Value Investing

Danaher Business Overview- Presentation Slides

Elliott Major’s presentation slides on Danaher Business System.

Danaher Overview

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.

Danaher Kaizen

Kaizen \ki-zen\

  • 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

Danaher

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%

Danaher Business Overview- Presentation Slides

What Is A Top Level Improvement Priority?

  • Process oriented
    • Should lead to the creation of sustainable, results-oriented processes… not short-term tasks
  • Focused
    • Meets Current or Emerging Customer Needs
    • Limited to the Critical Few
  • Measurable
    • 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.