Leveraging strengths

"Lean business practices are an essential element of our supply base strategy."To be a successful supplier to the heavy-duty truck industry in the new millennium, Freudenberg-NOK is looking at ways to add value, reduce cost, and better serve its customers' needs. As a leading supplier of standard and custom-designed sealing, vibration control, and precision rubber products for the heavy-duty truck

"Lean business practices are an essential element of our supply base strategy."

To be a successful supplier to the heavy-duty truck industry in the new millennium, Freudenberg-NOK is looking at ways to add value, reduce cost, and better serve its customers' needs. As a leading supplier of standard and custom-designed sealing, vibration control, and precision rubber products for the heavy-duty truck industry, the worldwide Freudenberg and NOK Group is focusing on three areas:

* Global capability

* Warranty reduction through lean culture

* Product packages to reduce total costs

As truck makers - like automakers - go global, they need suppliers who can draw from their global resources and technical expertise to provide them with high-quality, cost-competitive, value-added products.

The Freudenberg and NOK Group has more than a global presence - it has global balance as well. We can deliver uniform - quality and interchangeable products, processes, and materials to our customers anywhere in the world, day in and day out. And we are one of only eight suppliers in the top 100 that have true global balance in each of the three major automotive markets - Asia, Europe, and North America.

With more than 23,000 employees worldwide - 6,000 in the Americas, 8,000 in Europe, and 9,000 in the Pacific Rim - the Freudenberg and NOK Group's global network spans 27 countries around the globe.

Our commitment is to focus on specialization, unique capabilities, and niche orientation by helping our customers in the trucking industry reduce total warranty costs; by designing and building more robust products that outperform the warranty requirement of the truck so there is no downtime; by focusing on our core competencies in sealing and vibration, and by passionately practicing lean manufacturing at our facilities worldwide.

At Freudenberg-NOK, lean business practices are an essential element of our supply base strategy and a major route to bringing total cost down by warranty reductions, avoidance, and ultimately elimination. And we believe the best way to drive out warranty costs - and to enhance reliability - is through the diligent practice of the Toyota Production System. We've proven it yields greater productivity, more predictable and robust products, elimination of warranty costs, and enhanced customer loyalty.

For example, we recently saved systems suppliers in the U.S. $6 million, $15 million, and $48 million respectively on steering, axle, and compressor warranty costs. And on a 2001 engine sealing system for one automaker, we expect the total savings to exceed $50 million.

We're also applying another cost-down approach - total system sealing product packages. This approach, first pioneered by our European partner on a diesel engine in 1994, consolidates seal sourcing on engine, transmission, axles, and brake systems for single-point accountability. We help reduce those multiple sourcing expenses and consolidate as many as 70 parts previously supplied by numerous suppliers. We also help save floor space, labor, inventory, administration, and project coordination costs.

Freudenberg-NOK has built its reputation on two of the world's leading resources in sealing technology and vibration product applications - Freudenberg & Co. of Germany and NOK Corp. of Japan - leveraging global standardization of design, materials, processes, and research and development to create best-in-class solutions.

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