1. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved FASCore Follow-Up Discussion April 20, 2006

2. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Finance WorkshopPg 1 What is a Project? A discrete well scoped planned activity that is focused on fixing a customer or subset of a business problem within 4 – 6 months A project is defined by a written project charter approved by a Steering Committee -Finance has approved an initial financial estimate of the project value It is led by a Black Belt who facilitates a team of employees that are familiar with the process where the problem appears to be occurring The Black Belt is mentored by a -Project Champion - who breaks business and resource barriers and ensure the project is moving to completion -A Master Black Belt – who breaks technical and resource barriers and ensures the project is moving to completion

3. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Finance WorkshopPg 2 What is not a Project? A project is not a large Business Problem, for example: -Reduce Inventory for North America -Increase sales in the Northeast Region -Reduce Defects for the Nashua Plant These are “boil the ocean” issues, which are influenced by many factors Asking a Black Belt to solve a large Business Problem could result in extremely long project cycle times and incomplete solutions – results do not last! The goal - breakdown these business problems into their discrete factors until the project is identified. Typically, many projects are required to solve a large business problem – Increase Gross Margin – Improve Working Capital – Improve Customer Satisfaction Project Champions will be responsible for translating Business Problems into Projects

4. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Finance WorkshopPg 3 What is a Project Charter? The “Project Charter” is a document used to clearly describe the problem. It is structured, quantified, and contains the following elements: -Problem Statement Quantifies, baselines the issue, how long has it been a problem -Project Objective When will the problem be solved and by how much -Primary Metric, “Y” Definition of the defect - agreed to by customer and business -Defect Definition The metric or measure used to determine project success -Financial Benefits A written calculation as to the financial benefit based on project success -Scope of Project“Right sizes” the project to be successful in a give timeframe -Team Members Those who assist the Black Belt in achieving success The Project Charter is a contract between the Team and the Business Leaders to solve the identified issue

5. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Finance WorkshopPg 4 Why Do We Care About Well Written Charters? Writing project charters is not a trivial exercise, developing well written charters requires focus, data, and involves several iterations. A well written charter is easily understood by all – even those not involved in Lean Six Sigma It has been proven, time after time, that well written project charters have a much higher probability of success – shorter cycle times and minimal, if any, degradation of financial benefit.

6. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Finance WorkshopPg 5 What Does a Project Charter Look Like? (Reference Excel file of Project Charter – “Charter” tab) Not a trivial exercise... Gets better with experience Champions are primarily responsible for creating Project Charters for our Black Belts We will learn A LOT about creating well written charters during our training Reference the upcoming section on developing charters

7. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Finance WorkshopPg 6 Benefits Calculation

8. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Finance WorkshopPg 7 “As-Is” Process Map Perform Complex Formula Validation Perform Remediation In-scope? Reevaluation Apply Naming Convention Complex? Perform Standard Testing Steps Save Changes No Test Failures? Narratives Staging Area (US) Pre- production Area Copy Files (Batch Process) Production File share Create Testing Docs Update Testing Docs & Spreadsheets Yes No Yes Inventorying BVA NVA VA NVA Changes? Reconcile Tested file with Production version END No Yes NVA Legend: BVA = Business Value Add NVA = Non Value Add VA = Value Add Remove from Process Project #1 Post Remediation Testing Rework NVA BVA NVA BVA Apply Folder Security Settings Validate Security Settings BVANVA Project #2

9. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Finance WorkshopPg 8 Project Selection Checklist (Additional Info. for Each Criteria in Appendix) This checklist can serve as a guide when thinking through potential projects. If we don’t align with 1 or 2 criteria, we may still be OK to proceed. If we don’t align with several criteria, there is valid concern about the project succeeding.

10. Copyright © 2001-2005 Six Sigma Academy International, LLC All Rights Reserved Finance WorkshopPg 9 The following are trademarks and service marks of Six Sigma Academy International, LLC: Breakthrough Lean ®, Breakthrough Strategy ®, Breakthrough Value Services ®, Breakthrough Change Strategy SM, Breakthrough Design SM, Breakthrough Diagnosis SM, Breakthrough Execution SM, Breakthrough Sigma Lean SM, Breakthrough Six Sigma SM, Breakthrough Software Design SM, FASTART SM, Six Sigma Gold Belt TM, SOLVING YOUR BUSINESS PROBLEMS FOR THE LAST TIME SM. Six Sigma is a federally registered trademark of Motorola, Inc. MINITAB is a federally registered trademark of Minitab, Inc. SigmaFlow is a federally registered trademark of Compass Partners, Inc. VarTran is a federally registered trademark of Taylor Enterprises. Six Sigma Academy International, LLC 8876 East Pinnacle Peak Road, Suite 100 Scottsdale, Arizona 85255 Tel. (480) 515-9501 Fax (480) 515-9507 www.6-sigma.com