IT Asset Reassignment / Moves

David LevineInformation TechnologyIKON Network Center

2

Background – Current Process & Facts

Over 7900 major assets were due back to Compaq Financial between October 2002 and July 2003, of the 7900 assets over 3000 were never located or returned.

Until late 2002 a company wide physical inventory of IT assets had never been conducted.

Current National Help Desk (NHD) IT Asset Relocation web form, introduced in 2002 is being utilized less than 27% of the time.

Current NHD Move Employee web form does not track IKON Bar Code asset ids, Employee IDs (EID) or asset serial numbers.

The NHD desk currently tracks 12,000+ add, move or change tickets and 3,700+ hardware repair tickets annually.

Beginning January 2004 a significant amount of Dell equipment will be due to Dell Financial Services.

3

Project Definition

Problem Statement:

The process of tracking IKON's personal computing assets, which includes laptops, desktops and servers, does not allow us to accurately locate these assets when they need to be returned to the lessor. During the last three rounds of lease returns IKON was unable to locate 3,000 assets representing a write-off amount of $1.2mm. Without improving processes in this area IKON will perpetually write-off residual lease amounts for assets that IKON may actually be in possession of but can not locate. Over a 48 month period we estimate this expense, which has a direct impact on OI, will reach $3.5mm. This estimate is based on prior history and a review of future lease renewals.

4

Project Definition, Cont’d

Project Definition:

Implement controls that allow IKON to capture or validate location information as assets are touched by IT. Assets are physically touched by a member of IT as people are moved between offices or as assets are reassigned due to employee turn over. In addition to IT physical touching the assets this process can be augmented by performing data collection at the Help Desk. As users call into the Help Desk for assistance we have an opportunity to validate asset information with minimal effort. It is expected that the new controls will be in place within four months of starting this project.

5

Project Definition, Cont’d

Project Benefits:This project will not fully eliminate the write-off amounts but is expected to address 70% of them. This represents $2.45mm over the next 48 months. The $2.45mm can be easily measured and will be visible as an improvement to OI.

15% of the write-off amounts can be corrected through serialization issues with the lessors. (This will be a separate project, not part of this charter.) The remaining 15% is reserved for loss due to theft, etc.

6

Project Definition, Cont’d

Financial Benefits: Net Project Benefits: Year 1 = $575,000 and Year 2 = $650,000

Project Metric “Y”: Big Y = Asset Tracking 2nd Level Y = Asset Control 3rd Level Y = Asset Moves & Reassignment

Defect Definition: Each leased IT asset that is not found and returned to the

lessor leads to a write-off expense. The success of this project can be quantified by measuring the reduction in the raw number of units not returned.

Leveragability: Possible reduction in the number of physical IT inventories.

(Soft dollar benefit only through staff prioritization)

7

Additional Financial Information

Total Value of equipment on lease with Dell and IBM through 1-01-06 = $28,805,294.88

Monthly lease payments to Dell & IBM = $861,683.90 Total Laptops & Desktops Due = 15,386 Total Servers Due = 341 90% (14,163 items) of the equipment is due between 5-1-04

and 12-31-05 (20 Month Period) Average items due per month (14163/20) = 708 Average monthly lease cost per item = $61 Average monthly exposure for equipment returned outside of 5

days within the 20 month period (708x61) = $43,188 or $518,256.00 a year

8

Project Team

Champion – Tracey Rothenberger Process Owner – Mac McGraw Black Belt – David Levine Financial Analyst – Carol Uhlig Team Members:

Process Personnel – Rick Faber Process Personnel – Chris Fauth Process Personnel – Danny Goode Process Personnel (GHD) – Bob Burchell

Master Black Belt – Dan Douglas

9

Other Contributing Factors

Other factors contributing to low lease returns Stolen Equipment Equipment damaged beyond repair

10

Other Contributing Factors Cont’d

Serial numbers not matching lease schedules Technical issues with the bar code system Inconsistent use of the bar code system

Other General Lease Return Issues resulting in higher processing costs IKON owned equipment was shipped to the lease-end processing

company Equipment on leases with other lessors was shipped to the lease-end

processing company Equipment was miss-shipped to the lease end processing company

12

CT Flow Down

Critical to Satisfaction (CTS)

IT Asset Disposition within 5 days of the lease termination date.

Critical toQuality (CTQ)

Critical toDelivery (CTD)

Critical to Cost(CTC)

All lease itemsreturned or

accounted for

Accurate leaseschedules

No "miss-ships"

No serial numberissues

Accurate Bar Code(Asset Tracking)

Database

All data "cleaned"to DOD level 3Specifications

Replacementasset at the end

user prior toremoval of the "off

lease" asset

Final dispositionrecorded in theasset tracking

database

Timely employeenotification

Accurate leaseschedules

Timely equipmentreplacement

Accurate shippingand receiving

reports

Equipmentreturned On-Time

No damagedequipment

No "miss-ships"

No special operations/rework to account for

assets (i.e.. Census of allassets that have beenconducted in the past

13

Performance Standards

Y= IT Asset disposition within 0 - 5 days of lease end Tolerance Range is 0-5 days after lease end date and 30

days prior to lease end date. Any asset returned after 5 days triggers additional rental

charges to be billed to IKON Any asset returned more than 30 days prior to lease

termination results in an overlap of lease payments. The internal tolerance and acceptable customer range in this

case is equal. The total number of assets returned as a percentage will

also be measured.

14

End State Disposition Process Time

Disposition Process should take no longer then 31 Days 1 Day to locate equipment 17 Days to order and replace equipment

2 Request to Approve 10 Days from Order to Receive 5 Days from Receive to Install

6 Days to ship equipment to 3rd Party lease-end processor 2 Days required for 3rd Party lease-end process 5 Days to ship equipment to Dell via non-dedicated freightCalculation is based on fixed data

Locate EquipmentReplace

Equipment

Ship to 3rd PartyLease-endProcessor

Lease EndProcessing

Ship to DellDell Receives

Equipment

1 Day 17 Days 6 Days 2 Days 5 Days 0-5 Days

15

Current Process Capability for Returning Equipment On-time

3002001000-100-200

USLLSL

Process Capability Analysis for Days Late

PPM Total

PPM > USL

PPM < LSL

PPM Total

PPM > USL

PPM < LSL

PPM Total

PPM > USL

PPM < LSL

Ppk

Z.LSL

Z.USL

Z.Bench

Cpm

Cpk

Z.LSL

Z.USL

Z.Bench

StDev (Overall)

StDev (Within)

Sample N

Mean

LSL

Target

USL

973741.45

730809.07

242932.37

999999.85

999999.84

0.00

973462.25

673318.25

300144.00

-0.21

0.70

-0.62

-1.94

*

-1.70

5.79

-5.11

-5.12

61.2451

7.3691

4861

37.6818

-5.0000

*

0.0000

Exp. "Overall" PerformanceExp. "Within" PerformanceObserved PerformanceOverall Capability

Potential (Within) Capability

Process Data

Within

Overall

USL = 0 DaysLSL = -5 DaysZ Bench = -1.94Mean = 37.7 DaysDPMO = 973,741

Based on the Compaq Lease Return Data

16

High Level Process Map

Lease EquipmentPrepare and

Deploy EquipmentEquipment In Use Replacement

StrategyDisposition

Cycle time = 24 - 36 Months

Track Asset

17

Process Map Order to Deploy

RIPP checks forexisting inventory

RIPP assigns oneticket to CISP andone to Break-Fix

Request forHardware\

Software is madevia GHD

GHD creates 1 ParentRemedy ticket and 2

Child tickts and assignsthem to appropriate RIPP

RIPP obtainsapproval from

Reg. IT managers,MP DFO and Reg.

DFO

RIPP obtainsapproval from

Reg. IT managers,MP DFO and Reg.

DFO

RIPP assigns oneticket to Break-Fix

for deployment

Equipment isdeployed and

tickets are closed

CISP obtainsrequired approvals

CISP placesorder(s) and

updates all tickets

Product isrecieved at IKONat config centersand is scanned

Packing Slip isfaxed to CISP

CISP ticket isClosed

Equipment isdeployed to end

user

Break-Fix ticket isclosed

No

Yes

Request to Ordermin = 0 Daysmax = 105 DaysAverage = 15.8 Days

Order to Deliverymin = 3 Daysmax = 36 DaysAverage = 8.6 Days

Deliver to Installmin = 1 Daysmax = 55 DaysAverage = 20.9 Days

Request to Installmin = 4 Daysmax = 196 DaysAverage = 45 Days

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Request to Install Process Capability

-20 0 20 40 60 80 100 120 140

LSL USL

Process Capability Analysis for R to I

USL

Target

LSL

Mean

Sample N

StDev (Within)

StDev (Ov erall)

Z.Bench

Z.USL

Z.LSL

Cpk

Cpm

Z.Bench

Z.USL

Z.LSL

Ppk

PPM < LSL

PPM > USL

PPM Total

PPM < LSL

PPM > USL

PPM Total

PPM < LSL

PPM > USL

PPM Total

17.0000

*

0.0000

45.4167

48

18.5416

23.0251

-1.59

-1.53

2.45

-0.51

*

-1.38

-1.23

1.97

-0.41

0.00

895833.33

895833.33

7153.72

937311.80

944465.52

24277.18

891428.31

915705.49

Process Data

Potential (Within) Capability

Ov erall Capability Observ ed Perf ormance Exp. "Within" Perf ormance Exp. "Ov erall" Perf ormance

Within

Overall

USL = 17 DaysLSL = 0 DaysZ Bench = -1.38Mean = 45.4 DaysDPMO = 915,705

19

Delivery to Install Process Capability

6040200-20

USLLSL

Process Capability Analysis for Delivery to

PPM Total

PPM > USL

PPM < LSL

PPM Total

PPM > USL

PPM < LSL

PPM Total

PPM > USL

PPM < LSL

Ppk

Z.LSL

Z.USL

Z.Bench

Cpm

Cpk

Z.LSL

Z.USL

Z.Bench

StDev (Ov erall)

StDev (Within)

Sample N

Mean

LSL

Target

USL

936886.20

850796.26

86089.94

947493.93

904450.10

43043.82

895833.33

895833.33

0.00

-0.35

1.37

-1.04

-1.53

*

-0.44

1.72

-1.31

-1.62

15.3667

12.2227

48

20.9792

0.0000

*

5.0000

Exp. "Ov erall" Perf ormanceExp. "Within" Perf ormanceObserv ed Perf ormanceOv erall Capability

Potential (Within) Capability

Process Data

Within

Overall

USL = 5 DaysLSL = 0 DaysZ Bench = -1.62Mean = 20.9 DaysDPMO = 936,886

20

High Level Touch Point Map

EmployeeTermination\Resignation

Process

Employee MoveProcess

Equipment isscanned into

Asset Databseand deployed to

User

Equipment lost\Stolen

Process

WarrantyReplacement

Process

Physical InventoryProcess

Has equip. benn lostor stolen?

Has the item beenreplaced under

warranty?

Has the employeeresigned or been

terminated?

Is there a physicalinventory taking

place?

Is the employeemoving locations?

DispositionOffice is closed orsold?

Office Move\Sale\Closing Process

No No No No No

No

Yes Yes Yes Yes Yes

Yes

Asset Informationverified\Updated

when a call isplaced to the GHD

Call Placed to GHD?

Yes

NoLANDesk Scan

Asset is updated in this process

Asset is updated some of the time in this process

Asset is never updated in this process

Process does not exist

LANDeskHardware\

Software Inventory

No

Yes

21

Touch Point Inputs & Outputs

Physical InventoryProcess

Employee MoveProcess

Office Move\Sale\Closing Process

LANDeskHardware\

Software Inventory

Inputs Outputs

Equipmentlease Assumption andAssignment FormsBuyout QuotesUpdated Asset InformatonUpdated Asset Database

EquipmentUpdated Asset InformationUpdated Asset Database

Updated Asset InformationUpdated Asset DatabaseInventory

Asset Information inLANDesk Software Inventory Hardware Inventory

EquipmentLANDesk ClientLANDesk Servers

EquipmentNew OwnersContractInventory ListsHR Forms

EquipmentHelp Desk TicketsHep Desk FormsIT EmployeeHR Forms

EquipmentBar Code LabelsBar Code ScannerEmployee ListLocation ListInventory DataIT Employee

ITFinanceEnd User

Customers

ITHREnd User

ITFinanceEnd UserLegal

ITEnd User

Equipment lost\Stolen

Process

WarrantyReplacement

Process

Asset Informationverified\Updated

when a call isplaced to the GHD

Inputs Outputs

EquipmentEmployeeHelp DeskHR Forms

Verified\Updated AssetInformationVerified Updated AssetDatabase

EquipmentCall into Help DeskEmployee

Defective EquipmentHelp Desk TicketVendor Service CallEmployeePC Technician

New EquipmentNew Serial Number (sometimes)Updated Asset InformationUpdated Asset Database

Police ReportLease Buyout QuotePurchase OrderUpdated Asset ListUpdated Asset DatabaseIKON Incident ReportCheck InventoryHelp Desk Tickets

Customers

SecurityITFinanceEnd User

ITFinanceEnd User

ITEnd User

No Connection to Asset DatabaseThis process does not exist today

EmployeeTermination\Resignation

Process

Updated AssetInformationUpdated Asset Database

NoticeHelp Desk TicketsHelp Desk FormsEquipmentEmployees ManagerHR Forms

ITHREnd User

8/19/20030307-01-001 David Levine

IKON SixSigma

IssueC = ControllableS = SOPN = Noise

Asset is updated in this process

Asset is updated some of the time in this process

Asset is never updated in this process

Process does not exist

Employee NewHire Process

Updated AssetInformationUpdated Asset Database

NoticeHelp Desk TicketsHelp Desk FormsEquipmentEmployees ManagerHR Forms

ITHREnd User

22

Process Map for Inventories

Does item have anIKON Bar Code

Label?

Scan the itemIs the item in

the Database?Is all of the

information correct?

Update theinformation

Add item and allrelevant

informationAdd the label

Did the itemScan correctly?

Replace Bar CodeLabel and send

the old BC numberto Foster

Yes

No

Yes Yes Yes

No No No

Physical Inventorywith Bar Code

Scaner

C EquipmentC Bar Code Labels

C Device with label

C EquipmentC Bar Code Scanner

C Equipment ListC Bar Code ScannerC Bar Code Lables

C New Bar Code Label

C Old Bar Code #

C Updated Asset Information C Updated Asset Information

C Updated User\equipment Information

C Updated User\equipment Information

Go to next asset

10 sec.

20 sec.

30 sec. 5 min. 3 min.

Cycle Time = 20 sec. - 5.5 min.

Key C - Controllable N - Noise S - SOP

Issue

23

Process Map for Disposition

72 Min. - 35 Days

LocateEquipment

Equip.Found

KeepEquipment

ReplaceEquipment

Ship to 3rd PartyShip to lessor\lessor recieves

equipment

Buy OutEquipment

Is Equip.Returnable

No

Yes

Yes

No

No

Yes

C Lease Schedules C Equipment ListC Asset DatabaseC Other Asset RecordsC Vendor Information

C Lease ScheduleS Buyout RequestS Purchase OrderC Serial or Asset Number(s)

S RequestS Help Desk TicketS Existing Equipment

-or-S Purchase OrderS New Equipment

C Equipment to ReturnC Packing SlipC Packing MaterialsC Shipping Labels

Old Equip.Packing Slip

Shipping Report

Invoice

FoundEquipment

EquipmentList

Rework

C Equipment to ReturnC Packing SlipC Packing MaterialsC Shipping Labels

ReconciliationReport

List of equipmentto be returned

Lease scheduleclosed

Key C - Controllable N - Noise S - SOP

Issue

30 Min. - 1 Year +

2 Days for adedicated truck

5 Days for anon-dedicated

truck

Lease EndProcessing

C Equipment

Old Equip.Packing Slip

4 Days - 196 Days 1- 5 Days

24

Lease End Processing Map

Recieve Equipment New Equipment Preperation

Unbox EquipmentRecieve

Equipment intosystem

Fix Issue

Is there a Problemwith reciept?

2 Min. 5 Min.

30 Min.

Cycle Time = 7 min - 47 min

Prep to Ship

Cycle Time = 52 min - 5 Days

Total Cycle Time = 72 min - 35 Days

No

Yes

Is EquipmentDamaged?

Setup EquipmentRun inventory

program & uploadresults to server

Wipe Hard Drive

2 Min. 20 Min.

30 Min.

PasswordIssue?

No

Yes

Resolve Issue

20 Min.PhotographEquipment & Send

Photograph toIKON

10 Min.

Yes

No

Manual Inventory

Boot Issue?

Send Unit toRepair

Does Unit Boot to C:Prompt?

Is repair cost>= FMV?

Repair Equipment

Dispose ofEquipment

5 Min. - 5 Days

No

NoYes

Yes

Swap hard drivewith a known good

hard drive

No

Yes

Clean Equipment

Send to BulkStorage until truck

is ordered

Sort equipmentonto lease pallet

per lease due date

Ship equipment inSystem

Cycle Time = 13 min - 30 Days

7 Minutes

1 Min.1 Min.30 Days

Pack according tolessor quidelines

Send to Lessor

3 Min.

Times are averagesbased on 1 person and1 piece of equipment

Potential Issue

Spreadsheet EntryBox

1 Min.

20 Min.

Does equip. needother repair?

Yes

No

25

Data Collection Plan

Data Description Collection Type Type Collection Plan Status

Days + or - the lease end date that equipment is received by the lessor

On-Going Continuous – Time in Days Setup standard reports with Dell Complete

Return Status On-Going Discrete- Classification Setup standard internal reports Not Started

    Returned    

    Bought-out - Missing    

    Bought-out – Stolen    

    Bought-out – Damaged    

    Bought-out - Retained    

Cycle time from request to order One -Time Historical Continuous - Time in Days Systematic Random (every 40th ticket from the last 6 Months)

Complete

Cycle time from order to delivery One -Time Historical Continuous - Time in Days Systematic Random (every 40th ticket from the last 6 Months)

Complete

Cycle time from delivery to installation One -Time Historical Continuous - Time in Days Systematic Random (every 40th ticket from the last 6 Months)

Complete

Cycle time while at 3rd Party Lease End Processor

One -Time Historical Continuous - Time in Days Systematic Random (every 40th ticket from the last 6 Months)

Complete

26

Data Collection Plan Continued

Data Description Collection Type Type Collection PlanStatus

Number or Desktops, Laptops and Servers on lease with Dell and their Lease End Dates.

One -Time Historical Discrete – Count and Month All Dell Lease Schedules up to 1/1/2006 Complete

Number or Desktops, Laptops and Servers on lease with IBM and their Lease End Dates.

One -Time Historical Discrete – Count and Month All IBM Lease Schedules up to 6/30/05 Complete

Number of Moves, Add Changes One -Time Historical Discrete – Count GHD Report for the last the past quarter with annual estimates

Complete

Final Disposition Report for Compaq Lease Schedules

One -Time Historical Discrete – Returned\Not Returned Request Report from CFS-HPFS WIP

Final Disposition Report for Compaq Lease Schedules

One -Time Historical Continuous – Days early or late Request Report from CFS-HPFS Complete

Cycle time from 3rd Party Lease End Processor to Lessor

One -Time Historical Continuous - Time in Days Request data from Dendrite Complete

Cycle time from IKON to 3rd Party Lease End Processor

One -Time Historical Continuous - Time in Days Request from Regional IT managers Complete

27

Project DMAIC Checklist/Status

Problem Statement:

Black Belt: David Levine CTS’s: _______________________________________________________

Project Champion: Tracey Rothenberger Defects to be Reduced: Units not returned to lessor on time or at all

Deployment Champion: Andrew Twadelle Beginning DPMO/Sigma Level: 973741.45

Master Black Belt: Dan Douglas Final DPMO/Sigma Level: ________________________________________

Six Sigma Project DMAIC Checklist

Project : IT Asset Reassignment / Moves

Define Measure Analyze Improve Control

Completion Date: Completion Date: Completion Date: Completion Date:

Discover Variable Relationships

Establish Current Performance

Establish Performance Objective

ID Alternative Solutions

Determine “Best Fit” Solution

Establish Process Tolerances

Update FMEA

Develop Pilot Plan

Pilot “Best Fit” Solution

Validate Improved Performance

Conduct Cost/Benefit Analysis

Complete Improve Phase Project Review

Redefine Process Capability

Develop Control Plan

Develop Mitigation Plan

Implement Process Controls

Develop Monitoring Plan

Implement Process Control Plan

Obtain Financial Validation

Completion Date:

Define Project Scope

Initiate Team (Kick-off)

ID Process Customers

ID Process CTS’s

ID Process Metrics (Y’s)

Complete SIPOC Map

Complete Define PhaseProject Review

Receive Approval to Move to theMeasure Phase

Receive Approval to Move to theControl Phase

Confirm Baseline Capability

Identify Sources of Variation

Complete Detailed Process Map

Complete C&E Diagram & Matrix

Complete FMEA

Perform Data Collection for Analysis

Screen Potential Causes

Conduct Graphical Analysis-

Conduct Hypothesis Testing

Complete Root Cause Analysis

Receive Approval to Move to theAnalyze Phase

Develop Data Collection & Sampling Plan

Identify Potential X’s

Validate Measurement System

Collect Data on Y’s

Perform Capability Analysis

Voice of Process/Benchmark

Define Performance Objectives

Complete Measure Phase Project Review

Receive Approval to Move to theAnalyze Phase

Receive Approval to Close the Project

Complete Control Phase Project Review

Obtain Financial Analyst Sign Off

Obtain MBB Sign Off

Obtain Project Champion Sign Off

Obtain Steering Committee Sign OffComplete Analyze Phase Project Review

Leverage Project within Organization

August 19,2003