Results

Sealy

Sealy Corporation is North America’s No. 1 mattress brand and was one of the first KKR portfolio companies to enroll in the Green Portfolio Program in 2008, helping to design and pilot the framework. In 2008, Sealy focused on its efforts to improve the efficiency of its distribution fleet and to reduce waste from its operations. In 2009, the company added a focus on improving the energy efficiency of its manufacturing plants. In 2010, Sealy continued its efforts in all three areas.

Key Environmental Performance Areas:

• Greenhouse Gas Emissions (Fleet)
• Greenhouse Gas Emissions (Facilities)
• Waste Reduction

Greenhouse Gas Emissions (Fleet)

Sealy is actively measuring and managing its fleet performance. In absolute terms, GHG emissions from fleet operations have decreased 22%, compared to a 2007 baseline, while fleet efficiency improved by 28% (GHG/truck stop) over the same time period. These improvements in fleet efficiency have helped Sealy to avoid almost $7.2 million in fuel costs and more than 25,000 metric tons of GHG emissions since 2007.

Results

Sealy: Fleet Efficiency Results (2007 Baseline)

Actions

In 2010, Sealy achieved these results through the following practices:

• Implemented routing software to create more efficient delivery routes to and from all mattress plants
• Implemented focused improvements in pieces/cubes per load to reduce total loads needed for delivery by an estimated 1,066 equivalent loads and 370,000 miles
• Installed fuel governors and wind fairings and monitored idling
• Held driver mileage competitions and monthly miles per gallon efficiency reviews
• Communicated Sealy code of conduct to all associates charged with minimizing the environmental impact of its manufacturing and service facilities through comprehensive conservation and waste reduction efforts

Future Plans

In 2011 and 2012, Sealy is continuing to focus on the efficiency of its fleet and is considering or actively implementing additional improvements, such as:

• Begin to replace delivery tractor fleet with more efficient tractors that meet 2014 EPA standards and improve miles per gallon by 7-10%
• Reviewing trailer fleet specifications to increase raw material and third party backhauls resulting in reduced miles
• Improving fuel efficiency through wind reduction additions
• Increasing emphasis on backhauling raw materials to reduce need for common carrier service using centralized routing coordinators
• Launching a network analysis to ensure its customer base is serviced from the most logistics-efficient plant
• Implementing a partner code of conduct requiring its partners to be committed to reducing the environmental impact of their designs, manufacturing processes, and waste emissions

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Greenhouse Gas Emissions (Facilities)

In 2009, Sealy began actively measuring and managing energy consumption in its manufacturing plants and established a 2008 performance baseline for electricity use. In absolute terms, GHG emissions from manufacturing plants have decreased 2%, compared to a 2008 baseline, while efficiency has improved by 10% (GHGs/unit produced) over the same time period. These improvements in efficiency have helped Sealy to identify cost savings of over $975,000 and avoid more than 9,800 metric tons of GHG emissions since 2008.

Results

Sealy: Manufacturing Plants Efficiency (2008 Baseline)

Actions

In 2010, Sealy achieved these results by implementing the following practices:

• Launched a Kaizen pilot program at select mattress plants to improve process flow and reduce utilities consumption

Future Plans

In 2011 and 2012, Sealy is continuing to focus on the energy efficiency of its facilities and is considering or actively implementing additional improvements, such as:

• Scaling up Kaizen efforts proven at the pilot level
• Upgrading lighting technologies at 50% of the reporting facilities
• Eliminating compressed air leaks, reducing the load on the compressor, and reducing energy consumption

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Waste Reduction

Sealy is actively measuring and managing its material waste from bedding production. In absolute terms, Sealy has reduced bedding scrap by 35%, compared to a 2007 baseline, while productivity has improved by 27% (lbs of scrap/unit produced) over the same time period. These improvements in productivity have helped Sealy to identify cost savings of more than $17.9 million and avoid almost 6.3 million pounds of waste since 2007. Over the same time period, Sealy has reduced secondary landfill bedding by 32% on absolute terms, while productivity has improved by 32% (lbs of landfill bedding/unit produced).¹

Results

Sealy: Manufacturing Waste Reduction (2007 baseline)

Actions

In 2010, Sealy achieved these results by implementing the following practices:

• Modified machine settings to better utilize material and reduce scrap
• Instituted rigorous standard operating procedures to measure and report waste to ensure compliance

Future Plans

In 2011 and 2012, Sealy is continuing to focus on reducing waste from its manufacturing process and is considering additional improvements, such as:

• Reducing scrap from the new Stearns & Foster launch to be in-line with Sealy best practices to reduce scrap by more than 30%
• Regionalizing high speed, high volume processes that increase throughput and reduce scrap

Sealy enrolled in the Green Portfolio Program in 2008 and is reporting results for the third time.

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Notes:

¹In 2010, KKR and Sealy disaggregated landfill bedding and scrap metrics in order to better account for the different activities and cost drivers related to each of these waste streams. Past results have been restated.