1 Price Support (Vendor Rebates) Registration Cindy Reese Black Belt Finance – Western Region

2 Registration Project Status n Problem Definition n Original Data Assumptions (Florida) n Results of Testing Data n New Team n Process Map n Funneling Inputs – Identify Key Inputs n Preliminary Recommendations n Next Steps

3 Project Definition n Problem Statement: IKON does not currently take advantage of all price support (vendor credits) opportunities. Project targets Oracle based former SE region. n Project Definition: Determine why reps are not registering qualified customers for vendor price support program in the former SE Region and correct the issue.

4 Project Definition n Project Metric “Y”: Y 1 = Qualified customers not registered for vendor price support (Discrete) GOAL = 100% Registration of Qualified Customers IKON benefits by over achieving corporate purchasing commitments above customer commitments – 100% is target n Defect Definition: Qualified Customer Not Registered = DEFECT n Leveragability: Replicate success in all regions

5 Financial Benefits - Baseline n Former SE Region E-IKON Opportunity = $295k (does not include Central) n Coverage Date – 10/01/2002 to 10/31/2003 n Excludes Accessories, IMS and ITT’s Canon $245 Ricoh $50

6 VPS Collection Project Progress SUCCESS To DATE SUCCESS To DATE $112,000 Collected from original testing – not part of SE baseline

7 Capability n DPMO = 52,966 n Z st = 3.1 Total

8 Cumulative Financial Benefit $151K $57K $295K $112K $615K

9 Project Team n Champions – Linda Frisinger, Bruce Fiscus n Financial Analyst – Trish Daly n Black Belt – Cindy Reese n Process Owner – Linda Frisinger n Master Black Belt – Bob Conrad n Team Members: IT Support – Ben Rotz, Matthew Grimm, Glenn Crosen, Linda Hampel VCS Specialist – JoAnn Walton (SE), Kit Roedemeier (Central) Sales – Karl Lamb, Ryan Dingley (St. Louis), Kent Clark (NAM) Financial Project MGR – Raman Singh Programmer – Harmeet Arora IMS Analyst – Kevin Merrill

10 Risk Priorities for Registration Includes Accountability

11 Preliminary Recommendations 1. Create report to catch all qualified customers not registered and register them 4. Create accountability in sales management 5. Create accountability in sales force via chargebacks 3. Improve the registration process 7. Create proactive reporting tools and audit function 2. Train reps and management 6. Centralize the VCS team 8. Increase Ricoh window to 60 days = Canon

12 DATA COLLECTION PLAN Customer Commitme nt Invoice Info VPS Credit Filing and Receipts Invoice Cost Information Registered Customers, Attainment ACCESS DATA BASE ORACLE OSO VCTS ORACLE FINANCIAL VENDOR REPORTS SOURCES FOR VENDOR PRICING SUPPORT DATA BASE SIC Code Organizatio n Information IKONICS

13 PROCESS MAP - SALES REP REGISTRATION OF CUSTOMER Does IKON Provide Reps With Tools and Resources Necessary to Determine Customer Qualifies for Vendor Price Support ?

14 Next Step – FMEA Top Item Testing - Lack of Training n Test all defects for rep tenure Determine correlation between defect probability and tenure to support recommendation for organized training

15 Significant X - Rep Tenure SLG Avg Tenure = 7.1 yrs Avg Credit = $1.9k Total Missed = $238k 63% of Total Lost $ 92.5% of Total Defect Count

16 Significant X - Rep Tenure Commercial Accounts Avg Tenure = 7.2 yrs Avg Credit = $13k Total Missed = $139k 37% of Total Lost $ 7.5% of Total Defect Count

17 Next Steps - Training n Document VPS Course inside SFP Training For CORE Training Roll Out Expected in 2 nd QTR FY2004 Owner - Alanna Mahone n Create Course Inside Workflow Training For Sales Management and Tenured Reps – Roll Out when workflow programming is complete Owner – Alanna Mahone n Integrate VPS Forecasting in RAP Session Roll Out with Work Flow Owner – Alanna Mahone

18 Process Map – Rep Registration

19 Recommendation – Registration Process Automated System Feedback at Every Step Little Input by Rep Uses Data Directly From E-IKON Auto Registration Upload Paperless Benefits

20 Next Steps – Process Improvement n RD050 and MD050 approved n Project classified as Major - rolled out 2x per year n BR030 must be complete to move forward – target n Chuck Moyer to complete testing and training assessment which will determine date of completion (roll out) n No trial – go live as soon as complete (no choice)

21 Process Map – Authorization Level No consistency in who is reviewing and authorizing Level of Registration RISK if not standardized – NEW COMP PACKAGE encourages registration

CSMP Credits and Chargebacks n Total CSMP Credits = $67m n NE Received 32.9% of Total n NE Chargebacks 38.1% of Total n MW had 21.8% of Total n MW Chargebacks 12.5% of Total

23 CSMP Charge backs as a % of Credits What is an acceptable level of charge backs? Is MW the Process Capability. Is aggressive better than correct? (NE reserves against charge back upon filing) Includes $100k in Penalties!

24 Chargeback % by Approver

25 Chargeback % vs Rep Chargeback

26 Recommendations – Approval and Accountability n Recommendation – VPGM’s Approve Registrations Surveyed South key management for approval n Recommendation – DFO’s Back up VPGM’s n SLG customers will not need VPGM approval – vendor preapproves n Implement Consistent Chargeback Policies in Order to Lower Risk to IKON (note – tested to be sure marketplaces were truly charging back as indicated by DFO – only ONE did for $17K) - Lynn Collins to Make Final Decision based on State Law - Will role into another Six Sigma Project

27 Other Steps in Process - Poka-yoke n Centralize VCS Team (cannot occur w/o programming) n Lock Reps out of OSO Commitment - owned by VCS n Add Analyst to Team (currently interviewing) n Requested financial analyst for short term support to implement the following: n Developing Weekly/Monthly Reporting Tools SIC Code Review – Identify SLG/GEM not Registered Qualified not Registered – over $50k Run Rate (in place now) Forecasting Tool Expiration Report – 90 days, 60 day, 30 days out Charge back Report n Grace Period from Ricoh (Actually 30 days now – move to 60 days). Currently under review by Ricoh.

28 Steps to Closure n Complete Control and Monitoring Plans n Implement and Monitor vs 100% Registration Target Note: Achieving 100% registration with current monthly reports identifying qualified/not registered n Transfer Ownership to Process Owner n Financial Validation (will use new reports from Anne Quigley’s group as soon as available) n Review and Sign Off – Key Personnel