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Janet L HammillBusiness Process Excellence Rohm and Haas Company
“Business Processes Post ERP Implementation”
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Introducing Rohm and Haas Today
$4,199 MM | 51%$2,030 MM | 25%
$1,659 MM | 20%
$342 MM | 4%
2006: Sales $8.23 B
NORTH AMERICAN REGION EUROPEAN REGION
LATIN AMERICAN REGIONASIA PACIFIC REGION
SALT | $829Rapidly DevelopingEconomies| $184
Rapidly Developing
Economies | $1,202
Rapidly DevelopingEconomies| $342
We are a Global Company
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Introducing Rohm and Haas Today
Building & Construction 29%
Electronic & Electronic Devices 17%
Transportation 9%
Water 7%
Food & Food Related 2%
Packaging & Paper 15%
Industrial & Other 14%Household Goods & Personal Care 7%
Serving a Broad Set of End Markets
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Introducing Rohm and Haas Today
* External Sales
2006 Sales By Segment
Salt10%
Packaging & Building Materials
21%
Primary Materials*
11%
Performance Materials
14%
Electronic Materials
19%
Paint & Coatings Materials
25%
Organized for the Future
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Today’s Talk: Building a Winning Culture
the Playbook coversFocusing on strategic initiatives
Setting the right targets
Addressing the constraints
Engaging the organization
Persisting with passion
Rewarding and recognition
Spiraling upward
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Rohm and Haas Vision 2010
PHILADELPHIA--(BUSINESS WIRE)--Rohm and Haas Company (NYSE:ROH) today announced that its Vision 2010 Plan announced one year ago is on track to deliver on its goals of building a company with $11 to $12 billion in sales and to deliver $5.50 to $6.00 per share in earnings by 2010.
November 28, 2007 05:01 PM Eastern TimeRohm and Haas Company Updates Implementation Progress of its Vision 2010 Strategy to Accelerate Shareholder Value Creation
Vision 2010 is focused on generating profitable growth
www.rohmhaas.com
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Rohm and Haas Vision 2010 and the Five Pillars in 2007
Six Sigma has been applied to operational excellence
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Linking to Strategy – The 3:1 ROI Hurdle
Decrease Cash Tax paid
Decrease capital expenditures
Decrease working capital
Use competitive advantage
Increase operating margin
Increase Revenues
Dividends
TotalShareholder
Return
Increase Revenue
Reduce Costs
Optimize Assets
Leverage Technology
Capital
• Price • Volume
• COGS• SG&A
• Channels• Process R&D• Product R&D
• Inventory• AP/ AR
• Utilization• Recapitalize
• Debt /equity• Tax Location
Repurchase Shares
Invest Externally
Create ValueInternally
Working Capital has been the focus for BPE
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Cascading Business Strategy to Six Sigma Applications – Working Capital and Operational Excellence
Metrics cascades support working capital goals
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Working Capital Improvement Via Key Processes
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Thinking in a Process Oriented Mentality
Learned in an ABPMP meeting from Air Products
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Creating a Pipeline of BPM Projects
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Align Performance Goals with Operational Excellence (AMR model)
Supplier Quality
Supplier On-Time
Purch Costs
Dir Mtl Costs
RM Inv
Cost Detail
Production Sched
Variance
Plant Utilization
WIP + FG Inventory
Order Cycle Time
Perfect Order Detail
Supplier Quality
Supplier On-Time
Purch Costs
Dir Mtl Costs
RM Inv
Cost Detail
Production Sched
Variance
Plant Utilization
WIP + FG Inventory
Order Cycle Time
Perfect Order Detail
AP ARInventory
Total
Cash-to-Cash
AP ARInventory
Total
Cash-to-Cash
Perfect Order
SCM Cost
Supply Chain
Operationally Correct
Customer Service
Working Capital
Stakeholder View
End-to-End Process View
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DSO
% Total Past Due
Days late impact on
DSOCash-to-cash
cycle time% Bad Debt
Reserve
Invoice accuracy
% > 90 day late% 1-5 6days late
Pricing exception Credit limit review
D&B rating
Tax certificates Unearned discounts
% 16 – 30 days late
Lockbox, cash apps, unallocated
% 6 – 15 days late Exceeding credit limit
Payment Plan
% 30 – 60 days late Business rules
DSO
% Total Past Due
Days late impact on
DSOCash-to-cash
cycle time% Bad Debt
Reserve
Invoice accuracy
% > 90 day late% 1-5 6days late
Pricing exception Credit limit review
D&B rating
Tax certificates Unearned discounts
% 16 – 30 days late
Lockbox, cash apps, unallocated
% 6 – 15 days late Exceeding credit limit
Payment Plan
% 30 – 60 days late Business rules
Stra
tegi
cTa
ctic
alTr
ansa
ctio
nal
Stra
tegi
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Accounts Receivable Metrics Cascade Example
SCOR Model Example for Accounts Receivables
Payment Terms
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Building a Winning Culture Requires New Definitions – Redefine all 7 levers
Vision
Culture
Strategy
Products
Processes
Organization
Systems & Technology
& Services
Infrastructure
Learned this circular diagram in an ABPMP meeting
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Building Enthusiasm Within the Enterprise with the 8 Rules to Change Management
Was advised to read this book at an ABPMP meeting
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Change Acceleration – Engaging Stakeholders
Current Position = O Desired Position = X
Key Leadership Analysis ChartKey Leadership Strongly
AgainstModerately
AgainstNeutral Moderately
ForStrongly
For
Executive Management O XVice President of Manufacturing O X
Quality Organization O XVice President of Sales and Marketing O X
Finance Organization O XInformation Systems Organization O XHuman Resources Organization O X
Watch out for the CAVEMEN and WOMEN – Citizens Against Virtually Everything
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Persist with Passion and Anchor the Changes
IMPLEMENTED IMPLEMENTED IMPROVEMENTSIMPROVEMENTS
Control Plan
Aligning
Systems
& Structures
Documentation Plan
Monitoring Plan
Response Plan
Training PlanAligning
Systems
& Structures
Documentation Plan
Monitoring Plan
Response Plan
Training Plan
Verified Financial ImpactVerified Financial Impact
Process owners accountable to maintain new
level of process
performance
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Reward and Recognition: Building Enthusiasm in the General Workforce
Business Impact Awards
Formula NewslettersPromotions and New Roles
Letters of RecognitionTeam Dinners
Personalized Plaques and Awards
Team shirts and caps
Pace and scope projects to be completed in 8-12 months
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Who Said “Get Better or Get Beaten”?
First Quartile Materials Companies: 12.3%
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Spiraling Up - the Operational Excellence Journey (AMR example for Supply Chain)
Time
Cha
nge
-Org
aniz
atio
nal E
ffect
iven
ess
2004-2007
2007-2008Supply Chain
Value Network
Prioritize for Inside Out “Costs”
Prioritize for Inside Out “Costs”
Organize for Outside In “Value “
Organize for Outside In “Value “
2008 >Value Chain
Manufacturing Prioritize for Quality
& Compliance
“Leaders”Shaping Demand
“The Pack”Respondingto Demand
“Laggards”Demand Driven ?
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Building a Winning Culture with LSS Tools
Key Elements Lean Six Sigma ToolsFocusing on strategic initiatives Rohm and Haas Vision 2010 and 5 pillars
Setting the right targets Metrics cascade,Transactional metrics, median & variation
Addressing the constraints Strategy, process, policy, people, organization, metrics and system levers
Engaging the organization Stakeholder analysis,8 Rules of change management
Persisting with passion Building control plans
Rewarding and recognition Individual and team celebration
Spiraling upward Business excellence journey
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Thank you
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