar losses are only approximate. The (disguised) problem
statement was:
In (the previous year) the number of internal and external defects for the CPD was 150,
resulting in Bank losses of $400,000 as well as significant potential risk exposure.
Included in the losses is an anomaly of $280,000. The remainder represents a gap of
Much debate centered on whether to include the anomaly loss since it skewed the numbers
considerably. However, the decision was finally made to include it. Support for the CPD PIVOT
project centered on risk mitigation, which is difficult to quantify, and on dollar losses required to
DISCUSSION QUESTIONS
1. What conclusions can you reach on the importance of team preparation and member
selection to the “Define” stage, and eventual success of Six Sigma projects, such as the
PIVOT project?
2. How did the roles of the PIVOT team members, described in the case, potentially contribute
