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Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
Microsoft PowerPoint - (3)Julie Brignac
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Microsoft PowerPoint - (3)Julie Brignac

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  • 1. Achieving Realistic Business Goals by Defining Project Benefits Julie Brignac Vice President – Quality and Six Sigma Brambles Industries Limited October 2006
  • 2. Discussion Items Who is Brambles? Who is Julie? How does she know about project benefits? What can she share with me to help me better capture benefits in my organization? Copyrighted Material – Brambles 2006
  • 3. Who is Brambles? 1875 Walter Brambles began his career in Newcastle, north of Sydney, Australia 1925 Private company WE Bramble and Sons Ltd first formed 1954 Brambles Industries Limited first listed in Australia 1958 Commonwealth Handling Equipment Pool (CHEP) purchased by Brambles from the Australian Government 1975 CHEP’s international expansion began in the UK by means o joint venture between Brambles and GKN plc 1999 Records management established as an international busines under a global brand, Recall. 2005 Unify its dual-listed companies structure by the creation of a new single holding company focused on its premium growth businesses, CHEP and Recall. All other businesses divested. Copyrighted Material – Brambles 2006
  • 4. Company Statistics Headquartered in Sydney, Australia Major offices in Orlando, Florida; Atlanta, Georgia and London Dual Listed on Australian and London stock exchanges Approximately 13,000 employees in over 45 countries FY06 Revenues = US $3.5B Copyrighted Material – Brambles 2006
  • 5. Who is Julie? Read the biography, BUT…………. 15 years experience between • DuPont • Honeywell (AlliedSignal) • Newell Rubbermaid (Sanford Brands) Supply Chain Management, Sourcing, Operations & Manufacturing, Six Sigma Copyrighted Material – Brambles 2006
  • 6. How does she know about Project Benefits? Early career in DuPont with Malcolm Baldrige focus on process improvement – Engineering Finance & Project Management AlliedSignal Honeywell – Learned Six Sigma and Lean Supply Chain Operations career until………. – Director, Six Sigma – Integrated Supply Chain (Honeywe – Six Sigma Deployment Leader (CHEP) – VP Purchasing/Material Productivity (Newell/Sanford) – VP Quality & Six Sigma (Brambles) Copyrighted Material – Brambles 2006
  • 7. How does she know about Project Benefits? Process excellence experience from DuPont Early learnings supporting capital and maintenance projects in Finance Manufacturing and Operations based experience driving Six Sigma and Lean excellence Started driving (re)deployments to revitalize or institutionalize in organizations Had to define each organization’s success around project benefits – Depending on the unique key metrics Copyrighted Material – Brambles 2006
  • 8. IMPACTing Business Improvement Equipment Pooling Document Management Quality and Business Improvement Copyrighted Material – Brambles 2006
  • 9. What is IMPACT? Give Brambles a single identity to describe our business improvemen efforts and commitment to world class excellence Involve ALL projects for all functions that drive improvement in the business Include a new consolidated focus on project management skills Standard methodology with varying toolsets, such as Six Sigma and Lean, depending on the area, activity and need in the business Total Quality and Project Management Expertise – not just Six Sigma or LeanSig Copyrighted Material – Brambles 2006
  • 10. IMPACTing Project Benefits First……….. UNDERSTAND your businesses main drivers and metrics Develop a path and link your projects ultimately to those metrics Second………… Encase your project benefits definitions around your organizational structure – e.g., IMPACT involves all projects (6 sigma, Lean, IS, Just-Do-I so validation and guidelines must address all of those items Copyrighted Material – Brambles 2006
  • 11. How can this help me? Key elements to developing a good project benefit infrastructure Develop a global council to define definitions and models Develop company wide project benefit guidelines that link t your business’ KPIs Develop a matrixed network of financial representatives ACCOUNTABLE for projects in their respective areas Designate a global focal point for the network to drive the efforts and hold the businesses accountable – Who has the final word!!!!! Copyrighted Material – Brambles 2006
  • 12. How can this help me? More key elements to developing a good project benefit infrastructure Define what a project is Have a consistent Project Governance Process Support an electronic central project repository that mirrors your governance process Build a process that defines a reconciliation process project benefits to the business’ bottom line (or not) Copyrighted Material – Brambles 2006
  • 13. Key Definitions Benefits Assessment – the process of ensuring that benefits are included on project requests that they are correctly and consistently calculated, and that the requestor understands the financial impact in the validation process. Benefits Validation (tangible) – the process of reconciling project benefits from a completed project to the financials or metrics to ensure project benefit delivery. Benefits Validation (intangible) – the process of reconciling project benefits from a complete project to business metrics wherever possible to ensure project benefit delivery. Tangible Benefits – benefits that impact the financials, improve productivity, or change cash f All are measurable and can be validated and reconciled. Intangible Benefits – benefits that may or may not be measurable or validated after project completion. Copyrighted Material – Brambles 2006
  • 14. Key Definitions Baseline – prior year data that is used as a basis to compare data resulting from a completed project to determine the benefit delivered. In some cases, it may be applicable to use budget data as a baseline to forecast anticipated benefits. EVA – the value generated by a business / project over and above the total cost of all capital it uses to generate that value. EVA = EBITA – Capital Charge Completed Project – Project Sponsor has agreed that the project is complete and has formally signed off. Savings (Productivity) – Baseline data from previous year versus current year data Example: if $10 is spent in 2003 and $9 is spent in 2004, there is a $1 cost savings, excluding any capital costs and/or charges. If there are capital costs and charges, then the productivity is defined as the net savings calculated. Copyrighted Material – Brambles 2006
  • 15. Benefit Categories – Tangible Tangible Benefits – benefits that impact the financials, improve productivity, or change cash flow. All are measurable and can be validated. Revenue Growth – Projects that improve operating margin due to incremental revenue from volume or price increases Cost Savings / Reductions – Projects that result in year-over-year savings or cost reduction Asset Productivity – Projects that improve the utilization of current assts (i.e., process or productivity enhanced so that capital expenditures for new assets are avoided) Capital Expense Reduction or Working Capital – Projects that improve working capital (inventory, receivables, payables) Copyrighted Material – Brambles 2006
  • 16. Benefit Categories – Intangible Benefits Intangible Benefits – benefits that may or may not be measurable or validated after project completion. Risk Mitigation – Projects that reduce a business risk or threat and may or may not have a direct financial impact (can impact all benefit categories) Cost Avoidance – Improvements are made that avoid additional costs to the current process, but do not take cost out of the process or have a direct financial impact (can impact all benefit categories) Customer Satisfaction – Projects that improve customer satisfaction, but often have no measurable impact on financials or metrics Controllership – Projects that deliver process improvements or other improvements that have no measurable benefits Copyrighted Material – Brambles 2006
  • 17. Project Benefit Guidelines Purpose The intent of this document is to give Quality Project Leaders and Financial Approvers in all Brambles business units guidelines to understand project benefit categories, t process for assessing benefits in a project, and the calculation of project benefits. These guidelines apply to all Brambles Quality projects worldwide. Copyrighted Material – Brambles 2006
  • 18. Sample Guideline Contents Definitions Project Benefits Process & Roles General Rules Benefit Categories & Calculations Tools & Templates Copyrighted Material – Brambles 2006
  • 19. Project Benefit Network To provide project resources specific contacts who are responsible for validating their project benefits per the guidelines Roles and Responsibilities Project Governance Process should dictate a project benefit assessment at: – Charter stage Build initial benefits model – Periodic auditing throughout project to clarify benefits – Final signoff by Finance of validated benefits • Reconciliation to P&L, if applicable Copyrighted Material – Brambles 2006
  • 20. Sample Project Benefit Network PROJECT BENEFITS NETWORK Region Person Position Assists With: Final Approv US Mickey Mouse CFO Minnie Mouse Dir, F&P HR, Legal, Mktg, Finance X Daisy Duck Dir, Sales Finance Sales, Customer Svc Donald Duck Dir, Ops Finance Ops, Log, Asset Mgt Goofy Dir, Finance IS EU Pluto CFO Chip Dir, Finance All Functional Areas X AME Dale Dir, Finance X Cinderella Financial Analyst All Functional Areas AP Snow White Dir, Finance X Grumpy Com'l Mgr All Functional Areas CA Sneezy Dir, Finance All Functional Areas X LATAM Bashful Dir, Finance All Functional Areas X Copyrighted Material – Brambles 2006
  • 21. Global Focal Point In Brambles, there is a Director – Project Benefit Controll that reports to corporate Quality organization If your organization is not corporately centralized, then suggest building a global council with rotating leadership every 18-24 months to keep the network accountable ACCOUNTABILITY, ACCOUNTABILITY, ACCOUNTABILITY Copyrighted Material – Brambles 2006
  • 22. Define what a project is If you have 30,000 employees in your company, you have 30,000 different definitions of what a project is Important to clarify because……. Determine whether an effort needs to travel through th governance process – Hence requiring benefit validation Also helps determine which projects go into your central project repository Copyrighted Material – Brambles 2006
  • 23. Consistent Project Governance Process Generic Project Cycle Track Project Benefit Project Project Project work and Charter Assessment Approval Complete (controls & tollgates) Report Benefits Reporting and Analysis Where Does Project Benefit Leadership Support? (And, what’s in it for me?) Copyrighted Material – Brambles 2006
  • 24. Consistent Project Governance Process Generic Project Cycle Track Project Benefit Project Project Project work and Charter Assessment Approval Complete (controls & tollgates) Report Benefits Reporting and Analysis Guidance with • Ensure benefits Assist with • Track and defining are included potential changes report bene benefits and calculated in benefits estimate Copyrighted Material – Brambles 2006
  • 25. Track and Report Project Benefits Generic Project Cycle Track Project Benefit Project Project Project work and Charter Assessment Approval Complete (controls & tollgates) Report Benefits Reporting and Analysis What Does This Really Mean? Copyrighted Material – Brambles 2006
  • 26. Track and Report Project Benefits Generic Project Cycle Track Project Benefit Project Project Project work and Charter Assessment Approval Complete (controls & tollgates) Report Benefits Category Category Category Category 4 3 2 1 Benefits Benefits Benefits Active Submitted Assessed Cultivation Savings Phases Categorized …. Copyrighted Material – Brambles 2006
  • 27. Track and Report Project Benefits Generic Project Cycle Track Project Benefit Project Project Project work and Charter Assessment Approval Complete (controls & tollgates) Report Benefits Category Category Category Category 4 3 2 1 Benefits Benefits Benefits Active Submitted Validated Cultivation Savings 10 projects 5 projects 30 projects 15 projects $100 k benefits $ 500 k benefits $ 2.5 m benefits $ 3.0 m benefits Projects Tracked Throughout the Pipeline … Copyrighted Material – Brambles 2006
  • 28. Track and Report Project Benefits Generic Project Cycle Project Reporting Delivered Track Project Benefit Project Project Project work and Charter Assessment Approval Complete (controls & tollgates) Report Benefits Category Category Category Category 4 3 2 1 Benefits Benefits Benefits Active RECAL Submitted Validated Cultivation Savings BRAMBLES # Projects submitte # Projects validated 10 projects 5 projects 30 projects 15 projects # Projects WIP # Projects complete $100 k benefits $ 500 k benefits $ 2.5 m benefits $ 3.0 m benefits Monthly benefit $ Projected benefit $ Copyrighted Material – Brambles 2006
  • 29. Electronic Project Repository Requirements Web-based access for all business units Lifecycle management for all projects Estimating model, particularly for capital intensive projects Robust reporting including project dashboard, including benefit analysis 12-month forecasting of project benefits for active and pending projects MUST have governance process in place prior to system A system will not drive your process The system must MIRROR your process and meet your requirements Don’t think of the system as antidote for your lack of processes Copyrighted Material – Brambles 2006
  • 30. Financial Reconciliation (or not) Significance of building a model and process to reconcile the benefi to the bottom line Refer back to definitions Tangible vs. Intangible Not the same thing as Hard vs. Soft benefits Key things to consider: Big arguments can occur regarding benefit buckets! – Emphasizes importance of guidelines, global focal point(s) and reconciliation to P&Ls It’s ok if everything doesn’t fall to the P&L – But you then understand better what does fall and what doesn’t Copyrighted Material – Brambles 2006
  • 31. Quick Reference Guide Svgs Savings Not Visible in Financial Savings Compared t Compared to Statements Period Actual Repo Expected Productivity Plan/Fcst Project Opportunities Financial Result (Reduce Financial Non non-value (Cost Financial added) Avoidance) Cost Revenue Cost Increase Volume X venue Growth Increase Price X Decrease Direct Exp X st Savings / Reductions Decrease O/H Exp X Reduce Inventory X set Productivity / Capital Expense / Working Capital Reduce Receivables Increase Payables k Mitigation Mimimize Risk X Reduce Planned Costs X st Avoidance Avoid Unplanned Costs X stomer Satisfaction Increased Sat. Cust. X X ntrollership Process Improvement X X Copyrighted Material – Brambles 2006
  • 32. Summary Define your organization that will be benefit assessed Have a central governing council and focal point for project benefits Important to have project benefit guidelines and a network corporate wide so everyone talks the same language and reports the same way Let the process govern the system, not vice versa Copyrighted Material – Brambles 2006
  • 33. THANK YOU! Copyrighted Material – Brambles 2006

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