1. © 2002 Six Sigma Academy SimplexGrinnell Business Unit Results Rick Scheusener

2. © 2002 Six Sigma Academy SimplexGrinnell Highlights Targeted Areas Alarm and Detection Sprinkler Suppression Assessment Locations Denver Nashua Houston Chicago Approximately 170 Locations Four Locations Visited Opportunities Leveraged Across SG EBIT Opportunities Identified…$86M

3. © 2002 Six Sigma Academy Key Interviews Ray Broussard, Houston Regional Manager Steve Guyer, Total Service Manager Connie Bryer, HR & Accounting Rob Phillips, Construction Manager Electrical Jerry Matlock, Construction Manager Bob Kazmerick, Sales Manager Bob Kehrer, District GM Bill Jones, Service Manager Tammy Schissel, Office Supervisor Bill Bebensee, Electrical Manager Kraig Denking, Mechanical Manager Denver Houston ChicagoNashua Westminster Greg Gaither, Regional Manager Steve Hubick, District Manager Bob Lee, Electrical Bob Abrell, Total Service Manager Tom Leman, Mechanical Ops Manager Ron Brassard, Regional Manager Todd Buffum, Total Service Manager Frank Difonzo, Electrical Brian Cote, Suppression Bob Chauvin, CFO Dave Baer, VP Sales and Marketing Michael O’Rourke, VP National Accounts Jim Nickerson, Applications

4. © 2002 Six Sigma Academy SimplexGrinnell Projects

5. © 2002 Six Sigma Academy Project 1…Perfect Day Problem Statement: Installation processes builds 4-7% into the job to account for problems that occur on site during the installation process. Total cost of non-perfect day = $35M CTQ: (Critical To Quality): Margin Defect Definition: Margin less than optimal Project Objective: Understand what project management issues to address to ensure that bid margin for a job doesn’t slip. Current Goal: Cost Benefits: Reduce lost annual costs by $35M Internal/External Client Benefits: Improve margin and cash flow Build customer relationships Dependencies: Resolving customer quality issues Progress to Date: TBD Realize margin improvement of 5%

6. © 2002 Six Sigma Academy Margin Revenue Cost Labor Design Material WaitingInstall Strategic Goal Business Drivers Drivers $35M from 4-7% additional built into margin Project Cluster…Perfect Day Poor Specs Wrong Equip Wrong Parts Poor Design Drill Down Project (s)

7. SimplexGrinnell – Houston Region Design Process – Contract Business Work Folder forwarded to Design Forward to appropriate Design Project Manager Design work sorted by job type (Mech, Elect) Design Project Manager assigns Designer Drawings Prepared Equipment Ordered (depends on design type and schedule) Drawing Submitted for AHJ Approval Installation Drawings forwarded to Construction Drawings Reviewed by Senior Designer Drawings Complete? NO YES Drawings by Senior Designer? YES NO Drawings Approved? “As is” or “As Noted” YES NO

8. SimplexGrinnell – Houston Region Construction Process (Electrical) – Contract Business Work Folder forwarded to Construction Customer Contacted and Construction Schedule Obtained Customer Contacted Equipment Ordered Construction Project Manager Assigned Equipment List Reviewed by Project Mgr. Determine Job Type? Fast Track (5-7 Day Work) Bid Work Installation Work Scheduled Approved Drawings Received Installation Construction Project Manager Assigned Drawings Received from Design Project Mgr. forwards Equipment List to Purchasing Project Mgr. establishes Installation Dates Project Mgr. manages Construction Schedule Equipment Ordered Installation Crew Assigned by work type and schedule

9. © 2002 Six Sigma Academy Project 2…Accounts Receivable Problem Statement: Accounts receivable of $365M is $165M above the desired level. In addition, $3.4M is spent on administrative costs to address customer invoicing concerns and finance center opportunities. Total EBIT opportunity for accounts receivable = $15M CTQ: (Critical To Quality): AR DSO Administration expenses to address invoicing and finance center concerns Defect Definition: DSO greater than 60 days Admin time spent chasing invoicing and finance center errors Project Objective: Improve DSO and invoicing errors Realize margin improvement of 5% Current Goal: DSO <= 60 days Cost Benefits Reduce admin costs by $3.4M Cash flow from accounts receivable Internal/External Client Benefits: Improve cash flow Build customer relationships Dependencies: Resolving customer quality issues Progress to Date: TBD

10. © 2002 Six Sigma Academy Project Cluster: AR Cash Revenue Accounts Receivable Invoicing TermsSystems Billing Procedure Finance Center Strategic Goal Business Drivers Drivers $11.5M $1.7M

11. © 2002 Six Sigma Academy SimplexGrinnell Six Sigma Deployment Considerations 1.Simplex vs. Grinnell Culture Tremendous Progress over 20 months Recognition between management styles Current SG Activities: CRM Rollout, GL Merger,Job Costing, Training 2.Need for Data Anecdotal information - not actionable Programs coming on line 3.Significant DMAIC Applications Entitlement from programs Process Execution