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Albertsons announced on Friday that it is launching a company-wide Six Sigma Quality program, which company CEO Larry Johnston described as having "the potential to move Albertsons to an all new level of productivity and customer service in our industry. We are excited to be the first food & drug retailer in the world to launch a company-wide Six Sigma effort. Over the next 36 months, we plan to deploy hundreds of Black Belts into every corner of the company as we re-engineer our major processes in every function and discipline. The world has witnessed how Six Sigma can transform industrial giants like GE, Allied Signal, 3M and others ... we believe it holds the same exciting potential in food and drug retailing."

Johnston's last career posting, of course, was at General Electric - which became the poster child for Six Sigma processes as its then-CEO, Jack Welch, became its best-known evangelist.

The company named Jim Gentile, a three-decade veteran of the company who currently is president of its Northern California division, to be Senior Vice President of Six Sigma Quality.

Albertsons also announced a series of other moves:

  • The company said that it has formed a new Price Impact Division. "In the future, the company plans to open price impact stores in multiple cities across the U.S." According to the statement, "this new division will be completely autonomous and operated separately from Albertsons traditional food and drug operations."

    Mike Clawson, formerly President of the Northwest Division, has been named President of the company's new Price Impact Division


  • It is establishing a new centralized Customer Service Operation, with one leadership team responsible for all dimensions of customer service for every major banner in all of its more than two thousand stores. Pam Powell, currently Group Vice President of Marketing, will lead the new team with the title of Senior Vice President of Customer Service.

    Said Johnston, "This new organization will allow us to accelerate that progress by spreading industry best practices more quickly across banners, by monitoring service delivery in a more consistent manner and by consistently executing powerful merchandising promotions that make life easier for our customers."


  • According to a statement released by Albertsons, "Four former divisions - Southwest, Intermountain, Northwest and Rocky Mountain - have been consolidated to form the new Intermountain West Division headquartered in Boise, Idaho. Bob Butler, formerly Executive Vice President of Western Operations, has been named to lead the new division and is also being named Executive Vice President of Food Operations for the entire company with the responsibility for co-coordinating all Division Presidents."

    In addition, "The former Acme and Florida Divisions have been consolidated into one new Eastern Division. Carl Jablonski, currently President of Acme Markets, becomes President of this new division headquartered in Philadelphia, Pennsylvania. Larry Wahlstrom, currently President of the Florida Division moves to Boise, Idaho and becomes Assistant to the Chairman for special projects."

    And, Donna Robbins has been promoted from her role as Senior Vice President of the Northern California Division to its presidency, succeeding Gentile. This division continues to be headquartered in the San Francisco, California area.

    According to the Albertsons statement, it now has seven Operating Divisions (6 Food & 1 Drug). All seven Division Presidents will now report directly to Johnston, but will now have a strong dotted line reporting relationship to Butler, who also assumes the coordinating role as Executive Vice President of Food Operations for the company.


  • Albertsons also announced that it is creating a new division "to develop new formats and also manage the company's large store construction and remodel programs."

KC's View:
We don't want to overstate this, but does it seem to anyone else that Larry Johnston essentially is betting the house on these moves? This would appear to be his ultimate play - that if these steps don't work in making Albertsons better positioned for the future, it means either than it cannot be done or that he's not the guy to do it.

We wish Albertsons luck…though we have to admit that we wouldn’t be willing to bet our house on Johnston's ability to make good on his gamble. It's just an enormous task, and we're just not sure it all can be accomplished.

But you certainly have to admire the effort.