Honeywell 2014 Annual Report Download - page 4

Download and view the complete annual report

Please find page 4 of the 2014 Honeywell annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 101

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101

At our Investor Day we introduced three new areas we are developing that will add to
that momentum… HOS Gold, Software, and HUE (the Honeywell User Experience).
HOS Gold is so different from HOS (Honeywell Operating System) I could probably have
named it something else. I didn’t because the continuity helps and it does use HOS as a
fundamental building block. HOS Gold takes all our best practices from HOS to VPD (Velocity
Product Development) to HUE and brings them together to focus on creating a best practice
enterprise. We intend to marry big company cost effectiveness (which is real if you do it
right… and we are), and technical/functional excellence with small company speed and
customer responsiveness.
We have analytically broken down the company into 74 HOS Gold Enterprises, have
vetted the leaders, and completed the X-Matrix for each to develop real breakthrough goals
and strategies. As a company gets bigger it becomes too easy to focus on just the mean (the
big markets and competitors) and ignore the variation (smaller markets and competitors). We
of course don’t want that to happen to us.
Over the last 13 years we have implemented several different tools for improving
processes. We talked about starting something like HOS Gold 13 years ago with the thought
that the Honeywell Operating System applied to everything. It did, but I was fearful that
because we were in such a state of dysfunction at the beginning that if HOS was applied too
broadly it would just die of its own weight because we just weren’t ready for it. To build a base
we implemented Six Sigma training, especially Design for Six Sigma, and we started down
the long path of ERP implementation.
We then elected to implement the foundational tools we could build upon later as we
evolved in our process maturity and capability. We began with the Honeywell Operating
System in factories. Recall it’s really just the Toyota Production System, Honeywellized. It
clearly has worked and the culture change required was significant. Velocity Product
Development addressed the multifunctional process for developing new products and
services. Functional Transformation looked at processes for Finance, Information Technol-
ogy, Legal, and Human Resources in effect the Honeywell Operating System for Staff
functions.
We made great progress, so over time other process improvement programs were
added. Organization Effectiveness (OEF) to focus on labor costs, Sourcing to look at
materials purchasing, Honeywell User Experience, Becoming the Chinese Competitor (BCC)
to truly become the local competitor, etc.
In other words, there was a lot happening as we worked to develop the second driver of
our Business Model, making the machinery work better every day for our employees,
customers, and suppliers. With so much process work happening, it was getting confusing for
employees. We needed a better way to pull it all together and get it all done faster. That led
to HOS Gold. We are quite excited about what we think HOS Gold can do to further transform
Honeywell.