Lean@Hilti The way to operational excellence Mr Patrick O’Connell Kostas Kefalakis Hilti Corporation

Agenda Introductions & Expectations from the group Why Lean@Hilti is fundamental to our strategy History of Lean@Hilti Global & Local Lean structure How we spread Lean@Hilti

Lean is 50% about Tools & 50% about Mindset Both are required to reach operational excellence It takes Tools and Systems to create results and business impact It takes a Culture of Excellence (Mindset & Behaviors) to sustain results

Why Lean@Hilti & Link to our strategy The elimination of waste and continuous improvement makes us Faster…in our processes Better…in the quality of our products and services More cost effective…in the way we do business

Eliminate non-value-adding activities Eliminating waste = Reduced lead time Eliminate non-value-adding activities From the customer Value stream To the customer Reduce lead time

Examples of Wastes Inventory Motion Waiting Transport/information transfer Unused potential Over processing/unsuitable methods Defects Over information/production

History of Lean @ Hilti Lean@Hilti next level 2016+ 2015 Value stream thinking 2014 Lean in R&D 2013 Lean Assessment 2012 Lighthouse projects in different areas 2011 Lean@Hilti initiated 2010 Cookbook, standards, methods 2009 Start of Lean journey in Manufacturing Various methods…

Local Lean is vital to support the Lean journey Line organization: Local/ Regional LEAN organization: Global LEAN organization: Region Head/ Plant Manager Head of LEAN Global SC Warehouse/ Unit Manager LEAN Manager Local (60 – 100%) LEAN Manager Global SC Coach Jr. LEAN Manager Local (100%) Optional position, mandatory only at certain conditions Global LEAN community Change Agents within workforce (>10%) LEAN Exchange and best-practice sharing Solid line (direct report) Dotted line (Functional) Example from Supply Chain

How we spread Lean@Hilti: 4 Main Focus areas Trainings & Workshops Support Projects Lean Assessment Gemba coaching

Management Kick-off & Buy-in Experience visits Champions and unit Manager Lean Basic training Vision workshop Lean road map and target per function

Foundation of CI: Speedy Quality Circle Method to rapidly tackle small problems and improvement ideas Foundation for creating a bottom-up inclusive culture Embeds mindset of PDCA, problem definition, 5-why etc

Kaizen Workshop – “our bread & butter” 3-5 day event that uses a cross-functional team empowered to solve problems and drive improvements in a rapid manner on the shop floor Key Roles: Sponsor, Lead, Facilitator, Core team, Supporting team Example of Kaizen Workshop:

Kaizen Workshop Example – Manufacturing Topic: Transport Mgmt. Workshop Scope: Machine disturbance & Working space Team: 6 persons + Global lean facilitator Days: 3 days Impact: +20% pieces/shift | -50% walking

Kaizen Workshop Example – Transportation Topic: North America Transport Management Scope: Reorganize Transport routes Team: 10 persons + Global lean facilitator Days: 4 days Impact: $ 600.000

Kaizen Workshop Example – R&D Topic: Shorten Development Loops Scope: Dev.  Prod.  Assy  Test Team: 8 persons + Global lean facilitator Days: 2.5 days Impact: -30% in development time Before After

Support for Projects - Value Stream Projects 1-4 month project that uses a cross-functional team empowered to improve the entire value chain of a product from customer to supplier Key Steps: As-is analysis  Target state  Solutions  Follow-up Example: Batteries VSP – 7 workshops over 4 months with a team of 6 Results: $500,000 savings

Gemba Coaching Lean tool used to; Drive standardisation and sustainability Bring leaders closer to the ‘Gemba’ and to the team Drives continuous improvement Completed daily on different topics and all levels of the organisation Findings worked through the continuous improvement cycle

Lean Assessment 11-categories assessed over 2 days on-site global & local leadership to evaluate the lean maturity of a site to define next steps Maturity assessment in order to guide the site to the next level of Lean

Why Lean@Hilti & Link to our strategy The elimination of waste and continuous improvement makes us Faster…in our processes Better…in the quality of our products and services More cost effective…in the way we do business