PMI-MN Breakfast Meeting Tuesday, March 14 th , 2006

1. PMI-MN Breakfast MeetingTuesday, March 14th, 2006 Show Me The Business Value Discover Lean Six Sigma “Best Bets” for Tangible Improvements Part 2 Presented by: Michelle Goodman info@trissential.com

2. 3 Part Series Agenda • Lean Six Sigma and the Big Picture - Part 1 • What Exactly is Lean Six Sigma? • Corporate Deployments • Big is Not Always Better • Individual Execution – Part 2 • Project or Activity Selection and Scoping • Resource Utilization • Metrics & Results • Personal Corporate Citizenship • Beyond the office area – Part 3 • Best Bets in non-traditional business environments • Working with vendors and business partners • What to do with the uninitiated? • How can my community work benefit?

3. Goal – Reduce waste and increase process speed Focus – Bias for action/ Implementing known solutions Method – Kaizen events Goal – Improve performance on Customer CTQs Focus – Root Cause Analysis/ Developing Solutions Method – Black Belts dedicated to projects Lean Six Sigma Is the Integration of Two Powerful Business Improvement Approaches... Lean Speed Enables Six Sigma Quality (Faster Cycles of Experimentation/learning) Six Sigma Quality Enables Lean Speed (Fewer Defects Means Less Time Spent on Rework) Six SigmaCulture+Quality LeanSpeed+Low Cost

4. Michelle’s definition of a “Best Bet” • Does not require a LSS program • Does not require LSS certification • Applicable in various business environments • Has merit on individual basis

5. Project or Activity Selection and Scoping Individual Execution

6. Know the Heartbeat • Plan and execute in 90 day cycles • Be aware of prevalent political agendas • Tap into someone’s passion – sponsorship • First choose the visible – the rest will follow • WIIFM – What’s In It For Me?

7. Project Selection and Scoping • Have a Written Plan • Timelines & Deliverables • Shows commitment and dedication • Tangible plan for leaders to track and share • Easy to incorporate into divisional and individual objectives and reviews • Drives sense of urgency • Represents your ability to contribute value through project management skills

8. Resource Utilization Individual Execution

9. Lean & Six Sigma Tools Define Measure Analyze Improve Control • Project ID Tools • Project Definition Form • Value of Cycle Time • Net Present Value Analysis • Internal Rate of Return Analysis • Discounted Cash Flow Analysis • PIP Management Process • RACI • Quad Charts • Process Mapping • Value Stream Mapping • Process Cycle Efficiency • Lean Six Sigma Metrics • Process Sizing • Kaizen Events • Multi-Voting Techniques • Pareto Charts • C&E/Fishbone Diagrams • FMEA • Check Sheets • Run Charts • Control Charts • Gage R&R • Subjective Measurement Systems • Cp & Cpk • SupplyChainAcceleratorSM Time Trap Analysis • Analytical Batch Sizing • Multi-Vari • Box Plots • Interaction Plots • Regression • ANOVA • C&E Matrices • FMEA • Brainstorming, Affinity • Benchmarking • Kaizen Events • Pull Systems • Generic • Replenishment • Part Stratification • Setup Reduction • TPM, 5S • Process Flow • Line Balancing • DOE • Hypothesis Testing • Force Field • Tree Diagrams • Gantt Charts • Check Sheets • Run Charts • Histograms • Scatter Diagrams • Control Charts • Visual Control Tools • Poka-Yoke • Pareto Charts • Interactive Reviews

10. Desirable Characteristics…….Not just for Black Belts • Team Facilitation – Strong ability to lead effective teams • Problem Solving – Proven orientation to be a problem solver • Process Orientation – Demonstrated ability to understand and identify process vs. functions • Change Facilitation – Demonstrated ability to drive change across functional boundaries • Communication Skills – Ability to engage a wider audience through a variety of media, but including presentation • Computer Knowledge – Ability to effectively utilize technology, including Microsoft Office applications, or applicable, and the web • Financial Skills – Ability to understand basic financial documents (I.e Income statement and balance sheet) and develop project based cost/benefit analysis • Program and Project Management – Ability to develop a workplan and actively lead a team through it’s completion

11. Know the Heartbeat • Fewer people – better engagement • WIIFM Factor – who has the most to gain? • SMEs – best utilized in small doses • Focused work on fewer subjects (Little’s Law) • It’s not always about capital spending • Give a solid cost/benefit case – funding will follow

12. Comprehensive Communication • Be your own PR whiz, because it is about buzz, motivation, and excitement • If they don’t know, they can’t support you • Stakeholder communication – your strongest (but most underutilized) asset • A written plan speaks the loudest

13. Metrics & Results:Think Data and Process Individual Execution

14. What if I’m not a Finance Specialist? • Introduce proposed costs/benefits • Remember the 90 day rule! • Detail the measurement approach • Make it concise and user friendly • Establish baseline • Follow through on status reports

15. Types of Benefit Measures Process Requirements Measures • Quality • Speed or Cycle Time • Cost or Efficiency • Safety • Regulatory Compliance Financial Measures (measured in dollars) • Revenue Improvement • Cost Reduction • Asset Reduction

16. Types of Financial Benefits • Revenue Growth • Volume increases • Price increases • Cost Reductions • Purchased items and services • Waste elimination • Make vs. Buy • Labor reduction • Productivity improvements • Scrap/Rework reductions • Working Capital Reduction • Inventory • Receivables • Fixed asset reduction

17. Keep the information flowing • Report on Key Performance Indicators (KPIs) – formal or informal* • $$ Savings • Revenue Increase • Customer satisfaction / loyalty (internal or external) • Risk Management Success • Project duration reduction • ROI • Break-Even Point • IRR • Resource Utilization Levels • Give your boss or sponsor something good to talk about

18. Personal Corporate Citizenship Individual Execution

19. Celebrate Success • Give Recognition and Acknowledgement • Key Milestones and accomplishments that are truly deserving • Highlight benefits and value to organization • Be generous in sharing acknowledgments • Inclusive rather than exclusive • Make sure to reach beyond the “car-ride employees”: (sales, decentralized locations, customers, suppliers, overseas, etc.)

20. Individual Contributions • Research and Introduce Best Practices • Keep up with industry news and research • Utilize PMI’s and other professional associations’ resources fully • Represent your company at events, summits, conferences • Introduce new practices as appropriate through various company communication channels

21. Individual Contributions • Internal Collaboration • Embrace and be knowledgeable about a variety of methodologies • Help stakeholders understand how various project tools, reporting requirements, teams, and methods can work together and enhance results • Work with leaders to identify possible discrepancies or redundancies and propose solutions for bridging these differences

22. Individual Contributions • External Collaboration • Create a “Pull environment” where customers, suppliers, and vendors are requesting to work with a professional with your skill sets • Be active in professional associations for your networking and skills enhancement • Volunteer your skills in your community • Participate on Company outreach teams and boards

23. Sneak Peek • Lean Six Sigma and the Big Picture - Part 1 • What Exactly is Lean Six Sigma? • Corporate Deployments • Big is Not Always Better • Individual Execution – Part 2 • Project or Activity Selection and Scoping • Resource Utilization • Comprehensive Communication • Metrics & Results • Personal Corporate Citizenship • Beyond the office area – Part 3 • Best Bets in non-traditional business environments • Working with vendors and business partners • What to do with the uninitiated? • How can my community work benefit?

24. Conclusion Michelle Goodman, MBA, PMP Senior Process Consultant O 952-595-7970 C 651-261-9422 mgoodman@trissential.com www.trissential.com