P1246341505KHBoD

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Making Lean and P2 Work
Richard J. Guimond, Vice President for EHS
September 17, 2008



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MY PURPOSE

• Discuss who our company is
• Describe how we use LEAN tools
• Show you how this intersects with our EHS targets
• Give you some examples of progress
• Share with you why LEAN does not always work
• Discuss potential barriers for implementing LEAN
  and achieving P2 progress
• Give you some ideas on how to overcome the
  barriers

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WHO IS CARRIER?
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CARRIER BUSINESS UNITS
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CARRIER BUSINESS UNITS
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EHS
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BUSINESS OBJECTIVESCompete aggressively in a
global marketplace

• High single digit sales growth and double digit
  profits
• Industry leading technologies
• Best in class quality
• Meet or exceed customer product and service
  expectations
• World class EHS performance
• Highest standards of business ethics

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HOW DO WE USE LEAN?Achieving Competitive
Excellence (ACE)

• ACE is Carriers operating system for achieving
  competitive excellence through continuous
  improvement everywhere
• ACE seeks the highest levels of customer
  satisfaction
• Implementation involves all employees and covers
  manufacturing, business and support processes
• Plant managers are responsible for driving ACE
• Metrics and goals measure progress with various
  levels of achievement bronze, silver and gold

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ACE TOOLS

• Visual Factory
• 5S
• Total Productive Maintenance (TPM)
• Quality Control Process Chart (QCPC)
• Setup Reduction
• Standard Work
• Market Feedback Analysis (MFA)
• Process Certification
• Value Stream Mapping (VSM)
• Passport
• Production Preparation Process (3P)

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GUIDE FOR PLANT MANAGERSPrinciples for World
Class Manufacturing

• One-piece flow
• No forklifts, cranes, hoists
• Mistake proofing
• Operators dont leave line
• No process reversals
• Standard Work in place
• Systems to avoid shortages
• Cross-training is done
• No trash containers
• Moving line is pacemaker

• TPM is routine
• QCPC is internalized
• VSM is carried out
• No pits or platforms
• No multiple person processes
• Everything
• Move inspection upstream
• Utilize sub-assembly lines
• Principles are sustained
• Create an andon system

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MAJOR BARRIERS
People Organizational Inertia
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MAJOR BARRIERS

• People
• Poor training
• Too busy
• Unwilling to adapt
• Stuck in the past
• It wont work
• You dont understand
• I am afraid to try it
• I just do not want to do it
• Im mad
• Lip service

• Organizational inertia
• It works fine now
• We have always done it this way
• It is too expensive
• It will disrupt production
• The sales guys wont like it
• The ops guys wont like it
• We dont have the time now
• We are different

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DRIVING CHANGE

• Best times
• Business is strong but competitors are looming
• Major regulatory problems have been encountered
• New innovative leadership
• Major acquisition has occurred
• Competitors implemented it and are successful

• Worst times
• Business is in cut and burn mode
• Business is way ahead of all competitors
• Leadership is hunkering down
• No effective leadership

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EHS EXCELLENCEDriving continuous improvement

• Characteristics we need to drive
• Strong EHS commitment and accountability
• Robust and disciplined EHS management system
• Consistent implementation across all of Carrier
• Excellent EHS technical and managerial expertise
• Effective deployment of resources

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KAISEN SUCCESSTaylor Wastewater Facility
Rockton

• Problem - Production caused the facility to need
  to expand the wastewater system
• Solution Initiate a Kaisen event to implement
  systems and process controls to reduce water and
  chemical usage with better production control
• Results Using Process Mapping, SIPOC, Standard
  Work and other tools the team achieve significant
  benefits
• Water use reduced by 30
• Maintenance and labor savings
• Operational savings of 60K per year
• Avoidance of 200K for new treatment system

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COLLIERVILLE New coil painting robots
(VOC in 000 lbs)
Before
After
?
100
60
(40)
(CO2e in 000 MT)
40
39
(3)
OLD PAINT PROCESS
Saves 1.0M annually
NEW ROBOTIC PAINT PROCESS
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2010 EHS Performance Targets Factory and
operations metrics
GreenhouseGases(CO2 equiv.)
NonGreenhouse GasEmissions
Waste
Water
Industrial Process
Non-Recycled
Consumption
Chemicals Discharged
20
12
10
30
10
10
Assurance Review Score
Safety
Regulatory
Notice of Violation
Permit Exceedances
Worldwide Lost Day Incidence Rate
Worldwide Total Recordable Incidence Rate
70
0
0
Target .08
Target .63
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2010 EHS Performance Targets Suppliers and
Products
Critical Suppliers
Minimum requirements for Passport and design
review certification
100
Packaging
Energy Efficiency
10
10
meet UTC EHSexpectations
in productpackaging
from baselineproduct
Materials of Concern
100
Materialsof Concern
eliminated in new products
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SAFETY PERFORMANCE
(Recordable injuries per 100 employees)
(Lost day injuries per 100 employees)
Goal Rec injuries 3.19 2.64 1.95 1.65 1.24
1.15 0.88 0.97 Lost day injuries 0.44 0.38 0.29 0
.21 0.2 0.15 0.12 0.12
Rec cases 1526 1164 850 770 580 540 374 Lost day
cases 208 168 121 106 92 70 50
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GLOBAL METRICS Environment
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BEYOND 2010Vision

• Big Goals, Big Impact, Big Results
• No hearing protection required in factories
• LEED certified, silver and gold facilities
• GHG leadership in operations and products
• Zero VOC emissions