Reaching Peak Performance In A High-Intensity Operating Environment TDL Summit September 14, 2004

1 Thirty-five years of experience in –Manufacturing & Distribution environments –Serving over 1,500 demanding clients As part of a very successful $200MM management firm, we draw on significant in-house expertise –Industrial engineering –Safety/safety training –Quality control programs –Job analysis/design –Performance management systems –Training program design –Performance incentive design While maintaining a 95% customer retention rate! We’ve learned how to be different through...

2 Traditional On-Site PracticesOur Variable Workforce Management Program  Supply basic workers  Workforce performance outcomes are ensured  Will wait for an open position request before sourcing candidates  Build an available “pool” of candidates in advance and in excess of open position requests  Limited screening as required  Screen for required concerns and for those who score in the top 50% of eligible candidates for their demonstrated work ethic and motivation to perform  Simply supply more temp workers during peak season  Build cadre of capable “work leaders” to supplement training performance oversight and motivational tasks of your managers during peak season  Pay employees by the hour regardless of performance  Utilize performance checklists to reward and retain top performers  Replace poor performers when told to  Work Leaders proactively identify and replace poor performers This process starts with a Discovery Assessment. By creating value with Variable Workforce Management...

3 Do these sound familiar?  Are you facing... –Reduced productivity through turnover of your contingent workforce? –The need to increase staffing to meet production demand only to lose overall productivity per employee? –Excessive error rates and re-work from your temporary staff? –Overwhelmed supervisors in periods of peak demand with their span of control stretched? –Seasonal demands causing severe fluctuations in your workforce needs?

4 Do these sound familiar?  What happens when... –Poor screening creates excessive turnover? –Temps are just standing around waiting for direction? –A lack of productivity is addressed through the addition of more bodies? –You are attempting to control costs through reduced mark- up with only limited success? –You have exceeded the budget for staffing? Many of our customers were faced with similar issues and concerns. The following Case Studies will help illustrate solutions that your company may benefit from as well.

5 The Client’s SituationOur SolutionsThe Client’s Results  Large pick/pack/ship operation was losing money (and customer credibility) on many of the jobs it bid for and won  Improved job estimation processes and support tools  Installed experienced production supervisors on-site to train and oversee workers  Revised job testing screens to hire for work ethic… not just skills  Achieved the highest profitability per square foot of any of the clients multiple locations  Won large contracts based on jobs completed at new levels of performance  Decrease in absenteeism and turnover substantially reduced training costs  Food manufacturing firm faced with large, unanticipated production requirements. Historically used multiple local staffing firms to provide maximum number of bodies available  Provided a team of on-site supervisors who insured the right workers were in the right jobs  Customized screening measuring employee’s receptivity to the job requirements and environment  Production output increased 10%  Rework decreased dramatically from 26% down to 3%  Client subsequently awarded our firm additional manufacturing plants  Distributor of retail goods required additional quality output and productivity from their temporary workforce  Introduced individual employee performance scorecards, measuring daily performance vs. production standards  Implemented Pay for Performance incentive program  Employee productivity has risen by 8% Our solutions are flexible, creative and practical

6 The Client’s SituationOur SolutionsThe Client’s Results  Manufacturer of snack food products experiencing high employee turnover and poor productivity resulting from below average skill set of temporary workforce.  Performed analysis of specific job tasks  Developed job specifications and testing instruments to ensure appropriate employee-job matching.  Created an in-depth interview guide geared toward identification of reliability and work ethic traits.  Job/Skill matching reduced employee frustration and turnover  Average monthly turnover reduced from 35% to 20% in first year.  83% of employees now have perfect attendance.  Productivity improved.  World class automotive manufacturer required substantial recruiting, screening and selection effort to staff critical product start-up in a rural community. (Six Sigma/ISO 9001 environment, 90 day implementation)  Identified the top 15% of the applicant pool through a custom designed sourcing, screening and selection process.  Mobilized our internal staff of professionals to develop and manage the implementation plan to meet Client’s deadline  Successfully staffed start-up to required production levels within client’s time requirements.  Client executives report better than anticipated production from our employees and excellent response from our internal team. More solutions...

7 What does 5% really mean? Mark-Up vs. Productivity 5% Reduction in Mark-Up:5% Increase in Productivity: You employ temporary workers at a wage rate of $7.00/hour with a mark up of 40%. Each worker makes 100 widgets per hour at $10 each, producing a 10% profit. Bill rate is $9.80 per hour. A reduction of 5% in markup would reduce bill rate to $9.45. Through productivity enhancement offered by PMI, worker productivity increases by a conservative 5 %. At 2,080 hours annually per employee, this savings would be $728/year. Each employee now makes 105 widgets per hour at $10 each with the same profit margin. Employing 50 temps at this reduced mark-up would result in a savings of $36,400 annually. This results in an annual increase of $10,400 in profit for each employee. Employing 50 temps at this increased productivity results in $520,000 in additional profits. Although the $36,400 is beneficial... even a 1% increase in productivity will generate a $104,000 increase in profitability.