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Driving Growth, Productivity &Driving Growth, Productivity & Performance Performance

Driving Growth, Productivity &Driving Growth, Productivity & Performance Performance

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KONIG’s VisionKONIG’s Vision

• We will be a premier growth We will be a premier growth company, delivering unsurpassed company, delivering unsurpassed customer and shareholder value customer and shareholder value through talented people and through talented people and innovation.innovation.

• We will be a premier growth We will be a premier growth company, delivering unsurpassed company, delivering unsurpassed customer and shareholder value customer and shareholder value through talented people and through talented people and innovation.innovation.

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Year 2000 GoalsYear 2000 Goals

• Delight customers at every opportunityDelight customers at every opportunity

• Make the numbers Make the numbers

• Accelerate growth and productivity via Accelerate growth and productivity via Six SigmaSix Sigma

• Delight customers at every opportunityDelight customers at every opportunity

• Make the numbers Make the numbers

• Accelerate growth and productivity via Accelerate growth and productivity via Six SigmaSix Sigma

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Six Sigma:Six Sigma:

• KONIG’s KONIG’s overall overall strategystrategy to: to:– Accelerate Accelerate

improvements in improvements in allall processes, products processes, products & services& services

– Reduce cost of poor Reduce cost of poor quality by quality by eliminating waste eliminating waste and reducing defects and reducing defects and variationsand variations

• KONIG’s KONIG’s overall overall strategystrategy to: to:– Accelerate Accelerate

improvements in improvements in allall processes, products processes, products & services& services

– Reduce cost of poor Reduce cost of poor quality by quality by eliminating waste eliminating waste and reducing defects and reducing defects and variationsand variations

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Why Six Sigma?Why Six Sigma?

• Proven way to drive financial Proven way to drive financial & performance excellence & performance excellence

• Enables our business strategy by:Enables our business strategy by:– Identifying customer needsIdentifying customer needs– Crafting a value propositionCrafting a value proposition– Designing business modelsDesigning business models

• Proven way to drive financial Proven way to drive financial & performance excellence & performance excellence

• Enables our business strategy by:Enables our business strategy by:– Identifying customer needsIdentifying customer needs– Crafting a value propositionCrafting a value proposition– Designing business modelsDesigning business models

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Why Six Sigma?Why Six Sigma?

• Appropriate for every business & Appropriate for every business & functionfunction

• Provides many tools, aids, skillsProvides many tools, aids, skills

• Promotes fact-based decision Promotes fact-based decision making & breakthrough thinkingmaking & breakthrough thinking

• Appropriate for every business & Appropriate for every business & functionfunction

• Provides many tools, aids, skillsProvides many tools, aids, skills

• Promotes fact-based decision Promotes fact-based decision making & breakthrough thinkingmaking & breakthrough thinking

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2004--$1 Million2004--$1 Million

2005--$2 Million2005--$2 Million

2006--$4 Million2006--$4 Million

2004--$1 Million2004--$1 Million

2005--$2 Million2005--$2 Million

2006--$4 Million2006--$4 Million

Is Six Sigma Worth Effort?Is Six Sigma Worth Effort?

Huge payoff in

Savings !

Huge payoff in

Savings !

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Sigma--Our MeasurementSigma--Our Measurement

• Six Sigma is our strategySix Sigma is our strategy

• Sigma (Sigma ()) is our is our measurementmeasurement of quality to know how of quality to know how effectively we eliminate effectively we eliminate defects & variationsdefects & variations

• Six Sigma is our strategySix Sigma is our strategy

• Sigma (Sigma ()) is our is our measurementmeasurement of quality to know how of quality to know how effectively we eliminate effectively we eliminate defects & variationsdefects & variations

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Sigma--Our MeasurementSigma--Our Measurement

Defects/millionDefects/million Error-free RateError-free Rate

• Six SigmaSix Sigma 3.43.4 99.9997%99.9997%

• Five Sigma Five Sigma 233233 99.977%99.977%

• Four SigmaFour Sigma 6,210 6,210 99.4%99.4%

• Three Sigma Three Sigma 66,81066,810 93%93%

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Why Strive for Why Strive for SixSix Sigma? Sigma?

• If electricity worked at:If electricity worked at:– 44no lights about 1 hour/weekno lights about 1 hour/week– 66no lights about 2 seconds/weekno lights about 2 seconds/week

• Driving 40 miles per hour if your car Driving 40 miles per hour if your car operated at: operated at: – 4430 repair minutes every 3,000 miles 30 repair minutes every 3,000 miles – 66 30 repair minutes every 6,000,000 30 repair minutes every 6,000,000

milesmiles

• If electricity worked at:If electricity worked at:– 44no lights about 1 hour/weekno lights about 1 hour/week– 66no lights about 2 seconds/weekno lights about 2 seconds/week

• Driving 40 miles per hour if your car Driving 40 miles per hour if your car operated at: operated at: – 4430 repair minutes every 3,000 miles 30 repair minutes every 3,000 miles – 66 30 repair minutes every 6,000,000 30 repair minutes every 6,000,000

milesmiles

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• Use this Use this methodmethod to solve problems: to solve problems:– DDefineefine problems in processes problems in processes– MMeasureeasure performance performance– AAnalyzenalyze causes of problems causes of problems– IImprovemprove processes -- remove variations processes -- remove variations

and non value-added activities and non value-added activities– CControlontrol processes so problems don’t processes so problems don’t

recurrecur

• Use this Use this methodmethod to solve problems: to solve problems:– DDefineefine problems in processes problems in processes– MMeasureeasure performance performance– AAnalyzenalyze causes of problems causes of problems– IImprovemprove processes -- remove variations processes -- remove variations

and non value-added activities and non value-added activities– CControlontrol processes so problems don’t processes so problems don’t

recurrecur

Reaching Six Sigma Reaching Six Sigma PerformancePerformance

DMAIC!

DMAIC!

DMAIC!

DMAIC!

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Implementing The DMAIC Implementing The DMAIC MethodMethod

• Many tools, aids & skills help to:Many tools, aids & skills help to:– DDefineefine– MMeasureeasure– AAnalyzenalyze– IImprovemprove– CControlontrol

• Many tools, aids & skills help to:Many tools, aids & skills help to:– DDefineefine– MMeasureeasure– AAnalyzenalyze– IImprovemprove– CControlontrol

DMAIC!

DMAIC!

DMAIC!

DMAIC!

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Among Our Tools ...Among Our Tools ...

• Process MappingProcess Mapping

• Failure Mode & Effect AnalysisFailure Mode & Effect Analysis

• Measurement System EvaluationMeasurement System Evaluation

• Statistical TestsStatistical Tests

• Design of ExperimentsDesign of Experiments

• Control PlansControl Plans

• Process MappingProcess Mapping

• Failure Mode & Effect AnalysisFailure Mode & Effect Analysis

• Measurement System EvaluationMeasurement System Evaluation

• Statistical TestsStatistical Tests

• Design of ExperimentsDesign of Experiments

• Control PlansControl Plans

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Among Our Tools …Among Our Tools …

• Quality Function Deployment (QFD)Quality Function Deployment (QFD)

• Activity Based ManagementActivity Based Management

• Enterprise Resource PlanningEnterprise Resource Planning

• Lean EnterpriseLean Enterprise

• Quality Function Deployment (QFD)Quality Function Deployment (QFD)

• Activity Based ManagementActivity Based Management

• Enterprise Resource PlanningEnterprise Resource Planning

• Lean EnterpriseLean Enterprise

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Learning About Six SigmaLearning About Six Sigma

• Everyone learns “basics” of Everyone learns “basics” of 66

• Managers/supervisors and those Managers/supervisors and those responsible for processes become responsible for processes become Green Belts™Green Belts™

• Black Belt™, Lean, Activity-Based Mgmt. Black Belt™, Lean, Activity-Based Mgmt. and Total Productive Maintenance and Total Productive Maintenance Experts & Masters, all available to help Experts & Masters, all available to help businessesbusinesses

• Everyone learns “basics” of Everyone learns “basics” of 66

• Managers/supervisors and those Managers/supervisors and those responsible for processes become responsible for processes become Green Belts™Green Belts™

• Black Belt™, Lean, Activity-Based Mgmt. Black Belt™, Lean, Activity-Based Mgmt. and Total Productive Maintenance and Total Productive Maintenance Experts & Masters, all available to help Experts & Masters, all available to help businessesbusinesses

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Six Sigma Plus Six Sigma Plus CompetenciesCompetencies• Green BeltGreen Belt

• Black BeltBlack Belt

• Master Black Belt™Master Black Belt™

• Green BeltGreen Belt

• Black BeltBlack Belt

• Master Black Belt™Master Black Belt™

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Six Sigma Plus Six Sigma Plus CompetenciesCompetencies• Lean Experts & MastersLean Experts & Masters

• Activity Based Management Activity Based Management Experts & MastersExperts & Masters

• Total Productive Maintenance Total Productive Maintenance Experts & MastersExperts & Masters

• Lean Experts & MastersLean Experts & Masters

• Activity Based Management Activity Based Management Experts & MastersExperts & Masters

• Total Productive Maintenance Total Productive Maintenance Experts & MastersExperts & Masters

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Sharing Six Sigma Plus Sharing Six Sigma Plus KnowledgeKnowledge

• Quest for Excellence Quest for Excellence – Share best practicesShare best practices– Improve participants’ Improve participants’

skillsskills– Celebrate Six Sigma Celebrate Six Sigma PlusPlus results results

– Select Premier Select Premier Achievement Award Achievement Award teamteam

• Quest for Excellence Quest for Excellence – Share best practicesShare best practices– Improve participants’ Improve participants’

skillsskills– Celebrate Six Sigma Celebrate Six Sigma PlusPlus results results

– Select Premier Select Premier Achievement Award Achievement Award teamteam

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Six Sigma Plus in ActionSix Sigma Plus in Action

• At the warehouseAt the warehouse::

– Less waste, more first quality production Less waste, more first quality production & greater efficiency& greater efficiency

– Employee satisfaction increased: Employee satisfaction increased: smoother running process eased smoother running process eased frustration associated with equipment frustration associated with equipment breakdowns.breakdowns.

• At the warehouseAt the warehouse::

– Less waste, more first quality production Less waste, more first quality production & greater efficiency& greater efficiency

– Employee satisfaction increased: Employee satisfaction increased: smoother running process eased smoother running process eased frustration associated with equipment frustration associated with equipment breakdowns.breakdowns.

Example!

Example!

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Six Sigma Plus in ActionSix Sigma Plus in Action

• Better Service:Better Service: Customers benefit via use Customers benefit via use of Activity Based Management, Lean of Activity Based Management, Lean Manufacturing & other tools: Manufacturing & other tools:

• AndAnd these improvements led to increased these improvements led to increased revenue & productivity for KONIG!revenue & productivity for KONIG!

• Better Service:Better Service: Customers benefit via use Customers benefit via use of Activity Based Management, Lean of Activity Based Management, Lean Manufacturing & other tools: Manufacturing & other tools:

• AndAnd these improvements led to increased these improvements led to increased revenue & productivity for KONIG!revenue & productivity for KONIG!

Example!

Example!

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Six Sigma Plus in ActionSix Sigma Plus in Action

• AdministrativelyAdministratively:: An Industrial An Industrial Automation and Control teamAutomation and Control team::

– Reduced errors on 100,000 freight invoicesReduced errors on 100,000 freight invoices

– Decreased invoice cycle time from 35 to 25 Decreased invoice cycle time from 35 to 25 days; more reductions planned using days; more reductions planned using electronic invoicingelectronic invoicing

• AdministrativelyAdministratively:: An Industrial An Industrial Automation and Control teamAutomation and Control team::

– Reduced errors on 100,000 freight invoicesReduced errors on 100,000 freight invoices

– Decreased invoice cycle time from 35 to 25 Decreased invoice cycle time from 35 to 25 days; more reductions planned using days; more reductions planned using electronic invoicingelectronic invoicing

Example!

Example!

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““You know my methods. Apply them.”You know my methods. Apply them.”

--Sherlock Holmes--Sherlock Holmes

““Sign of Four”Sign of Four”by Arthur Conan Doyle, 1890by Arthur Conan Doyle, 1890