May 2015
This Year’s Successful
MATS was a “One
Navistar” Initiative
vehicle models should be slated to appear.
Those vehicles are then assembled at the
company’s plants, and customized to the
requirements of the trade show booth.
“Our display trucks made a real statement,”
Mark says. “Chris Ito and his team evaluated
multiple colors and determined in advance how
they would look under different lighting, and
would fit with the booth as a whole. They picked
a bright, bold red-orange color palette that
conveyed the bold return to leadership this
company is making.”
As this recap video clearly shows, Navistar’s
booth at the recent Mid-America Trucking Show
in Louisville (MATS) generated a great deal of
excitement. What is less immediately apparent is
the high level of lean coordination that assured
the booth would have maximum impact for each
dollar spent.
As an example of the team’s commitment to
lean practices, Mark cited the selection of a new
trade show agency that brought together
multiple functions, from building the booth to
handling video and graphic design. As a result,
the Marketing team was able to reduce their
overall trade show investment while improving
the overall experience at this year’s trade
show. This was especially true at MATS, where
additional lighting, displays and technologies
enhanced the customer experience.
“We plan every aspect of the show in a highly
coordinated manner,” said Mark Johnson, vice
president, Marketing. “We couldn’t be successful
in conveying our Uptime message if the
marketing team didn’t integrate multiple
functions together flawlessly, using a ‘One
Navistar’ approach.”
The team also worked hard to ensure that every
asset used at MATS was also used beyond the
show. For example, the ProStar ES displayed at
the show will soon be taken to various other
shows and dealer events nationwide, so that
customers who couldn’t attend MATS will be
exposed to this great vehicle.
Navistar displays vehicles at more than 10 major
shows every year. However, MATS is the biggest
show of the year, and it requires the most
intensive effort. Mark notes that the marketing
communications team, led by Heather Street,
started planning the booth as early as the
previous summer.
Looking forward, Mark also noted that the team
is using analytics to measure the impact of what
we accomplished at MATS 2015. “For example,
we used special ‘beacon’ technology, which
detected the number of visitor cell phones that
entered every major section of the booth,” Mark
said. “This kind of technology-based metrics will
help us figure out new ways to make our future
MATS presence even more exciting and
compelling.
Early decisions include everything from
identifying key messages to deciding which
Page | 1 Global Materials
Management Team Saves
Millions on Global Air
Freight Costs and in transit. These inventory levels can then
be reconciled with current demands and
consumption, which allows the team to identify
shortages well in advance.
“Because we have greater visibility upstream in
the supply chain, we can identify shortages
sooner, which gives us more time to resolve
them,” said Ben. “Having more time means we
have more options at a lower cost.”
The shift in Navistar’s global freight spend due
to the new process demonstrates the progress
the team made over the course of a year – in
2013, Navistar’s global freight spend was 60
percent air and 40 percent ocean, while 2014
was 20 percent air and 80 percent ocean.
Overall spending was reduced to $2.5 million in
fiscal year 2014, reflecting a $6.5 million
savings.
In an effort to reduce global air freight costs,
the Global Materials Management team designed
a process to proactively manage global material
through all stages of transportation, saving
significant dollars and creating a leaner overall
process.
In 2013, Navistar was spending $9 million on
global air freight. As plants would run out of
inventory, or issues with suppliers would arise,
often the only option was to use air freight,
which costs significantly more than transporting
supplies from overseas via ship.
“We put together a cross-functional team to
better manage our global freight costs,” said
Ben Bauman, manager, Global Logistics and
Trade Compliance. “We started with reviewing
our inventory levels and proactively planned
with our suppliers to make sure we wouldn’t run
out of inventory.”
The team incorporated lean principles and tools
to determine how much inventory was needed
for a supplier, where it should be stored, and
when it needed to be replenished. Working in
cooperation with Procurement, Material
Planning, Finance, Accounting and Navistar’s
foreign suppliers, the team launched the new
process with a few pilot suppliers and then
rapidly expanded to cover all Navistar managed
non-North American suppliers.
Now, the team can see inventory levels at
suppliers’ locations, in overseas warehouses,
“The new process has resulted in a dramatic
reduction in air freight costs and considerably
improved visibility for the material planning
process,” said Ben.
Home SWEet Home in
Escobedo
Our Escobedo Assembly Plant is now home to
Navistar’s second SWE (simulated work
environment), a powerful tool for delivering lean
training. The SWE is a scaled down
manufacturing line where trainees build a
product – in this case, a wooden cab – using
power tools.
“With a SWE, our employees will experience
what it’s like to work in a mature lean
operation,” said Oscar Ruiz, plant manager,
Escobedo Assembly Plant. “It’s a chance for us
to show them our vision for Escobedo and how
Page | 2 tools like andon and standard work can help
eliminate waste and downtime.”
According to Francisco Almanza, lean
manufacturing manager, Navistar procured the
system from a CAT facility in Torreon, Mexico
and began construction in December. “Our
Escobedo SWE trainers participated in a demo
class conducted by Spanish-speaking CAT
trainers, and some had their first SWE
experience at our Springfield plant. Each
facilitator had 10 days of robust training.
They’ve been enthusiastic throughout the
process and were looking for ways to make
training a fun experience.”
And on March 23, the Escobedo team officially
opened the facility with a ribbon cutting
ceremony. Julian Negrete, Secretario General
Adjunto del Sindicato Progresista (Joint
Secretary General of Escobedo’s local union),
joined plant leaders and union representatives
for the festivities. Afterwards, the first class was
held with 17 employees who learned about
identifying waste, flow issues, and waiting time
among other lean principles.
The award was accepted on behalf of Navistar
by Jeff Medek, director, Global
Security/Facilities, and Lisa Hartenberger,
director, Corporate Communications.
“A number of people have asked me for more
details about the flag that flies in front of our
world headquarters,” said Jeff, who is
responsible for maintaining the flag. “It
measures 30 feet by 60 feet, which is more than
40 percent larger than the original StarSpangled Banner that is kept in the Smithsonian
Institution. And its flagpole is 100 feet high.”
Thanking the Exchange Club for the award, Lisa
pointed out that there is a very good case to be
made that more than any other company,
Navistar helped make the United States the
strong, continent-spanning nation it is
today. She cited a few key facts that were
shared by historian Tom Clark:

Going forward, the plant will hold three classes
each week led by its 13 SWE trainers with the
goal of training all 3,400 employees.

Navistar Receives Award
for Promoting Patriotism in
the Community


Navistar was recognized by the Exchange Club
of Naperville, Ill., for its contributions to
patriotism in the community.
The “Proudly We Hail Award” is presented at the
organization’s annual “One Nation Under God”
breakfast. It is limited to residents and
businesses in the Naperville area who fly the
U.S. flag 24 hours a day, 365 days a year.
The reaper, which was invented by our
founder, Cyrus McCormick, did the same
work that previously had been done by
five farmhands, giving pioneers the
ability to move west and cultivate the
Great Plains.
It’s been said that thanks to the
McCormick reaper, the western frontier
moved another 35 miles farther west
every year, until the country was fully
settled.
The reaper’s labor-saving aspect also
allowed farmhands to leave their farms
to fight in the Civil War.
In fact, President Lincoln’s Secretary of
War, Edwin Stanton, said that without
the reaper, the North would not have
won, and the U.S. would not have
remained intact.
“So due in large part to the McCormick reaper,”
Lisa told the Exchange Club’s members, “the
U.S. today is one nation, which includes both
North and South, both East and West.
“Small wonder that if you go to the rotunda of
the U.S. Capitol, and look up at the fresco
painted on the ceiling, you will see Ceres, the
Goddess of Grain, sitting on a McCormick
reaper!”
Lisa also cited the role of Navistar’s current
products in keeping the U.S. strong and free.
Page | 3 “That includes everything from the big rigs and
delivery trucks that drive our economy, to the
school buses that transport our kids, to the fire
engines and ambulances that protect our
citizens,” Lisa said. “And ever since World War I,
we’ve been providing the vehicles that transport
and protect our troops.”
Navistar-Sponsored
Robotics Teams Finish
Strong in Midwest Regional
Competition
“We can all impact the world, and we can do it
in very meaningful ways,” he continued. “It
starts with a vision, and in knowing it’s cool to
be involved in organizations like FIRST
Robotics.”
In addition to sponsoring the competition,
Navistar also supported several teams from high
schools located near our Lisle headquarters. One
of those teams, “Gear it Forward,” from Oswego
Community Unit School District 308, will be
advancing to the FIRST World Championship
competition in St. Louis. “Gear it Forward” was
a regional finalist in the competition and also
won the Chairman’s Award, which is the most
prestigious award in the competition,
recognizing the team that best represents a
model for other teams to emulate. The team is
mentored by Navistar engineer Mike Shovels.
“Working with the team has been a very
rewarding experience,” said Mike. “I would
recommend it to anyone who enjoys developing
future leaders’ problem solving, teamwork and
gracious professionalism skills.”
In continuing our philanthropic focus on STEM
(science, technology, engineering and math)
education, Navistar sponsored the FIRST
Robotics Midwest Regional Competition at the
UIC Pavilion in Chicago. CEO Troy Clarke kicked
off the competition at a breakfast before the
opening ceremony, where he stressed the
importance of young people getting involved
with science and technology.
He compared today’s technological innovators to
the early space explorers of the past. “Many of
those pioneers are not rich,” he said. “They
didn’t make fortunes, but they did make history.
Overall, 53 teams competed in the Midwest
Regional. Teams traveled from across the United
States, with two teams even traveling
internationally, coming from Israel and Turkey.
The theme of the competition this year was
“Recycle Rush,” and teams were charged with
building a robot that could stack recycling totes
and bins. FIRST Robotics was founded in 1989
as a way to encourage students of every age to
get involved in science, technology and
problem-solving. FIRST predicts 3,000 teams will
compete in the FIRST Robotics competition this
year, reaching 75,000 high school students
across the country.
Page | 4