Six Sigma project

1. D M A I C
Six Sigma Tollgate
Turnover
Reduction
Kelly Kozik – Project Manager
1

2. D M A I C
Six Sigma
99.9% Quality is…...
•One hour of unsafe drinking water per month.
•Two unsafe plane landings per day at O’Hare International
airport.
•500 incorrect surgical operations each week.
•50 newborn babies dropped by doctors every day.
Six Sigma Quality is…...
•One second of unsafe drinking water every six years.
•One unsafe landing in all major United States airports in 10
years.
•1 incorrect surgical operation in 20 years.
•3 newborn babies dropped by doctors in 100 years.
(Medco Green Belt training manual 2005)

3. D M A I C
Suggested Deliverables for the Define Stage of a
Six Sigma Project
•Problem / Objective Statement
•Charter / Timeline
•Financial Estimate
•Baseline Data
•Conclusions/Next Steps

4. D M A I C
Problem/Objective Statement
Problem Statement:
Between May 1, 2005 - April 30, 2006, the Willingboro
pharmacy lost 268 employees in the following areas;
pharmacy tech, warehouse, support and Rph. This cost the
pharmacy approximately $2 million in turnover expenses.
Objective Statement:
To reduce voluntary turnover in four classifications by 20%
annualized.
Pharmacist
Technician
Support
Warehouse

5. D M A I C
Project Charter
Team Name: Turnover Reduction
Process: Recruitment and Retention Duration: Team Meetings:
Every T hursday, 1:30pm - 2:30pm
Sponsor: Cham pion: Team w ork Location: Willingboro, NJ
Team Members Function Team Role LOE Attendance Process Custom er (internal/external):
Ron Wizimirski T raining Black Belt Internal: Hiring managers, employees
Kelly Kozik Recruitment T eam Leader External: applicants
Pam West Support T eam member Critical to Quality Metric(s):
Sam Addy Customer Service T eam member T urnover
Debbie Bertino T raining Meeting Minutes
Josef Blankenburg Inventory T eam member Financial ‘Business Driver(s) Im pacted:
Chris Bizarro Human Resources Champion cost of turnover
Cory Angelini Business Planning T eam member
Bob Oehrle Warehouse T eam Member Project Scope:
Identify and remove constraints to hiring / rentention of
employees
Problem Statement:
Between May 1, 2005 - April 30, 2006, the Willingboro pharmacy lost 268 employees in the following areas; pharmacy tech, warehouse, support and Rph. T his cost the pharmacy
approximately $2 million in turnover costs.
See timeline on next page

6. D M A I C
Timeline
Team Name: Turnover Reduction Timeline
Step 11-May-06 15-Sep-06 15-Oct-06 15-Dec-07 15-Mar-07 30-Jun-07 31-Dec-07 30-Sep-08 Tools Used
Define
Measure
Analyze
Improve
Control
Plan

7. D M A I C
Revised Turnover Cost Analysis
Analysis Period: May 1, 2005 - April 30, 2006
RPh Tech Support Whse
Number of Terminations 6 77 106 79
Entry Wage for Job Class 40.00 10.75 10.00 10.00
Average Wage for Job Class 46.99 11.63 11.17 10.76
Average Trainer Wage for Job Class 46.99 13.66 13.09 12.56
Hiring Cost per Hire 152.00 212.50 394.00 273.00
Total Hiring Cost 912.00 16362.50 41764.00 21567.00
Training Cost 19,276.86 118,754.25 79,529.75 75,420.88
Learning Curve Cost @ OT 35,524.44 161,191.80 142,082.40 51,002.40
Time to Fill Position (days) 71.0 36.9 47.6 37.2
Vacancy Cost @ OT 171,580.63 283,237.02 483,080.16 271,041.33
Turnover Cost for Job Class 227,293.93 579,545.57 746,456.31 419,031.61
Turnover Cost per Employee 37,882.32 7,526.57 7,042.04 5,304.20
Total Cost for 4 Primary Categories 1,972,327.41
Inputs:
Total Training Hrs (no productivity) 348 7097 6284 6320
Total Peer Trainer Hrs (no productivity) 114 212 1275 973
RPh Trainer Hrs (no productivity) 842
Learning Impact (ramp-up prod)
Productivity Post-Training 40% 40% 50% 50%
Days to 100% Productivity 35 50 40 20
Labor Hrs to Make Up Productivity 84 120 80 40

8. D M A I C
Turnover
TOTAL JOB ABANDONMENT INVOLUNTARY VOLUNTARY
SUPPORT 106 34 33 39
WAREHOUSE 79 23 26 30
TECHS 77 16 18 43
RPH 6 1 0 5
268 74 77 117
% of total turnover 27% 29% 44%
Voluntary resignations
account for 44% of the
annual attrition.

9. D M A I C
Suggested Deliverables for the Measure
Stage of a Six Sigma Project
• Completed checklist on 117 voluntary
terminations from May 2005 – April 2006
– Compiled info from voluntary terminations
– Reviewed exit interviews, work schedules, training,
referral, resignation letters, schedule changes, etc.
• Mailed an abbreviated Exit Interview/Cover Letter
to those employees who had no exit interview.
• Completing checklist on employees who left from
April 2006 to present to get additional data.
• Summarized and evaluated collected data

10. # Observations
0
20
40
60
80
100
120
140
160
personal
reasons
career change
disat w/ mgmt,
promo,
working
conditions,
family
Group
return to
school
2005/2006 reasons for leaving
Pareto Analysis – Baseline Data
disat w/ shift
or schedule
transportation
0
1
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
D M A I C

11. D M A I C
Pareto Analysis – Baseline Data
2005/2006 source
1
120 0.9
0.8
100
0.7
80 0.6
0.5
60
0.4
40 0.3
0.2
20
0.1
0 0
employee r ef erral walk- ins ads schools int er net job f air ot her employment t r ansf er s
agency
Gro up

12. D M A I C
Current Team Status - Progress
• Summarized and evaluated collected data
and concluded that the data was
insufficient.
• Focus groups were formed to extract data
from current employees to find root cause.

13. D M A I C
Cause and Effect Diagram
4 Focus Groups – Over 200 Ideas Generated
People Method Measure
Job
Bonus for Interview Never get an
performance More cross interview
training Orientation Emr Process
Compensation
Emp. Refrerral Training Recognition
Clear Job
Rotating functions Descriptions
Job is not what EMPLOYEE
I expected Cleaner Working areas More chairs TURNOVER
Lack of growth needed
opportunities More decappers
Sups aren’t Equipment
encouraging Tools More
Communication handhelds Make cafeteria
emp. better
Day care
Development No follow-up Materials
during emr Environment
Language Employee
barriers meetings
needed

14. D M A I C
Affinity Diagram
Evolved into 13 problem statements
• #1-Need a cleaner place to • #8-Emp pay & incentives
work • # 9-Recognition incentives are
• #2-Emp don’t have a clear inconsistently…
understanding of growth opp. • #10-Ramifications of Union
• #3-Emr process is not effective Contract
• #4-No consistency in emp • #11-Onboarding process…
training transition 90 day emp..
• #5-Schedules are built solely on • #12-Company exhibits
Bus needs.. favoritism & inconsistency…
• #6-Communication… • #13-Available resources to do
• #7-Better understanding of job their job
expectations

15. D M A I C
Interrelationship Diagraph
Prioritized into 7 statements
• #1-Need a cleaner place to work Total Affects • #8-Emp pay & incentives Total Affects
• is affected by 9, 12, 2, 10, 6, 7
• is affected by # 4, 7, 13 • Affects 9
3 7
• • # 9-Recognition incentive are inconsistently…
• #2-Emp don’t have a clear understanding of growth opp. • is affected by 8, 7, 6, 12
• is affected by # 3, 4, 5, 7, 11, 12 • Affects 8, 12
• Affects 8, 12 6
8 • #10-Ramifications of Union Contract
• #3-Emr process is not effective
• is affected by # 4, 6, 5, 12, 7 • is affected by 7 Affects 8
2
• Affects 2, 4, 11
8 • #11-Onboarding process…transition 90 day emp..
• #4-No consistency is emp training • is affected by 13, 4, 3, 6
• is affected by # 3, 6, 5 • Affects 7, 5, 2
7
• Affects 2, 13, 12, 11
7
• #5-Schedules are built solely on Bus needs..
• is affected by 7, 11
• Affects 3, 12 4
• #6-Communication…
• is affected by 4, 3, 2, 12, 11, 9, 8, 7
8
• #7-Better understanding of job expectations
• is affected by 4, 13, 11, 12, 6
• Affects 8, 9, 10, 1, 2, 5 11

16. D M A I C
Prioritization Matrix
Identified topics to be
Ability
addressed at analyzing
Is it to
phase
feasible assign
Does it from a owner
Ability to affect all cost ship to Reasona
quantify Quick to employee perspectiv single bility of Easily TOT
results implement? groups? e? source success accepted AL
Emp don't have a clear
understanding of
growth opp. 247
No consistency in emp
training 229
Schedules are built
solely on bus. needs 185
Recognition incentives
are inconsistently
applied 213
Better understanding of
job expectations/ the on
boarding process does
not effectively transition
an employee (prior and
post hire) 241
Company exhibits
favoritism &
inconsistency in its
decision making 147
1. Little or no relationship
3. Some relationship
5. Strong relationship

17. D MA I C
Areas of Improvement
• No Consistency in Employee Training
• Recognition Incentives are Inconsistently Applied
• Better Understanding of Job Expectations / On-boarding
Process Does Not Effectively Transition and Employee
• Employees Do Not Have a Clear Understanding of Growth
Opportunities

18. D MA I C
Action Teams and Improvement
Processes
PROCESS PROCESS OWNER ORIGINATION DATE
Q
u
Job/Shift Rebid Process XHR/ Departments Q2 2007
New Emr Process XHR (Training) Q2 2007
Internal Job Selection XHR (Recruiting) Q2 2007
Above and Beyond XReward & Recognition's Team Q2 2007
Department Goals and Metrics XDepartments Q2 2007
Attendance Rewards XReward & Recognition's Team Q1 2007
Buddy Program XSurvey Action Team
HR Information Days XHR Q1 2007
Shift Meetings XDepartments Q2 2007
Quarterly Communication Sessions XDirectors Q2 2007
Survey Action Teams XDirectors Q2 2007
Prehire HR (Recruiting) Q2 2007
Post hire on-boarding

19. D MA I C
Please take a few minutes and answer the following questions as accurately as you can. This questionnaire is completely anonymous.
1.What is your level of awareness of the following: Select one the following responses:
■ Heard About ■ Don’t know ■ Know a lot ■ Helped
■ No Idea
It the details about it create it
Job/Shift Rebid Process     
New EMR Process     
Internal Job Selection     
Above and Beyond     
Department Goals and Metrics     
Attendance Rewards     
Medco & Willingboro Newsletter     
“Buddy” Program     
HR Information Days     
Shift Meetings     
Quarterly Communication
    
Sessions
Survey Action Teams     
1.Have you been a member of a team that developed any of the above? Please circle. Yes or No
2.If not, why?  Didn’t want to Didn’t know about it  I was not permitted
3.How long have you worked at Medco? Check One.
0-1year 1-3years 3-5years 5-8years 8 years or more
1.What department do you work in? Check One.
Admin BP CS HR Maint QRT Rph Security Support Syst. Coord. TA Tech Warehouse
1.What shift are you on? 1st  2nd 3rd

20. D MA I C
Employees do not have a clear understanding of growth opportunities
EMR Shift Rebid Quarterly Internal Job
Process Program HR Info Selection
Item # Issues Days
1 No Job rotation into new skills X X
2 Only scheduled in areas where efficiencies are high X X
3 Rated on items out of your control X
Do not understand EMR numbers and effect on
4 promotion X
Do not understand development resources that are
5 available X X X
6 No promotion availability X X
7 Never receive feedback on promotion applications X X X
8 Need development plan for growth X X

21. D MA I C
Please take a few minutes and answer the following questions as accurately as you can. This questionnaire is completely anonymous.
1.What is your level of awareness of the following: Select one the following responses:
■ Heard About ■ Don’t know ■ Know a lot ■ Helped
■ No Idea
It the details about it create it
Job/Shift Rebid Process     
New EMR Process     
Internal Job Selection     
Above and Beyond     
Department Goals and Metrics     
Attendance Rewards     
Medco & Willingboro Newsletter     
“Buddy” Program     
HR Information Days     
Shift Meetings     
Quarterly Communication
    
Sessions
Survey Action Teams     
1.Have you been a member of a team that developed any of the above? Please circle. Yes or No
2.If not, why?  Didn’t want to Didn’t know about it  I was not permitted
3.How long have you worked at Medco? Check One.
0-1year 1-3years 3-5years 5-8years 8 years or more
1.What department do you work in? Check One.
Admin BP CS HR Maint QRT Rph Security Support Syst. Coord. TA Tech Warehouse
1.What shift are you on? 1st  2nd 3rd

22. D MA I C
Impact Survey
This demographic informat ion is optional. However, it may be helpful in analyzing the dat a. Thank you.
De par t m en t
Sh i f t
How lon g have you w ork ed f or Medco? -
Circle one opt ion
Less than 1 yr 1-3yrs 3-5yrs more than 5yrs
Ag e – ci r cl e on e o pt i on 18-25 26-34 35-42 43-50 50 +
Gen d er – ci r cl e on e o pt i on M F
Tot al y e ar s i n t h e w o r k f o r ce – ci r cl e
on e opt i on
Less than 1 yr 1-3yrs 3-5yrs 5-7 yrs more than 7 years
St r on g l y Ag r ee N eu t r a l Di sag r ee
St r on g l y Di sag r ee
Ag r ee
5
1 2 3 4
Medco’s new hire processes make it difficult for a newly hired
employee to do a good job.
Medco’s new hire processes make it easy for a newly hired
employee to find things in and around the pharmacy.
I think it’s important that new employees learn what is expected of
them right away.
The company clearly communicates how people are selected for
new positions.
I understood the job rebidding process we went through last
summer.
When I was a new employee, it was important to me to find a
person or people to have breaks and lunch with right away.
I don’t care if I have my schedule in advance.
I believe that there are internal promotion opportunities for
employees at Medco.
As a new employee, I got enough training that I didn’t need to ask
questions once I was assigned to the work area.
I believe that it’s my responsibility to figure out how to be
successful at my job.
I want to know how my job affects the rest of the department
I want to know ahead of time what I will be doing (at least a week
in advance).

23. D MA I C
Turnover reduction / savings
52-week Rolling 52-week Annual
52-week Rolling Average Weekly Average Wkly Turnover
Week Ending: 1/0/1900 Headcount 52-week Rolling Average Terms Headcount Weekly Terms Turnover Percentage Rate
Location Chg vs. Chg vs. Chg vs. Chg vs. Chg vs. Chg vs. 2008
Description Job Category Current Prior Current Prior Current Prior Current Prior Current Prior Current Prior Goals
NJ WILLINGBORO
Back End Support 444.29 1.08 2.00 8.66 1.95% -0.63 0.0058 -470.99 0.3039 -4.70 30.00% 29.41% 0.00% -30.91% 30%
Pharm Tech 316.31 1.27 2.00 8.66 2.74% -0.02 0.0064 -325.99 0.33 -3.67 15.00% 14.36% 0.00% -33.33% 15%
Pharmacist 133.35 0.35 0.00 0.00 0.00% -0.17 0.0012 -141.00 0.06 -0.94 5.00% 4.87% 0.00% -6.77% 5%
NEW JERSEY AT HOME
Pharmacist 48.27 2.13 0.00 -0.08 0.0028 -76.00 0.145 -0.86 5.00% 4.83% 0.00% -8.67% 5%
Project Major Metric Major Metric Cost / Savings
Baseline Q2 Avg Variance Q1 - Q2 2008 Est 2008 TY
Turnover Reduction As of June W4
RPH RPH % Turnover 5.47% 3.71% (1.76 Pts) $ (21,350) $ (42,700)
Tech Tech % Turnover 52.82% 30.68% (22.14 Pts) $ (88,782) $ (177,564)
Support & Whse Support & Whse Turnover % 59.44% 25.60% (33.84 Pts) $ (153,836) $ (307,673)
$263,968 $527,937
Mid-year (Q2) metrics 20% savings met. Annualized savings of $1M/50%

24. D MA I C
Control Plan Strategy
• Our recommendations are based on current
process/team and employee data
• In order to control this turnover reduction
we will rely on continued feedback from the
survey actions teams and our annual
employee surveys. The processes will then
need to be adjusted accordingly.

25. D MA I C
Recommendations
VERY WELL RECEIVED, SHOULD BE MAINTAINED: WELL RECEIVED, BUT NEED TO BE BETTER COMMUNICATED
BY PROCESS OWNERS:
• DEPT. GOALS + METRICS
Employees unequivocally want to know about their job and how it • ABOVE & BEYOND (WOW Program)
affects their department. This program should definitely be maintained This program is well supported and recognized by the employee
and communicated at the dept. level. population and should continue. There is an opportunity to reach 37%
• SHIFT MEETINGS more employees who are either unaware of the work being done or
Employees feel strongly that this is a positive improvement, therefore who think it needs improvement. Better communication of the awards
we recommend it continue. Seventy three percent find it useful and results
• NEW HIRE PROCESS • ATTENDANCE REWARDS
Most of the employee population has not been through this process This program is highly supported by employees; however the program
(38% were unaware), but we recommend it continue and be evaluated details and the implementation of the rewards should be evaluated and
periodically. communicated to employees. There seemed to be confusion on award
criteria.
OPPORTUNITY FOR IMPROVEMENT: • INTERNAL JOB SELECTIONS
We strongly recommend improving on the communication to the
employees how this process works. Over fifty percent of the employees
• EMR PROCESS responded either neutral or negative.
Overall this process has shown improvement, however additional
progress is needed with regard to career discussions.
• QUARTERLY COMMUNICATION SESSIONS
The findings were that most employees do not know what these
• BUDDY PROGRAM sessions are. There is a need to communicate the purpose more
Employees strongly support the concept of this program and its effectively.
potential effectiveness. Thirty five percent of the employees had no Type of information employees would like to see presented
positive or negative reply. This could mean they were unaware of the
program. The recommendation is to re-establish, re-evaluate, and Cost=24.19% Quality=30.38% Willingboro
revise this program to meet the employee and department needs specific info=39.70% Other=5.72%
• WILLINGBORO NEWSLETTER • SURVEY ACTION
Had a positive impact on employees and the recommendation is to Results show there is a definite opportunity on communicating the
restart the distribution. Sixty five percent wanted a Willingboro programs and their results to employees. Fifty three percent were not
specific newsletter aware of the work being done, however fifty percent felt it was
valuable.

26. D MA I C
Turnover reduction / savings
52-week Rolling 52-week Annual
52-week Rolling 52-week Rolling Weekly Average Wkly Retention
Week Ending: 2/19/2011 Average Headcount Average Terms Headcount Weekly Terms Turnover Percentage Rate
Location Chg vs. Chg vs. Chg vs. Chg vs. Chg vs. Chg vs. 2011
Description Job Category Current Prior Current Prior Current Prior Current Prior Current Prior Current Prior Goals
NJ WILLINGBORO
Back End Support 449.04 (0.64) 0.66 (0.04) 437 0.00 0 (2.00) 0.15% -0.01% 92.21% 0.44% 90%
Pharm Tech 305.92 0.26 0.77 (0.02) 309 0.00 0 (1.00) 0.25% -0.01% 86.60% 0.34% 85%
Pharmacist 126.40 (0.09) 0.08 0.00 125 0.00 0 0.00 0.06% 0.00% 96.84% 0.00% 96%

27. D MA I C
Turnover reduction snapshot
• 2006 turnover
• RPH 10%
• Pharmacy Technician 65%
• Pharmacy Support (shipping and packing) 60%
• Warehouse 80%
• 2008 turnover was reduced
• RPH 5.47%
• Pharmacy Technician 52.4%
• Pharmacy Support (shipping and packing) 59.44*
• Warehouse 59%.44*
• (Operations made the decision to measure support and warehouse as one in early 2007)
• Mid-year Q2 metrics 20% savings met (slide 23). Annualized savings of $1M/50%
• Retention of February 2011
• RPH 96.84% (3.16 turnover)
• Pharmacy Technician 86.6% (13.4% turnover)
• Pharmacy Support & Warehouse 92.21% (7.79% turnover)