Anaheim, CA April 5, 2005

1. Ex-treme Design ReengineeringDeploymentIntegration of the DCOR BPM Framework with DFSS and Lean/Six Sigma Methodologiesby Anaheim, CAApril 5, 2005

3. Leadership Vision, Strategy, Direction Strategy & Organization Goals Value Chain Definition, Requirements and Priorities Business Process Architecture Process Description, Inputs & Outputs, Process Measures, Business Rules, Process Enablers, etc. Human Resources Architecture IT Architecture Process & Activity Management, Measurement Systems, Standard Work, Organization Development Human-IT Interface Model Enabling Application Software, Databases, Networking, Technology, and Hardware Enterprise ArchitectureHow do you build a World Class company? All Companies Share a Similar Architecture … the differences are found in the integration!

4. Enterprise Transformation Road Map Phase 4: Enterprise Transformation Integrated Supply Chain Streamlined Business Ops SCOR Deployment • Supplier Management Infrastructure • Internal Network • Sourcing Benchmarking & Selection • Commodity Management • Traditional Cost Reductions World Class Results • Pull System Adoption • Internal • Supplier Supplier Certification Value Chain Alignment Pull System Penetration 60%+ S/C Business Process Simplification Enabling System Solutions Phase 3: Value Chain Optimization Division Certification Supplier Joint Cost Red. Supply Chain Excellence SCORcard Measurement Supplier Quality & Delivery Improvements Cultural Change Year 4 Model Facilities Logistics Optimization Lean Six Sigma Organization Self Sufficiency – MBB Supplier Rationalization Kaizen as a way of life Phase 2: Program Value Expansion Supply Chain Definition Self managed teams Enabling Systems Integration Value Stream Redesign Small Parts Consumption Based Replenishment Year 3 System Wide Bottom-line impact Site Certification Set Based Concurrent Engineering • Results Acceleration • Kaizen Events Data Driven Decision Making • Program Infrastructure • Steering Teams • Roles & Responsibilities • Communication Plan • Tracking • Financial Verification • Directed Effort: • Policy Deployment Phase 1: Pilot Program Integrated Product Development Teams (IPDT) Business Process Kaizen Year 2 • Preparing the Culture • Cross Training • Reward & Recognition • Incentives DCOR/CCOR Deployment Cross Functional Teams • Streamline Design Process: • Waste analysis • Stage gates Business Process Improvements Product Development Rationalization • Focus Factory Projects • Product Rationalization • Develop Lean Model Areas • Variation Reduction • Key Enabling Variation / Cost reduction Projects Lean Sigma Enterprise • Skills Development: • DFSS Training • Innovation Year 1 Product Development Steering Team • Skills Development • Leadership Training • Management Training • Lean Black Belt Training • Greenbelt Training • Kaizen Training • Personnel Training Product Development Infrastructure Standard Measurements Definitions & Methods Knowledge Capture ProductDevelopment & Innovation Excellence • Foundational Changes • 5S • Standard Work • Change Over Reduction • TPM Driving the Evolution to a World Class Enterprise!

5. Tactical Value Optimization Strategic • “Content” Focus • Known Opportunities • Proof-of-Concept Pilots • ROI Justification • Business “Context” Focus • BPM Value Chain Opportunity Prioritization • Program Expansion • Value Realization • “Competitive” Focus • Enterprise Value Optimization • Program Integration with the Business • Competitive Advantage Redefine The Industry Enterprise Transformation Optimize Value Chains Business Process Reengineering Leverage Best Practices Process Redesign “Value Expansion” Process Improvement “Value Capture” Improve Process Efficiency Function Specific Projects Core Business Processes Primary Value Chains Extended Value Chains Enterprise Transformation Program Deployment Emphasis Change Objectives Breadth of Change

6. Phases of Program Maturity Phase 4 Phase 2 Phase 1 Phase 3 Pilot Program “Value Capture” Enterprise Transformation Program Value Expansion Value Chain Optimization • What is Lean? • What is Six Sigma? • What does a Lean Six Sigma Program look like? • Are we ready for Lean Six Sigma? • What are our goals? • How do we develop the infrastructure to support program growth? • How do we maintain accountability? • Where else can we leverage Lean Six Sigma? • What customer channels and product lines drive our business? • How can we strengthen our primary value chains? • How do we engage suppliers & customers? • How do we integrate and leverage process improvement efforts across the enterprise? • How do we develop suppliers & customers to share our business improvement goals? Program Design & Preparation Leadership Development Opportunity Identification Execution Skills Development • How do we develop leadership support? • How do we manage the culture change? • What are leadership’s roles & responsibilities? • How do we engage leaders of other functions? Divisions? • How do we begin to engage cross-functional projects? • How do we improve guidance of the Lean Six Sigma team? • What customer and strategic information is needed to drive value chain optimization? • Who will champion and drive value chain projects? • What leadership roles must be developed to manage enterprise transformation? • How do we better define customer channel strategies? • How do we capture known improvement opportunities? • How can we prioritize & scope our issues into specific projects and project charters? • How can we identify & prioritize projects of greater business impact? • What improvements can be made to the core business processes? • What resources and methodologies should we use to target and prioritize value chain improvement opportunities? • How do we ensure seamless linkage of business strategy to business process improvement and resource development? • What tools will be taught to Green Belts? Black Belts? • What success criteria will be associated with certification? • What unique curriculums will be required for specific process areas? • What tools apply best in transactional / engineering? • How do we execute value chain project? • What inputs and leadership interaction is needed for value chain optimization? • How do we leverage skilled resources across the enterprise? • How do we execute enterprise wide improvement projects? Context Focus Competitive Focus Content Focus Organizational Context Determines Program Needs!

7. Program Design & Preparation Leadership Development Goals, Change Mgmt, Roles & Responsibilities, Infrastructure, Selection Processes, Program Mgmt Opportunity Identification Strategic Req’ts, Performance Baseline, Value Steam Assessment, BPM Deployment, Project Definition, Portfolio Prioritization Execution Skills Development Lean / Six Sigma Training, Methodology & Tools Application, Project Execution, Project Tracking, Review, Results Validation, Certification Consulting Services Business Assessment, Organization Design, IT Deployment, Product Development, Advanced Planning, Logistics, Lean Six Sigma Project Management, Advanced Tools Application, Best Practices Expertise Enterprise Transformationusing the . Building the Capability to Transform the Enterprise!

8. What are BPM Frameworks?

9. BPM Framework – a cross-industry reference model that defines and standardizes the process definitions, metrics and best practices related to a specific value chain for the purpose of value chain reengineering Supply Chain Operations Reference (SCOR) Developed and endorsed by the Supply-Chain Council, a non-profit consortium of 800+ member companies since 1996 Continually under development – currently Release 6.1 Design Chain Operations Reference (DCOR) Preliminary version of DCOR developed by Hewlett-Packard (HP) for internal use; IP released to the Supply-Chain Council for development Customer Chain Operations Reference (CCOR) Preliminary version of CCOR developed by Hewlett-Packard (HP) for internal use; IP released to the Supply-Chain Council for development What are BPM Frameworks?

10. Summary of Discipline Benefits BPM Frameworks like SCOR, DCOR and CCOR are focusing Lean and Six Sigma on complete Business Transformation!

11. Structured Methodology “need the deployment methodology formally defined and structured so that it is repeatable and leverages the best available analytical tools” Training Based “need to be able to teach the deployment methodology to our clients so they can … do it themselves” Applied Approach “need to successfully apply the deployment methodology to a value chain reengineering project concurrent with the training” Results Focused “need to select value chains with significant impact to the business and prioritize the improvement opportunities with the greatest benefit” Desired Characteristics of BPM Framework Deployment Example – SCOR Deployment!

12. What is Design-for-Six Sigma (DFSS)?

13. DFSS Builds on Six Sigma and Design Tools The focus remains on customer and business needs Mastering Six Sigma tools supports DFSS results DFSS Tools Six Sigma tools Scorecard P-Diagram VOC & Kano Analysis Pugh´s Concept Selection TRIZ / Axiomatic Design Modeling & Sensitivity Analysis Optimization & Robustness Tolerance Design etc, etc,.. TMAP SIPOC PMAP FMEA MSE DOE NEM Control Plan Design for Six Sigma tools

14. DFSS Methodologies IDOV Identify, Design, Optimize, Validate (or ‘Verify’) IDDOV Identify, Define, Develop, Optimize, Validate DIDOV Define, Identify, Design, Optimize, Validate DIDOVM Define, Identify, Design, Optimize, Verify, Monitor DMADOV Define, Measure, Analyze, Design, Optimize, Verify DMADV Define, Measure, Analyse, Design, Verify DMEDI Define, Measure, Explore, Design, Implement Many methodologies have been proposed. Most of each can be mapped to the same basic tasks or phases: from ideas/needs gathering, through design selection and optimization, to implementation.

15. Purpose of DFSS InitiateProject • DFSS helps you to: • Balance competing requirements using the balanced scorecard • Minimize costly redesigns and schedule slips • Prioritize to efficiently allocate limited resources using sensitivity methods • Improve understanding of physical relationships using DFSS flow down • Make decisions on mean and variation data • Maximize test effectiveness through efficient DOE methods • Prove your designs are reliable and robust through proven DOE methods • Verify & Validate designs for defined operating conditions • Design products for production in a Lean manufacturing environment Customer Requirements Business Requirements Quantify customer and business requirements Define & Flow Down Requirements Define Scorecard Generate and evaluate alternative design concepts Balanced Scorecard for both the program and the product Select Concept & Establish Relationships Y = f (x) Parameters (X’s) Y=f(x): Develop physical relationship between engineering decisions and Customer requirements. Optimize Product & Process Cost Risk Quality Process Capability Design for Optimization and Robustness. Minimize effect of variation in internal processes, supplier processes; and operating environment • Risk Management: • Product risks for Performance and Quality • Program risks for Delivery and Cost Delivery Reliability Safety Feedback Assessment& Corrective Action (Control) Verify & Validate

16. Example: DFSS Process for Design & Development Projects IDDOV INITIATE PROJECT DEFINEREQUIREMENTS VERIFY & VALIDATE DEVELOPCONCEPT OPTIMIZEDESIGN • Strategic Priorities • Project Selection • Leadership Development • Define budget and plan the development project • Identify customer needs and define Critical Customer requirements • Develop Product/ Service conceptual design • Predict design’s Sigma Capability • Optimize Product/ Service detailed design and production processes • Perform pilot testing • Develop implementation and control plans Focus • Project Charter • Budget • Team Identified • Leadership Committed • Validated conceptual design • High-level production process design • Product/service production version design • Production process design • Customer reqs. • CTS’s • Competitors Comparison • Validated product/ service • Implemented control plans • Production readiness Key Deliverables Regardless of the DFSS Methodology used, it will mapto the phases, tasks and key deliverables of your Product Development process

17. DFSS Roadmap - Product Development Management Track Statistical Design Track DFSS Training Robust Engineering Track DFSS Design Methodology Innovation Track Training Tracks Align with Product Design Flow

18. How can DCOR be deployed tooptimize the Design Chain?

19. DCOR Levels of Detail • The Design Chain Operations Reference Model (DCOR) provides standards to assess your Design Chain processes against other Design Chain processes • Reference Document provides • Standard Process Elements • Standard Metrics • Best Practices • World Class Benchmarks 1 Top Level Design Chain Process Flow 2 Configuration Level Work Flow Process for Selected Design Chain DCOR Model 3 Process Element Level Decompose Specific Processes Implementation Level Process Improvement Project Execution 4 Project Execution

20. DCOR Quick ReferencePlan, Research, Design, Integrate, Amend

21. Design-Chain Operations Reference (DCOR) Model Plan Research Design Integrate Amend DCOR Implementation (Baseline, Benchmark, Analyze, Identify & Validate) DCOR Project Portfolio DFSS Design-for-Six Sigma (DFSS) DCOR Portfolio Implementation Plan • Projects focused on minimizing Product Design and Development Risk, Uncertainty, and Variation Lean Six Sigma Prioritization & Implementation Planning Lean/Six Sigma • Projects focused on minimizing Waste, Variability and Defects in the Product Development “process” Transactional Six Sigma Transactional Six Sigma • Projects focused on maximizing Transactional Efficiency, Timeliness and Yield to optimize information flow in the Product Development “process” DCOR Integration with the . Standardized Process Definition Industry Best Practices Metrics and Benchmarking Lean / Six Sigma Analytics Methodology & Resource Requirements

22. Phase 0 Phase 1 Phase 2 Phase 3 DCOR Deployment RoadmapRigorous - Flexible Phase 0 is the education and construction of a DCOR deployment with the Leadership Team. Initial definitions of unique Design Chains are addressed as well as the selection of the Diagnostic Team(s) for Phase 1-3 of deployment execution Unique Design Chains Steering Team Design Chain Planning & Organizing Phase 1 is to build a DCOR performance baseline for the high priority Design Chains (DCORcards), identify performance gaps to Strategic and Competitive requirements, and select the Design Chain(s) to be improved. Design Chain Performance Baseline Phase 2 is focused on the “As-Is” and “To-Be” assessment of the Product Development work flows and value stream. Use of Value Stream Mapping, Process Mapping, Product/Process Matrix, Cause and Effect Analysis, NEM analysis of level 2 metrics, benchmarking, survey analysis and DCOR Best Practices are used to diagnose design chain improvement opportunities to accelerate time to market and improve the performance of product development efforts. The project development improvement opportunities are financially validated and the Project Portfolio is the primary deliverable of Phase 2. Design Team(s) Product Development Work Flow, Value Steam & Opportunity Analysis Project Portfolio Phase 3 is an optional phase of DCOR deployment that is used to help organizations prioritize and plan for execution of the DCOR Project Portfolio. Projects resulting from DCOR may be executed using Standard Lean Six Sigma tools or may require use of DFSS (Design for Six Sigma) or Lean Design tools. Project Portfolio Prioritization and Execution Planning

23. DCOR Phases

24. Phase 0 Design Chain Planning & Organizing Phase 1 Business Unit A DCOR Steering Team Phase 2 The Design Team members must solidly represent the Plan, Research, Design, Integrate and Amend processes of Design Chain 1 – with additional Finance and IT support. Design Chain Performance Baseline Design Chain 1 DCOR Design Team Phase 3 Product Development Work Flow, Value Stream and Opportunity Analysis Phase 3 can be executed by the combined effort of the Steering Teamand Design Team OR transitioned tothe Six Sigma Deployment Champions. Optional (may be transitioned tothe Six Sigma DeploymentChampions) Project Portfolio Prioritization and Implementation Planning What would a Pilot DCOR Deployment look like? Business Unit A The Steering Team would be composed of both Business Unit Afunctional leadership and leadershipfrom the corporate “Shared Services” Organization.

25. Questions

26. Contact Information For more information or any questions on these topics contact: Rod Recker Office: (530) 587-1575 Executive Director Cell: (530) 277-3154 Advanced Integrated Technologies Email: rrecker@theaitgroup.com Group, Inc.