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

2 KONIG’s Vision We will be a premier growth company, delivering unsurpassed customer and shareholder value through talented people and innovation. We will be a premier growth company, delivering unsurpassed customer and shareholder value through talented people and innovation.

3 Year 2000 Goals Delight customers at every opportunity Delight customers at every opportunity Make the numbers Make the numbers Accelerate growth and productivity via Six Sigma Accelerate growth and productivity via Six Sigma Delight customers at every opportunity Delight customers at every opportunity Make the numbers Make the numbers Accelerate growth and productivity via Six Sigma Accelerate growth and productivity via Six Sigma

4 Six Sigma: KONIG’s overall strategy to: KONIG’s overall strategy to: – Accelerate improvements in all processes, products & services – Reduce cost of poor quality by eliminating waste and reducing defects and variations KONIG’s overall strategy to: KONIG’s overall strategy to: – Accelerate improvements in all processes, products & services – Reduce cost of poor quality by eliminating waste and reducing defects and variations

5 Why Six Sigma? Proven way to drive financial & performance excellence Proven way to drive financial & performance excellence Enables our business strategy by: Enables our business strategy by: – Identifying customer needs – Crafting a value proposition – Designing business models Proven way to drive financial & performance excellence Proven way to drive financial & performance excellence Enables our business strategy by: Enables our business strategy by: – Identifying customer needs – Crafting a value proposition – Designing business models

6 Why Six Sigma? Appropriate for every business & function Appropriate for every business & function Provides many tools, aids, skills Provides many tools, aids, skills Promotes fact-based decision making & breakthrough thinking Promotes fact-based decision making & breakthrough thinking Appropriate for every business & function Appropriate for every business & function Provides many tools, aids, skills Provides many tools, aids, skills Promotes fact-based decision making & breakthrough thinking Promotes fact-based decision making & breakthrough thinking

$1 Million $2 Million $4 Million $1 Million $2 Million $4 Million Is Six Sigma Worth Effort? Huge payoff in Savings ! Huge payoff in Savings !

8 Sigma--Our Measurement Six Sigma is our strategy Six Sigma is our strategy Sigma (  ) is our measurement of quality to know how effectively we eliminate defects & variations Sigma (  ) is our measurement of quality to know how effectively we eliminate defects & variations Six Sigma is our strategy Six Sigma is our strategy Sigma (  ) is our measurement of quality to know how effectively we eliminate defects & variations Sigma (  ) is our measurement of quality to know how effectively we eliminate defects & variations

9 Sigma--Our Measurement Defects/millionError-free Rate Six Sigma %Six Sigma % Five Sigma %Five Sigma % Four Sigma6, %Four Sigma6, % Three Sigma 66,81093%Three Sigma 66,81093%

10 Why Strive for Six Sigma? If electricity worked at: If electricity worked at: – 4  no lights about 1 hour/week – 6  no lights about 2 seconds/week Driving 40 miles per hour if your car operated at: Driving 40 miles per hour if your car operated at: – 4  30 repair minutes every 3,000 miles – 6  30 repair minutes every 6,000,000 miles If electricity worked at: If electricity worked at: – 4  no lights about 1 hour/week – 6  no lights about 2 seconds/week Driving 40 miles per hour if your car operated at: Driving 40 miles per hour if your car operated at: – 4  30 repair minutes every 3,000 miles – 6  30 repair minutes every 6,000,000 miles

11 Use this method to solve problems: Use this method to solve problems: – Define problems in processes – Measure performance – Analyze causes of problems – Improve processes -- remove variations and non value-added activities – Control processes so problems don’t recur Use this method to solve problems: Use this method to solve problems: – Define problems in processes – Measure performance – Analyze causes of problems – Improve processes -- remove variations and non value-added activities – Control processes so problems don’t recur Reaching Six Sigma Performance DMAIC!DMAIC!

12 Implementing The DMAIC Method Many tools, aids & skills help to: Many tools, aids & skills help to: – Define – Measure – Analyze – Improve – Control Many tools, aids & skills help to: Many tools, aids & skills help to: – Define – Measure – Analyze – Improve – Control DMAIC!DMAIC!

13 Among Our Tools... Process Mapping Process Mapping Failure Mode & Effect Analysis Failure Mode & Effect Analysis Measurement System Evaluation Measurement System Evaluation Statistical Tests Statistical Tests Design of Experiments Design of Experiments Control Plans Control Plans Process Mapping Process Mapping Failure Mode & Effect Analysis Failure Mode & Effect Analysis Measurement System Evaluation Measurement System Evaluation Statistical Tests Statistical Tests Design of Experiments Design of Experiments Control Plans Control Plans

14 Among Our Tools … Quality Function Deployment (QFD) Quality Function Deployment (QFD) Activity Based Management Activity Based Management Enterprise Resource Planning Enterprise Resource Planning Lean Enterprise Lean Enterprise Quality Function Deployment (QFD) Quality Function Deployment (QFD) Activity Based Management Activity Based Management Enterprise Resource Planning Enterprise Resource Planning Lean Enterprise Lean Enterprise

16 Learning About Six Sigma Everyone learns “basics” of 6  Everyone learns “basics” of 6  Managers/supervisors and those responsible for processes become Green Belts™ Managers/supervisors and those responsible for processes become Green Belts™ Black Belt™, Lean, Activity-Based Mgmt. and Total Productive Maintenance Experts & Masters, all available to help businesses Black Belt™, Lean, Activity-Based Mgmt. and Total Productive Maintenance Experts & Masters, all available to help businesses Everyone learns “basics” of 6  Everyone learns “basics” of 6  Managers/supervisors and those responsible for processes become Green Belts™ Managers/supervisors and those responsible for processes become Green Belts™ Black Belt™, Lean, Activity-Based Mgmt. and Total Productive Maintenance Experts & Masters, all available to help businesses Black Belt™, Lean, Activity-Based Mgmt. and Total Productive Maintenance Experts & Masters, all available to help businesses

17 Six Sigma Plus Competencies Green Belt Green Belt Black Belt Black Belt Master Black Belt™ Master Black Belt™ Green Belt Green Belt Black Belt Black Belt Master Black Belt™ Master Black Belt™

18 Six Sigma Plus Competencies Lean Experts & Masters Lean Experts & Masters Activity Based Management Experts & Masters Activity Based Management Experts & Masters Total Productive Maintenance Experts & Masters Total Productive Maintenance Experts & Masters Lean Experts & Masters Lean Experts & Masters Activity Based Management Experts & Masters Activity Based Management Experts & Masters Total Productive Maintenance Experts & Masters Total Productive Maintenance Experts & Masters

19 Sharing Six Sigma Plus Knowledge Quest for Excellence Quest for Excellence – Share best practices – Improve participants’ skills – Celebrate Six Sigma Plus results – Select Premier Achievement Award team Quest for Excellence Quest for Excellence – Share best practices – Improve participants’ skills – Celebrate Six Sigma Plus results – Select Premier Achievement Award team

21 Six Sigma Plus in Action At the warehouse: At the warehouse: – Less waste, more first quality production & greater efficiency – Employee satisfaction increased: smoother running process eased frustration associated with equipment breakdowns. At the warehouse: At the warehouse: – Less waste, more first quality production & greater efficiency – Employee satisfaction increased: smoother running process eased frustration associated with equipment breakdowns. Example!

22 Six Sigma Plus in Action Better Service: Customers benefit via use of Activity Based Management, Lean Manufacturing & other tools: Better Service: Customers benefit via use of Activity Based Management, Lean Manufacturing & other tools: And these improvements led to increased revenue & productivity for KONIG! And these improvements led to increased revenue & productivity for KONIG! Better Service: Customers benefit via use of Activity Based Management, Lean Manufacturing & other tools: Better Service: Customers benefit via use of Activity Based Management, Lean Manufacturing & other tools: And these improvements led to increased revenue & productivity for KONIG! And these improvements led to increased revenue & productivity for KONIG! Example!

23 Six Sigma Plus in Action Administratively: An Industrial Automation and Control team : Administratively: An Industrial Automation and Control team : – Reduced errors on 100,000 freight invoices – Decreased invoice cycle time from 35 to 25 days; more reductions planned using electronic invoicing Administratively: An Industrial Automation and Control team : Administratively: An Industrial Automation and Control team : – Reduced errors on 100,000 freight invoices – Decreased invoice cycle time from 35 to 25 days; more reductions planned using electronic invoicing Example!

26 “You know my methods. Apply them.” --Sherlock Holmes --Sherlock Holmes “Sign of Four” by Arthur Conan Doyle, 1890