James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (September 2019)
25 slides from James Hardie Industries's investor presentation, Sep 16, 2019
Slide 1: Zero Harm & Lean Transformation
Exhibit 99.3 Zero Harm & Lean Transformation Ryan1 Kilcullen, EVP - Operations
Slide 2: Agenda
AGENDA Zero Harm Foundation Lean Transformation Alabama Construction Update 2
Slide 3: Agenda
AGENDA Zero Harm Foundation Lean Transformation Alabama Construction Update 3
Slide 4: Our Zero Harm Strategy
OUR ZERO HARM STRATEGY Zero Harm is the foundation of everything we do… • Safe People − Empowered & Engaged − Living Zero Harm 24/7 • Safe Places − World Class Work Environment − Standardized & Organized • Safe Systems − Processes Enabling Safe Work − Forward-Looking Risk Reduction 4
Slide 5: Global Standardization
GLOBAL STANDARDIZATION Global approach to our Zero Harm culture • Global standards • Global organization With processes to replicate regional best practices • Local innovation shared & replicated • Replication celebrated as an equal to invention 5
Slide 6: Safe People – Leadership Commitment
SAFE PEOPLE – LEADERSHIP COMMITMENT Oversight at ELT level • Prattville construction pause Significant investment • 20+ incremental global safety professionals since FY17 • Investment in safety data management system, training, facilities upgrades, etc. 6
Slide 7: Safe People – Global Mindset
SAFE PEOPLE – GLOBAL MINDSET Improve, Standardize, Replicate – on a global scale – PPE example Before After (Europe) (Europe) 7
Slide 8: Safe Places – Global Mindset
SAFE PLACES – GLOBAL MINDSET • One JH standard in our plants accelerates best practice replication • Global best practices, benchmarked to world class levels, with strong local ownership − 5S replication – standardization − Pedestrian/Forklift standardization leads global improvement team Before Aft
Slide 9: Global Performance & Summary
GLOBAL PERFORMANCE & SUMMARY Incident Frequency • Lagging indicators are 1.6 tracking in-line with our 1.4 1.2 strategic roadmap 1.0 0.8 0.6 0.4 • Our focus remains on creating 0.2 a culture of empowerment at 0.0 the floor level FY17 FY18 FY19 DART 0.8 0.7 • We are making progress, but 0.6 we will n
Slide 10: Zero Harm Summary
ZERO HARM SUMMARY • Zero Harm is the foundation of everything we do • Strong leadership commitment • Operators are empowered & engaged to live Zero Harm 24/7 • We are making good progress, but will never be satisfied until true Zero Harm is achieved • Zero Harm fundamentals are at the core of how we
Slide 11: Agenda
AGENDA Zero Harm Foundation Lean Transformation Alabama Construction Update 11
Slide 12: Lean Manufacturing Transformation
LEAN MANUFACTURING TRANSFORMATION Transforming FROM the world’s best fiber cement producer TO a world class manufacturer From To Local site autonomy A highly integrated network, operating as one Silos of Fiber Cement knowledge & A connected organization, leveraging scale & hero dependency organizati
Slide 13: HMOS
HMOS From the world’s best producer of Fiber Cement to a world class manufacturer L2: Process, Reliability, & Six Sigma L3: Plant Management & Steering team Manufacturing Operating System -Leadership drive & engagement -Change management capabilities -Lean tools L1: Operators & Supervisors It is all
Slide 14: HMOS Framework
HMOS • HMOS enables flawless, daily HMOS Framework execution to the company strategy, with feedback up & down the site Strategy Deployment • Consistent execution reduces variation • Predictability & connectivity - enable time to add value & increase engagement of operators • Engaged operators, reduc
Slide 15: Connecting the Network – L4
CONNECTING THE NETWORK – L4 • We are creating a force multiplier by connecting all of our sites into a highly integrated network • Best practice sharing is accelerating our pace of improvement • Clear targets, measured & reviewed frequently • Intra-site sharing & communication is accelerating Prattv
Slide 16: HMOS Global Timeline
HMOS GLOBAL TIMELINE Lean Cost Out Targets Region FY20‐FY22 (in millions) North America US$100 Europe US$20 APAC US$19 APAC Rosehill, AUS Carole Park, AUD Penrose, NZ Peru, USA Summerville, USA Cleburne, USA Reno, USA Orejo, ES Cabuyao, PHL Waxahachie, USA Pulaski, USA Plant City, USA Tacoma, USA Fo
Slide 17: Getting Started – The Power of Gemba
GETTING STARTED – THE POWER OF GEMBA • Leverage learnings from APAC and generate excitement in NA − 40+ NA employees GEMBA to APAC (Feb & May 2019) • Lay the groundwork for future deployment in Europe − 15 EU manufacturing employees GEMBA to NA (Jul 2019) • Replicate & Improve − APAC GEMBA to NA to
Slide 18: Organizational Capability
ORGANIZATIONAL CAPABILITY Significant investments in organizational capability to enable the transformation… • NA Lean VP with a team of 10 Lean professionals • Lean roles created at all of our manufacturing facilities • All 2,000+ NA manufacturing employees will be trained in Lean by end of this fi
Slide 19: Employee Empowerment
EMPLOYEE EMPOWERMENT • Operators transforming from Doers → Thinkers → Problem Solvers • Management GEMBAs significantly increase leadership presence on the floor & help solve problems faster – at the source • Recognition of employee contributions is happening on a daily basis. It is a core principal
Slide 20: Performance Drivers Impact the P&L
PERFORMANCE DRIVERS IMPACT THE P&L Roll Throughput Yield How Lean Manufacturing Net available hours is impacting our P&L Lower cost per square foot Net Available Hours (NA network) 20
Slide 21: Delivering Value
DELIVERING VALUE • We are targeting $100M cost out in NA • We are on-track and committed to full delivery • Additional upside realized by deferred capital investment FY20 – FY22 Region Lean Cost Out Targets APAC $19MM USD • Global cost-out targets established Europe $20MM USD 21
Slide 22: Lean Summary – The Journey Never Ends
LEAN SUMMARY – THE JOURNEY NEVER ENDS • We are on-track to implement HMOS in all 9 NA plants by the end of Q3 FY20 • Employee engagement is improving • We are on-track to deliver our $100MM cost-out target in NA • We are forward-looking in our approach & see significant opportunity through lean depl
Slide 23: Agenda
AGENDA Zero Harm Foundation Lean Transformation Alabama Construction Update 23
Slide 24: Prattville Construction Update
PRATTVILLE CONSTRUCTION UPDATE Prattville, Alabama greenfield expansion project is on-budget and on-track to be completed by end of calendar year 2019 • 1H FY21 Commissioning Best Practice Sharing and Replication from Global engineering teams 24
Slide 25: Summary
SUMMARY • Zero Harm is the foundation of everything we do • HMOS is a cultural transformation in how we operate. It connects our sites & our network as one JH operating system • Employee engagement is improving • Lean savings commitment is on-track • Alabama construction is on-track 25
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