Nordson Corporation

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Management Systems and Operational Excellence

Our strong management systems drive excellence and are part of Nordson's overall Corporate Responsibility & Sustainability strategy.

Management Systems and Operational Excellence

Overview 


Our strong management systems are the underlying systems which ensure adherence to global standards and excellence across our operations. These systems enable us to function efficiently and effectively across the globe.

The Nordson Business System

Introduced in 2014, the Nordson Business System (NBS) is a collected set of tools and best practices that help us improve performance across Nordson Corporation and move our Key Performance Indicators (KPIs) forward. Rooted in the Lean Six Sigma framework and supported by our corporate Values, the NBS reaches all areas of the Company, including all business units and corporate functions. The tools that the NBS provides have been essential to our success and will continue to shape our processes for years to come as we grow and expand into new markets. 
NBS process diagram
At the center of the NBS is Continuous Improvement, which is based on Lean fundamentals and reinforces our focus on getting better in all that we do, all the time. The inner ring illustrates the various processes across the Company we are working to reinforce and link together to drive productivity. Every employee supports or touches at least one of these processes daily. Behind each of these processes is an evolving set of tools or best practices to help improve performance. The blue ring emphasizes that Lean Six Sigma practices can be applied to all processes, not just manufacturing; that innovation informs everything we do; and that business intelligence informs our decision making. Finally, the outer ring shows that the Nordson Business System creates values for all of our key stakeholders – customers, investors, employees and communities. 

Performance

The NBS framework helps drive improvement in our Key Performance Indicators (KPIs)—leading indicators that define and measure progress toward our future. They also enable us to focus on how we drive Nordson’s success and to understand what factors allow us to get the job done. These eight measurements help align the organization around our most critical success factors: Growth, Profitability, Productivity, Asset Utilization and Customer Satisfaction. Each month, senior leadership reports on the level of improvement within the eight KPIs for their specific business. We leverage the KPIs to provide insight to help direct corrective action as well.
 

KPI

WHAT IT MEASURES

1. Growth Initiatives

Year-to-date progress on growth initiatives, including product, market and geographic expansion.

2. Price Effectiveness

Incremental revenue/operating profit from pricing initiatives including price increases, reduced discounting and incremental revenue associated with terms & conditions or value-added services.

3. Cost Reduction Initiatives

Year-to-date progress on cost reduction initiatives including value-engineering, cost of goods sold, facility optimization and selling/general/administrative expenses.

4. Cost-of-Poor-Quality

Lost profit due to not meeting specifications the first time.

5. Customer Delivery Performance

Ability to meet customer requested delivery date.

6. Days of Sales Inventory (DSI)

Ability to minimize inventory while meeting customer delivery requirements.

7. Productivity

Revenue and operating profit per employee.

8. Sales from New Products

Revenue from new products introduced over the prior three years.


Directed by our Chief Executive Officer and our Vice President of Global Continuous Improvement and owned by our company officers, the NBS and KPIs act as universal systems and measures that ensure consistency across Nordson operations regardless of location. Our Strategic Deployment Process allows for specific goals to cascade from senior level management to every level of the organization to further drive alignment. Executive compensation is also ultimately aligned with our management systems and stakeholder interests as described in detail in our 2016 Proxy Statement.

NBSNBS Increases Output and Optimizes Layout at Recent Acquisition

The application of NBS tools at recently acquired WAFO in Pirmasens, Germany, is making a difference in improving process and product performance. A Rapid Improvement Event (RIE) improved the performance of furnaces used to make polymer processing components. After this initial success, a Production Preparation Process (3P) event was held to optimize production layouts and better use space. By using demand flow technology, a new plan layout has increased efficiency to four times its previous rate. In addition, 21 outdated machines were replaced with five new machines, reducing the total number of machines on the floor by 40 percent and creating more space while decreasing cycle time.