This document provides an overview of Alcan's Continuous Improvement (CI) program and methodology. It details Alcan's vision of becoming a top quartile company through growth, cash flow, and value creation. CI is a key part of Alcan's Integrated Management System and utilizes tools like Policy Deployment to translate strategic goals into specific, quantifiable improvement initiatives. Policy Deployment aligns all levels of the organization from corporate down to individual plants to work towards shared objectives.

1. How to Use This Reference Guide
Alcan’s success in the global marketplace depends as much on big, innovative
ideas as it does on the smallest details.
This Reference Guide explains the common language of Continuous
Improvement (CI), our tool for creating standard work, achieving operational
excellence, serving our customers better and becoming more competitive.
CI creates a system for operational excellence because it:
• Focuses on our customers
• Empowers our employees
• Provides tools and resources
• Helps prioritize opportunities
• Finds solutions based on root causes
• Builds sustainable results
• Uses a structured and disciplined process
• Offers the ability to leverage success across the organization and accelerate
improvement
This CI Reference Guide details the vision for Alcan Inc. as well as Alcan Food
Packaging Americas and its operations. It defines key CI terms and explains tools
that speed the improvement process and help measure needs as well as progress.
Use it to focus department resources in ways that elate customers, streamline
processes and improve performance. If you can make CI a way of life and help
those who work with you do the same, Alcan can unleash the power of the
process. The rewards are a delighted customer, reduced waste, fewer variations in
our processes and a sense of pride in a job well done.
i

2. ii
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
© 2006 ALCAN – George Group Curriculum
This ALCAN – George Group Continuous Improvement training material is for internal use only. It contains ALCAN
proprietary information which is restricted to ALCAN employees.
This material is intended for discussion and use only within ALCAN Group companies as well as customers and
suppliers only for Alcan project purposes.
Access to, use or copying by non-ALCAN employees in any form, is prohibited.

3. Contents
Part I – Aligning our Efforts.....................................................................................1
Our Vision and Who We Are...................................................................................1
AIMS and Where We Are Going..............................................................................3
Part II – Coordinating Our Efforts Through Policy Deployment.........................5
Principles...................................................................................................................5
The Starting Point ....................................................................................................6
Strategic and Operating Agendas ............................................................................6
Linking Our Vision with Specific Goals..................................................................7
Creating Timetables for Realizing Our Vision........................................................9
Primary Tool is the X-Matrix ................................................................................10
Tools for Charting and Tracking Actions..............................................................12
Part III – Putting Three Key CI Components to Work.........................................15
The Continuous Improvement Umbrella .............................................................15
CI Policy for Food Packaging Americas................................................................18
Component One: Manufacturing Excellence Basics (CI Roadmaps) ..........19
Priorities, Objectives and Goals .....................................................................19
Why it Works...................................................................................................19
Methodology ...................................................................................................20
Tools.................................................................................................................21
Component Two: Lean Six Sigma ....................................................................25
Priorities, Objectives and Goals .....................................................................25
Why it Works...................................................................................................25
Four Keys to Success .......................................................................................26
Tools.................................................................................................................33
Methodology (DMAIC: Define, Measure, Analyze, Improve, Control) ......35
Validation Step ................................................................................................54
Gate Reviews....................................................................................................55
Roles.................................................................................................................57
Importance of Sponsors .................................................................................60
Certification Requirements ............................................................................63
Component Three: Best Practice Networks ...................................................65
Priorities, Objectives and Goals .....................................................................65
What is a Best Practice? ..................................................................................66
Why They Work ..............................................................................................66
Methodology ...................................................................................................67
Tools.................................................................................................................70
Team Creation Phases.....................................................................................72
Part IV – Tracking Our Success..............................................................................75
Logging In...............................................................................................................75
Finding Best Practices ............................................................................................79
Inputting a New LSS Project..................................................................................80
Most Frequently Asked Questions.........................................................................84
Glossary ..................................................................................................................87
Index.........................................................................................................................97
iii

4. iv
CONTINUOUS IMPROVEMENT REFERENCE GUIDE

5. 1
Part I: Aligning Our Efforts
Our Vision and Who We Are
Alcan Inc.
Alcan is a multinational, market-driven company and a
global leader in aluminum and packaging as well as
aluminum recycling. With world-class operations in
primary aluminum, fabricated aluminum, flexible and
specialty packaging, aerospace applications, bauxite
mining and alumina processing, today’s Alcan is well
positioned to meet and exceed its customers’ needs for
innovative solutions and service. As of 2006, Alcan
employs 65,000 people and has 430 operating facilities
in 59 countries and regions.
Since 2000, Alcan has made numerous acquisitions in
the packaging sector including Pechiney, the global
aluminum and packaging producer based in France. In
addition to an increased capacity to serve customers
worldwide, we also benefit from enhanced scale, a
strengthened market position and complimentary
industry-leading technologies and technological
resources. We enjoy enhanced opportunities for growth,
especially in the aerospace and packaging markets.
Alcan’s governing objective is to be ranked in the top
quartile of companies. In order to meet this goal the
corporation must:
• Grow operating earnings per share
• Create free cash flow to facilitate investment in
growth
• Create Economic Value Added (EVA) efforts for the
company
PARTI
Bauxite and Alumina
Primary Metal – 34%
Engineered Products – 30%
Packaging – 29%
Bauxite and Alumina – 7%
34%
30%
29%
7%
2005 Revenue by Sector
Engineered Products
Primary Metal
Packaging

6. 2
Alcan Packaging
Alcan Packaging is one of Alcan’s four business groups (as of
2006). It represents:
• Approximately 144 facilities in 33 countries worldwide
• US$ 6 billion in annual sales
• More than 31,100 employees
• 29% of Alcan, Inc. revenue
Alcan Packaging is dedicated to providing customers with
solutions that will enhance their products and brands by
capitalizing on our expertise and leadership positions in
packaging. We are acknowledged as a global packaging leader in
Food Flexible, Pharmaceutical and Beauty and hold a pre-
eminent position in the worldwide supply of Tobacco cartons.
Alcan Packaging’s improved ability to serve multinational
customers and its multi-market capabilities constitute a strong
platform for growth.
We operate in a dynamic and intensely competitive global
industry. Customers place increasingly steep demands on their
packaging partners. They expect quick turnarounds, superior
service and flawless product quality.
To achieve our corporate goals and remain a leader in our
industry, Alcan Packaging must:
• Adapt the organization to market needs
• Accelerate innovation of new products and technologies as
well as business service models
• Leverage experience, offer a large portfolio of technologies
and spread geographically to improve our customer
offering
• Use a disciplined investment policy to target key profitable
growth segments
• Operate at peak efficiency and ensure that we share Best
Practices across our entire system
Alcan uses a standard methodology called the Alcan Integrated
Management System (AIMS) to build on our operational excellence, new product
pipeline and market focus.
This management system allows us to focus our energies on market segments and
geographies that offer the highest potential, fit our capabilities and provide an
avenue for strong, continued and profitable growth. In short, Alcan Packaging is
committed to becoming a world-class organization using AIMS as a standard to
manage improvement.
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Food Flexible
Pharmaceutical
Beauty
Tobacco

7. 3
PARTI
AIMS and Where We Are Going
Alcan Integrated Management System (AIMS)
AIMS provides a balanced framework to help us reach our goals. It aligns efforts
within and between business groups for maximum effect and value, and it has
four major pillars: Environment, Health and Safety (EHS) FIRST, Value-Based
Management, Continuous Improvement and Alcan’s People Advantage.
AIMS Components:
Environment, Health and Safety (EHS) FIRST introduces common standards and
procedures to create a mindset for achieving excellence in Alcan’s performance in
environment, health and safety. This benefits our employees and the communities
in which we operate. EHS FIRST represents a commitment from each employee
and from all levels of Alcan to improve through increased awareness, knowledge
sharing and Best Practice application.
Value-Based Management is the basis for all strategic investment decisions and
value-generating initiatives worldwide at Alcan. It uses rigorous financial
discipline and allows each business group to identify Economic Value Added
(EVA) projects in order to capitalize on opportunities and make the best use of all
available resources. As Alcan’s governing objective, Value-Based Management
identifies our priorities.
EHS FIRST
Continuous
Improvement
Value-Based
Management
Alcan’s People
Advantage
Alcan Integrated Management System

8. 4
Continuous Improvement (CI) aims to maximize opportunities by making us more
competitive and efficient. Our CI program provides a full range of tools so we can
select the most appropriate improvement technique for each situation. Much
more than a cost-reduction program, CI paves the way to world-class status. It
embodies a philosophy that drives our daily process management activities. Using
CI, we can produce higher-quality products more quickly. If Value-Based
Management shows us what we need to do to meet our financial objectives, CI
shows us how we will make it happen.
Alcan’s People Advantage is a key factor on which Alcan differentiates itself. This
goes above and beyond traditional talent management. This pillar reflects how
alignment, capabilities and engagement drive overall workforce performance and
build a high-performance organization.
• Alignment is the extent to which employees are connected or have a line of
sight to the strategy.
• Capabilities capture the extent to which the organization matches talent,
information and resources with the business strategy.
• Engagement is the extent to which the employees are committed to the
organization.
CONTINUOUS IMPROVEMENT REFERENCE GUIDE

9. Part II: Coordinating Our Efforts through Policy Deployment
Policy Deployment
Policy Deployment is a disciplined methodology we use to distribute a strategic
plan throughout our organization. It translates strategic intent into the required
day-to-day behavior, converting the vague generalities of long-term strategies into
realistic annual initiatives upon which our organization can act. Policy
Deployment also translates annual corporate objectives into coordinated,
quantitative contributions at the local level.
Policy Deployment: Principles
• Align our organizational goals with changes in the environment
• Focus on identifying vital strategic gaps
• Work with others to develop plans to close these gaps
• Specify methods and measures to achieve strategic objectives
• Highlight cause and effect linkages among local plans
• Continuously improve the strategic planning process
At each level, Milestones, Action Plans and Key Performance Indicators (KPIs) are
developed to keep us focused on how the business is performing (see pages 12-14
for additional details on these tools). Think of KPIs as a car dashboard. Indicator
lights on the dashboard alert us if we are running low on gas or driving too slow
so we can make adjustments based on that information. Just like these dashboard
lights, KPIs help us monitor a situation and deliver the heads-up we need to make
changes or corrections.
PARTII
5
Vision
Strategic Agenda
Operating Agenda
Annual Initiatives
Business Processes Support Groups
Business Unit Business Unit Business Unit Business Unit
Milestones
Action Plans
at each level
KPIs
Sector Policy Deployment

10. Policy Deployment: The Starting Point
Alcan efforts to implement CI initiatives begin with Policy Deployment. After we
have assessed the current state of our business, we can then apply Policy
Deployment methodology to develop a vision of the most desirable future state.
This new vision describes what we need to do to realize the future state. In short,
Policy Deployment helps us convert visions into a disciplined methodology that
will help us create, distribute and implement a strategic plan throughout our
organization.
Policy Deployment: Strategic & Operating Agendas
Each business unit must do its share to help Alcan realize its vision. To do so, we
need a forward-looking plan that translates long-term strategy to process
improvements, projects and yearly business unit goals. The Strategic Agenda is
used to align the organization with these ambitious strategies. With the Strategic
Agenda in hand, each business unit develops its own Operating Agenda.
An Operating Agenda summarizes what the business unit has to do in the long and
short term to fulfill the company’s business goals. Because it lists performance
initiatives the business unit will undertake to meet its commitments, it helps us
managers develop an economic understanding of Value-Based Management
methodologies and potential financial benefits.
At the sector level, the Operating Agenda is still very general, listed, for example,
as “improve EHS 5%” or “Optimize Plant X.” We managers must establish specific
projects and initiatives in our Operating Agendas to drive improvement. CI is a
powerful system for generating value at this stage of planning and goal setting.
6
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
CURRENT
REALITY
ALIGNED
GOAL
Fuzzy Future State
Perceived Current State
Many individual
perceptions
Group clarity
Realizing Our Vision

11. Policy Deployment: Linking Our Vision with Specific Goals
After Operating Agendas and Strategic Agendas have been developed through
review and prioritizing vital strategic gaps, we managers need to establish
concrete improvement goals. Vision and objectives must be reflected in and relate
to annual and daily activities. Policy Deployment ensures everything we do on a
daily basis and every performance goal in our annual initiatives links with our
business’ long-term vision and goals.
Policy Deployment at the Sector Level
At the sector level, policies are very general, but become more specific as they
deploy through support groups. These groups link how they will support the
business and meet long-term or annual objectives. Support groups such as
marketing and purchasing must use Policy Deployment — just as manufacturing
groups do — to ensure universal goal alignment and eliminate duplication (see
prior page 5 for graphical representation of sector deployment).
PARTII
7
1. Plant X Optimization
2. Plant Y Expansion
3. Partial closure of
Plant Z and Harvest
4. Profitable extension of
participation in Market X
5. EHS First
Implementation
40
450
100
40
na
Initiatives
Key BU Decision Point
Request for Capital from ExCom
Expenditure of Capital
Action
Target Competition
Proposed Timing and Milestones
2003
1 2 3 4
2004
1 2 3 4
2005
1 2 3 4
2006
1 2 3 4
2007
1 2 3 4
Capex
($M)
90
200
75
50
na
Value
Creation
($M)
Strategic Agenda
The Operating Agenda is a summary of the initiatives the
business undertakes to deliver the performance to which it
has committed.
Illustrative Operating Agenda
Agenda
Output from
MaxVal
(“the what”)
Input into
CI
(“the how”)
Management
Identifies
high-value,
at-stake
strategic
issues and
opportunities
that may
make their
way onto the
operating
agenda as
they are
resolved into
initiatives
The Operating Agenda

12. Policy Deployment at the Business Unit Level
At the business unit level, just as in the sector level, each support group aligns
with the Corporate Vision. Policy Deployment, Milestones, Action Plans and KPIs
are developed to align the Business Unit Vision. At the business unit level, projects
and initiatives are completed across the business unit globally.
Policy Deployment at the Manufacturing Plant
At the plant level, the same process occurs that occurs at the business unit level.
Here, however, Policy Deployment involves individuals and specific improvement
projects. Teams drill down and link requirements with action that is aligned with
the goals of the entire organization.
8
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Vision
Strategic Agenda
Operating Agenda
Annual Initiatives
Sales &
Marketing
Finance
Human
Resources
Manufacturing
Plants
Milestones
Action Plans
KPIs
at each level
Business Unit Policy Deployment
Plant Annual Initiatives
Managers / Departments
Supervisors / Machine Centers
Teams / Projects
Waste Speed Quality Lean
Milestones
Action Plans
KPIs
at each level
Plant Level Policy Deployment

13. Policy Deployment: Creating Timetables for Realizing Our Vision
Policy Deployment translates strategic intent into required day-to-day behavior
and turns broad, long-term strategies into realistic annual initiatives upon which
our organization can act. It plays an essential role because it translates annual
corporate objectives into coordinated, quantitative local contributions managed
by a timetable.
We create many integrated goals to help Alcan and its businesses succeed. These
include:
Long-Term Strategies:
Long-term strategies form a bridge between our organization’s current situation
and its long-term vision. They describe the challenges, opportunities and
priorities for our organization over the next several years. These strategies specify
how the organization will effectively:
• Meet changing requirements
• Distinguish the organization from its likely competitors
• Manage internal strengths and weakness
Mid-Term (3- 5 Year) Strategies:
Mid-term strategies map a three-to-five-year journey toward the company vision
and align the team with top annual initiatives. They specify vital strategic gaps
that must be closed within three to five years to ensure a strategic position. These
strategies exist to:
• Identify one, two or three breakthrough objectives that require multi-year
effort on the part of the organization
• Determine the preliminary responsibilities and annual sequencing of key
tasks to achieve these objectives
• Achieve consensus that the selected items are priorities and then link these
items to daily management activities
High-Level Annual Initiatives:
Annual initiatives create focus for mid-term goals and make them specific and
measurable. They specify competencies on which employees must focus in the
next 12 months so as to make dramatic inroads toward five-year objectives.
After annual initiatives are established, actions for the year are linked to them and
deployed throughout the organization.
PARTII
9

14. Policy Deployment: Primary Tool is the X-Matrix
The X-Matrix document is key to putting CI into action. This CI blueprint
outlines everything we want to accomplish in order to be profitable in our
business. It illustrates how we will achieve our objectives and who will be
responsible for specific activities and tasks. It helps us align ourselves with the
corporate objectives and vision. In short, it helps people in charge organize and
integrate what people who report to them do.
While specific actions included in the X-Matrix differ from facility to facility and
business unit to business unit, each matrix contains the following:
10
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Top Level Matrix
Sector
4th Level Matrix
Manager
3rd Level Matrix
Plant
2nd Level Matrix
Business Unit
Example of
X-Matrix Drill Down
A – Achieve
Manufacturing
Savings
B – Material Waste
Reduction Focus
C – Waste Initiatives
for Manufacturing
Plants (All Plants)
D – Plant Waste
Reduction by 20%
E – Waste Project
• Extruding
• Slitting
F – Reduce Waste
20% (Line A+D)
Reduce Waste
15% (Line B)
A
C E
F
B D
“Deploy” Annual Objectives and Initiatives
Top
Annual Initiatives
Left Side
3-5 yr. Objectives
High Level Annual
Initiatives
Right Side
Key Performance
Indicators (KPIs)
Far Right Side
Resources
X-Matrix Format for Policy Deployment

15. PARTII
11
=Primary
=Support
13
12
11
10
9
8
7
6
5
4
3
2
1
EstablishImprovedKPIs
ManagementPlan
ProcessSimplification
PeoplePlan
TakeOutDinners
CustomerGolfOutings
LessOrderOutFood
CIImplementation
ImproveProducttoMarket
OrganicSalesGrowth
Training
RoadmapImplementation
MarginEnhancement
$XXMMIncome
$XXXMMTotalCapitalEmployed
$XXXMMSales
XX%ROCE
CustomerFocus
Safety
ImplementCI
PeopleDevelopment
TotalAverageAnnualGrowth
XX%ROCEby2006
XX%OperatingMargin%ofSalesby20063-5yr.
3-5yr.
3-5yr.
3-5yr.
3-5yr.
OperatingProfitof$20.5MM
OperatingProfitXX%ofSales
ReturnonCapitalEmployedatXX%
SalestoPlanof$349.3M
DevelopPerformanceMgmntProcessandMetrics
P.Deployment
PeopleEvents
TF1<X
TF2<X
TotalCapitalEmployed<$XX
FoodCISavingsof$XX
JohnSmith
KeyPerformanceIndicators
3-5yr.Objectives/
AnnualObjectives
$Impact
AnnualInitiatives/
ImprovementActivities
FoodBusinessUnit2006PolicyDeploymentXMatrixBigBossJohn—VP/GM
MaryJo
JohnWayne
JamesBonn
GeorgeLooker
BigBoss
JohnIT
MaryPurchasing
RandDMike
87654321
123456789101112
123456789101112StaffSupport
Example of X-Matrix That Documents Goals and Policy Deployment

16. Once an X-Matrix is developed, managers need to direct individuals who have
agreed to work on these goals so they can develop specific actions or projects to
move forward. One way to generate project ideas to achieve target goals on the
X-matrix is through a Project Selection Workshop (see page 33). Major project
initiatives listed on the X-Matrix are tracked and reviewed with a Milestone
Chart, which contains KPIs linked to specific projects, goals and actions. Bowling
Charts help present KPI results to date.
Policy Deployment: Tools for Charting and Tracking Actions
CI tools such as Milestone Charts, Action Plans displayed on Action Item
Registers, Key Performance Indicators and Bowling Charts help us track annual
initiatives with our business unit vision.
Milestone Charts
Milestone charts help project managers lead initiatives because they detail how
and when major steps will be completed and who will be responsible for them.
They measure progress on plan implementation, so project sponsors review them
constantly. A Functional Focus Group may keep several related initiatives under
one umbrella on one Milestone Chart. Each level reports progress to the level
above. Each key metric or annual initiative from the X-Matrix should have a
Milestone Chart.
Action Item Registers
An Action Item Register is a format for an Action Plan that links people to specific
tasks and resources related to an improvement project. If actions listed on a
Milestone Chart are too broad to contain specific actions for individuals, an
Action Item Register can be developed. In addition to a Milestone Chart, each key
metric from the X-Matrix should also have an Action Plan displayed on an Action
Item Register.
Key Performance Indicators (KPIs)
These specific guideposts allow us to determine if our CI action plans are meeting
objectives. Much as dashboard lights signal a driver so he or she can make
adjustments, KPIs can alert us so concerns can be addressed based on urgency
and need.
Throughout our organization, Key Performance Indicators (KPIs) created at one
level support and are reflected in KPIs developed at the level above. Each level’s
KPIs list supporting objectives, and owners need to be named for each measure
and for corresponding plans and actions. (In a plant, these measures might relate
to plant waste, department waste, machine center waste or waste caused by
wrinkles. In a support office, they might relate to business unit sales, sales by
market, sales by customer, sales by product and sales by specification.) KPIs are
listed in Bowling Charts and tied to annual initiatives.
12
CONTINUOUS IMPROVEMENT REFERENCE GUIDE

17. PARTII
13
Action Items / Deadlines /
Responsible Individuals
Accountability &
Responsibility
Event Goals & KPI’s
Alignment Next Level Goals
StatusAction Item Register
Diagnostic ActionPlans
Improvement
Goals
Managethe
Process
Measurethe
Improvement
Top
Annual Initiatives
Next Level Deployment
Milestone Charts
You will want to develop
Action Plans illustrating the
milestones for implementation.
Integrated Policy Deployment Tools
ACTUAL$0000Base Material1 $0 $0 $0 $0 $0
P/ABudActualTarget to Improve Jan Feb Mar Apr May
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Direct Material2 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Waste3 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Reduce Claims4 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Roto Make Ready5 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Flexo Make Ready6 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Run – All Depts.7 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Reduce POC/PONC8 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$00$00Maint. Mtls./Op Supplies10 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$00$00Service Labor and OT9 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
X-Matrix
Annual Initiatives
KPI’s from the X-Matrix
Bowling Chart
This tool is used to track the monthly
performance to the annual initiatives
X-Matrix Bowling Chart Linkage

18. Every month at a policy deployment meeting, each manager reports on
performance using KPIs. (This is called a “drill down” of KPIs by level). Any
shortfall becomes visible in KPIs at more than one level of the organization. This
draws attention to required actions and needed resources.
Three Levels of KPIs
As we cascade objectives throughout our organizations, we should think in terms
of using at least three types or levels of KPIs:
Measurable KPIs allow us to measure overall performance of an organization at a
high level. Managers can review the general health of their organization with
Measurable KPIs.
Manageable KPIs help managers understand specific opportunities within their
area. They measure local-level contributions to higher-level or Measurable KPIs
and help establish local ownership of CI goals.
Actionable KPIs are at the root of an activity and help managers monitor daily
activities linked to higher-level KPIs. When Actionable KPI goals are met, they
lead to improved Manageable and Measurable KPIs.
Bowling Charts
Bowling Charts are the standard way to measure progress and results of specific
actions or Lean Six Sigma projects, and they allow managers to review objectives.
These offer up-to-date and at-a-glance visual reminders of objectives and goals
outlined in KPIs, which originated from the X-Matrix.
14
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
ACTUAL$0000Base Material1 $0 $0 $0 $0 $0
P/ABudActualTarget to Improve Jan Feb Mar Apr May
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Direct Material2 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Waste3 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Reduce Claims4 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Roto Make Ready5 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Flexo Make Ready6 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Run – All Depts.7 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$0000Reduce POC/PONC8 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$00$00Maint. Mtls./Op Supplies10 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
ACTUAL$00$00Service Labor and OT9 $0 $0 $0 $0 $0
PLAN $0 $0 $0 $0 $0
Red Cell: Represent KPIs performing worse than target and last year
Yellow Cell: Represent KPI performance better than last year but not to target
Green Cell: Represent KPI performance meeting target
Key Performance Indicators on Bowling Chart Tool

19. Part III: Putting Three Key CI Components to Work
The Continuous Improvement Umbrella
CI drives business success on an ongoing basis because it uses broad-based
employee input, clearly defined and measurable goals, and built-in tracking
mechanisms. Under this process, every employee in every facet of business (from
design to manufacturing to sales and administrative support functions) works to
find ways to maximize opportunities and increase profitability.
The Continuous Improvement Umbrella illustrates how each system relates. Every
day, at any time, we can use one, two or all three CI components found under the
CI Umbrella to sharpen our focus, measure our progress and gain new
perspective.
PARTIII
15
Lean Six Sigma
Manufacturing Excellence Basics
CI Roadmaps
Best Practice
Networks
Project Selection
Project Charters
Sponsors
Black Belts
Green Belts
Yellow Belts
White Belts
Project Tracking
• Project Action Plans
• ProjX
• Monthly Status
DMAIC
LSS Tool Box
Common Language
Required Foundational
Elements
• Policy Deployment /
Improvement Goals
• Workplace Organization
& Visual Management
• Work Standards & Best
Practices
Gap Analysis
Priority Focus
• Material Waste Reduction
• Inventory Management
• NEFPM Improvement
Value at stake – EVA $
Action Plans
KPIs
Identify
Select
• Solventless Adhesive
Lamination
• Extrusion Lamination
• Inventory Management
• Waste Management
• Laceration Prevention
• Waste Recycling
• Press (Roto Print)
• Press (Flexo Print)
Adopt
• Assign Resources
• Team Meetings
Prepare
Deploy
Control
Validate
• Best Practice Bowling
Chart
• Quarterly Self Audits
• Rotating Team Audits
Roadmaps
• Foundational
• Key Manufacturing
• Customer Focus
• Cross Functional
Self-audit
• Assign Ownership
• Action Plans
• Quarterly Self Audit
End of year audits
Continuous Improvement Umbrella

20. Three Components of Continuous Improvement
Continuous Improvement processes consist of three main components.
Component One: Manufacturing Excellence Basics (MEB) or CI Roadmaps
The common language for Alcan Packaging’s business and CI is outlined in the
Manufacturing Excellence Basics (MEB) or CI Roadmaps methodology. With
MEB, we use fundamental systems to manage and improve our processes; these
systems are required to ensure success.
MEB and CI Roadmaps help us focus on a directional approach to realizing the
most important goals. They also provide structure to carry out our business
plans. CI Roadmaps allow every business, no matter how different, to manage and
sustain measured improvement. Alcan Packaging has deemed three Foundational
Roadmap Elements as mandatory priorities for each of its business. They are:
1. Policy Deployment/Improvement Goals
2. Workplace Organization/Visual Management
3. Work Standards & Best Practices
In addition, each sector must complete an annual Gap Analysis to reveal other
roadmap elements needed to improve the business. Each business group
determines the Economic Value Added (EVA) at stake and links specific Key
Performance Indicators (KPIs) to these high-priority initiatives so progress can be
monitored.
Roadmap Elements help managers decide what to do next to improve our
business. The roadmaps can be visually represented as simple building blocks.
These illustrate the importance of creating a strong base from which to build and
grow a business and serve customers. Some roadmaps target manufacturing
processes, but many are cross functional to help support groups fully integrate
and serve our business.
Each business must review performance on a regular basis as a reality check on
improvement. A business unit can use the self-audit tool to review roadmap
performance at any time. Business groups assign managers responsibility for
specific roadmaps in their job descriptions to encourage them to develop actions
and to see that they take ownership in the improvement. At the end of the year, an
audit will gauge year-over-year improvement related to the Foundational
Roadmap Elements.
Component Two: Lean Six Sigma
Once business units know what to improve, we permanently fix issues with
Lean Six Sigma (LSS), another component of CI. This problem-solving toolbox
standardizes how employees approach problems. The methods we use to select,
define, measure, analyze, improve and control projects are part of the Lean Six
Sigma toolset.
16
CONTINUOUS IMPROVEMENT REFERENCE GUIDE

21. Alcan benchmarked similar corporations renowned for beating their competition
and growing their business. We found the best companies use a standard toolset.
They also have a system for obtaining successful results and implementing
improvement projects to maximize company value.
Lean Six Sigma methodology maximizes shareholder value by achieving the
fastest rate of improvement in customer satisfaction, cost, quality, process speed
and invested capital. Lean Six Sigma (LSS) combines two problem-solving
concepts aimed at profitability. Lean tools focus on reducing the number of
wasteful steps in a process. Six Sigma tools help explain and reduce the variation
in processes. Together, Lean and Six Sigma make a very powerful mechanism
when used properly. These tools need to be used together because Lean strategies
cannot, alone, bring a process under statistical control, and Six Sigma
methodologies, by themselves, cannot dramatically improve process speed or
reduce invested capital.
The Principal Of Lean Six Sigma states: The activities that cause the customer’s
critical-to-quality issues and create the longest time delays in any process offer the
greatest opportunity for improvement in cost, quality and lead time.
Component Three: Best Practice Networks
After project teams come up with solutions, we take advantage of them by
sharing the new standard methodology throughout the entire organization.
The mechanism we use is called Best Practice Networks.
Alcan has developed a methodology to find “Best Practices” processes within our
business. If a process maximizes value, it may be possible to implement it across
our company. The Best Practice Network allows managers to be aware of and
“shop” for systems proven successful elsewhere in the organization and then to
implement them to benefit our business.
Alcan Packaging is a large organization with many facilities and businesses
worldwide. Each business has developed methodologies or processes to improve
its market competitiveness by using Manufacturing Excellence Basics and Lean
Six Sigma tools. Best Practice Networks make it possible for the entire company to
share benefits from individual project results completed at every level of the
organization. Our size allows us to leverage what we have learned across the entire
organization, which can help us compete.
PARTIII
17

22. Continuous Improvement Policy for Food Packaging Americas
Within Food Packaging Americas, our Governing Objective is to Maximize Value
by doubling our warranted value every five years.
We will do this by:
1. Continually improving our processes
2. Managing our capital assets
3. Realizing profitable selective growth
Our CI Process consists of three main components:
• Manufacturing Excellence Basics
• Lean Six Sigma
• Best Practice Networks
CI will enable us to reach our Governing Objective. By focusing our efforts and
resources with this process, we will also meet and exceed Customer Expectations.
Objectives and Goals for Continuous Improvement
Manufacturing Excellence Basics Goals:
• Foundational Elements: level 4 rating within three years of implementation
• Key Elements for Manufacturing: level 4 rating within three years of
implementation
• Key Elements for Functional Areas: level 5 rating at the end of the team’s
existence
Lean Six Sigma Goals:
• Reduction of controllable costs of 5% per year
• Profitable growth of 10% per year (Including Acquisitions)
• Black Belts create value by implementing projects focused on increasing
customer satisfaction and revenue and reducing cost in projects and general
Manufacturing savings
Best Practice Networks Goals:
• Creation of Best Practice Networks for each of the 8 Manufacturing Processes
by 2008
These are:
I
Solventless Adhesive Lamination
I
Extrusion Lamination
I
Inventory Management
I
Waste Management
I
Laceration Prevention
I
Waste Recycling
I
Press (Roto Print)
I
Press (Flexo Print)
• Other Cross-functional BP Networks reviewed and identified annually
• 100% implementation of adopted Best Practices
18
CONTINUOUS IMPROVEMENT REFERENCE GUIDE

23. Component One: Manufacturing Excellence Basics (CI Roadmaps)
Manufacturing Excellence Basics: Priorities, Objectives and Goals
Alcan Packaging’s president has named our top three priorities (Foundational
Elements) for implementing CI Roadmaps. They include:
1. Policy Deployment/Improvement Goals
2. Workplace Organization/Visual management
3. Work Standards & Best Practices
Food Packaging Americas CI Objectives and Goals for Manufacturing Excellence
Basics (CI Roadmaps) are:
• Foundational Elements: Level 4 rating within three years of implementation
• Key Elements for Manufacturing: Level 4 rating within three years of
implementation
• Key Elements for Functional Areas: Level 5 rating at the end of the team’s
existence
Manufacturing Excellence Basics: Why it Works
Manufacturing Excellence Basics methodology (most often referred to as CI
Roadmaps) helps us quantify problems and assign credit to improvements that
are not easily quantifiable. CI Roadmaps can help us recognize what improvement
looks like throughout the organization, and they show us how to improve in
phases so that improvement is sustainable. Because CI Roadmaps outline the
common language of CI, they help direct our work on agreed-upon business
goals and structure our efforts to carry out business plans. They help us
determine where to start and how to chart progress.
Just as a mechanic can use a systematic method to improve a car’s performance or
make a repair, CI Roadmaps give us a systematic method for improving our work
systems. And once we, like good mechanics, are trained in diagnostic methods, we
have an efficient system with step-by-step, user-friendly instructions at our
disposal to help us serve our customers and do our jobs better every day.
In addition, CI Roadmaps:
• Are a system that gives teams a way to measure performance on key elements
• Help us measure ourselves against world-class performance
• Illustrate levels of performance and identify a road for improvement
• Start with a self-evaluation to baseline our current performance
• Lead to action plans for improvement following the guidelines prescribed in
the roadmap elements
• Help track our performance to the action plans
• Use KPIs to track our performance along the way
• Ensure sustainability with annual audits
CIROADMAPS
19

24. Manufacturing Excellence Basics: Methodology
The CI Roadmaps were developed as a result of benchmarking several other
companies within and outside our industry. Our CI Roadmaps include five areas
of emphasis or Axes aligned with the business group’s values. The 5 Roadmap Axes
are:
• Employee Mobilization
• Customer Relations
• Supply Chain
• Manufacturing Systems/Processes
• Products & Processes Innovation
Elements are specific, measurable goals for the work group.
Roads are general objectives that support excellence for the group.
An Axis is a grouping of several roads that support the group’s values. Each Axis is
divided into Roads.
CI Roadmaps illustrate five levels of effectiveness for each Foundational Roadmap
Element. Each level describes the characteristics that should be present in order to
qualify for each level of effectiveness.
Roadmaps use a 1-5 graded ratings system. Incremental improvement is on an
all-or-nothing basis. All requirements for the level must be met in order to obtain
that level. When a level 5 is obtained, a business unit is considered “Best in Class”.
20
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Roadmap Framework
1 2 3 4 5Element
Rated Speed
NEFPM
Change-over
Elements are grouped
logically into Roads
Several roads are
grouped into Axes
Each best practice
“element” is presented
as a line in the table
Each element is
characterized by
5 levels described as a
short sentence
Axis: Manufacturing Systems / Processes
Road Equipment efficiency

25. The maturity of elements is described as follows:
Level 1: Basics Basic principles not yet formalized. Progress stages not
defined. No performance indicator.
Level 2: Launch Basics principles defined and known locally. Pilot
workshops launched.
Level 3: Development Pilots workshops have produced results. An extension
plan defined and implemented.
Level 4: Maturity Command of principles and tools displayed. Entire
organization involved in CI process. Best Practices shared.
Standards stemming from Best Practices described,
validated and audited.
Level 5: Excellence Unit recognized as a reference. Standards applied, audited
and continuously improved.
Manufacturing Excellence Basics: Tools for reviewing processes and
monitoring improvement
CI Roadmaps methodology provides processes to review progress and measures
to monitor process improvement. These tools allow us to focus our efforts, and
they are at the heart of our MEB efforts. They can help us manage and improve
our process, but we must apply them to ensure our success. CI Roadmap tools can
also be used to determine the Economic Value Added (EVA) at stake for
businesses and link specific KPIs to high-priority initiatives in order to better
monitor execution.
Gap Analysis
Each sector must complete an annual Gap Analysis to reveal other CI Roadmap
Foundational Elements that may be needed to improve the business.
Foundational Elements
CI Roadmaps are comprised of basic Foundational Elements that illustrate how a
business should be run. They can be represented visually as blocks in a Building
Block House. They also can be compiled into a CI Roadmaps Index that lists goals
and areas of responsibility (see graphics to follow).
Foundational Elements help managers decide what to do next to improve a
business once the values most at stake have been determined. While some CI
roadmaps relate to manufacturing priorities, others are cross functional in nature
and require support group involvement.
CIROADMAPS
21

26. CI Roadmaps Index
Foundational Elements and the functions implementing them can be displayed
on a CI Roadmaps Index chart. This Roadmaps Index uses color to correspond with
sections of the Building Block House and outlines a road for improvement.
22
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
EmployeeMobilization
ManagementSystem
Diagnostics
PolicyDeploymentand
ImprovementGoals
ActionPlans
ImprovementManagement
andMeasurement
Workstandardsand
BestPracticeManagement
PeopleDevelopment
ManagementRole
andLeadership
SkillsDevelopment
TrainingProcess
EmployeeInvolvement
ImprovementActivities
andSuggestions
WorkplaceOrganization(5S)&
VisualManagement
Recognition
ColorKey
SectorRequiredElements
BasedonRoadmapElementsandPrioritiesfrom2006
BUFoundationalElementsManufacturingElementsCross-FunctionalElementsCustomerFocusElements
CustomerRelations
NewBusinessDevelopment
IdentifyingMarkets
IdentifyingCustomers
QualificationandRamp-up
SupplyChain
Demandand
ProductionPlanning
DemandandResource
Reconciliation
MasterProductionSchedule
(MPS)
ProductionControlActivities
Manufacturing
System/Processes
ProcessControl
VariabilityMonitoring
CapabilityImprovement
MaterialWasteReduction
Over-ConsumptionReduction
Self-Inspectionand
Error-Proofing
ProductsandProcesses
Innovation
ProjectManagement
ProjectsPortfolio
Management
ProcessesandTools
ProjectTeams
ProjectPerformanceCustomerRelationship
Management
VoiceoftheCustomer
CustomerCustomization
CustomerRetention
CustomerBPSharing
Purchasingand
Procurement
Strategy
Organization
PurchasingValueChain
SupplierRelationship
Management
Procurement
EquipmentEfficiency
RatedSpeed
NEFPMMeasurement
andImprovement
ChangeoverTimeReduction
NewProcessandTechnology
EquipmentSpecification
DesignandManufacturing
InstallationandRamp-up
NewTechnology
QualityRequirements
TechnicalRequirements
CompliantManagement
QualityImprovementPlan
ServiceRequirements
ServiceExpectations
DeliveryManagement
ServiceImprovementPlan
andTechnicalAssistance
ThroughputManagement
ThroughputDesign
InventoryManagement
InformationAccuracy
EquipmentReliability
RepairEfficiency
PlannedMaintenance
Reliability
AutonomousMaintenance
ProductIntroduction
ProductStandardization
andSimplification
ProductDesign
ProductLaunch
Roadmaps Index: Food Packaging Americas

27. Building Block House
The same CI Roadmap elements listed in the Roadmaps Index on page 22 have
been prioritized in this Building Block House format. The CI Roadmaps Index and
Building Block House offer a quick visual reminder of our goals and display how
each goal supports our company priorities.
In the illustration, each block represents a CI Roadmap or a strategy. Each block
at the lower levels supports the “customer focus” blocks depicted in yellow at the
top of the house. Customer focus is our top priority. The blocks at the base of the
house contain CI Roadmap Foundational Elements. These have to be
implemented before higher roads (or blocks) can be tackled. This chart shows
how we prioritize implementing CI projects.
CIROADMAPS
23
Based on Roadmap Elements and Priorities from 2006
Voice of the
Customer
Service
Expectations
Customer
Retention
Customer
BP Sharing
Projects Portfolio
Management
Products Standards
Simplification
Product
Launch
Inventory
Management
Autonomous Maintenance Planned Maintenance
Quality Improvement Delivery Management
NEFPM Measure
Improvement Rated Speed
Waste
Reduction
Changeover
Time Reduction
Management Role
and Leadership Recognition
Workplace Organization (5S) &
Visual Management
Improvement
Activities and Suggestions
Training
Process
Diagnostics
Policy Deployment
Improvement Goals
Action
Plans
Improvement
Manage / Measure
Work Standards
Best Practices
Environment / Health / Safety Systems
Continuous Improvement
Customer
Focus
Cross
Functional
Key
Manufacturing
Foundational
Roadmap Building Blocks for Food & Specialty Flexibles

28. Self Audit
A Self Audit begins with an evaluation to create a documented baseline of current
performance. Next, we create Action Plans for improvement following the
guidelines prescribed in the CI Roadmap Foundational Elements. Last, we track
performance against action plans and then put KPIs in place to track our
performance along the way. Annual Self Audits are performed to ensure
sustainability. Each business must review performance on a regular basis to
achieve a reality check on improvement.
The Self-Audit can be used to review a CI Roadmap performance score anytime.
Business groups assign managers responsibility for specific roadmaps that fall
under their job descriptions so they can develop actions and take ownership in
the improvement. At the end of the year, an audit is completed to gauge year-
over-year improvement to the CI Roadmap Elements.
24
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Project on Planned
Maintenance,…
Project on “Critical to
Quality”, SPC chart, …
Management
System
0
1
2
3
4
5
People Development
Employee Involvement
Quality Requirements
Service Requirements
Demand and Production Planning
Purchasing and Procurement
Product
Introduction
New Process and Technology
Project Management
Equipment Reliability
Equipment Efficiency
Process Control
Throughput Management
Target Current Projects
Projects on Claims
Reduction (Pareto, action
plan, monitoring)
Self Audit Chart

29. Component Two: Lean Six Sigma
Lean Six Sigma: Priorities, Objectives and Goals
Food Packaging Americas’ CI Lean Six Sigma Goals are:
• Reduction of controllable costs of 5% per year
• Profitable growth of 10% per year (including acquisitions)
• Black Belts create value by implementing projects focused on increasing
customer satisfaction and revenue and reducing costs in projects and general
manufacturing savings
Meeting these goals requires us to take every step to successfully complete Lean
Six Sigma projects throughout our company.
Lean Six Sigma: Why it Works
The activities that cause the customer’s critical-to-quality (CTQ) issues and create the
longest time delays in any process offer the greatest opportunity for improvement in cost,
quality and lead time. That’s the Principle of Lean Six Sigma (LSS), a problem-
solving toolbox that can help us standardize how our employees approach problems.
Alcan benchmarked similar corporations renowned for beating their competition
and growing their business. We found that the best companies use a standard
toolset. They also use a system for obtaining successful results and implementing
improvement projects to maximize the company’s value.
We have adopted LSS methodology because it maximizes shareholder value by
achieving the fastest rate of improvement in customer satisfaction, cost, quality,
process speed and invested capital.
Six Sigma is one of the most widely used quality improvement methods available
today. It establishes a new set of roles and procedures inside an organization that
work continuously to generate results and maximize value. LSS broadens our
company’s framework of meeting goals and customers’ needs and helps us flourish
in a world where customers expect high quality and fast delivery at minimal cost.
Using Lean Six Sigma in our work areas can:
1. Help our company become more profitable by:
a. Focusing on Customer Needs
b. Growing Revenue
c. Cutting Costs
d. Improving Delivery Time
e. Reducing Inventory
2. Developing valuable job skills
a. Decision Making
b. Problem Solving
c. Teamwork
3. Make our own job and workplace better by getting rid of waste, saving
time and making our work more meaningful
LEANSIXSIGMA
25

30. Lean Six Sigma: Four Keys to Success
Lean Six Sigma helps us put our energies
into solving problems that are important
to our company and our customers. As
this graphic shows, the goal is to Delight
Customers by delivering higher quality
products and service in less time. To
achieve this goal we have to Improve
Processes by reducing variation and
defects that are unacceptable to our
customers and focus on how work flows
through our processes. Our employees
working on this project use Teamwork
and share ideas to solve the problem.
Solution decisions are based on Data
and Facts. All these elements together
create real solutions – one element
alone is not enough.
Delight Customers
The term “Voice of the Customer” (VOC) helps remind us that we must represent
the opinions and needs of all our customers in our decisions about products and
services. Some customers are external, while others, such as the employees inside
the company to whom we hand off work, are internal. For example, our
manufacturing plants are customers of our Research and Development
organization. Whether or not we have contact with external customers, we need
to remember they are the ultimate judges of our company’s goods and services,
and they affect our company’s profit.
Enhancing Quality:
Customers compare our offerings with everything else in the marketplace. Then
they determine what best fits their needs. That’s the reason Lean Six Sigma
projects always begin with trying to figure out what customers will focus on as
they compare us to our competitors.
For example, when shopping for a hotel, some customers equate quality with a
five-star hotel. Others think quality means a motel that is reasonably-priced, clean
and close to the highway. Quality is defined by what the customer wants.
Companies that do the best in the marketplace are the ones that take the time to
view everything through their customers’ eyes and deliver what customers want.
The biggest challenge for us is to become aware that any decisions we make about
service or our products have to start with our customers.
26
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Lean Six
Sigma
Delight
Customers
Q
U
A
L
I
T
Y
S
P
E
E
D
V
A
R
I
A
T
I
O
N
P
R
O
C
E
S
S
F
L
O
W
TEAMWORK
Improve
Processes
Data and Facts

31. Increasing Speed
Customers want quality (no errors) as well as speed
(quick delivery) and low cost (best possible price).
When we implement LSS, it shows us we can’t achieve
any of these goals alone – they all have to be tackled at
the same time.
LSS provides a standardized problem-solving toolset
that incorporates a step-by-step plan that leads to
predictable results. The combination of Lean and Six
Sigma is the most powerful engine available for
sustaining value creation. Using tools within the LSS framework makes it possible
for us to be extremely successful when solving problems and implementing high-
value-added projects.
LSS combines two problem-solving concepts aimed at profitability.
Lean is a discipline that focuses on process speed and efficiency and offers tools
that work to reduce the number of wasteful steps in a process. Six Sigma is an
improvement method that uses data to identify and eliminate process problems.
Its tools help us understand and reduce the variation in processes.
Lean strategies cannot bring a process under statistical control, and Six Sigma
methodologies alone cannot dramatically improve process speed or reduce
invested capital. But combined and used properly, Lean and Six Sigma create a
very powerful improvement mechanism.
LEANSIXSIGMA
27
Lean Six
Sigma
Delight
Customers
Q
U
A
L
I
T
Y
S
P
E
E
D
V
A
R
I
A
T
I
O
N
P
R
O
C
E
S
S
F
L
O
W
TEAMWORK
Improve
Processes
Data and Facts
• Goal – Reduce waste and increase
process speed
• Focus – Identify non value added steps
and causes of delay
• Bias – Quick wins and Kaizen events
Lean
Speed+Low Cost
• Goal – Improve performance on
Customer CTQs
• Focus – Use DMAIC with TQM tools to
eliminate variation
• Method – Management engagement,
1% dedicated as Champions and Black
Belts
Six Sigma
Culture+Quality
Lean Speed Enables
Six Sigma Quality
(Faster Cycles of
Experimentation/Learning)
Six Sigma Quality Enables
Lean Speed
(Fewer Defects Means
Less Time Spent on Rework)
Lean and Six Sigma Concepts

32. Improve Processes
LSS puts a big emphasis on documenting how work
gets done (steps that comprise the process) and giving
people knowledge and methods they need to
constantly improve that work. Most process
improvement methods either eliminate variation or
improve process flow and speed.
Reducing Variation
Everything varies, but the way something varies can
help us understand what is causing that variation. The
pattern of variation can expose the cause of a problem, especially if we know our
customer’s true requirements and how our process variation affects them. The
greater the variation, the greater the chance we are creating defects for the
customer. The language of variation gave rise to the term “Six Sigma.” The Greek
symbol “sigma” is used in statistics to stand for the amount of variation in a
process (process yield), a set of data or anything measured. Understanding
variation and the critical part it plays in satisfying customer needs is at the heart
of our CI efforts.
Low sigma numbers mean low yield, and high sigma numbers mean high yield.
Yield is the % non-defective parts the customer receives. If a process is rated as “6
Sigma” it has a yield of 99.99966%. This represents 3.4 defects per million
opportunities or units produced. To best impact yield, we must focus on reducing
both variation and the number of steps in the process. We use the term Sigma Level
to define the effectiveness of our operation relative to true customer requirements.
28
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Lean Six
Sigma
Delight
Customers
Q
U
A
L
I
T
Y
S
P
E
E
D
V
A
R
I
A
T
I
O
N
P
R
O
C
E
S
S
F
L
O
W
TEAMWORK
Improve
Processes
Data and Facts
±6σ±5σ±4σ±3σ# of Steps
99.986499.07477.946.2940
99.993299.53688.2925.0820
99.996699.76893.9650.0810
99.997699.83995.73361.637
99.99966%99.976799.379%93.32%1
Source: Six Sigma Research Institute, Motorola University, Motorola, Inc.
Six Sigma Improves Quality of Value Added Steps
Lean Six Sigma Drives Quality, Speed and Cost Simultaneously
LeanReducesNon-ValueAddedSteps
Overall Yield vs. Sigma
Six Sigma improves quality, Lean eliminates non-value-added steps in the
value stream — BOTH are required to reduce the cost of process complexity.
Sigma Level as it Relates to Yield and Process Steps

33. Improving Process Flow
Variation is one of the most common sources of process problems, but how work
moves through the system (process flow) also must be addressed. The more steps
or complexity in a process, the greater the chance for a mistake and the more time
it takes. Historically it has shown that 85% of problems are built into the way the
process is designed; only 15% are the fault of an individual.
Teamwork
In today’s business world, we have to work together for maximum gain.
When we gather people from all parts of the process and different departments
and use data, facts and process knowledge, we can get at the root causes of
problems faster. Formal Lean Six Sigma teams are just part of the picture. We also
need an environment that encourages us to work together every day.
Alcan has trained employees in LSS problem-solving methodologies so they can
train others to help increase profitability throughout the organization. The most
experienced trainers, Master Black Belts, train and teach throughout the company.
Black Belts are change agents who help facilitate improvement throughout the
organization. Green Belts receive focused training on a toolbox to help them in
their ongoing projects and to provide a resource in quality and Lean
improvement efforts. White Belts and Yellow Belts are trained to understand CI
and have a framework to work on day-to-day improvement goals.
Employees throughout the company are learning and using Lean Six Sigma
methodologies to meet CI goals. We don’t have to be a Black Belt to work on a
project. All of us can help identify and tackle needed improvements with the LSS
toolsets available to us.
Data and Facts
Data and facts form a true foundation for Lean Six Sigma. Who are our
customers and what do they want? How do our processes vary? What defects can
we identify? We need to base our decisions on fact, not guess work.
LSS concepts are also extremely powerful when we use them to improve the
quality and speed of transactional processes, including those found in our
marketing, human resources, finance, sales, order processing and pricing
departments. LSS projects should occur in these transactional processes because
they support our manufacturing processes, which, in turn, support our
customers.
LEANSIXSIGMA
29

34. • Every organization or company
has many transactional processes.
• The largest potential financial
rewards for companies often
lie in improving their
transactional processes.
• Even traditional
“manufacturing”
companies rely heavily
on critical transactional
processes.
• In addition, many
inefficiencies in
transactional processes
drive follow-on inefficiencies
in manufacturing processes.
Transactional Processes offer some of the greatest improvement opportunities.
Plant Overhead
and Quality
12%
Direct Labor
11%
Material
60%
EBIT
7%Other Operating
Expense and
Depreciation
10%
30
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Transactional Processes
Why Are Transactional Processes Important?
• Often “customer-facing”
• May be the determining factor in whether a customer is satisfied or
dissatisfied
• Represent the major cost or overhead component of many organizations
• Have traditionally received much less attention than manufacturing
processes and are therefore in much more need of improvement
• Represent many of the primary or most critical functions of both
manufacturing and non-manufacturing companies

35. LEANSIXSIGMA
Typical Business Process Projects
• Increase Sales
• Reduce Lab Lead Time
• Reduce New Product Development Lead Time
• Reduce Delivery Time and Delivery Time Variability (to Requested Date)
• Improve Technical Support Response Time and Deployment
• Reduce Purchase Order Lead Time
• Improve the Pricing, Quotation and New Business Development Processes
• Improve the Quality and Consistency of Services Provided
• Improve Response Time for Order Confirmation or Other Customer
Service Tasks
• Reduce Recruiting Lead Time
• Reduce Employee Turnover
• Improve ECN Lead Time
• Improve the Product Sampling Process
• Ongoing Optimization of the Distribution Network
• Reduce Workers Compensation Incidents
• Provide Customers With Better Information (Availability, Delivery Status,
Etc.)
• Back Office Process Improvement – A/R, A/P, Customer Claims
• Improve Management of Price Increases and Contract Changes
• Assess and Improve Customer Satisfaction
• Optimize Distribution System and Transport Equipment Utilization
• Improve Customer or Dealer Network Processes
• Lower Costs of Processing Medical Benefits
31

36. Lean Six Sigma: Making Improvement Jumps to Sustain Long-Term Profitability
Traditional day-to-day business improvements are not rapid or far-reaching
enough to allow us to maintain competitiveness. LSS projects, on the other hand,
help us develop improvement jumps to sustain long-term business profitability.
We try to minimize the number of active projects while we maximize the
allocation of resources to gain the greatest Benefit versus Effort. If we use all the
resources at our disposal to choose projects with the best potential to create big
jumps in productivity and financial return, LSS projects will bring us to new
levels of success.
32
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
“Black Belt” Projects
• top-down initiated
• across departments & plants
Day-to-Day Improvement
• Voice of the Employee initiated
• focused area or department
• incremental improvements
The CI Model is designed to enable both break-through
and incremental improvements.
Time
Improvement
$$$’s
Returned
• Minimize the number of active projects
• Maximize the allocation of resources (intellectual capital) to the projects with the greatest Benefit/Effort
Projects
Projects
8
7
6
5
4
3
2
1
0 10 20 30 40
Weeks
8
7
6
5
4
3
2
1
0 10 20 30 40
Weeks
Additional potential reduction
of cycle time
Resources Spread:
Results Accrue at the end
Resources Focused:
Results accrue as projects complete
Faster lead time is achieved through Project Prioritization
CI Model

37. Lean Six Sigma: Tools to Identify Opportunities and Measure Results
Project Selection Workshop
This tool helps us diagnose process problems or identify improvement projects
that will help us meet our Operating Agenda. The Project Selection Workshop
allows us the chance to review and filter opportunities through different
categorical groups or lenses. This analysis is usually done in a team environment
in which multiple functional groups provide data, input and ideas. Four lenses
help us analyze key business measures for potential projects:
• Voice of the Business (VOB) – Data that reflects financial performance and
related gaps
• Voice of the Customer (VOC) – Data that highlights service, quality and
performance opportunities
• Voice of the Process (VOP) – Data on individual system performance
• Voice of the Employee (VOE) – Bottom-up approach for ideas (includes
Environment, Health and Safety and Regulatory projects)
LEANSIXSIGMA
33
Operating
Agenda
(from MaxVal
Strategy
Development)
Strategic
Agenda
Others
• EHS
• Regulatory
ALCAN
Roadmaps
Process analysis links
the business by
process (versus
functions) and gives
perspective on project
Voice of
Customer
(VoC)
Voice of
Process
(VoP)
Voice of
Business
(VoB)
Identifying gaps in
meeting customer
needs (critical
customer
requirements) provides
ideas for projects
Performing financial
analysis identifies
gaps in performance
to generate project
Bottoms-up ideas
including EHS &
Regulatory Projects
Voice of
Employee
(VoE)
ideas
ideas
Long-List of
Potential CI Projects
Sources
Project Selection Workshop

38. Benefit versus Effort Chart
Our Operating Agenda gives scope to the filtering process, and Alcan CI
Roadmaps help quantify strategic gaps. This background helps us review potential
projects and then prioritize them using a quantifiable method called Benefit
versus Effort analysis. With this analysis, we can apply a simple equation for
reviewing financial or EHS impact versus the amount of time and expense it will
take to complete the project.
34
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
SCREENING POTENTIAL PROJECTS
Highly Desirable
Projects
Identify projects
with highest BENEFIT
and with least amount
of EFFORT
EXAMPLES
OF PROJECTS
BENEFIT
EFFORT
Set-up time reduction
EHS issues
Waste reduction
Productivity improvement
Least Desirable
Potential Projects
Potentially Desirable
Projects
Usually require more
analysis to ensure good
decision making
“Potentially Quick Hits”
Kaizen
Just Do It — Action Plans
Screening Potential CI Projects
Reading the Chart
Projects in the Red Zone
are passed over
Projects in the Yellow
Zone are reviewed to see
if resources should be
assigned
Projects in the Blue Zone
are quick-hit/Kaizen
events
Projects in the Green
Zone are lower-value,
short-term opportunities
– could be Green Belt
or Black Belt projects
Projects in the Grey
Zone are higher-value
opportunities
300
250
200
150
100
50
0
Benefit
Benefit Effort Matrix — EVA vs. Time
1.0 2.0 3.0 4.0
Time
EVA(’000)
Effort
5.0 6.0 7.0 8.0
1
2
8
3
6
7
5
4
9
Legend
BB Project GB Project Kaizen/Quick Wins Discuss NO GO
Using the Benefit versus Effort Chart

39. Lean Six Sigma: Methodology
Define, Measure, Analyze, Improve and Control (DMAIC)
We can use Benefit versus Effort analysis to prioritize potential projects. Only
those with the highest ratio are accepted. A Green Belt or Black Belt resource may
be assigned to the project to assist us in applying a scientific problem-solving
methodology. This Define, Measure, Analyze, Improve and Control methodology,
DMAIC for short (pronounced duh-MAY-ick), consists of five distinct stages of
problem solving.
Our structured LSS approach to identifying and choosing projects allows our
plants and functional groups to develop a prioritized hopper of projects to which
resources can be dedicated.
Every organization thinks it has solved problems only to have them reappear.
These solutions cannot be sustained for long-term benefit. When using the LSS
DMAIC approach, it is important to follow the methodology. If our LSS teams
jump to conclusions about
root causes, we may
implement the incorrect
solution. (LSS teams are
dedicated to solving
problems where the
solution is unknown.
Installation of equipment
or implementations of an
existing Best Practice are
examples of projects that
do not fall under the LSS
approach.)
LEANSIXSIGMA
35
Prioritized by
Management
Team
Assign Project
to Sponsor
and BB/GB
Sponsor
Ensures and
Reviews
Progress
Define Measure Analyze Improve Control
efine project purpose and scope
easure current performance
nalyze causes & confirm with data
mprove by removing variation and
non value-added activities
ontrol gains by standardizing
Results are
Captured and
Sustained
DMAIC is the project
management framework
Project
Candidates
D
M
A
I
C
Sponsor
ensures
deliverables &
checkpoints for
each phase
Structured approach
of project selection
300
250
200
150
100
50
0
Benefit
1.0 2.0 3.0 4.0
Time
EVA(’000)
Effort
5.0 6.0 7.0 8.0
1
2
8
3
6
7
5
4
9
LSS Approach to Identifying and Choosing Projects
All Possible x’s — Variables
y = f(x1+x2+.....xn)
Critical Input Variables
$ $
100+ Inputs
25-30
8-10
3-6
1-3
1st Hit List
Screened List
Found Critical X’s
Controlling Critical X’s
• Process Maps
• Project Charter
• Capability Study
• Measurement Study
• C&E Matrix
• FMEAs
• Multi-Vari Studies
• Design of
Experiments (DOE)
• Control Plans
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROL
y = f(x): Finding the Critical X’s

40. DMAIC is effective at solving problems because it forces a team to use data to:
• Confirm the nature and extent of the problem
• Identify true causes of problems
• Find solutions that evidence shows are linked to causes
• Establish procedure; maintain the solutions even after the project is done
Each phase has requirements the team must fulfill to progress to the next phase. A
Gate Review (see page 55) must be completed as each phase is completed. Phases
start out very general but become more specific as the team drills deeper toward
the potential solution.
DMAIC Phases
36
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Define the opportunity from both
business and customer perspectives
Search for the key factors (critical X’s)
that have the biggest impact on process
performance and determine the root causes
Understand the process
and its performance
Develop improvement
solutions for the critical X’s
Implement the
solution and
control plan
Critical Enablers
• Opportunity Identification and Project Selection
• Project Sponsorship
• Tollgate Reviews
Phases of the DMAIC Process

41. DMAIC: Define Phase
In this first phase, our objective is to develop a project charter and team mandate.
The team is chosen, formalized and then launched. The key is having a focused
scope, a data-driven charter and a well-balanced team with a sponsor dedicated to
solving the issue.
Define Phase Deliverables include:
• Determine VOC
• Determine VOB
• Determine Focus Areas
• Develop Project Charter
I
Scope
I
Goals
I
Key metrics
• Team members
• Map the Process (Suppliers, Inputs, Process steps, Outputs, Customers)
This diagram shows how all required Define Phase Deliverables fit together to
create a complete picture of the work of the team and its goals.
Define Phase Tools
Project Charter
Purpose: The most important step prior to a team getting started is the
establishment of a Project Charter. After the project selection process is complete
and a project has been identified as a priority, then the project sponsor will draft a
Project Charter. This two-to-three-page document describes what the sponsor
wants the team to accomplish. Alcan uses a standard form for this, and every LSS
project must have one.
LEANSIXSIGMA
37
Voice of the
Customer
(VOC)
Voice of the
Business
(VOB)
Focus Areas
Project Charter: Scope, Goals, Metrics, Team
P
Process Map
O CIS
Time Cost GrowthQuality
Define Phase Deliverables

42. Application: This is initiated just before the project launch, but it is a deliverable of
the Define Phase. Sponsor and Project Leader work together on it.
Benefits:
Aligns the project team, determines scope, and proposes timeline, team members,
financials and problems statement to coordinate efforts before the project starts.
38
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
*mandatory sections to be completed by Sponsor
ALCAN Continuous Improvement — Project Charter
Purpose:
The Project Charter purpose is to establish a standardized “contract” between the project sponsor
and the project team. The Project Charter defines the problem – it does not solve it. It is a living
document that could change over the DMAIC phases and should normally not exceed 3 pages.
Admin Data
Project Name:
Business Group: please select
Sector/Unit/Value Center:
Site(s):
Key area(s) to be improved:
EHS Customer Satisfaction Cost
Quality Process Speed Capital Employed
Sponsor:
Sponsor telephone:
CID: please select
CI Champion:
Black Belt:
BB telephone:
Green Belt:
Business Impact *
Q1: Why should we do this project?
Q2a: What is the quantified value
creation of the project according
to ALCAN CI financial
guidelines expressed in EVA $?
Q2b: What is the range of CAPEX?
Q2c: What is the EHS risk
avoidance?
Q3: Which Operating Agenda item
is supported by this project?
Q4: What is the risk that the project
will not succeed?
• Click here to type in for Q1
• Click here to type in for Q2a
• Click here to type in for Q2b
• Click here to type in for Q2c
• Click here to type in for Q3
• Click here to type in for Q4
Opportunity / Problem Statement *
Q1: What is happening (describe in
detail)?
Q2: When did the problem start?
Q3: Where is the problem
occurring?
Q4: What “Pain” are we or our
customers experiencing? Or
what is the magnitude of the
problem?
• Click here to type in for Q1
• Click here to type in for Q2
• Click here to type in for Q3
• Click here to type in for Q4
Project Charter Example

43. SIPOC (Suppliers, Inputs, Process, Outputs, Customers) Diagram
Purpose: The SIPOC Diagram is a high-level process map. This first step in
addressing customer-related issues takes a process view of how our company goes
about satisfying a particular customer requirement.
SIPOC stands for:
Suppliers – individuals or groups who provide whatever is worked on in the
process
Inputs – information or material provided for that step
Process – steps used to do that work
Outputs – product, service or information being sent to the customer
Customers – next step in the process or the final (external) customers
Application: A SIPOC Diagram, a Process Map tool or both can be used during the
Define Phase to scope the project.
Benefits:
• Helps us understand the relationship between customers, inputs, outputs and
process steps
• Helps us understand how the process is measured
• Gives an overall glance at the process to help the team better scope the
project
LEANSIXSIGMA
39
Input Metrics Process Metrics Output Metrics Measurement System
Viscosity
Temperature
Roll Ratio
Roll Gap
Roll Configuration
and Material
Tear
Coat Weight
Appearance
Adhesion
Dart
Scale
Visual
Instron
Quality
Adhesives Supplier Viscosity
Temperature
Run Speeds
Roll Gap
Roll Ratio
Mix
Adhesive
Metering
Roll
Transfer
Roll
Application
Roll
Adhesive Application
Proper Coat Weight
Proper Appearance
Proper Adhesion
Proper Tear
Customer
A
Run Speed
Machine Speed
(ft/min and m/min)
Coat Weight Scale Speed
Process Specification
Process Control
# +/–# lbs/ream
CPK
Process Variation
Process Mean
Performance at Customer
Basis Weight
Scale Cost
Suppliers Inputs Process Outputs Customers
SIPOC Diagram Example

44. Process Map
Purpose: Identifies all the steps in the process, lists key outputs, suppliers,
customers and inputs at each step. Some maps may classify inputs and outputs as
controllable, noise or standard.
Application: A SIPOC Diagram or Process Map should always be done at the first
stages of an LSS project.
Benefits:
Provides valuable input to Cause & Effects matrix, Failure Modes Effects Analysis,
Control Plan, Process Capability studies, Conducting Design of Experiments and
understanding transactional processes.
40
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Solventless Lamination
Process Map
Input Variables Legend
Noise (N) — impact output variables but are
difficult or impossible to control
Controllable (C) — can be changed to see the
effect on output variables
Key (K) — critical inputs statistically shown to
have major impact on variability of outputs
Primary substrate (N)
Unwind tension (C)
Roll orientation (K)
Roll O.D. setting (C)
Webguide setting (C)
Speed (C)
Power setting (K)
Intimate contact
substrate to
backup roll (K)
Correct tension (C)
Speed (C)
Temperature
controller setting (K)
Correct treatment
Correct tension
Primary
Treater
Pre-heated substrate
Flat substrate
Correct orientation
Alignment w/coating deck
Correct tension
Primary
Substrate
Pre-heat
Primary
Unwind
Secondary substrate (N)
Unwind tension (C)
Roll orientation (K)
Roll O.D. setting (C)
Webguide setting (C)
Speed (C)
Power setting (K)
Intimate contact
substrate to
backup roll (K)
Tension setting (C)
Speed (C)
Correct treatment
Correct tension
Secondary
Treater
Flat substrate
Correct orientation
Alignment w/coating deck
Correct tension
Secondary
Unwind
Inputs Output Inputs OutputProcess Step Process Step
Process Map Example

45. DMAIC: Measure Phase
Measurement helps LSS succeed when other approaches fail. Without data,
projects can become short-lived or provide disappointing results.
In this DMAIC phase, we need to establish an accurate baseline measurement to
determine project improvements. Identifying process constraints is key.
Measure Phase Deliverables may include:
• Identify the key process
output variable – “Y”
• Calculate total Process
Lead Time
• Develop Data Collection
Plan
• Perform Measurement
System Analysis
• Develop Control Charts
• Determine Process
Capability
• Establish Measurement
Baseline
• Identify Quick Improvement
opportunities
Measure Phase Tools
Value Stream Map
Purpose: A Value Stream Map shows the materials and information flow along
with detailed process information. The goal for the project illustrated in our
sample map is to improve lead time. This map (see page 42) highlights areas in
which operations can be sped up and potential areas where waste exists in the
process.
Application: Used during the Measure Phase of a project to help us understand the
current state of the process and the source of waste.
LEANSIXSIGMA
41
Late Invoice
Cause Checksheet
Category
Totals
No Order Form
Customer Data
Missing
Taxable
Question
Order/P.O.
Discrepancy
Weekly Total
1
9
2
Weeks (01, Month 1)
4
3
6
4
6 25
9
Misfile and
Other
6
4
3
3
Data Collection Plan Example

46. Benefits:
• Provides understanding of how the current process works
• Communication of the current process
• Highlights inefficiencies and waste
• Reference document for the team and for discussion
• Highlights possible quick wins for process improvements
Measurement System Analysis (MSA)
Purpose: This is a statistical technique used to determine the ability of a
measurement system to measure a process precisely and accurately.
Two sources of variation can occur when measuring process output: part-to-part
variation and measurement system variation.
If measurement system variation is large compared to the part-to-part variation,
few conclusions can be drawn.
Application: First, validate the accuracy of the measurement system against a
known standard (if available). Second, validate the precision and discrimination
of the measurement system with a Gauge Repeatability and Reproducability
study. If the measurement system is not capable, the baseline data may be
misleading. After passing MSA, process control and capability can now be used to
determine the stability and capability of the process.
42
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Total Process Lead Time
DistributionAssembly 2Assembly 1Forge Machine
•Raw castings
•Daily schedule
•Forged material
•Daily schedule
•Forgings, bolts, nuts, washers
•Daily schedule
•Assy 1, o-ring, bearing, snap ring
•Daily schedule
Receiving/Warehouse
Customer
I
I I I I1 1 1 1
•Assy 2
•Daily schedule
1
MACHINING
& ASSEMBLY
Order, Daily, Fax
CUSTOMER
SERVICE
PURCHASING
100 pcs
I
100 pcs
I
C/T = 30 Sec
C/O = 30 Min
Uptime 95%
Batch Size 100
P/T = 20 Sec
C/T = 45 Sec
C/O = 60 Min
Uptime 80%
Batch Size 100
P/T = 35 Sec
C/T = 60 Sec
C/O = 5 Min
Uptime 95%
Batch Size 100
P/T = 50 Sec
C/T = 50 Sec
C/O = 10 Min
Uptime 95%
Batch Size 100
P/T = 40 Sec
1
Assembly 1Assembly 1
1000 pcs 5000 pcs 100 pcs 200 pcs
20 sec 50 sec35 sec 40 sec
92.1 hours23.7 hours 1.6 hours 3 hours
Processing time
= 145 seconds
Production lead time
= 122.3 hrs
1 1 1 11
MACHINING
& ASSEMBLY
CUSTOMER
SERVICE
PURCHASING
100 pcs
1.8 hours
I I I
I I I I
Work Orders, Daily Release, Paper
Quick
Improvement
20,000 pcs/mo
Module=100
1/Week
MRP MRPMRP 20,000 pcs/mo
Module=100
Receiving/Warehouse
Customer
Work Orders, Daily Release, Paper
Order, Weekly (5-day), Fax
Forecast, 90/60/30 Day, Fax
SUPPLIER
2/Day
MACHINING
& ASSEMBLY
Forecast, 6 Month, Fax
Order, Daily, Fax
CUSTOMER
SERVICE
PURCHASING
Current State Value Stream Map Example

47. LEANSIXSIGMA
43
Percent
Part-to-PartReprodRepeatGauge R&R
500
250
0
% Contribution
% Study Var
% Process
% Tolerance
SampleRange
0.010
0.005
0.000
_
R = 0.00341
UCL = 0.00879
LCL = 0
21
SampleMean
0.43
0.42
0.41
=
X = 0.41882
UCL = 0.42232
LCL = 0.41533
21
Part
10987654321
0.43
0.42
0.41
Operator
21
0.43
0.42
0.41
Part
Average
10987654321
0.43
0.42
0.41
Operator
1
2
Gauge name: Basis Weight Scale
Date of study: 12-14-04
Reported by: Halden Zimmermann and Brad Schobert
Tolerance:
Misc:
Components of Variation
R Chart by Operator
Xbar Chart by Operator
Response by Part
Response by Operator
Operator * Part Interaction
Operator
Differences
Gauge R&R (ANOVA) for Response
Two-Way ANOVA Table Without Interaction
(Poor Gauge R and R result)
Source DF SS MS F P
Part 9 0.0012753 0.0001417 20.1038 0.000
Operator 1 0.0000336 0.0000336 4.7670 0.034
Repeatability 49 0.0003454 0.0000070
Total 59 0.0016543
Gauge R&R %Contribution
Source VarComp (of VarComp)
Total Gauge R&R 0.0000079 26.12
Repeatability 0.0000070 23.20
Reproducibility 0.0000009 2.91
Operator 0.0000009 2.91
Part-To-Part 0.0000224 73.88
Total Variation 0.0000304 100.00
Study Var %Study Var %Tolerance %Process
Source StdDev (SD) (6 * SD) (%SV) (SV/Toler) (SV/Proc)
Total Gauge R&R 0.0028167 0.0169000 51.11 1126.67 216.67
Repeatability 0.0026549 0.0159294 48.17 1061.96 204.22
Reproducibility 0.0009408 0.0056446 17.07 376.31 72.37
Operator 0.0009408 0.0056446 17.07 376.31 72.37
Part-To-Part 0.0047373 0.0284239 85.95 1894.93 364.41
Total Variation 0.0055114 0.0330686 100.00 2204.57 423.96
Number of Distinct Categories = 2
Gauge Repeatability and Reproducibility Output Example
Greater than 30%
represents poor
R&R. In this case,
operator is the issue
should be 4 or more

48. Benefits:
• Determines if the measurement system can adequately discriminate between
different parts
• Identifies the source of the variation in measurements (i.e., operators, testing
methods)
Control Charting or Statistical Process Control (SPC) Tool
Purpose: The concepts of Statistical Process Control (SPC) were initially
developed by Dr. Walter Shewhart of Bell Laboratories in the 1920s and were
expanded upon by Dr. W. Edwards Deming, who introduced SPC to Japanese
industry after WWII. After early successful adoption by Japanese firms, Statistical
Process Control has now been incorporated by organizations around the world as
a primary tool to improve product quality by reducing process variation.
Dr. Shewhart identified two sources of process variation. Chance variation is
inherent in process and stable over time, and Assignable or Uncontrolled variation
is unstable over time. Assignable or Uncontrolled variation is the result of specific
events outside the system. Dr. Deming relabeled chance variation as Common
Cause variation and assignable variation as Special Cause variation. Based on the
laws of statistics and probability, Dr. Shewhart and Dr. Deming devised control
charts to plot data over time and identify both Common Cause variation and
Special Cause variation.
A Control Chart is a specialized time series plot designed to identify abnormal
patterns of variability in a process. The X-bar & R-charts are probably the most
commonly used control charts.
Application: Use with time-ordered sample data to identify an important quality
characteristic.
44
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
X-bar/R-Chart for Output
RangesMeans
X = 69.80
R = 10.96
3.0SL = 76.12
–3.0SL = 63.48
3.0SL = 23.17
–3.0SL = 0.000
3020100Subgroup
6
77
72
67
62
20
10
0
Control Chart Example

49. Benefits:
Control Charts can help answer questions such as:
• Is my process (machine/operator) stable?
• Is the process average in control?
• Does the process average remain consistent between subgroups?
• What is the variability in the manufacturing process?
Process Capability
Purpose: Process Capability (Cp, Cpk) analysis is used to determine how capable a
process is of producing parts that are on target and/or within specification limits.
It is measured using these two Process Capability ratios:
Application: Use Process Capability (Cpk, Cp) analysis after a process is verified to
be in control. Use it to understand the ability of a process to stay within a certain
specification. This is best done in the Measure Phase as a baseline for the project.
LEANSIXSIGMA
45
Equations
for Process
Capability
1.201.080.960.840.720.60
LSL USL
Process Data
Sample N 40
StDev(Within) 0.132297
StDev(Overall) 0.13301
LSL 0.65
Target *
USL 1.1
Sample Mean 0.9605
Potential (Within) Capability
CCpk 0.57
Overall Capability
Pp 0.56
PPL 0.78
PPU 0.35
Ppk 0.35
Cp 0.57
Cpm *
CPL 0.78
CPU 0.35
Cpk 0.35
Observed Performance
PPM < LSL 25000.00
PPM > USL 100000.00
PPM Total 125000.00
Exp. Within Performance
PPM < LSL 9462.73
PPM > USL 145839.06
PPM Total 155301.79
Exp. Overall Performance
PPM < LSL 9787.27
PPM > USL 147137.28
PPM Total 156924.55
Within
Overall
Process Capability of Boscobel
Process Capability Analysis Example

50. Benefits:
Use Process Capability analysis to answer questions such as:
• What is the variability in the manufacturing process?
• Is this new equipment performing as expected?
• Which vendor or process should I use?
• What is the predicted process performance?
• What process modifications would be helpful?
• What tolerances should be set along the way so that the final product meets
specifications?
DMAIC: Analyze Phase
This phase makes sense of all the information and data collected in the Measure
Phase and uses that data to confirm the source of delays, waste and poor quality.
Here, the challenge is to stick to the data and identify the few critical Cause-and-
Effect relationships that explain how most of the key process input variables (X’s
or root causes of failures) and key process output variables (Y’s) relate to one
another.
Analyze Phase Deliverables typically include:
• Identify the key process input
variables – “x’s”
• Use LSS tools to perform root cause
analysis to identify Critical “X’s”
• Cause & Effect matrix
• Failure Modes and Effect Analysis – FMEA
• Analysis of Variance – ANOVA
• Main Effects charts
• Regression analysis
46
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Critical “X’s”
Trivial Many X’s
X X X X X
X X X

51. Analyze Phase Tools
Cause and Effects Matrix
Purpose: This tool is used to understand and satisfy customer needs. It does so by
transferring often vague and general requirements into process parameters. The
tool helps the team develop an understanding of the greatest sources of variation
within the process and pinpoints the critical few key process input variables
(KPIVs) that must be addressed to improve the key process output variables
(KPOVs).
• A cause and effect matrix relates process steps to inputs and correlates to
process outputs.
• Customer requirements are ranked by order of importance, and then inputs
and outputs are rated by their interaction impact.
• It relates the key inputs to the key outputs (customer requirements) using the
process map as the primary source.
Application: It should be used to prioritize process input variables (X’s). This is
usually done with large processes prior to performing an FMEA. It helps narrow
the choice of FMEA project area.
Benefits:
• Obtain Pareto of key process inputs to be evaluated in: FMEA, Control Plan
and Process Capability.
• Structured way to understand and satisfy customer’s needs.
LEANSIXSIGMA
47
3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
7 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Customer: End User, Inner Plant (Slitter, etc.), Inter plant, Extrusion Depts
3 3 2 3 2 3 3 2 2 2 1 2 1 2 3 1 3 3 3 3
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Process Step Process Input
1 Unwind Substrate 1 1 1 1 1 1 3 3 3 3 1 1 1 1 3 3 3 3 7 3
Unwind Roll Size 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 7 1 7 3
Unwind Unwind tension 1 1 1 1 1 1 1 7 1 1 7 3 1 1 7 3 1 1 1 1
Unwind Print quality 1 1 1 1 1 1 7 1 1 7 1 1 1 1 1 1 1 1 3 3
Unwind Splice method 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 7 1 3 3
Unwind Speed match 1 1 1 1 1 1 1 3 1 1 1 1 1 1 7 1 1 1 1 3
Unwind Edge guide 1 1 1 1 1 1 1 1 1 1 3 1 1 3 1 1 1 3 3 3
Unwind Splice marking 1 1 1 3 1 1 1 1 1 1 1 1 1 1 1 1 1 7 1 1
Unwind Type of tape 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 7 1 1 3
Unwind Web cutting mechanism 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 7 1 1 3
Unwind Roll structure 1 1 1 1 1 1 1 1 3 1 1 1 1 1 3 1 3 3 1 1
Unwind Roll wind 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 7 1 1 1
Unwind Surface tension 1 1 1 7 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Unwind Unwind direction 1 3 1 3 1 1 1 1 1 1 1 1 1 1 1 1 3 1 1 1
Unwind Splice tape location 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 1 1
Unwind Film gage 1 1 1 1 3 1 1 3 1 1 3 1 1 1 1 1 1 1 1 1
Unwind Orientation 1 1 1 3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Unwind Web center 1 1 1 1 1 1 1 1 1 1 3 1 1 1 1 1 1 1 1 1
Unwind Brake tension 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
4 Treater Power setting (watts density) 3 3 1 7 1 1 3 1 1 1 1 1 1 1 1 1 1 1 3 1
Treater Electrode gap 3 3 1 7 1 1 3 1 1 1 1 1 1 1 1 1 1 1 3 1
Treater Correct set-up 3 3 1 7 1 1 3 1 1 1 1 1 1 1 1 1 1 1 3 1
Treater Treater roll condition 3 3 1 3 1 1 3 1 1 1 1 1 1 1 1 1 1 1 3 1
Treater Mode of operation (Manual) 1 3 1 3 1 1 1 1 1 1 1 1 1 1 1 1 3 1 3 1
Treater Proper exhaust function 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 7
Treater Electrodes operational 1 1 1 3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 1
Treater Unwind output 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Rating of Importance to Customer
1 = Low 2 = Medium 3 = High
Cause and Effects Matrix (C and E Matrix) Example

52. Fishbone Diagram and Five (5) Why Analysis
Purpose: Several logical names refer to the figure shown here: Ishikawa Diagram,
Cause and Effect Diagram, Fishbone Diagram and Root Cause Analysis. K. Ishikawa
invented the tool and first used the technique in the 1960s. Cause and Effect also
aptly describes the tool because it captures the causes of a particular effect and the
relationships between cause and effect. Fishbone describes how the diagram looks
on paper. Lastly, it is used to find root causes of problems. The diagram highlights
six categorical groups in which the possible root cause of a problem may occur.
The 6 “Ms” are Man, Method, Machine, Material, Measurement and Mother
Nature (Environment).
A completed diagram can help any team evaluate which items on the chart have
the highest likelihood of contributing the most to the root cause of a failure. The
team should pick three high-potential items from the diagram and then conduct a
Five (5) Why Analysis, drilling further into the root cause of the problem.
48
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Effect: Too many price
adjustments at
check-out
Machine / Measurement Method
Material / Mother Man
Updates
Not enough staffing
during peak times
Discovery of
different discount
rates occurs too
late in processComputer screens
Billing process
not accurate
Too many “jumps”
between screens
needed to get simple
tasks doneMaster customer
discount table not
up-to-date
Incomplete Training
on common
complaints
Unfamiliarity with procedures
Too many problems
require management
sign offs for
resolution Marketing
offer not clear
Notification of
absence
For vacation
notification
Policies unclear
Fishbone Diagram Example

53. Five (5) Why Analysis
In a Five (5) Why Analysis, team members ask “why” five times to get to the root
cause. Asking why repeatedly causes team members to change the outlook on the
root cause. The effort focuses on the failure in such a way that corrective action
becomes more obvious.
Application: Used during the Analyze Phase or anytime the root cause of a
problem needs to be understood. Can be done in the office or manufacturing cell
with operators.
Benefits: Understanding the true root cause to a problem is the most important
step to fixing it. This method allows everyone to have input and gives structure to
the review. LEANSIXSIGMA
49
Ask “Why?” 5 Times
1. Why? Users keep too many large files as email
attachments
2. Why? Users don’t know that this results in an
extra charge to the company
3. Why? Email policy not communicated
4. Why? Official email policy not defined
5. Etc….
Computer Storage Costs Too High
1. Why?
2. Why?
3. Why?
4. Why?
5. Why?
Five (5) Why Analysis Example

54. Failure Modes Effects Analysis (FMEA)
Purpose: Failure Mode and Effects Analysis (FMEA) is a tool used to prioritize
potential corrective action on failure modes based on their severity, expected
frequency and the likelihood of detection. An FMEA can be performed on a
design or a process and is used to prompt actions to improve product designs or
minimize process risk. This is an excellent vehicle to prioritize and organize CI
efforts into areas that offer the greatest potential return.
Application: Used during the Analyze Phase, Control Phase or the start of a new
product launch.
Benefits:
• Identifies the ways in which product or process can fail
• Estimates the risks associated with specific causes
• Prioritizes the actions that should be taken to reduce the risk
• Helps evaluate the control plan
DMAIC: Improve Phase
Here the team develops potential solutions for the prioritized, validated Root
Causes uncovered in the Analyze phase. The team also optimizes solutions to
reduce risk and enhance impact. Members develop a vision of the future state and
then outline an implementation plan to get there. When ready, team members
pilot the best solutions.
50
CONTINUOUS IMPROVEMENT REFERENCE GUIDE
Process
Step/Input
Potential Failure
Mode
Potential Failure
Effects
Severity Potential Causes Occurrence
Current
Controls
Detection Risk Priority Number
Actions to be
Commended
What is
the input?
What can go
wrong with
the input?
What is the
effect on the
outputs?
How
bad?
What are the
causes?
How
often?
How can this
be found?
How
well?
What
can be
done?
Process
Step/Input
What is the
process step
and input
under
investigation
?
Fill carafe
with water
Potential
Failure Mode
In what ways
does the Key
Input go
wrong?
Wrong
amount of
water
Potential
Failure Effects
What is the
impact on the Key
Output Variables
(Customer
Requirements)?
Coffee too strong
or too weak
Potential
Causes
What causes
the Key Input
to go wrong?
Faded level
marks on
carafe
Current Controls
What are the existing
controls and
procedures
(inspection and test)
that prevent either the
cause or the Failure
Mode?
Visual inspection
Water spilled
from carafe
None
Water too
warm
Coffee too strong Faucet not
allowed to
run and cool
Finger
Actions
Recommended
What are the
actions for
reducing the
occurrence of the
cause, or
improving
detection?
Replace carafe
Resp.
Mel
Actions
Taken
What are the
completed actions
taken with the
recalculated RPN?
Carafe replaced
Train employees Flo Employees trained
Train employees Flo Employees trained8
8
8
S
E
V
E
R
I
T
Y
8
5
4
O
C
C
U
R
A
N
C
E
4
9
4
D
E
T
E
C
T
I
O
N
256
360
128
R
P
N
8
8
8
S
E
V
E
R
I
T
Y
9662
11272
2431
O
C
C
U
R
A
N
C
E
D
E
T
E
C
T
I
O
N
R
P
N
FMEA
Failure Modes Effects Analysis (FMEA) Example

55. Improve Phase Deliverables include:
• Confirm Critical X’s
• Develop potential solutions
• Select solution
• Create Future State Value Stream Map
• Optimize solution
• Pilot solution
I
Setup Reduction
I
Total Productive Maintenance
I
Replenishment Pull System
I
Design of Experiment
I
Team confirms proposed solution will achieve desired results
Improve Phase Tools
Future State Value Stream Map
Purpose: The purpose of the Future State Value Stream Map is to highlight sources
of waste by comparing this map to the Current State Value Stream Map created in
the Measure Phase and revisited in the Improve and Analyze phase. The Future
State map reflects a vision for change and shows how elimination of waste in the
future will affect the process. The goal is to build a chain of production in which
the individual processes are linked to their customer(s) either by continuous flow
or pull. Each process gets as close as possible to producing only what the
customer(s) need(s) on schedule.
Application: Used in the Improve Phase when the team is ready to pilot the
solution. It allows for the entire team to understand what needs to be done to
make the improvement.
LEANSIXSIGMA
51
SUPPLIER
DistributionAssemblyAssemblyMachine Machine
Warehouse
Receiving
Customer
Kanban
FIFO FIFO11
Production
Control
MACHINING
& ASSEMBLY
CUSTOMER
SERVICE
PURCHASING
20,000 pcs/mo
Module=100
SUPPLIER
DistributionAssemblyAssemblyMachine Machine
Warehouse
Receiving
2/Day
Daily
Customer
C/T = 30 Sec
C/O = 30 Min
Uptime 95%
Batch Size 100
C/T = 45 Sec
C/O = 10 Min
Uptime 95%
Batch Size 100
C/T = 60 Sec
C/O = 5 Min
Uptime 95%
Module Size100
C/T = 50 Sec
C/O = 10 Min
Uptime 95%
Module Size 100
200 pcs 500 pcs
Max 100
pcs
Max 200
pcs
20 sec 50 sec35 sec 50 sec
3.0 hours 9.2 hours 1.6 hours
Processing time
= 145 seconds
3.0 hours
Production lead time
= 16.9 hours
Kanban
Kanban
Daily
O
rder
Via
paper
Kanban
Kanban
Kanban
1 1 1Set-up ReductionTPM
Production
Control
MACHINING
& ASSEMBLY
Forecast, 6 Month, Fax
Order, Weekly (5-day), Fax
Forecast, 90/60/30 Day, Fax
Order, Daily, Fax
CUSTOMER
SERVICE
MRP
PURCHASING
MRP
DOE
Future State Value Stream Map Example