Larry Fitzgeralds Presentation

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Innovation at Honeywell Larry Fitzgerald, Site Leader, Honeywell Aerospace Mississauga



Great Positions in Good Industries

Energy, Safety

& Security

Chemicals,

Specialty

Materials &

Fertilizers

Safety & Security

Aviation &

Defense

Automotive &

Transportation

Buildings,

Construction &

Maintenance

Consumer &

Home

Efficiency, Energy

& Utilities

Fire Protection

& First Responder

Healthcare &

Medical

Industrial Process

Control Manufacturing

Oil & Gas,

Refining,

Petrochemicals &

Biofuels

Scanning &

Mobile

Productivity



Company Recognition

Fortune 500 Company - #74 Fortune Magazine

World’s Most Admired Companies Fortune Magazine

Best Places to Launch a Career BusinessWeek Magazine

World’s Most Ethical Companies Ethisphere Institute

Blue Ribbon Company Fortune Magazine

Biofuels Company of the Year Biofuels Magazine

Alexander Hamilton Award, Overall Excellence Treasury and Risk Magazine

Alexander Hamilton Award, Category Level Treasury and Risk Magazine

Most Influential People in Finance Treasury and Risk Magazine

Top 100 Global Innovators Thomson Reuters

2011 North American Top Company for Leaders Aon Hewitt, The RBL Group and Fortune Magazine

Honeywell Chief Engineer Receives US Medal

of Technology and Innovation



Energy Efficiency

By immediately and

comprehensively

adopting existing

Honeywell products,

the United States could

reduce energy

consumption by

20 to 25 percent

More than 50% of

Honeywell’s portfolio offers

energy efficiency benefits

Green Buildings

Biofuels Air Traffic

Modernization

Reduced Emissions

Fuel Efficiency Industrial Process

Efficiency

Energy Efficiency, Demand Response,

& Smart Grid

Energy Performance Contracts



Honeywell’s Businesses

• $35-36 billion* in revenues, 50% outside of U.S.

• Nearly 130,000 employees operating in 100 countries

• Morristown, NJ global corporate headquarters

Aerospace

$10.8-11.2B*

Automation & Control Solutions

$14.7-15.1B*

Specialty Materials

$5.0-5.2B*

Transportation Systems

$4.3-4.5B*

*‘11 revenues estimate



The Enablers

Processes for

safety, quality,

delivery, cost

and inventory

excellence,

which can

provide a

20-year

competitive

advantage

Standardizes

the way we

work, reducing

waste and

helping us to do

things better

and faster at a

lower cost

Integrated

strategies,

processes, tools

and culture that

help us bring

profitable

products that

customers need

and want, and

are willing to

pay for, to

market faster

Velocity Product

Development™

Functional

Transformation

Honeywell

Operating System



Technology & Innovation

• Research, Development and

Engineering is the growth

engine for Honeywell

• 19,000 scientists and

engineers worldwide

• 97 research and

engineering facilities

• Honeywell Technology

Solutions in India, China

and Europe

• More than 30,000 patents or

patents pending worldwide

Developing solutions for the world’s toughest challenges

and building on Honeywell’s Great Positions in Good Industries



Innovation & Honeywell

• What can we learn about innovation from Honeywell?

• Key elements of Honeywell’s Innovation DNA

1. Voice of the Customer

2. IPDS (Integrated Product Development System)

3. Opportunity Reviews

4. Identification of Core / Non-Core Products

5. Lean Operations & the Honeywell Operating System



Voice of the Customer



What is Voice of the Customer? A complete set of Customer Wants & Needs that are:

• Expressed in the customer’s own language;

• Organized the way the customer

- thinks about the product,

- uses the product, and

- interacts with the product;

• Prioritized by the customer in terms of both importance and performance (i.e. current satisfaction with existing alternatives)

• A clear statement of commitment to the customer in order to try to meet / exceed their expectations and delight them.

• It is not an event. It is a process of continuous, direct and timely communication with the customer to understand and validate their needs.

• Active listening to the customer in order to accurately identify their requirements and deploy them.

• An enabler for the alignment of corporate / business goals and customer expectations.

G. Katz; the PDMA Toolbook 2



Types of Customer Needs

• Revealed Needs - Spoken

- Spoken and articulated – typically performance related that must be fulfilled to meet and exceed customer expectations

- Spoken but unarticulated – represent latent requirements and potential delighters if you can gain more insight into underlying needs

• Unrevealed Needs – Unspoken

- Basic Needs: must be met for the product to be accepted

- Delighters: unexpected, strong impact on customer satisfaction – differentiator.

Unlocking unarticulated and unrevealed needs can lead to a

competitive advantage



Integrated Product Development System



Integrated Product Development System

1.

Identify

Customer

Needs

2.

Concept

Definition

3.

Planning

&

Specification

4.

Development

5.

Verification

&

Validation

6.

Delivery,

Support, &

Improvement

7.

Sunset

Phase Gate Reviews

Sales &

Marketing Program Managers

Operations

Marketing

&

Product

Mgmt

Formal Phase Review criteria established for each phase

Clearly Defined Phases, Ownership, & Accountability

Define Customer CTQs (Critical to Quality elements)

Phase Owner is responsible for driving completion of, and

conducting, the Phase Review



What IPDS “Really” Means

• Really understand your customers needs and requirements to produce the ‘right’ product the first time.

• Manage the development with cross-functional teams to assure all aspects of product success are considered and acted on.

• Plan the Project, Track to the plan using measurable data, Manage risk, and Recalibrate at every phase of the project.

• Keep Leadership informed and Engaged throughout the program to help ensure success.

• Consider downstream issues early, avoid wasteful changes and rework in later phases.

• Use DFSS principles throughout the program to enhance quality, manufacturability, product cost/margin, and customer satisfaction.

• And above all, apply sound Judgement and Common Sense throughout



Core and Non-Core Products



Product Line 3 Product Line 1 Product Line 2

Core / Non-Core Identified O

wn

/ In

vest

M

ake /

Bu

y

Dem

ise

/ B

uy



Honeywell Operating System



HOS Deployment at Toronto

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Operational Readiness

Baseline and Planning

Learning Through

Observation

Work Process Improvement

Knowledge Sharing

4-6 weeks 6-12 weeks 6-12 weeks 24-30 weeks 3-5 weeks

2009

• Training on

Standard Work,

Kaizen, Rapid

Problem Solving

• OD re-design

• Deployed Leader

Standard Work

• Create Tiered

Accountability

process

• Exited Phase 3

30th April 2009

2008

•Supply Chain and

Organizational

Design workshops

• Identified UDO’s or

undesirable

observations

• Complete initial

value stream

mapping of key

value streams

• Exited Phase 2

30th April 2008

2009

• Implemented Future

State Value Stream

Maps in all

deployment areas

• Rapid kaizen in

deployment areas

• Plan For Every Part

• Standard work in all

deployment areas

• Exited Phase 4

September 2011

2010

• Knowledge Sharing

and benchmarking

with other

Honeywell locations

and other

companies

• Continuous

improvement culture

embedded in day to

day operations

• Exited Phase 4

September 2011

2007

• Ensure leadership

team is in place

• Stabilize the

business

• Complete any other

major projects or

transitions

• Exited Phase 1

30th Mar 2007



Value Stream Mapping Activities

Promote Single Piece Flow!

Results: Monthly Distance reduced

from 31920 ft to 11445 ft

64 % Reduction

Objective: As per the Future State

Action Plan, design the APU cell to improve

flow and reduce waste

Grace Lozinski, Rada Moro, Curtis Hunt, Mike

Yhan, Lucian Dragomirescu, Alla Royzman,

Andrei Stahie, Luisa Medina, Yvonne Lindner,

Teresa Melo, Hadi Farashahi

Contributors:

Before

After



Implemented Kaizens

Employee-driven implemented daily kaizens growing rapidly

> 8000 kaizens

implemented in 2011



Winning through Innovation at Honeywell



Winning Through Innovation

Wireless Technology

• Applications enhance productivity and safety

• Enabling new market opportunities

Bio Renewables Process Technology

• Honeywell Green Diesel™ and Honeywell Green

Jet Fuel™

• Conversion of waste plant materials to fuels

Smart Grid

• Integrates energy efficiency systems

• $100 million U.S. Department of Energy grants

• Recent acquisitions: Akuacom and E-Mon



Winning Through Innovation

Low-Global-Warming-Potential Fluids

• LGWP for refrigeration, air conditioning and

insulating foam

• Regulations driving acceptance of HFO-1234yf for

auto air conditioning

New Air Traffic Management and Flight Safety

• Increasing flight efficiency

• Flight safety enhancements

Turbochargers

• Lower emissions

• ~20% better fuel economy

• Expanded adoption on gasoline engine platform



Innovation & Honeywell

• What can we learn about innovation from Honeywell?

• Key elements of Honeywell’s Innovation DNA

1. Voice of the Customer

2. IPDS (Integrated Product Development System)

3. Opportunity Reviews

4. Identification of Core / Non-Core Products

5. Lean Operations & the Honeywell Operating System

Larry Fitzgeralds Presentation

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