BAB003

Revised November 29, 2004

Institute for Latin American Business

Quality at Gillette Argentina

Jorge Micozzi, president for Latin America of the Gillette Company, looked up from the report on Argentinas Total Quality Management (TQM) program that was going to be delivered to the corporations quality council in early 1999. As you can see from these business measures, he told the casewriter, our TQM program has been very successful. This has been my most important program and Victor Walker, program manager, was the key to its implementation. Micozzi described the early days of the TQM program when, as general manager of the Argentine subsidiary of Gillette, he assigned Victor Walker as total quality manager, When this program was launched, Victor helped us see how to implement it. This program has changed the companys culture. We now believe that we have experienced a 40% benefit in our business as a result of TQM. He pointed around him at the small, elegant building in a suburb of Buenos Aires that housed the professional and administrative staff of the Argentine affiliate: This building was designed and built in 10 months by nine quality action teams tackling everything from furnishings to moving. The move occurred over a weekend. Its tangible proof of our program. Micozzi had recently been promoted from his position as general manager of the Argentine affiliate to group President. His intention now that he had responsibility for all of Latin America was to assure that every affiliate adopted the model that Argentina had developed: Im going to tell them, Go, see and implement in your own subsidiaries.

Background
Every working day at a Gillette plant in South Boston, 200 men lather up their faces and scrape away the fifteen thousandths of an inch their 10,000 whiskers have grown over the previous 24 hours. Peering into side-by-side mirrors, these volunteers are evaluating razors of the future for sharpness of blade, smoothness of glide, and ease of handling. When theyre finished, the men punch their judgments of the prototype they used into a computer
Anne Donnellon and Susan Engelkemeyer, Associate Professors, Babson College, prepared this case as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. The development of this case was made possible with the generous support of the Institute for Latin American Business at Babson College. Copyright by Babson College 2000 and licensed for publication to Harvard Business School Publishing. To order copies or request permission to reproduce materials, call (800) 545-7685 or write Harvard Business School Publishing, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise without the permission of copyright holders.
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These rituals are carried out in a building emblazoned with a quaint sign proclaiming it to be WORLD SHAVING HEADQUARTERS; the whole exercise seems more than a little archaic, like some throwback to a pre-industrial age. Yet the humble facility is operated by one of Americas premier corporate innovators, a company that churns out so many cutting edge products that it has climbed into a select circle of Wall Street superstars1 Best known for its razors and blades (Trac II, Sensor, and its latest, the premium-priced MACH3), the Gillette Company was also the leader in batteries (Duracell), dental care (Oral-B), and toiletries (Gillette Series), and was a top seller of writing products (Paper Mate and Parker Pen) and electric shavers and other small appliances (Braun).2 The company was founded in 1901 and by 1905 had started operations abroad with a sales office in London and a manufacturing site in Paris. In 1999, Gillette sales amounted to $10 billion, with 60% of revenues from outside the United States. Manufacturing operations were conducted at 54 facilities in 20 countries, and products were distributed in over 200 territories around the world. The company employed 39,800 people, nearly three-quarters of them outside the United States.3 Every day, at least 1.2 billion people around the world used one of more Gillette products. In 1998, the company was the worldwide leader in 10 consumer product categories. In recent years, Gillette had introduced more than 20 new products annually. That year was the fifth consecutive year in which at least 40% of sales came from new products. Gillette opened operations in Argentina shortly after World War I. Until 1942, it had functioned as an importer and distribution company. According to a recent history of the company,4 the Argentine subsidiary built its first manufacturing plant in that year to take advantage of a void created when a German blade company closed its operations. Throughout the tumultuous decades that followed the war, the companys early presence in Argentina allowed it to remain and grow, while other competitors fled from the countrys political and economic instability. From 1945, when General Juan Pron nationalized companies in many sectors and introduced extremely high tariffs, Argentina was a closed economy. Once the worlds seventh largest economy, the country suffered from regular bouts of high inflation and scarcity. By the late 1980s, hyperinflation (with a spike from 388% in 1988 to 4,923% in 1989) had precipitated a whole new way of managing the business in consumer goods companies like Gillette. It involved a sophisticated and perilous hedging of dollars, buying and selling at appropriate times ... [and] meant communicating almost daily with key suppliers frequently it meant demanding payment in advance.5 Despite these extreme challenges, Gillette Argentina never failed to deliver a profit to headquarters, with the exception of 1989.

1 Grant, Linda. Gillette Knows Shaving And How to Turn Out Hot New Products. Fortune, October 14, 1996, page 207. 2 http://www.hoovers.com. The Gillette Company Hoovers Online. 3 http://www.gillette.com/company/ataglance.html. 4 McKibben, Gordon. Cutting Edge Gillettes Journey to Global Leadership. Boston: Harvard Business School Press, 1998, p. 327. 5 McKibben, p. 336.

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The economic crisis of 1989 brought Peronist presidential candidate Carlos Menem to office, and within a year, the business climate began to undergo profound change. State-owned companies were privatized, tariff laws all but disappeared, and regulatory changes of huge proportions were put into place. Astute managers began to recognize that competition would soon increase, in all likelihood from foreign companies. At Gillette, people began to see that soon the company would need to move beyond the financial approach that had, of necessity, dominated in the past.

Quality Comes into Focus

The inspiration to focus on quality in Argentina started in the late 1980s, with Carlos Rotundo, then director of manufacturing and logistics. While reading an article that posed the question who is our customer, he became excited about the possibilities for using the best practices described there. He was particularly interested in the idea of using crossfunctional teams to achieve better efficiencies. After an early and successful focus on managing inventories, Rotundo soon moved to the interface with sales. As he saw it, The most important outcome [of this effort] was a different way of working with sales. We put ourselves on their side, saying ask whatever you want or need, well do it for you. At about the same time, the Gillette Latin American management team began to take stock of the significant changes occurring within their business environment. As trade barriers were coming down with the potential to increase competition and affect Gillettes market shares, they realized that to survive and be successful within this new environment, they could not just continue to manage the business in the way it had been managed in the past. For this reason, they turned to total quality management. Michael Sharp, the human resource director for Latin America, investigated a number of consultants on total quality management and narrowed the choice to Organizational Dynamics Inc. (ODI), a Massachusetts-based consulting and training company. When Robert G. King started his job in March 1991 as group vice president for Latin America, he learned that Michael Sharp was just hiring ODI as the consulting firm to help Gillette Latin America implement quality principles. King had just come from being general manager of Gillette Mexico where I was being preached to about the benefits of TQM, which I saw as a matter of people doing what they should. As he became convinced of the benefits of TQM and of the qualifications of ODI, King wondered about the next hurdle, who is going to do this? He was persuaded that the worst way would be to force it down peoples throats. So with Sharp, he decided to broach the idea at one of his quarterly meetings for Latin American general managers. Here, ODI put on a day and a half workshop on quality for all of them. When it was finished, King told his managers, Okay, if you want to do this, Ill pay for it. So, who wants to volunteer? King and Sharp recalled that Ken Rule, then GM of Mexico put his hand up first, followed quickly by Jorge Micozzi of Argentina. While all of this was occurring in Boston, Argentina continued its independent path toward quality. In 1990, Rotundo started collecting more articles and books on TQM. He prepared two sessions of talks to develop the thinking of his colleagues. They agreed to start forming teams to continue the work that had started in Rotundos department. We started by creating a client survey with sales people. Then, we chose ten of the clients critiques and assigned one to each team to work on, Rotundo explained. Thus, when Jorge Micozzi, an
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Argentine who had held various positions throughout the Americas, was assigned in 1991 to be general manager of the Argentine subsidiary, he found a company already working on an initiative that would start a spread effort in the region.

Getting Serious about Quality

Organizational Dynamics Inc. (ODI) developed the quality initiative for Gillette. The initiative was based on customer focus, total participation, systematic support of the effort, measurement of results, and continuous improvement. ODI recommended creating a quality structure, consisting of a quality council that gave strategic direction concerning quality initiatives, a steering committee that oversaw implementation, and a quality director responsible for assuring and improving execution of the quality programs established. The quality action team was the mechanism recommended by ODI for achieving wide participation in total quality programs. In 1992, Mexico introduced a program for TQM that involved one-to-one contracts between individuals working interdependently. For example, the molding machine operator and the pen assembly operator agreed to use quality principles to improve a low rate of molded assembly due to inferior piece parts. This program was implemented very successfully. In the beginning, Argentina started applying both the ODI approach with teams as well as the contract approach. To prepare them for the quality action teams (QATs), employees received specialized training in a four-phase problem-solving process, called FADE. The phases were: 1. 2. 3. 4. Focus development of a problem statement. Analyze use of data to understand the magnitude of the problem. Develop determination of a solution and implementation plan. Execute implementation of the plan and measurement of its impact.

QAT members were also trained in seven basic quality tools (check sheets, control charts, fishbone diagrams, histograms, Pareto charts, run charts, and scatter diagrams) as well as brainstorming, force-field analysis (identification of the forces and factors that support or work against the solution to a problem), and cost-benefit analysis. The teams were assigned facilitators who were trained as team leaders. Team leaders received formal training in areas relating to group dynamics, leadership skills, effective meetings, and group conflict. The one-to-one contract system was so successfully introduced in Mexico that it produced over 10,000 contracts within the first few years of operation. Argentina began its implementation soon after Mexico. Colombia also introduced the ODI program, as did Chile. King observed that, Brazil was the slowest to adopt the approach. Over 4,000 people in Latin America went through ODIs training conducted by Gillette facilitators. In 1993, ODI sent consultants to Buenos Aires to train the Argentine directors, managers, and 20 others who would become the trainers of the rest of the organization. Jorge Micozzi became an immediate convert to TQM. He explained his conversion,

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As I preach to almost anyone who will listen: I came to the conclusion soon after we launched the TQM program in Argentina that the recommendations, solutions, results from principles of working in crossfunctional teams were better, richer, more creative than any others. When you put people from different disciplines together to improve a process or a ratio, you get far better results. We needed to improve our decisions and processes because I could see that as our Argentine market opened, more competition would come in from the U.S. and Europe. To compete and keep our market share, we needed to be better, faster, and easier to work with. Micozzi and his directors became the quality council. One of their earliest decisions was to introduce the use of contracts for achieving improved quality, the approach that was being successfully implemented in Mexico. Ana Maria Bazan, taxes and accounts payable supervisor in the Treasury Department, was one of the original quality trainers, called facilitators. She characterized the challenge of involving others: Before TQM, we were not accustomed to team work, we solved problems alone and didnt understand how our work cost other areas It was hard in the beginning. I used to care only about what my group wanted or needed. We were fighting for our interest, but worked against the interests of the company overall. Bazan and the other quality facilitators became frustrated with the contract approach. It created lots of paperwork. People liked the idea of quality action teams but rejected the contracts. They refused to sign them. The facilitators took their concerns to Rotundo under whose direction the quality program was. Rotundo delegated responsibility to investigate the concerns to the newly hired quality manager, Victor Walker.

Gillette Argentina, a New TQM Approach

Victor Walker, an Argentine who had worked in several manufacturing assignments for Gillette including a stint in the Boston headquarters, had recently returned from Mexico. There he had been the business manager for the writing instruments product line. Within months of taking that position, Walker was in a near fatal car accident that left him in a coma for many weeks. Miraculously, he survived and underwent extensive rehabilitation therapy for several months. When he was able to return to work, the recommendation was that, in the beginning, he take a job that would not entail much stress initially. In December 1993, Micozzi assigned him to the new post of total quality manager, with Carlos Rotundo as program director. When, as his first quality task, Walker investigated the complaints about the contract approach to quality, he found that people felt it was too bureaucratic and unnecessary. Walker researched the quality movement extensively. He became convinced that the action team approach would be most effective in the Argentine company. This was not just because of the enrichment of ideas that he thought came from teams but also because he thought it would serve as an integration tool within the company, eliminating the usual departmental barriers and/or selfish attitudes. With Micozzis and Rotundos blessings, he set about creating the new Gillette Argentina TQM. Workshops were conducted with all personnel to inform them about the new culture and working style to be achieved through quality action teams. The role of team sponsor was explained: a member of Micozzis operating committee who helped clarify the team charter,
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supported the team in any way needed, and helped the team achieve its objective with recognition of their empowerment, according to Walker. Because the culture of teamwork demands significant changes from traditional leadership style, Walker found that he often had to remind the sponsors, be careful, by [your] giving orders and suggestions, the team may avoid doing its own work. Another survey of clients by an external consultant provided the starting point for the new quality action teams. The steering committee, which was made up of managers from every functional area and facilitated by Walker, identified appropriate cross-functional teams and sponsors to work on the top client priorities. Teams were guided in their process by the ODI methodology and by sponsors. Walkers role was to monitor teams progress, offer workshops on problem-solving and statistical analysis, and to inspire everyone. According to many of his colleagues, Walker was an apostle, a prophet, singing the praises of TQM and with his energetic involvement, to change the culture and realize TQMs business potential.

Meeting the Challenges of Quality

Once the quality action teams were underway, the steering committee turned its attention to the early problems endemic to most TQM programs: getting full management support, increasing participation, execution of objectives with a sense of urgency, and sustaining momentum. Micozzi, whom Walker described as a TQM zealot, was deeply involved in winning the support of all of his operating committee. He signaled his own commitment in every meeting, where he routinely inquired of his executives how TQM was evolving in their functional areas. He was also an example of quality principles. He understood well the challenge that, as Walker put it, TQM cannot be dictated from above; you have to be patient, and to win people over by persuasion and with hard data on the benefits of TQM. Micozzis influence paid off. The quality council developed into a cohesive force for cultural change. In the words of one executive, the systematic support that the quality council displayed in the company towards TQM certainly was a cornerstone in the development of this working culture. The councils support enabled the steering committee to develop its own esprit de corps. Made up of important and well-respected managers from each functional area, facilitated by the TQM manager and led by the program director, the steering committee worked as a collegial body that conducted TQM in the company. One manager described the committees operating approach: all decisions were the result of ample and deep discussions within the committee and only implemented once consensus is reached. Many saw the major role displayed by the steering committee as a keystone for achieving Argentinas success. Increasing participation evolved slowly in the company. Initially, people were asked to participate on teams addressing issues of interest to them. Not everyone was pleased to participate. Micozzi described the efforts he had to make behind the scenes to persuade his executives to give their full support to the quality program, Early in the program, we noticed that we had the least participation on our quality action teams from the sales department. We thought this was
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incompatible with our quality programs main purpose of customer satisfaction. To guarantee that teams would achieve that, you had to have sales people on your team. So I had a chat with the chap responsible for sales and told him this. His response was you cant take people out of the field to participate in teams. My response was you have to, if your goal is improved customer satisfaction. After nine months of such conversation, the results were amazing. Today 80% of Gillettes sales force is participating in QATs. As teams became more proficient in working together, they also became more efficient, which made them less demanding on peoples time. The emphasis on client needs also made them more compelling. Eventually, the norm became that people volunteered to participate on teams they heard were forming. Mario Pomar, sales manager of local sales service, maintained that people liked working on the quality action teams because they learned about the whole company and through the experience, gained a global perspective. He said that by 1998, people enjoy[ed] being part of TQM because they can see their ideas are respected and even implemented. To increase the likelihood of successful execution of team objectives, new steps in the process were created. First, it was agreed that the steering committee would create annual objectives for the TQM program. (Exhibit 1 is a partial listing of the various team projects undertaken at Gillette Argentina). Over time, teams were required to specify early in their process how their efforts would contribute to business outcomes. (Exhibit 2 shows the form used in the benefits quantification method developed by a QAT in 1997 and used by every team thereafter.) Finally, it was decided that the teams task would not be concluded until they made a presentation concerning their work and its benefits to the Operating Committee. Walker was well known for his constant oversight of teams. He would routinely contact team leaders to get progress reports and those leaders knew that Walker would be reporting this to the operating committee. Colleagues described his approach as tenacious but supportive, he gave no compulsory deadlines, just asked whens it going to be done? and then followed up at that time. One early doubter of TQM who became a true believer characterized Walkers personal contributions to TQM: Victor has a very special attitude; he supports and helps everyone in the company with all related subjects. He is very involved; when a team has problems, he participates and helps them. He has a very strong character, very good analysis, and transmits real commitment not just a cassette but real. To sustain the momentum that the TQM program developed at Gillette Argentina, Walker initiated two new aspects of the effort in 1994 and 1995. The first was the inclusion of TQM participation measures in the annual performance appraisal. Walker and others felt that the numerous calls at years end to determine, how many teams did I serve on this year? showed the depth of commitment that people felt to the program. The second was the creation of a special recognition program called quality stars. The steering committee created a Star of Quality award that would be given annually to four employees from different parts of the company who contributed the most that year to TQM in Argentina. One each was selected from headquarters and factory administration, factory workers,
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and field sales. Announcement of the awards was made at a banquet attended by every employee of Gillette Argentina. Each awardee received a set of elegant silver pens and a specially designed sculpture. These stars formed a group that met to suggest how to improve and deepen the TQM program. The prominent display of these awards in the stars workplace bespoke the value attached to them.

Outcomes of TQM
According to Carlos Rotundo, the TQM program generated benefits to the company that were both tangible and intangible. Our most important results, he argued were: first, comprehension among areas that these changes can only be done with the participation of people, and second, the creation of a team-work climate. We dont work with orders but with consensus, we listen to others problems, and we work together to solve problems. Mario Pomar, while recognizing the costs of TQM in terms of the time spent in meetings, argued that another important outcome of TQM was the change in culture that heightened everyones focus on customer satisfaction. He also felt that the culture had become one of real empowerment, in which people were truly trusted and therefore felt confidence in their own decisions. Not insignificantly, he believed that the culture had changed in another aspect, that people have developed the habit of working to remove the source of their problems. Ana Maria Bazan expressed similar sentiments and elaborated, people say they have found another way of working; those who left and come back say they like the way we work now; and we work with our clients in the same way we care about the others interests. Conflict doesnt disappear, but you can work to manage it. The tangible benefits to customers of Gillette Argentinas quality program were clear-cut in 1998. That year, the company conducted another audit of customers to verify that its TQM program was having the business benefits it sought. Conducted by Research International, a U.S.-based consultant, the survey solicited the opinions of the major wholesalers and retailers in Argentina comparing Gillette with major competitors in each product line, e.g., Colgate, Unilever, Bic, and Eveready. The survey found that Gillette went from 6.5 on a 10-point scale of satisfaction in 1991 to 8.0 by 1994 and to Best in Trade by 1998. On one specific measure of customer satisfaction of great importance to the large retailers who were Gillettes main customers, the index of complete order delivery went from 85% in 1994 to 97% in 1998. Gillette Argentina also realized significant financial benefits in the period that followed the implementation of the total quality program. Annual sales grew by 19% in the years between 1993 and 1998, and the average profit growth in this same period was 22%. Inventory turns went from 4.8 to 8.7, and POE (period operating expense) went down by 40%. Finally, ROA (return on assets) increased by 60% in the same period. Walker estimated that the profitability increase attributable directly to TQM were $17.8 million dollars between 1993 and April 2000, plus all non-monetarily quantified benefits, mainly related to external clients and internal process improvements.

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Conclusion
Although quality was thriving as a business process in Gillette Argentina, it was moribund as a driving force in other parts of the company. Bob King, who left his Latin American group vice-president position in 1995 to become vice president of international and most recently executive vice president for commercial operations for the Western Hemisphere, felt that TQM was not a particularly current concept at Gillette in 1999. He thought that as a business philosophy, TQM per se has faded. However, he felt that the benefits of such concepts and philosophies were that they challenge you to reinvigorate your processes and your business. In 1999, with all the restructuring that Gillette is going through, the techniques and principles are still evident. King elaborated: the lasting elements of TQM are the focus on customer satisfaction, both internal and external and the removal of barriers between departments. Success of the enterprise depends on total customer satisfaction, whether the customer is Wal-Mart or pen assembly. Mike Sharp, who in 1999 was the human resource director for Gillettes Africa/Middle East region, felt too that TQM had become an outmoded phrase. However, Sharp added, The basics of TQM like overall business process mapping, continuous improvement, openmindedness to change, and working as a team are still critical to success. Working as a team is more important than ever. Both knew that Micozzi was realizing considerable business benefits in Argentina and expected him to continue to spread the word again throughout Latin America. However, it would not be easy. According to them, the quality initiative in Mexico, where it had once thrived was dying in 1999 because the people who were the real zealots have left. There were also several Latin American subsidiaries where the quality initiative had never really taken hold. Nevertheless, the opportunity and need for ongoing business transformation were great. Kings words, in Latin America now, things are changing rapidly. Due to the introduction into the retail market of major US and European retailers like Carrefour, Promodes, Ahold, and Wal-Mart, the technology being used for point of sales is as sophisticated as any in the world. The top four customers are 80% of the business. So there is still great opportunity for companies that put the customer first. Jorge Micozzi knew it too, as he said, call it the way you want, but without teamwork and customer focus, you are bound to fail, now or back then in 1993, when TQM was first implemented in Argentina. To increase market share elsewhere on the continent and to preserve it in Argentina, he felt quality principles had to be the way the company worked. He was also persuaded that the Argentine quality program needed to be exported to the rest of Latin America. His only real question now was how.

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Exhibit 1 Quality at Gillette Argentina Quality Action Teams and Estimated Cost Savings
QAT 7 8 9 16 & 31 17 18 19 22 25 27 28 45 46 51 53 56 62 72 78 79 80 95 97 104 117 119 121 122 128 131 132 136 137 159 DESCRIPTION JIT in manufacturing operations. Diminish purchasing lead-times - non prod. matl's. Improve handling of palletized finished goods. Modify 'order-invoicing' process improving deliveries. Diminish unloading time in warehouse. Orders shipped complete. Self-budgetary control. Reduce assembly time of Trac II razors. Profitability improvement plan in P. Care line. Solve collection problems with SSS. New building: QAT's savings Cost reduction opportunities in male deodorant line Profitability improvement in WI. - Massive line. Suppliers proposal show. Contract filler service to Gillette. Increase efficiency in Coster machine. Integration of Parker/Sylvapen operations to Gillette Cost reduction in female deodorant products. New system for sales to personnel. New packaging system for Oral-B toothbrushes. Inventories and SKUs reduction in WI line. New coloring method in molding area. Rationalize daily invoicing information. Minimize issuance of manually made Credit Notes New packaging system for Sensor one-up. In-house aerosol caps molding DCVs reduction. P.V.C. thickness reduction for ER-49 blister. Integration with Duracell in Argentina. Health protection Cost reduction of blistering process-Oral-B & WI Optimize clients list Analysis of Duracell former accounts. '98 world cup among clients. Credit invoices -24760 law. ANNUAL SAVINGS 10,000 5000 2,000 100,000 1,000 65,000 100,000 10,000 1,693,403 480,000 270,000 50,000 187,000 34,500 60,000 107,000 1,100,000 50,000 17,400 60,000 100,000 12,000 95,000 19,200 757,000 104,000 27,600 1,976,000 500,000 203,000 587,000 151,130 450,000 310,000 CATEGORY Method improv Method improv. Method improv. Client focus Method improv. Method improv. Method improv. Cost savings Profitability Client focus Cost savings Profitability Profitability Cost savings Cost savings Tech. improv. Cost savings Profitability Method improv. Profitability Profitability Cost savings Method improv. Cost savings Profitability Profitability Profitability Cost savings Cost savings Profitability Cost savings Cost savings Sales increase Method improv.

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Exhibit 1 (Continued) Quality at Gillette Argentina Quality Action Teams and Estimated Cost Savings
QAT 160 162 192 194 196 204 206 223 224 226 243 256 N/A N/A N/A DESCRIPTION Use of laptop computers by Stationery salesforce. Banking system for personnel within Gillette. Building of new Toiletries manufacturing plant. Inventory reduction in WI line Integration of Gillette Uruguay to Argentina Cost reduction of packaging materials for WI. Toothbrushes packaging. Clear Gel plastic parts. Partnership with vendors. CMD operations for WI Prestige line in GMC Stationery Products line. G.O.C.I. implementation Self-service stores / Central warehouses '96 vs. '95 inventory turnover improvement. '97 vs. '96 inventory turnover improvement 98 vs. 97 inventory turnover improvement ANNUAL SAVINGS 20,000 98,000 5,000,000 60,000 537,000 218,300 154,000 195,000 20,000 99,000 217,000 210,000 284,000 100,000 175,000 CATEGORY Cost savings Pers. excellency Profitability Profitability Methods improv. Profitability Profitability Profitability Profitability Profitability Profitability Cost savings Method improv. Method improv. Method improv.

ADDITIONAL SAVINGS: Projects already finished with economical impact being evaluated Sub - Total: 200,000

POTENTIAL SAVINGS: Projects underway, nearly finished, with favorable monetary impact Sub-Total: 550,000

GRAND TOTAL:

$ 17,831,533

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Exhibit 2 Benefits Quantification Form

QUANTIFICATION OF BENEFITS
QAT: # ________
I) Define which category corresponds the subject of your team:

Processes

Sales

Int. client

Ext. client

Company image - internal

Company image - external

II)

Final results measurement will be in:

$$$$$

Measurement scale - 1 to 10

Survey

a) If a "scale", indicate the factors to be used and their weighing value:

FACTORS 123456_____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ WEIGHING _________ _________ _________ _________ _________ _________

b) If it is a "survey" or "scale", 1) estimate value of actual measurement / starting point, 2) verify with proper study when work is concluded

Starting value

Final value

III) Indicate the "added value" to the process

________________________________________________________________ ________________________________________________________________ ________________________________________________________________

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