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Lean Supplier Initiative: Freudenberg-NOK Helps its Suppliers Learn 'Lean'

20 June 2000

Lean Supplier Initiative: Freudenberg-NOK Helps its Suppliers Learn 'Lean'

    PLYMOUTH, Mich. - Building upon its remarkable success in implementing lean 
practices to boost quality, productivity and responsiveness, Freudenberg-NOK is 
now integrating its strategic suppliers into the lean culture through its Lean 
Supplier Initiative.

    According to Thomas A. Faust, Freudenberg-NOK's vice president of
GROWTTH(R) (Get Rid Of Waste Through Team Harmony) and continuous improvement,
the company has already enrolled 30 key suppliers into the program and the
results are meeting expectations with double-digit improvements in key
metrics.

    "Through our Lean Supplier Initiative, we are helping our suppliers to
'jumpstart' their conversion to lean systems by sharing our extensive
experience gained over the past eight years and thousands of kaizens," Faust
said.

    "By helping suppliers learn to be lean, our Lean Supplier Initiative
benefits both of us," Faust said.  "The supplier improves its productivity,
quality and space utilization, and likely gains more business from
Freudenberg-NOK as well as other customers.  We ultimately receive a higher
quality product, better responsiveness, improved cost and a stronger supply
base, and we eliminate the need for non-value-added activities like incoming
inspections."

    "We're serious about meeting customer expectations for quality and
warranty," said Rich Uglow, Director of Procurement and Commodity Management
for Freudenberg-NOK.  "The only way to achieve this is to help our suppliers
implement the same systems that have helped many of our operations to reach
Six Sigma quality levels."

    Freudenberg-NOK has dedicated four GROWTTH managers to the Lean Supplier
Initiative and hopes to generate savings of $9 million and quality
improvements of 50 percent or more this year with targeted suppliers.

    "Freudenberg-NOK has the best system for lean that we have ever seen.
Since we have accepted lean and made it part of our practices, we have
conducted 15 kaizens," said Chris Doughty, President of Capstan Atlantic Inc.,
one of the participants in the Lean Supplier Initiative.  "With just one press
line, we experienced a 32 percent reduction in scrap, a 30 percent decline in
non-value-added steps, and the distance traveled by a diesetter was cut in
half."

    How it works

    According to Faust, the Lean Supplier Initiative program starts with a
strategic supplier who is enlightened to the power of and need for lean
systems.  This is confirmed with a visit by the supplier's top management to
Freudenberg-NOK, where they are exposed to the history of the GROWTTH program
and its accomplishments.  The purpose of the Lean Supplier Initiative is also
explained along with the approach.  Finally, the supplier's commitment to
cooperate is solicited.

    The Lean Supplier Initiative program then proceeds with a visit to the
supplier's facility by a Freudenberg-NOK GROWTTH manager, who provides an
overview of the process and of lean systems.  A product or product family is
chosen for review and the supplier's team is trained in value stream mapping.
In this process, the team reviews and maps out the entire production process
for this product, from raw material to finished product, and identifies
exactly where value-added and non-value-added steps occur.  From this "current
state" value stream map, the team identifies where lean improvement is needed.

    Once ideas for improvement are generated, a "future state" value map is
devised, as a living document that sets goals achievable in a 90-day period.
Next, an action plan is created which links the current and future state value
maps, and the supplier is charged with the tasks to be completed.  After 90
days, the Freudenberg-NOK GROWTTH manager conducts a follow-up visit to
evaluate the results obtained and update the current value stream map.  Then,
future projects are identified for the cycle to be repeated.

    Plymouth, Mich.-based Freudenberg-NOK is part of the Freudenberg and NOK
Group Companies, which have total annual sales of nearly $7 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 offer an extensive portfolio of
precision-molded products for the aerospace, appliance, business machine,
fluid power, marine, medical, off-highway equipment and recreational vehicle
markets.