The Scania Way

Martin Lyckström Head of Scania Way Office

1996

The Scania Way

The Scania House

Priorities

Dem

and-

driv

en o

utpu

t

Normal situation

Customer first Respect for the individual Quality

Continuous improvementsR

ight

from

me L

eadership

Sub-principles

The Scania Way

The Scania Way

• Our core values describes our way of living within the company. • They are a mirror of our way of being since 1896 (bottom up).

Which means that they where not created 1996, only put into words within the Scania House.

• Our core values also highlights the importance of our Customer,

Employees and the Company, all combined.They must never be unbalanced, otherwise the system will not be successful.

• The purpose of the Scania house is to establish a common

company language. It describes the way we should express ourselves.

• The thinking model describes how the system is applied. • The box that surrounds the house, Leadership, is the mortar that

binds together the stones.

PrioritiesD

eman

d-dr

iven

out

put

Normal situation

Continuous improvements

Rig

ht fr

om m

e

Sub-principles

Our foundation

A way of thinking…

A way of doing things…

In order to reach desired resultsTop

EmployeesCustomer

Satisfaction

VolumeGrowth Profitability

Customer first Respect for the individual

Quality

A balance of values Priorities

Dem

and-

driv

en o

utpu

t

Normal situation

Customer first Respect for the individual Quality

Continuous improvements

Rig

ht fr

om m

e Leadership

Sub-principles

SPS (1996) • Improvement teams • Motivation

P2000 (1995)

Modular system (1945) P90 (1990)

• Involvement • Leadership

SRS (2005)

The Scania Way

• Principles • Methods

Priority1. Safety/Health/Environment2. Quality3. Delivery4. Cost

Con

sum

ptio

n co

ntro

lled

prod

uctio

n

Normal situation – Standardized work

Customer first Respect for the individual

Quality

Continuous improvements

Rig

ht fr

om m

e

Leadership

Standard Takt Leveled flow Balanced flow Visual Real time

The Scania House – Group wide concept R&D Way Office (2011/2016)

The Scania Way (2016)

Evolution step -

A journey without an end

HR Office (2015)

Scania Thinking model

The Scania Way

Documented success

The Scania Way

Respect for the individual

95

96,7

95,1

9393

90,5

90

91

92

93

94

95

96

97

98

1985 1990 1995 2000 2005 2010 2015 2020

Health attendance Global

The Scania Way

9

171820

27

39

05

1015202530354045

1985 1990 1995 2000 2005 2010 2015 2020

Number of accidents with sick-leave/million worked hours

Global

Respect for the individual

The Scania Way

6,56,7

5,54,8

3,52,7

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

1985 1990 1995 2000 2005 2010 2015 2020

Productivity Global

Customer First

The Scania Way

Quality

80,8

70

60

5045

40

0

10

20

30

40

50

60

70

80

90

1985 1990 1995 2000 2005 2010 2015 2020

OPE Global

The Scania Way

8,59,6510,6610,52

15,11

19,15

0

5

10

15

20

25

1985 1990 1995 2000 2005 2010 2015 2020

Environment responsibility MWh/Vehicle Global production

Customer First

The Scania Way

Quality 1,7

3,0

5,0

7,0

10,0

0

2

4

6

8

10

12

1990 1995 2000 2005 2010 2015 2020

Quality Claims/VehicleTrucks SEU

The Scania Way

Next step?

Target ROCE > 40%, EBIT >10%

How are we doing?

13

Balance sheets

Income statements

Profitability

CTR

Net sales

Total capital

Assets

Inventory (ITR)

Receivables (RTR)

Cash equivalents

Profit margin

EBIT Net sales

COGS

OPEX

Net sales

X

+

+

-

CTR = Total capital

Net sales

Profitability =

CTR x Profit margin

Profit margin = Net sales

EBIT

-

Key financial metrics

The Scania Way

Capital Employed

The Scania Way

The Scania Way

Scania Way Office

X - Corporate Management & Venture Business

Head of X Daniel Wedberg

Business Control, XK Peter Schultz

Project Office, XP Helene Sjöblom

Scania Way Office, XW

Martin Lyckström

Sustainable City Solutions, XY

Anders Grundströmer

Strategy and Business

Development, XX Eric Lund (acting)

HR Mona Filander

Assistant Annica Löfling

The Scania Way

Scania Way Office

Mission

Secure a Scania Group wide concept for Flow management, Culture and Leadership

Support the Digital transformation within Scania

Ensure that all parts of Scania focus on both flow efficiency and resource efficiency

Focus on end to end flow including the operation of Scania, our customer and customers customer

The Scania Way

How

Lead larger cross functional assignments Challenge and support Scania´s flow transformation on an overall level Development of methods and principles Coordinate cooperation with existing Offices Gradually add more components to “the Scania Way”

CONNECTED ELECTRIFIED AUTONOMOUS

The Scania Way

Existing offices

SWO

Steering group

Resource efficiency In more than 200 years, history of traditional industrial development has been based on the benefit / refining resources

(resource efficiency).

Focus on that one single resource (man or machine) is 100% utilized e.g. OPE and Workload Most often is the one working with resource efficiency not burdened for the waiting time (e.g. Hospital). It takes place outside the hospital. However, the society is burdened.

The Scania Way

Flow efficiency

Whenever there is a product for a customer, there is also a value stream (process). The challenge is to be able to see that flow.

Focus on the object in the flow so that it is adding value for the end Customer A company has the advantage that the waiting time (burden) takes place inside the company. Which makes the objective to work with flow efficiency even greater.

No Waiting

Working Working

Focus on the object in the flow so that it is adding value for the end Customer

Waiting WaitingWorking Working

Focus on that one single resource (man or machine) is 100% utilized e.g. OPE and Workload

Thank you

The Scania Way