Copyright © Six Sigma Academy International, LLC All Rights Reserved Executive Case Study Credit Card Declines

Copyright © Six Sigma Academy International, LLC All Rights Reserved Case StudyPg 1 Client: Large Financial Services Organization Challenge: Improve Credit Card Approval Process Goal: Identify and reduce the cause for credit card declines by 70% for a savings of > $1.4 million Measure PhaseAnalyze Phase Define Phase Critical To Quality (CTQ) Identified Client satisfaction Credit card processing time Lost revenue Problem Defined Inaccurate credit card declines result in client dissatisfaction Total lost revenue in previous year was $2 million Goals Established Improve client satisfaction Current 10,000 defects; Goal 3,000 defects Process defined and possible causes identified for data collection. CTQs identified, problem defined, goals established. Transaction volume 535 declines per 10,000 transactions for high volume 262 declines per 10,000 transactions for low volume Market segment 569 declines per 10,000 transactions for standard card 228 declines per 10,000 transactions for premium card Is this significant? Case Study Overview

Copyright © Six Sigma Academy International, LLC All Rights Reserved Case StudyPg 2 Improve PhaseAnalyze Phase Results Analysis concludes: Significant difference in variation of transaction volume to declines Significant difference in median of transaction volume and declines Experimentation verifies transaction volume and market segment are major contributors to lost revenue Improvement Plan developed and implemented Lost revenue reduced. Variation of lost revenue tightened. $1.6 million increased revenue 1.5% increase in client satisfaction measured by ASI No adverse impact on credit card processing time Defects reduced from 10,000 to 2,000 Control Phase Case Study Overview (Cont’d)

Copyright © Six Sigma Academy International, LLC All Rights Reserved Executive Case Study Days Sales Outstanding

Copyright © Six Sigma Academy International, LLC All Rights Reserved Case StudyPg 4 Client: Large Multinational Conglomerate Challenge: Reduce DSO by 12 days Goal: Recently centralized Collections department has established a goal of 70% of entitlement to reduce DSO from 78 days to 66 days A project is already underway to improve invoice accuracy. The Six Sigma project will operate in parallel to this project focusing on different Xs driving the same results (reduced DSO) Current DSO Performance = 77.8 Days (Based on $9.2B in Trade Sales) Avg. A/R $2.110B Avg. A/R $2.199B Avg. A/R $2.154B Avg. A/R $2.044B Baseline Performance analysis indicates reasonably consistent performance over past 12 months A/R and Past Due Analysis Measure PhaseAnalyze Phase FMEA highlights need for process consistency Define Phase Case Study Overview

Copyright © Six Sigma Academy International, LLC All Rights Reserved Case StudyPg 5 Root cause analysis identified (1) Pricing disputes, (2) Invoice Accuracy and (3) Collections Productivity as most significant contributors to DSO Reduced outstanding balance of Pricing Disputes from $175M to $60M Improved Collection Productivity through use of Portfolio Prioritization, Collection Strategies, use of and desktop faxing Reduced DSO by 11.7 days Reduced running Trade A/R balance by nearly $500M and related carrying cost by $40M Identified and chartered several follow-up Six Sigma projects to address “upstream” business processes resulting in Customer disputes (e.g., shipping, customer service) Established Collection Department metrics to manage and monitor departmental, individual, and Business Unit performance Documented roles and responsibilities to manage department by metrics – Trained organization Developed DSO and Collector Effectiveness Control Charts for managing group and individual performance Developed Weighted Average Terms Control Chart to monitor and enforce new Terms Policy Created Standard Operating Procedures (SOP) utilizing new processes and reports to consistently perform tasks, optimize performance Collector Productivity Improve Phase Process Maps documented inconsistencies between Credit Analysts processes, disconnect between Sales Reps and price updates Control Phase Analyze Phase Established Portfolio Prioritization reports and procedures enabling us to focus on the right Customers Implemented Collections Strategies to improve collector effectiveness Identified and corrected cause of Price disputes resulting from quarterly updates to price lists Established and communicated standard “Terms” to Business Unit VP-GMs and Sales Staff Engaged Business Units in process by updating Incentive Compensation policy to include Cash performance and established weekly Cash Calls with Business Unit VP-GMs Use of and desktop faxing improved workflow and greatly improved Customer contacts Results Case Study Overview (Cont’d)