Cox Machine Material Management Process February 25, 2012 Jason Cox Chief Technical Officer Cox Machine, Inc.

Aerospace components and assemblies since employees ~28M sales Machining in Wichita, KS Sheet-metal in Harper, KS Major customers Spirit, Cessna, Vought, Gulfstream, HBC, Boeing

Material Management Process (TLD) Process Improvement The material management process is mapped as part of the whole-company value stream map created and reviewed by the Continuous Improvement Steering Committee (1.1.4). Areas for improvement are selected based on this map. Inventory Accuracy Raw material is primarily ordered on a per-job basis, so a very low level of material inventory is maintained. Material that is maintained is cycle-counted to ensure accuracy per Shipping Standard Work 002. Inventory Purge Inventory is purged a minimum of every three years per Production Standard Work 006. Aging reports are generated through the MRP system. Raw material items that have not been used for 3 years or more will be scrapped. Finished goods and hardware that have not been used in 18 months will be packaged and moved to a storage facility. Inventory at the storage facility that has not been used in 3 years will be destroyed. After the inventory is purged, all remaining items will be removed for cleaning. After shelves, bins, etc. are cleaned, items will be returned to shelves and their location will be adjusted in inventory as necessary.

Shipping Standard Work 002

Intranet Cycle Counting

Production Std Work 006 Annual Inventory Purge Run aging report for Finished Goods, Hardware and Raw Material (Access Report) Determine items that have not moved for 3 years or more and mark them as items to be purged. Give reports to Inventory Agents in each department. Inventory Agents will then remove these items from stock and package them in the appropriate boxes for storage. Inventory Agents will then identify the boxes to be stored with proper identification numbers (Bin and Box Number within Global Shop.) Raw material items will be purged and scrapped. Correction of MRP inventory system. Inventory Supervisors will then move the inventory items in the Global Shop MRP system to the storage bin location and put the box number it is located in. Inventory System/file/Inventory parts/open bin location example (location 8 box 61)

Production Std Work 006 Annual Inventory Purge Transportation and or disposal of aged items Warehouse personnel will then transport the boxes to be stored and put them in the proper storage location. At this time the oldest aged items will be removed from storage and destroyed. All items will be removed from inventory by Inventory Supervisors. Inventory System/transactions/physical inventory/changes to physical inventory zero out inventory and save. A list of all disposed items will then be given to the Production Control Manager and Strategic Leadership Team for review. Clean up of Finished Goods, Hardware and Raw Material areas (Inventory Agents) Remove all remaining inventory from storage shelves that have had aged items removed. Properly clean shelving units and make sure unit in proper working condition. Any shelving units not deemed safe will be repaired or replaced immediately. Check all containers to make sure items are properly identified and all labeling is correct. Repair or create any new labels to identity containers/parts. Re-stock shelves with the appropriate stock making sure not to overload any given shelving unit. Correct Global Shop bin locations if any items have moved. Inventory System/file/Inventory parts/open correct bin location and save. Correct inventory tags for parts that may have been moved to a different shelf.

First Article Process New process flow

First Article Process Pop-up notification

First Article Process Electronic FAI

Re-tag Material Re-tag and inventory drop material from saw

Point of Use

Vending Automatic reorder Usage tracking

In-process Station FIFO Load-sharing