1. Alpharma Six Sigma Deployment Proposal November, 2003

2. Deployment Goals Goal is to have 100+ Black Belts trained throughout Alpharma by 2006 –Benchmark companies target 1%-3% of employees trained as Black Belts Green Belt training to start within first 12 months –Accelerate culture change, tools, terminology & methodology used by greater portion of company Some Alpharma Black Belts will become Master Black Belts –Master Black Belts train Black Belts & Green Belts. –Critical to Alpharma self-sufficiency in Six Sigma Alpharma to be self-sufficient by end of 2006 100+ Black Belts & Self-Sufficiency by 2006

3. Key Deployment Roles Provides executive oversight for all Six Sigma activities Controls resources within the functional group Drives the Six Sigma initiative Owns the Six Sigma Project Leads Project Team Reports progress to Project Champion Subject matter expertise as needed Deployment Support DMAIC Instruction DMAIC Mentoring Owns project cluster Breaks down barriers that prevent project progress Review projects Drives projects to completion Functional Champion Team Members Project Champion Six Sigma Academy Black Belt Black Belt Deploymen t Champion Set Six Sigma Strategy Build Infrastructure Support Overall Deployment

4. Timeline & Milestones 2004 Pre-planning Pre-deployment Interviews Executive Session Functional Champion Workshop Project Champion Workshop FASTART Training Master Black Belt Wave 200520062003 Wave 1Black Belt Wave 1Green Belt Wave 2Black Belt Wave 3Black Belt Wave 4Black Belt Wave 5Black Belt Wave 6Black Belt Wave 2Green Belt Wave 3Green Belt Wave 4Green Belt Wave 5Green Belt ALO MBB Shadow SSA MBB Shadow

5. Functional Champion Workshop A ½-day session with each of the Functional Champions that includes –A review of project clusters identified during the pre-deployment interviews –Point-of need, one-on-one coaching on Six Sigma principles –Framing of the approach for applying Six Sigma within the functional group –Validation of project cluster financial impact –Next-level cascade of validated project clusters –Identify Project Champions and Black Belts

6. Project Champion Training & Workshop A 3-day educational work session designed to –Transfer mid-level knowledge regarding the application of Six Sigma principles and tools –Validate the expectations for Project Champions –Communicate the Human Resource, IT, Finance and Communications support –Verify project clusters identified to date –Cascade the project cluster to the level of an individual Black Belt project –Create Project Charters for enrolled Black Belts –Communicate requirements of project reviews

7. Fastart Training A 2-day Training Session that focuses on –The approach used by the organization to implement Six Sigma –Leadership, Change Management and Alpharma values –Applying MINITAB software to Six Sigma process analysis and improvement –Using flowcharting software to map processes and conduct process simulations –Preparation for the first week of Black Belt training

8. Breakthrough Value Services Deployment Model Training Sessions: –Executive –Champion –Black Belt –Green Belt –Master Black Belt Deployment: –Executive Consultant Leads initiative for SSA Responsible for overall success of Six Sigma initiative Participates in Steering Committee meetings 75% dedicated –Deployment Manager Assists Executive Consultant & Client with deployment logistics Initially full-time, transitions to part-time role –Deployment Planning 2-day workshop with Client Deployment Champion to establish initial deployment logistics (timing, roles, etc.) –Finance Specialist Assists Client in establishing financial guidelines, project benefits determination, etc. Participates in Steering Committee meetings 25% time over life of deployment SSA Master Black Belts - Support: –Mentor Black Belt students –Ensure students’ understand tools & techniques –Works directly with Black Belt students to drive project results –SSA MBBs may also work projects on their own (without Alpharma BBs) SSA Master Black Belts – Instructors: –Train students in classroom environment –Assume mentoring and related responsibilities (similar to Support MBBs), but for fewer students Scottsdale Support: –SSA employee needs –Customization of training material –Travel & logistic support for SSA employees –Staffing –Accounting & legal –Client satisfaction & reporting SSA Support Extensive, Accelerating Knowledge Transfer, Improving Effectiveness Of Black Belts, Achieving Unparalleled Results

9. Steering Committee Structure Six Sigma Executive Steering Committee Business Unit Steering Committee Business Unit Steering Committee Business Unit Steering Committee Business Unit Steering Committee Business Unit Steering Committee Business Unit Steering Committee Business Unit Steering Committee Business Unit Steering Committee Number of Business Unit Steering Committees driven by level of activity at BUs Oversees BU Six Sigma Steering Committees: Who…BU Management, SSA ECs, DMs, etc. Why… BU Six Sigma Organizational/Personnel Issues Strategic Alignment…Business Goals/Projects Progress towards goals & adjustments Project review, approval, monitoring & sign-off Reward & Recognition When… Meets 2-4 hours / week Review 10 – 15 projects / week Six Sigma Executive Steering Committee: Who…Client Sr. Leaders, BU Presidents, SSA Senior Leaders Why… Communications Goal Setting & Strategic Alignment Organizational/Personnel Issues High Level Program Review (progress) Policies (R&R, rules of engagement, etc.) Major project reviews (>$10M) When…Monthly Hierarchy Addresses Different Levels Of Responsibilities & Project Volume

10. Deployment Financing Breakthrough Value Services: –Six Sigma Academy assigns additional resources to deployment, assumes greater role in early stages –SSA earns fee as a percentage of Alpharma’s realized project benefits Exception for first Black Belt wave: –Need to accommodate Alpharma’s needs to finance first BB wave. –Will fix fee for first wave at $640K –Payment will be $320K in 3 monthly payments After BB wave-1, SSA Fee: –10% of Project Benefits (projects started during engagement period, approved by Steering Committee) –Project Benefits Net of “incremental” project cost If investment required Does not include deployment cost (SSA fee, T&L, Salaries & Wages of deployment personnel – such as Black Belts, Green Belts, Champions, team members, etc.) –Project Benefits measured at Operating income level –Benefits measured, and SSA Fee calculated for period not to exceed 24 Mos. –SSA fee determined and paid as Alpharma realizes benefits from projects (not forecast or projected) Other considerations: –Travel & Living expenses –Laptops & Six Sigma (MiniTab, Sigma Flow, TRIZ, Etc.) software for Black Belts, Green Belts –Project Tracking system Breakthrough Value Model … Need To Be Flexible On Wave 1 Financing, With Appropriate “Cap” Breakthrough Value Model … Need To Be Flexible On Wave 1 Financing, With Appropriate “Cap”