Lean Six Sigma: A Critical Value Driver for 3M

Transcription

4 2012 Corporate Overview 3M is the Innovation Company That Makes Progress Possible Create transformational products and solutions that enable customer success and improve people s lives around the world Collaborative, high-energy approach to solving the toughest problems across industries and markets: Constantly exchange and build on each other s ideas Uncover new connections between seemingly unrelated markets and more than 40 diverse technology platforms Culture of intellectual curiosity and creativity that pushes boundaries 4 3M All Rights Reserved.

5 2012 Corporate Overview Enabling Customer Success: Our Five Market-leading Business Groups Through our five market-leading business groups, we turn our ideas into ingenious products and solutions that make life better for our customers and end- users every day Consumer Simplifying life and work Industrial From purification to aerospace changing how industry works Electronics & Energy Enabling the global power and telecommunications ti networks and the world's electronic devices Safety & Graphics Keeping you safe, your world secure and enhancing visual communication and interactivity Health Care Promoting health and improving quality care 5 3M All Rights Reserved.

6 2012 Corporate Overview Acknowledged by Opinion Formers Most Innovative Companies 3M Ranks 3 rd Most Reputable Companies 3M Ranks 4 th Most Admired Companies 3M Ranks 15 th Most Respected Companies 3M Ranks 7 th Best Global Green Brands 3M Ranks 2nd 7 time ENERGY STAR Sustained Excellence Award Winner European Best Multi-national Workplaces 3M Ranks 16 th 6 Based on 2011 information 3M All Rights Reserved.

7 Corporate Overview

8 2012 Corporate Overview Working Together to Achieve More Innovate with a core focus on helping customers tackle challenges and enable progress in our fast-changing world 3M innovations are born from the contributions of many, working together to share and reshape ideas in a way that creates more than could be done alone Borderless exchange and expansion of ideas between 84,000 employees 65 countries, including growing footprints in developing markets 46 technology platforms 5 market-leading businesses R&D engine with consistent prioritization and investment Partnership between 3M and our customers yields tangible success 8 3M All Rights Reserved.

9 Corporate Overview One Strong Brand, Complemented by Many Strategic Brands 3M named one of the Best 100 Global Brands by strategic brand consultancy, Interbrand in 2012 Proud of the household names we have created with our market leading strategic brands Our strategic brands play an integral role in strengthening the 3M brand and allowing us to deliver tangible results that enable customer success At 3M, we continuously build on each other s ideas 3M All Rights Reserved to innovate unexpected solutions and make progress possible

10 Corporate Overview

11 2012 Corporate Overview Ideas Connect Across Diverse Technologies Ab Abrasives Bi Biotech Em Electronic Materials Pm Polymer Melt Processing Sm Specialty Materials Ac Acoustics Ce Ceramics Es Electronics & Software Nt Nanotechnology Po Porous Materials & Membranes Su Surface Modification Ad Adhesives Dd Drug Delivery Fc Flexible Converting & Packaging Mi Microbial Detection ti & Control Nw Nonwoven Materials Pp Precision Processing Tt Track & Trace Am Advanced Materials Di Display Fe Flexible Electronics Fs Filtration, Separation, Purification Is Integrated Systems & Design Me Metal Matrix Composites Mo Molding Op Opto-electronics Pr Process Design & Control Vp Vapor Processing An Analytical Do Dental & Orthodontic Materials Fi Films Im Imaging Lm Light Management Mf Mechanical Fasteners Mr Microreplication Pd Particle & Dispersion Processing Rp Radiation Processing We Accelerated Weathering As Application Software Ec Energy Components Fl Fluoro-materials In Inspection & Measurement Md Medical Data Management Pe Predictive Engineering & Modeling Se Sensors Wo Wound Management 11 3M All Rights Reserved.

12 Corporate Overview Making Progress Possible All Around Us

13 2012 Corporate Overview Driving Progress Around the World Canada Mexico Costa Rica Trinidad & Tobago Colombia Brazil Guatemala El Salvador Jamaica Dominican Republic Puerto Rico UK Denmark Germany Netherlands Norway Czech Republic Panama Italy Ecuador Venezuela Chile Peru Argentina Spain Uruguay Portugal France Morocco Belgium Greece Turkey Sweden South Africa Estonia Kenya Egypt Finland Israel Latvia Lithuania UAE Poland Pakistan Kazakhstan Switzerland Austria India Sri Lanka Hungary China Indonesia Ukraine Russia Taiwan Japan Vietnam Malaysia Australia Sales & Marketing Romania Korea Hong Kong Philippines Thailand Singapore New Zealand Manufacturing/Converting Technical Capabilities 13 3M All Rights Reserved.

14 2012 Corporate Overview Working from a Position of Leadership and Growth Global Sales: $29.6 Billion (66% International) Net Income: $4.3 Billion R&D & Related Investment: $1.6 Billion Earned 514 U.S. Patents Global Reach: Sales in ~200 Countries One of 30 companies in DJIA Stock Index Five Market-Leading Business Groups 14 3M All Rights Reserved.

15 2012 Corporate Overview The 3M Opportunity World Class Innovation An Ecosystem of Ideas Trusted Partnership Collaborative Culture Unparalleled Quality Curious Problem Solvers Uncommon Connections Creative Passion 15 3M All Rights Reserved.

16 Lean Six Sigma Evolution Inception Establishment Cultural Transformation Six Sigma / DMAIC Lean Six Sigma Business Execution Process / Hoshin Kanri 2012 and beyond, deeper Lean penetration in emerging markets LSS deployment in Acquisition Integration Increase Supply Chain Optimization Focus 65,000 employees trained 73,000 Projects Closed or in-process 450+ full-time, committed resources globally 720 Customer Projects either In Process or Closed from inception 16 Investor Meeting November 8, M. All Rights Reserved.

17 Lean Six Sigma is Creating Natural Deep Connections Business Units Finance Supply Chain Common Leadership Language Sales & Marketing 3M Lean Six Sigma IT Manufacturing Leadership Development Best Practice Replication Lean Six Sigma Is Established At 3M As the Common Language, Connecting Functions Across 3M Globally 17 Investor Meeting November 8, M. All Rights Reserved.

18 The Correlation Between Six Sigma Resources and Benefits Six Sigma Cer rtified Black Be elt Population 3,000 2,500 2,000 1,500 1, Black Belts in every region Over 90% of all employees Six Sigma trained (GB) 99% of executives Six Sigma trained There is Opportunity for Greater Savings 18 Investor Meeting November 8, M. All Rights Reserved.

19 Lean Six Sigma is a major contributor to 3M s success Annual LSS Cost Project Savings $Billions $0.9 $0.8 $1.0 LSS projects needed in order to... Fund additional technology development and new product launches Finance new plant start-ups Offset inflation and other cost increases while at the same time, 3M continues to deliver premium returns Low 20s operating margins and 20% + ROIC e Creating the fuel to drive continued growth in sales and profits 19 Investor Meeting November 8, M. All Rights Reserved.

20 These Lessons Influence Our Manufacturing & Supply Chain House of Excellence fortifying our operating framework even further fortifying our operating framework even further Vision Primary Lever Key Principles Improvement Targets Primary Initiatives Highest quality, lowest total cost & shortest lead-time Extended Value Stream Improvement Design Material Flow Quality and Service Product Development NPI and Product Redesign Multi Sourcing Supplier Mgmt Package design COGS Improvement Productivity Waste elimination Plant productivity Asset utilization Speed & Cycle time Process continuous improvement SNOP Rigor Lean revitalization HISC focus Inventory Reduction System design Global footprint Regionalization / localization Consolidation Bus process redesign Key metrics Foundational enablers For stability Material Cost Muti-Source Yield / T-OE, OEE, Unit cost, Turns, Cycle days, OTIF DPPM Lean manufacturing and supply chain Lean Six Sigma Safety Lean and Six responsibility Sigma at workplace Safe and Business responsible Transformation workplace Business Transformation RSS, T-OE, Tax rate Foundational stability tools Kaizan Early Supplier Involvement Waste Elimination Visual Management Standardized Work Preventive Maintenance PDCA Scientific Method Robust Products and Processes 20 Investor Meeting November 8, M. All Rights Reserved.

21 Big Questions Business Execution What are the vital few priorities / attributes that MUST be in place in order for an organization to successfully deliver business results? Three Words to Remember Resource Allocation & Alignment Focus on Vital Few Cross functional prioritization to deliver the business plan Accountability Key business metrics have an Owner (A3 owner) Key business metrics are aligned directly to employee contribution & development plans Execution Execution and development mindset is elevated (plans in balance / align with organization s capacity to implement) Continuous and step-change improvements through business improvement process 21 Investor Meeting November 8, M. All Rights Reserved.

22 2012 3M Quality Achievement Award From Lead to Lead-free Soldering on Single Pair Protection plugs, for outstanding achievements ACHIEVEMENTS Yield improvements of over 90% Shift Output improvement by 20% Rework reduction of over 65% Reduction in power use by 10% ZERO customer defects GOLD A d T GOLD Award Team 3M Pondicherry, India Simpler Solution Greater Results Team 22 Investor Meeting November 8, M. All Rights Reserved.

23 Customer Voices 1 2 Reduced oversight on quality! 3 They are more than just a Supplier Our Mission Of Customer Success Is Paying Off Everywhere 23 Investor Meeting November 8, M. All Rights Reserved.

24 Looking Ahead, We Are Accelerating Lean Penetration Even Further To Generate Cash Reduce Cost and Support Growth To Generate Cash, Reduce Cost and Support Growth Building Shareholder Value Strategic t Imperatives Investor Meeting November 8, M. All Rights Reserved.

25 In Summary 3M s key focus is to drive superior levels of Operational Excellence company wide to improve : Cost Cash Growth We are building from a solid foundation and structuring ourselves to further support high growth opportunities Working to further cement Lean Six Sigma as the foundation of all operations and growth Building to expand our successes in Acquisition Integration We Have Made Significant Strides In Lean Six Sigma Deployment, However, There is Much More to Do And We Are On It! 25 Investor Meeting November 8, M. All Rights Reserved.