1. Changeover Plan & Tools Hancor Changeover Team Notes for Discussion December 2, 2004

2. Meeting Overview o Desired Outcomes from meeting o Finalize the 3020 Changeover Documentation and agree to the process o One more check to insure that any steps which can be moved out of the “Total Changeover/Downtime” area have been moved into either staging or Post Changeover o Agree to in-process checklists and reporting forms. o Agree to transition checklist to determine when we actually move from one stage in the process to the next. o Agree on staging requirements for each plant – basic framework and their specific plan (to be done with 1 st focus plant) o Discuss and Agree to the reporting format for changeovers (proposed new document attached) o Discuss and Agree to specific 2005 improvement strategy. o How to select focus plants o Basic time table and goals for this process o Agenda for “focus plants” – what will that mean. o Include a CO Team Conference call between focus plant group and others who cannot attend. o Prep key thoughts for review with Plant leaders on December 12 – and key plant communications process. o Agree and commit to following this plan so that the process can be standardized – we cannot make significant improvement to a “flexible and undisciplined” process.

3. One more Time – We Agree to: o Standardize In-process checklists and reporting forms. o Plan specific Staging requirements for each plant – basic framework and their specific plan o Use Reporting format for changeovers (proposed new document attached) o Implement 2005 improvement strategy. o Follow this plan so that the process can be standardized “We cannot make significant improvement to a “flexible and undisciplined” process!!!”

4. Communication Plant Leaders o Explain our Strategy o Have a standardized process o Work on Focus Plants – next 3 months o Expect significant improvement and communication of learnings o What we want to convey… o We have a need to make a significant reduction in CO time – to do that we must get “control” over them o Standardization of Process o Review of CO outlines (photos) o Core group of “Changeover” people who own the process o Standardization of Reporting o This may cause some “questions” – we expect to see some initial increase in CO time o Everything get’s tracked (NSP’s are out for CO’s) o What about “comparing plant to plant” – our focus is on “comparing improvement to your self” o Current Measure of CO’s is wrong thing – need to track trends on a plant by plant basis – and as an organization. o Review of forms o Key Issues o 24 hour On-site time for tooling before changeover and after changeover (Scheduling involvement) for tooling prep – and for proper maintenance. o Maintenance labor expense to be charged to shipping branch if tooling is not in “run-able” condition. o Staging Completed before physical change begins. o Help on getting Tooling “under cover” or “inside” o New Level of Discipline to Process – may be very uncomfortable. o Need their support for time/manpower o Schedule this group to work together on some of the focus plant changeovers o Schedule time for each regional CO champion to visit and work with other plants in region. o Insure effective Post Changeover Review time.

5. What will we do when we go home??? o Meet with Plant Leadership Group o Review information o Ask for time to participate in Focus plant meetings o Get a “back-up” for other assignments so we can focus on this area. o Solicit support and “Agreement” to improvement o Present information to others at plant o Get operators together and discuss o Convey a positive message that: o We have improved and are really trying o We can Still improve changeovers 50% without capital expenditures. We have to believe!!!

6. Changeover Overview

7. o “Staging” occurs while the current Product is being produced. This time is not part of Total Changeover time. o “Post Change over” activities also do not affect downtime since the qualified new pipe is running. o One key goal is to move any activities, which can be done “before” the changeover to “Staging”, and to move any activities, which can be done after the changeover to Post Changeover.

8. o Switching – The Mechanical portion of the changeover. o Starting –The energizing and initiating of the production process o Qualifying – The time it takes to produce “qualified” pipe, which can be shipped to a customer. This qualifying time is extremely important since it includes not only downtime – but also product “waste” which is a costly proposition to any plant.

9. o In preparing this outline – we will be identifying activities and results which should occur in each of these phases of the changeover. o You will note that we have included four (4) Check Points into the equation. The checkpoints will provide a specific guideline you may use to determine if you are ready to move to the next phase of the changeover. o We highly recommend that you follow the checkpoints, especially #1 since this is your opportunity to have everything staged and ready for a prompt and immediate change before you stop production.

10. Checkpoint 1 o We are staged and ready to begin when: o The plant specific, DETAILED Staging Layout has been followed. o Where, when o Accessways o For all the following o Tooling o Tools o Materials o Requires complete list of tools, tooling, materials o ScoreBoard is posted with History and Goals o Pre Changeover meeting and Plan complete o Review of previous run history o Pre-Changeover Checklist Complete o 3020 Pre-Tooling Checklist Complete

11. Sample Scoreboard

12. Forms

13. Historical Log – Info from last plant

14. o Staging all the necessary parts at the exact location where they will be installed. o Planning area for the old parts to be staged or stored for removal following their disassembly. o Having all tools ready and at their needed location. o Having components pre-assembled to the greatest degree possible. o Having lifting or positioning equipment in place and ready to use. o Having the people assigned, knowing their specific role and the steps of the process. o Having all the necessary locks, tags, or other visual safety tools ready for disabling the machinery. o Having any guards or equipment changes ready or partially disassembled and ready for a quick exchange when the machinery is off. o Having quick-couplers on changeable hoses or other connections where possible. o Having automatic rail positioning systems in place or other fixed point change systems. o Having visual instructions, settings, or other information readily available and posted at key points to facilitate correct placement during the changeover.

15. o At the time the machinery is disabled and the actual switching of components or resetting of parameters is to be done – we need a specific process for making the change. This really involves: o What is the sequence of switch out –switch in o Who does what and when o How – what is the correct, fastest and most effective method for making the shift. o What tools are necessary and where are they o Effective switching depends strongly on effective staging. This is where the actual gains are seen and results demonstrated.

16. Checkpoint #2 o We are ready to startup when: o 3020 Pre Start-up Checklist is complete

17. o This too is a process piece and requires the following be checked o Check key set-up points for proper setting o Check power and prepare to initiate o Run test and insure process is working to standard o Insure proper lubrication, settings, alignment, guarding, and etc. prior and until standardization of process flow.

18. Checkpoint #3 o We are ready to produce pipe when: o First Pipe Verification sample has been taken

19. o This is a great opportunity. Often we start a line and then “Tweak” it until it runs pretty well. All this “Tweaking” time is part of the changeover. Our goal should be to know the equipment so well that all parts can be positioned, set, gauged, and calibrated for full operation first time, every time. Then we have truly optimized the startup. o At Hancor – Qualifying time is time that we are producing pipe – but the pipe is not yet “customer quality.” This area makes it triple wasteful – 1. Wasting operating Time 2. Wasting Product 3. Having to regrind product and store for re-use.

20. Checkpoint #4 o We have good pipe when: o Pipe has been “First Piece Verified” through our quality Process.

21. 3020 Changeover Accountability The following form tracks the elements of the changeover required for system accountability. Each plant should add measures, timelines, etc. that help them specifically in their improvement process. This information comes from Summary Spreadsheet. The CO Team Plans the Goals and projects Target Times. Actual Clock Times are Tracked and Actual Time Calculated.

22. Excel Spreadsheet and Summary Input Sheet (input) Summary Sheet (automatic)

23. o This part is often overlooked. In our effort to “get things ready to ship,” we often take time to clean, adjust or stack equipment from the changeover that could be completed after the next product is completely running. o These activities take time to do – and we simply need to take them out of the Critical Path of the changeover if possible. o Debriefing the changeover and projecting improvements for the next time create real continuous improvement.

24. Checkpoint #5 o Outcomes from Post CO Review: o Historical Log Complete and set to plant receiving molds o Changeover Report is Complete and data entered into Reporting spreadsheet o Post Changeover meeting has reviewed: o How we did o What can we improve o What will we do differently o Assignments and Dates

25. Historical Log – Info to next plant