Six Sigma Deployment

1. Six Sigma Deployment Approach to Assess & Select Projects for Quality

2. Voice of The Customer Voice of The Customer Voice of The Customer Voice of The Business Voice of The Business Voice of The Business Prioritize Projects XXXXX XXXXXXXXXX Allocate Resources XXXXX XXXXXXXXXX Monitor & Adjust Framework for Deployment & Execution Deployment/Execution Steps Goals • Provide Strategic Focus & Balance • Prioritize Projects • Ensure Strong bottom Line Impact • Allocate Resources • Launch yearly plan • Monitor progress

3. Projects Can Come From Either.... Reactive Proactive or Market & Competitive Pressure Customer Complaints Business Mandated (or Regulatory) • New Products • New Processes • Outsourcing • Business Acquisition • Regulatory • Patriot Act • Operational Risks • Analysis of Critical Processes • Rework, “Work-around” • Internal Process Problems Macro View of Deployment & Execution A + B Align to Strategic Business Objectives = 2006 Prioritized Project List C All Project Must Have Tangible, Bottom-Line Impact

4. A B C Populate list w/ problems Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx • Organize Problems • Themes • Strategic Fit • Misses ID Processes Xxxxx Xxxxx Xxxxx Xxxxx Team Selection is critical • Teams need proper breadth to encompass the entire set of involved processes • Teams also need the appropriate depth of functional and departmental knowledge • Black Belt projects tend to be cross-functional • Green Belt projects tend to be single function Prioritize Projects Projects Process Graphical View of Deployment & Execution 1 Project Sources 4 2 5 3 (Prioritization Matrix - See Next Page 5)

5. Project Prioritization Matrix Strategic Benefits Risk Expected Financial Impact on Alignment to Probability Impact Customer Strategic Priorities Data Availability Time to Complete Complexity of Success Rank Potential Projects Champion Total Relative Importance (5-Critical, 1- Nominal) 5 5 4 3 2 2 5 1 0% 2 0% 3 0% 4 0% 5 0% 6 0% 7 0% 8 0% 9 0% 10 0% 11 0% 12 0% 13 0% 14 0% 15 0% 16 0% 17 0% 18 0% 19 0% 20 0% Complexity is a function of Champion Hard dollar benefits Solutions will be felt Alignment to Strategic Data availability around time to complete and the Probability of Project name responsible (revenue gains, cost Time to complete project directly by customer. Priorities of Business core process statistical difficulty of the success for results take-out) problem. 3 < $500k 3 < Purely focused 3 = indirect 3< protracted data 3 = up to a year 3 = high complexity 3 = low 6 = $1MM on back office 6 = moderate collection necessary 6 = 9 months 6 = moderate complexity 6 = moderate 9= $5MM or Cust. will not feel 9 = burning platform 6 =data can be procured 9 = 6 months or less 9 = low complexity 9 = high higher 6= Customer will with nominal effort appreciate 9= data readily 9= Delights available customer

6. Step by Step Process for Deployment & Execution Steps Suggestions Comments 1 Identify Projects • Key managers and others within the function can develop initial list. This is the pre-work needed to complete the initial steps. • Do over several meetings, with support from Blackbelt. • Project list is tabulated from inputs from key managers. Some functions or business have used their key managers to gather the preliminary list of problems/ opportunities The attachment is used to help define and facilitate discussion on the projects submitted for prioritization. This will drive a more factually based discussion and decision (see page 7 & 8). Populate List with Projects 2 Prioritize Projects • Senior managers complete the prioritization of the opportunities/projects. • An extended meeting is needed (suggested). Allow sufficient time for the meeting. • The meeting should be conducted as a working meeting. • Identify resources to execute projects. Will need Blackbelts and team members. • Develop action plan for 2006 plan 3 Charter Top Four Projects 4 Identify Resources 5 Action Plan for Launch

7. Form to Capture Problem/Opportunity

8. Describe what is wrong: “The Pain” When and where do problems occur? Size and impact of problem. Use specific business metrics. Would customers be happy if they know we are working on this? Financial saves Name(s) of customer Name(s) of process Describe where the process start to establish boundary What are the boundaries of the process? Describe where the process ends to establish boundary What is out of bounds for the project? . Define the improvement objective for Critical to Quality :Start with a verb- Reduce, Eliminate, Control, Increase … Tends to start broadly Should include measurable target. Should NOT prescribe solution. Completion Guide to Capture Problem/Opportunity

9. Problem Type Business Need Time Toolkits Rapid q Remove non - value Hrs – 30 Days Improvement added work, waste and Less Complex Less Complex Process bureaucracy (RIP) Continuous q Problem requiring fix Typical 6 Months Or Less (sometimes > 9 months) Improvement goes across several (DMAEC) functions Large Process / & Large Process / q Enterprise wide Complex Design For Complex initiative Six Sigma q New product / process (DMAEC) Introduction Business Typical 2 Months Set-up Then On-going Process & Risk q Meet regulatory Compliance / Management Compliance / requirements Risks (BPRM) Risks q Enterprise wide Note: To be used assessment for process mgt. and compliance Project Types & Six Sigma Tools

10. Project Selection - The Execution Plan

11. Project Selection A Good Project will... • Be clearly bound with defined goals • If it looks too big, it is • Be aligned with critical business issues and initiatives • It enables full support of business • Be felt by the customer • There should be a significant impact • Work with other projects for combined effect • Global business initiatives • Show improvement that is locally actionable • Relate to your day job • Focus on elements that are critical to the output of the process

12. Project Charter • Elements: • Business Case - Explanation of why to do the project • Problem and Goal Statements - Description of the problem/opportunity and objective in clear, concise, measurable terms • Project Scope - Process dimensions, available resources • Milestones - Key steps and dates to achieve goal • Roles - People, expectations, responsibilities • Purpose: • Clarifies what is expected of the team • Keeps the team focused • Keeps the team aligned with organizational priorities • Transfers the project from the champion to the improvement team

13. Charter Components • Problem Statement (A) • A sentence describing the problem that needs to be addressed • What is the magnitude of the trend or problem? • What is the baseline performance? • Business Case (B) • Why is the project worth doing? • Why is it important to do it now? • What are the consequences of NOT doing the project? • What activities have higher or equal priority? • How does it fit with the business initiatives and target? • Goals(C) • What is the definition of a defect? • What primary and secondary metrics will be tracked? • What must the team deliver to be successful: • Defect reduction? • Productivity/cost savings? • Growth or customer impact? • Scope • What process will the team focus on? • What are the process boundaries for the process? • Is the project scope at the actionable level? • What is off limits (in-scope / out-of-scope)? • Milestones • Required deliverable dates • Scheduled tollgates and reviews • Team Composition and Balance • Who is the team accountable to? Who is the Champion? • Roles & Responsibilities? • Who is the Black Belt? • Team Members? • Process Owner? • How will the team interface with Design and Implementation Teams? Do they need to be included now? • What resources does the team need to succeed? Opportunities or problems can be defined or expressed in ways which can be captured catalogued & prioritized See (page 7 & 8)

14. Team Composition Team Selection is critical • Teams need proper breadth to encompass the entire set of involved processes • Teams also need the appropriate depth of functional and departmental knowledge • Black Belt projects tend to be cross-functional • Green Belt projects tend to be single function

15. Why Do We Care About Selecting Appropriate Projects? • Link strategic improvement goals to the projects • Avoid having projects that do not fit the methodology • Utilize appropriate level of resource for potential benefit • Avoid unintended biases • Focus on key business priorities • Optimize monetary impact!

16. High Impact Medium Impact Delivered CTQ Importance Low Impact Low Medium High Performance Project Prioritization • Six issues in selecting a project: • Process • Feasibility (Is it doable?) • Measurable impact • Potential for improvement • Resource support within the organization • Project interactions • Success Factors • Project scope is manageable • Project has identifiable defect • Project has identifiable impact • Adequate buy-in from key stakeholders • To be Successful… • Set up project charter and have it reviewed • Measure where defects occur in the process • Assess and quantify potential impact up front • Perform stakeholder analysis • Common Pitfalls • Resourcing of project is inadequate • Duplicating another project • Losing project momentum • Picking the easy X, not the critical X • Avoiding Pitfalls… • Identify and get committed resources up front • Research database and translate where possible • Set up milestones and communications plan