1. Matrix Certification Voith Siemens: three introducing remarks Customers ask for information on role of OUs within VS regarding: its financial and technical capacity, its position relative to headquarter and other OUs, its QM-System. Complexity of projects becomes increasingly demanding: growing need for internal collaboration between OUs, complex interfaces with high penalties for delay and performance, continuing cost pressure from the market side.  Need for optimization of resources and processes / interfaces. VS-Strategy: Matrix Certification based on new VS Management System Matrix Certification among top management goals of all OU Presidents  Everybody is asked to do her / his best to make Matrix Certification happen.

2. What is a Matrix Certificate ? It certifies the compliance of a Management System with an Inter- national Quality Standard for an entire company with several affiliates. Example Voith Siemens: Company:VSH + all VS-OUs International Quality Standard: ISO 9001:2000 Management System:VS GDDs + Voith GDs Example for Matrix „Business Function vs. OUs“: GDD = Group Division Directive GD = Group Directive

3. Matrix Certificate: how does it look like ? One main certificate for Voith Siemens Hydro: all VS OUs listed all business functions listed issued by one (central) Certification Body. Separate local certificates for all OUs: reference to main certificate relevant business functions of OU listed local certification body not listed.

4. VS TRQM Matrix Certification: the two main drivers Oct 00Mar 01Oct 01Mar 02Oct 02 Mar 03 FY 2000/01FY 2001/02 FY 2002/.. VS Mgmt. System established ISO 9000:1994ISO 9000:2000 transition phasepastfuture Management (inside) view:  implement VS Management System a.s.a.p.  end "transition phase"  include all OUs already in certification audits 2002 Customer (outside) view:  identical Quality standard of all products and services throughout all VS-OUs

5. Matrix Certificate: Requirements, Pre-requisities (I/II)  Products and services are similar/comparable at all locations,  There are central functions working for all locations  The parent company applies a management system that is also valid for all locations. For the relevant locations additional or deviating documents may exist for the description of special processes.  The legal responsibilities of the parent company and/or the management representative for all location must be guaranteed.  The manufacturing programs and/or manufacturing processes are standardized or similar at all locations.  There is an own product and process responsibility in the parent company.

6. Matrix Certificate: Requirements, Pre-requisities (II/II)  The suppliers are assessed and selected centrally.  The management system is supervised by the QM representative of the board of management of the parent company. He/she has authority to issue directives for all locations.  The training requirement is determined centrally.  All locations are subject to the internal audit program of the company. At all locations the complete management system must be audited (to do).  A central management review must have been carried out (to do).  The certificate is withdrawn for the entire company, if one location meets the conditions for withdrawal. The exclusion of a ”problematic” location is not permitted as a matter of principle. (!)

7. Milestones to Matrix Certificate VS Oct 01Mar 02Apr 02May 02 International Standards and internal directives published in Voith and VS-Intranet: Standard DIN EN ISO 9001:2000 Group Directives J.M. Voith AG Group Division Directives VS TRQM Meeting TRQM-Manual VS (MKe) Certification audits VSH + all OUs Matrix Certificate VS Adaption of local Mgmt Systems (I) (OU-TRQMr) Adaption of local Mgmt Systems (II) (OU-TRQMr) Audits of the Mgmt Systems (OU-TRQMr) Announcement of VS matrix certification goal (HPS) Mgmt Review of VS Technical Risk and Quality Mgmt System VSD wi, MKe, 2002-08-21, Schedule 3 Matrix Certificate VS.ppt VS is about to complete the implementation of the new VS Management System. The VS Top Management has decided to aim at a Matrix Certification of the whole Company as soon as possible. Review of TRQMM (all OUs) Aug 02Sep 02Oct 02 Group Meeting Nov 02Dec 02 Release TRQMM, selection of TÜV as Certification Body For details, contact your OU-TRQMr

8. Matrix Certificate: Certification Body Since most OUs had recommended their national TÜV organizations, VS has chosen TÜV Germany as the leading Certification Body.  Cooperation of TÜV Rheinland / Berlin / Brandenburg and TÜV Süd (Stuttgart / Munich) as leading body.  National TÜV organizations will be responsible for the local certification audits.  List of national TÜV organizations that will perform the local audits to be published soon at this place.

9. ISO 9000:2000 What’s New? Product Realization Product Service Management of Resources Measurement Analysis Improvement Responsibility Input Output Qualitätsmanagementsystem Kontinuierliche Verbesserung Management Input Output Quality Management System Continuous Improvement CUSTOMERCUSTOMER CUSTOMERCUSTOMER SATISFACTIONSATISFACTION REQUIREMENTSREQUIREMENTS

10. ISO 9000:2000 What’s New? Four Main Chapters Management responsibility (General requirements, objectives, planning, quality management system, management review) Management of Resources (Human resources, information, infrastructure) Product Realization (Design and development, purchasing, production) Measurement, Analysis and Improvement (Customer satisfaction, internal audit, monitoring of processes, continuous improvement)

11. ISO 9000:2000 What’s New? Important Changes: The Management Review: The management review now requires a complete set of fact and data based reporting including customer satisfaction data and evidence for improvement The Management review Output now requires clear statements and action plans for: - Improvement of the Quality Management System and its processes - Resource planning in order to realize the improvements and overall Quality Management System - Improvement of product related items

12. ISO 9000:2000 What’s New? Important Changes: Resource Management: Resource Management now covers: - Training - Work environment - Financial resources Continual Improvement Active determination of customer satisfaction Process Improvement based on facts and data (performance indicators) Evidence that process improvements lead to a better overall company performance

13. The Matrix Certification Affiliate Headquarter Affiliate Audit Affiliate Audit Affiliate Audit Certificate Certification Audit VS has decided to include all OUs in certification audits 2002

14. The Matrix Certification Affiliate Headquarter Affiliate Audit Affiliate Audit Affiliate Audit Surveillance Audit Audit Report

15. Summary Important Factors of Successful Process management: Develop processes across functions (Think process not function) Think Business Success not ISO 9000:2000 (ISO 9000:2000 is only a framework) Share process knowledge across organizational units Develop continual improvement platforms Create standards as far as possible and reasonable Connect Processes to measurable Indicators Include Process Performance reporting in normal performance report structure Facilitate systematic improvement by providing resources included in organization budget