Holcim Leadership Journey
With total realized benefits of CHF 1.848 billion by the end of 2014, Holcim has exceeded its contribution to operating profit objective of the Holcim Leadership Journey. The Group had committed to a target of a contribution to operating profit of CHF 1.5 billion by the end of 2014, compared to the base year 2011 and under similar market conditions. In the year under review the contribution of the Holcim Leadership Journey to the Group’s operating performance amounted to CHF 748 million. The Customer Excellence stream contributed CHF 248 million to this result, and cost initiatives contributed CHF 500 million.
The Holcim Leadership Journey was launched Group-wide in May 2012, with the aim to sustainably improve return on invested capital. Value creation is measured with a focus on operating profit and capital expenditure. Since its introduction, around 6,000 initiatives have been launched and successfully implemented under the two main components of customer excellence and cost leadership. A Project Management Office was established to centrally manage and coordinate the program and to foster cross-stream and cross-regional collaboration. The entire Group has been mobilized and engaged and higher transparency and better sharing of good practices achieved, all leading to an improved focus on customers and innovation. In addition, lower cost base and net working capital, reduction of investment cost per tonne of new capacity, better talent management, stronger leadership, intensified social dialog with all stakeholders, and an improved legal and compliance framework could be realized.
The Holcim Leadership Journey Model
Organizational and process efficiency
As part of the Holcim Leadership Journey several functional and regional organization structures were adjusted to contribute as efficiently as possible to the different focus topics. Processes and tools were standardized. Procurement, as one example, was set up in a completely new form in order to leverage the scale of the whole Group and reap benefits respectively.
Transparency was increased through the implementation of coordinated financial tracking and qualitative initiative tracking under the Holcim Leadership Journey. While financial tracking shows the actual stream performance achieved, qualitative initiative tracking allows understanding of the activities behind the figures. Together they provide a holistic view of the actual performance in the Group.
The Holcim Leadership Journey required the Group to further focus on foundational elements. In line with the Group’s strategic approach, highest priority was given to occupational health and safety with the goal of “zero harm to people”. Holcim has built a broader range of talents and enhanced the experience of its leaders in management roles and functions. Intensified social dialog with all stakeholders has also been established. Holcim will continue to leverage its legal and compliance framework and live up to its values.