West Michigan HDI October 10 th , 2012

1. Amway’s Lean Office Journey West Michigan HDI October 10th, 2012

2. Agenda • WelcomeJill Bierens– Manager, Global IT Service Desk • Lean Office OverviewStephen Sweers – Manager, OPX Lean Office • Amway IT ResultsDavid Drake – Lean Leader, ITJill Bierens Daniel Uecker-Herman – Lead Service Desk Technician • Q&A • Optional Tour: IT Operations, ITAM, Lean Cell

3. About Amway • Founded in 1959 • Second largest direct-selling company in the world • Annual sales of more than $10 billion in 2011 • More than 450 products • 80 countries and territories • 20,000 employees • Six million entrepreneurs selling Amway products around the world • More than 900 patents granted and more than 800 pending

4. The Heart of Amway

5. Amway’s Global Service Desk • Metrics • Nearly 6,000 customers in North America and SE Asia • Average 13,000 incoming contacts per month (all channels) • Average 5,000 calls per month • Live answer = 85% • First Contact Resolution = 75% • Eight Service Desk Technicians • Four User Management Technicians

6. Amway’s Global Service Desk • Current State • Strategy • Four regions • Follow the Sun • Standardized processes Ada HQ 6:30am–7:30pm Malaysia 7:00am-7:00pm Caller IT Operations Weekends & Holidays

7. WHY LEAN OFFICE? • Identify and eliminate wasteful process steps in a systematic way • More than 60% of the cost of a product or serviceis attributable to administrative processes. • Quality and service improve • Turnaround time shortens • Costs go down and profits go up • The customer is ultimately delighted • Resources (people and money) become available to be redeployed to further grow the business

8. Whipped Sheep Back Self Altar Kai zen “ change ” “ good ” (revolutionary) (sacrifice) KAIZEN DEFINED

9. LEAN OFFICE ISSUES • Quality:How to improve it? • Cost:How to reduce it? • Delivery:How to ensure it? • Talent:How to develop it?

10. ELIMINATE WASTE • The 8 Wastes • Defects • Over-production • Waiting • Not engaging people • Transportation • Inventories • Motion • Excess processing

11. ELIMINATE WASTE • Unevenness • Can often be eliminated by managers through level scheduling and careful attention to the pace of work. • Overburdening • Workers by requiring them to operate at a higher pace, with more effort and for a longer period of time than appropriate workforce management allows (target utilization @ 85%).

12. TRUE NORTH METRICS • Right 1st time Quality Improvement • Delivery/Lead Time/Flow Improvement • Cost/Productivity Improvement • Talent Development “These are a select few measures, and if you improve them each year, ‘good things’ will happen.” – George Koenigsaecker

13. LEADERSHIP BEHAVIOR

14. THOUGHT-PROVOKING QUESTIONS

15. SUCCESS FACTORS • Factors for success: • Clear Business Case • Leadership Endorsement • Clear Roles & Responsibilities • Dedicated Internal Resources • Structured, Systematic Method • Simple, True North Metrics • Frequent Reviews

16. DEPLOYMENT MODEL: PHASE 1“STABILITY” • What: • Improve Internal Process Workflows and Reliability • Standardize Work Processes • Improve Process Throughput Time • Reduce Clerical Errors (implement mistake-proofing techniques) • Establish “Lean Plans” • Where: • Transactional Business Processes (ex: Idea-to-Market, Procure-to-Pay, etc.) • Key Functional Areas (ex: Planning, Procurement, QA, R&D, IT, Sales, Finance) • Impact on: • Throughput Time Variation (Operational Lead Time Improvement) • Right 1st Time Quality Improvement

17. LEAN OFFICE SPECIALIZATION: INSTABILITY Employees typically retain 80% of the process knowledge. OFFICE EMPLOYEES SPECIALIZATION Breadth of Knowledge • Specialized work • No level loading • Work duplication • No realization of waste

18. Skills/Training Matrix LEAN OFFICE SPECIALIZATION: STABILITY OFFICE EMPLOYEES GENERALIST Shared Knowledge • Multi-Skilled • Multi-Process Handling • Level loaded @ 85% of Capacity

19. LEAN LEADER STANDARD WORK • Assess efficiency of Functional & Cross-Functional business processes. • Develop Functional “Lean Plans” aligned with Enterprise Strategy. • Enable improvement by providing kaizen breakthrough method & support. • Create expectation for annual improvement in: • Right 1st Time Quality • Productivity (Cost) • Delivery (Lead Time) • Talent • Encourage active sharing & adoption of best practices.

20. GETTING STARTED: ACTIVITY • What are the top 2 or 3 most costly outputs (products or services) your “lean office” makes and delivers to your customers? Or, what causes you the most pain? Brainstorm! • Select one output (product or service for your customer), assemble a team and together explore using the SIPOC Tool (Supplier/Input/Process/Output/Customer). • Plan your 3-5 Day Kaizen Event using your completed SIPOC as a guide (hint: you may want to include the voices of suppliers, processors, customers and “outside eyes” as well). • Execute the Kaizen Breakthrough Method…. again, again and again (5X)!

21. SIPOC

22. KAIZEN BREAKTHROUGH METHOD • Pre-Event Planning • Event Execution Kaizen Sponsor Secured? Kaizen Team Leader assigned? Kaizen Target Area Selected/Scoped? Kaizen Dates & Times Scheduled? Kaizen Team Room Scheduled? Kaizen Team Members Assembled (Rule of 1/3’s, SIPOC) Kaizen Supplies Collected? Kaizen Pre-Work/Data Collected? Catering Scheduled? Kaizen Training Material Prepared? Management Report-Out Scheduled? Kaizen Team Trained, Ground Rules Established. Current State Condition Identified. Opportunities for Improvement Defined. Future State Improvements Implemented & New Process Standardized. Management Report-Out Created & Delivered. Adhere to the Improved Process, Continue to Improve & Retrain After Each Improvement. • Post-Event Monitoring Visual Controls are in place, Maintained & Continuously Improved. Standard Work Audits are Conducted, Economic Benefits calculated & Results Communicated. Weekly Kaizen Newspaper Accountability Meetings Conducted.

23. Current State Process (7 Days) WASTE 7 Days V/C 56 Minutes Kaizen Value-Creating Work WAITING 2 Days V/C 10 Mins Waste (2 Days) KAIZEN BREAKTHROUGH METHOD: RESULTS 75% savings!

24. Lean IT: Impact on Amway • Service Desk • Data Center • IT Asset Management • Operations • Voice Telecom • Release management • Application Development

25. Service Desk • Corporate data stores • Average of 100 requests per month • Original process plagued with excessive active and wait times • Active time reduced from 45 minutes to 15 minutes • SME provides clear direction on users’ needs • Process to be leveraged globally

26. Service Desk • Granting Remote Access • Focused on providing correct access without hand-offs • Ensuring we meet PCI compliance requirements • Decision tree developed and training provided for SD staff • Standard work reduces training time • Returned capacity = 1,400* hours (Jan-Aug 2012) * Includes time savings in IT Security and Network Services

27. What Have We Learned? • New concept to IT • Lean is traditionally associated with manufacturing • Many of the things we do have a production flow to them • Balance between focusing on results vs. learning • Staff hesitation to act without management direction • Empowerment is critical • Innovation, learn by doing • Quantified improvements vs. observed improvements

28. What Have YOU Learned?

29. QUESTIONS

30. Tours • Service Desk • IT Operations • PC Lifecycle Lean Cell …Please gather in the lobby… David will be your guide