1. Vince Pierce, Laura Wells, and Don Mears July, 2011
Institute for Industrial Engineers Office Depot Business Process Improvement
Vince Pierce, Laura Wells, and Don Mears
July, 2011

2. Office Depot Company Overview
Office Depot is a leading global provider of office products and services:
2010 sales of $11.6 billion
North American Retail Division 43%
North American Business Solutions Division 28%
International Division 29%
One of the world’s largest e-commerce retailers – $4.1 billion in sales in 2010
North American Retail
(43% of 2010 Sales)
North American BSD (28% of 2010 Sales)
International (29% of 2010 Sales)
1,100+ stores in U.S. and Canada
Largest concentration of stores in California, Texas and Florida
Catalog, contract and e-commerce
Dedicated sales force works with medium sized to large customers
Orders serviced through 16 distribution centers
Catalog, contract, e-commerce and retail
Sell to customers directly and through affiliates in 51 countries outside of the U.S. and Canada
40+ websites and 400+ stores

3. Business Process Improvement - Cause for Action
Office Depot benchmarking efforts highlighted a significant opportunity to improve service levels (effectiveness) while reducing SG&A costs (efficiency).
Senior Leaders also recognized the competitive advantages that would accumulate from building a cultural focus on Continuous Improvement.
Office Depot created the Business Process Improvement Organization (BPI)
to help us achieve world class execution by effective alignment of people, process
and technology in the service of our business objectives and operational priorities.

4. BPI 2010 – Proof of Concept
During our first year, we demonstrated our ability to partner with business leaders, engage process owners and associates, and deliver meaningful results
Expectations
Outcomes
Partner with Business Leaders
Defined a Partnership Model
Established around joint accountability for results
Enabled Business Leaders without abdicating their responsibility for results
Engage Process Owners and Associates
Positioned Process Owners as owners in design, decision-making and change management
Positioned BPI as facilitators and coaches first and within carefully selected delivery roles
Engaged associates as SMEs to identify problems and countermeasures
Involved associates in implementation of solutions and CPI Fundamentals to sustain results
Deliver Meaningful Results
Delivered detailed current state analysis
Delivered integrated transformation plan and business case
Transitioned ERP integration responsibility with improved performance
Exceeded targets by a margin of $MM, accretive to P&L and Balance Sheet
…this success won us a hearing to go further afield into North American Retail, Supply Chain and Private Brand areas…

5. Process Transformation Continuous Process Improvement (CPI)
BPI Dual Strategies
Our dual strategies are designed to deliver near-term results by addressing critical problems while deploying process improvement principles and practices across the organization to create a management culture of continuous improvement
Dual Strategies
Process Transformation
Continuous Process Improvement (CPI)
Surgery – Tactical near-term focus to achieve world-class SG&A efficiencies:
Reduce Indirect Spend
Restructure our Service Delivery Model
Improve Process Efficiency
Lifestyle Change – Strategic long-term platform to increase competitive advantage:
Optimize our customer Value Streams
Deploy CPI Fundamentals
Build capability for Continuous Improvement

6. BPI Integrated Centers of Excellence
Our mission is to drive superior execution that accelerates associates, customers, and
shareholder value
Program/Project Management (PPM)
Partner with Business to drive superior program/project execution through best-in-class management disciplines and stakeholder adoption of new behaviors, processes, and technologies
Program/Project
Management
ERP Integration
Partner with Business and IT to deliver maximum ERP value through best-in-class governance, deployment, and user adoption
Continuous Process Improvement
Partner with Business to apply Process Improvement principles and practices to deliver best-in-class process performance and build the capability for continuous improvement
ERP Integration
Continuous Process Improvement
Integration
Change
Management 6

7. PPM Deployment Strategies
We operate a three-channel deployment strategy to drive superior program/project execution that delivers the required ROI on strategic initiatives
Program/Project Management Deployment Strategies
PMO Operations
PPM Capability Development
PPM Execution
Govern the portfolio of Strategic Initiatives to achieve the ROI defined in Strategic and Annual Operating Plans
Deploy standard Project and Change Management Methods, Tools, Training, and Support to enable Project Managers to deliver significant business outcomes
Staff Program, Project, and Change Managers on strategic initiatives (augmenting Business Unit and Functional capabilities) to deliver significant business outcomes
Our PPM Strategies drive program/project execution excellence throughout the organization

8. ERP Integration Strategy
We operate in partnership with the Business and IT to align ERP investments with strategic priorities and deploy integrated solutions that deliver significant business outcomes
Information Technology
Build, Deploy, and Support
Solution
IT partners with the Business to:
Design Solution (Technical)
Build and Test Solution
Deploy Solution
Support the Solution
Business
Identify Business Case and Requirements
Business identifies Need
ERP Integration partners with Business to define Business Case
ERP Integration partners with Business to define Business Requirements
ERP Integration
Design and Integrate Solution Architecture
ERP Integration partners with IT and Business to:
Build Release Schedule
Design Solution (Functional)
Integrate Solution
Drive User Adoption 8 8

9. CPI Deployment Strategies
We operate a three-channel deployment strategy to realize significant process improvements while building the long-term capability for Continuous Improvement
Continuous Process Improvement (CPI) Deployment Strategies
Value Stream Transformation
Tactical Process Improvement
HR Integration
Application of Process Improvement principles and practices in an entire Value Stream to achieve breakthrough improvement sustained through CPI Fundamentals
Application of selected Process Improvement principles and practices to discrete processes to deliver a minimum of 5% quality, cost, speed, or growth improvement sustained through CPI Fundamentals
Integration of Process Improvement principles and practices into the organizational management culture through HR programs and processes
(Training Curriculum; Performance Expectations; Hiring and Promotion Criteria; Competency Models; Incentives, Rewards and Recognition)
Our CPI Strategies apply Process Improvement principles and practices to deliver best-in-class process performance and build the capability for continuous improvement
How do we “do” tactical deployment?
3 to 4 month improvement cycles
Focused on processes selected by the EC
With Process Owner commitment
Delivering a minimum of 5% improvement in quality, productivity, or speed / timeliness
Under a train-the-trainer format with a “CPI Champion” dedicated at least 20% to CPI (long term)
While deploying the “CPI Fundamentals” for sustainability 9

10. CPI – An Inclusive Approach
A3 Problem Solving
Total Quality Management
Ford 8D
Six Sigma
Toyota Production System
PDCA – SDCA
Lean
Strategy Deployment
Office Depot Continuous Process Improvement

11. Continuous Improvement Capability
CPI Goals
Meaningfully improve process performance
Deploy “CPI Fundamentals” to sustain results
Use the CPI Fundamentals to build team capability for continuous improvement
Process Excellence
Continuous Improvement Capability
Process Maps and
Standard Work
Leading and Lagging
Metrics
Operating System
Management
A3 Problem Solving
Process Ownership
Leadership Alignment

12. BPI Approach to Culture Change
A culture is the repertoire of mutually reinforcing beliefs & assumptions, behaviors & practices, and values shared by a community of people
Changed Beliefs/Assumptions lead to readjustment of Values
Beliefs & Assumptions
CULTURE
Behaviors & Practices
Different Behaviors/Practices demonstrate and reinforce changed Beliefs/Assumptions
Values
Readjusted Values drive changes in Behavior/Practice
The culture cycle can be entered and changed through any of its drivers

13. BPI Approach to Culture Change – 2
By focusing on Behaviors and Practices we deliver Value and reinforce Belief
Culture Drivers
X Beliefs & Assumptions
X Values
 Behaviors & Practices
Difficult to influence directly and slow to change
Can be influenced directly and changed quickly
Not directly observable and measurable
Can be directly observed and measured against a desired standard
Cannot be influenced by direct order or requirement
Can be influenced by direction or requirement
People can be brought to believe that it is in their best interests to adopt the new behaviors
Add Value to new behaviors by rewarding them and sanctioning old behaviors

14. Joint Accountability for Results
BPI Partnership Model
Our imperative is to enable and support the Business without removing their responsibility for delivering results
Collaborative
Partnership
Business
BPI
Business
Owner
BPI Team Lead
Business
Ownership
BPI
Enablement
Process Owner
BPI Deployment Lead
Joint Accountability for Results 14

15. BPI Delivery Framework
Plan
Engage
Deliver
Sustain
Governance
Enablement
Right
Projects
and Metrics
Leadership and
Resources
Actions
and Results
Strategy Matrix
Delivery Objectives
Delivery Strategies
Delivery Plans
Delivery Organization
Management
and Capabilities
Business Expectations
Opportunity Assessment
Delivery Approach
Resource Requirements
Business Alignment
Project Charters
People Solutions
Process Solutions
Technology Solutions
Business Results
Leadership Alignment
Process Standardization
Process Metrics
Management System
Problem Solving Capability

16. Project and Change Methods
BPI Delivery Framework – Process View
Plan
Engage
Deliver
Sustain
Governance
Enablement
Planning
Engagement
Delivery Methods
Strategic Plan
Business Requests
CPI Fundamentals
Demand Management
Resource Allocation
Project and Change Methods

17. Standard Delivery Lifecycle
BPI Delivery Methods Share a Common Foundation
Our Standard Delivery Lifecycle establishes a fundamental delivery structure and discipline, but is adaptable enough that it can be tailored to fit a variety of engagements
Analyze
Design and Build
Validate
Deploy
Plan
Project Management
Change Management
Standard Delivery Lifecycle
Value Stream Transformation
Process Improvement
Technology Integration
Custom Methods
Project Management
Change Management

18. Change Management Integrated into Every Engagement
Change Management and Project Management work in partnership to deliver desired business results
Project Management: Solution is Designed, Developed and Delivered Effectively
Change Management: People Embrace, Adopt and Use the Solution Effectively
Conduct Stakeholder Analysis
Plan Communications
Execute and Monitor Communication Plan
Define Change Agent Network
Build and Manage Change Agent Network
Create
Training Plan
Execute and Monitor Training Plan
Define Change Strategy
Create
Re-Org Plan
Execute Re-Organization Plan
Assess Readiness
Assess Readiness
Assess Readiness
Create Change Sustainment Plan
Execute Change Sustainment Plan 18

19. CPI Fundamentals Enable Sustained Process Excellence
Continuous Improvement Capability
End-to-End / Detailed Process Maps
Desktop Procedures
Standard Work
Process Maps and Standard Work
Daily Performance Huddle
Weekly Process Owner Check
Monthly Executive Review
Management Operating System
Process Maps and
Standard Work
Leading and Lagging
Metrics
Operating System
Management
A3 Problem Solving
Voice of Customer
Customer Success Metrics
Key Input Metrics (Drivers)
Leading and Lagging Metrics
Cross-functional Teams
Basic 5 Step Process (PDCA Cycle)
Why-Why Analysis
A3 Problem Solving
Process Ownership
Leadership Alignment 19

20. Business is Accountable to Adopt CPI Fundamentals
BPI Terms of Engagement 
The Business will identify and assign “CPI Champions” with clear accountability for adoption of the CPI Fundamentals
BPI will manage the CPI Champions as a community of practice with weekly touch-points, monthly learning sessions, and quarterly training events
BPI will implement day reviews of the CPI Fundamentals with a simple measurement of adoption, reported to Senior Leadership
Business will conduct routine leadership floor-walks to reinforce adoption and celebrate success

21. Key Success Factors Factor Examples Effective Senior Level Sponsorship
Initiative and support of CFO was key
Initiation within the Finance organization provided an avenue of influence into the businesses
Dual Strategy – Surgery and Lifestyle
Delivering near-term value proposition to demonstrate value and encourage belief
Incorporating “lifestyle change” expectation even into “surgery” engagements
Incorporating clear value proposition even into “lifestyle” engagements
Integration of PPM, CPI,
ERP Integration
Enables wide field of vision across the enterprise
Recognizes the interconnectedness of business drivers
Structured Change Management
Proactively identifies and works to align human factors
Mitigates risk of non-adoption
Business Partnership Model
Collaborative partnership with joint accountability for results
Business ownership
BPI enablement