Roberts Tool Company, Inc Strategic Planning Presented at SEA Webex January 10, 2011

Agenda Leadership and Culture: Strategic Planning Starting Point: Teamwork Strategic Planning Cycle Process Steps Cascading of Objectives Connecting Strategy to Daily Work –VSM / Kaizens –Quality System –Process Management Resource Allocation

Starting Point: Teamwork Trust Conflict Consensus Accountability Results World Class Performance: Ordinary people doing extraordinary things. Commitments monitored? Measured (time / qty./ qual.) Am I willing to be held accountable? Do we have the same set of facts? Am I willing to compromise? Do I stand firm when appropriate? Walk away – unresolved/no learning Walk toward – risk/potential negative outcome*/only path to consensus I know how he/she will respond The response is predictable. Words consistently translate into action *When things go wrong, a choice must be made: find blame OR find solutions. Root causes are systemic - process driven. People errors are a part of the natural variation in any process, not the root cause.

Prepare Meet Brainstorm Plan Communicate Implement Check Complete Annual Strategic Planning Cycle

Prepare Meet Brainstorm Plan Communicate Implement Check Complete Annual Strategic Planning Cycle 1 Month 3 Days 2 Weeks 4 Months 1 Day 6 Months

FebruaryPreparation (1 Month) - QMS Review - Audit Trends - Customer Feedback Supplier Performance Reports Annual Customer Survey “Soft” Inputs - Continuous Improvement Plan Achievement - Metrics Performance Sales OTD Quality Productivity - Market Environment Economic Trends Industry Trends Future Outlook Prepare

MarchStrategy Meeting (4 days): Participants DAY 1(8 Hours)Sales - Sales Review - Sales Budget DAY 2 (3 Hours)Sales, Mgrs & - Management Review (AS9100) Supervisors - Strategy Inputs Market Environment SWOT - Brainstorm Improvement Opportunities DAY 2 & 3 (12 Hours)Individuals - Workshops - Individual Investigation - Results Preparation DAY 4 (3 Hours)Sales, Mgrs & - Present Results Supervisors - Finalize Continuous Improvement Plan - Clarify Implementation Actions and Responsibilities - Adjourn Meet Brainstorm Plan

MarchStrategy Meeting: Outputs - Updated Vision Statement - Updated Strategy Statement - Updated SWOT - Continuous Improvement Plan - Departmental Objectives - Management Review – ACTIONS - Resource Requirements AprilCommunication - All Hands Meeting - Posting - Flow-down through management and supervision. April – July Implementation - Work the plan - VSM and Kaizen Events JulyStrategy Update (1 Day) Aug – DecImplementation Communicate Meet Brainstorm Plan Implement Check & Continue

Cascading of Objectives Strategy and Vision Continuous Improvement Plan Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Staff Meetings / Action Items VSM / Kaizens Projects Monitoring / Metrics Annually Quarterly Monthly At each meeting Beginning, Middle, End Annual Review; Recognition; Disciplinary

Cascading of Objectives Strategy and Vision Continuous Improvement Plan Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Staff Meetings / Action Items VSM / Kaizens Projects Monitoring / Metrics Annually Quarterly Monthly At each meeting Beginning, Middle, End Annual Review; Recognition; Disciplinary

Why Meetings? 1.Where teamwork – conflict resolution/consensus/accountability – get done. Understand differences / generate buy-in Align effort - avoid double work and counterproductive action Maximize results / minimize time 2.Accountability at the working level Objectives provide high level direction and targets, but don’t get the work done. Action items from meetings are “where the rubber meets the road.” 3.Meeting Minutes are the “Corporate Memory” A record of agreements / policies established. Evidence of actions taken / communications made. Repetitive reminder of the Company vision, goals and objectives A means of communicating to those not physically present

Meetings: Process / Tools 1.Meeting Format 2. Meeting Schedule 3. Basic Meeting Organizing Tool: Outlook Setting meetings with Outlook Guidelines 4. Outlook Calendar Use for company-wide events Individual use As time management tool

Continuous Improvement Map Supplier OTD/DPMO Customer OTD/DPMO Internal OTD/DPMO CAR’s NCR’s Pareto Root Cause Problem Solving Engineered Solutions... Procedural Solutions... Kaizen... DMAIC / Six Sigma... Process Owners Audit Process Maturity... Definition... Documentation... Standard Work... Training... Continuous Improvement... World Class Value Stream Mapping / Kaizen Quality SCAR’s Process Mgmt

Process Assessment / Resource Allocation Critical to Success? High Low Current Effectiveness HighLow

Process Assessment / Resource Allocation Critical to Success? High Low Current Effectiveness HighLow

Process Assessment / Resource Allocation Critical to Success? High Low Current Effectiveness HighLow

Process Assessment / Resource Allocation Critical to Success? High Low Current Effectiveness HighLow

Process Assessment / Resource Allocation Critical to Success? High Low Current Effectiveness HighLow

Prepare Meet Brainstorm Plan Communicate Implement Check Complete Annual Strategic Planning Cycle 1 Month 3 Days 2 Weeks 4 Months 1 Day 6 Months