This document describes a Six Sigma project to improve the process of assigning costing sheets to projects. It outlines the current process where project definition forms are submitted without guidelines for selecting the correct costing sheet, sometimes resulting in incorrect assignments. The team developed a costing sheet selection tool in the form of spreadsheets to provide criteria and assist users in choosing the proper costing sheet. This is projected to standardize the process, reduce errors, and cut down on rework from incorrect assignments.

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Raytheon Six Sigma Specialist Project:Raytheon Six Sigma Specialist Project:
Costing Sheet Assignment ProcessCosting Sheet Assignment Process
MARCH 2005MARCH 2005

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
 Sponsor: Robert J Given
 Mentor: Robert P Tamilio
 Team Members:
 James J Wright (Specialist Candidate)
 Thomas Chase (Specialist)
 Carol Prescott (Specialist)
 Janet McCue (Specialist)
 Karen Campo (Specialist)
 Cathy Kurpiel (Specialist)

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Visualize Phase
 Problem Statement
– It has been identified that some
IDS/NCS projects have been assigned
an incorrect costing sheet, which is a
mechanism used to apply overhead
rates to booked actuals.
 Vision Statement
– We will improve and standardize the
assignment of costing sheets with the
creation of a spreadsheet that will
assist in the completion of the Project
Definition Request Form (PDRF).

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
• IDS projects should not have a NCS costing
sheet assigned to it.
• Capital costing sheets should only be assigned
to capital projects.
• Incorrect rates will continue to be applied on
Project bases
• OH and G&A rates will be calculated improperly
• Incorrect costs on Projects will lead to errors in
the fee rate calculations
• Incorrect calculations could cause errors on the
Balance Sheet and Income Statement
Examples
of the
Problem
Undesirable
Effects
(UDE)

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Commit Phase
 Sponsor: Robert Given
 Team: Members from a variety of expertise
 NESS Finance – Controlling & Burden Rates
 NESS Finance – Contracts (Project Definitions)
 IDS Budgets & Planning – Costing Sheet expertise
 Managed Programs – Project Structure expertise
 Metrics for Tracking Improvement:
 Reduced amount of Projects with incorrect assignment
 Eliminate the possibility of future errors
 Reducing the number of man hours worked to correct problems

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
1. Current Process Flow
2. Selection of Costing Sheets
3. Criteria on how Costing Sheets are selected
Areas Which
Can Use
Improvement
Prioritized
Focus
1. Develop guidelines on how to assign Costing
Sheets
2. Correct the Projects with more obvious
assignment errors
Prioritize Phase

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Characterize Phase
 Current Process
 Project Definition Request Form (PDRF)
• Submitted electronically via E-mail to Contracts group
• Supporting documentation required depending on type of project
– Customer, IOT, Capital, Internal, or General Ledger
 Costing Sheet is indicated on the PDRF
• If left blank, the request is sent back to be resubmitted with all
required fields including respective authorization (Bottleneck)
 Managed Programs and Contracts open up projects based
on the PDRF using transaction CJ20N in APEX

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
PDRF (Top Half)

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
PDRF (Bottom Half)

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Uneducated
requestors
Costing Sheets assigned
incorrectly to Projects?
No Guidelines
set forth to aid in the
selection process
Not easily
identified
Numerous
Costing Sheet
choices
Why?
Why?
Why?
Why?
Why?
Why?
Why? Chosen
mistakenly
on PDRF
Erroneously
entered into
APEX

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Brainstorming
• Assist spreadsheet can be obtained
through a link on the website where the
PDRF is located
• Send out a mass e-mail to notify
persons responsible for filling out the
PDRF that there is a Tool to assist in
the selection of Costing Sheets
• Indicate that the Costing Sheet field is
required to submit the PDRF to
eliminate this bottleneck in the process

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
• Root Causes
– No Guidelines set forth to aid in the selection process
– Numerous Costing Sheet choices
• Proposed Solution: Desired Option
– Create a spreadsheet to assist accounting and managed programs in
the selection process.
• Alternative Solution: Advanced option considered and not suggested
– Develop the PDRF form using filters that will allow the user to narrow
down the choices as more and more criteria have been selected.

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Preliminary
Approach • Create a Costing Sheet Tool that will be used to
assist in assigning a correct CS to a project.
• The Tool will be placed out on the Web for easy
access as well as possibly incorporating it into the
Web Based PDRF Form.
• We only took into consideration the Generic, IDS, and
NCS Costing Sheets when developing this Tool.

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Generic Costing Sheet Tool (Partial)Generic Costing Sheet Tool (Partial)
Costing
Sheet
Costing Sheet
Description
Bus Unit
Functionality Project Types Customer
ZNCAP GENERIC CAPITAL ALL
Full Fringe and Overhead burdens on all Labor and Material. Prime
and Performing Organizations burden their costs with their
Domestic/DoD Full G&A (SAS), Special Material G&A (RMS), or
Major Sub G&A (NCS & IDS). Prime Organization (Corp) does NOT
burden ANY cost with G&A.
Capital Corporate
ZNDODA
GENERIC DOD
ASSIST WORK
ALL
Full Fringe and Overhead burdens on all Labor and Material. Prime
and Performing Organizations burden their costs with their
Domestic/DoD Full G&A. Prime Organization does NOT burden
Performing Organization's cost with Domestic/DoD IOT G&A.
IOT
Other Business or
CAS G&A Pool
ZNNOGA GENERIC NO G&A ALL
Full Fringe and Overhead burdens on all Labor and Material. Prime
and Performing Organizations do NOT apply ANY G&A burdens.
IOT or Internal
Corporate Enterprise
Campaigns or
Business COE
ZNSEL
GENERIC FRINGE
ONLY
ALL
Full Fringe burden on all Labor. NO Overhead burdens on Labor or
Material. Prime and Performing Organizations do NOT apply ANY
G&A burdens.
Internal Any
ZRLI
GENERIC BLANK -
NO LINES
ALL Prime and Performing Organizations do NOT apply ANY burdens.
GL - Raw Mat'l
Inv
Any
• Can be used by any Business Unit

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
IDS Costing Sheet Tool (Partial)IDS Costing Sheet Tool (Partial)
Costing
Sheet
Costing Sheet
Description
Bus Unit
Functionality Project Types Customer
ZACAP IDS CAPITAL IDS
Full Fringe and Overhead burdens on all Labor and Material. Prime
and Performing Organizations burden their costs with their
Domestic/DoD Full G&A (SAS), Special Material G&A (RMS), or
Major Sub G&A (NCS & IDS). Prime Organization (IDS) also
burdens Performing Organization's cost with Domestic/DoD Major
Sub G&A.
Capital IDS
ZADFS IDS DFS IDS
Full Fringe and Overhead burdens on all Labor and Material. Prime
and Performing Organizations burden their costs with their Direct
Foreign G&A. Prime Organization (IDS) also burdens Performing
Organization's cost with Domestic/DoD Major Sub G&A.
Customer Foreign
ZADOD IDS DOD IDS
Full Fringe and Overhead burdens on all Labor and Material. Prime
and Performing Organizations burden their costs with their
Domestic/DoD Full G&A. Prime Organization (IDS) also burdens
Performing Organization's cost with Domestic/DoD IOT G&A.
Customer Domestic
ZADODD IDS DOD NO G&A IDS
Full Fringe and Overhead burdens on all Labor and Material.
Performing Organizations burden their costs with their Domestic/DoD
Full G&A. Prime Organization (IDS) does NOT apply ANY G&A
burdens.
IOT
IDS - Within CAS
G&A Pool

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
NCS Costing Sheet Tool (Partial)NCS Costing Sheet Tool (Partial)
Costing
Sheet
Costing Sheet
Description
Bus Unit
Functionality Project Types Customer
ZCCAP NCS CAPITAL NCS
Full Fringe and Overhead burdens on all Labor and Material. Prime
and Performing Organizations burden their costs with their
Domestic/DoD Full G&A (SAS), Special Material G&A (RMS), or
Major Sub G&A (NCS & IDS). Prime Organization (NCS) also
burdens Performing Organization's cost with Domestic/DoD Major
Sub G&A.
Capital IDS
ZCDFS NCS DFS NCS
Full Fringe and Overhead burdens on all Labor and Material. Prime
and Performing Organizations burden their costs with their Direct
Foreign G&A. Prime Organization (NCS) also burdens Performing
Organization's cost with Direct Foreign IOT G&A.
Customer Foreign
ZCDOD NCS DOD NCS
Full Fringe and Overhead burdens on all Labor and Material. Prime
and Performing Organizations burden their costs with their
Domestic/DoD Full G&A. Prime Organization (NCS) also burdens
Performing Organization's cost with Domestic/DoD IOT G&A.
Customer Domestic
ZCDODD NCS NO G&A NCS
Full Fringe and Overhead burdens on all Labor and Material.
Performing Organizations burden their costs with their Domestic/DoD
Full G&A. Prime Organization (NCS) does NOT apply ANY G&A
burdens.
IOT
NCS - Within CAS
G&A Pool

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Summary
of
Tools
Used
• Brainstorming
– This tool was used to come up with ideas on how to
notify people whom use the PDRF that there are updated
versions and a new tool is available that will assist them
in assigning Costing Sheets to their respective projects.
• Process Flow
– This tool was used to show the Bottleneck in the current
process that requires using more man hours to correct
the problem.
• 5-Whys
– This tool was used to indicate the root cause of incorrect
assignment of Costing Sheets, which realized the need
of a tool to assist in the selection process.

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Projected
Benefits
and
Savings
• Benefits
– Reduced potential bottleneck in process where
PDRF’s would have to be sent back because of CS
field left blank
– Reduced number of man hours and number of
projects assigned incorrect Costing Sheets
– Increase in Quality Control where FP&A estimating
will be done more accurately
• Savings
– Estimate of 80 man-hours of effort saved per month
• Based on 160 projects set-up per month
• Other possible benefits
– Costing Sheets have a potential impact on the
Balance Sheet and therefore the Income Statement,
which could affect P&L positively or negatively.
– There are other prospective cost savings not
identified

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Costing Sheet Assignment ProcessCosting Sheet Assignment Process
Recommended
Follow-on
Activity
• Use the Tool to correct projects that have previously
been set-up and assigned incorrect Costing Sheets
• Conduct random checks to make sure that new projects
are being assigned the correct Costing Sheets
– This will ensure people are using the Tool
• To set-up a filter on the PDRF that will be used to assign
Costing Sheets by selection criteria that have been
identified on the CS Tool