March 5, 2012 Continuous Improvement Management SEA Roadmap Process NTS PIPELine: Process Improvement Execution Dan Cannon NTS Corporate Director of Quality & Regulatory Affairs

Company Overview 2 NTS (NasdaqNM: NTSC) is an engineering services company providing engineering solutions and services ranging from a complete array of testing to product support Founded in 1961, we just celebrated our 50 th anniversary Employees 20+ North American testing locations plus locations in Japan, Germany, and Vietnam Revenues approximately $150M

Capabilities 3 Acceleration Thermal Vacuum Chamber Vibration

Capabilities 4 EMC/EMI Testing Thermal Testing Shock Testing

NTS and SEA 5 Engaged with SEA for 5+ years. SEA Certified in Fullerton, CA and Boxborough, MA locations, with more planned. (SEA Site Visits / Open Houses at both locations later this year) Winner of SEA’s 2011 Leadership and Culture Award. Our CEO/COO sit on SEA’s Supplier Advisory Council (SAC).

Continuous Process Improvement Criteria 6 How does your organization select improvement priorities and review progress on improvement initiatives? Executive Team members champion initiatives which are reviewed quarterly at strategic planning meetings. How are process owners, master trainers, and strategic champions included in this process? Executive Champions charter initiatives and nominate Process Owners and Master Trainers. What criteria are used to select priorities for improvement? Alignment to 5 Year Plan, Core Values, Company Strategy Map, ROI, resource utilization.

Continuous Process Improvement Criteria 7 How are improvement projects and teams selected and given direction? Process Champion defines Team Charter. Director of Quality provides training and facilitation resources where needed. How is a standard problem-solving model deployed throughout the organization? The PIPELine process provides a path to process maturity. Many problem solving tools can be employed along this path, including the Corrective/Preventive Action process. How are recognition and sharing of mistakes and successes accomplished? These are typically accomplished via meetings including Operational Excellence Meetings, All Hand Meetings, Executive Road Shows, Holiday Parties, etc.

NTS Linkage of L&C Processes 8 Strategic Planning Leadership Communication Workforce Development Organizationa l Performance Review Continuous Improvement (PIPELine) Plan Do Check Act

PIPELine 9 NTS PIPELine: Process ImProvement Execution PIPELine ensures NTS follows a structured and standard process to achieve mature best enterprise practices and sustained effectiveness as a result of investing in process improvement. PIPELine is based on the SEA Lean Process Improvement methodology, Process Maturity Model and tools customized to NTS’ business strategy.

Process Maturity Model 10 Process continuously shows positive trends and benchmarks world class Process under control, analyzed, and improved using data Process has certified trainers and is standardized across NTS Process identified, defined, and has an owner Process documented to work instruction (Process Map or SOP) level

PIPELine Fundamentals 11 All NTS Processes shall have Process Owners and Master Trainers assigned. Process Owners are empowered and authorized to define processes company-wide. Improvement initiatives are undertaken by Process Owners in alignment with Corporate Strategy.

PIPELine Fundamentals 12 Improvement Team Members (including Process Owners) are responsible for informing and soliciting feedback from all NTS employees impacted by process improvements/changes. Standard Work or a mature standard process is a prerequisite for successfully deploying enterprise tools an systems associated with the process. Formal reviews are used to evaluate each level of Process Maturity (PM) and ensure all of these fundamentals are achieved.

Process Maturity Gate Reviews 13 PMGateReview Group Primary Deliverable or Input 1Define the Project Exec. TeamTeam Charter Process Worksheet 2Stabilize the Process Leadership Team Work Instruction Training Schedule 3Improve the Process Corporate Quality Training Matrix Internal Audit 4Control the Process Leadership Team Metrics showing goals achieved / process controlled 5Benchmark World Class Customer Group Long Term + trends vs. competitors process

Process Flow 14

Tracking Progress 15

Collaboration Tool 16

Technology Helps Organize Geographically Diverse Company. 17

Lessons Learned 18 Teams need the most support, facilitation and resources as they develop process maps and work instructions. Teams should be empowered, but also accountable for soliciting feedback and buy-in from the organization. Process Owners/Teams aligned to a single formal job role have an easier path. When possible, Process Owners should be aligned to formal positions within the org chart.

Lessons Learned 19 External motivators help. ISO audits, SEA certification, customer requirements. A team improving a quantifiable metric, especially one measured in dollars, and a specific goal. Achieve faster results. Using finance personnel to help define ROI in the Team Charter can help with this.

Questions? Dan Cannon THANK YOU!