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The Freudenberg and NOK Group Surpasses Another Kaizen Milestone

29 February 2000

14,000 and Counting: The Freudenberg and NOK Group Surpasses Another Kaizen Milestone

    PLYMOUTH, Mich., Feb. 28 -- In its ongoing quest for
perfection, the global Freudenberg and NOK Group has surpassed a major
milestone no other automotive supplier has reached -- its 14,000th kaizen
(continuous improvement) project, according to Joseph C. Day,
Freudenberg-NOK's chairman and CEO.
    "Although we are proud of achieving this milestone, we're even prouder of
the results that our kaizens generate -- more robust, reliable products that
help automakers cut warranty costs," Day said.  "The kaizens have boosted
productivity dramatically, but more importantly, they have created a
manufacturing environment in which Freudenberg-NOK's defective parts per
million (PPM) rates have dropped from about 1,300 in 1992 to less than 100 in
the fourth quarter of 1999 on an automotive production rate of 2.0 billion
components per year."
    Day said Freudenberg-NOK's PPM targets for 2000 are 25 or less, as the
company continues to improve its processes through kaizen activities.
    According to Day, Freudenberg-NOK's kaizens have doubled labor
productivity and improved product quality, delivery, waste reduction, customer
satisfaction and global competitiveness.  In addition, they have increased
factory floor space utilization by 200 percent, doubled inventory turns and
improved margin rates by 14 percent since 1992.
    During 1999, Freudenberg-NOK conducted more than 1,100 kaizens in the
Americas alone.
    In addition, Freudenberg-NOK has conducted hundreds of poka-yoke ("mistake
proofing") projects to prevent defects in manufacturing -- which have yielded
more robust products, higher reliability in vehicle systems and, ultimately, a
cost of quality that has dropped more than 75 percent since 1992.
    Day said the robustness of the Freudenberg and NOK Group's products are
best demonstrated by warranty failure rates in Japan of .03/1000 to .07/1000.
These rates have now been duplicated in North America and Europe for Japanese
vehicles due to the interchangeability of products and standardized
manufacturing methods practiced by the Freudenberg and NOK Group Companies.
    "Our commitment as a Technology Specialist extends beyond the development
and perfection of new product and material technologies ... to the perfection
of manufacturing processes and supply chain business practices," Day said.
"It is a never-ending journey for our entire organization around the world."
    North American vehicle manufacturers and tier-one systems suppliers can
dramatically reduce their warranty costs as part of the total cost-down
efforts, according to Day.  For example, on three recent projects for North
American customers, Freudenberg-NOK reduced its customers' warranty costs by
$6 million, $15 million and $45 million.  On current projects such as
powertrain-sealing packages, the warranty targets are lower by as much as
50 to 80 percent.
    "These examples are the direct result of our culture of continuous
improvement -- which yields the lowest PPM rates and reliable, robust and
consistent products and drives lower warranty costs and higher customer
satisfaction," Day said.
    Plymouth, Mich.-based Freudenberg-NOK is part of the Freudenberg and NOK
Group Companies, which have total annual sales of more than $6.5 billion.
With global automotive sales of approximately $4 billion, the Freudenberg and
NOK Group ranks among the world's top 20 automotive suppliers and is one of
only eight in the top 100 that has global balance in each of the three major
automotive markets -- Asia, Europe and North America.
    Through a global network of facilities spanning 27 countries with some
23,000 automotive employees worldwide, the supplier group offers its
automotive customers globally integrated products, including sealing packages
for transmissions, engines, brakes, axles and steering, NVH (noise, vibration
and harshness) components and packages, and all rubber, plastic and PTFE
components for suspension, electrical and fuel systems.
    The Freudenberg and NOK Group also offers an extensive portfolio of
precision-molded products for the aerospace, appliance, business machine,
fluid power, marine, medical, off-highway equipment and recreational vehicle
markets.  For more information, visit the Freudenberg-NOK web site at
http://www.freudenberg-nok.com