Supplier Conference Presentation - WABCO Us/Suppliers... · Local SourcingLocal Sourcing Global...

transcript

TODAY’S OBJECTIVES

Understanding the critical role you have in our strategy

TARGETSTARGETS STRATEGIC LEVERSSTRATEGIC LEVERS

SIX SIGMA LEAN

DEPLOYMENT

COST REDUCTION

PROJECTS

GLOBALIZATION

ZERO DEFECT

ENHANCED

PRODUCTIVITY

PASSION, POWER, PERFORM

JACQUES ESCULIERCHAIRMAN & CHIEF EXECUITIVE OFFICER

� Following a severe decline in 2009, our industry offers SIGNIFICANT GROWTH opportunities with MAJOR SHIFTS in global production distribution

MARKET FOCUS

Products, systems, services

and support for vehicle manufacturers

and aftermarket customers

DAIMLER

FREIGHTLINER

PACCAR

SCANIA

among others

DAIMLER

GENERALMOTORS

PSAPEUGEOTCITROEN

SSANGYOUNG

among others

EVOBUS

NISSAN

YUTONG

among others

AFTERMARKET

Supportingfleet and truckowners overvehiclelifetime

Distributors

Workshops

Fleets

GREAT DANETRAILERS

KÖGEL

SCHMITZCARGOBULL

WABASH

among others

TRAILER

Engaged by the industry’s leading players

MARKET EVOLUTION

Significant shift in regional distribution of CV production

Global Truck & Bus Production >6t GVW

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PRODUCTION FORECAST

Market Forecast for WE, NA, SA, Asia and E Europe from “World Truck Industry Forecast Report” December 2009 HIS Global Insight

Developed markets not planned to return to their historical peaks

TRUCK & BUS PRODUCTION (thousands)

0'08 '09 '10 '11 '12 '13 '140

'08 '09 '10 '11 '12 '13 '14

W. Europe E. Europe Japan &Korea

N. America

IndiaChina

S. America

� Following a severe decline in 2009, our industry offers significant growth opportunities with major shifts in regional distribution

� In 2005, WABCO embarked on a path ofCONTINUOUS TRANSFORMATION to enhance customer service and SUSTAIN DIFFERENTIATION

WABCO VISION & CORE STRATEGY

Sustained through our vision, ‘Passion for Innovation’

� INNOVATION/TECHNOLOGY LEADERSHIP Bring value as a development/systems integration partner Integration solutions provider

� Vehicle efficiency and environment� Advanced safety and driver effectiveness

� GLOBAL CAPABILITY Connect with customers in every region Leverage global operations/expertise

� EXCELLENCE IN EXECUTION Differentiate WABCO through

� service and quality excellence � breakthrough performance in cost-reduction� maximum operational efficiency(backbone is Six Sigma Lean)

INNOVATIONS LED BY THE MARKET

Offering end-to-end solutions to today’s industry issues

COMPRESSION & BRAKING

Air Compressors

Air Processing

Conventional Brake Controls

Actuators

Foundation Brakes

Suspension Control

Anti-Lock Braking Systems

Transmission AutomationClutch Control

Electronic Brakingand StabilityControl Systems

Car Products

POWER THROUGH GLOBALIZATION

Powerfully positioned across emerging growth markets

Local MarketConnectivity

LocalManufacturing

Local SupplyChain

ProductDevelopment

10%22%

30% 35% 40%47%

2000 2002 2004 2006 2008 2010F

Share of Sourcing:

High Cost Country Best Cost Country

Share of Variable Workforce:

44% 42% 48% 53%66% 68%

2005 2006 2007 2008 2009 2010

2009: A CRITICAL BALANCE

Sustaining the right balance for survival and success

Essential short-term cost focus and risk management

� OPEX reduction; materials savings

� Carefully manage restructuring; sustaining flexibility

� Productivity enhancements

� Supplier/customer liquidity

Long-term pursuit of WABCO vision & strategies

� Globalization

� Innovation & technology leadership

� Excellence in execution

2009: FINANCIAL SUMMARY

Growing from a strong result despite severity of industry slump

� Anticipated crisis; initiated response in summer 2008

� Achieved flexibility; managed nearly 50% sales decline/first half of 2009 followed by sequential improvement in second half

� Established presence in emerging markets boosted performance

� Over $100M of OPEX & indirect manufacturing cost savings

� Strong productivity performance and sustained transformation initiatives

Sales $1,491.5 $2,588.0 (42%)

Performance Op. Income 42.8 298.2 (86%)

Performance EBIT 38.9 301.1 (87%)

2.6% 11.6%

Performance Net Income 25.7 246.8 (90%)

1.7% 9.5%

Performance EPS 0.40 3.75 (90%)

FY 2009 FY 2008 Growth(in $ Millions except per share data)

$ 78.8Free Cash Flow

2010 FRAMEWORK

Confident of outperforming the market in 2010

FULL YEAR GUIDANCE

Perf. Op Margin

Salesvs. ‘09

Perf.EPS

Free Cash Flow Conversion

15% – 20%

5% – 7%

$1.00 – $1.40

80% - 90% (Excluding Stream. & Separation)

� Following a severe decline in 2009, our industry offers significant growth opportunities with major shifts in regional distribution

� In 2005, WABCO embarked on a path of continuous transformation to enhance customer service and sustain differentiation

� WABCO service levels improved significantly as we preserved acceptable financial results in the face of a severe decline in revenues

� We need your FULL ALIGNMENT and mutual support to reach the next level on our path to CONTINUOUS SUCCESS

PERFORMANCE THROUGHCHANGE

Generating margin in an increasingly competitive industry

� Commit to continuous CHANGE See the opportunities in -30% A trigger for innovation

� Demonstrate clear differentiation GLOBALLY Flexibility Adding value to WABCO supply chain

� Adhere to an advanced management environment: SIX SIGMA LEAN Enabling quality Enabling cost reduction

URGENT NEED TO ALIGN

Rapid action required to balance quality performance

� Resource absorption is not sustainable

Cost burden on WABCO and you

Pressure is increasing as WABCO drives improvements

Diverting valued expertise

� Share learning of WABCO’s journey towards zero defects

Mutual benefit from future savings

Essential foundation before strategic collaborations

� The KEY REQUIREMENT to satisfy YOUR customer

Supplier quality levels >1,000 PPM

WABCO 0KM quality levels <50PPM

EKKEHARD PETZOLDVICE PRESIDENT

SOURCING AND PURCHASING

Breakthrough approach introduced in 2007

SUPPLIER CONFERENCE OUR OBJECTIVES 2007

Objectives

Transfer challenges into business opportunities

DefectsDefects 00

CostsCosts --30%30%

Objectives

Transfer challenges into business opportunities

DefectsDefects 00

CostsCosts --30%30%

YOUR RELATIONSHIPWITH WABCO

Working on common objectives leads to mutual satisfaction

Source WABCO Supplier Questionnaire 2010

Status

TrendImproving

Stable

Deteriorating

Not sure

Best in class

Above average

Average

Below average

A clear focus on foundations is essential for sustainable benefits

YOUR FOCUS 2010Source WABCO Supplier questionnaire 2010

� Business opportunities

� Strong financial performance

� Innovation/market leader

� Global footprint

� Six Sigma Lean

� Flexibility

� Ethical

Strong interest in deeper collaboration with best suppliers

OUR VALUE PROPOSITION

SOURCING & PURCHASING OUR ROLE & MISSION

Be the BEST in quality, cost, delivery

& innovation

SOURCING & PURCHASING OUR ORGANIZATION

A diverse, global team seeking to deliver breakthrough performance

Global SourcingGlobal Sourcing

Strategic Sourcing

Supplier Development

Six Sigma & Quality

Strategic Sourcing

Supplier Development

Six Sigma & Quality

Local SourcingLocal Sourcing

Global PurchasingGlobal Purchasing

Project Purchasing

Operational Purchasing

Project Purchasing

Operational Purchasing

Site PurchasingSite Purchasing

Decision TakingDecision Taking

Cross-functional

Data-driven

Cross-functional

Data-driven

Single decisionSingle decision

WABCO EXPECTATIONS FROM OUR SUPPLIERS

A robust extended enterprise for sustainable success

� Aligned to vision

� Global capability

� Innovation leadership

� Flawless execution

� Continuous improvement

� Zero defects

� Flexibility

Sustaining the breakthrough mindset is key

SOURCING & PURCHASING OUR OBJECTIVES

DefectsDefects 00

CostsCosts --30%30%

JEAN-CHRISTOPHE FIGUEROA

VICE PRESIDENTVEHICLE DYNAMICS & CONTROL

VISION OF THE FUTURE

Global trends relevant to our customers

� Increasing mobility

� Reduction of natural resources

� Growing need for environmental care

� Increasing demand for safety and security

� Shift of economies among regions

CUSTOMER VALUES

VEHICLE DYNAMICS &CONTROL

COMPRESSION & BRAKING

DRIVELINE CONTROL

TRAILER SYSTEMS & AFTERMARKET

CAR SYSTEMS/ PRODUCTS

VEHICLE

EFFICIENCY

ENVIRONMENT

ADVANCED

SAFETY AND

DRIVER

EFFECTIVENESS

Right response to customer concerns

Constantly striving for better performance…

WABCO has a clear path to

enhance vehicle efficiency by

�Within 5 years: 11% additional weight reduction on brake system

� Clutch Compressor eliminating parasitic horsepower in off-load is our latest BREAKTHROUGH development

We expect our suppliers’ engagement at every stage of these innovations

� Available SOON: Products to achieve 10% fuel savings

TARGETING VALUED RESULTS

~ 100.000

IMPENDING SAFETY LEGISLATION

Advanced Emergency Braking

Lane Departure Warning

as of 2013+

Electronic Stability Control

as of 2013+as of 2011

~ 300.000 ~ 450.000 ~ 450.000

POTENTIAL GROWTH LINKED TO LEGISLATION ADOPTION

~ 100.000 ~ 100.000

~ 200.000 ~ 200.000 ~ 220.000

Legislation drives systems usage to 100%

A strong path for volumes and technology

BEGINNING OF A NEW ERA

� Safety functions will become MANDATORY

� Production volumes will increase DRAMATICALLY for

equipment driven by law

WABCO has a vision to reduce the number of

commercial vehicle accidents by 50%

by 2020

� We expect our SUPPLIERS TO BE ENGAGED at every

stage of these innovations

CHRISTIAN WIEHENCHIEF TECHNOLOGY OFFICER

Primary focus is total cost of ownership

Fuel Efficiency

Energy Recovery

Weight Reduction

Suspension Control

Advanced Driver Assistance System

Competences in Electronics

DRIVING INNOVATION

Braking & Stability Control System

CLEAN AIR MANAGEMENT

Air circuit delivers significant energy savings

Compressor� Clutch (on demand)

� Aluminium use (crankcase)

� Two-stage compression

� Lubrication-free

� Electrically driven

� Integrated

Air Processing Unit� Delivers in overrun phases

� Oil separation

� Integrated

ELECTRICAL AUXILIARIES FOR HYBRID VEHICLES

Hybrid drive trains for buses and heavy duty trucks

DCdiesel enginerectifier

DCinverter3~400V

e-comp

SteeringPump

Air condition

electric driven auxiliaries

converter

electric driven axle

energy storage(battery or capacitor)

generator

e-motor& generator

DC intermediate circuit450V – 750V DC

DCinverter3~400V

e-comp

SteeringPump

Air condition

converter

generator

e-motor& generator

DC intermediate circuit450V – 750V DC3~AC

DCinverter3~400V

e-comp

SteeringPump

Air condition

converter

generator

e-motor& generator

DC intermediate circuit450V – 750V DC

E-comp� Electrification projects at many bus and truck manufacturers

� Series hybrids and fuel cells require electrical drive of auxiliaries

� Entry with electrically driven air compressor

AIR DISC BRAKE EVOLUTION

Entering the heavy duty truck segment

1. Generation

PAN2. Generation

PAN3. Generation

FUTURE

Generation X

NG22MAX4. Generation

1. Generation

PAN2. Generation

PAN3. Generation

FUTURE

Generation X

PAN2. Generation

PAN3. Generation

FUTURE

Generation X

PAN2. Generation

PAN3. Generation

FUTURE

Generation X

Proven reliability growing into high volume applications

� Light weight design for 16” up to 25” wheels

� Highly efficient single-piston design

� Strong and redundantly sealed guiding system

� Significant reserves to mitigate overloading

ELECTRONICALLY CONTROLLED BRAKING SYSTEM 3RD GENERATION

New component family – power of applying a standard

Rear AxleModulator

Trailer Control ValveABS Valve

ABS Valve

Central ModuleESC

Steering AngleSensor

BrakeSignal

Transmitter

Radar Sensor

Front AxleModulator

DRIVELINE CONTROLS

Modular system highly attractive to emerging markets

25 years of experience in driveline automation

50 % penetration in European heavy duty trucks

� Fuel efficiency

� Driver effectiveness

� Reduced operating cost

� Economy, comfort

AMT integrated AMT 3rd generation AMTMedium duty Clutch actuator Pedal unit

OptiDriveTM

ELECTROMECHANICS & ELECTRONICS

Sensors, Actuators, Cable & Connections

� Reduces size and weight

� Improves robustness

� Reduces complexity

� Reduces cost

� Mechatronics integration

Electronic Control Units

� Obsolescence management

� Components for lead-free process

� Emissions reduction > encapsulation- high temperature PCB technology

Key components for all systems

OUTPUTSUPPLY

EXHAUST

KURT LEHMANNVICE PRESIDENT

PRODUCT DEVELOPMENT

Future systems hold great opportunities for growth

� Vision systems

� Autonomous functions

� Internet service solutions

� Full domain control systems

� Hybrids

Evolution into systems level

� Move from “functional” control to “supervisory” control

� Systems must be “Fault Tolerant”

� Organization must develop competencies

Need for “Engineered Products”

� Provide products and components with described “functions”

� Functions must be secure against failure – FMEA as standard

� Supply base to deliver fully qualified products and expert services

SYSTEMS PROVIDE OPPORTUNITIES

Move to systems increases need of functional products

Standardized

processes

and methods

Standardized

project

organization

& roles

Standardized

deliverables

Modular

product

Architecture

Standardize

IT- Tool

Support

Integrated IT Based Product

Development Methodology

INTEGRATED WABCO PRODUCT DEVELOPMENT WORLDWIDE

Implementing a systematic framework is essential

CAPABLE

COMMIT

DELIVER

Discipline and excellence:

� COMMIT to QCD

� CAPABLE to develop prototypes and meet PPM

� PROVE function and component meets requirements

� DELIVER PPAP’ed product for C-sample delivery

A worldwide process standard

CROSS CDP: CROSS-FUNCTIONAL DEVELOPMENTCommon Development Process

FUNCTIONAL ALIGNMENT

Customer Leadership

Program Management

Product Or Component

Commercial

Project Management

Finance

Suppliers

Engineering Quality

M&L(VS)

Ensure crisp project execution:

� All resources and responsibilities defined

� All elements and activities defined

� Product defined

� Fully integrated and cross functional

� Applied to all product development and cost reduction projects

A global standard applied to all projects

DANIEL SAMSONVICE PRESIDENT

MANUFACTURING AND LOGISTICS

Claye Souilly, France

Mannheim, Germany Hanover & Gronau, Germany

Wroclaw, Poland

Meppel, The Netherlands

Qingdao, China

Ambattur, IndiaMahindra, India Jamsedpur, India

Jinan SWAP (JV)Jinan, China

Taishan, China- planned Mid 2010-

Charleston, SC, USA (JV)

Madrid, SpainCampinas, Brazil Dubai

Higashi, Japan

Distribution Center

Production Location

Pyungtaek, KoreaNeunkrichen, Germany (CEVA)

WABCO MANUFACTURING LOCATIONS

GLOBALIZATION:MANUFACTURING STRATEGY

GLOBAL MANUFACTURING STRATEGY

Optimizing manufacturing workforce

• Supporting LOCAL MARKETS

from LOCAL FACTORIES

• Leveraging manufacturing

capabilities in CHINA and INDIA

to lower costs

• Starting to move from high cost

countries to BEST COST

COUNTRIES

• Accelerating SIX SIGMA LEAN

deployment in all facilities

SHARE OF VARIABLE WORKFORCE

63% 61%56% 58%

52%47%

34% 32%

37% 39%44% 42%

48%53%

66% 68%

2003 2004 2005 2006 2007 2008 2009 2010

� VOLUME RECOVERY expected for 2010

� FORECAST ACCURACY is a myth!

� CUSTOMER ORDERING BEHAVIOR has changed towards short term orders

� Only one solution to fulfill customer demand: FLEXIBILITY

Flexibility is the key success factor in 2010

LUIS MARTINSGROUP QUALITY DIRECTOR

Quality finally is the key enabler to stay in and grow business

To listen to the Customer…

To enhance capability…

To continuously raise the bar

Quality is...

WHAT DOES QUALITY MEANFOR WABCO

Stable and continuous downward trend

TO LISTEN TO CUSTOMER EXPECTATIONSP

� Zero tolerance for defects

� Perform to committed targets

� Respect response time

� Right PPAP on time

within 24 hours

Prevent the flow of defects through the supply chain

TO LISTEN TO CUSTOMER PERFORMANCEIn

� Despite improvements some of you are still far from WABCO’sexpectation

� Need to manage inconsistency and negative trend

ENHANCE CAPABILITY - MATURITY LEVEL

Unstable process & lack of Quality control

Unstable process with established firewall

III. Stable process & strong Quality control

II. Assured Quality

I. Lean / design & build in Quality

Moving from reactive to proactive Quality management

Maturity level N° of suppliers

OVER 10 000

1 000 10 000

1001 000

LESS10

Zero defects at Customer

Internal Preparation

Capable process

Joint approach to component requalification

Ready for execution

Completion level

Execution Control

ENHANCE CAPABILITYDRIVING PERFORMANCE FROM LEVEL V to III

STRATEGY TO ENHANCE CAPABILITY

� 0 km claim

�Warranty

� High scrap

� High cost of

poor Quality

Firewall

Permanent inspection

Firefighting

ProactiveQuality

Reactive Quality

Evolve from reactive to proactive mindset

STRATEGY TO ENHANCE CAPABILITY

Design Quality into product

Built Quality into process

Customer Satisfaction

� FMEA

� Component Quality Plan

� Poke Yoke

� PPAP

� Standardization

� Perfect Tooling

� Problem Solving

� Lessons Learned

� Look Across

ProactiveQuality

Reactive Quality

Evolve from reactive to proactive mindset

Metrics are the results of capable process through Six Sigma Lean

CONTINUOUSLY RAISE THE BAR

Understand Customer expectation

Plan activity

Check your job

Act & standardize

Moving up maturity level

To stay in business with WABCO requires you to be level III minimum

Level II is the threshold to grow your business with WABCO

In summary

SYLVAIN DA CUNHA SUPPLIER DEVELOPMENT LEADER

Poor Quality could lead to a life-or-death situation

WHY IS THIS IMPORTANT

WABCO wants to make SAFE products

to help prevent this …

Today is far from where we want to be

PPM, INCIDENTS

Target

Spikes at SOP

CHALLENGE

PPM, INCIDENTS

Target

TODAY - NEW PRODUCT LAUNCH

In 2009 poor Quality cost min WABCO $40M, what is it costing you?

THE COST BURDEN

It creates a hidden mass ofWASTES

CQP is the WABCO methodology to ensure costumer satisfaction

COMPONENT QUALITY PLANNING

A WABCO method inspired from the Advanced Product Quality Planning

It defines and establishes the steps necessary to assure that a product satisfies the customer

Definition OK to Propose

OK to Quote

OK to build B-Prototype

OK to Tool

x Common Development Process

OK to Process Validation

OK to Deliver SOP

Concept

Prototype Design

Series Design

Industrialization

OK toRelease Team

Validation

Stabilization

CQP INTEGRATION INTO CROSS CDP

CQP is integrated into product development

Component Quality Planning

Project Definition / Supplier Selection / Supplier Nomination

Supplier Process Planning

Process Preparation & Validation

Production Control

Focus on prevention is better than cure

EXPECTATION OF YOU

Are youPREPARING your products

EARLY enough?

Urgently LIFT your maturity level from level V to III to stay in business with WABCO

PERFORM to the targets you receive

NATALIA NOBLET BUSINESS IMPROVEMENT LEADER

PROCESS IMPROVEMENTS

Dedicated functional team to drive process excellence

Six Sigma & Qualityin Sourcing & Purchasing

� Integrate market requirements

� Align between functions

� Share best practice

� Standardize processes with suppliers

Engine for functional excellence and an important communication link supported by clear standards and

efficient processes

BENEFITS OF COMMON STANDARDS

Common standards are our foundation stone

1. Set clear expectations

2. Better planning

3. Improve communication

4. Enable smooth handoffs

5. Synchronize the tasks

6. Performance benchmark

STANDARD PROCESSES

Clear interfaces to WABCO’s global operations

Drive FUNCTIONAL EXCELLENCE and provide CLEAR EXPECTATIONS

WABCO UNIVERSITY

A gateway to process improvement skills

� Six Sigma (Yellow & Green Belt)

� Process optimization

� 5S & waste elimination

� Communication & visualization

� Problem solving techniques

PROCESS IMPROVEMENT

Over 10 000 participants a year

YOU are the critical piece in our process improvement plans

?Are YOU ready to improve together

www.roeders.com

A Lean StoryA Lean Story

G.A.Röders –Company Presentation

• Founded in 1814 in Soltau/Germany

• Family owned business in 6th generation

• Segments - Plastic molding- Aluminum die casting- Tool shop

• 140 employees, 11 mio € turnover (2009)

• Joint Venture in Uherske Hradiste/Czechia- Plastic molding and die casting- 80 employees, 7 mio € turnover (2009)

• Customers: automotive, medical care, aircraft, pneumatics

• First plastic part for WABCO in 1961

Joint Road to Lean

• Sep 2006 Lean workshop at WABCO in Wroclaw

• Oct 2006 Kick-off at G.A.Röders, 5S

• Feb 2007 Kaizen for logistics

• Aug 2007 SMED-workshop at G.A.Röders

• Jan 2008 Start standardization

• Aug 2008 Reduction of lot sizes

• Jun 2009 Internal kanban

• Jun 2009 Pull-production

• Jan 2010 Roll-out of continuous improvement (Measure-Analyze-Improve-Control)

Continuous Improvement Loops

Define standards

Processes become clear and simple

Deviations are immediately visible

Direct actions

Production sheet makes

deviations visible

Daily shift meetings -max. 5 minutes!

Immediate actions

Our Idea of Lean

Lean is “clear and simple”!

Not Lean!

Improvement loops (measure-analyze-improve-control) are installed for

• SMED

• Productivity

• Fill rate

• Internal scrap rate

• Rework

• Lead time for offers

Effects of Lean –Cash Flow Improvement

Stock from 239 k€ (2006) to 49 k€ (2009)

Overproduction down to 1,9 k€

Effects of Lean –More Flexibility

- 84 %

- 89 %

Effects of Lean –Lead Time new Tools

- 67 %

Manufacturing time for new tool reduced to 4 weeks

Effects of Lean –Lead Time new Tools

Manufacturing time for new tool reduced to 4 weeks

Started 02.02.2010 – Finished 26.02.2010

Success Factors

• Take a clear decision for Lean

• Develop a vision of Lean in your company

• Convince the staff

• Create standards, not bureaucracy

• Make processes reliable

• Do not overload your staff with Lean

• Have a look around

• Go to Gemba!

Benefits of Lean

Joint Lean activities have generated significant business increase with WABCO

Jay Michaels Lean Promotion Office Leader

WHAT IS SIX SIGMA LEAN?

Path to sustaining competitive advantage

� Increase customer satisfaction and loyalty

� Improve quality, delivery, productivity

� Reduce inventory

� Accelerate time to market

� Increase motivation among workforce

SIX SIGMA LEAN

Long term strategy for improvement integrates key suppliers

Baseline and

Initial Kaizen

Additional 13 suppliers in Lean program

Breakthrough quality through Six Sigma Lean

S2 line - Over 1,350,000 pcs. produced without customer claim

First mixed model line ‘S2’. 10 suppliersselected for Lean integration

Quality Stabilization System implemented

Additional 10 suppliersto be integrated

LEAN IMPLEMENTATION IN WROCLAW, POLAND

Lean Logistics

Operational Change

CustomerCustomer

DistributionCenters

SupplierMerchandized

SupplierProduct

Components

SupplierProduct

Components

OperationsOperations

Baseline Assessment(Future State)

Supplier Integration

Driving Six Sigma Lean across all aspects of the Value Stream

Customer Integration

ENTERPRISE-WIDE DEPLOYMENT

Project reviews on regular basis

joint improvements

Standard process for integration of suppliers

• Initial meeting

• Introduction of Six Sigma Lean• Key suppliers

identified based on shop floor needs

• Lean training at supplier site

• Joint lean assessment

• Definition of initial project

• Joint and supplier led improvement projects

• Regular project reviews

ROADMAP FOR SUPPLIER INTEGRATION

?Are you our missing piece

2010 can be a WIN-WIN year!!

SALVADOR MUNOZPROJECT MANAGEMENT LEADER

OUR CUSTOMERS REQUIRE

PASSION for our customer needs

RELIABLE

AFFORDABLE

YESTERDAY

Breakthroughs came from small groups …

Co-operation is essential

Today, success is more than ever a question of co-operation

2009 KEY SUCCESS FACTORS

Seeking to engage suppliers more deeply in 2010

Value chain

Alignment

100 engineers

80 project teams

400+ active projects

Cross-functional steering

GLOBAL CHANGE CONTROL process

All functions aligned to a common goal

From customer teams to supplier development

SOME SUPPLIERS actively and constructively contributing

Commercial

Project Management

Finance

Suppliers

Engineering Quality

M&L(VS)

PASSION to align

PERFORMANCE

Achievements begin with strong conviction

POWER of a structure

30%more than

cost reduction

0defects

Commercial

Project Management

Finance

Suppliers

Engineering Quality

M&L(VS)

SOURCES OF COST REDUCTION

Design Optimization

Processes Improvement

Supply Chain Localization

Exploiting all sources of quality improvement and cost reduction

?Are WE finding the missing piece

Mutual benefits as we grow together in 2010!!

JOHN HYNES STRATEGIC SOURCING LEADER

SOURCING & PURCHASINGOUR OBJECTIVES

Stretch targets drive innovation & performance

-30% Cost Reduction

Zero Quality Defects

Zero Delivery Defects

-30% Zero

Collaboration is the only way to succeed

SOURCING & PURCHASINGTHE CHALLENGES

Constantly challenge and change the status quo

Together we have to identify & develop “SUSTAINABLE” programs to compete YEAR AFTER YEAR

SOURCING & PURCHASINGTHE PROCESS

Technical, Process & Cost

Develop your business – protect your business

Define & Validate Projects

Fill the futurepipe-line

Design ProcessFootprint

Supplier Cost ReductionRoad Map

Proactive – not reactive – approach to cost reduction

Task NameJan Feb Mar Apr May Jun

Project 1 - Material ChangeDefinitionScopeplanningimplemementation

Project 2 - Design ChangeDefinitionScopeplanningimplemementation

<10<10<101530PPM

001510# of Incidents

5,5 %4,5 %3,5 %Productivity (%) w/o raw material

--Transfer of

automatic assembly

Transfer of direction control valve & piston cylinder

-transfer of leveling valve 1 Mio € -20%

Footprint Evolution

Equipment maintenance know-

Improve capabilities for machining

Process Evolution

-----Design / Innovation Evolution

HyABSwithdrawn1500

Chassis leveling valve to WCR

Turn parts100

Removed Business (k€)

Readiness for

WABCO potential outsourcing if needed

Readiness for

Transfer from HCC to BCC assembly

supplier1000

Turn part assemblies

Casting Machining1000

Potential New Business (k€)

4.669Turnover (k€)

20142013201220112010

<10<10<101530PPM

001510# of Incidents

5,5 %4,5 %3,5 %Productivity (%) w/o raw material

--Transfer of

automatic assembly

Transfer of direction control valve & piston cylinder

-transfer of leveling valve 1 Mio € -20%

Footprint Evolution

Equipment maintenance know-

Improve capabilities for machining

Process Evolution

-----Design / Innovation Evolution

HyABSwithdrawn1500

Chassis leveling valve to WCR

Turn parts100

Removed Business (k€)

Readiness for

Transfer from HCC to BCC assembly

supplier1000

Turn part assemblies

Casting Machining1000

Potential New Business (k€)

4.669Turnover (k€)

20142013201220112010

SustainablePerformance

SOURCING & PURCHASINGPOTENTIAL PROJECTS & PROGRAMS

Sustainable performance from continuous improvement actions

SevenWastes

Equipment &

Layout

Materials &Sub-Contract

Design

Footprint

U-shape cells, space reductionSMED, optimise equipment

Qualify more raw material suppliers,long term supply agreements

Specification & tolerances changes, material alternatives

Flexible best cost production locations

Overproduction, waiting, transportingprocessing, inventory, motion, defects

SOURCING & PURCHASINGBENEFITS YOU CAN SHARE IN

Common vision and right mindset

� Maintain and grow your margins

� Avoid difficult negotiations each year

� Grow your business

� Stable long term business agreements

� Satisfy WABCO’s expectations

� Become an integrated partner

Understanding the critical role you have in our strategy

TARGETSTARGETS STRATEGIC LEVERS

STRATEGIC LEVERS

SIX SIGMA LEAN

DEPLOYMENT

COST REDUCTION

PROJECTS

GLOBALIZATION

ZERO DEFECT

ENHANCED PRODUCTIVITY

WABCO DRIVERSWABCO DRIVERS

CONCLUSIONS

� CUSTOMER VALUES

� TECHNOLOGY AND

INNOVATION

� PRODUCT ENGINEERING

� MANUFACTURING EVOLUTION

� QUALITY

� PROCESS IMPROVEMENT

� SIX SIGMA LEAN

� CHANGE MANAGEMENT

� STRATEGY

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