1. INTEGRATING MANUFACTURING & SPECIAL PROCESSING KAIZEN PROCESS 3.1.1

2. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Brief History of Joined Alloys – 50 Years of experience – Integrated Capabilities Vacuum, Torch & Induction Brazing Welding Heat Treating Machining Sheet Metal Fab

3. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Products Honeycomb Seals Turbine Nozzles Bearing Housings

4. 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

5. INTEGRATING MANUFACTURING & SPECIAL PROCESSING

6. 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

7. 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

8. 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

9. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Value Streams

12. INTEGRATING MANUFACTURING & SPECIAL PROCESSING

14. PurchaseReceiveRec InspectSupermarket RELEASE TO FABRICATION 3 locations Tube Sheet metal Bar CUTBend TubeLatheCope TubeDebur TubeMillDeburLaserBrakeWeld SubSupermarket RELEASE TO PRODUCTION RELEASE TO FABRICATION Need: # Operators, # Shifts, Cycle time 1 piece, Scrap/Rework each Distance of moves from one to the next

15. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Robot WeldManual Weld RecDeburWeld InspDeburFinal InspPackShip RELEASE TO PRODUCTION OP P.O.PackOilManual Blast Auto Blast END Need: Distances of moves from one to the next

16. INTEGRATING MANUFACTURING & SPECIAL PROCESSING 12423452-00212423452-001AssemblyPaintSand BlastDeburrMig WeldSpot Weld12423451Spot WeldBrakeDeburrPunchShear12423450Spot WeldBrakeDeburrPunchShear12423003 OSP (E-Coat) DeburrMig WeldBrakeDeburrPunchShear12423005 12421372-007 Adhesive MS21266-2N Grommet, Plastic Edging 12421181 Seal, Self Adhesive 12414473-010 Washer, Plain 12423041 Grommet, Duckbill 12414307-003 Bolt, Hex, Flange 12419169-003 Nut, Plain, Clinch 12423452 OSP (E-Coat) Laser 12423035 Plate, Cover

17. INTEGRATING MANUFACTURING & SPECIAL PROCESSING days per period [249Growth number of period [18% Part NumberDescriptionPeriod VolumeDaily VolumeLine Design Volume - - - - - - - - - - - - - - - - - - - - - - - - - - - - Totals [ - - -

18. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Process #1 Part NumberDescription Design Volume HEAT TREAT CLEAN Machine Changeover Machine Run Labor (Minutes) Volume modifier Throughput 0 - 100% - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - 0 - - - - Process Throughput (units/day) - Effective Time per process (Minutes/shift)460 Number of Shifts (shifts/day)1 Takt (sec/unit)#DIV/0! Min Std Time000 Max Std Time000 TOTAL PEOPLE Weighted Average Std Time#DIV/0! People per process#DIV/0! Workstations per process#DIV/0! Selected number of Workstations Machines per process#DIV/0! People available per process Resources per workstation1 Labor utilization#DIV/0! Machine utilization#DIV/0! Number of models per day#DIV/0!

19. INTEGRATING MANUFACTURING & SPECIAL PROCESSING TRACTOR RAMP SPAGHETTI 8215 FT

20. 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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22. Kanban- Pull Systems Office Kaizens Flow Manufacturing Value Stream Improvement Process (VSM) Set-Up Reduction 6S

23. INTEGRATING MANUFACTURING & SPECIAL PROCESSING MetricPre-KaizenPost-KaizenChange MFG Lead- time 8.6 wks5.4 wks 3.2 wks 37% WIP 15 jobs12 jobs 3 jobs 20% Travel 2695 ft1340 ft 1355 ft 50% Setup 3.1 hrs2.6 hrs.5 hrs 16%

24. INTEGRATING MANUFACTURING & SPECIAL PROCESSING 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%

25. INTEGRATING MANUFACTURING & SPECIAL PROCESSING MetricPre-KaizenPost-KaizenChange WALKING PARTS = 1065 ft PEOPLE = 1931 ft 627 ft 1254 ft 41.1% 35.1% LEAD TIME12.3 d9.5 d 2.8 d 22.7% WIP

26. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Plant Productivity %

27. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Furnace Productivity %

28. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Customer On Time Delivery %

29. 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

30. INTEGRATING MANUFACTURING & SPECIAL PROCESSING Questions ??? Thank You Paul Kobishop Director of Quality Assurance and Lean Systems Joined Alloys Phoenix, AZ pkobishop@joinedalloys.com 602-328-4235