1. INTEGRATING MANUFACTURING & SPECIAL PROCESSING KAIZEN PROCESS 3.1.1

2. INTEGRATING MANUFACTURING & SPECIAL PROCESSING The purpose of the Kaizen Process is to accelerate and create breakthroughs in work-area process performance. 3.1.1 Kaizen Process – How does your organization set and review priorities for Kaizen events? How are Kaizen events conducted? How is recognition for team members provided and are senior managers and the workforce involved? How are lessons learned shared with others who can benefit? How are process improvements documented and deployed to others using the same or similar processes? How are internal Kaizen leaders developed and deployed? How are goals set for Kaizen leadership and how is progress monitored? Setup Preparation Event Post Event KAIZEN PROCESS Kaizen Leader collects data from work area related to upcoming Kaizen event Kaizen Leader confirms objectives with Process Owner and Champion Resources are approved by Champion – standby resource confirmed Kaizen event schedule is set with specific daily action plans Value Stream Maps Kaizen Splash Plans Annual Improvement Plan Kaizen Team Leader appointed from work area Kaizen Objectives set and linked to Annual Improvement Plan Conduct training Assign action plans Daily report outs Pilot run if applicable Create new standard work and training Prepare report out Present results Manage event follow-up Share results and learning with other teams/work areas PPT report Feedback Collect feedback and improve process Areas Addressed 3.1.1 Kaizen Process

3. INTEGRATING MANUFACTURING & SPECIAL PROCESSING

4. Team Leader follows up on Action Items related to the Kaizen. Process Owner is responsible for updating documentation, and ensuring that training takes place. Process Champion oversees the change process, and ensures accountability of the Process Owner and Team Leader. Key Roles

5. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Goal #1 Increase Process OTD from 97% to 98% by September 2012. (Measured on a 3 month rolling average) Goal #2 Increase Manufacturing OTD from 96% to 97% by September 2012. (Measured on a 3 month rolling average) Goal #3 Increase Productivity (earned hours/actual paid hours) from 55% to 85% by September 2012. (Measured on a 3 month rolling average) Goal #4 Reduce Scrap Dollars from $15,476/mo. (2.4% of Sales) to $10,850/mo.(1.7% of Sales – 1% per month) by September 2012. Goal #5 Decrease Internal and External PPM from 3273 to 2000 by September 2012. (Measured on a 3 month rolling average) Goal #6 Decrease Safety Incidents from 3 to 0 by September 2012. Strategic Goals

6. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Kanban- Pull Systems Office Kaizens Flow Manufacturing Value Stream Improvement Process (VSM) The one common element: these tools help us eliminate waste from our processes. Set-Up Reduction 6S

7. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Value Streams

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10. PO REC TRIGGER < 90 N Y NEW N Y NPD PROCESS REVIEW EDIT QA REVIEW EDIT PRODUCTION CONTRACT REVIEW PROCESS FLOW

11. INTEGRATING MANUFACTURING & SPECIAL PROCESSING ENGINEER TO ORDER PROCESS FLOW

12. INTEGRATING MANUFACTURING & SPECIAL PROCESSING HOSPITAL ADMISSIONS PROCESS FLOW

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16. days per period [249Growth number of period [18% Part NumberDescriptionPeriod VolumeDaily VolumeLine Design Volume - - - - - - - - - - - - - - - - - - - - - - - - - - - - Totals [ - - -

17. INTEGRATING MANUFACTURING & SPECIAL PROCESSING LEAVE WJ/BRAKECELLSWAPCNC WALL CURRENTFUTURE 1FUTURE 2FUTURE 3FUTURE 4 LABORMATERIALDISTANCELABORMATERIALDISTANCELABORMATERIALDISTANCELABORMATERIALDISTANCELABORMATERIALDISTANCE WATER22302230223022302230 WATER24302430243024302430 SAW3253 3 3 3 LASER1.3501.3501.3501.3501.350 LASER1.3 LASER0.9 LASER1.3501.3501.3501.3501.350 LASER0.9 LASER0.9 LASER0.9 BRAKE1.54.71.54.71.50.91.51.91.54.7 BRAKE161611.510.7516 MAN MILL104.752.55 CNC258 4.7250.2250.1251.9 CNC155.3151.0150.6150.8153.8 CNC201.1202.1202.3202.3204.0 DEBUR101.928.96 DEBUR31.25096 DEBUR31.3 MIG90619012.5906.6909 9.6 GRIND106.9104.4105 6.9 SANDBLAST68.756 64.37561068.75 PAINT252.535.4252.535.4252.535.4252.535.4252.535.4 MIN503.5STEP331.1477.5STEP264.5477.5STEP241.8269231477.5STEP255.1692308477.5STEP266.0336538 HRS8.4FT827.78.0FT661.28.0FT604.56730778.0FT637.92307698.0FT665.0841346 2666.62689.268438912675.926131222665.06170814 199.8267.8053167227.7783937195.1851244 3.34.4634219463.7963065613.253085407 0.0HOURS0.00.4HOURS0.10.4HOURS0.10.4HOURS0.10.4HOURS0.1 0.04 YRS0.01102.84 YRS565.11102.84 YRS757.31102.84 YRS644.11102.84 YRS551.9 $0.00SAVGS$0.00$167,296.29SAVGS$14,126.62$167,296.29SAVGS$18,932.35$167,296.29SAVGS$16,102.67$167,296.29SAVGS$13,798.50 SETUP419.1SETUP$0.00SETUP$0.00SETUP$0.00SETUP$0.00 TOTAL SAVGS$0.00683.8TOTAL SAVGS$181,422.91TOTAL SAVGS$186,228.64TOTAL SAVGS$183,398.95TOTAL SAVGS$181,094.79 MOVE$22,022.48MOVE$2,500.00MOVE$2,500.00MOVE$2,500.00MOVE$2,500.00 ELECT$19,801.59ELECT$2,500.00ELECT$2,500.00ELECT$2,500.00ELECT$2,500.00 $167,296.29$2,500.00 CNC $30,000.00CNC$30,000.00CNC$30,000.00CNC$30,000.00 COST$37,500.00COST$37,500.00COST$35,000.00COST$35,000.00 $143,922.91$148,728.64$148,398.95$146,094.79 $90,000.00 $233,922.91$238,728.64$238,398.95$146,094.79

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19. MetricPre-KaizenPost-KaizenChange Travel1986’500’ 1486’ 74.8% LT Mfg20.2 d1 d 19 d 95% LT Process2 d0.5 d 1.5 d 75% WIP18 j4 j 14 j 77.8% CONTRACT REVIEW KAIZEN

20. INTEGRATING MANUFACTURING & SPECIAL PROCESSING MetricPre-KaizenPost-KaizenChange Cycle time – New 2150 min1725 min 425 min 19% Cycle time – Repeat 830 min645 min 185 min 22% Work Instructions 055 Lead Time387 hrs375 12 hours 4% Through-put1.78 Jobs/d2.54 jobs/d.76 jobs/d 46% $4,000,000/yr ENGINEERED TO ORDER KAIZEN

21. INTEGRATING MANUFACTURING & SPECIAL PROCESSING MetricPre-KaizenPost-KaizenChange Planning time4 days1 day 3 days 75% WIP Inventory 71 Jobs $1.3 mil 24 Jobs $0.4 mil 47 Jobs 66% Through put75 pcs/day PRODUCTION PLANNING KAIZEN

22. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Benefits PROJECT 1 MetricPre-EventPost-EventImprovementPercentage Dollarized Improvement 7S AUDIT SCORE12 pts 91 pts 79 pts658% SQUARE FOOTAGE 172 sq ft100 sq ft 72 sq ft 42%$100,800 SAFETYDangerousHazard free TIME 30 min 100%$15,750 Benefits PROJECT 2 MetricPre-EventPost-EventImprovementPercentage Dollarized Improvement 7S AUDIT SCORE3 pts 6764 pts 2133% SQUARE FOOTAGE 8 sq ft TIME 10 min 100% $1100.00 GENERAL APPEARANCE cluttered neat HOSPITAL 7S KAIZENS

23. INTEGRATING MANUFACTURING & SPECIAL PROCESSING LESSONS LEARNED 1.Don’t be rigid in your kaizen process 2.Have a coordinator to manage the events 1.Too many events at once will create a mess 2.Schedule the events to manage resources 3.Communicate, Communicate, Communicate 4.ROI Before the event 5.Small to make big, Big to make better

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25. Thank You Paul Kobishop Director of Quality Assurance and Lean Systems Continuous Improvement Manager Phoenix, AZ pkobishop@yahoo.com 303-882-6040