1 SEA Process Owners Forum CI Management September 13, 2011

2 AGENDA CI Mgmt. Process Map RTC CI Priorities 2011 CI Resources and Tracking CI Example: Engineering Process Flow Summary: Review of CI Mgmt. Process Map

Continuous Improvement Management SEA 2011 All Rights Reserved Continuous Improvement Management Process – How does your organization select improvement priorities and review progress on improvement initiatives? How are process owners, master trainers, and strategic champions included in this process? How are improvement projects and teams selected and given direction? How is a standard problem-solving model deployed throughout the organization? How are recognition and sharing of key learning accomplished? How are process improvement ideas solicited, reviewed, approved, and implemented? How is a high level of workforce participation ensured? How are improvement suggestions recognized? How are suggestions made visible in work areas? Preparation Collect Data Reviews Feedback CONTINUOUS IMPROVEMENT MANAGEMENT Compile data for each review – secure SEA Quarterly Reporting process feedback Compile process owners and master trainer reports Compile Kaizen and project report outs Prepare the Annual Improvement Plan in Prepare the Quarterly Report Feedback Kaizen schedule Process maturity listing Process Owner reports Master trainers reports SEA Examiner Feedback Conduct reviews and develop action plans Champion reports Process Owner reports Master Trainer reports Collect feedback and improve process Quarter Report Action Plans Prioritized Kaizen Schedule Updated Process Owner Listing Purpose: to prioritize and drive improvement efforts, as well as allocate necessary resources. Areas Addressed

4 Continuous Improvement Priorities 2011 Engineering Specialization / Process Flow Dedicated Prototyping / New Parts Resources Integration of new acquisition’s mfg planning system NDT Failures (Castings & Forgings) Customer support to improve casting/forging house performance Receiving Inspection / Rejection by lot Aggressive CAR process with casting/forging houses On-site visits General Mill and Lathe Cell-like disciplines: SU – Run – Tear-Down Single piece flow without interruption On-time Delivery of Materials to Cells Shop Floor: Improved real-time communication system for team leads and support staff Paperless Processes Manufacturing Orders Financials Accounts Receivable: Invoicing/Payment and Collection QA Files (Job File) Production Sheets Overtime Accountability We develop, communicate and publish our annual targets.

5 Continuous Improvement Opportunities 2011 Team Leader accountability for production v. standard Process for closing mfg orders Improve Wash Area Operations buy-in/coordination for delivery date changes PRB parts flow: quick turnaround on MRR dispositions Inspection turnaround times for “courtesy checks” Mfg Order package readiness: tool lists, inspection sheets, inspection tools HRIS – select software package Machine Maintenance visibility / improved unplanned downtime measurement Deburring capability in lathe area Receipt to ISSUE cycle time monitoring Improve parts handling between buildings Cycle Counting – optimize process Reduce shop floor “escapes” to Inspection High Speed Machining – investigate new technologies Printer in Shop (v. QC) Copy machine for QA Optimize shop floor inspection sampling plans Review QA/Engineering buy-offs at MO print Suggestion Box Program Staff Meeting – More Discussion... and pursue additional opportunities.

6 What human resources are available to support CI ?

7 Who owns these processes and are the natural leaders for CI?

8 How do we make activities transparent and accessible to all? Folders on “company” Meeting Agendas 2011 CI Engineering Process Flow -Team Charter- Reports - VSM- Metrics - Agendas / Actions

9 We track our progress...

10... and report the results.

11 TEAM CHARTER The Champion uses this form to charter improvement teams. Process Name: Engineering Process Current Process Maturity Level (0 – 5) 0 Process Owner / Team Leader TBD Champion BJ Facilitator / Consultant BJ Team Members S. Smuck, S. Nguyen, F. Reyes, J. Stump, D. Simpson Problem Statement (as it is currently understood, in measurable, fact-based terms) Engineering capacity is one of, if not the, primary constraint to company growth. How can we change the process to reduce the total cycle time for new PN’s from Contract Review Approval through FAI acceptance? Desired State (Measurable Results Desired from the Team’s Efforts) 50% Reduction in Total Cycle Time Start of the Process (what triggers the first step) Contract Review Approval End of the Process (what signals the process is complete) FAI Acceptance (Internal) Project Scope Includes: All PN’s which hit the Readiness Report Excludes: Repeat PN’s which flow directly from Contract Review to MO Release. Requested Improvement Completion Date TBD How do we initiate a CI Project or Kaizen?

12 Contract Review Mfg Plan Programming Tooling Control Plans Release 1-5 Days 2-4 Weeks 8 hrs – 40 hrs 1-2 Weeks8 hrs – 40 hrs [QC; Cutter / Fixture Design] 1-2 Weeks8 hrs – 80 hrs [Fabrication] Sub-plates by hand; standardize? Special Tooling – long lead; ordered early? 2wks 1-2 Weeks Lack of feedback to Engineering? Data analysis / ensure good parts Mfg standards – feedback? 1 Day Lead Time: 5-10 Weeks We develop a VSM for the process to be improved:

13 Contract Review Mfg Plan Programming Tooling Control Plans Release 1-5 Days 2-4 Weeks 1-2 Weeks 1 Day Lead Time: 5-10 Weeks Contract Review Mfg Plan ProgrammingToolingProcurement Final Review & Release Lead Time: 3-5 Weeks 1-3 Days Control Plans 2-3 Days We envision the future state:

14 We get into the details: BRAINSTORMING PARETO ANALYSIS FISHBONE DIAGRAMS AGENDAS – ACTION ITEMS – PARKING LOT - FOLLOW-UP

15 Key Parking Lot Issues (Out of Scope) QC Cycle time to process FAI FAI process –1 st time setup on floor –Debug programming –Refine tooling –Adjust operations –QC buy-off Contract Review – what does each reviewer look for? Gate managing funnel of priorities into Engineering – committee? Individual manager?

16 Fourth – we develop tracking and measurement tools Fifth – we do it and make improvements Sixth – we close out the project - Recognition - Close-out the Team Charter

Continuous Improvement Management SEA 2011 All Rights Reserved Continuous Improvement Management Process – How does your organization select improvement priorities and review progress on improvement initiatives? How are process owners, master trainers, and strategic champions included in this process? How are improvement projects and teams selected and given direction? How is a standard problem-solving model deployed throughout the organization? How are recognition and sharing of key learning accomplished? How are process improvement ideas solicited, reviewed, approved, and implemented? How is a high level of workforce participation ensured? How are improvement suggestions recognized? How are suggestions made visible in work areas? Preparation Collect Data Reviews Feedback CONTINUOUS IMPROVEMENT MANAGEMENT Compile data for each review – secure SEA Quarterly Reporting process feedback Compile process owners and master trainer reports Compile Kaizen and project report outs Prepare the Annual Improvement Plan in Prepare the Quarterly Report Feedback Kaizen schedule Process maturity listing Process Owner reports Master trainers reports SEA Examiner Feedback Conduct reviews and develop action plans Champion reports Process Owner reports Master Trainer reports Collect feedback and improve process Quarter Report Action Plans Prioritized Kaizen Schedule Updated Process Owner Listing Purpose: to prioritize and drive improvement efforts, as well as allocate necessary resources. Areas Addressed