Elliott Major’s presentation slides on Danaher Business System.
A global, diversified manufacturing corporation dedicated to continuous improvement and customer satisfaction
- Revenue 16% CAGR, four fold growth 1999-2009
- Operating Profit 18% CAGR
- EPS 20% CAGR
- $1.8bn cash flow
- NYSE $25B market cap. 22 p/e
- 18 consecutive years of Free Cash Flow greater than Net income
Danaher Strategic Platforms
A large portfolio of operationally efficient businesses, with industry leading brands, strong growth and high margins.
Michael Mauboussin: Here’s what active managers can do
- A continuous improvement mindset. Everything that we do today can be improved. Kaizen has no end.
- A team-based continuous improvement process. Utilizes DBS tools to quickly eliminate waste and standardize the resulting sequence of operations.
- Typical Kaizen event is an improvement opportunity identified by policy deployment
- Day 1: 1 to 2 hours of training
- Day 2: Study current situation, brainstorm
- Days 3 & 4: Implement improvement ideas
- Day 5: Standardize new process, report-out
What Is A 3-5 Year Breakthrough?
- Represents SIGNIFICANT change in PROCESS improvement, as seen through the eyes of the customer
- Requires the organization to stretch itself
- Usually, no standard or system exists for this level of breakthrough
- Can be characterized as a “Big Win”
Q Improve grade of service for call center from 72% to 99% in 3 years
D Improve OTD to customer request date from 80% to 98% in 3 years
C Increase operating profit 25% in 3 years
I Grow product line A sales +300% in 3 years
Aim High Because …
- Customers demand it (continually rising expectations)
- Competitors aren’t standing still
- Requires you to change paradigms
What Is An Annual Breakthrough?
- Represents HOW FAR you need to improve in first year to meet 3-5 year breakthrough objective
- Rule of thumb is 30-50% of your 3-5 year target in the first year
- Avoid the hockey stick
- Annual breakthroughs exceed budget targets
Q Improve Grade of Service for Call Center from 80% to 92%
D Improve OTD to customer request date from 80% to 91%C
C Improve gross margin by 15%to fund growth
I Grow product line A +125%
What Is A Top Level Improvement Priority?
- Process oriented
- Should lead to the creation of sustainable, results-oriented processes… not short-term tasks
- Meets Current or Emerging Customer Needs
- Limited to the Critical Few
- Process must be something that can be measured
- But not a Measure itself
Q Implement Standard Work and Daily Management in Call Center
D Lean Conversion of Targeted Global Sites
C Implement material sourcing process to drive gross margin
I Drive Accelerated Product Development Process for Co-Developed Products
See full slides below.