1. Business Excellence Monthly Report-Out Site: Montreal Report Date: January 4 th 2007 Site GM : Jean Lafrance Site BE Lead : Nathalie Lecours

2. 2 Lean Engagement Maturity Progress What’s Going Well? Some good results on strategic areas. For example : PCBA (mix from 25% to 50%, ) Field Repair (LT from 40 to 21 days) OM5K (mix sustained at 100%) OME5.0 & New customer (Verint); approach taken to introduce Lean from Day 1 Good commitment around the 2008 Lean strategic plan from GM and Cabinet : Plan covers both business priorities and activities to reach Level 3 of the LMT What’s Not Going Well? For Q4 2007, kaizen plan realized at 65% Resources availability to participate to kaizen and realize the kaizen newspaper For 2007, “point kaizen” approach; local improvement vs business transformation 1 Lean prime has changed position What More Need To Be Done? Need to standardize and leverage the best practices (eg : visual management, 5S, …) Training and use of proper lean tools VSM leaders identified and accountable for their kaizen plan Having more structured approach ; develop lean strategic plan for 2008 (underway) What are the Challenges Ahead ? Adherence to the Lean strategic plan 2008; continuous effort will be required to meet the targets Cultural transformation while reducing the crew size

3. 3 Lean Engagement (By Value Stream)

4. 4 Lean Engagement – Plan vs Actual

5. 5 Lean Engagement – Plan vs Actual (cont’d)

6. 6 Targeted KOI Improvement for Site / Operation Value Stream PCBA Business Impact - Effectiveness Key Project Deployment Problem Definition The SMT produces in large batch causing high inventory in the Back End Boards are transferred in batch all way through the process Some yield issues impact the mix and the production schedule Goals Reduce lead time To achieve this : Reduce batch size Reduce transfer batch size Implement rules to manage yield issues (Jidoka) Objectives Lead time : from 10 to 2 days for the Back End Mix attainment : from 25% to 80% Value Stream Field Repair Problem Definition Long lead time due to high inventory and long waiting time at different steps of the process Goals Reduce the lead time To achieve this : Standard WIP MRB to manage issues Cellular manufacturing Part replenishment Objectives Lead time : 21 to 14 days Inventory : 1800 to 1000 boards Aging : 77 to 14 days Value Stream OME 5.0 Problem Definition New production introduction/product unstable make it difficult to implement Lean from Day 1 Need to establish the standard work/expectations (WIP, #employees, processes, …) Goals Implement all Lean best practices according to the LMT Stabilize the products in order to implement the concepts Objectives # Employees : 18 to 16 DL Inventory :1.1M$ to 0.6M$ Stop line rules and quick response team : yes

7. 7 Targeted KOI Improvement for Site / Operation Value Stream Stockroom Business Impact - Effectiveness Key Project Deployment Problem Definition No standard process to replenish the production cell No calculation of required level of inventory in the stockroom and in the production cells High level of non-moving material; long lead time to dispose Goals Implement a plant wide supermarket strategy (PFEP, ROP, Min/Max, water strider) Objectives Making material flow/supermarket Inventory : TBD Value Stream OME5K Problem Definition Goals Objectives Under definition

8. 8 Lean Engagement – Planned Actions

9. 9

10. 10 Lean Engagement – Planned Actions

11. 11 After Kaizen Action TakenResults Before Kaizen Problem Kaizen: Productivity (Shipping Lead Time Reduction – Field Repair) Site/ Owner Name : Montreal/Jocelyn Bouret Email Id/ Contact Phone : jocelyn.bouret@ca.flextronics.com /+1 514-818-3139 Station Shipping Area Customer Flextronics Field Repair Memphis Sustaining & yoko ten status 1.The lead time for shipping field repairs to Memphis is from 15.6 hrs to 41 hours. 2.Makes it hard to commit on which product will be shipped every day 3.52 steps required in BAAN to perform the shipment; 23 minutes/board + risk of errors 4.Cut-off times for shipping not communicated 1.Analysis of the information required in BAAN and other systems 2.Analysis of steps required to prepare the shipment 3.Increase milk run frequency for shipping the products 4.List the cut-off times for the different carriers 1.Reduce from 52 to 15 steps in BAAN 2.Eliminate double scanning operations 3.Increased the milk run from 1/day to 1/hour 4. Cut-off time established (for all products and destinations) Check phase (PDCA) : Most of the action completed Act/Adjust : 7-jan-08  Pick list process every 30 minutes  Class B process 35% more time than class A process (23 minutes compared to 15 minutes)  Waiting time for Field Repair ( average 8 hours)  Double scanning  Cut-off times not communicated  Pick list process; recuced from 30 to 10 minutes  Class B process in BAAN from 23 to 15 minutes  60 hours/week  Waiting time for Field Repair : from 8 to 1 hour  Double scanning eliminated  Cut-off times established e.g.: cut-off times

12. 12 Back Up

13. 13 Flextronics Montreal – Kaizen Plan Q1 2008

14. 14 Labor High (DL,IDL,Temp) 1. Adjust 2. Plan 4. Check 3. Do $ TC Contributors -ve PBIT Man Machine Method Material Unbalanced Line Excessive Capacity Heijunka Not Applied (Levelling & Sequencing) No Entitlement Process PPV Poor incoming Parts Q No Std Work Target Sheet Progress : Meeting Target : Not meeting Target Good Trend : Not meeting Target Wrong Trend Q4Q1Q2Q3Q4 OS Admin Scrap TPM Quote Process Note : Customer disengaging from SLR Lean in Operations Title: TC Improvement in Scientific Atlanta PDCA Note : Customer disengaging from Q4 beginning. Tigers pulled back. TC impacted by fixed cost. DL in good trend. Note : Run rate = 15M K$ % TC model not yet established for Montreal