Employing the whole person

1

新范式学院

雇佣整个人

2

The Trust Arch at NEWILHAN Way -2006

Seoul ↔ Inchon

3

The Best Employer in Korea

87

44

88

51

63

32

57

39

72

28

4

In 1995, When Elected as CEO of YKMarket Situation

1. Rushes of Global Giants into Korean Market

- P&G, Unicharm, LG

2. Excessive Capacity / Competition

3. Consumer Shift to Imported Brands

4. Soaring Labor Rate

5. Militant Labor Disputes & Strikes

5

23.4

19.9

63.8

67.5

29.3

54.4

39.2

49.5

57.8

35.731.5

25.3

58.3

53.349.8

39.4

10

30

50

70

1988 1989 1990 1991 1992 1993 1994 1995

In 1995, When Elected as CEO of YKMarket Share Trends

P&G

YK

(%, Value Share)

Hygiene Market 1988-1995

6

In 1995, Elected as CEO of YKThe Question

"Close Down & Sell Off

Or Innovate!”

7

In 1995, When Elected as CEO of YKCustomer Relations

ㆍ No 2 Retailer: Delisted Key YK Products 6 months (Private)

ㆍ No 1 Retailer: Delisted Key YK Products 6 months (Govt-Run)

8

Sustainable Competitiveness and Growth

= Sense of Urgency

X Group Dissatisfaction

X Shared Vision, Value & Trust

X Continuous Learning

X Entrepreneurship From Everybody

X 360°Constant Innovation

X Leadership

> Resistances to Changes / Innovations

9

Dramatic Shift: 1995-2007

Hygiene Market Share Trends

19.9 21.4

27.2

48.2

54.259.1

62.258.7

55.7 56.960.8

32.541.8

24.6

33.5

28.2

51.456.8

64.167.5

42.5

23.5 22.0

27.125.0 24.3

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

P&G

P&G

YK

YK

10

Dramatic Shift: 1995-2007

Infant Market Share Trends

45.142.1

45.2 45.9

54.660.3

63.366.6 68.1 66.7

71.8 73.069.9

9.512.2

9.5

35.0 36.032.7

26.7

16.3

8.5 9.7 10.65.8 4.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

P&G

YK

P&G

YK

11

Dramatic Shift: 1995-2007

1. P&G Withdrew from Korean Infant & Household Care Market

2. Unicharm Withdrew from Korean Market

3. YK Took Over Management of Kimberly-Clark North-Asian Companies

4. YK Rejuvenated KC Taiwan, KC China Operations

12

Sustainable Competitiveness & Responsible Growth

The Secrets1

.

2

.

3

.

4

.

5

.

6

.

7

.

Speed

Value

360°

Constant

Preventive

Responsible

LLL

vs

vs

vs

vs

vs

Vs

vs

Scale

Cost

Top-Down

Stop & Start

End of Pipe

Indifferent

Diploma

13

“In a knowledge economy

where skill is based on knowledge, and

where technology and economy are likely

to change fast…

the only meaningful job / business security

is the capacity to learn fast. ”

“Responsible Functioning Society”

by Peter F. Drucker

14

CarePeople, Family, Community &

Environment

Environment

“People”

Family Community

Company

People

15 Employ The Whole Person Hands, Head, Heart

Re-engineer Work & Life Balance

InnovationInnovation

AccidentFatigue

Misfortune

Work

1997

Work

2007

16

• Flexible Time System

• 4 Crew 2 Shift System

• Functional Excellence Teams

• Internal Schools

New Culture Created

Knowledge and Competence Building

17

Jan.01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

Day Sun

Mon

Tue

Wed

Thu

Fri Sst Sun

Mon

Tue

Wed

Thu

Fri Sst Sun

Mon

Tue

Wed

Thu

Fri Sst Sun

Mon

Tue

Wed

Thu

Fri SstSun

Mon

Tue

ACrew

T T

BCrew

T

CCrew

T T

DCrew

T T

HolidayLunar New

Year’sday

Schedule for January, 2006

: Day Time(07:00~19:00)

: Night Time(19:00~07:00)

H : Holidays

T : Training

KHMoon

Y-K Leads

4 Crew + 2 Shift System

18

Y-K Leads

4 Crew + 2 Shift System

19New Culture Created

Trust & Life-Long Learning Culture

(Hours/Year)

* Total expenses are borne by Y-K

30

80

130

180

230

280

330

1998 1999 2000 2001 2002 2003 2004 2005 2006

248148

167180

280

302 306 310

54

302

20Learning Cafeteria

Internally Built

Professional

Junior

Engineer

Senior

Safety

Quality

RQP

E & E

SPARE

P . M

Export

SAP R3

SMART

WCM

CAP

Mechanical, G/C

OJT, Floor Safety

Tools II, L/I

Maintenance II

PROCESS

Tools I, G/C

Maintenance I

Quality Awareness, SOP

T/S,

CONTROLLER

Maintenance

Machines

COMPU-TER

INTER- NET

E-MAIL

HOME- PAGE

WORD

EXCEL

Team Building

Volunteerism

Health Welfare

Communication

Opportunity Analysis

Non-Smoking

Economics

P/LCENTER LINE

K/T( Problem Solving)

Action Leader

Innovative Leaderships

Internal Lectures

Power of Positive Thinking

Technical & Vocational (60%) Social & Leadership (40%)

Sales

VIDEO News

Team Meeting

MBO

T/S REVIEW

Safety W/S

Quality W/S

WASTE/ DELAY MTG

7 HABITS

English

Movies

Music

Arts

Articles

New Paradigm Trends

Creativity W/S

Reading W/S

21

4.3

6.2

7.27.7 8.1

9.210.0

10.5 10.2

2,077

2,4242,542

2,6332,714

3,027

3,2503,350

3,253

3

5

7

9

11

13

15

17

19

1998 1999 2000 2001 2002 2003 2004 2005 2006

1500

1700

1900

2100

2300

2500

2700

2900

3100

3300

3500

360°Constant Innovationby All Knowledge Workers

Total Suggestion

sPer Capita Suggestion

22

0

5

10

15

20

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07

-Hygiene-

30.1

7.517.3

0

10

20

30

40

50

N. America

Gunpo

Taejon

<Safety Record> <Quality Record>

42.242.140.1

37.035.9

15.1

19.7 19.923.0

25.428.8

33.4 33.8

2.62.12.02.11.8

14.7 7.3 8.5 7.24.5

2.4 2.1 2.0

0

5

1015

20

25

30

3540

45

50

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Productivity (SU/HR) Waste(%)

A B C

<Productivity Record>

Key Deliveries

23

NEWAYS on Everything 1995-2007

ERPSystem

NowPast

BPRProcess

Restructuring &Change Management

Business &

Organization

SAP R3

KHMoon

24

NEWAYS on Everything 1995-2007

NowPast

Supply ChainManagement

Leadership CentralizedMBO &Self ControlMBO &Self Control

Empowered

Just-in-TimeJust-in-Time

Mistrust & Check

WH

S

WH

YK

WH

C

Trust & Integrated

S YK C

25

End of Pipe(EOP)Technology

Re-use Re-cycle Treatment Dispose

Energy

Raw Materials

Different Process

Innovate process

Waste

Reduction atSource

Reduce Resources& Waste

Cleaner TechnologyDfE

Y-K Focus

NEWAYS on Everything 1995-2007From “End of Pipe” to “Prevention at

Source”

26

YK Reputation in Asia/Korea

•The Best Employer :

•The Most Respected Company :

•Ethical Management :

•Env. Management :

•Market Share :

No. 1 (Hewitt+The Asian Wall Street Journal)

No. 1 (Dong-A Daily+IBM BCS)

No. 1 (KMAC)

No. 1 (Mateone Research & Consulting)

No. 1 (All Categories Involved)

27

“7 Habits of Highly Effective People” by Steven R. Covey

28New Paradigm

Sustainable & Responsible CEO

Foster Lifelong Continuous Learning

Develop EntrepreneurshipLead Constant Innovation

Chief Ethics OfficerChief Environment OfficerChief Education Officer

Chief Entrepreneurship Officer

Sustainable Competitiveness and Responsible Growth

29

Balanced & Integrated Efforts

Environmental Performance

Social Performance

New Paradigm

Care Triple Bottom-Lines

Economic/Financial Performance

30

New Paradigm Initiative

Moon, Kook-Hyun

o YuHan-Kimberly (YK)

o Kimberly Clark – North Asia

o YuHan Schools

o Presidential Special Committee

on New Competitiveness

o Forest For Life

CEO, Chairman

Group President

Chairman

Chairman

Founding Chair

1995-2007

2003-2007

2004-2007

2004-2006

1998-2007

31New Paradigm

Corporate Social Responsibilities

1985 2001Before plantation After 16 years “Keep Korea Green”

32

Closed Forest Tended Forest

New ParadigmSocial Enterprise

“Forest For Life”

33

New Paradigm Opportunity for Korea

Job & Value Creation Opportunity

34

New Paradigm Opportunity for KoreaFlexSecurity and Future Jobs

35New Paradigm Adopted 2004-2007

By Industry

2004

2005

2006

2007

Total

Manufacturing

5

14

28

12

59

Service

3

24

28

40

95

Public

5

11

20

21

57

Total

13

49

76

73

211

36New Paradigm Adopted 2004-2007

By Size (Employee)

2004

2005

2006

2007

Total

300+

7

12

19

7

45

300-100

2

15

25

23

65

99-1

4

22

32

43

101

Total

13

49

76

73

211

37New Paradigm Performance 2004-2007

Growth Turnover Rate

Annual Training Hours Job Created

Ave M S P

29.12%29.53%

31.46%

13.78%

Ave M S P

-55.8%

-75.5%

-21.4%

-85.7%

Ave M S P

10.92%

14.11%

9.54%7.23%

Ave M S P

549%

1092%

54.3%

274.2%

Park Woo-Sung (KHU), 2006

38

중국의 경제 한류 , 뉴패러다임 모델

39

New Paradigm Opportunity for ChinaKnowledge vs Muscle

$ 3,000

$ 2,500

$ 2,000

$ 1,500

$ 1,000

$ 500

40

Q & A

Thanks!