T B M C O N S U L T I N G G R O U P

Leading Your Competitive TransformationAs we attempt to navigate the daunting challenges of today’s global economy, the survivalof the businesses we lead may hinge on our ability to consistently coordinate immediate,unified responses to new threats and market shifts.

To successfully compete over the long term, we must continuously break down obstacles,increase our speed andefficiency and get closer to our customers and valuechain partners. But how do we embed the team-basedspeed and responsivenessrequired into the culturalDNA of our organization?Through a LeanSigma®

Transformation, the journeythat has taken Toyota andhundreds of other enter-prises to new levels of sus-tained competitive strength,innovation and growth.

Transforming your business or organization into a competitive powerhouse is a long-term,multi-faceted journey of change. While each journey is unique, our clients typically followthe roadmap illustrated on page three. The stories that follow cover the range of TBMclients – discrete manufacturers, continuous process companies, healthcare, financial servicesand government – and give you a snapshot of the challenges they faced and where theystand today in their LeanSigma transformations.

As you will see, the foundation of success is visionary leadership – the ability of managementto inspire a new culture, motivated to continuously drive improvement in every part of yourbusiness and supply chain through the application of proven lean and six sigma tools andtechniques. The payoff for your “transformational leadership” will be an energized, relentlesslyinnovative enterprise that can turn on a dime, in unison, to anticipate and quickly meetthe needs of rapidly-evolving markets and customers.

I hope these stories give you a sense of how TBM and Guidon may be able to assist you inleading your own journey of transformation and success.

Anand SharmaFounder and Chairman, TBM Consulting Group

TBM serves clients throughout the world,on five continents, in multiple languages.

Business FocusDiscrete ManufacturersContinuous Process CompaniesHealthcareFinancial ServicesGovernment

1

LeanSigma® Transformation Model

Founded in 1991, TBM is the worldwide leader in lean innovation and rapidperformance improvement for discrete manufacturers, continuous process companies,healthcare, financial services and government. We operate on five continents inmultiple languages.

The hallmark of our work is rapid implementation, generating sustainable resultsfor our clients. Our proprietary LeanSigma® process helps clients achieve newcompetitive advantages and consistent sales and earnings growth.

TBM Consulting GroupOver 150 senior-level consultants work side-by-side with senior management to drive culture change, transfer knowledge, and generate immediate, hands-onimprovement for discrete manufacturers and continuous process industries – inthe factory and in their business processes.

TBM LeanSigma® InstituteA faculty drawn from TBM’s most experienced consultants, providing essential,experience-based LeanSigma training and development. With an action-orientedcurriculum rooted in the Toyota Production System and distilled from hands-onexperience.

Guidon Performance SolutionsA TBM subsidiary dedicated to helping healthcare, financial services, informationtechnology, other service organizations and government agencies generate immediateprocess improvement and establish a high-performance culture.

“How many consulting firms unconditionally guarantee every aspect of their work? TBM is theonly one I know of.”– Tim Powers, Chairman & CEO,

Hubbell Incorporated

Every TBM and Guidon consultant is a seasoned professional, with a minimum of 10 years of hands-on experience in their area of expertise. Unlike traditional consulting firms, wefocus on developing a vision and moving quickly to execution. And we guarantee total clientsatisfaction, unconditionally.

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

3

TBM clients follow this roadmap to achieve rapid and dramatic performance improvement and to translate their success into

game-changing competitive advantage and sustained growth and profitability.

CURRENTACTIVITIES

2

1

3

About Us

• Market segmentation

• Value innovation

• Rapid product development

• Lean acquisition strategy

• Demand management

• Order fulfillment

• Supply chain development

• Business planning andsegmentation

Stage 1 Stage 2 Stage 3

Improvement Potentia

l

Foundation: Lean Leadership & Culture Change

LeanSigma Process Improvement

LeanSigma Growth Strategy

Lean Value Chain

Foundation

• Policy Deployment

• Performance metrics

• Managing for DailyImprovement

• Lean Leader training

•Operational excellence

•Kaizen Breakthrough

•Time-based strategies

•Toyota Business System

In the PowerFlo Matrix pump cell in Hayward Pool Products’

Clemmons, North Carolina plant:Paul Adelberg, Vice President of Lean Technology, Hayward

Pool Products; Anand Sharma,Chairman, TBM Consulting Group.

“We thought we’d have to makethis pump in China.”“Instead, we’re producing it just as efficiently in North Carolina, with higherquality – and a fraction of the lead time,” points out Paul Adelberg, Hayward’svice president of lean technology. “It’s one example of how we’re converting ourlean improvement into meaningful benefits for our customers and employees.”

When it began its LeanSigma transformation in 1999 with TBM, Hayward PoolProducts was an unlikely candidate for serious change – already the worldwidemarket leader, growing at double-digit rates nearly every year. “We were enjoyingvery good growth, or what we thought was good growth,” Paul recalls. “But wewere a typical batch manufacturer and growth meant more equipment, spaceand inventory. TBM showed us a new way, which enabled us to do far morewith less.”

Since then, Hayward has tacked on an additional 10 market share points – anddoubled their business with less space and no change in direct labor headcount.Work in Process (WIP) inventory turns have jumped from 12.6 to over 50 peryear, on-time delivery is up almost 25 percentage points and time-to-market fornew products has been cut in half. Integral to that dramatic improvement: aKaizen Promotion office in each plant and ongoing Kaizen Breakthrough events.

For TBM clients like Hayward, operational excellence is not the end game, butrather the starting line for a Lean Value Chain – and sustained growth, innova-tion and competitive advantage. Two initiatives Hayward is now aggressivelypursuing with TBM: new product development, using Design for LeanSigma,and strategic “lean” acquisitions.

“Instead of sending out a new brochure, our salespeople invite customers andprospects to tour one of our plants,” explains Paul. “They experience our entireprocess, the efficiency and testing, the enthusiasm, the quality and innovationwe’re building into every product. It’s an easy sell. Especially if they’ve been toone of our competitors’ plants first.”

“Operational excellence is the price of admission to today’s global world. The real payoff lies in where you go from there. Can you take that improvement across your value chain – and translate it into significant benefits for your customers?”– Paul Adelberg, Vice President of Lean Technology, Hayward Pool Products

Leveraging lean for growth Hayward Pool Productswww.improvemypool.com

Lean Value ChainRapid Product Development

Strategic Acquisitions

5

“The LeanSigma process is more rigorous than Six Sigma. It allows us to use existing resources to quickly identify and fix sophisticated problems – and significantly improve profitability and competitive strength.”– John Martis, Managing Director, Westbrook Mill, Sappi Warren

“This paper machine is 100 yearsold. It’s probably more productivenow than when it was brand new.”Aging, inefficient infrastructure is a common issue for 24/7 process operations –and Sappi Warren’s Westbrook Mill in Maine is older than most, dating back tothe 1850s. It also had all the typical throughput and revenue-drainers when TBM

began working there in 2004. “We were losing share to more responsive domesticcompetitors,” recalls John Martis, the mill’s managing director. “Long change-overtimes, excess WIP and machine downtime were dragging us down. TBM beganengaging teams with targeted Kaizen and 5S events in high-opportunity areas,combined with process capability and equipment maintenance initiatives.”

Unplanned mechanical downtime has been reduced by more than 50%, as TotalProductive Maintenance and Operator Autonomous Maintenance have beenimplemented throughout the mill. WIP (work in process) inventory turns havetripled, total process time has been cut in half and value-added time has doubled.Change-over time and frequency have improved dramatically. “At first look,you’d think this 100 year-old machine couldn’t possibly run efficiently,” saysJohn. “But it does and change-overs now take 70% less time.”

“TBM’s LeanSigma methodology,” John continues, “is an incredibly powerfulimprovement tool in a continuous process environment, where the root causesof problems are less visible. How an activity impacts other parts of the operationmay not be readily apparent. Lots of people talk about Lean and Six Sigma.TBM speaks from a wealth of process experience. They are hands-on and moredisciplined about implementation than I’ve seen with any other consultants.”

“The word is getting out,” John points out. “Other parts of the company arecalling to say ‘we want to try this.’ They’ve seen how we have significantlyimproved our financial and business performance and are taking back marketshare – using the same resources we started with.”

In Sappi Warren’sWestbrook, Maine mill: John Martis, the mill’s managing director; BillSchwartz, Executive VicePresident, TBM ConsultingGroup; Doug Bonner, SeniorManagement Consultant,TBM Consulting Group.

LeanSigma in 24/7 continuous process operations

Sappi Warrenwww.warrenreleasepapers.com

Throughput and Process Capability Overall Equipment Effectiveness (OEE)

Total Productive Maintenance (TPM)

7

How do you become so valuable to your customers that you cannotbe replaced by a low-priced, outsourced competitor?The growth of the global marketplace has made it harder for companies to stayrelevant doing the same thing, year after year. When you listen to customers,you become aware that their needs are changing rapidly. To avoid getting stuckin endless, no-win price wars – as global competitors race to deliver attractivealternatives to your traditional customers – you must constantly reinvent theproducts and services you offer.

“We had unintentionally become the producer of a commodity, which customerstended to purchase infrequently, in large quantities,” observes Alexander Wiegand,WIKA’s chairman and chief executive officer. “New competitors were selling similarproducts for 30-50% less. Our competitive response was much more powerful thanoutsourcing. We began to leverage our ongoing process improvement into significant,tangible value for our customers.”

WIKA, the global market leader for pressure and temperature instruments, was a typical batch manufacturer when they began their LeanSigma transformationin Germany and the United States in 2002. Huge reductions in manufacturinglead time, change-over time and delivery time have enabled WIKA to implementa “just in time” low-volume, high-variation production strategy – which is creating loyal customers and driving higher profits.

Says Michael Gerster, who leads WIKA’s U.S. operations, “Today, WIKA is theclear alternative to low-cost, low-quality and long supply chain performance.Customers always ask for product variations to meet specific needs. We can produce high-quality, customized products and have them in customers’ handsin just 3-5 days. We’re truly selling added value.”

Making your company irreplaceable begins with a different answer to the questionabout what your company does. “The old system of ‘we make stuff, you buy stuff ’is over” emphasizes Michael. “I believe a company’s strength is determined by thelevel of customer dependence. We must keep finding ways to increase our customers’reliance on WIKA as a valuable partner. That’s our future – and TBM is helpingus write the script.”

“We’re connecting ouroperational performancedirectly with the needs of

our customers, so we’re positioned as an essential

business partner. Our customers are buying based

on value, not price.”– Alexander Wiegand,

Chairman and Chief Executive Officer, WIKA Alexander Wiegand GmbH & Co. KG

In a lean work cell inWIKA’s Klingenberg,Germany plant: MichaelHerr, Managing Director Europe, TBM ConsultingGroup; Alexander Wiegand,Chairman and ChiefExecutive Officer, WIKAAlexander Wiegand GmbH & Co. KG.

Global competitive strategy WIKAwww.wika.de

Fast High-Variation ProductionReplace Price with Value

Leveraging Lean for Growth and Profitability9

Game-changing new product development

Hubbell Incorporatedwww.hubbell.com

“Design for LeanSigma enabled us to develop and launch the two largest product lines in our company’s 120-year history – a total of 2,200 discrete SKUs –

in less than half the time of our normal product development cycle.”– Bob Murphy, Senior Group Vice President, Hubbell Wiring Systems, Hubbell Incorporated

“This is something no other manufacturer in our industry hasever done.”Translating your lean improvement into sustained growth and competitiveadvantage is the biggest potential payoff of a LeanSigma transformation, whichHubbell began with TBM in 2001. Wiring Systems, Hubbell’s first division, had a long-established reputation as the industry’s top-of-the-line supplier.

“We identified two significant strategic gaps in our product offering,” explainsBob Murphy, Wiring Systems’ senior group vice president. “In 2004, we receivedthe go-ahead to self-develop both. One alone would have been a mammothundertaking, not to mention both together. We decided to use TBM’s Design forLeanSigma process, which another division had utilized to quickly develop abreakthrough new product.”

With TBM’s guidance, Hubbell formed two dedicated product teams. “In thepast,” says Bob, “one function would throw the project over the wall to the nextgroup. Instead, we had all disciplines working as a team, in the same location,through the entire process – from Voice of the Customer and concept to packagingand delivery. Each project was managed as a team, rather than by individual disciplines, with everyone committed to a specific timeline. We got feedbackinstantly and made prompt decisions. It was totally collaborative.”

Added Kevin Mallory, who headed up the residential product line team, “We hadno preconceived notion of what the new product line would look like. Each teammember collected Voice of the Customer input related to their function. Based on that input, we decided to differentiate through incremental improvements.One might not be a knock-out punch, but together we had a clear, defendableadvantage over our competitors.”

“We’ve transformed the business,” Bob concludes, “into a full-line supplier that cansell profitably at every price point. Before, we would have developed these twoproduct lines in sequence, with each taking two to three years. We developed andcommercialized both concurrently in just 24 months – at far less cost and withhigh-quality innovative products that could immediately be produced efficientlyand flexibly. That’s a great story.”In a Hubbell product development “war

room”: Bill Schwartz, Executive VicePresident, TBM Consulting Group; HubbellWiring Systems’ Bob Murphy, SeniorGroup Vice President; Brian McGlone,Senior Vice President, Marketing andSales; Rajiv Katwala, Section Head,Residential Devices Design Engineering;John Lamoureux, Section Manager,Hubbell Asia Plant Support; Kevin Mallory,Vice President, Residential Markets.

Design for LeanSigmaConcurrent Product Development

Market Leadership

11

“Those who say it cannot be done…should not interrupt the persondoing it.”“That gives you a pretty good idea how our team feels about process improve-ment,” observes Jeff Ruiter, referring to the Chinese proverb posted on the door of the Kaizen/LeanSigma “war room” in EDS’ Des Moines distribution and fulfillment center. “We may run into a brick wall, but we’re always going to figure out a way to the next level, fast. Guidon has been a huge contributorto our engaged, can-do culture.”

Guidon Performance Solutions, TBM’s service industry and public sector practice,works with healthcare institutions, financial service organizations, governmentagencies, information technology and other service organizations. This EDS

facility began its LeanSigma transformation with Guidon in 2005. “We handle awide range of business process outsourcing for our customers – from processingand fulfilling orders to warehousing and managing their inventories,” adds Jeff.“Our performance and efficiency reflect directly on our customers’ reputations– and how competitively we can sell our services. So it’s imperative to keepimproving quality, cost and delivery.”

“Guidon provides a unique toolset, using LeanSigma methodology, that’stremendously effective at generating rapid improvement in service environments,from office processes to distribution and fulfillment.” Part of that toolset is theGuidon High Performance Culture (GuidonHPC™), which simultaneously drivesthree critical improvement elements: culture change, performance managementand talent development.

To date, Jeff ’s team has conducted over 250 Sigma Kaizen Breakthrough events,with 93% full-time employee participation, turning the operation into a solidprofit center. Units per labor hour are up almost 70%, accompanied by majorimprovements in accuracy and first-pass yield. Cycle time and floor space havebeen cut over 30%. “Guidon is also helping us translate that improvement intoenhanced value and innovation for our customers, which in turn generates revenuegrowth for us. As space and resources are freed up, we’re able to add new servicesand value that our competitors can’t.”

“To the unknowing eye, many business processes seem almost invisible. A finger hits a key to input an order, but what happens next? Guidon helps us see every step – so we can quickly evaluate and improve the entire process.”– Jeff Ruiter, Director of Demand Management Distribution, BPO Service Delivery US, EDS

Value-Stream MappingTime-Based Strategies

High Performance Culture

In the EDS “war room”: Larry Mead,Co-founder and Vice President, GuidonPerformance Solutions; Jeff Ruiter,Director of Demand ManagementDistribution, BPO Service Delivery US,EDS; and members of the EDS Kaizen/LeanSigma office brainstorm their nexthigh-impact improvement target.

LeanSigma transformation in the service sector

Electronic Data Systems(EDS)www.eds.com

13

“We set stretch goals two years agothat each of my presidents thoughtwere ludicrous...”“And we’ve exceeded them every year,” says Dave Westgate, president and chiefexecutive officer of privately-held Jason Incorporated, a global diversified manufacturing company headquartered in Milwaukee, Wisconsin. “We’veincreased profitability 40% each year, recovered over 200,000 square feet ofmanufacturing space, drastically reduced inventories and added hundreds ofmillions in revenue.”

Jason began working with TBM in 2005. “We weren’t realizing our intrinsicvalue as a public company,” adds Dave. “Effective private owners like oursestablish aggressive goals – we basically had a two-year window to execute afive-year plan for transforming the company. TBM is very comfortable in situations like this. They immediately began to show us, hands on, how to usethe Policy Deployment process and LeanSigma methodologies to quickly driveoperational excellence and culture change throughout our five businesses.”

“Policy Deployment has been critical. It helps us identify what’s really importantto the company – the vital few objectives that our lives depend on. Moreimportantly, it tells us what we should not be focusing our resources on. We alsouse it as a communications tool to cascade those objectives down through eachlevel of the organization, so everyone is focused on what we need to do. AndLeanSigma processes provide the speed and toolsets for achieving and sustainingoperational excellence, the foundation for profitable organic growth.”

Today, Jason is either the North American or global leader in 90% of its nicheproducts. “The active example set by my entire management team has beenessential. One of us is always on a kaizen team, on a shift-change walkthroughor involved in some other activity with our workers – to demonstrate howimportant this is for all of us. It’s a journey that’s never done because substantialimprovement opportunities always exist.”

“If we don’t live and breathe our LeanSigma

transformation from the top,it’ll never work. It has to be led by our entire management team. For

culture change to take hold,our people need to see thatwe’re passionate about lean

and actively involved.”– David Westgate,

President and Chief Executive Officer,Jason Incorporated

On the shop floor at MilscoManufacturing, a Jasonbusiness and major supplierto Harley-Davidson®

motorcycles since 1934. Left to right: Gary Hourselt,Executive Vice President,TBM; Jerry Bole, President of Milsco; David Westgate,President and CEO of JasonIncorporated.

Rapid value creation Jason Incorporatedwww.jasoninc.com

Lean LeadershipPolicy Deployment

Rapid Culture Change

15

Responding to foreign competition

Sealy Corporationwww.sealy.com

“Keeping production in the U.S.isn’t only patriotic, it’s fundamentalto our business strategy.”“If you walk through any of our customers’ warehouses,” says Sealy’s MikeHofmann, executive vice president of operations for North America, “you’ll seethat over half their inventory says ‘made in China.’ We could have jumped onthat bandwagon, but felt that we could build a far more powerful competitivemodel, with TBM’s help.”

Sealy began their LeanSigma transformation in a strong position, as the world’slargest bedding manufacturer, holding the number-one U.S. market share for over20 years. However, their 26 factories in North America were typical of the entireindustry – inefficient batch and queue piece-rate production with mountains ofinventory. “So far, we’ve cut total inventory 62%,” states Shailesh Patel. “For abusiness our size, a one-day reduction equates to about $1.5 million in freed-up cash.”

A focus on using LeanSigma principles, kaizen events and Managing for DailyImprovement (MDI) to drive rapid improvement and culture change has been ahallmark of Sealy’s initiative. All critical metrics are posted on shop floor SQSCM

boards (Safety, Quality, Service, Cost, Morale), as part of the MDI discipline.Asked how lean and MDI have changed his environment, one long-time Sealysupervisor replied, “A year ago, if you had asked me how we were doing at anygiven point, I couldn’t tell you. Now I know.”

“Our regional manufacturing strategy is about improving the workplace,encouraging innovation – and producing great products close to our customers,”adds Mike. “We’re using lean to drive standardization and eliminate wastethroughout our supply chain, with TBM as our trainer and catalyst. We havelots of work ahead of us, but we’ll only become more competitive as our journey continues.”

In Sealy’s Batavia, Illinois mattress factory: Don Pflug, Plant Manager;Carl Deeley, Director – US Consulting,TBM Consulting Group; Shailesh Patel,Vice President Operations, CentralRegion, Sealy Corporation.

“Over 85% of our customers are within 300 miles of one of our manufacturing facilities. Our foreign competitors quote eight to ten week lead times. We build customized products to order in 48 to 72 hours, without any finished goods inventory. Who’s got the advantage?”– Shailesh Patel, Vice President Operations, Central Region, Sealy Corporation

Managing for Daily ImprovementVisual Management

Mixed-Model Production

17

“With this training, you can leadyour own LeanSigma transformation,anywhere en el mundo.”LeanSigma leadership and the ability to drive and sustain culture change are

essential foundations of a successful lean transformation. That challenge is

magnified when the transformation involves multiple countries and languages,

as it does for A.O. Smith, a leading global manufacturer of electric motors.

Mike Mills, manager of continuous improvement, recalls, “We wanted to beself-sufficient, to train our own team of ‘Value Process Champions’ who wouldconduct regular kaizen events and be the front line of our LeanSigma transfor-mation.” A.O. Smith began their self-driven transformation in late 2004.

“One of our fundamental values,” says Anand Sharma, TBM chairman, “is toalways teach you everything we know. We formalized our hands-on improvementknowledge into a curriculum of essential lean learning for each stage of yourLeanSigma transformation. That learning is absolutely critical to the success ofyour initiative, whether you get it from TBM’s LeanSigma Institute workshops orsomewhere else.”

“We felt TBM had the strongest training program, with the real-world applicationof lean tools our champions would use every day,” adds Mike. “First, our entiremanagement team and one Value Process Champion from each plant attended TBM’sfoundational lean-immersion workshop, Quest for the Perfect Engine. Then we putevery champion through four other intensive workshops, what I call TBM’s ‘self-reliance package’: Kaizen Breakthrough Experience, Kaizen Promotion Office, ShopFloor Kaizen Breakthrough Instructor Training and Managing for Daily Improvement.”This training, conducted in both English and Spanish, was completed in June 2005.

“We hit the ground running”, says Mike. “Our champions ran 145 shop floorand business process kaizen events in 2005 and almost 300 in 2006. We’veimplemented the same model in China, with TBM’s China office giving ourchampions the identical training in Mandarin and English. The efficiencies and performance improvement we’ve achieved have been outstanding. We bringin TBM periodically to assess our progress and suggest ways to get better, butotherwise, we’re running our transformation ourselves.”

Rocio Hernandez, one of A.O. Smith’s TBM-trained Value Process Champions,leading a Kaizen team in A.O. Smith’s IG Mex #6 plant in Juarez, Mexico.

“TBM helped us build the infrastructure of our LeanSigma improvement program – and trained and certified our Value Process Champions, who are now spearheading

our lean transformation in 30 locations worldwide, in four languages.”– Fred Stell-Smith, Continuous Improvement/Kaizen Manager for Mexico, A.O. Smith Electrical Products Company

A roadmap to self-sufficientLeanSigma leadership

A.O. Smith ElectricalProducts Companywww.aosmithmotors.com

Essential LeanSigma LearningKnowledge Transfer

Culture-Specific TrainingMulti-Lingual Curriculum

19

Creating competitive advantagewith a lean, synchronized

value chain

Argos UKwww.argos.co.uk

“The value chain contains thelargest chunk of total costs andlead time… but is often the weakestlink in a LeanSigma transformation.”Ninety-five percent of the United Kingdom’s population lives within 10 miles ofan Argos store. Argos sells all types of merchandise, from toys and electronics tojewelry and furniture. Like most major retailers today, they offer a multi-channelapproach, serving over 130 million customers a year in nearly 700 stores, as wellas handling approximately four million orders either online or over the phone.

“Once you could sell speed or price,” says Alistair Sercombe, Argos’ head ofoperational excellence. “Now customers routinely expect both. The performanceof our retail, supply and distribution operations are all intertwined in that customer satisfaction equation.” Argos started working with TBM in 2004,focused on building operational excellence into its new National DistributionCentre. After saving more than $2 million at this facility in the first 18 months,Argos expanded its Lean Value Chain focus to other areas:

— Regional distribution centers: product returns, goods received and dispatch— Home delivery distribution centers: small parts put-away, returns and picking— Retail stores: customer picking, returns and repairs

“We’re in the early stages, but a cultural shift is definitely taking place,” addsAlistair. “People are generating new ideas and building enthusiasm for involve-ment and improvement, not because it’s a top management edict, but becausethey see the value.” One recent benefit: by cutting truck-loading time by 75%

and reducing the number of loading docks required by 55%, Argos can nowmeet anticipated growth targets without new warehouse facilities.

The Lean Value Chain, the second ongoing phase of a LeanSigma transformation,eliminates excess pipeline inventory, long lead times, erratic demand, poor on-time delivery, price variances and limited visibility. By opening the entire chain’seyes to all the processes involved in getting their products to the customer – andthen building excellence into all those areas – companies create the power totransform their competitive landscape.

“When a customer is looking for a product we normally carry – and we don’t have it for them – they don’t care if the problem is in our warehouse, with one of our suppliers, or someone who put it on the wrong shelf. It’s all Argos to them.”– Alistair Sercombe, Head of Operational Excellence, Argos

At Argos’ Magna Park DistributionCentre: Richard Holland, Managing

Director – UK, TBM ConsultingGroup; Alistair Sercombe, Head of

Operational Excellence, Argos.

Demand ManagementOrder Fulfillment

Supply ManagementBusiness Planning and Scheduling

21

“What we’ve achieved isn’t aboutthe company’s management.”“Each person here deserves credit. All of us are proactively engaged in theimprovement process,” points out Denny Van Zanten, Wood Division president.“We do MDI walkthroughs like this at every shift change to share key metrics.Each team member always knows where we stand and what we need to accom-plish. It’s an essential discipline that maintains improvement momentum – andreinforces how serious we are about it.”

Lack of sustained culture change is the number-one reason LeanSigma initiativesfail to take hold or lose momentum. Pella, a leading manufacturer of premium-quality windows and doors, is one of the business world’s outstanding examplesof the impact of culture change in a lean transformation, which they began withTBM in 1993. Using two of the most powerful drivers of rapid improvement andculture change – Kaizen Breakthrough events and Managing for Daily Improvement(MDI) – Pella has achieved operational excellence, which they are extendingacross their value chain.

“It’s a testament to the quality and initiative of our people, at every level,” saysVan Zanten. “Together with TBM, we’ve built a positive, can-do culture, whichengages everyone. Our people know they’re leading our transformation – thatit means better conditions for them, improved company performance and moresatisfied customers.”

Culture change is a primary focus of TBM’s teaching and implementation work,because it is such an essential component of success. Pella has been at it for 15 years, Toyota over 50. Reinforces Mel Haught, Pella’s president and chief executive officer, “I don’t think you can ever relax or assume that you’ve got it.”

An early morning production line meeting andwalk through in the Pella, Iowa plant: Pella’sDenny Van Zanten with Pella team members.

“Everyone at Pella wants to improve every day. Continuous improvement is embedded in our culture. It’s the way we do business. It’s how all of us think.”– Denny Van Zanten, President, Wood Division, Pella Corporation

Culture Change Long-Term Sustainment

Managing for Daily Improvement (MDI)

Sustaining a culture of continuous improvement

Pella Corporationwww.pella.com

23

“Traditional government doesn’tsee taxpayers as customers theyneed to satisfy or compete for.”Ask people about their state government and chances are you’ll get an earfulabout long lines, infuriating waits and illogical levels of bureaucracy. If you’rethe only game in town, what difference does it make how fast or innovativeyou are? “Every state agency competes for visibility, constituent support andscarce resources,” observes Teresa Hay McMahon, performance results directorin Iowa’s Department of Management. “You may be the only department issuing a certain permit, but you’ve got plenty of competition.”

When Iowa began its LeanSigma transformation with Guidon PerformanceSolutions, TBM’s service industry and public sector practice, collaborationamong state agencies was alien to the culture. The first Sigma Kaizen eventfocused on the air quality permit process. At 62 days, it was one of the short-est in the country, but the one-week event reduced it to 12 days, with processsteps cut 70%. The next one-week event decreased the lead time of anotherpermitting process from 28 to 4.5 months.

So far, Iowa has conducted more than 70 Sigma Kaizen events in 18 departments– and similar dramatic examples of new efficiency and responsiveness are nowcommonplace. Says Teresa, “It’s human nature to be defensive about the wayyou’ve always done things. Guidon’s approach removes personalities and allowsworkers to step out of the process, so they can see and implement far bettersolutions. And it helps them empathize with the needs of their ultimate customer, the taxpayer.”

With LeanSigma tools designed for the public sector, Guidon helps state governments quickly build efficiency and performance into their culture.Concludes Teresa, “We can be more responsive to constituents, minimize theneed to raise taxes and deploy scarce resources where they serve the publicbest. It’s a big win for everyone.”

“We want Iowans to know they are getting the most effective, responsive state government possible – that we are customer- and

results-driven and work hard for them every day.”– Teresa Hay McMahon, Performance Results Director, Iowa Department of Management

LeanSigma transformation in the public sector

State of Iowawww.lean.iowa.gov

Competing for Scarce ResourcesPublic Sector Service Excellence

In the Senate Chamber of the IowaState Capitol building: Teresa Hay

McMahon, Performance ResultsDirector, Iowa Department of

Management; Brent Jameson,Director of Business Development,

Guidon Performance Solutions;Anita Walker, former Director, Iowa

Department of Cultural Affairs.

25

27

Awareness. Skill Development.Skill Mastery. Peer Networking.100% Satisfaction Guarantee.Lean leadership and culture change are the foundation for every step of a successful LeanSigma transformation. Unless your entire organization under-stands and rallies behind your initiative – and is proficient with the criticaltools and techniques required to drive fast, continuous improvement – it isunlikely you will succeed. The TBM LeanSigma Institute was formed to providethat essential learning and motivation – and facilitate its rapid, efficient transferto every part of your organization.

All the clients in this brochure have relied on the Institute’s experience-basedlearning at different phases of their transformation… from basic awarenesstraining for senior management… to skill development and skill mastery foroperational teams. Each of our instructors is a senior TBM consultant who’sspent more than ten years, hands-on, actually implementing the LeanSigmaprinciples they’re teaching, grounded in the roots of the Toyota ProductionSystem. Many are widely-recognized experts. They spend most of the year inthe field, quickly leading client teams to dramatic performance improvement,enabling them to bring a wealth of real-world experience to every workshop.

Introduce the concepts of LeanSigma to multiple levels of management andoperations… and give them a clear understanding of the road ahead. Advancenew skill sets and internal capabilities to create teams of action-orientedchange agents who will help your organization travel further, faster. Buildleadership skills. And create the rock-solid internal capability you need forsustained innovation, growth and competitive advantage.

The TBM LeanSigma Institute provides essential LeanSigmaknowledge and support at each stage of your transformation,for every level of your organization.

TBM LeanSigma InstituteKnowledgeTransfer

Workshops at the TBM LeanSigma InstituteThe TBM LeanSigma Institute conducts a comprehensive curriculum of interactive,instructor-led workshops at our headquartersin Durham, North Carolina and at confer-ence centers and hotels around the world…to position each level of your organizationfor success at every stage of your LeanSigmatransformation.

Workshops in live, host-company operationsNothing reinforces and builds upon classroom learning more effectively thanthe hands-on, real-life application of critical LeanSigma tools and techniques…conducted in operations similar to yourown, on an actual manufacturing or continuous process plant floor or in abusiness process or service environment.

On-site, dedicated workshopsTBM on-site workshops bring our fulllearning curriculum right to your facility, orthe location of your choice, tailored to yourneeds and objectives. A cost-effective alter-native if you have six or more individualsto train.

Customized learningWork directly with senior TBM LeanSigmaInstitute consultants to develop a trainingcurriculum customized to your uniqueenterprise needs and culture. Provides theskills, tools and roadmap for a self-driventransformation, similar to the A.O. Smithstory on pages 18-19 of this brochure.

Online learningTBM’s innovative Online Learning Centerdelivers LeanSigma learning globally, atinternet speed, providing a convenient,cost-effective way to train an infinitenumber of employees in a short time. Ourapproach combines interactive exerciseswith simulations to reinforce key learning…and get everyone quickly speaking the sameimprovement language.

Materials licensing with 24/7 online accessQuick and easy access to TBM’s extensivelibrary of training materials… online, inseven languages. Immediately downloadmaterials you need to conduct training atlocal facilities worldwide… and even viewthe latest report-outs for LeanSigma eventswithin your organization.

Multinational, multilingualUniquely qualified to serve the training needs of multinational clients, the TBM

LeanSigma Institute provides a comprehensive global curriculum in multiple languages, from offices in North and South America, Europe, Asia and Australia…to help our clients implement consistently, across multiple cultures.

“Tell me and I’ll forget. Show me and I’llremember. Involve me and I’ll understand.”– Native American Proverb

“If I had eight hours to chop down a tree, I'd spend six sharpening my axe.”– Abraham Lincoln

“If you have knowledge, let others light their candles with it.”– Winston Churchill

Lean “Best Practice” conferencesPeer networking is an extremely effectiveform of knowledge transfer. TBM holdsseveral “Best Practice” conferences each year,designed to encourage experiential learningfrom peers and outside experts around theworld, who share challenges and successesfrom their LeanSigma journeys.

Essential training and development for each stage of your Lean journey

TBM Consultants (India) Private Ltd.Technopolis, Sector-54DLF (Golf Course Road)Gurgaon, India 122 002Tel +91.124.437.5995

TBM MexicoCalzada San Pedro #250 Nte.Edificio HQ

Col. Miravalle Monterrey, NL CP 64660

Mexico

Tel 52.81.50.00.91.36

Fax 52.81.81.24.00.69

TBM United Kingdom3 Gleneagles HouseVernon GateDerby DE1 1UP

United KingdomTel 44.1332.367378

Fax 44.1332.367.379

Guidon Performance Solutions2550 N. Thunderbird CircleSuite 317

Mesa, AZ 85215

Tel 866.986.4414

Fax 480.357.6324

TBM Corporate Headquarters4400 Ben Franklin Blvd. Durham, NC 27704

Tel 800.438.5535

Fax 919.471.5135

TBM BrazilAvenida Moema 170, cj - 45/46

São Paulo – S.P.Brazil 04077-020

Tel 55.11.5051.7490

Fax 55.11.5052.0082

TBM ChinaRoom 3, 3/F, POS PLAZA

1600 Century Avenue Pudong Shanghai, 200122

P.R. China Tel: 86.21.6888.6671

Fax: 86.21.6888.6672

TBM Europe29, Route de Pré-Bois 1215 Geneva 15

Switzerland Tel 41.22.710.77.70

Fax 41.22.710.77.71

www.tbmcg.com

www.guidonps.com

Copyright 2008 – LeanSigma®, TBM and the TBM logo are registered trademarks of TBM Consulting Group, Inc.

Consulting Group

®TBM

TBM Consulting Group4400 Ben Franklin Blvd.Durham, NC 27704800.438.5535www.tbmcg.com