2011-06-01 ©SKF Slide 1 [Code] SKF [Organisation]

SKF Business Excellence- our Lean journey

Tom JohnstonePresident & CEO

2011-06-01 ©SKF Slide 1 [Code] SKF [Organisation]

May 31st 2011

SKF Quality Journey Key milestones

1950-1970 1980 1990 2000 2010

SKF Group QMSG Q

SKF GlobalProduct stds

The Knowledge Engineeringcompany / 5 techn platforms

Group Key Business Processes

SKF

SKF Q1

Group QMSQb

Bus. Proc.system

Group QAudits

SKF QualityAcademy

Aut Div ZD concept

Group ZD

SKF Sustainability SKF Care

Group EHSEb

Group6 Sigma

TQM6 Sigma in

transactionalprocesses

SKF Channel concept

Manufact.Excellence

BusinessExcellence

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Audi/VwEXTERNAL

Supplier cost reduction pressure

Warranty terms

Liability laws

Mil. Std.

AQAP(NATO)

ISO 14000 OSHAS 18000 InternationalAwards

BS 5750 QS 9000ISO 9000 TS 16949

FordQ-101

TS 16949-09GM/others

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Six Sigma

• 2011 Q1 status:

• 22 Master Black Belts

• 437 Black Belts

• 2,105 Green Belts

• 181 projects closed whereof 7 replicated

• 955 projects ongoing

Hard savings2005 SEK 150 m

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2005: SEK 150 m 2006: SEK 200 m2007: SEK 302 m2008: SEK 462 m2009: SEK 430 m2010: SEK 468 m2011 Ytd: SEK 69 m

4 dimensions:”Standard” Six Sigma, Design for Six Sigma, Lean Six Sigma and Six Sigma for Growth

SKF Bridge of Manufacturing Excellence

• Everyday improvement

• by everybody• by everybody

• everywhere

Find the problem

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Fix the problemKeep the problem from

coming back

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What is Business Excellence for SKF?

“Delivering value to our customers in the most effective and efficient ways possible,

through fully utilising the knowledge of our people, our partners and our

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technology”

It all begins…with a focus on the customer!

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SKF Business Excellence – the next step on our journey

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It starts with Leadership !

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Mindset changeCultural change

Change of managing

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The SKF Excellence model

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The foundation is the SKF Values

• Empowerment

• High Ethics

• Openness

• Teamwork

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Teamwork

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Under the roof of the SKF Drivers

• Profitability

• Quality

• Innovation

• Speed

S t i bilit

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• Sustainability

The SKF Excellence model

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The SKF Business Excellence Principles

• Standardised Work

• Right from me

• We care

• Customer value driven output

• Continuous improvement

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• Continuous improvement

The SKF Excellence model

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Applying the methods

• Continuous improvement

• SKF Six Sigma• SKF Six Sigma

• Value Stream Mapping

• A defined escalation plan

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The SKF Excellence model

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Three categories of processes

Manufacturing processesTransactional processesCreative processes

localised team

•Defined process•Defined organisation•Defined product / spec’s

localised remoteteam team

•Partly defined process•Defined organisation•Partly defined product or service

localised remoteteam team

• Process not always defined •Defined organisation•Non repetitive

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spec s•Defined measures•Repetitive•Localised team•Can be standardised

or service •Repetitive•Can be standardised

•Non-repetitive•Standardisation?

Business Excellence in Demand Chain

Practice Grounds in each area – focus on efficiency

Marketing & Sales

Distribution &Cust. Service Manufacturing PurchasingCustomer Supplie

r

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Business Excellence in Demand Chain

Practice Grounds in each area

Marketing & Sales

Distribution &Cust. Service Manufacturing PurchasingCustomer Supplie

r

Practice Grounds phase 1 Focus on Efficiency

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Business Excellence in Demand Chain

DC Practice Ground – focus on effectiveness

Marketing & Sales

Distribution &Cust. Service Manufacturing PurchasingCustomer Supplie

r

Information & physical flows

Practice Ground phase 2 Focus on Effectiveness

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Business Excellence in Demand Chain

Demand Chain Practice Grounds

Marketing & Sales

Distribution &Cust. Service Manufacturing PurchasingCustomer Supplie

r

Information & physical flows

Practice Ground phase 1 Focus on Efficiency

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Practice Ground phase 2 Focus on Effectiveness

The Excellence Journey- the natural phases

BE-> effectiveness-> efficiencythrough knowledge

Doing the right things

Doing the right things right

Creating customer value

Driving out wasteWhat BE is about

1.Stabilise

0. Leadership / Way of

thinking / Culture

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2.Promote C.I. culture

& activitiesD M A I C

3.Sustain

D M A I C

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The Excellence Journey - the tool box

0. Leadership / Way of thinking /

CultureCollecting the

NeedsBridge

meetingsBE simulation

games”Go & See”Leadership training

1.Stabilise

Standardised processes/ activities

5S6 Sigma

Reduction of variation

2. Promote C.I. culture & activities

Methods / tools training

Act in real time Escalate / 6σPulse

meetings

Visualisation

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3.Sustain

QMS Qb/Qc/Qd

BE assessm.and/or audits

Deviation from ‘Normal Situation’

Challenge the normal situation

Keys to the success of SKF Business Excellence

• Must by done by the people for the people - and for the customers!and for the customers!

• Drive for and ownership of SKF Business Excellence must be in the operations

• Central SKF Group BE team – bridge the business processes

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• This is an extremely important culture change - training for leadership and to help the change is vital!

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What is Business Excellence?

It’s not a one time initiative- It’s a journey…

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Thank You

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