10 May, 2008 Sabancı’s Six Sigma Journey Ersoy Nisanoğlu, İrfan Özlem Alikaya, Rıza Murat Yılmaz,

2 Six Sigma has been launched twice, in 2004 and in “3005 Program” started  Targeted 30% reduction in the unit costs by the end of 2005  The start of a continuous improvement journey with the strategic objective of achieving “world competitiveness” or differentiation by the lowest unit cost  The need to provide the organization with the right tools, techniques and methodology was identified Six Sigma initiated and initial assessment was done  Initial assessments of Holding companies  Classification the companies by their improvement strategy whether being data driven or knowledge base. 1st and 2nd Wave Black Belts trained SABE team initiate new approach to Six Sigma  Formation of a new roadmap  The “Dark” Green Belts : the base of the Six Sigma deployment Lean Six Sigma Methodology is introduced  With the consideration the portfolio of businesses that Sabanci Holding, the need of additional methodologies arose  Addition of the “Lean Approach” to the Six Sigma methodology  The first Six Sigma Black Belt training (1st wave Black Belt training) was started in May 2005 at Beksa, Brisa, Gidasa Marsa Piyale, Advansa, Akcansa and Bossa.  By the end of the same year 2nd wave Black Belt training was completed (Advansa – 2000; Kordsa – 2002)

3 1 st Sabancı Black Belt Training 2 nd Sabancı Black Belt Training 3 rd Sabancı Black Belt & Green Belt Trainings Kordsa Green Belt Training 126 Green Belts, 75 Black Belts Since 2000

4 Standardization Building Infrastructure - 6 month - 5 month - 3 month- 1 month - 4 month - 2 month Deployment Phases Preparation - 7 month  Training Requirements  Documentation  Organizational Structure  Communication  Software HR & Finance Integration  HR & Finance Responsibilities  Role Definitions

5 Deployment Phases Initialization Development Deployment Management MEASURE  Executive Awareness Building  Desinging Infrastructure  Establish KPI’s  Budgeting  Selecting Candidates  Selection of Projects  Scheduling Trainings 1 st Year KICK OFF  1st Wave Trainings  Rewards & Recognition  Upgrade Trainings  Financial Validation of Projects & Effect on Next Year Budget 2 nd Year  Include Customers and Suppliers  2nd Wave Trainings  Rewards & Recognition  Validation of 2nd Wave Projects  Certification of Belts  3rd Wave Trainings  Review Financial Benefit & Effect on Next Year Budget  Rewards & Recognition 3 rd Year Next  Leading change management  Upgrade Trainings  Financial Validation of Projects & Effect on Next Year Budget  Training Cycles  Rewards & Recognition

6 What is Next? Development of the project time line Initilization, Development, Deployment & Management Phases Preparing the Project report Preparation Phase  Approval of the Project and the time line of the project  Collecting the feedbacks and integrating it to the project  Appoinment of the necessary resources for the project

7 21 Advansa & 19 Kordsa Projects 21 Projects including 1 st Wave Projects 33 Projects including 2 nd and 3 rd Wave Projects 91 Projects & Gains* will be realized next year $ realized gains from 185 projects since 2000 * Expected Gains cover Pilsa and Gidasa projects; however at the moment the progress of these Companies’ projects is unknown.

8 8 However Research Show That Only 16 % of Change Programs are Successfully Delivered Most Transformations Fail Usually Due To Poor Ownership Building Source: European Lean Six Sigma Summit Amsterdam, Anderson Mannson - Ericson 16% Successful (delivered on time and on budget)  Clear statement of requirements  User involvement  Exec. Mgmt. support  Proper training 31% Cancelled  Business Case invalid  Funding  Prioritization 53% Underperform (late, over budget and / or deliver less than the requirement)  Lack of Exec. Mgmt. support & comm.  Lack of consistent follow-through  Lack of implementation capacity  Unclear, unrealistic objectives  Incomplete requirements  Poor communications CHANGE MANAGEMENT

9 THANK YOU