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Janet L HammillBusiness Process Excellence Rohm and Haas Company

“Business Processes Post ERP Implementation”

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Introducing Rohm and Haas Today

$4,199 MM | 51%$2,030 MM | 25%

$1,659 MM | 20%

$342 MM | 4%

2006: Sales $8.23 B

NORTH AMERICAN REGION EUROPEAN REGION

LATIN AMERICAN REGIONASIA PACIFIC REGION

SALT | $829Rapidly DevelopingEconomies| $184

Rapidly Developing

Economies | $1,202

Rapidly DevelopingEconomies| $342

We are a Global Company

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Introducing Rohm and Haas Today

Building & Construction 29%

Electronic & Electronic Devices 17%

Transportation 9%

Water 7%

Food & Food Related 2%

Packaging & Paper 15%

Industrial & Other 14%Household Goods & Personal Care 7%

Serving a Broad Set of End Markets

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Introducing Rohm and Haas Today

* External Sales

2006 Sales By Segment

Salt10%

Packaging & Building Materials

21%

Primary Materials*

11%

Performance Materials

14%

Electronic Materials

19%

Paint & Coatings Materials

25%

Organized for the Future

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Today’s Talk: Building a Winning Culture

the Playbook coversFocusing on strategic initiatives

Setting the right targets

Addressing the constraints

Engaging the organization

Persisting with passion

Rewarding and recognition

Spiraling upward

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Rohm and Haas Vision 2010

PHILADELPHIA--(BUSINESS WIRE)--Rohm and Haas Company (NYSE:ROH) today announced that its Vision 2010 Plan announced one year ago is on track to deliver on its goals of building a company with $11 to $12 billion in sales and to deliver $5.50 to $6.00 per share in earnings by 2010.

November 28, 2007 05:01 PM Eastern TimeRohm and Haas Company Updates Implementation Progress of its Vision 2010 Strategy to Accelerate Shareholder Value Creation

Vision 2010 is focused on generating profitable growth

www.rohmhaas.com

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Rohm and Haas Vision 2010 and the Five Pillars in 2007

Six Sigma has been applied to operational excellence

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Linking to Strategy – The 3:1 ROI Hurdle

Decrease Cash Tax paid

Decrease capital expenditures

Decrease working capital

Use competitive advantage

Increase operating margin

Increase Revenues

Dividends

TotalShareholder

Return

Increase Revenue

Reduce Costs

Optimize Assets

Leverage Technology

Capital

• Price • Volume

• COGS• SG&A

• Channels• Process R&D• Product R&D

• Inventory• AP/ AR

• Utilization• Recapitalize

• Debt /equity• Tax Location

Repurchase Shares

Invest Externally

Create ValueInternally

Working Capital has been the focus for BPE

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Cascading Business Strategy to Six Sigma Applications – Working Capital and Operational Excellence

Metrics cascades support working capital goals

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Working Capital Improvement Via Key Processes

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Thinking in a Process Oriented Mentality

Learned in an ABPMP meeting from Air Products

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Creating a Pipeline of BPM Projects

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Align Performance Goals with Operational Excellence (AMR model)

Supplier Quality

Supplier On-Time

Purch Costs

Dir Mtl Costs

RM Inv

Cost Detail

Production Sched

Variance

Plant Utilization

WIP + FG Inventory

Order Cycle Time

Perfect Order Detail

Supplier Quality

Supplier On-Time

Purch Costs

Dir Mtl Costs

RM Inv

Cost Detail

Production Sched

Variance

Plant Utilization

WIP + FG Inventory

Order Cycle Time

Perfect Order Detail

AP ARInventory

Total

Cash-to-Cash

AP ARInventory

Total

Cash-to-Cash

Perfect Order

SCM Cost

Supply Chain

Operationally Correct

Customer Service

Working Capital

Stakeholder View

End-to-End Process View

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DSO

% Total Past Due

Days late impact on

DSOCash-to-cash

cycle time% Bad Debt

Reserve

Invoice accuracy

% > 90 day late% 1-5 6days late

Pricing exception Credit limit review

D&B rating

Tax certificates Unearned discounts

% 16 – 30 days late

Lockbox, cash apps, unallocated

% 6 – 15 days late Exceeding credit limit

Payment Plan

% 30 – 60 days late Business rules

DSO

% Total Past Due

Days late impact on

DSOCash-to-cash

cycle time% Bad Debt

Reserve

Invoice accuracy

% > 90 day late% 1-5 6days late

Pricing exception Credit limit review

D&B rating

Tax certificates Unearned discounts

% 16 – 30 days late

Lockbox, cash apps, unallocated

% 6 – 15 days late Exceeding credit limit

Payment Plan

% 30 – 60 days late Business rules

Stra

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ansa

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nal

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Accounts Receivable Metrics Cascade Example

SCOR Model Example for Accounts Receivables

Payment Terms

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Building a Winning Culture Requires New Definitions – Redefine all 7 levers

Vision

Culture

Strategy

Products

Processes

Organization

Systems & Technology

& Services

Infrastructure

Learned this circular diagram in an ABPMP meeting

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Building Enthusiasm Within the Enterprise with the 8 Rules to Change Management

Was advised to read this book at an ABPMP meeting

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Change Acceleration – Engaging Stakeholders

Current Position = O Desired Position = X

Key Leadership Analysis ChartKey Leadership Strongly

AgainstModerately

AgainstNeutral Moderately

ForStrongly

For

Executive Management O XVice President of Manufacturing O X

Quality Organization O XVice President of Sales and Marketing O X

Finance Organization O XInformation Systems Organization O XHuman Resources Organization O X

Watch out for the CAVEMEN and WOMEN – Citizens Against Virtually Everything

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Persist with Passion and Anchor the Changes

IMPLEMENTED IMPLEMENTED IMPROVEMENTSIMPROVEMENTS

Control Plan

Aligning

Systems

& Structures

Documentation Plan

Monitoring Plan

Response Plan

Training PlanAligning

Systems

& Structures

Documentation Plan

Monitoring Plan

Response Plan

Training Plan

Verified Financial ImpactVerified Financial Impact

Process owners accountable to maintain new

level of process

performance

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Reward and Recognition: Building Enthusiasm in the General Workforce

Business Impact Awards

Formula NewslettersPromotions and New Roles

Letters of RecognitionTeam Dinners

Personalized Plaques and Awards

Team shirts and caps

Pace and scope projects to be completed in 8-12 months

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Who Said “Get Better or Get Beaten”?

First Quartile Materials Companies: 12.3%

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Spiraling Up - the Operational Excellence Journey (AMR example for Supply Chain)

Time

Cha

nge

-Org

aniz

atio

nal E

ffect

iven

ess

2004-2007

2007-2008Supply Chain

Value Network

Prioritize for Inside Out “Costs”

Prioritize for Inside Out “Costs”

Organize for Outside In “Value “

Organize for Outside In “Value “

2008 >Value Chain

Manufacturing Prioritize for Quality

& Compliance

“Leaders”Shaping Demand

“The Pack”Respondingto Demand

“Laggards”Demand Driven ?

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Building a Winning Culture with LSS Tools

Key Elements Lean Six Sigma ToolsFocusing on strategic initiatives Rohm and Haas Vision 2010 and 5 pillars

Setting the right targets Metrics cascade,Transactional metrics, median & variation

Addressing the constraints Strategy, process, policy, people, organization, metrics and system levers

Engaging the organization Stakeholder analysis,8 Rules of change management

Persisting with passion Building control plans

Rewarding and recognition Individual and team celebration

Spiraling upward Business excellence journey

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Thank you