Value Creation Copyright 2008 Alex Coman ARENA Value

Value Creation Copyright 2008 Alex Coman ARENA Value Delivery: Harmonic Strategic Planning Refinement Stages: Arena, Focus, Action Create Strategy n. Corporate Layer: Portfolio Businesses Arena Layers: Maximize Value Corporate, n. Business Layer: Business Positioning Products by Market Strategy Core Define Hierarchy n. Operations Layer: Process, Project and Product Agile value drive A F O C U S A R E N A C T I O N n. Arena actors: Partners, Threats; Current, Future n. Target Criteria Tailored Patterns. Prioritize attention Manage Control span Alex@Coman. org Tel: (972)3 -510 -1768 -1 - WWW. Coman. Org n. Dynamic Vectors: Vision, Resource, Deliver Guru 2 Gorilla Value Creation

Copyright 2008 Value Creation Alex Coman ARENA Canonical Form n. Entities: l. Market l. Firm/Coalition Vocabulary n. Relationships: Drugs l Business l Control l Information Teva l Web l. Monopoly/ Regulatory Agency l Integration: FDA l. Vertical Syntax l. Horizontal n. Value Chain: Structure Up Low Farmer n. Concise: Back Dairy Push l. Link Markets rather than Firms Distributor l. Business implies information flow. Retailer Down l. Titles on significant arrows. Forward High Consumer n. Pertinent entities only. Pull Alex@Coman. org Tel: (972)3 -510 -1768 -2 - WWW. Coman. Org Value Creation

Copyright 2008 Value Creation Alex Coman Health-Care Corporate Arena FDA Ministry of Health GMP Ivax Vitamed GSK Teva Innovative Generic Drug Manufacturers American CTS Lemon Glaxo IL Hospital Supplies Distributors Product EDI Disease Specialists Advertising Management Clalit Shahal Macabi Health Management Org. Admin Tele List Super. Pharm Shor. Tab Macabi Physicians medicine Pharmacies Web e. Med Prescription IMS Prescription Drugs Public Alex@Coman. org Tel: (972)3 -510 -1768 -3 - WWW. Coman. Org Over the Counter Value Creation

Copyright 2008 Value Creation Alex Coman Virtual Firm: off-shoring n. Agility: Value Net n. Li&Fung: 3, 600 employees in 37 countries: Logistics South Korea: Spinning Li&Fung European fashion designer Orders thousands of garments (Virtual Firm) Japanese plant in Guangdong China: zippers Five Tai sewing workshops Shipper Distributor Customer Alex@Coman. org Tel: (972)3 -510 -1768 -4 - WWW. Coman. Org Value Creation

Copyright 2008 Value Creation Alex Coman Time-To-Market: TTM Inditex’ 79 Hi. Tex 23 Robot cut & Die #3 >40% 400 Small Shops >50% Zara ‘ 75 Zara 467 Stores Older& Wealthier Alex@Coman. org Delta Fabric Far East Far Tefron Solog Benetton Delta East Garment Manufacturers Benetton Victoria’s Secret Labels Benetton Walmart Retailers St. Michael CK H&M Inner 900 Secret GAP suppliers GAP H&M M&S Macy’s 25 -35 years. College Crowd Late Teens Girls 12+Up Anti Gap Trendy Urban Cost Conscious Cheap cool Customers Tel: (972)3 -510 -1768 -5 - WWW. Coman. Org Value Creation

Pareto Copyright 2008 Value Creation Share of total revenue 100% 90% 80% Alex Coman C B “A” Significant few: 20% of population 80% of resources 20% Alex@Coman. org “B” 30% of population 10% of resources “C” 50% of population 10% of resources Classify – סווג Differentiate - בדל 30% Income Group Tel: (972)3 -510 -1768 -6 - WWW. Coman. Org 50% 100% Value Creation

Copyright 2008 Value Creation Alex Coman Pareto Distribution of US federal Income-tax revenue by income group 100% 50% 100% 25% 80% 60% 5 4 40% 20% Cum Percent Share of total revenue 15% 40% 20% 1 4 5 15% 25% 50% Income Group Alex@Coman. org Tel: (972)3 -510 -1768 -7 - WWW. Coman. Org 0 Value Creation

Value Creation High Oyster 80% 4% Value Expected Copyright 2008 Focus: 25% Pearl /– 25% 16% Alex Coman 4%Effort=64%Value White Low Elephant 64%E= 4%V Quick Wins 64% Difficult 80% Alex@Coman. org Easy Ease to Implement Value Creation Tel: (972)3 -510 -1768 -8 - WWW. Coman. Org

Copyright 2008 Value Creation Alex Coman FAST: from SWOT to SWAT Vision חזון Opportunities הזדמנויות Arena זירה Threats איומים Value חשוב Focus מיקוד Ease קל Action מימוש Strengths עוצמות Core ליבה Weaknesses חולשות Alex@Coman. org Tel: (972)3 -510 -1768 -9 - WWW. Coman. Org Value Creation

Copyright 2008 Value Creation Alex Coman Event-Factor-Review – EFR Event Outcome Description Value Factors Strengths Weaknesses Success Failure Pending Alex@Coman. org Tel: (972)3 -510 -1768 -10 - WWW. Coman. Org Value Creation

Value Creation Event Outcome Description Winning a tier 1 customer contract Leading a Success significant technical standards committee Copyright 2008 Alex Coman Event-Factor-Review Factor Strengths Weaknesses Rapid multidisciplinary • Product not product development. differentiated Good engineering and enough. production. New markets Good interdisciplinary require communications. “education”. Sales to market leaders. Technological innovation and professionalism. Choice people working in a creative atmosphere. High employee motivation. Exceeding Strong sales department. sales High sales growth rate. targets Tel: (972)3 -510 -1768 -11 - WWW. Coman. Org Alex@Coman. org The firm is losing money. Value Creation

Copyright 2008 Alex Coman Event-Factor-Review Event Factor Outcome Description Strengths Weaknesses Failure to sell to the leading Technological Small player in giants’ company in leadership. playground. the market Value Creation Failure Losing money over a period of 3 years Product over-specification and over-design. No access to the end-user Insufficient R&D strategic gating. High burn rate. Failure in M&A negotiations with a leading player in the industry Excessive technological orientation. No awareness of mergers and acquisition (M&A) potential. Alex@Coman. org Tel: (972)3 -510 -1768 -12 - WWW. Coman. Org Value Creation

Copyright 2008 Value Creation Alex Coman Core-Competence-Tree - CCT Owner Value was created High Sales Growth rate Sales to Market Leaders Strong Sales Department Good Engineering And Production Technological Innovation and Professionalism Rapid multidisciplinary System view Development Influence in Standards Committee Good Inter-functional High employee Motivation Communications Sales and Partnership with Choice People working in an atmosphere of excellence Leading Firms Core Competencies Technological Leadership Vision, Leadership and Managerial Ability Alex@Coman. org Tel: (972)3 -510 -1768 -13 - WWW. Coman. Org Value Creation

Copyright 2008 Value Creation Alex Coman Current-Reality-Tree - CRT Firm’s Market Value is Insufficient No Exit The Firm is Losing Money No Awareness to M&A Objectives Product Over-Specification and Over-Design Low Profitability Not enough Strategic Product No access to Gating in R&D Differentiated Enough The end User New markets Require “Education” Excessive Technology High Burn Focus on single Small Player Orientation New Technology In Giants’ Arena Rate Root Problems Alex@Coman. org Tel: (972)3 -510 -1768 -14 - WWW. Coman. Org Value Creation

Copyright 2008 Current-Reality-Tree: CRT Alex Coman n. Major Un-Desired Effect n 8 -12 Un-Desired Effects (UDE): Brainstorm l. Current l. Concrete l. Undesired l. Under our influence Value Creation n. Schema l. Arrows pointing from cause to effect. l. Effects at top, Causes at bottom. l. Root Problems ≈ 3 n. Feedback loops. Alex@Coman. org Tel: (972)3 -510 -1768 -15 - WWW. Coman. Org Value Creation

Value Creation Copyright 2008 Current-Reality-Tree Alex Coman Expensive Low Product High Product Cost Infrastructure Maturity Low Forecast Lack of DFX Long Lack of Reliability Planning Development commonality Process Resource Sales Process TTM Market management conditions Information management Flow in org. High mix Market Business Low volume Measurement ($) Conditions Incomplete Buyers’ Information development Marketing systems policy Lack of knowledge Synchronization. Competition Culture Outdated Lack of technology Structured Forgiveness processes No value engineering Alex@Coman. org Org. size & complexity Tel: (972)3 -510 -1768 -16 - WWW. Coman. Org Value Creation

Value Creation Alex@Coman. org Copyright 2008 Tel: (972)3 -510 -1768 -17 - WWW. Coman. Org Alex Coman Value Creation

Value Creation Alex@Coman. org Copyright 2008 Tel: (972)3 -510 -1768 -18 - WWW. Coman. Org Alex Coman Value Creation

Copyright 2008 Value Creation Alex Coman Vision Value Opportunities Arena Focus Action Ease Threats Strengths Core Weaknesses Alex@Coman. org Tel: (972)3 -510 -1768 -19 - WWW. Coman. Org Value Creation

Value Creation Alex@Coman. org Copyright 2008 Tel: (972)3 -510 -1768 -20 - WWW. Coman. Org Alex Coman Value Creation

Value Creation Alex@Coman. org Copyright 2008 Google Tel: (972)3 -510 -1768 -21 - WWW. Coman. Org Alex Coman Value Creation

Copyright 2008 Value Creation Alex Coman Vision Opportunities Arena Value Focus Action Ease Threats Strengths Core Weaknesses “It is not enough to succeed; Others must fail” Gore Vidal Alex@Coman. org Tel: (972)3 -510 -1768 -22 - WWW. Coman. Org Value Creation

Copyright 2008 Value Creation Alex Coman Ansoff Product Line Ansoff Old New Market Development: Diversification: (3/4 failure) M New A R K E T Old The Firm Old New Old Market Penetration Product Development: The Firm Old Market Penetration Market Development Boutique Firm Old New Market Breadth Product Development Firm New Old Market Diversification Depth Vertical Alex@Coman. org Tel: (972)3 -510 -1768 -23 - WWW. Coman. Org Value Creation

Value Creation Alex@Coman. org Copyright 2008 Brit. Vic Tel: (972)3 -510 -1768 -24 - WWW. Coman. Org Alex Coman Value Creation

Value Creation Alex@Coman. org 2008 Reckitt. Copyright Benckiser Tel: (972)3 -510 -1768 -25 - WWW. Coman. Org Alex Coman Value Creation

Value Creation Copyright 2008 Alex Coman Gap Analysis Core-Competencies Gap Analysis Game-Plan Key-Success-Factors Root-Problems Alex@Coman. org Tel: (972)3 -510 -1768 -26 - WWW. Coman. Org Value Creation

Value Creation Copyright 2008 P 4 A: Control Cycle Alex Coman Bottleneck Performance Control Chart Process Action Deployment Who What When Exploit: Strategic Gating Utilize: Garbage Subordinate: DBR – Tactical Gating Elevate: Offload P 4 A Setup Job Size Cost Accounting No Kit BMT WIP Pareto Problems: CRT Tel: (972)3 -510 -1768 Alex@Coman. org -27 - WWW. Coman. Org Value Creation

Value Creation Process: . 1 Aircraft Turnaround Critical Path Model Aircraft Unloading 32 minutes B 747 Copyright 2008 ONBLOCK Connecting Stairs/Jetty 7 minutes Deplaning Passengers 17 minutes Recharge Catering 22 minutes Cleaning Aircraft 33 minutes Cabin Security Check 8 minutes Aircraft Loading 44 minutes Alex Coman Fueling Aircraft 32 minutes Boarding Passengers 38 minutes OFFBLOCK Alex@Coman. org Tel: (972)3 -510 -1768 -28 - WWW. Coman. Org Value Creation

FRONTIER OPERATIONAL PERFORMANCE vs. The Industry 2. Performance U. S. DEPARTMENT OF TRANSPORTATION PERFORMANCE RANKINGS Over the last 15 months, Frontier has led all major carriers in On Time Performance 8 times. Percentage of Arrivals within 14 Minutes of Schedule On Time Arrival Performance Rankings shown above compare “major” carriers with similar operations. These carriers include: Frontier Airlines, Northwest Airlines, American Airlines, Air. Tran Airways, Southwest Airlines, Delta Airlines, US Airways, Alaska Airlines, Jet. Blue Airways, United Airlines, Continental Airlines & ATA Airlines.

Copyright 2008 3. Pareto Value Creation Alex Coman Reactionary Technical Air Traffic Control Operations Other Weather Passengers Alex@Coman. org Tel: (972)3 -510 -1768 -30 - WWW. Coman. Org Value Creation

Value Creation Copyright 2008 4. Problems Ishikawa / Fishbone Analysis Reactionary Delay AIRCRAFT ROTATION late arrival of aircraft from another flight or previous sector CREW ROTATION awaiting crew from another flight (flight deck or entire crew) Alex Coman CABIN CREW ROTATION awaiting cabin crew from another flight Reactionary Delay LOAD CONNECTION awaiting load from another flight Alex@Coman. org THROUGH CHECK-IN ERROR passenger and baggage OPERATIONS CONTROL re-routing, diversion, consolidation, aircraft change for reasons other than technical Tel: (972)3 -510 -1768 -31 - WWW. Coman. Org Value Creation

Copyright 2008 Value Creation 5. Action Alex Coman Action Deployment Gap משימה Alex@Coman. org Process לוח זמנים Resource באחריות מי Tel: (972)3 -510 -1768 -32 - WWW. Coman. Org Value Creation

Value Creation 2008 Alex Coman מדדים 6 : הגדר n Value Copyright Measures עקומת למידה : אתגר n. ניהול לפי יעדים - ותגמול , מעקב – תרשים בקרה : נטר n n 6 Value drivers n. Financial: l. Throughput = Sales – Direct Expenses; l. Operating Expenses: less people or more productivity n. Competitive: l. Lead Time=Time(Finish–Start)=Work + Wait. l. Due-Date-Performance n. Functional: l. Inventory: Raw materials+Work-In-Process+Finished Goods l. Quality l. Robust: Problems per Million l. Agile: Customization Alex@Coman. org Tel: (972)3 -510 -1768 -33 - WWW. Coman. Org Value Creation

Copyright 2008 Value Creation Alex Coman Old Economy Throughput New Economy Overhead “Non recurring” Hourly rate: Overhead Hours Direct Expenses “Bill-Of-Materials” Value, not quantity: Debt collection Antennas Bugs Hand sets Alex@Coman. org Tel: (972)3 -510 -1768 -34 - WWW. Coman. Org Value Creation

MAXIM Periscope Module Learning Curves I n s t r u m e n t 25 April 2003 MAXIM Periscope Module S y n t h e s i s & A n a l y s i s L a b o r a t o r y PRICE H Cost Model, p 35 Final Version

Copyright 2006 Coman Quality -> Garbage -> 6 Dr. Alex Sigma Control Cycle: P 4 A Operating Due-Date-Expenses Lead Performance Time Inventory/ WIP Garbage : X 10 Throughput Quality : PPM Robust Design Total Quality Management Alex@Coman. org Tel: (972)3 -510 -1768 -36 - WWW. Coman. org Supply Chain Control Cycle: P 4 A

Copyright 2006 Control Cycle: P 4 A Dr. Alex Coman C Sigma = = Deviation = EN SO R ED Normal Distribution - Gaussian Curve ( Square root of variance ) Axis graduated in Sigma -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 between + / - 1 between + / - 2 between + / - 3 between + / - 4 between + / - 5 between + / - 6 68. 27% result: 317300 45500 95. 45% 2700 99. 73% 63 99. 9937% 0. 57 99. 999943% 0. 002 99. 9999998% Alex@Coman. org Tel: (972)3 -510 -1768 -37 - WWW. Coman. org ppm outside ppm ppm ppm Control Cycle: P 4 A

Copyright 2006 Dr. Alex Coman Robust Design Cost of [Lack of] Quality: X 10 Law Control Cycle: P 4 A 47% None 240 Exposed 24 Damaged 1 Complaint 250%: 380% Spec 70% Use 100% Code Alex@Coman. org Tel: (972)3 -510 -1768 -38 - 75% Test WWW. Coman. org Control Cycle: P 4 A

Copyright 2006 & Mean Dr. Alex/Coman Just-In-Time / Lean Pull Control Cycle: P 4 A Throughput Operating Expenses Due-Date. Lead Performance Time Quality WIP Context Switching Bad Multi Tasking Complete Kit Gator Alex@Coman. org Tel: (972)3 -510 -1768 -39 - WWW. Coman. org Pull Control Cycle: P 4 A

Copyright 2006 Control Cycle: P 4 A Dr. Alex Coman Push and Pull Tactical Gating: JIT משימותחודש 200 Pusher Gator Push Pull O O O O O 1 מחלקה O O O O 2 מחלקה O O O O O WIP 600 משימות בתהליך O 3 מחלקה O O O O Alex@Coman. org Tel: (972)3 -510 -1768 -40 - O 1 מחלקה WIP 200 O O O משימות בתהליך 2 מחלקה O ב O WWW. Coman. org O 3 מחלקה O א Control Cycle: P 4 A

Control Cycle: P 4 A Dr. Alex Coman Tactical Gating Copyright 2006 Garbage Time Pusher WIP = ∞ Gater 0 Control Freak WIP = 1 Extreme Analysis Paralysis Satisficer WWW. Coman. org Alex@Coman. org Tel: (972)3 -510 -1768 -41 - Control Cycle: P 4 A

Copyright 2006 Subordinate לאילוץ המערכת יתר Dr. Alex את Coman הכפף. 4 כל המחלקות האחרות צריכות ל"שרת" את האילוץ המחלקות האחרות תומכות בתוכנית לניצול ומיצוי האילוץ ° שחרור העבודות בהתאם לתוכנית העבודה של האילוץ ° Control Cycle: P 4 A Warehouse Kit Preparation Lacquering Supervisor Electronic Testing Lab Processing Customer Quality Inspection Quality Assurance Processing Electronic Testing Lab Shipping Group Technology : התמקצעות Alex@Coman. org Tel: (972)3 -510 -1768 -47 - Customer Quality Inspection Shipping WWW. Coman. org Control Cycle: P 4 A

Copyright 2008 Value Creation Alex Coman FAST: from SWOT to SWAT Vision חזון Opportunities הזדמנויות Arena זירה Threats איומים Value חשוב Focus מיקוד Ease קל Action מימוש Strengths עוצמות Core ליבה Weaknesses חולשות Alex@Coman. org Tel: (972)3 -510 -1768 -50 - WWW. Coman. Org Value Creation

Copyright 2006 Control Cycle: P 4 A Dr. Alex Coman The Project Beam A river with no banks is a puddle Stabilize Responsibility Allocation Matrix Freeze gic e t a r t S Gating Kit cal V&V ti ctivity c a T G A + Gap Deliverable SOW Nice-to-have Value Killer Risk Existential Platform Pro to. G en Sim M e) P S C B W ages: eatur : s s e ack rce, F c o r P ork P esou Ext s/Wime(R e i Re. LVIP/B t i v nt: T Org sou ead N/ Acti e m ani rc ers n ig s zat es s A io Risk n Alex@Coman. org Tel: (972)3 -510 -1768 -51 - WWW. Coman. org Control Cycle: P 4 A

Control Cycle: P 4 A The Project Kite Dr. Alex Coman Fan Out Fan In Copyright 2006 Alex@Coman. org Tel: (972)3 -510 -1768 -52 - WWW. Coman. org Control Cycle: P 4 A