Hexcel’s primary initiative to build and sustain operational excellence is our Lean Enterprise Program. The implementation started in late 1998 and continued in 1999 with a roll-out to all facilities in the US and Europe.

All Hexcel manufacturing facilities are now actively implementing Lean. Our program is based on the production system techniques first developed by Toyota, but also includes other business improvement tools such as Six Sigma and ISO Quality Management Systems. Among other things, this program is designed to identify and eliminate all forms of non-value-added time and activity in both production and office processes.

One Lean tool being widely used is the Rapid Improvement Workshop (RIW). These workshops, usually lasting one week, are designed to achieve dramatic operational improvements. RIWs focus on improving the flow of work through manufacturing and administrative processes, resulting in lower inventories, faster cycle times, lower direct and indirect labor requirements and improved quality. RIWs typically are sponsored by a member of management, but are driven by employees responsible for the process targeted for improvement. Hexcel has achieved dramatic improvements in a number of processes. For example, one RIW in our honeycomb production facility in Casa Grande, Arizona, produced a 98% reduction in work-in-process (WIP) inventory, a 98% reduction in manufacturing cycle time and a 36% reduction in the labor hours required to perform the process. At our plant in Pottsville, Pennsylvania, four RIWs averaged a 49% reduction in WIP and a 65% reduction in cycle time. Improvements of 50% to 80% are typical for a one-week event. A total of 60 workshops were conducted at our various plants in 1999. We plan to undertake 150 events in 2000, focused on further improvements in manufacturing and key office support activities. These RIWs will not only be within single plants, but also with our customers, suppliers and between our business units.

In addition to Lean, Hexcel is also embarking on initiatives to reengineer support functions across the company. For 2000, we have targeted human resources and procurement. We will use best practices, e-commerce tools and other techniques to reshape how we perform these functions. We are confident that, through these and other initiatives, we will improve the way we interact with customers and suppliers and provide our people with the tools they need to be even more effective.