6 Sigma Success Stories

1. 6 Sigma Success Stories DMEDI: Create new processes, products, services, and plants to 6 Sigma quality DMAIC: Improve existing processes, products, services, and facilities to 6 Sigma quality

2. Points to Ponder about 6 Sigma • Why has 6 Sigma been successful at Global benchmark companies? The people and projects make the difference.Leadership commitment. • Why is encoding important?Encoding is supporting a culture where 6 Sigma methodology, discipline & tools are used by your employees to continually create, improve& manage products, processes and services to enable attainment of the Vision. Only by encoding – making 6 Sigma the way you work - will you ensure sustainable growth and achieve the Vision. • How do dealers and suppliers factor into encoding 6 Sigma?No other company can compete with a Company’s value chain if 6 Sigma is rightly deployed, and encoding 6 Sigma throughout the value chain makes it even stronger. • What else?It’s about people... how they use the methodology to create value; it’s about engaging, empowering people to make decisions on facts & data; it’s about developing leaders, giving them skills needed for the future.

3. Success Stories • G&L, a machine tool builder based in US. Trained 15 leaders, 1 MBB. 6 BBs completed 14 projects, delivered >$5M benefits since November 2001. • Lessons learned: • It all starts at the top of the organization; leaders must embrace the process and stay committed • Jump on the Six Sigma bandwagon; it really works! • Challenge your organization to drive transformational change. • Haldex, a manufacturer of hydraulic components in Illinois, headquartered in Sweden. 1, DC, 10 business leaders completed leadership workshop, 57 trained GBs. Attended BBW 5 times, 8 BBs generated $1.8M benefits from 15 projects focused on: • improving productivity (8) & reducing inventory (1) , 59% of the benefit • improving quality (3), reducing costs (3), 41% of the benefit since Feb ‘03. • Lessons learned: • The best-practice deployment approach, materials and training are excellent • The key to success is MANAGEMENT support and involvement

4. Success Stories • ZhejangYinglun Machinery, a manufacturer of heat transfer equipment, began deployment in China Y2004. Trained 5 leaders, created 8 BBs who completed 8 projects which delivered about $1M benefits . Plan the 2nd wave leadership workshop on Y2006, about 40 people will attend the workshop. • One project achieved $110,000 benefit through the quality improvement of an OEM oil cooler. • Lessons learned: • It all starts at the top of the organization; leaders must embrace the process and stay committed. • Jump on the Six Sigma bandwagon; it really works! • Challenge your organization to drive transformational change.

5. Success Stories • Hagemeyer North America, a distributor of electrical materials, safety and other maintenance repair and operations support products began deployment 9/03. • 14 business leaders completed the 6 Sigma workshops. • Black belt candidates attended five different waves of DMAIC workshops, creating 12 full time black belts as of January 13, 2006. • 22 projects initiated since 9/03. • 8 have been completed to the control phase. • Realized approx $2M in level I and $250K level II benefits to date. • Identified $8M in combined level I and level II savings in total of those 22. Balance of projects not yet into Control phase.

6. Success Stories • Hagemeyer North America(continued) . . . Steve B., Executive VP Supply Chain Management says: • “6 Sigma is key to our long term success. • After two years we have made great progress. We have been exempted from (physical) inventory by our external auditors . . . • our freight costs are $1M less today than in 2004. • More and more, 6 Sigma is the language of our customers”. • Early projects dealt with very large issues around informational databases. The hard work the teams did has an additional benefit as we convert one of our operating systems to our common platform. We are able to duplicate the processes we used in these early projects. . . An added win!! • Our associates are beginning to think “ 6 Sigma Project” when they encounter a recurring process problem.

7. Success Stories • ABB, a factory automation supplier located in US reduced average aftermarket software delivery time 97.1% with a 98% reduction in variation, netting $218,000 in process cost savings and $408,000 incremental revenue through new market penetration( $616,000). • Wheels India, the leading manufacturer of steel wheels for passenger cars, utility vehicles, trucks, buses, agricultural tractors and construction equipment in India began deployment 11/03. By 3/05, they completed their first 7 projects which delivered $298,000 level I savings. LESSONS LEARNED: • “ With the increasing costs of power, steel and transportation, 6 Sigma has helped us reduce our own costs and will help us grow . . . 24 - 6 Sigma projects are underway and expect to deliver $444,000 in savings “. “ . . . this methodology uncovered problems we never knew were there. It found solutions for problems that hadn’t surfaced yet.

8. Success Stories • ECCO, an ESOP company headquartered in Idaho designs, manufactures and markets electronic safety products for commercial vehicles. Began deployment 9/03. 10 leaders trained, 6 BBs (4 DMAIC, 2DMEDI) created. • One project achieved 50% reduction in parts outages & 50% reduction in past dues from parts outages for annual savings of $132,000. • A second project eliminated false failures & cost of calibration of testing. Reduced tech support 50%, reduced production stops by 75%, and generated annual savings of $75,000. • Machine shopof castings in Europe, 39 employees, generated 1500 additional hours of capacity through first project on lead time reduction.

9. Success Stories • Nanjing Automobile Forging Co. Ltd., a manufacturer of forging parts, began deployment Y2004. Trained 3 leaders, created 5 BBs who completed 5 projects which delivered about $2M benefits, 2 projects on-going, projected benefit is $20,000. 4 projects were worked in collaboration with Customers. • One project achieved $1.5M benefit through the heat treatment process improvement of the track link. Lessons learned: • The best-practice deployment approach, materials and training are excellent. • The key to success is MANAGEMENT support and involvement.

10. Success Stories • Volex, a wiring harness supplier in UK. 938 employees, £220M in annual sales. Began deployment 6/03. First project chartered to reduce cut cable scrap. Actual financial benefits for the project: • Total Saving Achieved £46,148 / Year • Reduction in overhead costs (tax, electricity, heating) by closure of fourth floor - £8,327 • (reduced handling costs) reassigned personnel - £13,000 • Saving achieved by reducing . . . • scrap - £10,800 • inventory - £14,021

11. Success Stories • Mechanical Devices, a family owned business located in Bloomington, IL. MD machines casting which are shipped to Customer facilities located in the midwest & south. The MD 6 Sigma deployment journey began in Feb. ’03, 1 DC, 6 leaders, 1BB. • Through a series of interlocking 6 Sigma projects, MD . . . - focused on improving quality performance (measured by - ppm reduction internally and externally) which had a positive impact to Customer facilities - improved product availability to Customers, - reduced in-bound freight costs approximately 30% - reduced inbound freight time from 3 days to 1 day, - reduced all inventories, including WIP, - reduced manufacturing cycle time - reduced aged accounts receivables and - doubled sales . . . in a 24 month period

12. Success Stories • WD Allen,a supply chain management firm providing sourcing/resourcing strategy analytics, order/delivery management, content management, requirement / demand management to meet production schedules, suppler relationship management, re-packaging, kitting, and sub-assembly. Headquartered in Crystal Lake IL with a subsidiary company in Worcester UK, total employment 17. Began deployment in June 2004. 1DC, 1 Leader, and 1 Black Belt Results: • The investment in Six Sigma recovered in the first year, via initial 2 projects. • WD Allen is involved in an on-going combination of internal and customer collaborative projects with Customers delivering >$800K level I benefits through May ‘06. • Lessons learned: • “6 Sigma success requires the total commitment of the company’s management.“ • “A small firm, due to their size, will not uncover million dollar savings opportunities, but small companies CAN change the business culture and imbed the Six Sigma methodology at a pace measured in months rather than years. “ • “6 Sigma is an excellent tool to train the next generation of senior managers.” • “ 6 Sigma is an excellent vehicle to better understand what your customers expect from supplies now and in the future”. Mike Doran, DC

13. Success Stories • Morton Metalcraft, a sheet metal fabricator headquartered in the midwest with operations there & southeast US. Total employment of approximately 1200, 45 leaders, 10 BBs, over 100 GBs trained since deployment began Nov 2001 (Pilot wave). Delivered nearly $10M level I benefits. • Pareto analysis of quality issues revealed 20% of rejected part numbers cause 80% of problem. Created 9 GB lead projects with positive impact on cost, delivery and quality internally & externally. “The empowerment and training of our Green Belts has positively impacted our corporate culture. . .” Executive VP Operations

14. Success Stories Presrite Corporation,a forging manufacturer located in Cleveland, Ohio. PC employ 480 people generating approximately $120M in sales per year. Began the 6 Sigma journey 7/03, 1 DC, 10 Leaders in ‘03 & ‘04. 20 Project Sponsor trained 7/05, 6 BB, >50 GBs, 1 MBB. 18 6Sigma projects,Yellow belt training conducted 3x / year per plant. Results $1.5M / year