2010 Sustainability Report - Cummins.com

Challenges ahead: Financial performance
Despite the Company’s relatively strong performance during the recession, Cummins faces some
significant challenges in 2010. Among them:
Continued economic weakness in the United States
and Western Europe: These large, mature markets
have not rebounded from the downturn as quickly
as developing economies such as India, China and
Brazil. Cummins expects our business in the U.S.
and Western Europe to grow more modestly than in
other areas in 2010, although the second half of the
year is expected to be better than the first half.
Continued investment in critical technologies:
Cummins needs to continue to manage its business
conservatively in order to earn a solid
profit and generate the cash necessary to fund
increased investment in key technologies and
products. The Company plans to increase its
capital spending by 30 percent from 2009, with
much of the investment going to fund new
products and capacity expansion.
Planning for the recovery: Even as Cummins
continues to work through the global economic
downturn, the Company needs to increase its
focus on taking advantage of the significant
long-term opportunities we see for the business
beginning in 2011.
changes. So in 2009, after the downturn hit,
Cummins could adjust, making a profit while
investing in key projects and technologies.
Ten years of improving quality and processes
paid off. “Waste and variation just cost you money,”
Strodtbeck said.
The benefits of Six Sigma can be seen in the
39 projects recognized this year with the Chairman’s
Six Sigma Quality Award. These projects represent the
best of the nearly 4,000 projects completed in 2009.
The winning projects, considered the best of the best,
are responsible for savings of $67 million to Cummins
and $8.6 million to customers last year.
Strodtbeck notes that while other companies can sell
their customers an engine or other products, Cummins
can deliver a full range of services and support that
includes working with them to lower their costs.
As Cummins enters its second decade of Six Sigma,
the tools remain a vital part of how the Company does
business. In fact, employees in upper management
must be Green Belt certified in order to advance or
make a lateral move within the Company.
More about Six Sigma
The use of the term Six Sigma refers to a
measurement in which 99.99966 percent of
manufactured products are free of defects.
By the numbers
18,000
Green and black belt projects completed since 2000
4,000
Projects completed in 2009
$3 billion
Total savings to Cummins since 2000
$750 million
Total savings to Cummins customers since 2000
11,000
People trained in using Six Sigma tools at Cummins
108 Cummins Inc. Sustainability Report 2010