Optimize Operations Performance

November 2015
Place
OPERATIONS
EXCELLENCE
/ www.sustainablesolutions.dupont.com
Practice Leaders
Copyright ©2015 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo and DuPont™ are registered trademarks or trademarks of DuPont or its affiliates.

2
WHAT IS OPERATIONS EXCELLENCE?
Operations Excellence is
“The application of principles, systems and tools to engage and focus everyone’s efforts
on meeting customers’ needs and continuously improving process performance”
“PREVENT VALUE DESTRUCTION
MAXIMIZE VALUE CREATION”
Said another way, Operations Excellence requires both:
• Minimization and management of downside risks (prevention of incidents that
negatively impact safety, the environment, assets, supply chains, right to operate,
reputation, communities, etc.
• Maximization of operations’ performance and shareholder value creation
/ OPERATIONS EXCELLENCE

3
EXTERNAL DRIVERS ARE PRESSURING COMPANIES
TO IMPROVE THEIR OPERATIONAL PERFORMANCE
External Macro Drivers
GLOBAL
COMPETITION
PUBLIC POLICY &
ACCOUNTABILITY
INVESTOR
EXPECTATIONS
RISING PLANT
DEMANDS
Most companies face global
competition and are part of
global supply chains
Stringent social &
environmental regulations &
expectations
Pursuit of lower-cost &
higher-value products with
existing assets
Rapid and efficient adaptation
to market demand changes and
competitive pressures
expected.
Clear pursuit of asset synergies
to drive productivity and
efficiency

4
0
0.5
1.0
1.5
2.0
2.5
3.0
0
0.5
1.0
1.5
2.0
2.5
3.0
OPERATIONS EXCELLENCE IS ONE OF THE MOST
IMPORTANT ISSUES FOR CEOS GLOBALLY
TOP 10 Global Challenges
Sustainability
0.82% 0.92% 1.31% 1.55% 1.68% 1.72% 1.99% 2.10%0.46% 2.44%
Customer
Relationships
Trust in
Business
Corporate
Brand and
Reputation
Global
Expansion
Government
Regulation
Global
Political/Economic
Risk
Innovation
Operational
Excellence*
Human Capital
Source: The Conference Board, CEO Challenge, 2013

5
BUT OPERATIONS EXCELLENCE
IS NOT EASILY ACHIEVED…
While adoption rates are high, low success rates of operational improvement
efforts are prevalent worldwide. Some essential elements are clearly missing.
“An estimated 60% of Six
Sigma projects fail.”
Professor Chakravoty in Wall
Street Journal
“Six Sigma is merely a set of
process tools…Equal attention
must be paid to people,
innovation, and customer
relationships.”
CRM Magazine
“The top and most difficult
challenge involves people, and
how to break down silos…and
foster greater collaboration.”
LNS Research
“Recent studies say that failure
rates for Lean programs range
between 50 percent and 95
percent. The basic reason…
Lean fails as most companies
boil down to the culture.”
Tim McMahon

6
BUT OPERATIONS EXCELLENCE
IS NOT EASILY ACHIEVED…
Identified Gaps
Workforce engagement, collaboration and communication
Management of competing priorities & business interrelations (SILOS)
Narrow approach on single initiatives (Six Sigma, Lean, TQM)
Lack of sustainability of results
Effective knowledge management
Data availability & integrity
ROI justifications
6

8
THE BENEFITS & VALUE
Benefits across operational value levers*
PRODUCTIVITY
& QUALITY
IMPROVEMENTS
• Capacity release
• Increase high quality product
• Waste reduction
1
IMPROVED
MAINTENANCE
AND RELIABILITY
• Reduced downtime
• Increased predictability
• Reduced breakdown
2
IMPROVED SAFETY
AND FOOTPRINT
REDUCTION
• Maintain right to operate
• Mitigation of injuries & incidents
• Reduced energy consumption
• Alternative energy sources
3
SUPPLY CHAIN
EFFICIENCIES
• Improved purchasing process
• Reduced stock of raw material,
MRO & finished product
• Reduced transition loss / waste
4
8* Results extracted from individual cases. Actual clients results may differ according to their specific circumstances

9
OPERATIONAL EXCELLENCE PRACTICE AREAS
CONTRACTOR
MANAGEMENT
ENERGY
EFFICIENCY
ENVIRONMENT
MANAGEMENT
SUSTAINABILITY
& VALUE
CREATION
PRODUCTION SYSTEM/
CAPABILITY BUILDING/
MINDSETS & BEHAVIORS
ASSET PRODUCTIVITY/
MAINTENANCE &
RELIABILITY
PROCESS
PERFORMANCE
INTEGRATED BUSINESS
EXCELLENCE / SUPPLY
CHAIN MANAGEMENT

DuPont PRODUCTION SYSTEM
• CAPABILITY BUILDING
• MINDSETS & BEHAVIOURS
10/ www.sustainablesolutions.dupont.com

11
THE DuPont PRODUCTION SYSTEM
The success has far surpassed our expectations
20051990 2000 20101988 20062004200320022001 2007 2008 20091999199819971996199519941993199219911989
20051990 2000 20101988
2006
2004200320022001 2007 2008 20091999199819971996199519941993199219911989
Best Practices and Technologies, Work Teams & Networks
Quality Metrics
Culture Six sigma
Benchmarks & Assessments
Operations
Powerhouse DPS Launch
Structure & Governance
New Product Stage-Gate Process (Pace)
Manufacturing in the Supply Chain
DPS for Supply
Management
DuPontProduction
System
Lean Six Sigma
Supply Chain Transformation DIBM

12
DuPont PRODUCTION
SYSTEM RESULTS TO DATE
Business Results… so Far
• 4x increase in annual gross value of improvements delivered by
Integrated Operations (pre-tax earnings basis).
 $200-300MM/year baseline in 2004-2005.
 More than $1B/year delivered in 2009, 2010, 2011, 2012.
• Rapid response to 2009 Recession and Financial Crisis - shifted
focus from Capacity Release to Fixed and Variable Cost.
• 2x increase in annual working capital benefits delivered vs. baseline.
12

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MANAGING
PROCESSES
To keep focus on what really
matters with the right people
TECHNICAL
MODEL
CAPABILITIES
ENGINES
MINDSETS &
BEHAVIORS
To ensure the
right skills and
effective coaching on
operational risks
To align organization
on the purpose and
objectives of
operational risk
reduction
Standard tools and
practices to drive
focused operational
risk reduction
DuPont PRODUCTION SYSTEM FRAMEWORK
DuPont Production System has 4 main elements designed to ensure
the organization has the capability to achieve operating performance

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OPERATIONAL EXCELLENCE MODEL ELEMENTS
Helps to build an integrated and comprehensive production management
system that covers all the aspects of successful performance
TECHNICAL
MODEL
CAPABILITY
BUILDING
MINDSETS &
BEHAVIORS
MANAGING
PROCESSES
• Answering “Where’s the $$?”
 Cataloging all existing improvement work
 Defining additional improvement options
 Establishing stretch targets
• Prioritized improvement plan
• Assess where the site is vs. world class focus on frontline capability building
 Teamwork
 Problem solving skills
 Expanded knowledge and skills
• Understanding the site’s culture. Defining and implementing needed
changes to improve employee engagement
 Leadership behaviors
 Leadership rituals
 Develop processes and systems to integrate all key elements and monitor
performance at all levels
 KPIs
 Visual performance management
 Talent Management

ASSET PRODUCTIVITY
• MAINTENANCE & RELIABILITY
• TAR MANAGEMENT
15

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Several Studies Show there is Significant Unutilized
VALUE HIDING IN MOST COMPANIES’ ASSETS
16
“An attribute of any asset that
consistently produces the
same results, meeting
or exceeding its specifications”
MAINTENANCE
“1% increase in asset reliability equals
10% reduction of maintenance costs.”
Solomon
“5% of annual production is lost for
unplanned asset downtime and 80% of the
losses are preventable and can be avoided.”
ARC
“36% of the advantage of the best in class
refineries is due to effective maintenance.”
Solomon
“10 to 15 % of all fatal accidents at work
and are connected with maintenance.”
OSHA

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GOOD MAINTENANCE & RELIABILITY…
Is Beneficial for the Company as Well as for the Society
• Why should the shareholder care about M&R Improvement?
• Why should Corporate and Business management care about M&R Improvement?
• Why should customers care about M&R Improvement?
• Why should operators, mechanics, and engineers care about M&R Improvement?
• Why should the community care about M&R Improvement?
17

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GOOD MAINTENANCE BRINGS TANGIBLE VALUE
Through Implementing Improvements in Its Various Components
VALUE LEVERS ENABLERS
• Optimize automation vs. labor mix per region.
• Optimize mix of Autonomous vs. In-house vs.
3rd party maintenance execution.
• Introduce regular training and up-skilling.
• Implement mobile maintenance solutions.
• Optimize spare parts quality, functionality and specification.
• Implement risk based spare part inventory levels.
• Optimize supply infrastructure network across
Businesses and sites
• Consequently outsource inventories
TYPICAL MEASURES
Labor
Materials
Infrastructure
MAINTENANCEVALUE
IMPROVEMENT
OPEX
• Consequently deploy Risk Based Maintenance.
• Implement Equipment Condition Monitoring.
• Implement standard maintenance KPI’s.
Increase Asset
Utilization
ADDITIONAL
OUTPUT
Environment
Health and Safety
• Apply advanced analytics to optimize quality insurance
• Integrate inspection program with demand planning
MECHANICAL
INTEGRITY
5-10%
5-10%
3-5%
5-10%
10-25%
5-10%
5-10%
3-4%
10-20%
10-20%
10-15%
2-5%
5-10%
18

19
TURNAROUNDS
are One of the Most Challenging Tasks for M&R
What are they?
So what are the upsides?
And what are the unfortunate downsides?
What commonly goes wrong?
19

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Turnarounds are Complex and Require Extensive Planning.
WHAT ARE THE CHALLENGES AND WHAT CAN GO WRONG?
20
What Commonly
Goes Wrong?
Why are Turnarounds
so Challenging?

21
We Often Find the Following Areas of
WEAKNESS IN THE PREPARATION PHASE OF TARS
Key Elements of Focus
for TAR Preparation
EFFICIENT TAR
EXECUTION
CONTRACTOR
INVOLVEMENTANALYSIS AND CONTINUOUS
IMPROVEMENT
WORK EXECUTION COMMUNICATION
JOB PLANS /
PACKAGES
INTEGRATED SCHEDULE

22
CONSISTENT APPROACH TO PLANNING & EXECUTION
A large variety and range of procedures, plans, processes and templates
are required for a consistent approach to planning & execution
TAR MANAGEMENT
WORK
PLANNING
SCHEDULE
PREPARATION
AND MANAGEMENT
PROCUREMENTTAR EXECUTION
CONTRACTOR
MANAGEMENT
SAFETY

PROCESS PERFORMANCE
• LEAN
• SIX SIGMA
• VALUE ACCELERATOR
23

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SIX SIGMA
Minimize Costs
Improve Quality
DSS can help to improve processes through the implementation of
LEAN AND SIX SIGMA APPROACHES AND TECHNIQUES
Lean Six Sigma seeks to minimize costs and improve quality
by eliminating waste and reducing defect variance
Reduce
Variability
Eliminate
Waste
LEAN
Triple Bottom Line
24

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This Includes:
• Direct costs associated with finding and fixing defects
• The hidden cost of failing to meet customer expectations the first time
• The hidden opportunity for competitive advantage gained thru:
 Optimum production rates.
 Optimum cost & efficiency.
 Optimum production cycle time.
 Optimum new product introduction cycle time.
 Enhanced customer satisfaction (grow with customers).
DSS can help to improve processes through the implementation of
LEAN AND SIX SIGMA APPROACHES AND TECHNIQUES
Lean Six Sigma attempts to “quantify” the hidden opportunities
25

26
VALUE ACCELERATOR
Is a proven and effective process for delivering bottom-line
value in short timetables with limited or no capital investment.
Purpose
Value Accelerators are targeted to enable rapid improvements applied to a
wide variety of high-value business needs
26

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VALUE ACCELERATOR
Key Features
 Emphasizes rapid action and implementation with results-driven performance bias
 Maximizes innovation by integrating shop floor ideas with subject matter expertise
 Engages all levels of the organization in continuous improvement
27

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Goal: Improving Top-line Growth
and Bottom-line Efficiency
VALUE ACCELERATOR
Examples
• Increase Uptime
• Increase Yield
• Reduce Cycle-time
• Streamline Supply Chain
• Reduce Energy Consumption
• Reduce Equipment Failure
• Reduce Set-up and Adjustment Time
• Reduce Start-up Losses
• Eliminate Defects/Rework
• Improve Safe Work Practices
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• INTEGRATED BUSINESS EXCELLENCE
• SUPPLY CHAIN MANAGEMENT
29

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REQUIRED
BUSINESS OUTCOME
MANAGING
PROCESSES
To keep focus on what really
matters with the right people
TECHNICAL
MODEL
CAPABILITIES
ENGINES
MINDSETS &
BEHAVIORS
Production Systems
Manufacturing Locations, S&L,
Engineering, Across Supply Chains
CURRENT AND FUTURE
REQUIREMENTS FOR
CAPABILITY AND
PERFORMANCE
Operations Excellence is a Key Contributor to
INTEGRATED BUSINESS EXCELLENCE (IBE)
Demand Review
Product/project Review
Supply Review
MANAGEMENT BUSINESS REVIEW
IBE
2-24 months
FINANCIAL INTEGRATION
CONTEXT
ANDPERSPECTIVE
Safety Environmental
People/Ethics
Customer Service
Quality
Cash/Asset
Productivity
Cost Productivity
BUSINESS STRATEGY
BUSINESS RESULTS VS. OBJECTIVES
Sales
Strategy
Marketing
Strategy
Technology
Strategy
SUPPLY CHAIN STRATEGY
Plan –
Systems/
Processes
Buy –
Sourcing
Make – Asset
& Mfg Tech
Deliver – SND
& Logistics
Current
Capabilities &
Performance
Improvement
Opportunities/al
ternatives

31
SALES
MARKETING
FINANCE
TECHNOLOGY
MANUFACTURING
SUPPLY CHAIN
Integrated business excellence analysis focus areas to identify
high level opportunities for improvement – supply chain zoom-in
IMPROVEMENT - SUPPLY CHAIN ZOOM-IN
• Demand, supply and product management.
• Business profitability.
Focus Areas
• Production to schedule
• Supplier delivery performance
• Deliver to request
• Deliver to promise
• Supply and inventory planning analysis
INTEGRATED BUSINESS
EXCELLENCE

32
Support Analytical Tools
• Value Stream Mapping
• Financial Baseline Analysis
• Asset Structure Analysis
• Cost Analysis
• Product Line Analysis
• Customer Segmentation Analysis
• Production Strategy Analysis
• Inventory Analysis
• Capacity Analysis
• Demand Planning Analysis
• Supply and Inventory Planning Analysis
• DIBM 5 Step Planning Analysis
• Performance Management Analysis
• Distribution / Shipping Cost Analysis
• Decision Support / IT systems analysis
IMPROVEMENT - SUPPLY CHAIN ZOOM-IN
32

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Definition & Rationale of
SUPPLY CHAIN MANAGEMENT (SCM)
SUPPLIERS’
SUPPLIER
SUPPLIER
(INT/EXT)
CUSTOME
(INT./EXT).
CUSTOMER’S
CUSTOMERYOUR BUSINESS
Source: APICS organization, SCOR model - Supply Chain Council
PLAN
33
SOURCE MAKE DELIVER
DELIVER SOURCE MAKE DELIVER
RETURN RETURN
RETURNRETURN RETURN RETURN
RETURNRETURN
SOURCE MAKE DELIVER SOURCE

34
Definition & Rationale of
SUPPLY CHAIN MANAGEMENT (SCM)
Definition of Supply Chain
Supply Chain is the global network used to deliver products and services
from raw materials to end customers through an engineered flow of
information, physical distribution and cash, more specifically, the:
• Flow of physical material and services from suppliers to customers
• Flow of cash from customer back to raw material supplier
• Flow of information back and forth along the chain and external environment
• Reverse flow of products from customers for repairs, recycling or disposal
34

• SUSTAINABILITY & VALUE CREATION
• ENERGY EFFICIENCY
• ENVIRONMENTAL MANAGEMENT
35

36
STABILIZING VALUE EXTRACTION,
VALUE CREATION COMES TO FOCUS
RETURN ON CAPITAL
Reduce footprint, sustainable assets and value chain
GROWTH
Design for sustainability, build societal progress
RISK EFFICIENCY SUSTAINABILITY
Operational Risk Management
Governance & Compliance
Stakeholder Engagement
Sustainable Value Chain
Sustainable Capital
Operational Excellence
Valuerelease,employee
engagement,culturechange
Riskmanagement
skills&behaviors
OrganizationalMaturity
VALUE EXTRACTION VALUE CREATIONVALUE PROTECTION
PROFIT
PEOPLE PLANET
Triple Bottom Line

37
THE 3 COMPONENTS AND THEIR INTERSECTIONS
Should be Considered When Talking about Sustainability
ENVIRONMENTAL
Natural Resource Use
Environmental Management
Pollution Prevention
SUSTAINABILITY
SOCIAL
Standard of Living
Education
Community
Equal
Opportunity
ECONOMIC
Profit
Cost Savings
Economic Growth
R&D
SOCIAL - ENVIRONMENTAL
Environmental Justice
Natural Resources Stewardship
Locally & Globally
ENVIRONMENTAL - ECONOMIC
Energy Efficiency
Subsidies / Incentives for use of
Natural Resources
ECONOMIC-SOCIAL
Business Ethics / Fair Trade / Worker’s Rights

38
PURPOSE
OF AN ENMS
• The purpose of an EnMS is to provide a managing
structure and processes to enable long-term, continuous
improvement of an organization’s energy consumption.
BENEFITS OF
AN ENMS
• Increase visibility and understanding of energy performance.
• Keep energy on the business agenda and assist in the allocation
of resources for improving energy performance.
• Establish processes for monitoring performance and assist in the
development of action plans for improving it.
• Develop organization’s capability for improving energy efficiency.
• Assist with standardization and learning sharing.
ENERGY EFFICIENCY, INCORPORATED THROUGH
AN ENERGY MANAGEMENT SYSTEM (EnMS)
Is an Important Part of Sustainability
38

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We draw on our own operating experience to offer a
FULL SPECTRUM OF CONSULTING SOLUTIONS
that targets a range of needs for improving Energy performance
DSS OFFERING
Energy Management
Assessment
CLIENT NEEDS SOLUTIONS
What is my current level of performance?
Where are the opportunities for improvement?
Comprehensive assessments vs. DuPont
Bold Energy Plan and global standards.
Energy Management
System (EnMS) Design
& Implementation
How to prioritize and allocate resources to
drive continuous and sustainable energy
improvements?
Design of a customized energy
management system to meet client’s
needs. Implementation EnMS including
pilot facility demonstration.
Energy Strategy
What is the business case for developing
energy as a strategy, and where are the
value capture opportunities?
Vision, goals, benchmarking, and
a roadmap for performance-based
energy strategy
Capital Project Energy
Value Improving
Processes (VIP)
How to imbed energy performance into the
capital project process?
Design for sustainability and
Energy VIP.

41
We draw on our own operating experience to offer a
FULL SPECTRUM OF CONSULTING SOLUTIONS
that targets a range of needs for improving Energy performance
DSS OFFERING
Facility-level Energy
Management
CLIENT NEEDS SOLUTIONS
How to identify, prioritize and capture specific
energy reduction opportunities?
Initiative identification & prioritization
workshops and methodologies, Energy
Audits, and codification of standards
Energy Management
Best Practice
Workshops
I am interested in the concept of Energy
Management, but I would like to learn more
before I decide to implement changes
Engaging workshops given by DuPont
energy leaders highlighting both DuPont
and Industry Energy Management best
practices
Organizational Energy
Efficiency Training
I need to build my internal energy
efficiency capabilities.
Technical learning and development
based on DuPont energy efficiency
best practices

42
The essential elements of an environmental management system (EMS) are the programs and
controls an organization uses to manage operations which ensure sustainable compliance with
company environmental policies and standards and regulatory requirements.
EMS
DEFINITION
BEST-PRACTICE ENVIRONMENTAL
MANAGEMENT SYSTEM (EMS)
Is also a Key to Building a Sustainable Organization
PRINCIPLES &
MANAGEMENT
COMMITMENT
CAPABILITIES,
CULTURE, AND
COMPETENCIES
F U N C T I O N E M S E L E M E N T S
STANDARD EMS ELEMENTS
ADDITIONAL BEST-PRACTICE
ELEMENTS
INTEGRATED OPERATIONAL FOCUS
Environmental Policy
Planning
Implementation & Operation
Monitoring & Measuring
Corrective & Preventive Action
Management Review
EFFECTIVE AND
SUSTAINABLE
ENVIRONMENTAL
MANAGEMENT
SYSTEM
Strong
Leadership
Appropriate
Structure
Focused Processes
and Actions
CULTURAL VALUES ELEMENTS
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Environmental Management System - Implementation & Assessment
• Fewer fines, improved reputation, lower risk.
• Lower clean-up, correction or remediation cost.
Corporate Environmental Planning
• Lower long-run environmental costs via improved impact for money invested.
• Optimize corporate resource allocation, identify synergies.
Environmental Footprint Management
• Cost savings (energy, water, other resources).
• Lower costs via higher impact per dollar invested.
Capital Project Environmental Performance
• Lower long-run remediation costs via investment in root cause solution vs. end of pipe.
Environmental Performance Strategy
• Higher environmental ROI via focus and improved resource allocation.
• Better reputation & better business strategy alignment.
OUR CONSULTING OFFERINGS COVER DIFFERENT
ASPECTS OF ENVIRONMENTAL MANAGEMENT
43

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Editor's Notes