Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 1 Lean Six Sigma at Alliant Energy Larry Heckert LSS Master Black Belt

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. Agenda Alliant Energy’s Journey Six Sigma Overview The Move to Lean Lean/Lean Culture 2

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. We are an energy-services provider. Our customers… Interstate Power and Light (IPL) – 527,000 electric – 234,000 natural gas Wisconsin Power and Light (WPL) – 457,000 electric – 179,000 natural gas Alliant Energy – Who We Are

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. Generation Portfolio

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. Lean Six Sigma Timeline Green Belt Wave LSS Basics for all employees 2010 Black Belt Wave 1 Full-Time Black Belts & Decentralization LSS Approval (Six Sigma emphasis) Training internal 2011 Lean curriculum Lean Emphasis approval

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 6 Breadth and Depth

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 7 Six Sigma Basics Many factors cause the output of a process to vary – Inconsistent results – Output may not meet customer’s requirements (defects) Using Six Sigma, sources of variation are: – Identified – Quantified – Eliminated or Controlled

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 8 Six Sigma Basics Inputs Processes have many inputs Inputs influence the output in different ways To improve a process, we need to understand the relationship between inputs and the output Improving key inputs has the greatest impact on our output Process Y = f(x) Y Output X1X1 X2X2 X3X3

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 9 DMAIC Methodology Define What’s the problem? How does the process work today? Define What’s the problem? How does the process work today? Measure Can I trust my data? What are the potential Key Process Input Variables (KPIVs)? Measure Can I trust my data? What are the potential Key Process Input Variables (KPIVs)? Analyze How do we know we have found the most important input variables? Analyze How do we know we have found the most important input variables? Improve How can we improve the key inputs? Improve How can we improve the key inputs? Control Ensure it stays fixed. How can we control the key inputs? Control Ensure it stays fixed. How can we control the key inputs? Characterization Optimization Delivering Results Delivering Results

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 10 Shift to a Lean Emphasis Our Six Sigma Experience – Application - Reduce variation or finding root causes – Projects typically 6 months or longer – Relies on data/technology for certain analyses – Limited impact on “the way we work” Lean – Easily applied to any process – Continuous improvement focus – Low-tech, hands-on approach – Focus on immediate or short-term improvements

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 11 Lean Let’s consider an example A philosophy that emphasizes Reduction of wasteful activities, Getting products or services to flow, and involving Continuous improvement, made by The people who do the work, using Experimentation

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 12 Lean in Auto Racing

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 13 Lean Principle – Precisely specify the value of a specific process as defined by the customer Each activity or task in a process is identified as: Value-Added – Transforms the deliverables of a process in such a way that the customer is willing to pay for it – Done right the first time Waste – Uses resources but doesn't contribute to the product or service – Customer wouldn’t want to pay for it (or wouldn’t if they knew about it) – Note: Some waste may be required (regulatory, legal, etc.) Goal = Eliminate or reduce the waste!

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 14 Customer-Defined Value – First step of a Lean effort is to define the “voice of the customer” in meaningful and measurable terms Cost Safety Delivery   Quality Critical To Satisfaction   A critical mistake is assuming we know what the customer wants!

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 15 The Eight Types of Waste WastesThe Simple Explanation… DefectsIt doesn’t meet customer expectations OverproductionProducing too much and/or too fast WaitingIdle time when resources are not available Non-Value-Added Processing Any effort that adds no value to the product or service TransportationUnnecessary movement of materials, products, or information InventoryMore materials on hand than are required to do the work MotionExcess movement of people within a process Employees UnderutilizedNot using people to the best of their unique abilities

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 16 Lean Principle – Identify the Value Stream for each process and challenge all of the steps that do not add value (waste)  Value assumes you are creating something of value that a customer is willing to pay for  Stream refers to a sequential flow of activities needed to create an output and deliver it to the customer  Value Streams identify all of the steps currently required to move products or services from beginning to end

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 17 Making the Process Visible

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 18 Generation Value Stream Map

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 19 Lean Tools to Address Opportunities Value Stream Map identifies opportunities – Quick Hits (Just do it!) – Focused Lean Events RI Event 5S (Workplace Organization) 2P – Process Preparation – Six Sigma Project (Variation) Bursts become opportunities

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 20 Lean Building Blocks Setup Reduction Standardized WorkBatch ReductionTeams Quality at Source 5S SystemVisualFacility Layout POUS Cellular/FlowPull/Kanban Continuous Improvement Value Stream Mapping TPM

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 21 What does a Lean Culture look like? Knowing what it looks like allows us to move our culture in the right direction Four basic concepts: 1.Every activity is structured 2.Every customer-supplier is clearly connected 3.Every flow path is simple and specific 4.We improve through experimentation

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 22 Horizontal vs. Vertical

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 23 Lean Thinking 1.Get rid of old, traditional concepts and assumptions 2.Accept no excuses - Look for ways to make things happen 3.Say “No” to status quo and assume new methods will work 4.Don’t expect or worry about perfection, but look to continuously improve – starting now 5.The primary cost of Lean events is effort – not capital 6.If something is wrong, fix it on the spot 7.Empower everyone to think of ways to solve problems. Good ideas come when the going gets tough. 8.Before making decisions, ask “Why” five times to get to the root cause 9.Look for wisdom from 10 people rather than one 10.Improvement has no limits. Never stop trying to improve.

Strategic Planning Document – Confidential and Proprietary – Preliminary Draft – For Discussion Purposes Only. The opinions, interpretations, and conclusions contained in this presentation are preliminary in nature and included for discussion and strategic plan development purposes. They are not necessarily the final opinions, interpretations, or conclusions of Alliant Energy, IPL, or WPL. 24 ? Lean Six Sigma at Alliant Energy