Hill’s Pet Nutrition

1. Hill’s Pet Nutrition A Six-Sigma exercise to reduce at-fault accidents and increase travel efficiency April 26, 2010 Jorge Rojas SalehAlSaleh Thierry Haspil

2. Overview Problem Preventable truck accidents contribute to damaged product, delivery interruption, lower customer satisfaction, and higher overhead. Current Performance • In 2010 • Accidents 72 (32 of them were preventable) • Incidents 7 (all of them were preventable) • 2010 financial losses from preventable accidents: • $163,983 Define Measure Analyze Improve Control

3. Overview, cont’d Performance Objective Define Measure Analyze Improve Control

4. Overview, cont’d Analysis Median Accident Rate: .48 (per 100,000 miles driven) Standard Deviation = .160321 Goal = Accident Rate Reduction to .319679 (per 100,000 miles driven) Recommendation Implement changes to effectively reduce annual accident rate by one standard deviation over the 2011 calendar year. Define Measure Analyze Improve Control

5. Process Description • 280 Trucks • 300 Drivers • 2010 Records • Driving Hours: 590,928 regular operation • 61,149 Overtime hours • Total Miles Driven: 8,621,517 • In 2010, 37% of all HPN preventable vehicle accidents involved overhead hazards that included bridges, trees and wires. • 9% of the vehicular accidents in 2010 involved rear end collisions Define Measure Analyze Improve Control

6. New Customer Fulfillment Organization Anchorage • Sean Spearin New England ACSM • Kevin LaFrance, TL Westfield Todd Varley New York Empire ACSM Westfield Seattle Spokane Rochester Grants Pass Mansfield Butte Portland Lansing • Val Beasley Northwest ACSM • Rob Diaz, TL Seattle, Yakama, Spokane • Stu Courtain, TL Portland, Anchorage • Stuart Johnson, TL Salt Lake City, Boise, Butte, Denver Chester Boise Chicago Baltimore • Kyle Bryant Midwest/Southeast ACSM • Lane Fenstermacher, TL: Atlanta • Steve Davis, TL Memphis, Nashville • Dan Mieszala, TL Chicago • Brian Sweet, TL Lansing Salt Lake City Vacaville Denver Richmond San Leandro • John Larson Mid-Atlantic ACSM • OPEN, TL Baltimore, Richmond Nashville Las Vegas Fresno Memphis Industry Atlanta Albuquerque • Jesse Landis California/ Hawaii ACSM • Esteban Perez, TL COI, Fresno, Vegas • OPEN, TL Vacaville, San Leandro Dallas Phoenix Mobile Jacksonville Ponchatoula San Antonio Orlando Tampa Houston Davie Val Beasley Jesse Landis Chad Martin Kyle Bryant Todd Varley John Larson Sean Spearin Jim Greene • Chad Martin Texas ACSM • Neil Williams, TL Houston, Phoenix, Albuquerque • Scott Hurlbut, TL San Antonio • Debbie Guth, TL Dallas • Jim Greene Gulf Coast ACSM • Terrence Donaldson, TL Ponchatoula, Mobile • Jorge Rojas, TL Davie, Orlando • Scott Harvey, TL Tampa, Jacksonville

7. Current Performance Define Measure Analyze Improve Control

8. Unfamiliar Routes Require Increased Awareness

9. Typical Roof Damage

10. Not All Clearance Hazards Are Overhead Obstacles

11. Ice And Snow Can Cause Wires To Hang Lower And The Road Grade To Rise

12. Incorrect Back up

13. Could Increased Awareness of Clearance Helped to Prevent This Accident?

14. Measurement System Analysis • Projected values were taken on a rolling 5 year basis utilizing the previous 5 year median as assumption for unknown values. • Savings were annualized and projected over 5 year basis for a projected ROI of $144,141.22 • This is a 14.78% improvement annually Define Measure Analyze Improve Control

15. Historical Performance Define Measure Analyze Improve Control

16. Target Performance Define Measure Analyze Improve Control

17. Data Analysis Define Measure Analyze Improve Control

18. Solutions • Training - Apply Smith System Keys • Once every two years – costs $1000 for each of the 19 location managers • Continual Improvement Meetings • Costs $126,000 over 5 years • Extended Rearview Mirrors • Costs $9800 for 280 trucks • Truck Labels • $2800 for 280 trucks (reusable) Define Measure Analyze Improve Control

19. Smith System Keys • #1 Aim High In Steering • Look ahead 15 seconds into your future • #2 Get The Big Picture • Maintain a 4 second following distance • #3 Keep Your Eyes Moving • Move your eyes every 2 seconds • #4 Leave Yourself An Out • Have an escape plan • #5 Make Sure They See You • Ensure others are aware of your presence Define Measure Analyze Improve Control

20. Extended Rear View Mirror Define Measure Analyze Improve Control

21. Financial Benefit • Total initial investment = $195,100 • 5 year cumulative savings = $339,241.22 • Return on Investment –Gain = $144,141.22 (over 5 years) Define Measure Analyze Improve Control

22. Additional Benefits • Improved Delivery Schedule • Reduction of damaged inventory • Improved Customer Satisfaction Scores • Improved Productivity • Reduced Downtime (Injury / Sick days) Define Measure Analyze Improve Control

23. Recommendation(s) • Update truck fleet in 5 years • Improved specifications • Blind Spot Scanner • Rearview Camera • Reduced overhead clearance • Continued Quarterly Driver Training Define Measure Analyze Improve Control

24. Control Phase • Gather and Review Monthly Metrics • Training - Apply Smith System Keys • Continual Improvement Meetings • Extended Rearview Mirrors • Truck Labels • Safety Management Monthly Meetings • Route Assessments to identify unsafe driving behaviors • Post accident investigations to identify root cause and lessons learned • Routinely truck maintenance Define Measure AnalyzeImprove Control

25. Summary • At fault accident rate was exceeding company standards • Implemented Quarterly Safety Meetings • Return on Investment –Gain = $144,141.22 (over 5 years) • Next Steps • Implement Solutions & transition to control phase • Responsible Party - Jorge Rojas • Solutions are expected to be implemented by Q3 2011 Define Measure AnalyzeImprove Control