WCBF 2nd Annual Conference Design for Six Sigma*September 13-14, 2006

* Six Sigma is a Registered Trademark and Service Mark of Motorola, Inc. ® Registered Trademark, Ashland

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DfSS For Business Transformation

Ashland Overview

Global Technology and Marketing

Design for Six Sigma (DfSS) Implementation

Portfolio Management

Advanced Tools and Examples

Takeaways

Benefits

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iew FORTUNE 500

company with sales of $9.3 billion*

Listed on NYSE: Symbol ASH

* 2005 Results FORTUNE 500 is a Registered Trademark, Time Inc.

ChemicalChemical TransportationTransportationConstructionConstruction

$2.5 Billion*$1.7 Billion*$1.3 Billion*$3.8 Billion*

•38 manufacturing facilities owned and operated worldwide• 12 manufacturing joint ventures in 19 countries

Ashland Distribution

AshlandPerformance

Materials

AshlandWater

Technologies

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Ashland Performance MaterialsMarket Overview

Specialty Polymers & Adhesives

Composite Polymers

CastingSolutions

Performance MaterialsBusiness Units

Markets

Consumer

Packaging & Labels

Building & Construction

Transportation

Marine

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Global Technology Center – Dublin, Ohio

• Adhesives• Composite Resins• Gelcoats• Foundry Binders• Water Technologies• Lubricant Technologies

An optimum organizational structure that enables aggressive transformation of concepts into market-driven, customer-focused technologies

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Implementation Strategy

Business integrated pitch to senior management Multiple vendors evaluated for training – selected Winovia Talked with all functions regarding current processes Customized training for Ashland from input on functions Aligned business functions for growth and market focus Project portfolio review process installed Customized templates and tools for Ashland

Registered Trademark, Winovia, LLC

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Implementation Strategy

DfSS training rolled out to VPs, directors and managers first Trained all technology exempts and some technicians Trained Marketing, Commercial, Manufacturing, Legal

Communications in Week One− Week 1 DfSS Overview and Tollgate Training (Winovia)− Week 2 Statistical Tools and DOE for GBs (MBBs)− Week 3 Advanced Statistics and DOE for BBs (MBBs)

Developed scorecards (metrics) for DfSS and organization Imbedded DfSS process in global ISO process

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Implementation Strategy

CTO and directors (Marketing and Technology) owned implementation, portfolios and business connection

Identified early adaptors in marketing to be black belts (leads) Master black belts drove training, implementation, mentoring black

belts and greenbelts Black belts (in business groups) focus on project tollgates and

mentoring GBs on tools Kellogg Marketing Strategy program for advanced marketing skills

(Define Stage) Regular project portfolio reviews by directors & VPs, portfolio

summary presented to senior VPs

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Global MarketingGlobal Marketing

Building & Building & ConstructionConstruction MarineMarine TransportationTransportation

Global M

anufacturing

Custom

er FocusedC

ustomer Focused

AmericasAmericas

EuropeEurope

AsiaAsia

Global TechnologyGlobal Technology

Business AlignmentGlobal Marketing & Technology Management

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Composites Development Portfolio

Strong Portfolio of Developmental Programs Strong Portfolio of Developmental Programs That Meet Composite’s Strategic Growth Focus in Premium MarketsThat Meet Composite’s Strategic Growth Focus in Premium Markets

Strategic/Marketing Plan

Global Development Portfolio

Programs/Platforms

Development Projects

Experimental Requests

Tests

Linking what we do to the bigger picture

Requires New Skill Set• Portfolio Management Skills• Broaden Platform Knowledge• Project Management Skills• Experimental Design Skills• Testing/Gauge R&R Skills

DfSS

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Portfolio Goals and Probabilities

• Understand all developmental efforts globally• Clear visibility for business leaders• Align efforts with strategic markets• Eliminate low value added efforts• Increase focus by reducing projects• Leverage platforms across global markets

Portfolio Value Should be Significantly More Than Strategic GoalPortfolio Value Should be Significantly More Than Strategic Goal

x3

x6

LSL LCL

Strategic Plan = Lower Specification Limit

Current Portfolio Value

Probability of Success

0 $150MM. .. .. .. . . ..

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2006 Commitment 2006 Commitment ““Portfolio Fits Strategic Plan”Portfolio Fits Strategic Plan”

Rank Project ListRank Project List FinancialFinancial StrategicStrategic

IdentifyIdentifyTechnology ActivitiesTechnology Activities

Bottoms Up LookBottoms Up Look

2X Projects2X Projects

1.5X Projects1.5X Projects

X ProjectsX Projects

Project Prioritization Process

3X Activities3X Activities

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D M A V I C

New Product Pipeline

Speed ToMarket

VitalityIndex

Define Measure Analyze Validate Implement Control

Type 1 New to World

Type 2 New to Ashland

Type 3 Product Line Extensions

Type 4 Cost Out / Minor Modifications

New Solutions(Method 1)

Growth PDTargets (Method 2)

Design for Six Sigma (DfSS) Execution:

Concept Through CommercializationConcept Through Commercialization

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Platforms: Linking Technology to Markets

Markets & ApplicationsMarkets & Applications

TechnologyTechnologyBuilding BlockBuilding Block

Technology PlatformTechnology Platform

TechnologyTechnologyBuilding BlockBuilding Block

TechnologyTechnologyBuilding BlockBuilding Block

TechnologyTechnologyBuilding Block Building Block

ProductProductProduct

2211

ProductD

evelopment

ProductProduct

Developm

entD

evelopment

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ProductProductProduct

2211Product

Developm

entProductProduct

Developm

entD

evelopment

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Mold Temp

Hum

idit

y

9080706050

90

85

80

75

70

Hold ValuesGelcoatTemp 70

Overlaid Contour Plot of Porosity, Film Cure

GelcoatTemp

Hum

idit

y

9080706050

90

85

80

75

70

Hold ValuesMold Temp 70

Overlaid Contour Plot of Porosity, Film Cure

A Practical Use of DfSS at the Customer

• In-mold coating commonly used in fiberglass composite applications• Unsaturated polyester normally initiated with peroxide• Cross-links through a radical generating reaction

Gelcoat

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Gelcoat DfSS Summary

When including humidity, response data is clearly explained− R² adjusted values are very good− For Porosity: 83.2 percent− For Film Cure: 100 percent− For Backside Gloss: 99.2 percent

Conditions of 70-90ºF appear to be optimum for performance

Mold temp is more critical to control than gelcoat temp

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Advanced DfSS Tools and Examples

Best optimized product example(Something we are promoting anyway)

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Key Takeaways

Size of company can be important DNA of culture is important Talk to all functions (management of change buy in) Train all functions and levels Teaching of directors, VPs and champions first Directors drive process

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Key Takeaways

Black belts should be very technical MBBs in central global technical group BB in marketing and technology (in business) No separate quality organization Portfolios owned by directors & VPs Platforms drive speed (Customer view) Focus teams on increasing

− Probability of Success (Risk Management)− Quality − Speed− Not Check List

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The Future

Further training on project management

Improved VOC training

Improved flow up/flow down models

More DfSS in management of change projects

Process focus (Resin Manufacturing Process)

Complete measurement systems analysis

− Gauge R&R plus improvement

DfSS Completely Embedded in Culture

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Benefits (Views of Management)

Significantly reduced non-value added efforts

Solid growth portfolio to meet strategic goals

Clearer understanding of marketing and technology growth efforts

Can take on larger, riskier projects by managing risk

Prediction-based quality decisions

Recognized quality system by ISO auditors