Business Case

NAFTA created need for global competitiveness
Non-competitive costs, quality > no new business
Major restructuring weakened capabilities; C.S. crisis

Actions Results

Before	Metric	After
78.1 %	On-time delivery	84.4 %
15.7k PPM	Quality	13.8k PPM (+12%)
$117.5%	Budget Attainment	$92.6% (under budget)

Summary

Implemented a total system to manage four component plants and one assembly plant
Active “learn by doing” to upgrade capabilities

Business Case Actions Results

Before	Metric	After
11%	Market share	41% (+273%)
3100	Hours/unit	1750 (-44%)
0.82	Internal Safety	0.13 (-84%)
50	Internal Quality	25 (-50%)
$10.6k	Indirect materials/unit	$6.3k (-41%)
~3-20 days	Service parts lead time	1-5 days (-75%)

Summary

Business Case

150 year old company in bankruptcy, losing business
Poor delivery, deferred maintenance, poor quality

Actions Results

Nov. 04	Metric	4th Quarter 05
30%	On-time delivery	92% (+207%)
206	Customer PPM	115 (-44%)
21,180	Internal PPM	10,789 (-49%)
17	Inventory days	13 (-24%)
$128K	Sales/employee	$142K (+11%)

Summary

Business Case

• Rapid 50% rise in Euro destroyed N.A. price competitiveness
• Need to reduce purchased parts costs and develop local suppliers (lacked internal

Actions

• Developed & demonstrated supplier assessment program
• Lead implementation at suppliers to N.A. plants

Results

Metric	Before	After	Total Savings
Purchasing cost	$99.8 M	$94.1 M (-$5.7 M)	Purchase Cost $7.9 MM
Related Internal Costs		(-$2.2 M)	Purchase Cost $7.9 MM
Inventory cash-Suppliers		(-$3.0 M)	Inventory Reduction $6.0 MM
Inventory cash-Internal		(-$3.0 M)	Total Cost Savings $13.9 MM

Summary

• Transferred knowledge + process to continue on their own.
• Supported client in deploying to three other North American plants, and assisting in documentation and training to successfully deploy model and methodology for dramatic ROI from pilot project.