Monday, December 8, 2014

A Note from Halden Zimmermann on Best Practices

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Our upper management focuses on addressing gaps in operations by constructing Alcan’s Best Practice Network teams. Middle managers then have employees participate in the Best Practice teams to gain exposure to available new Best Practices. Team members are tasked with taking the Best Practice back to operations and leading the implementation.


As project teams develop solutions, we want to take advantage of them and share these new standard methodologies throughout the entire organization. The mechanism for sharing these is called the Best Practice Networks. ProjX, the online CI database, can help us see what solutions already exist.


Alcan Packaging is large and has many facilities and businesses worldwide. Each of our businesses has developed methodologies or processes to improve market competitiveness. Best Practice Networks allow the entire company to benefit from lessons we have learned from individual projects completed at every level of our organization. How we all leverage what we’ve learned can benefit the entire company.


Our Best Practices methodology focuses on finding projects that maximize value and then implements them across the organization. The Best Practice Network allows us managers to reference and even shop for proven systems successes so we can implement them to benefit our business. Please note: Improvement can be made even if a current Best Practice is being used or if an operation is considered a Best Practice site. This process is perpetual, and CI tools help us to continually re-evaluate our systems and methods to maximize value even if we are a “Best in Class” facility.


A Best Practice is an existing practice or process that is transferable. It represents a significant and demonstrated improvement.

It is:


Any practice, knowledge, know-how or experience that has been proven valuable or effective within one organization and may apply to other organizations. It has been successfully demonstrated (even locally), is sharable and transferable (with limited delay) and is beneficial (measurable and tied to key priorities).


It is not:


Just an idea, a brand-new concept or an R&D project.





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Continuous Improvement Pt. 5 | Halden Zimmermann

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Policy Deployment: Primary Tool is the X-Matrix


The X-Matrix document is key to putting CI into action. This CI blueprint outlines everything we want to accomplish in order to be profitable in our business. It illustrates how we will achieve our objectives and who will be responsible for specific activities and tasks. It helps us align ourselves with the corporate objectives and vision. In short, it helps people in charge organize and integrate what people who report to them do.


While specific actions included in the X-Matrix differ from facility to facility and business unit to business unit, each matrix contains the following:


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Deployment and X-Matrix – Halden Zimmermann






Once an X-Matrix is developed, managers need to direct individuals who have agreed to work on these goals so they can develop specific actions or projects to move forward. One way to generate project ideas to achieve target goals on the X-matrix is through a Project Selection Workshop (see page 33). Major project initiatives listed on the X-Matrix are tracked and reviewed with a Milestone Chart, which contains KPIs linked to specific projects, goals and actions. Bowling Charts help present KPI results to date.


Policy Deployment: Tools for Charting and Tracking Actions


CI tools such as Milestone Charts, Action Plans displayed on Action Item Registers, Key Performance Indicators and Bowling Charts help us track annual initiatives with our business unit vision.


Milestone Charts


Milestone charts help project managers lead initiatives because they detail how and when major steps will be completed and who will be responsible for them. They measure progress on plan implementation, so project sponsors review them constantly. A Functional Focus Group may keep several related initiatives under one umbrella on one Milestone Chart. Each level reports progress to the level above. Each key metric or annual initiative from the X-Matrix should have a Milestone Chart.


Action Item Registers


An Action Item Register is a format for an Action Plan that links people to specific tasks and resources related to an improvement project. If actions listed on a Milestone Chart are too broad to contain specific actions for individuals, an Action Item Register can be developed. In addition to a Milestone Chart, each key metric from the X-Matrix should also have an Action Plan displayed on an Action Item Register.


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Example of X-Matrix – Halden Zimmermann









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Thursday, December 4, 2014

Halden Zimmermann | Continuous Improvement with ProjX, Part 5

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Halden Zimmermann’s Continuous Improvement


Best Practice Networks Tools














Each Best Practice Network Team should have two measurement documents – a Bowling Chart and a Best Practices Network Tracking Document.


Bowling Chart


A BP Bowling Chart outlines KPIs associated with the process they are trying to improve. For example, a BP team on Business Development might focus on New Business Growth rate. A KPI can be baselined and tracked while the team is active to verify it is moving in the right direction. Bowling Chart metrics should reflect representation on the team. So, if four plants are on the team, each should have a KPI, if necessary. The bowling chart is communicated to the team members, sponsors and upper management so progress on investment can be understood. For more on bowling charts, see page 14.








Best Practice Networks Tracking Document


The Best Practice Tracking Document helps communication with the sponsors and upper management. It outlines the implementation success rate for the team and individual groups/plants. It tracks the pace at which Best Practices are being adopted.





Best Practice Networks: Creating a Best Practice Team


When a gap in the business has been identified and quantified by the business unit level management, a Best Practice Team can be created to address this top issue. This review can occur during the Project Selection Workshop phase. If the same type of project is given high priority by different parts of the business, an opportunity exists to form a BP team. The Best Practice Networks Team Roadmap can guide Best Practice teams. We strive to share many Best Practices through these teams and to start new teams on a regular basis. Teams consolidate expertise to work on problems that do not have easy solutions. The roadmap on how to start and run a Best Practice Team should be shared in the opening team meeting and customized for the team and sponsor. The team leader should seek to formalize elements that reflect successes other BP teams have enjoyed with this methodology.


Team-creation phases are cyclical and are used throughout the life of the team. A phase can be re-initiated to focus on different issues and be fine tuned. Phase structure similar to that of DMAIC is used for the process.





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Continuous Improvement Using ProjX, Part 4

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Halden Zimmermann: Best Practice Network Team Creation Phase II: Analyze


Create Process Documents Identify Opportunities



  • Begin this phase at the same time as Phase I (i.e, at first benchmarking meeting) and continue with conference calls between meetings; when monthly benchmarking meetings are complete, continue with bi-monthly face-to-face meetings rotated between the member plants with conference calls between meetings.

  • CreateProcessMap


What stages comprise the process?



  • What are the desired outputs of each stage?

  • What inputs to each stage influence the output?

  • Create Cause and Effect Matrix

  • What are our external and internal customers’ requirements (i.e., what are

  • the key attributes of our product)?

  • Rank requirements by importance to customer (including customer in

  • process is desirable)

  • Rank inputs identified on the process map by their effect on customer

  • requirements/key attributes

  • Create Process FMEA (Failure Modes Effect Analysis)

  • Use ranking of inputs in Cause & Effect matrix to determine which stages of process are most critical (e.g., drying)

  • For these stages, what are the failure modes of the process? Failure modes are the opposite of the desired outputs.

  • What are the potential causes of each failure mode?

  • Rank severity, frequency of occurrence and likelihood that the failure mode will not be detected – these three rankings are multiplied to produce a risk priority number (RPNs) for that failure mode. Rankings are achieved by consensus of member plants or averaged across the member plants.

  • Rank failure modes by RPN. High RPN represents significant improvement opportunity.

  • Introduce concept of control plan but do not complete at this time

  • This is the plan to prevent the failure modes from occurring.

  • What are the spec limits?

  • Is the process capable relative to spec limits?

  • What are the measurement systems? Where and when do we measure?

  • What is the variation due to the measurement system itself (gauge R&R study)?


What do we do if we are out of spec/control (reaction plan)?






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Tuesday, December 2, 2014

Halden Zimmermann, Continuous Improvement Guide Pt. 2

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Alcan Packaging


halden-zimmermann-alcan2Alcan Packaging is one of Alcan’s four business groups (as of 2006). It represents:


• Approximately 144 facilities in 33 countries worldwide


• US$ 6 billion in annual sales


• More than 31,100 employees


• 29% of Alcan, Inc. revenue


Alcan Packaging is dedicated to providing customers with solutions that will enhance their products and brands by capitalizing on our expertise and leadership positions in packaging. We are acknowledged as a global packaging leader in Food Flexible, Pharmaceutical and Beauty and hold a pre- eminent position in the worldwide supply of Tobacco cartons. Alcan Packaging’s improved ability to serve multinational customers and its multi-market capabilities constitute a strong platform for growth. We operate in a dynamic and intensely competitive global industry. Customers place increasingly steep demands on their packaging partners. They expect quick turnarounds, superior service and flawless product quality. To achieve our corporate goals and remain a leader in our industry, Alcan Packaging must:


• Adapt the organization to market needs


• Accelerate innovation of new products and technologies as well as business service models


• Leverage experience, offer a large portfolio of technologies and spread geographically to improve our customer offering


• Use a disciplined investment policy to target key profitable growth segments


• Operate at peak efficiency and ensure that we share Best


Practices across our entire system


Alcan uses a standard methodology called the Alcan Integrated Management System (AIMS) to build on our operational excellence, new product pipeline and market focus.


This management system allows us to focus our energies on market segments and geographies that offer the highest potential, fit our capabilities and provide an avenue for strong, continued and profitable growth. In short, Alcan Packaging is committed to becoming a world-class organization using AIMS as a standard to manage improvement.


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Monday, December 1, 2014

Halden Zimmermann | Continuous Improvement with ProjX Guide

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ProjX: Using it to Find Best Practices


ProjX allows us to share information about other similar projects currently being worked on by Black Belts and Green Belts. The ProjX online software can specialize searches to find other similar Black Belt projects. We encourage sharing with this tool because on average two or three similar projects are being worked on at the same time. Click on the Search function on the control bar after logging in to ProjX to access the filter screen and search for a listing of projects associated with a search. It also is possible to save the criteria of the search to use it another time. Search criteria can range from tools used in other projects to specific key words that can be found in the project (as described in the Best Practice Network Team section). We recommend looking for similar projects on the software even before starting. Using what other people have learned can provide great value. We can learn from their formats and methods to make projects easier to implement.


ProjX: Inputting a New LLS Project


To input a project, use the new project box on the My ProjX page and click the Create New Project button. When the Create New Project wizard page appears, complete it and the system will create the entire project roadmap based on the selected methodology. Project ownership will be assigned by default unless otherwise assigned. The ProjX system is organized by Phases, and a Black Belt or Green Belt is responsible for populating the phases with information pertaining to the project. Each phase will have specific questions and inputs designed to walk team members through the project in a controlled manner. E-mail offers prompts when a Deliverable is due by a specific team member. A user can either click on the hypertext in the e-mail or log on manually and complete the input. The project leader can assign the project tasks to any team member, but at the end of each phase, appropriate approvals are required. Deliverables are the specific tools, Action Items or Milestones identified by the company to complete a particular phase of a project. The work breakdown structure is logically arranged in a top-down fashion in the suggested order of completion.


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Wednesday, November 26, 2014

Halden Zimmermann | Continuous Improvement

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ProjX: Sign Off Process for LSS Projects


This chart shows who has responsibility for the phase-by-phase Gate Review sign off, and it indicates when a joint Gate Review sign off is required. For example, in the Control Phase, both the Sponsor and CI Champion are responsible for Gate Review sign off. The chart also outlines Financial Phases for the project from forecasting savings to narrowing savings estimates down and tracking project savings. The Controller signs off these Financial Phases in ProjX. The ProjX system also sends the Controller an e-mail reminder about sign off. Please note: the Define Phase Financial Estimate is just that, an estimate. The calculation should be accurate and assumptions conservative, but the Controller should not stop progress on the sign off if 100% of all the assumptions are not known at this time. Scrutiny on the financials occurs in the Validate Phase.


Lean Six Sigma Sign-off Methodology

[image]


Financial Valuation Tool Example


If a project is displayed in ProjX, update or review it in the Personal ProjX home page. Then complete a variety of functions to work on the project. Each of the options can be clicked on, and specific deliverables can be populated depending on the project requirements. One item that is very important in this process is the financial upload of project savings information. A standard project valuation tool must be uploaded into the project for it to be approved by the CI Champion of the sector. This financial software can be downloaded from the Alcan CI website (see page 76).

Using the financial guidelines, it is appropriate to estimate the potential savings of the project. Then go to the Financial section of the ProjX software and populate it by uploading the Financial Valuation tool file. This is the standard tool that everyone in Alcan uses for determining the Economic Value Added (EVA) savings of a project.


Validation Phase

• Project Status changes to the Validate Phase when the Control Phase is completed.

• The Validate Phase allows the financial savings for the project to be tracked in ProjX for up to 12 months after the project improvements have been made to help ensure the forecasted savings are being realized.


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Monday, July 7, 2014

Halden Zimmermann – Barilla SpA Case Analysis Part 4(Final)

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Recommendations


Based on the preceding discussion, Team 09 recommends the JITD system to Barilla SpA. We further propose the following steps be taken to solve Giorgio Maggiali’s


- Implement a collaborative planning system between Barilla and its distributors to ensure that ordering information is relayed to Barilla in a regular manner.


Furthermore, it is imperative that Barilla review the inventory savings to the distributors and their customers through the implementation of this system (i.e., vendor managed inventory system).


- Switch data gathering frequency, from weekly to daily, to allow a steady stream of delivery and production. This system eliminates the bullwhip effect from the downstream to upstream channels.


- Reduce the number of stock keeping units (SKUs) to a minimum number as it is known that retailers only carry the product in one and, at most two, packaging option(s).


- Utilize sales people to gather demand requirements from supermarkets and communicate the information to Barilla and to communicate promotions to logistics/factory.


- Implement a paperless ordering system (e.g. Electronic Data Interchange – EDI or Point-of-Sale [POS] terminals) to facilitate the transmission of orders from end-


users to Barilla. Through the POS terminals, reorder quantities are automatically transmitted to the manufacturer (similar to an electronic Kanban system).


- In the long run, eliminate the distribution channels and use the 18 Barilla-run depots to supply the chain supermarkets, independent supermarkets and small (Signora Maria) shops to smooth the production operation and optimize overall inventory by “bringing” Barilla operations closer to the end user (Chart II).Initially, while we anticipate resistance to these recommendations, we are confident that Barilla will be able to demonstrate that the JITD system will be a win-win solution for all. Considering that Barilla is selling directly to Signora Maria shops, Barilla is controlling inventory for mom and pop establishments and can easily implement the JITD system here. Through the successes with these small stores, Barilla will be able to show its end users how the collaborative planning and technology will work to everyone’s advantage.


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Tuesday, June 24, 2014

Halden Zimmermann – Barilla SpA Case Analysis part 3

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Logistics


Traditionally, logistics would work with manufacturing on the quantity of product to make to meet the orders from the distributors. This system is totally reactive and not giving enough control to Barilla. JITD systems would allow the logistics department to plan with production increases in demand due to holidays or seasonality and replenish only what is used up at the distributors. This system reduces the emotional effect of being out of stock or having low inventory because it is backed up by data. Logistics could work with the distributors and end users to allow them to have some safety stock and still implement a smoothed delivery system without having radical swings with orders (Graph III). Depending on customer demand, the same quantity could be delivered every week and still fulfill the 2-week safety inventory requirement by the distributors.


Proposed 2 Week Inventory


Barilla needs to implement an inventory control system being managed by Barilla instead of orders coming in from downstream channels. It is these downstream channels that are the causes of the amplified fluctuations. Furthermore, by having Barilla manage inventory, movement of goods (i.e., trucking and delivery) can be more effectively controlled and trucks filled with higher density. This method subsequently reduces the number of trucks required to deliver the same quantity of product. In addition, “milk runs” can be developed as a smoother schedule will allow for better planning on departure and arrival of trucks from depots.


Another major change required is a reduction in the number of stock keeping units (SKUs) to a minimum. Although Barilla offered many pasta products in multiple package types, most retailers would only carry the product in one and, at most, two packaging option(s). Instead of having multiple packages, pack pasta in the most popular package size.


On the marketing aspect, Barilla will be able to benefit from the fact that through the JITD system, the company can provide its customers with the inventory required using a “collaborative planning” of inventory.


Technologically, Barilla should implement a paperless ordering system (e.g., Electronic Data Interchange – EDI or Point-of-Sale [POS] terminals) to facilitate the transmission of orders from end-users. Through the POS terminals, reorder quantities are automatically transmitted to the manufacturer (an electronic Kanban system) thereby eliminating the need for distributors to gather inventory information to relay to Barilla.


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Wednesday, June 18, 2014

Halden Zimmermann – Barilla SpA Case Analysis part 2

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Barilla’s goal is to smooth demand and only ship and manufacture what the “end customer” will need. The desired outcome would be to reduce the fluctuations caused by overcompensation or padded ordering from downstream channels. By having a better ordering system, the manufacturer would know the approximate demand of the particular store or supermarket, and manufacture what is needed. This allows the manufacturing and logistics department to plan ahead to meet anticipated demand.


The major change in the ordering system would result in decision rights shifting the inventory management from the distributor to the logistics division of the manufacturer.


Logistics would review the anticipated or understood demand from the end customer, working with manufacturing, to deliver the product in time to the distributor to meet consumer demand. The distributor would only communicate what had been shipped to the customer that day and the producer would ship to replenish according to end customer demand.


Sales


The traditional role of sales was to get distributors to buy in bulk and give quantity discounts at different levels of volume. Sales could affect the distributors request for more product because of the volume discount. With the smoothed out deliver system, it must be explained that one doesn’t make profit on products one doesn’t sell and buying in bulk cost more money in the form of floor space and inventory. Furthermore, by offering incentives to buy in bulk, an inflated demand is created by the downstream channels to the manufacturer. This action results in an undesirable bullwhip effect.


Under the Barilla system, its sales force spends an estimated 90% of their time working at the store level. Through the JITD system, sales people would be able to sell additional services to the supermarkets to improve retail presence (e.g., shelf positioning, promotional signage, taste testing, etc.) and generate new business.


Potentially, Barilla’s savings due to the smoothed and planned delivery system could be passed on to the distributor (via reduced inventory levels by at least 2 weeks due to possibly daily replenishments from the factory) as well. In addition, stock outs would be reduced because there would be a connection between actual demand and production channels. Graph II shows the “shoot-by-the-hip” re-order system with a date-driven system. Graph II is a perfect example of a “Bullwhip” system. As seen below, sales relatively flat, but the inventory levels at the supplier are fluctuating dramatically.


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Monday, June 9, 2014

Halden Zimmermann – Barilla SpA Case Analysis Part 1

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Barilla SpA Case Analysis


Just In Time Distribution Systems


Background


Barilla SpA is one of the world’s largest pasta and bread products manufacturers. They ship to small “mom and pop” stores, large independent super markets and large chain supermarkets. These customers all purchase their products through a broker or an intermediary warehouse and then the distributors (also known as “Grande Distribuzione” and “Distribuzione Organizzata”) deal with Barilla’s sales and distribution centers for Barilla’s product line is composed of “fresh” and “dry” products. Fresh pasta products have a 21-day shelf life while fresh bread has a one-day shelf life. Dry products, represent 75% of Barilla’s sales and have shelf lives ranging from 10 weeks to 24 months. It should be noted that, in total, Barilla’s dry products are offered in 800 different packaged stock keeping units (SKUs). Although Barilla offered many pasta products in multiple package types, most retailers would only carry the product in one (at two) packaging options. Currently, Barilla’s distributors check their orders and place their orders once a week. Average lead time in the current scenario is ten calendar days. While the demand for pasta is relatively flat, the variability resulting from distributors’ sales volume and demand triggered the need to find a way to “take costs out of the distribution channel without compromising customer service.”


Proposal


Organizational Changes


Barilla’s dilemma revolves around how product is ordered by its distributors based on a weekly ordering system. Instead of using forecasted or actual demand data, distributors used a simple periodic-review inventory system and place orders for products whose levels fall below a targeted reorder level. This system causes an “emotional” knee jerk reaction issue when an end customer is out of product. Many times the end grocer will order more product than is necessary, as may the distributor, causing the plant to go into production for a specific product that is hugely inflated. After the customer receives the order they realize they do not need the large amount of inventory and discontinue future orders. This sinusoidal ordering effect is called the “bullwhip effect” (Graph I). As can be observed, the inventory/order levels are amplified from the downstream to the upstream channels (i.e., retailers to distributors to manufacturer) within the supply chain. This “artificial inflation” results in increased costs to the manufacturing plant, distributors and end customers because of the lack of planning, excessive overtime and inventory costs in the form of floor space and potential spoiling.


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Tuesday, January 21, 2014

Continuous Improvement: Part 1

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This Reference Guide explains the common language of Continuous Improvement


(CI), a tool for creating standard work, achieving operational excellence, serving our


customers better and becoming more competitive.


Continuous Improvement

Continuous Improvement



CI creates a system for operational excellence because it:


• Focuses on our customers


• Empowers our employees


• Provides tools and resources


• Helps prioritize opportunities


• Finds solutions based on root causes


• Builds sustainable results


• Uses a structured and disciplined process


• Offers the ability to leverage success across the organization and accelerate


improvement


This CI Reference Guide details the vision companies that want to be successful. It


defines key CI terms and explains tools that speed the improvement process and


help measure needs as well as progress.


Use it to focus department resources in ways that elate customers, streamline


processes and improve performance. If you can make CI a way of life and help those


who work with you do the same, you can unleash the power of the process. The


rewards are a delighted customer, reduced waste, fewer variations in our processes


and a sense of pride in a job well done.


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Friday, January 17, 2014

Sense of Urgency: Part 1

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A Sense of Urgency: Part 1


When we think about continuous development of highly innovative technology,


changing political environments, globalization and steep growth, tough competition,


mergers and acquisitions, it’s a whirlwind of rapid change that fosters urgency.


Urgency means a sense of pressing importance. To live out success factors, its


crucial to be able to distinguish between a “true sense of urgency” and a “false sense


of urgency.” In fact, distinguishing between them during the very first step of any


kind of change can mean the difference between success and failure.


A good change model is one whose leadership adopts and promotes a culture of


the “right” sense of urgency throughout the company. The thought leader on this


phenomenon is Harvard MIT Change Expert Dr. John Kotter, who says that 50%


of all change efforts fail during the first step of change. Why do they fail? Mainly


because of lack of vision, communication of the vision, empowering others to act on


the vision, and more, the lack of which creates a false sense of urgency.


In many cases, the opposite of a right sense of urgency is compliancy. We all


unconsciously experience complacency to a certain degree in certain situations. And


it is possible to see problems and be complacent because you do not feel tat they


require change from YOU.


On the other hand, people having a true sense of urgency think that action on


important issues is needed now and not eventually when it fits into their schedules.


“Now” means making progress every day. “Critically important” means that acting


upon it is central to success and winning. To illustrate something we all face every


day, a sense of urgency is not an attitude that I must have the team meeting today,


but rather, a positive, focused attitude that the team meeting must accomplish


something important today.


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