MAKING MODERN LIVING POSSIBLE

Colleagues shoot 800 photos about Climate & Energy • Interview with the top management • Major investment in India • Silent heat pump makes a difference • Tracking down Jens Jensen • Work & Leisure time in Monterrey • Early birds in Washington

4/2011 | A Stakeholder Publication | English edition

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Published by Danfoss A/S

Total number printed: 19,550

Address: Danfoss A/S, D11 DK-6430 Nordborgglobaldanfoss@danfoss.com

Responsible: Ole DaugbjergEditor: Niels Chr. LarsenPrepress: Christa HartmannMai Halberg SchönwandtPhotographers: Glenn Simonsen Rasmus Erslev Holt

Print: Laursen Grafisk A/S

Published in Danish, English, French, Spanish, Polish, Slovenian, German, Chinese and Russian.

Printed with vegetable colors on envi-ronmentally approved paper.

Reproduction only by permission of the Editor and always with acknowl-edgement to Global Danfoss

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Global DanfossOctober 2011 20

26

4 InDIA. Close to 2,000 employees in four years.

8 CORE & ClEAR. Makes us act fast.

12 HEAT PumPS. The sound expert from the Swedish woods.

14 WORk & lEISuRE TImE In mOnTERREy. Meet Gustavo Luna from Danfoss in Mexico.

16 PHOTO COmPETITIOn. Thanks to all the photographers.

20 EnVISIOnEERInG. Danfoss, a solid beacon in the USA.

24 CuSTOmERS. Better insight in the customers’ needs.

26 InVOICES. Many end up into the wrong place.

28 TIDyInG uP. Away with the dead product codes.

29 POST-IT. No task should take more than six hours.

30 mAn On THE mOOn. First team with mostly women.

The front page photo shows some of the photographers who sent photos into the photo competition

3

”

Leader

By Executive Vice President and COO Kim Fausing

Core & Clear works in good times and bad

A great number of employees might have

thought: ”Oh no, not again,” when share prices

went for a rollercoaster ride on the world’s

stock exchanges in August and the first reports

appeared that Danfoss was trimming the sails.

”Are we going to re-live 2009?”

Basically, the situation was odd considering

that we managed to present the best half-year

result ever at the end of August: impressive net

sales, impressive earnings, a super cash flow

and substantially reduced debt.

So why are we removing the foot from the

accelerator and applying a light pressure on the

brake? It might be necessary to give an answer

to this.

First I would like to thank all of you for your

efforts which are mirrored in the half-year

result. We should be proud with what we have

achieved; everyone has worked hard. Having

said that, we also have to conclude that there

are clouds on the horizon. We had zero growth

in July, the prospects are uncertain, the solar

market in Germany has almost come to a stand-

still, and many countries are having difficulties

boosting growth – especially Europe and the

USA. All worrying factors, though not in any

way catastrophic because we are in an entirely

different situation to the one we were in 2008-

2009, when the world was turned upside down.

Our strategy has proven its worth. With Core

& Clear, we have cleaned up some of our busi-

nesses that we have been struggling with for

years. We have almost halved the debt and we

have set out on a journey which aims to ensure

that we are in control of basic elements such as

quality, on-time delivery and stocking the right

products.

Therefore, I have a rather simple message: we

have been in this situation before, and we are

in control.

We should show that, with Core & Clear, we

are capable of maneuvering Danfoss through

difficult years too, and presenting satisfactory

results.

We have taken stock of the situation and are

considering a number of scenarios, all of which

include the necessary initiatives and ways to

achieve our objectives. The current situation

requires that we are cost-conscious but nothing

suggests that we have to revise our 2015 objec-

tives. We will uphold them whether or not we

are on a bumpy road as is the case right now.

We should show that, with Core & Clear, we are capable of maneuvering

Danfoss through difficult years too, and presenting

satisfactory results.

4

India

Facts

• By having production in the country,

Danfoss will avoid import duty on goods

which are being produced and assem-

bled here. At the same time, India has a

considerably lower cost level compared

to Europe.

• The Indian government expects growth

to increase by 9 percent annually over

the next five years.

• The strategy is called “India 2015”.

India set to blossomWith investments close to 70 million Euros over the next four years, India

will become a key player market for Danfoss. A new headquarters is set to

be constructed in Chennai, in the south-eastern part of the country.

Some of the factors that, on September 26, prompted the Danfoss A/S

Board to approve Danfoss’ new strategy plan for India were: large pool of

engineers, an English-speaking middle class and a home market that is

becoming increasingly bigger.

For a great number of years, Danfoss has been present in India with its

own sales company, but only now will product development and

production be set up on a larger scale.

The new Indian headquarter is scheduled to open in the fourth quarter

of 2013.

5

By N I E L S C H R . L A R S E N

The new India is flourishing

everywhere. Modern apartment

blocks are sprouting up in Indian

cities, shopping malls are opening,

and in the period until 2016 the

middle class is expected to swell

to 53 million households and they

have deep pockets. According to

the Indian National Council for

Applied Economic Research – a

total of 267 million people will

have a major need for the goods

that belong to a modern way of

life.

This figure equals the combined

total number of inhabitants in

Germany, France, Great Britain,

Spain and Holland. Moreover, the

UN estimates that India will be the

most populous country in just a

few decades and that it has had

strong growth rates over several

years.

In the light of this, it is not so

strange that Danfoss has been

keeping an eye on the Indian sub-

continent for such a long time.

Highway corridor at Chennai

Work to prepare the now adopted

strategy has been ongoing for 2½

years. After all, it is a major step

to decide to establish such a large

production facility in the country,

because India still experiences

major problems with its infra-

structure. The power supply fails

regularly and the road system is

still very incomplete so getting

goods to and from the chosen

location is vital.

The location has been found – in

a highway corridor outside the

seaport of Chennai on the Indian

east coast; on the main road

between Chennai and Bangalore,

one of the country’s major IT cit-

ies. Here, Danfoss plans to buy a

200,000 square meter plot – the

size of approximately 30 soccer

fields – in an industrial area which

is skyrocketing.

”It is still too soon to tell exactly

what kinds of production will be

established in India, but it will

definitely be within the area of

Danfoss Refrigeration & AC Con-

trols, and a total of 700 production

employees are expected by 2015.

Up to 800 employees will deal

with development, especially in

Power Electronics but also in the

other divisions,” says Noel Ryan,

the President of Danfoss in India.

Outsourced under same roof

Not all of the new staff will have

Danfoss as their employer. Danfoss

has already outsourced a number

of development tasks to the IT

company HCL, and the plan is for

the company to move into

Danfoss’ new Indian headquarters.

Ole Møller-Jensen, Senior Vice

President of Danfoss Power Elec-

tronics and the Chairman of the

Board of Danfoss India, points out

that the basis for the decision was

largely due to the fact that it is

possible to get the skilled Indian

development engineers precisely

in Chennai.

”There are a lot of them in Chen-

nai, and so by also establishing

production in the country, we will

be covered by the Indian ‘customs

umbrella’ and will send a strong

signal to the Indian industry and

the authorities that we are here to

stay,” he explains.

Employees in India close to 2,000 in four yearsA massive waste of food and a colossal need for cooling and energy savings are key reasons that Danfoss is now making an even greater commitment in India. India has also demonstrated its ability to resolve development tasks. Prospects are that India will become a very large and attractive market place.

By 2030, four out of ten Indians will live in cities. This is new construction in the area close to

Chennai, where Danfoss is setting up business.

6

India

Indians moving to town

Hariharan Krishna

Noel Ryan, newly appointed President of

Danfoss in India, will be the one who will be

tasked with implementing the strategy, and

he is looking forward to getting started. Noel

was not appointed until this summer, but he

has extensive knowledge of India and, in his

view, success is first and foremost to be secured

through India’s potentially major role as a food

manufacturer and Danfoss’ role as a supplier

of energy-saving solutions, such as frequency

converters.

Today, India is the world’s largest manufacturer

of milk, the second-largest producer of fruit

and vegetables and the third-largest of food

grain and fish, says Noel Ryan. But, 30-35 per-

cent of perishable goods such as fruit, greens,

meat, poultry, milk and fish are lost, resulting

in an estimated loss of 11 billion USD. Reason:

poor refrigeration.

“Major plans exist for the entire cooling chain

from producer to consumer. In fact, we are talk-

ing about doubling the cooling capacity five

times by 2015 – and this will pave the way for

substantial business opportunities for Danfoss,”

he points out.

Today, the fact that less than 11 percent of food

is put in cold storage in the existing 5,400 cool-

ing/freezing stores makes it a national priority

for India to extend the cooling chain through,

among other things, public subsidies for the

modernization of facilities. It also makes it an

open window for foreign supermarket chains

to invest in India with an ownership share of

51 percent. This will make it more attractive for

large global chains to have operations in the

country, thereby increasing pressure even more

to cool down the goods so that they arrive

safely onto the cold counters and to the Indian

consumers.

Foods are lost

7

The Indians are moving from the countryside to the cities in great num-

bers. By 2030, four out of ten Indians will reside in cities and that will be

even more to Danfoss’ advantage, estimates Hariharan Krishna, Senior

Director in GS and a long-standing member of the management of

Danfoss in India. From his point of view, September 26 was a day he had

long been waiting for. He and his management colleagues in India have

impatiently pushed for Danfoss to gain a more distinctive role in India.

”India holds great opportunities for Danfoss within the field of climate

and energy. The country has a scarcity of energy and the result is that

large amounts of food are lost. With this decision, I anticipate that we will

progress so rapidly that we can contribute to the success of Danfoss,” he

says.

A frequent loss of powerOle Møller-Jensen knows all too well about

the frequent power losses in India. He is head

of Danfoss Drives’ sales in the country which

accounts for 40 percent of the group’s total

sales in India. And he is convinced that India

will become a huge market for Danfoss. One

of the reasons is that the Indians will develop a

staggering need for energy-friendly solutions

as they are forced to save electricity.

”There is already today a significant need for

power in India. The powerful growth and the

migration taking place from the countryside to

the cities increases the pressure on the power

network every day, and the frequent power

outages are a stone in the shoe of develop-

ment,” he says, referring to the International

Energy Agency that predicts that the country’s

need for energy will have more than doubled

by 2030.

So, this is about the Indians placing new

requirements on energy efficiency, and the

potential is big. A survey shows, for example,

that between 23 and 46 percent of the energy

consumption is in public buildings.

”Those figures tell us a lot about the pos-

sibilities. We have defined three main trends

in India as the background to our strategy: the

increasing urbanization, the need to extend

the cooling chain, and the need to save energy.

They are in perfect harmony with our focus on

Climate & Energy and each grows faster than

the normal growth rate in India,” he says.

Noel Ryan, topOle Møller-Jensen, centre

8

Read the explanation below as to why another potential global crisis will not remind you of 2008-9. Now, Danfoss has a strategy that works – and that means a fast response, if needed.

We can act fast with Core & Clear

By N I E L S C H R . L A R S E N When the financial crisis swept across the world

in the fall of 2008, Danfoss was in a vulnerable

position. Today, the situation has changed

significantly. It is an entirely different Danfoss

which faces the crisis which may or may not be

evolving. These are some of the words of CEO

Niels B. Christiansen and COO Kim Fausing in

this ‘double’ interview.

The background to the conversation is twofold:

the finest half-year result that Danfoss has ever

delivered, but accompanied by gloomy thun-

der in the background caused by unrest on

the financial markets. What are the employees

expected to think about the future in such a

situation? We are taking a look into the engine

room.

”We are of course monitoring development

closely, and steps have already been taken to

adapt ourselves to the situation. Travel activi-

ties have been cut and a few have been made

redundant but they were part of the adjust-

ments which the divisions are always making,”

points out Niels B. Christiansen.

”Most importantly, the groundwork of our

business is much more solid than it was three

years ago. We had a very difficult first half-year

and our expectations for the second half-year

are lower but, in spite of this, we are main-

taining our expectations for the 2011 result.

Consequently, we do not anticipate making

any downward adjustments. The reason is that

the Core & Clear strategy has given us a major

drive. It has helped Danfoss achieve an entirely,

different shape compared to that of 2009

because we have changed our focus entirely

and it makes it possible for us to adapt faster to

whichever new situation we are being exposed

to,” he says.

Full focus on healthy parts

The strategy was presented to the top 200

Danfoss leaders, approximately, at the Global

Management Meeting at the beginning of

2010. The main elements of the strategy are

that Danfoss should be financially indepen-

dent, should focus on the customers’ needs,

should cut away unnecessary complexity and

should only produce what will yield a profit.

Niels B. Christiansen (left) and Kim Fausing:

”We are able to take swift action,

if we need to tighten up.”

9

10

(Mio.DKK)

Net interest bearing debt

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q1 2011

Q2 2011

Q3 2010

Q4 2010

0

2,000

4,000

6,000

8,000

10,000

12,000

(Mio.DKK)

Total net sales EBIT margin

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q1 2011

Q2 2011

Q3 2010

Q4 2010

0

10,000

8,000

6,000

4,000

2,000

-2,000

-4,000

-6,000

0%

25%

20%

15%

10%

5%

-5%

-10%

-15%

Net interest bearing debt

Total net sales and EBIT margin

we made about Danfoss being reduced in

size for a period of time – that was when we

launched Core & Clear less than two years ago.

But what actually took place? Well, we have not

shrunk, but we have stayed at the same level.

Because the strategy is working.”

The long journey

Core & Clear was launched as a journey with

2015 as the end target. Niels B. Christiansen

points out that all parts of Danfoss have set

out on the journey towards Core & Clear and

Today, close to 18 months on, what you refer to

the portfolio of companies has been revised.

The household compressors have been sold

as have Danfoss Water Controls and Danfoss

Geared Motors – which in the case of two of

them meant saying ‘goodbye‘ to some not very

profitable businesses. This enabled full focus

to be directed onto the five strong divisions

within Climate & Energy – and Sauer-Danfoss

– all of which are healthy businesses comple-

mented by six growth businesses, explains Kim

Fausing.

At the same time, steps have been taken to set

up an overall control of Danfoss’ investment

policy, meaning that money is channeled into

the businesses with the greatest potential –

and to the markets that grow the most, such

as the BRIC countries, Brazil, Russia, India and

China.

”We have invested intensively in the growth

markets, so now we are certain to get our share

of the cake in those parts of the world. Gener-

ally, we have made considerable investments

over the years, which the employees may not

have noticed. And then there is the prediction

“We have invested intensively in the growth

markets, so now we are certain to get our share of the cake in those parts of

the world Kim Fausing

11

are running projects which reduce complexity,

raise quality, cut away unnecessary work flows,

increase customer contact and put a limit on

costs.

”There are plenty of ongoing projects. They are

at very different stages in the process, but they

all indicate that we will have become Core &

Clear by 2015. However, here and now – facing

the real possibility of another global recession

– the most important thing is to underline the

significance of the fact that we have achieved a

new kind of transparency and clarity in terms of

what is going on throughout Danfoss. We have

defined 47 areas that are constantly being mea-

sured – relating to the quality that we deliver,

customers’ perception of the service we offer,

financial key figures and so on – and every third

month, the divisions meet with the Executive

Committee to present their plans. This means

that we have a full overview of our priorities

and how we spend money.”

”Yes, and it means that we can take very swift

action, should we need to tighten things. We

have set up various scenarios for global finan-

cial development on the markets and have

“Most importantly, the groundwork of our

business is much more solid than it was three

years agoNiels B. Christiansen

defined the steps we need to take to adjust

accordingly,” says Kim Fausing, adding:

”The Core & Clear strategy has proven to be

working. It has already given us a lot of tail-

wind; perhaps we now need to show that it

also works in headwind. And it does. With Core

& Clear, we can ensure a strong bottom-line in

both the good times and in the downturns.”

Non-core businesses have been

sold

Five divisions focusing on

Climate & Energy created

Six growth businesses allocated

extra large investment funds

Sauer-Danfoss is once again in a

strong position

Major growth in the BRIC coun-

tries, and we are retaining mar-

ket shares in the ’old’ markets

Transparency facilitates swift

action

Debt has been almost halved in

two and a half years

Cash flow has been substan-

tially improved, meaning more

available funds to finance

investments

All divisions have defined why

the customers should buy from

them (their value proposition)

A clear model has been created

as to how far costs should be

allowed to increase at Danfoss

Global Services

10 strong steps forward

12

Noise plays a key role in the air-to-water heat pumps, as opposed to ground heat pumps. One part of the system – the fan – is placed outside the house, and the heat pump then transfers the heat from

the outdoor air to the water circulating in the heating system of the house. Photo: Bosse Frizén.

13

B y L E N E I L S ø E N I E L S E N

Far away in the Swedish countryside, in a

sound-proof room, is the man in Danfoss Heat

Pumps who knows the most about sounds. His

name is Martin Hamberg, a trained machine

engineer with a specialty in acoustics, whose

know-how can be the key factor that makes a

customer select a heat pump from Danfoss. He

has paid extra attention to the new model, the

DHP-AQ, an air-to-water heat pump that

Danfoss Heat Pumps put on the market in May.

He was asked to develop the quietest heat

pump on the market. And quiet it is. Laboratory

tests prove that the DHP-AQ has a capacity of

11kW with a noise level of just under 60 deci-

bels. The competitors cannot compete with

that – their level is 72. The 12 decibel difference

does not seem much, but small variations have

a major impact on the decibel scale, and in this

case it amounts to more than a doubling of the

sound.

”It has been a strenuous and tricky project,

because we were asked to design the quietest

heat pump ever launched on the market. It has

been an incredibly interesting process,” says

Martin, who previously dealt with noise and

vibration in Scania trucks.

There are two components in particular in a

heat pump that make a noise: the compressor

and the fan. In designing the product, Martin

considered the shape and location of all parts

of a heat pump. Every time he replaced a com-

ponent, he took the heat pump back into the

sound laboratory for testing.

”Minor adjustments can make the difference

and have a great impact on the sound. And

with the AQ we did not compromise on any of

the components,” he says.

The efficiency of the new heat pump is top-

class and it is also easy to install. The installers

themselves have noticed that the noise has

lessened. Islam Pearson, the owner of Eco Logic

Living in Great Britain, is surprised at how quiet

it is.

”It is not at all what you would expect when

you are standing next to a heat pump. It is,

without a shadow of a doubt, the quietest,

especially compared with similar competing

heat pumps,” he says.

He has installed Danfoss heat pumps, and

those of other manufacturers, for more than

three years and has 14 employees.

The sound expert from the Swedish woods

”It is not at all what you would expect when you

are standing next to a heat pump

Islam Pearson, Eco Logic Living

Facts

• All sound is measured in decibels (dB).

There are two ways to calculate it:

sound power or sound pressure. The

former is measured in a sound-proof

room while the latter is measured in

combination with the surroundings,

such as up against a house wall.

• Sound power – the pure sound in a

laboratory – is the best basis for com-

parison. The results cannot be ’embel-

lished’ by moving the heat pump,

making the surfaces (which reflect the

sound) softer or by carrying out the

measurements at different distances to

the heat pump.

Danfoss Heat Pumps has launched the quietest heat pump ever seen – or heard – on the market. Meet the man behind it, Martin Hamberg, a specialist in acoustics.

14

Gustavo Luna is 31 years old, chief engineer and the head of Condensing Units Business Develop-ment at Danfoss Mexico’s factory in Monterrey. Despite the fact that he is so young, Gustavo’s career spans 12 years so far. He set out as a student and was permanently employed after a year. He has worked 18 months in Baltimore and is now head of a small group of three engineers and two students.

In father’s footsteps

Gustavo’s father, Guillermo Luna, worked in the compressor

business, but lost his job when the production was moved to

Slovakia. He is now a pensioner and runs a corner store.

A trip in the park

Fundidora Park is an attractive

excursion spot in Monterrey. It sur-

rounds the city’s old steelworks,

which was declared bankrupt in

1986. Instead of removing the

works, they have become a dis-

tinctive sculptural element on the

townscape. Gustavo and Judith

often visit the park and once in a

while they go to a concert or other

events in the large conference

centers that are located next to

the old steelworks.

His father’s pride and joy

Xander was born on December 27, 2010. That’s a rather unusual name in

Mexico. The couple found it very difficult to choose the right name for

their son, but when they heard the actor Vin Diesel grunt ”Welcome to

the Xander zone” in the movie ‘xXx’, they looked at each other and that

settled it. The photo was taken in May, so Xander is much bigger today.

Work & leisure time in Monterrey

Wife’s lunch is best

Beef with a corn tortilla… ahem. The canteen usually does a better job

now than they did before. Normally, Gustavo is reasonably content with

the food in the canteen, which is simple Mexican. Once or twice a week

his wife prepares his lunch.

Dog on the front stairs

Gustavo has two dogs. He and his wife got

themselves their Labrador Pluto because they

wanted to wait before having a child. Then

one day, there was a female dog outside the

door on the front stairs. Gustavo spent a few

days trying to chase it away. He then gave

it some water, then something to eat, then

he took it to a vet, all the while searching for

someone who would give it a home. And it

got a home: Gustavo´s house.

Part of a young team

Gustavo is part of the Condensing

Unit team – a group of 13 people,

most of whom have only been

at Danfoss a short time, in many

cases less than a year. Gustavo

and his boss, Daniel Torres, are

the ones who have been with the

company the longest. Daniel is the

guy with the red notebook.

Supports Chivas

Monterrey has two teams that

rank among the best football

teams in Mexico but Gustavo is

not from the city and his favorite

is Chivas from Guadalajara. They

reached this year’s semi-final.

Saving to buy a house

Gustavo and Judith live in a rented

town house less than ten minutes

by car from the factory, while they

save up for a house of their own.

They dream of 160sqm, which

costs 1.4m Pesos (85,000 Euros).

They live in a quiet neighborhood,

but they have hired a private secu-

rity patrol which goes on rounds

during the night.

Work & leisure time in Monterrey

Thank you to the many skilled photographers ...Photo competition:

Thank you to the many skilled photographers ... 374 Danfoss colleagues sent in their best shots on the theme: Climate & Energy. Here are some of

them. To see all photos, take a look on the Intranet.

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continue until October 31.nominees

20

Early birds in Washington, DCnormally, morning meetings are a rare occurrence on America’s Capitol Hill, where the

American Capitol building is located. But, early one morning in June, 50 Senior Executives

from the refrigeration and air-conditioning industry convened at the noblest and oldest of

the three buildings where the uS Senators have their offices. The occasion was the 15th

Danfoss EnVisioneering symposium.

Read more on the following pages.

21

Early birds in Washington, DC

22

Envisioneering

Facts

For decades, the Russell Senate Office Build-

ing has been the scene of key historic events.

Built in the neoclassical style, it was the setting

for the Watergate hearings in the 70s, which

brought about the fall of President Nixon.

Also, one of its conference rooms has been

dedicated to the memory of the Kennedy fam-

ily. And it has housed the most recent in the

series of Danfoss’ EnVisioneering symposiums

– which is beyond compare, but just serves

to illustrate that, through the symposiums,

Danfoss has managed to place itself in the top

‘layer’ of US public administration, where fun-

damental decisions are made.

Seats in demand

Previously, Danfoss has held these symposiums

in the Library of Congress, yet another of Wash-

ington’s iconic buildings. One meeting was

even held in the Capitol. By hosting the event

in such noble surroundings, Danfoss is able to

attract the right speakers – and increase inter-

est in participating.

Two cancellations on the day before the meet-

ing in June meant that two others on the

waiting list cleared their calendars and went

to Washington. This is how it has developed:

there is now major interest in getting one of

the 50 seats – and, what’s more, those who

wish to take part are influential people in the

refrigeration and air-conditioning industry. The

purpose of the symposiums is to convene a dia-

logue among the public and private sectors to

exchange ideas and views on energy and cre-

ate a forum for industry to discuss with NGOs,

stakeholder organizations and politicians. And

that’s exactly what is so ingenious about the

initiative, points out Richard Lord from Carrier

Corporation.

”The symposiums are really good. They bring

together the right people.”

Over the past five years, Danfoss has held a series of discussion-based meetings about climate and energy efficiency. The program has established Danfoss as a strong industry voice – making Danfoss appear larger than actual US market share.

Danfoss, a solid beacon in the USA

The Russell Senate Office Building was

built 1903-08 and is the oldest of the

Senate office buildings. At first, there

was room enough for everyone, but

over time, the number of states grew

and the number of staff numbers grew

– currently, a Senator has a staff of 60

employees – and two more office build-

ings have been constructed next to the

Russell building.

P H O T O A N D T E X T : N I E L S C H R . L A R S E N

Ryan Hodum,

David Gardiner & Associates

(climate and energy consultancy)

”The Danfoss name has increased

in significance. Now political lead-

ers go to places like Arkadelphia,

Arkansas (where Danfoss produces

scroll compressors – editor’s note)

to learn the meaning of energy

efficiency.”

Eugene Smithhart,

Director, Trane

(Danfoss OEm customer)

”This is big. The perception of

Danfoss’ leadership has changed

dramatically over the past decade.

With this, the company shows itself

as a leader. You wouldn’t be able to

buy that kind of advertising.”

Hari Harikumar,

Vice President, Ingersoll Rand

(Danfoss OEm customer)

”I’m here to learn. The Danfoss

staff deal with new trends like, for

example, ‘smart grid’ where even

governments worldwide are look-

ing for solutions. When you get

the chance to meet with others in

small groups, things get moving.”

mark menzer,

Regional VP Intertek

(global test company)

”This is my third meeting, and I

consider it an honor to be invited.

Danfoss has a prominent posi-

tion in the industry and these

symposiums deal with interesting

matters. The symposium about

smart grid was perfect for me. It

came at a time when Intertek is

very involved in smart grid testing.

Thumbs up.”

As a result of the success, they have also man-

aged to engage top policy makers in the sym-

posiums. At the meeting in June, the Chairman

of the Senate Energy and Natural Resources

Committee, Jeff Bingaman, who is a Democrat

from New Mexico, prepared the ground for the

debate. It featured speeches by, among others,

Stephen Yurek, the head of the American trade

organization AHRI, which represents 300 lead-

ing manufacturers within heating, refrigeration

and air-conditioning.

Impressive track record

Vice President Robert Wilkins and Director Lisa

Tryson are the organizers of the symposium

series. Both are from Communications & Brand-

ing, and Robert Wilkins emphasizes that the

events are not meant as ‘sales shows’. The pri-

mary intention is not to sell Danfoss products,

but for Danfoss to become a company that

leads the way in its industry – like a towering

beacon. He believes this has been achieved.

”We have reached the point where the major

OEMs are familiar with us. Our symposiums are

getting strong industry-related press coverage,

and it has become easier for us to attract the

appropriate speakers now that we have a track

record.”

At Danfoss’ American headquarters in Bal-

timore, not far from Washington, DC, John

Galyen, President of Danfoss North America,

has reason to be pleased. According to him,

businesses in the sectors in which Danfoss

operates no longer ask ‘Danfoss, who?’:

”As we have raised the profile and visibility of

Danfoss over the years, we now answer the

question ’Danfoss what?’ – showing what we

can offer. The symposiums are not directly

measurable in sales, but, they clearly position

us a leader in our industry and gives us the

opportunity to engage with our customers on

a higher level.”

The next symposium will be held in November,

this time in Bonita Springs, Florida, with the

theme ”The Grid, Systems & Buildings:

A Glimpse Over the Horizon.”

24

Facts

What are the customers’ views? So far, this has not been entirely clear, but now, shared analysis tools imple-mented in the divisions will provide the answer.

B y N I E L S C H R . L A R S E N

Ryan Air is a rather good example. It might be

that customers are not so content with the

service on board the planes. But how come

they choose Ryan Air anyway? Because the Irish

airline has a razor-sharp focus on transporting

passengers as cheaply as possible from A to B.

The company delivers what the customers are

asking for. No more, no less.

How to get a better insight into the customer’s needs

Thomas Højsager, Director, and since May, in

charge of what you might call customer insight,

is happy to use Ryan Air as an example because

it represents a company that is really good at

understanding the real needs of customers.

”It is something that Danfoss needs to improve

on. We need to become better at understand-

ing what makes the customers successful and

to help them by providing solutions that create

value for them.”

He has been put in charge of a seven-strong

team including representatives from the divi-

sions and DBS (Danfoss Business System), and

the team is currently preparing the ground to

make it happen. So far, the divisions have con-

ducted a variety of customer surveys but three

surveys have now been selected, which are to

be conducted at regular intervals.

The rough edges still need to be smoothed off,

but the three surveys have, by and large, been

defined:

A measurement of customer loyalty. It is

already being conducted in all the divisions

and the plan is for it to be carried out once a

year. The customers are asked whether they

would recommend Danfoss to others and also

to come up with suggestions as to what they

would like to see changed. This year, more than

70,000 customers have been interviewed.

The second one is a more detailed question-

naire concerning the customers’ perception

of subjects like quality, service, price, ability to

deliver – in short, Danfoss’ ability to meet cus-

tomers’ demands compared to the capability of

their competitors. It is planned that this survey

will be carried out every second year.

And, finally, there is an in-depth survey of

Danfoss’ reputation, and how to improve it.

Two surveys have been carried out so far. The

most recent involved around 2,000 customers

and potential customers distributed on seven

markets.

”It includes rather extensive material and the

divisions are currently working to integrate the

resulting insight into strategic planning,” says

Thomas Højsager.

Jens Thisgaard, Senior Director Global Market-

ing at Danfoss Power Electronics, refers to the

present activities within quality as being the

results of the customer surveys.

”We use the analyses when we are choosing

where to take action. We have noticed that,

for the customers, quality has been the most

prominent inducement to buy, so we have now

taken a number of initiatives within quality to

reduce the error rates even more,” he says.

• Previously, Thomas Højsager headed

market research at Schweppes.

• The three surveys are called: Customer

Loyalty Index, Customer Perception

Study and Reputation Survey.

• By and large, the measurements show

that Danfoss still needs to improve on

the basics: quality, delivery and ’easy

to do business with’.

Thomas Højsager

25

Danfoss advertisements are adorning the

subway trains these days in five major

Chinese cities. The adverts are part of a

combined image and recruitment cam-

paign. Danfoss has an increasing need to

attract production workers and white-

collar employees to factories in the coun-

try, while it is also important that Danfoss

becomes better-known generally in

China. In addition to the adverts in the

subway trains, Danfoss also advertises in

various job portals, in newspapers and

industrial magazines. Furthermore, 16

Danfoss buses carry the Danfoss logo on

their sides.

“The results so far have been satisfactory.

For example, people who did not know

of us before have now approached us,”

says Alfred Che, Head of Corporate Com-

munications in China.

Warehouses stock Danfoss goods in APACIt is too expensive to build new ware-

houses and rent space in many different

locations in a single country, so four

years ago, Danfoss began to search for

external partners in the APAC region.

Rocket Warehousing became the latest

local partner in Australia in July, and

now the previous crowded stock facili-

ties of 950m2 have been exchanged for

1,850m2. Danfoss goods are stored and

serviced in Hallam, only 250m from the

Danfoss office in Melbourne.

Robert Sherry, Director, Global Services,

says that the accuracy and output KPIs

(Key Performance Indicators) have

increased considerably and the required

KPI levels of 99 percent will very soon

have been reached.

Danfoss production employees in Europe have been given new work clothes and they were

involved in selecting it.

Danish company Berendsen is in charge of the new line of modern work clothes.

”We have aimed for high-quality clothes, that are stylish, and are delivered on time.

We have had problems with on-time deliveries,” says Charlotte B. Steffensen, from the

ServiceShoppen, the Danfoss shop where you can order the clothes.

Currently, the clothes are only available in Europe, due to the customs barriers and

clothes standards that differ from country to country.

modern and better quality

Raising the Danfoss profile in China

26

Who on earth is John Smith?”John Smith, Danfoss.” It’s not always

an easy task to locate someone with

a name like that. But incomplete

addresses are very frequent and they

are one of the reasons, for example,

that 30 percent of all invoices from

Danfoss Heating Solutions in Denmark

end up in the wrong place. They do

not go to the right person for approval

but, instead, go on a tour round the

organization and, as a result, suppliers

are not paid on time. Now, a range of

initiatives will remedy this – not just

at Heating Solutions, but throughout

Danfoss.

Ohhhh, please show me

the way to John Smith

... No way!!

27

At the end of last year, Danfoss signed a new

contract with Capgemini, the company that

deals with a range of Danfoss’ accounting func-

tions. Under the new contract, some of the less

complex functions were moved from Krakow in

Poland to Kolkata in India, though not quite as

smoothly as planned, says VP Global Financial

Services Henrik Paulsen.

”Over the course of winter and spring, a lot of

invoices were not paid on time and that has

led to complaints from suppliers. So, we have

implemented some initiatives which will rectify

this,” he says.

One of the moves is extending the training of

the Indian employees at Capgemini and prepar-

ing a detailed step-by-step action plan when

an invoice lands on your desk. In addition, fixed

KPIs have been created: measurements which

show, on a monthly basis, how many invoices

are not paid on time and how many end up

with the wrong person at Danfoss. This data is

analyzed to find out whether there is a pattern.

And this has shown that half of the invoices that

arrive from Heating Solutions in Denmark and

end up with the wrong recipient, come from as

few as 40 suppliers. The analysis is set to iden-

tify where errors occur in order to rectify them.

”It is obvious that Capgemini have made errors,

but we also have to look at ourselves and

acknowledge that we are not always making it

easy for them. It’s not very easy to find some-

one with an incomplete address such as, ”John

Smith, Danfoss,” says Henrik Paulsen.

Around 150 permanent employees at

Capgemini have Danfoss as their responsibility.

Their tasks include making sure that money

from our customers is received and that bills are

paid on time. In addition, meanwhile, they keep

the overall accounts for Danfoss’ sales compa-

nies. Ninety work in Kolkata, 60 in Poland. The

staff in Poland have been retained, because

they are able to communicate with customers

and suppliers in their own language.

From Krakow to Kolkata with a slight delay

”It is obvious that Capgemini have made errors, but we

also have to look at ourselves and acknowledge

that we are not always making it easy for them

Henrik Paulsen

28

B Y A N D E R S M C C U L L O C H

Do they sell T-shirts at Danfoss

Heating Solutions?

Taking a look at the divi-

sion’s product list as it

was six months ago, you

would think that they did.

The T-shirts were most

likely ‘leftovers’ from a PR

campaign, but had been

included in the sales list by

mistake.

Such curious examples

have appeared in almost

all of the division’s product

lists. But this will not hap-

pen again. Over the past six

months, Danfoss Heating

Solutions and the four other

Climate & Energy divisions

have taken part in a project

under Danfoss Business Sys-

tem (DBS), where the target

has been to weed out the

product codes which have

not been sold even once

over the past 12 months;

due to wrong entries in

the system or because the

products have long been

discontinued.

Operation clean-up is just

the first step on the way to

creating a more streamlined

and profitable product

catalogue. At the end of the

day, this is about cutting

products which are not

cost-effective to produce.

This is the explanation of

DBS Navigator Søren Got-

fredsen, who has helped

the divisions on the project.

DBS is counting on the five

divisions to have removed

close to 25 percent of the

codes by the end of 2011.

”The clean-up is making

us focus on our core busi-

ness. And once we have an

overview we can begin to

concentrate on something

much more interesting, i.e.

what we are making money

on,” says Søren Gotfredsen.

Away with the dead product codes

325,000 product codes are currently being scrutinized in a major project to reduce complexity.

A large sum to obtain

Until now, the project has

meant that Danfoss Heat-

ing Solutions has deleted

26 percent of the product

codes.

”you should not belittle the

act of cleaning and keep-

ing clean. It is similar to

when it is messy at home.

If too many things are lying

around, you lose track of

them and you let go. But

when you clean up, you

get a better overview,”

says Randi Pedersen,

Project Leader at Danfoss

Heating Solutions.

She adds that not all prod-

ucts are cut after a year

with no sales. There might

be special reasons that a

product code is kept. One

example is if the division

has a special obligation

towards a good customer.

Danfoss is sorting through around 325,000 product codes in a large-scale project that will create an overview of products – and result in a more streamlined and profitable product catalogue in the future.

The project has built on

experience gained at

Danfoss Refrigeration &

Air Conditioning Controls,

which took part in a pilot

project in the business unit

Danfoss Industrial Refrig-

eration and increased

its earnings potential by,

among other things, cal-

culating which products

are the most profitable.

The end result is that they

are now in the process of

removing 49 percent of the

products.

This is something that

other divisions have also

started to deal with,

explains Søren Gotfredsen.

But he is also able to spot

some immediate ben-

efits in the introductory

cleaning-up: old products

do not take up warehouse

space anymore and people

have been appointed to

take responsibility for each

product code and to make

sure that the product range

is routinely updated.

”And we now have the

processes and the tools in

place in the divisions so

that we will never again

have to clean up, but only

keep clean. That’s a good

starting point,” he says.

29

Facts

”The notes describe specific tasks and give a much better overview,” says R&D physicist Thomine Stolberg-Rohr, Danfoss IXA.

Danfoss IXA is an independent com-

pany with Danfoss as it main share-

holder. It has developed patented

sensor technology for the measure-

ment of gases in, for example, barns

and the holds of ships.

Colorful Post-its increase efficiency and make employees in a Danfoss development company happier.

T E K S T A N D P H O T O : O L E K A N S T R U P

A whiteboard with hundreds of Post-its is the

dominant feature of a meeting room in the

sensor business Danfoss IXA in Vejle, Denmark.

Every one of the notes describes a task that

takes a maximum of six hours to solve, and

in the morning the employees each take one

note off the board before logging on to their

computers.

According to Chief Commercial Officer, Henrik

Gedde Moos, this has resulted in stress and

poor results being replaced by efficiency and

happy employees.

”The daily work here is made up of product

development. And product development

projects tend to become intangible quanti-

ties where the tasks drag on for months. That

results in stress. But with the Post-its system,

all tasks are broken down to daily projects that

the employees are able to deal with in their

heads – and they can see the result on an ongo-

ing basis,” says Henrik Gedde Moos, adding that

welfare surveys conducted before and after the

company introduced this method show a clear

improvement in the working environment.

The idea came from a team of consultancts that

Danfoss IXA had hired to come up with a bid to

make sure that development projects did not

run off track. The solution is that once every 2

weeks, the company’s nine employees jointly

decide which tasks they will perform over the

next 14 days. Each task is given the name of the

employee who has the competencies and the

urge to solve it and is then put on the white-

board.

”It may sound as something very pedantic but it

works. Everyone contributes with what they are

good at and our projects proceed as intended,”

says Henrik Gedde Moos, adding that the

method of Post-its was originally developed

by the IT industry and goes under the name of

Scrum.

(Read more about Scrum at www.scrumalliance.

com)

No task to take more than six hours

30

Facts

The Man on the Moon semi-

final was held in October

after Global Danfoss went

to press. The final will

take place in Nordborg in

December.

B Y O L E K A N S T R U P

A lot of suits, but only a few

dresses. That’s how it usually is

with the Man on the Moon com-

petition. Until now, only a few

women have taken part in the

contest to find the best idea for

new products, services or business

processes, but this year one of the

teams in the competition is mainly

women. And that is the first time,

even though more than one hun-

dred teams have participated in

the competition so far.

”It struck me immediately when I

saw the list of the 12 teams in the

semi-final. I think this will motivate

more women to take part and

Women want to go to the moon toothat’s good,” says Dorthe Kjær,

Nordborg, competition project

coordinator.

But, according to the participants

on the team, that does not change

their competitiveness.

”I do not think it has any signifi-

cance in terms of our chances of

winning. I don’t agree with the

stereotypes about women suppos-

edly being better at multi-tasking,

or men being better at concentrat-

ing on specific subjects,” says Test

Engineer at Danfoss Power Elec-

tronics, USA, Jasmine Vadgaama.

The team calls themselves ’The

SimplePower’ and its male team

member George Miller, Mechanical

Engineering Manager, agrees:

”Personality and motivation are

more important than gender.

We have good chemistry in our

team. We come from different

departments and have different

competencies to offer. That’s our

strength,” he says.

‘The SimplePower’ participants

come from Danfoss Power

Electronics, USA, and span four

departments: Marketing, Project

Management, Supply Chain, and

Mechanical Engineering. Their idea

is about developing a smaller and

simpler drive than existing Danfoss

drives.

There is a predominance of female names on the team ‘The SimplePower’. From the left: Chelsea Ballou, George Miller, Jasmine Vadgaama, and Lisa Arnold.

31

Mikhail Shapiro, General Manager of Danfoss Russia, received an

Order of Honor during a Danish state visit in Russia recently. The

Royal Danish Family and representatives from more than 100 Danish

companies had travelled to Moscow to promote business on the Rus-

sian market. The order was given to Mikhail Shapiro to recognize him

as the best Manager heading a Danish company abroad.

Also present in Moscow were President and CEO Niels B. Christiansen,

who met prominent officials, among them the Russian President

Medvedev, at a State Banquet in Kremlin. Lars Tveen, President

Danfoss District Energy, and Troels H. Petersen, President Danfoss

Power Electronics also visited Moscow.

Power cables make the football rollOver the past years, Danfoss DEVI has

made major sales of DEVIflex power

cables for use in football stadiums in

Europe. One of the recent deliveries was

for the Danish town of Silkeborg, where

the local football club can now avoid

having to transfer the home matches

taking place in early spring and late in

fall to neighboring cities, where heating

is installed under the playing surface.

Leif Olsen, Sales Manager at Danfoss

Heating Solutions, says the project helps

to highlight Danfoss’ dominant position

on the market of electricity-heated sta-

dium fields.

One of the world’s largest solar cell plants is

being constructed on a former NATO base in

Northern Germany. The facility will generate

up to 80MW – enough to supply 100,000

people with green energy – and 5,000 invert-

ers from Danfoss Solar Inverters will make

sure that the electricity produced by the solar

Green energy for 100,000

Danfoss leader received an Order of Honor

cells is transferred to the power network.

Once the new solar cell plant in Eggebek

begins to produce electricity later this year,

it will also be one of the most efficient of its

kind in the world.

32

Danfoss around the world

Lithuania

USA

Germany

Out of breath in Hamburg You can only complete the task if you help each

other out. This was the message when, recently,

the participants in the 12 teams in the Man on the

Moon competition were sent out onto the streets

of Hamburg in turns at midnight, taking with them

a cell phone and a sheet of tasks. They did not have

a map, but were guided by their team-mates who

were back at the hotel, following them via GPS.

“It really proved that you don’t get far if you do

not work together and trust your colleagues,” says

Design Line Specialist Anders Clausen.

Danfoss kept the ball spinning Hundreds of Danfoss products were added to the

experience of both players and spectators during

the European Basketball Championship held in

Lithuania recently. In preparation for hosting the

biggest sporting event in the country’s history,

Lithuania built a set of new arenas and all were

equipped with Danfoss products in different appli-

cations. Floor heating, radiator heating, and cooling

Taking pride in the plant Employees at the nozzle factory Danfoss Hago Inc.

Mountainside, USA, want to take more pride in their

work place. At the end of last year, they started a

work place pride campaign. One of the ways to

make it a success was to give the factory a make-

over, which was completed in July.

A small group of key people sat down to brainstorm

and came up with new solutions for a new improved

production layout. Based on the DPP Principles,

they came up with the idea to set up production in

horseshoe cells.

systems, among others, ensured an even more

comfortable experience for the spectators.