Sector-Lean-Workshop-Rev1

OperationalExcellence:IngersollRandBusinessOperatingSystemTimJefferDirectorIRBOSSectorLeanWorkshopAStructuredMethodforImprovingComplexSystems2PolicyDeployment’sStructuredProcessStep1:WHATLRPBreakthroughThinkingStep3:HOWIdentifyKeyDriverProcessStep4:HOWMUCH/WHENDetermineMeasures&TrackStep5:WHOIdentifyKeyResources&DeployStep2:HOWFARAOPAnnualBreakthroughsActyourwayintoThinkingdifferently3ConversionofThinkingintoaPDMatrixRESOURCESAnnualBreakthroughObjectivesTargetstoImprove3-5YearBreakthroughObjectivesTopLevelImprovementPriorities=PrimaryResponsibility=SecondaryResponsibility5-WHO4-HOWMUCHUsedotstoshowrelationshipofTargetsandResourcestotheImprovementPriority3-HOWUsedotstoshowrelationshipofImprovementPrioritiestoAnnualObjectives2-HOWFAR1-WHATTheFULLpictureofthecompanyononesheetofpaper!OWNER4PolicyDeployment=HoshinKanriInitssimplestform,HoshinKanriisnothingmorethanasystemofformsandrulesthatencourageemployeestoanalyzesituations,createplansforimprovement,conductperformancechecks,andtakeappropriateaction.Inpracticalapplication,however,ismuchmorethanformsandrules-Hoshinisaphilosophyofmanagement!+PD=5ExampleEnterprisePDMatrixSteveShawleyDickPedtkeChrisVasiloffJimBolchMikeLamachMikeRyanTimMcLevishJeffSongPatNachtigalRevenueGrowthCAGR10%IncreaseOIto18.8%PrimaryResponsibilityIncreaseEPSto$5.95SecondaryResponsibilityWCat7.5%ofRevenueROICat29.5%ResourcesHerbertL.HenkelTopLevelImprovementPriorities3-5YearBreakthroughObjectivesAnnualPolicyBreakthroughObjectivesTargettoImproveIncreaseROICto14.5%DecreaseWCto10.4%ofRevenueIncreaseEPSfrom$3.35to$3.45IncreaseOIto13.1%RevenueGrowth9%How?MaintainFavorableTaxStatusLeverageProcurementCOEIncreaseInventoryTurnsLeverageLCCRegionalDiversificationDeploymentofIRBOS-OpExMarket/ChannelDevelopmentRecurringRevenueExpansionNewProductDevelopmentBoltonAcquisitions$400MillioninBoltonAcquisitions$1.55BillioninNewProductDevelopment12%RecurringRevenueExpansion$520MillionRevenuefromEnterpriseInitiatives$50MillioninOpExImprovements15%GrowthinIndia20%GrowthinChina20%MaterialsfromLCCIncreaseInventoryTurnsto6$75MillioninGrossMaterialProductivity$700MillionFreeCashFlow6PolicyDeploymentMechanics6=OriginalPlanx=ProgressatReviewActionStep/KaizenEventsMilestoneJanFebMarAprMayJuneJulyAugSeptOctNovDecImprovementPriorityTitle:*Department/Location:*ManagementOwner:*Date:*CoreObjective:*TimelineTargetImprovementPlannedDatesPolicyDeploymentActionPlanReviewTeam:*NextReview:*EnvironmentalSituationSummary:*Status(PastDueinRed)ImpactOwner(Leadisbold)2003SecondLevelPolicyDeploymentPrimaryResponsibilitySecondaryResponsibilityRESOURCESTargettoImproveSECONDLEVEL–SectorDanaherBusinessSystemOffice-PolicyDeployment1998PrimaryResponsibilitySecondaryResponsibilityResourcesAnnualBreakthroughObjectives3-5YearBreakthroughObjectivesTargettoImproveTOPLEVEL–EnterprisePOINTOFIMPACT-ACTIONPLANEngineer/SupvPOINTOFIMPACTSecondLevelPolicyDeploymentPrimaryResponsibilitySecondaryResponsibilityRESOURCESTargettoImproveROOTCAUSELEVEL-Business/PlantAnnualObjectivesBreakthroughTopLevelImprovementPrioritiesSecondLevelImprovementPrioritiesTopLevelImprovementPrioritiesTopLevelImprovementPrioritiesSecondLevelImprovementPrioritiesThirdLevelImprovementPrioritiesStep1:WHATLRPBreakthroughThinkingStep3:HOWIdentifyKeyDriverProcessStep4:HOWMUCH/WHENDetermineMeasures&TrackStep5:WHOIdentifyKeyResources&DeployStep2:HOWFARAOPAnnualBreakthroughs7TransferringMatrixtotheNextLevelSecondLevelPolicyDeploymentPrimaryResponsibilitySecondaryResponsibilityRESOURCESTopLevelImprovementPrioritiesAnnualObjectivesTargettoImproveSECONDLEVELTOPLEVELPolicyDeployment2004PrimaryResponsibilitySecondaryResponsibilityResourcesAnnualBreakthroughObjectivesBreakthrough3-5YearObjectivesTargettoImproveTOPLEVELBreakthroughSecondLevelImprovementPrioritiesTopLevelImprovementPrioritiesTypically,a2ndLevelMatrixiscreatedforaprimaryresourceforeachtop-levelImprovementPriority.Imp.PrioritiesandAnnualObjectivesarecopieddirectlyontothe2ndLevelP.D.Matrices.The2ndlevel12o’clockand3o’clockpositionshaveallnewtextinthem–nothingisrotatedintothemfromlevel1.8HowdoesPDCreateAccountability?DeploymentofIRBOS-OpExANNUALBTOBJECTIVESTARGETTOIMPROVE3-5YEARBREAKTHROUGHOBJECTIVETOPLEVELIMPROVEMENTPRIORITIESIncreaseOIto13.1%$50MillioninOpExImprovementsRESOURCESProductionDepartmentMarketingDepartmentEngineeringDepartmentFinanceDepartmentSalesDepartmentHumanResourcesDept.MaterialsDepartment=PrimaryResponsibility=SecondaryResponsibilityTOPLEVELMATRIXTOPLEVELBOWLINGCHARTIncreaseOIto18.8%ActionPlansfeedtheBowlerPlan=OriginalPlanx=ProgressatReviewActionStep/KaizenEventsMilestoneJanFebMarAprMayJuneJulyAugSeptOctNovDecImprovementPriorityTitle:*Department/Location:*ManagementOwner:*Date:*CoreObjective:*TimelineTargetImprovementPlannedDatesPolicyDeploymentActionPlanReviewTeam:*NextReview:*EnvironmentalSituationSummary:*Status(PastDueinRed)ImpactOwner(Leadisbold)2003POINTOFIMPACT9CountermeasurePhilosophy•HavingaPDmi