Diebold 2006 Annual Report

Improving manufacturing operations is an important part of our plan to transform the company. The first thing we did was recognize that procurement, manufacturing engineering and production must work very closely together, so we put them under a common leadership structure. Then we began to work together to identify and map out how we could both reduce costs and improve quality, in terms of eliminating defects, delivering products on time and making the customer happy.

It's been a tough, but exciting process. We're making steady progress. More broadly, we're focused on ensuring our manufacturing processes around the world are lean. By lean, I mean processes that reduce and eliminate waste across all areas.

We have implemented a flawless launch initiative with new products that measures the performance of every manufacturing run prior to the start of production. During these runs, we are measuring the performance of the production system and the quality of the products. This is an important part of our effort to implement continuous quality processes, analyses and metrics throughout the company. It's how we will generate consistent, sustainable improvements today, tomorrow and the next day. It is an important part of our culture and our way of doing business.