The ‘Black Belts’ and ‘Master Black Belts’ of Siebe Plc’s new Six Sigma program are hard at work, grinding ever improving margins out of the UK-based engineering conglomerate’s hundreds of production facilities. And the end result is yet another year of growth for Siebe, one of the global leaders in control systems for automating industrial plants, both in revenues and in profits. Net profits for the year to April 5th are up 31.5% at 253.8m pounds on revenues that rose 15.6% to 3.005bn pounds. But who exactly are these mysterious masters of the art of production engineering, who have kept the city’s naysayers at bay when they insist that Siebe cannot be viewed as a growth stock forever? The Black Belts are so called masters in the art of implementing Six Sigma – a production ethos, originally invented by Motorola Inc, which Siebe has adopted as lean manufacturing. The idea is to get the manufacturing process absolutely right before you automate it, leading to negligible component defect rates. Their influence on trial sites within Siebe has been so successful during 1996 that Yurko has created a Six Sigma academy to train up a further 240 Black Belts. The company estimates it will save a further 50m pounds a year by the year 2000. Meanwhile, back in the present day there is no denying that Siebe’s results really are good, surpassing many analysts expectations and driving the shares up 10 pence by midday to 959 pence. Profits were held back by a hefty foreign exchange adjustment of 138.4m pounds caused by the strength of Sterling. Siebe reports in the UK but makes 92% of its sales outside of Britain. The board is recommending a final dividend of 9.8 pence per share, bringing the total for the year to 14.7 pence, up 10.4%.
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