Driving Further Excellence in Execution

In 2015, while outperforming prolonged volatile markets for new commercial vehicle builds globally, WABCO’s unique operating system continued to power innovation, cost efficiency and quality to deliver bottom-line value.

A pillar of WABCO’s differentiation for customers and shareowners is our commitment to excellence in execution. In 2015 we enhanced productivity and performance throughout our global supply chain. Below are a few examples that demonstrate our passion for continuous improvement.

Engineering, the lifeblood of innovation – the heart of differentiation!

WABCO’s team of nearly 2,000 engineers continues to deliver critical innovations that help to advance our industry’s technological roadmap.

WABCO’s technology leadership is rooted in unique capabilities to pioneer the overwhelming majority of the commercial vehicle industry’s breakthroughs in safety and efficiency technologies in our space. Engineering is the heart of WABCO and today’s global engineering team has grown by 50% since 2010.

Innovation is the lifeblood of WABCO’s differentiation. It sets us apart as a leading development partner and global supplier to original equipment manufacturers in every region of the world. It propels our expansion within the world of commercial vehicle fleets by providing differentiated products and services over the vehicle’s operating life. In 2015 alone, WABCO was granted 265 new patents.

We always ensure that WABCO’s industry-leading pipeline of technology innovation continues to flow. In 2015, we invested $140 million in research, development and product engineering. That’s an increase of 13% in local currencies from a year ago. To support this growth, we opened a new facility in Chennai where 250 software engineers – doubled in number since 2010 – contribute to the development of advanced WABCO technologies. We also committed in 2015 to invest $27 million to further enhance WABCO’s advanced systems engineering and innovation center, which is located in Hanover, Germany. Overall, WABCO’s engineering talent is globally connected through a network of hubs and local product application centers throughout Europe, the United States, China, India, and Brazil.

WABCO’s frugal engineering generates major future savings

As of 2015, WABCO engineers creatively re-engineered 58 products

WABCO’s global excellence in execution also benefits from decades of market-leading experience in India, where product and manufacturing engineers have perfected the art of frugal engineering.

For WABCO, this means leveraging our knowledge to adopt advanced technologies that originate in Europe and launch them successfully in accordance with the technical and commercial specificities of emerging markets. A case in point is WABCO’s world-class brake actuators. We frugally redesign them to satisfy the local requirements of emerging economies. We produce these variants locally in India at lower cost. And we export to major customers in other developing regions.

WABCO engineers in India constantly collaborate with colleagues based in Europe. Together, they apply frugal engineering practices to support advanced product and system development. They simplify electronics. They drive down costs on components through smarter materials productivity. They devise novel ways to achieve more efficient manufacturing and assembly. It all makes a difference and dollars!

As of 2015, WABCO’s frugal design and re-design practices have been successfully applied to 58 creatively re-engineered products. This program represents $103 million in cumulative future savings over the lifetime of these products. And we don’t stop there! We extend WABCO’s frugal expertise wherever it makes sense. In 2015, we re-engineered die-casting tools in India to more than double their lifetime and reduce capital spending by 30%.

265 new patents

From George Westinghouse establishing one of the world’s first corporate intellectual property departments to manage his growing number of patents until now, WABCO has a proud heritage as an innovator. In 2015, we saw a record number of 265 new patents granted that help to advance our industry’s technological roadmap.

Another passion: the art of sourcing high-quality materials at low cost!

What further differentiates WABCO is our sourcing of high-quality materials at low cost. We act early and quickly to foresee and respond efficiently to market opportunities and changes. As of 2015, WABCO’s world-class manufacturing network comprised 21 sites in 11 countries on four continents. Fifteen of our factories are in best value countries, with 11 sites in Asia alone.

We continue to generate superior value by connecting WABCO’s manufacturing to sources of high-quality, low-cost materials and components. In fact, the share of our sourcing from best-cost regions has now reached 44%. As of 2015, our five industry-leading factories in India satisfy 80% of their sourcing needs locally. Our four world-class factories in China procure 85% of their materials locally. In the fourth quarter of 2015, WABCO set a new quarterly record for gross materials productivity in our factories at 6.6%.

Also in 2015, we extended our reach into best-value countries with initiatives in Mexico and Vietnam. We also further integrated key suppliers into WABCO’s frugal engineering practices.

Six Sigma Lean, WABCO’s Operating System

Now in its tenth year and powered by Six Sigma Lean, WABCO’s Operating System, our globally standardized management environment, enabled superior customer service and generated strong productivity gains. For 2015, conversion productivity in our factories reached 6.5%, a new annual record. In the fourth quarter, it set a new quarterly record for gross materials productivity at 6.6%. And it delivered $72.5 million of supply chain productivity, another robust result.

31 major awards

In 2015, WABCO won 31 major awards from customers around the world, an annual record.

These valued commendations cite overall supplier and cost excellence, technology innovation, top quality and service, among other distinctions that exemplify our excellence in execution.