Service Productivity- Parts Project # Black Belt – Rich Capasso Northeast Region

2 Project Team n Champion’s – Cedric Trice / William Morris n Team Members: n Supply Chain - Alison Chmielewski / Jenny Buckley Field Service - Joe Baigent / Lang Moss / Tom Dillow Technicians- Rural / Metro 3PL Supply Chain Liaison – Dave Haley IT Support - Ann Quigley Local Support - Bill Lewis / Tom Cormier Process Support - John Newhouse / Kent Imhoff / Garry Wallace / Bill Blochberger n Financial Analyst – Peter Bottke Master Black Belt – Dan Douglas

3 Project Background n There are currently 1,500 service technicians, in both the CER & SER n They average over a million service calls a year n The average first call completion rate within all of IKON, is 85% n The company best, first call completion rate, is 90% n The CER & SER, operate using Oracle. All other regions, continue to operate using OMD n Purchasing activities for CER & SER, are centralized at the supply chain facility in Malvern n Inventory planning also resides at this location n Servigistics, a “bolt on" system, is integrated w/ Oracle and recommends min/ max levels for location P10 n Two Servigistics “Super Users” tweak those recommendations, before passing onto planners n Two stock planners place parts orders for the 3PL (3 rd Party Logistics) n Eight buyers place NDA orders, which are batched and placed daily, with our vendors n Tech inventories are replenished, & emergency orders fulfilled, through 3 rd Party Logistics & our Vendors

4 Project Charter n Project Charter Goal n To Increase First Call Completion Rate by 1% n Anything beyond the first call has been determined to be a defect in the process n To have the right part, in the right place, at the right time n Project Charter Proposed Savings from a 1% Increase in FCCR n Estimated at 650K in Oracle based Regions n Identified Project Benefits were based on a sampling of 1,184 technicians (roughly 2/3 of the 1500 in CER & SER) n Increasing First Call Completion Rate from 88% to 89% n Increasing First Call Completion Rate from 929,080 to 939,637 calls, will eliminate 10,557 Second Calls n Headcount Reduction of 12 Service Technicians, including salary/ benefits n Headcount Reduction of one Field Service mgr, including salary/ benefits n Annual Savings from Mileage Reduction It is important to have the right part at the right place at the right time to give the service technician the opportunity to complete the service call on the first visit. The measure is first call completion rate which is currently at 85% company wide. The current company best is 90%. Step one implementation will be in the Central and Southeast regions representing the current 11i world. The assumption is that if 1000 service technicians improve the first call percent rate by 1%; then the savings is estimated to be $445,000 per year. This component of the project accounts for 75% of the savings described above. It is important to have the right part at the right place at the right time to give the service technician the opportunity to complete the service call on the first visit. The measure is first call completion rate which is currently at 85% company wide. The current company best is 90%. Step one implementation will be in the Central and Southeast regions representing the current 11i world. The assumption is that if 1000 service technicians improve the first call percent rate by 1%; then the savings is estimated to be $445,000 per year. This component of the project accounts for 75% of the savings described above. It is important to have the right part at the right place at the right time to give the service technician the opportunity to complete the service call on the first visit. The measure is first call completion rate which is currently at 85% company wide. The current company best is 90%. Step one implementation will be in the Central and Southeast regions representing the current 11i world. The assumption is that if 1000 service technicians improve the first call percent rate by 1%; then the savings is estimated to be $445,000 per year. This component of the project accounts for 75% of the savings described above. It is important to have the right part at the right place at the right time to give the service technician the opportunity to complete the service call on the first visit. The measure is first call completion rate which is currently at 85% company wide. The current company best is 90%. Step one implementation will be in the Central and Southeast regions representing the current 11i world. The assumption is that if 1000 service technicians improve the first call percent rate by 1%; then the savings is estimated to be $445,000 per year. This component of the project accounts for 75% of the savings described above. It is important to have the right part at the right place at the right time to give the service technician the opportunity to complete the service call on the first visit. The measure is first call completion rate which is currently at 85% company wide. The current company best is 90%. Step one implementation will be in the Central and Southeast regions representing the current 11i world. The assumption is that if 1000 service technicians improve the first call percent rate by 1%; then the savings is estimated to be $445,000 per year. This component of the project accounts for 75% of the savings described above. It is important to have the right part at the right place at the right time to give the service technician the opportunity to complete the service call on the first visit. The measure is first call completion rate which is currently at 85% company wide. The current company best is 90%. Step one implementation will be in the Central and Southeast regions representing the current 11i world. The assumption is that if 1000 service technicians improve the first call percent rate by 1%; then the savings is estimated to be $445,000 per year. This component of the project accounts for 75% of the savings described above. It is important to have the right part at the right place at the right time to give the service technician the opportunity to complete the service call on the first visit. The measure is first call completion rate which is currently at 85% company wide. The current company best is 90%. Step one implementation will be in the Central and Southeast regions representing the current 11i world. The assumption is that if 1000 service technicians improve the first call percent rate by 1%; then the savings is estimated to be $445,000 per year. This component of the project accounts for 75% of the savings described above. It is important to have the right part at the right place at the right time to give the service technician the opportunity to complete the service call on the first visit. The measure is first call completion rate which is currently at 85% company wide. The current company best is 90%. Step one implementation will be in the Central and Southeast regions representing the current 11i world. The assumption is that if 1000 service technicians improve the first call percent rate by 1%; then the savings is estimated to be $445,000 per year. This component of the project accounts for 75% of the savings described above.

5 Incomplete Call Rate- By Market

6 Incomplete Call Data n Next Steps with Data n Review data at the Field Service Mgr level n Determine if possible, why some FSM’s teams have better call completion rates than others n Tenure of team relation n Metro vs. Rural n Review data at the Service Technician level n Incomplete calls for lack of parts n Can we identify those parts and why they did not have them in their car stock n Incomplete calls for technical n Incomplete calls for other (time related) n Identify Best Practices in SER vs. CER n SER techs use the recon and location valuation report to verify car stock levels n CER techs use the recon report to verify car stock n Period of time operating in Oracle

7 Additional Identified Opportunities & Those Next Steps n Current Process Review has Identified Additional Opportunities (pending validation) n Frequency & Processing of Technicians Parts Returns n Currently, there are over 40 skids of unprocessed returns from the SER at the 3PL, this does not includes CER returns n Systemic capability issues with processing returns n Supply chain replenishment of 3PL and Technician ASL, without utilization of those returns n NDA’s - Next Day Airs (3PL Processed) n SER averaged 5,916 a month, from Oct 02 through May 03 n CER/ SER combined, averaged 15,288 a month from June through August 03 n Acquire data on NDA’s that are processed directly w/ our vendors n Review incomplete for parts calls vs. # of NDA’s that are processed n Headcount: Supply chain currently utilizes 8 buyers for NDA’s n Associated freight/ shipping costs

8 Graphical View of NDA’s

9 Additional Identified Opportunities & Those Next Steps (cont.) n Inventory Planning/ Replenishment of 3PL n Review process and methodology n How tech replenishment rolls up to the 3PL n Frequency of tech replenishment for large parts/ kits n Technical Tools n Utilization of parts/ machine manuals and microfiche n FMEA n May identify additional opportunities and/ or quick hits

10 Questions/ Answers n Q and A