1. North American Lighting and TQM Kevin Blatnik

2. My Background 1998: Graduated from EIU with BSIT 1998: Graduated from EIU with BSIT Went to work for Navistar International as a Design Engineer Went to work for Navistar International as a Design Engineer 2000: Came to word for North American Lighting as a Manufacturing Engineer 2000: Came to word for North American Lighting as a Manufacturing Engineer 2003: Became an Industrial Engineer with NAL 2003: Became an Industrial Engineer with NAL 2004: Graduated from EIU with MST and a Certificate in Quality Systems 2004: Graduated from EIU with MST and a Certificate in Quality Systems 2005: Promoted to Sr. Industrial Engineer 2005: Promoted to Sr. Industrial Engineer

3. Background of NAL Established in 1983 in Flora, Illinois Established in 1983 in Flora, Illinois Subsidiary of Koito, the world’s largest supplier of Automotive Lighting Subsidiary of Koito, the world’s largest supplier of Automotive Lighting $500 Million in sales annually $500 Million in sales annually Employ’s 2500 people in 6 facilities Employ’s 2500 people in 6 facilities 4 Manufacturing Facilities 4 Manufacturing Facilities –Flora, Illinois: Forward Lighting –Salem, Illinois: Rear and Secondary Lighting

4. Background of NAL –Paris, Illinois: High Quality Forward Lighting –Muscle Shoals, Alabama: High Quality Rear and Secondary Lighting Design group located in Farmington Hills, Michigan Design group located in Farmington Hills, Michigan Corporate Headquarters located in Paris, Illinois Corporate Headquarters located in Paris, Illinois

5. Preferred Business Management System A quality management system A quality management system Management responsible to create and maintain documents to ensure customer quality Management responsible to create and maintain documents to ensure customer quality –Preparation of quality plans –Identification and acquisition of any controls, processes, equipment, fixtures, resources, and skills needed to achieve the required quality –Ensure the compatibility of design, production process, installation, inspection, and test procedures and the applicable documentation –Update as necessary the quality control, inspection and testing techniques, including development of new instructions –Identification and preparation of quality records It is a continuously changing process It is a continuously changing process

6. Preferred Business Management System Specific areas of the System Specific areas of the System –Quality Manual Manual spells out all international standards as well as NAL standards Manual spells out all international standards as well as NAL standards Direct correlation between ISOO9001:2000/TS16949:2002 Direct correlation between ISOO9001:2000/TS16949:2002 –Control of Documents All documents have to go through an approval process All documents have to go through an approval process All documents are stored in one central controlled location All documents are stored in one central controlled location

7. Preferred Business Management System –Engineering Specifications All Engineering changes have to go through and approval process All Engineering changes have to go through and approval process All changes are recorded and stored in a central location All changes are recorded and stored in a central location –Control of Records –Records Retention Quality records for production part approvals, tooling, purchase orders, and amendments will be maintained for a length of time equal to the time that the item(s) is active plus one calendar year Quality records for production part approvals, tooling, purchase orders, and amendments will be maintained for a length of time equal to the time that the item(s) is active plus one calendar year

8. Customer Focus

9. Performance Indicators provided by the customer Performance Indicators provided by the customer Results are plotted and verified to our goals Results are plotted and verified to our goals –Green: Meets target –Yellow: Marginal –Red: Does not meet

10. Customer Focus On-site QRE’s (Quality Resident Engineer) On-site QRE’s (Quality Resident Engineer) –Improves relationship with the customer –Located on site at major customer sites –Troubleshoot quality issues prior to contacting production facility –Try to put out fires early

11. Supplier Development Purchasing Purchasing –Procure components and raw materials of superior quality and reliability that exceeds customer expectations on a global basis –Purchasing Management will invest time and effort to understand business culture and importance of customer support at all levels of a given organization

12. Supplier Development Supplier Quality Assurance Manual (SQAM) Supplier Quality Assurance Manual (SQAM) –All suppliers receive a copy of this document –Spells out all of NAL’s Quality expectations –Supplier Quality Engineers (SQE) are assigned to suppliers to help them along with our requirements

13. Supplier Development –SQE’s will conduct Continuous Improvement activities with the suppliers to bring the up to our quality level and expectations –Audit suppliers to ensure that they are meeting mandated TS16949 and ISO standards

14. Performance Measurement Dimensional Measurements Dimensional Measurements –Check lamps daily to ensure that we meet current customer requirements –Dimensions are charted daily to ensure visually show any trend lines –When a point is outside the control limits, engineering is notified to correct the problem

15. Performance Measurement Glue Weight Measurements Glue Weight Measurements –Glue weight is checked every day –Charted using SPC Charts to determine the trend line. –Report is generated every day to inform people of the current status.

16. Performance Measurement Gauge R & R Gauge R & R –Repeatability and Reproducibility –Measures how repeatable the process is –3 different operators will load 30 parts into a gauge and measure the parts Gauge instructions ensure proper loading of the part by all operators Gauge instructions ensure proper loading of the part by all operators –The results are entered into a computer to calculate the results

17. Performance Measurement –Results are reported as a percentage 0 - 9 %: Acceptable measurement system, no action required 0 - 9 %: Acceptable measurement system, no action required 10% - 30%: Improvement is encouraged, but may not be desirable 10% - 30%: Improvement is encouraged, but may not be desirable >30%: Unacceptable measurement system >30%: Unacceptable measurement system

18. Performance Measurement Capability Studies Capability Studies –After successful R & R, parts are measured to determine capability –20 parts are measured –After part are measured, the data is analyzed using SPC –Based on the CPK value, a determination is made as to the products capability

19. Performance Measurement FMEA (Failure Modes and Effects Analysis) FMEA (Failure Modes and Effects Analysis) –Created by Manufacturing Engineer –Identifies potential failures prior to creating a process –Works with processing departments to ensure accuracy –Controlled and living document

20. Performance Measurement Control Plan Control Plan –Created by our Quality Engineers Lists each quality measurable for each product and each process Lists each quality measurable for each product and each process Details frequency of quality checks Details frequency of quality checks List specific SPC tool to be used for the checks List specific SPC tool to be used for the checks

21. Employee Motivation NAL has a couple of motivation tools NAL has a couple of motivation tools –Profit Sharing At the end of fiscal year, NAL will deposit a percentage of salary into 401K At the end of fiscal year, NAL will deposit a percentage of salary into 401K –Improvement Suggestions Employee will make an improvement suggestion Employee will make an improvement suggestion If implemented, employee will receive a percentage of the total money saved If implemented, employee will receive a percentage of the total money saved

22. Continuous Improvement NAL practices continuous improvement every day NAL practices continuous improvement every day –We live, eat, and breathe it NAL follows a Kaizen philosophy NAL follows a Kaizen philosophy –Pick a small problem and implement countermeasures to fix –Many small improvements lead to a large amount of savings

23. Continuous Improvement Impact Activities Impact Activities –Diverse group that is assembled to fix a problem within the company –Group makeup is diverse to allow for a new point of view of the issue –Group is dedicated to the activity for an entire week –Problems are identified, brainstormed, and countermeasures are implemented

24. Continuous Improvement –Problem is studied again and improvement is recorded –Group presents findings to management

25. Any Questions?