© 2003 Six Sigma Academy1 Albertsons Proposed Deployment Plan September 12, 2003

© 2003 Six Sigma Academy 2 Agenda 1. What We Heard (Current State) 2. Deployment Approach Recommendations Based On ‘Voice of Customer’ 3. What Albertsons Will Gain From A Six Sigma Academy Assisted Deployment

© 2003 Six Sigma Academy 3 Corporate Rationalize Organization Structure Optimize Cost Structure Reduce Workman’s Compensation Manage Store Labor Efficiency Generate Early Demonstrable Results 1. What We Heard (Current State) “I want to standardize with the most consumer-efficient processes, everything that makes sense without harming the local brand image.” – Larry Johnston, CEO

© 2003 Six Sigma Academy 4 Finance Workman’s Compensation Accounts Payable Sales/Cash Control 1. What We Heard (Current State) Human Resources Deployment Speed Self-Service vs. Paper Based Transactions Do Corporate First (Divisions Overwhelmed With Initiatives) IT One Year Along a Five Year Plan (DSSS) Partnership With Business (Business Plan vs. IT Plan) Opportunities in Service Delivery/Help Desk (PMO leverage) Supply Chain Leverage Strategy & Deployment Plan…FAST

© 2003 Six Sigma Academy 5 Strategy/Development Energy Supplier Sourcing Limitations Currently With Systems/Data Collection  Store Size Analysis  Store Format Analysis 1. What We Heard (Current State) Operations Pull Environment (Loss Stores) Peer Metrics-Variation In Execution Initiative Overload…Filtering At All Levels Pharmacy Pharmacist Shortage/Turnover Prescription Misfills Productivity (Automation, Generic Brand Utilization) Marketing Fresh Foods (Tree To Mouth) Consumer Value Proposition (Expectations/Differentiators) Promotional Planning Display Planning

© 2003 Six Sigma Academy 6 SWIFT 1. What We Heard (Current State) Voice of Business (Project Identification) Leverage PMO Concept Great Groundwork/Successes Experience With Execution

© 2003 Six Sigma Academy 7 Corporate Supply Chain Marketing SWIFT North California Dallas – Fort Worth Pharmacy IT Division HR 2. Deployment Approach Areas of Focus # of Black Belts

© 2003 Six Sigma Academy 8 Corporate Supply Chain Marketing SWIFT North California Dallas – Fort Worth Pharmacy IT Division 12-Step Breakthrough Sigma Lean DFSS | DSSS HR 2. Deployment Approach Curriculum Alignment # of Black Belts 12-Step Breakthrough Sigma Lean

© 2003 Six Sigma Academy 9 Corporate Supply Chain Marketing SWIFT North California Dallas – Fort Worth Pharmacy IT Division 12-Step Breakthrough Sigma Lean DFSS | DSSS MBB HR 2. Deployment Approach Six Sigma Academy - Support # of Black Belts MBB 12-Step Breakthrough Sigma Lean

© 2003 Six Sigma Academy Deployment Preparation Executive Summit, Business Unit Summits, Champion Training, & Leadership Overviews Black Belt Waves 1, 2, 3 & 4 Black Belt Wave 5 Month Number Black Belt Wave 6 Black Belt Wave 7 Black Belt Wave 8 Black Belt Wave 9 Black Belt Wave 10 Black Belt Wave 11 Black Belt Wave 12 Master Black Belt Wave 1 Green Belt Wave 1 Note: Master Black Belt Wave 2 & Green Belt Wave 2 TBD Leadership Training (Beginning in consecutive weeks) Early Wins! 2. Deployment Approach Timeline & Milestone

© 2003 Six Sigma Academy What Albertson’s Will Gain From A Six Sigma Academy Assisted Deployment 300 Highly Skilled Black Belts in months ‘Working Hard To Make Life Easier’ Self-Sufficiency Through Development of Albertsons MBBs Ability To Fine Tune Intensity Of Deployment (Scalable) Albertsons-Centric Deployment  Establish Culture For Change (Critical Mass via Initial Waves)  Deliver Quick Wins  Align With Supply Chain  Leverage (Accelerate) SWIFT Knowledge … Self Sufficiency … Culture … Results

© 2003 Six Sigma Academy 12 Next Steps Align Projects To Strategy Define/Agree On Contract Deliverables Focus Resources On Key Activities  Deployment  Infrastructure  Execution Ensure Accountability

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