Competitive Analysis of the P/M Industry

Report 01-1

Research Team: Chickery Kasouf (Advisor)Sanjay Chablani (Research Assistant)

Project 1: PMPA/PMRC Benchmarking and Statistics Project

Objectives:

The development of a statistical data base for the P/M parts industry to enablefirms to:

• Benchmark key performance data vis- -vis other part producers• Develop relationships between success measures and independent

variables

Strategies:

• Collect annual data from PMPA membership using three reports.

Achievements since November:

• Data collection and analysis completed and debriefing at PMPA WinterMeeting. Craig Paullin and Chick Kasouf presented the results to PMPAmembership. (see attached questionnaires, sample of results for ReportsA and B, and sample of PMPA presentation).

August 28, 2000

Dear PMPA Official Representative:

As we noted in our previous letter, the PMPA Statistics and Benchmarking Committee,working with WPI s Metal Processing Institute, has revised its statistics program. We willbe conducting three annual surveys of the industry, each with a specific focus. Each ofthese new surveys is included with this mailing. These are replacing Reports 2, 3 & 4.After submitting your 2nd quarter data for these reports, please destroy any remainingforms for Reports 2, 3, and 4.

Report A: Expense Asset Management/Sales Distribution Report measures yourexpenses and asset management to benchmark resource efficiency in the P/M partsindustry. It also contains a brief section measuring sales and production distribution inthe P/M parts industry. The other two surveys are Report B: Operational BenchmarkingSurvey (includes plant level data about operational efficiency), and Report C: Wage andSalary Survey (a continuation of the wage and salary survey with additional data onturnover and absenteeism).

By participating in this study, you will have a summary of current practice in the industry.As noted in the cover letter, all responses are confidential and will be analyzedanonymously. John Pavlovsky, CPA will be collecting data for PMPA andforwarding it to the research team at WPI with identification codes to disguise theidentity of participating companies. Neither the Statistics Committee nor WPIstaff will have any access to your identity when dealing with your responses.

Each participant in the study who completes 75% of the items will receive a customizedreport that includes a summary of all responses and your responses compared to theaggregate data.As noted above, this report is prepared using codes to analyze data anonymously.

In order to facilitate timely analysis of the data, could you please return thequestionnaires to Mr. Pavlovsky s office by September 18, 2000?

If you have any questions, please feel free to call Pete Johnson (609.452.7700;johnson@mpif.org), Craig Paullin (310.715.9800; x 108; craig@pacificsintered.com) orChick Kasouf (508.831.5548; chick@wpi.edu).

We look forward to your participation and hope to see you at the Fall ManagementConference.

Best regards,

Craig Paullin Chickery J. KasoufPresident, Pacific Sintered Metals Metal Processing InstituteChairman, PMPA Statistics and Worcester Polytechnic InstituteBenchmarking Committee

PMPA/WPI Report A:Expenses, Asset Management/End Market Sales Distribution

(Corporate Level)

Summer/Fall 2000

Report A

Expense, Asset Management/End Market Sales DistributionReport

This questionnaire measures your expenses, asset management, and endmarket sales distribution to benchmark the resource efficiency of P/M partproducers at the company level. By participating in this study, you will have asummary of current practice in the industry. As noted in the cover letter, allresponses are confidential and will be analyzed anonymously. JohnPavlovsky, CPA will be collecting data for PMPA and forwarding it to theresearch team with identification codes to disguise the identity ofparticipating companies. Neither the Statistics Committee nor WPI staffwill have any access to your identity when dealing with your responses.

Each participant in the study who completes 75% of the items will receive acustom report that includes:

• A summary of all responses• Your responses compared to the aggregate data. As noted above, this

report is prepared using codes to analyze data anonymously.

Please use data from your most recently completed financial statements.Section I uses data from your income statement and Section II uses data fromyour balance sheet. Section III asks for information about firm size to classifycompanies in the analysis. Section IV measures sales end market andproduction distribution.

To facilitate timely analysis of the data, could you please return the survey to Mr.Pavlovsky s office by September 18, 2000?

If you have any questions, please feel free to call:Peter Johnson (609.452.7700; johnson@mpif.org)Craig Paullin (310.715.9800; x 108; craig@pacificsintered.com)Chick Kasouf (508.831.5548; chick@wpi.edu).

Report A

I. Expense Statistics

Please provide information regarding aggregate company operations from yourmost recently completed fiscal year. Each item asks you to report data inpercentage of net P/M sales, i.e, total sales of P/M parts, tooling, andservices less returns. Please refer to the glossary at the end of thequestionnaire for definitions of each variable. Please note that these are annualexpense items taken from your income statement. Please do not include netcapital expenditures.

Raw materials _______ %Direct labor costs - wages _______ %Direct labor - benefits _______ %Out of pocket purchases of secondary operations _______ %Net new tooling costs and expenses _______ %Net replacement tooling costs and expenses _______ %Maintenance costs _______ %Utilities costs _______ %Insurance _______ %Depreciation _______ %R&D expenses _______ %Total manufacturing expenses _______ %

Sales and marketing expenses _______ %General and administrative expenses _______ %Income before interest and taxes _______ %

II. Asset Management Statistics

This section asks for information from your balance sheet

Current assets (as a percentage of your total assets) _______ %Average collection period _______ daysCurrent ratio at the end of the last reporting year _______Quick ratio at the end of the last reporting year _______Average raw materials inventory _______ daysAverage work in progress inventory _______ daysInventory turnover _______ daysReturn on adjusted gross assets _______ %Return on adjusted net assets _______ %

III. Classification Data

These data are used to classify firms in the analysis. No company sales orassets will be identified.

Total assets (in US dollars) _______Net P/M sales in your last fiscal year (in US dollars) _______Average number of employees in the last fiscal year _______IV. End Market Sales Distribution

Please provide a percentage breakdown of your net P/M sales by market

Automotive OEM ________ %Automotive tier 1, 2, or 3 ________ %Automotive replacement parts ________ %Heavy duty truck ________ %Off-road vehicles ________ %Construction ________ %Lawn and garden ________ %Agricultural ________ %Appliance ________ %Office equipment ________ %Other (please specify) ________ %Other (please specify) ________ %

Total 100 %

Please provide a breakdown of your net P/M sales by region. Please provide thisinformation by the country where the part is delivered, not by the ownership ofthe customer. For example, a sale to Toyota in the United States should beconsidered a United States sale.

United States ________ %Canada/Mexico ________ %Central America ________ %South America ________ %Western Europe ________ %Asia/Pacific Rim ________ %

Please break down your P/M production by region. Production is the site atwhich the part is produced,

United States ________ %Canada/Mexico ________ %Central America ________ %South America ________ %Western Europe ________ %Asia/Pacific Rim ________ %

Please return by September 18, 2000 to: John Pavlovsky Jr.,CPA

176 Northfield Road

Bridgewater, NJ08807

E-mail: Jpavlovsky@aol.com FAX: (908) 927-0213

Definition of terms

Unless noted otherwise, all data are annual from your most recent financialstatements).

Raw materials: Cost of raw material used in the product plus related freight in;not indirect materials or supplies or freight materials thereof.

Direct labor - wages: All straight-time wages of workers directly involved in theproduction of the sales product, such as compacting press operators, sinteringfurnace operators, and secondary equipment operators (Include shift differentialbut exclude overtime premium, benefits, supervision, and set-up).

Direct labor - benefits: The cost of all benefits for hourly workers, includinghealth, dental, and life insurance, unemployment or disability benefits, vacation,retirement contributions or other costs associated with your benefit package.

Out of plant purchases of secondary operations: All outside purchases ofservices that relate directly to the production of the sales product (such asmachining heat treating, impregnation, etc.).

Net new tooling costs and expenses: Internal and external costs includinglabor and new materials incurred to acquire the initial set of tools, fixtures, jigs,etc. to manufacture a P/M part, less the portion of any such cost funded by thecustomer.

Net replacement tooling costs and expenses: Internal and external costsincluding labor and new materials incurred to repair and/or replace tools, fixtures,jigs, etc. to manufacture a P/M part, less the portion of any such cost funded bythe customer.

Maintenance costs: Expenses associated with plant and equipmentmaintenance (including office space).

Utilities costs: Gas, electricity, nitrogen, ammonia, and other utilities costsassociated with the production of product. EXCLUDE telephone.

Insurance: Purchase of business insurance to cover operations (but notincluding employee benefits)

Depreciation: Depreciation expenses for the last accounting period

R&D expenses: Expenses associated with new product development andgeneral research

Total manufacturing costs: Costs associated with the production of P/M parts,not including depreciation, interest, taxes, or general and administrative costs.

Sales and marketing expenses: Expenses associated with sales andmarketing, including salaries and commissions.

General and administrative expenses: Executive and office salaries andbenefits not included elsewhere, legal and audit services, rent for offices,telephone, office supplies, office equipment expense, and all other expenses(NOTE: Exclude interest income and expense and income taxes.)

Income before interest and taxes: Earnings before interest and taxes as apercentage of gross sales.

Current assets (as a percentage of your total assets): Current assets dividedby total assets.

Average collection period: Accounts receivable divided by credit sales perday.

Current ratio at the end of the last reporting year: Current assets divided bycurrent liabilities at the end of the last reporting year.

Quick ratio at the end of the last reporting year: Cash plus accountsreceivable divided by current liabilities, at the end of the last reporting year.

Average raw materials inventory in days: Average inventory of available rawmaterial divided by average daily raw material consumption (in pounds)

Average work in progress inventory in days: Average work in progressinventory divided by average daily production (in pounds)

Inventory turnover: Average daily sales divided by average inventory.

Return on adjusted gross assets: Net profit divided by gross assets, i.e.:

The sum of all recorded assets employed in P/M partsoperations after elimination of cash, marketablesecurities, accumulated depreciation (to include fixedassets at gross value), and investments, plus thecapitalization of leases

Return on adjusted net assets: Net profit divided by:gross assets as defines above less total accumulated depreciation.

PMPA/WPI Report B:Operational Benchmarking Analysis

(Plant Level)

V. Summer/Fall 2000

Report BOperational Benchmarking Analysis

This report collects data on critical benchmarks identified as competitivemilestones by the industry. Data will only be reported to the group in theaggregate, but you will receive a customized report summarizing the results ofthe entire sample and compares your answer to the group.

All responses are confidential and will be analyzed anonymously. JohnPavlovsky, CPA will be collecting data for PMPA and forwarding it to theresearch team with identification codes to disguise the identity ofparticipating companies. Neither the Statistics Committee nor WPI staffwill have any access to your identity when dealing with your responses.

Each participant in the study who completes 75% of the items will receive acustom report that includes a summary of all responses and your responsescompared to the aggregate data. As noted above, this report is preparedusing codes to analyze data anonymously.

To facilitate timely analysis of the data, could you please return the survey to Mr.Pavlovsky s office by September 18, 2000?

If you have any questions, please feel free to call:Peter Johnson (609.452.7700; johnson@mpif.org)Craig Paullin (310.715.9800; x 108; craig@pacificsintered.com)Chick Kasouf (508.831.5548; chick@wpi.edu).

Report BOperational Benchmarking Analysis

Please provide the data requested below. Definitions for each item are includedat the end of this survey. Please use data from your most recent reporting year.

Number of P/M employees ________Total pounds of P/M parts shipped ________Net sales of P/M parts ________Square footage of P/M operations ________Total energy costs ________Average number of presses operating ________Total press hours ________Average capacity utilization ________Percentage of on time product delivery ________Percentage of sales using premium freight (due to late production) ________Defective parts per million at final inspection ________Percentage of accepted first article (or PPAP) submissions ________P/M shipments per molding set-up employee ________Percentage of sales in scrap ________Percentage of sales requiring rework ________Percentage of sales returned ________The total number of new product tooled ________New tooling as a percentage of net sales ________The percentage rate of sales growth or decline from the

previous year in dollars ________The percentage rate of sales growth or decline from the

previous year in pounds ________Percentage of sales from parts less than one year old ________Percentage of sales from parts less than three years old ________Percentage of bids won last year ________Expected percentage of sales this year from bids won last year ________

Please return by September 18, 2000 to: John Pavlovsky Jr., CPA176 Northfield RoadBridgewater, NJ 08807

E-mail: Jpavlovsky@aol.com FAX: (908) 927-0213

Definition of terms

All data are annual from your most recent reporting year. PLEASE NOTETHAT NET ANNUAL SALES ARE THE DOLLAR SALES OF P/M PARTS,TOOLING AND SERVICE, LESS RETURNS.

Number of P/M employees: The total number of employees assigned to yourP/M business (including production workers, executive, sales, clerical, andsupport staff.

Total pounds of P/M parts shipped: The total volume of P/M parts (in pounds)shipped during the year.

Net sales of P/M parts: The total dollar volume of P/M parts, tooling andservices, shipped during the year less returns.

Square footage of P/M operations: The total square footage used in themanufacture of P/M components, including office space.

Total energy costs: The total costs for utilities and fuel related to your P/Moperations.

Average number of presses operating: The number of presses that wereavailable during the period, even though some may have been operatingintermittently. If there is a change in the number of presses during the period(such as the introduction of a new press or the removal of an obsolete press,show the nearest whole number of presses representing the AVERAGE numberof presses available.

Total press hours: The total hours run for all presses in y our operation duringthe period. For example, if 10 presses are operating for 40 hours a week, for 52weeks, then total press hours are 20,800.

Average capacity utilization: Total hours of press utilization divided by 6240(120 hours per week x 52 weeks)

Percentage of on time product delivery: Percentage of your orders whichwere delivered complete and on schedule.

Percentage of sales using premium freight: Percentage of sales that requiredpremium freght charges because of late production.

Defective parts per million at final inspection: Total parts rejected by yourcustomer divided by the total parts shipped, multiplied by 1,000,000.

Percentage of accepted first article (or PPAP) submissions: The total partsaccepted by the customer on a first submission basis. If modifications are madeto the component but are still approved by the customer, this would beconsidered first article approval.

P/M shipments per molding set-up employee: Net annual sales divided bythe average number of set-up personnel employed during the year.

Percentage of sales in scrap: Value in labor and material of product scrappedduring the year as a percent of net annual sales.

Percentage of sales requiring rework: Total internal and external costsassociated with deviated product correction during the last year as a percentageof net annual sales.

Percentage of sales returned: Total dollar vale of product returned bycustomer as a percentage of net annual sales.

The total number of new product tooled: The number of new products tooledfor production during the last year.

New tooling as a percentage of net sales: Internal and external costsincluding labor and new materials incurred to acquire the initial set of tools,fixtures, jigs, etc. to manufacture a P/M part, less the portion of any such costfunded by the customer/, divided by net sales.

The percentage rate of sales growth or decline from the previous year indollars: The rate of change in sales based on preceding year s dollar volume,expressed as a percentage. For example, if your sales increased from $20million to $22 million, your rate of growth was 5%.

The percentage rate of sales growth or decline from the previous year inpounds: The rate of change in sales based on preceding year s shipment inpounds, expressed as a percentage.

Percentage of sales from parts less than one year old: The percentage ofnet sales, in dollars, generated by parts with PPAP or first article approval in thelast year.

Percentage of sales from parts less than three years old: The percentage ofnet sales, in dollars, generated by with PPAP or first article approval in the lastthree years.

Percentage of bids won last year: The percentage of bids made during thelast year that were awarded sales.

Expected percentage of sales this year from bids won last year: Theexpected percentage of sales volume this year from bids won last year.

PMPA/WPI Report C:Wage & Hour Classification/

Fringe Benefits Survey

Summer/Fall 2000

TO: ALL PMPA MEMBERS

SUBJECT: WAGE & HOUR CLASSIFICATION/FRINGEBENEFITS SURVEY 2000

THIS SURVEY WILL BE COMPILED BY THE MPIF CPA, JOHN PAVLOVSKY JR.NO INDIVIDUAL COMPANY DATA WILL BE RELEASED. THE REPORTINGFORMS SUBMITTED BY EACH COMPANY WILL BE DESTROYED AS SOON ASCOMPILATION HAS BEEN COMPLETED.TO PROTECT CONFIDENTIALITY A CODE DESIGNATION WILL BEASSIGNED TO EACHFORM SO THAT THE COMPANY REPORTING COULD NOT POSSIBLY BEIDENTIFIED.RESULTS WILL BE AUTOMATICALLY MAILED TO TIMELYPARTICIPANTS.IF WE HAVE LESS THAN 4 PARTICIPANTS IN ANY GIVEN SECTION, IT WILLNOT BE PRINTED.__________________________________________________________________________________________

Reporting Company Code _________ Contact Name______________________________

DEADLINE FOR FILING: SEPTEMBER 18, 2000__________________________________________________________________________________________

RETURN TO: John Pavlovsky Jr., CPA 176 Northfield Road Bridgewater, NJ 08807 Fax: (908) 927-0213 E-mail:

Jpavlovsky@aol.com__________________________________________________________________________________________

** FILL IN ONLY THE SPACE APPROPRIATE TO YOUR ORGANIZATION**

New England _____ Maine, New Hampshire, Vermont, Massachusetts, Connecticut, andRhode Island.

Mid Atlantic _____ New York, New Jersey, Pennsylvania, Maryland, Delaware, and WestVirginia.

Midwest _____ North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa,Missouri, Wisconsin, Illinois, Indiana, Michigan, and Ohio.

Southern _____ Virginia, North Carolina, South Carolina, Georgia, Florida, Kentucky,Tennessee, Alabama, Mississippi, Arkansas, Louisiana,Oklahoma, and Texas.

Pacific Coast _____ California, Oregon, Washington, Alaska, Hawaii, Montana, Wyoming,Colorado, New Mexico, Idaho, Utah, Arizona, andNevada.Canada _____ Please indicate if wages given are: U.S. Dollars ____ CanadianDollars _____

For comparison Canadian Dollars will be converted to U.S. Dollarsin the final report.

COMPANY LOCALE: RURAL ______ URBAN ______(Rural-Metropolitan area less than 25,000 people/Urban-Metropolitan area over 25,000

people)

COMPANY SALES CATEGORY: 0-5 Million ____ 5-10 Million ____ 10-25 Million ____Over 25 Million ____

NUMBER OF EMPLOYEES: FULL-TIME ________ PART-TIME ________ (Include both hourly and salaried employees for this location only)

NOTE: Companies with more than one location should submit a separate surveyfor each location.

** COMPLETE ONLY FOR POSITIONS AVAILABLE IN YOUR COMPANY ***** USE ACTUAL HOURLY WAGES NOT WAGE SCALES ***

I. DIRECT HOURLY LABOR Dollars/Hour Average Lowest Highest

A. Compacting Set-Up Operator _______ _______ _______

B. Compacting Press Operator _______ _______ _______

C. Computer Press Operator _______ _______ _______

D. Furnace Loader/Unloader _______ _______ _______

E. Secondary Equipment Operator _______ _______ _______

F. Powder Blender/Operator _______ _______ _______

G. Grinder Loader/Unloader _______ _______ _______

H. Heat Treat Operator _______ _______ _______

I. Part Time Worker _______ _______ _______

J. Parts Packer _______ _______ _______

K. Finishing & Tumbling Operator _______ _______ _______

L. Sorter _______ _______ _______

II. Indirect Hourly Labor

A. Production

1. Compacting Set-Up A (Sr.) _______ _______ _______

2. Compacting Set-Up B (Jr.) _______ _______ _______

3. Compacting Set-Up C (Trainee) _______ _______ _______

4. Secondary Equipment Set-Up _______ _______ _______

5. Material Handler/Lift Truck Operator _______ _______ _______

Dollars/Hour Average Lowest HighestB. Production Control

1. Schedulers/Dispatchers _______ _______ _______

2. Metallurgical Technician _______ _______ _______

3. Shipping/Receiving Clerk _______ _______ _______

4. Production Control Clerk _______ _______ _______

C. Quality Control

1. Chief/Precision/Layout Inspector _______ _______ _______

2. In-Process Inspector/Patrol Inspector _______ _______ _______

3. Final Inspector/Quality Auditor _______ _______ _______

4. Process Technician _______ _______ _______

D. Supervision-Leadperson _______ ______ _______

E. Maintenance

1. Millwright _______ _______ _______

2. Electrician _______ _______ _______

3. General Repairman _______ _______ _______

4. Janitor/Custodian _______ _______ _______

5. Maintenance Mechanic/Repairman _______ _______ _______

6. Maintenance Helper _______ _______ _______

F. Tool Room

1. Tool & Die Maker _______ _______ _______

2. Tool & Die Maker-Trainee _______ _______ _______

3. Machinist _______ _______ _______

4. Machinist-Trainee _______ _______ _______

5. Tool Crib Attendant/Tool Control _______ _______ _______

6. Tool & Gauge Inspector/Tool Maintenance Inspector _______ _______ _______

III. Salaried Labor Annual Salary (Dollars)

A. Manufacturing Staff Average Lowest Highest1. Manufacturing Manager _______ _______ _______

2. General Foreman/Production Control Mgr. _______ _______ _______

3. Shift Foreman _______ _______ _______

4. Quality Control Manager _______ _______ _______

5. Engineering Manager/Chief Engineer _______ _______ _______

6. Manufacturing/Process Engineer _______ _______ _______

7. Industrial Engineer _______ _______ _______

8. Tool Design Engineer _______ _______ _______

9. Metallurgist _______ _______ _______

10. Estimator _______ _______ _______

11. Draftsman-Sr. _______ _______ _______

12. Draftsman-Jr. _______ _______ _______

13. Personnel Manager _______ _______ _______

B. Office Staff

1. Executive Secretary _______ _______ _______

2. Secretary _______ _______ _______

3. Controller/Accounting Manager _______ _______ _______

4. Bookkeeper _______ _______ _______

C. Sales

1. Sales Manager _______ _______ _______

2. Marketing Manager _______ _______ _______

3. Manager Customer Services _______ _______ _______

4. Salesman _______ _______ _______

5. Sales Correspondent _______ _______ _______

6. Applications Engineer _______ _______ _______

NOTE: UNLESS OTHERWISE INDICATED, ALL RESPONSES SHOULD PERTAIN TOHOURLY EMPLOYEES.

Turnover and Absenteeism

Using the categories in pages 2 — 4, please provide the following information about turnover andabsenteeism in terms of the percentage of that category:

Resignations/retirements: The number of voluntary resignations during the lastreporting year.

Dismissals: The number of terminations due to work performance.Layoffs: The number of involuntary separations due to head count

adjustment.Absentee rate: The percentage of scheduled workdays missed.

Category Resignations/retirements

Dismissals Layoffs Absenteerate

Direct Hourly LaborIndirect Hourly LaborSalaried Labor

Probationary Period1) A. Do you have a probationary period? Yes ____ No ____

B. What is the length of your probationary period? _____________ (days)

COLA2) A. Do you have an automatic "COLA" (Cost of Living Adjustment) allowance? Yes

____ No ____

B. Do you have a capped or open "COLA" allowance? Capped

____ Open ____

C. If you have a "COLA" allowance, what index is it based on?

________________________________________________________________________

____________

Labor Unions3) A. Do you have a labor union? Yes ____ No ____

B. What is the length of your labor contract in months?__________

Increases4) A. Last general increase: Date __________ Percent increase for base

wages? ________%

B. Provisions for future increases: Date __________ Percent increase for base

wages? ________%

Shift Premiums5) A. Do you pay shift premiums? Yes ____ No ____

B. Amount paid to second shift: +$.________/hr

C. Amount paid to third shift: +$.________/hr

Incentive/Profit Sharing/Bonus Plans6) A. Does your company have an incentive plan? _____ Profit Sharing Plan? _____

Bonus Plan? _____

B. If your company has an incentive, profit sharing, and/or bonus plan, what is it based

on?

Production _____ Profits _____ Management Discretion _____

Other _____

C. If your company has a profit sharing plan, are payments made annually? ____

deferred? _____ other? _____

D. If your company gives bonuses, are they given annually? _____ other? _____

E. If you have an incentive/profit sharing/bonus plan, what percent of payroll was paid in

the calendar year for this plan?_______

Pension Plan7) A. Does your company have a pension plan? Yes _____ No _____

B. Are the costs shared by employees? Yes _____ No _____

C. Do the employees earn vested rights? Yes _____ No _____

D. After what length of service? _____ (years)

Employee Shareholding/ESOP8) A. Have you instituted an employee shareholding or ESOP plan? Yes_____

No_____

B. Are you considering doing so? Yes _____ No

_____

Holidays9) A. How many paid holidays do you have? ______

Sick Leave10) A. Does your company have sick leave coverage? Yes _____ No

_____

B. Number of paid sick days: _____

Funeral Days11) A. Number of paid funeral leave days for immediate family: _____

Jury Duty12) A. Does your company have provisions for jury duty pay? Yes _____ No

_____

B. Maximum number of days: ______

Premium Pay13) A. Does your company provide premium pay for the following? If so, at what rate?

(1.5x, 2x etc.)

Over 8 hours per day ________ Saturday work

________

Over 40 hours per week ________ Sunday work

________

Holiday work

________

Vacations14) A. Please indicate the number of years service required to qualify for vacation as

indicated below:

1 week vacation __________ 4 weeks vacation __________

2 weeks vacation __________ 5 weeks vacation __________

3 weeks vacation __________ 6 weeks vacation __________

Life Insurance15) A. Do you offer group life insurance to your employees? Yes _____ No

_____

B. What percentage of the cost does the employee pay?

None _____ Under 25% _____ 25-50% _____ Over 50%

_____

C. Please complete the following information:

_________ x annual rate or ___________ $ Amount - Natural Death

_________ x annual rate or ___________ $ Amount - Accidental Death

Additional insurance can be purchased: Yes ______ No

______

_________ Days probationary period required for life insurance coverage

Hospitalization/Major Medical Insurance16) A. Do you offer hospitalization/major medical insurance? Yes _____ No

_____

B. What percentage of the cost does the employee pay for his/her coverage?

None _____ Under 25% _____ 25-50% _____ Over 50%

_____

C. What percentage of the cost does the employee pay for his/her dependent’s coverage?

None _____ Under 25% _____ 25-50% _____ Over 50%

_____

D. Amount of deductible per employee ________ per family________

Short-Term Disability17) A. Do you have short-term sickness and accident benefit coverage? Yes _____

No _____

B. What percentage of the cost does the employee pay?

None _____ Under 25% _____ 25-50% _____ Over 50%

_____

C. Number of weeks benefits paid: ________

D. Amount of weekly benefit: Minimum _____ Maximum _____

Long-Term Disability18) A. Do you offer long-term disability coverage? Yes _____ No _____

B. What percentage of the cost does the employee pay?

None _____ Under 25% _____ 25-50% _____ Over 50%

_____

C. Number of weeks long-term disability benefits paid: __________

D. Percent of weekly pay ______%

E. Is it social security integrated? Yes _____ No _____

Dental Coverage19) A. Do you offer a dental plan? Yes _____ No _____

B. Is there a deductible? Yes _____ No _____

C. Amount of deductible __________

D. Does it cover orthodontic treatment? Yes _____ No _____

E. What percentage of the cost does the employee pay?

None _____ Under 25% _____ 25-50% _____ Over 50%

_____

Cafeteria Plan - Defined as: Above a certain minimum medical coverage, employees can

elect to give up some insurance and/or benefits in exchange for other

insurance and/or benefits.

20) A. Have you instituted a cafeteria plan? Yes _____ No _____

B. Are you considering doing so? Yes _____ No _____

PLEASE ANSWER THE FOLLOWING QUESTIONS FOR SALARIEDEMPLOYEES ONLY

Bonus Plan1) A. Does your company have a bonus plan? Yes _____ No _____

B. Is it based on profits _____, management discretion _____, or other _____?

C. Are bonuses given annually _____ or other ______?

Pension Plan2) A. Does your company have a pension plan? Yes _____ No _____

B. Do the employees contribute to the plan? Yes _____ No _____

C. Is the benefit = _____ or > _____ than the benefit offered the hourly employees?

Medical Plan3) A. Do you offer Hospitalization/Major Medical Insurance? Yes _____ No

_____

Is the benefit = _____ or > _____ than the benefit offered the hourly employees?

B. Do you offer Short-Term Disability benefits? Yes _____ No _____

Is the benefit = _____ or > _____ than the benefit offered the hourly employees?

C. Do you offer Long-Term Disability? Yes _____ No _____

Is the benefit = _____ or > _____ than the benefit offered the hourly employees?

D. Do you offer Dental Coverage? Yes _____ No _____

Is the benefit = _____ or > _____ than the benefit offered the hourly employees?

Automobile4) A. Do you offer a company car to sales personnel? Yes _____ No _____

B. Do you offer a company car to other management? Yes _____ No _____

Memberships5) A. Does the company pay for membership in APMI? Yes _____ No _____

B. Does the company pay for memberships in other organizations? Yes _____

No _____

Other Benefits6) A. Does the company offer stock options? Yes _____ No _____

B. Does the company pay for education? Yes _____ No _____

C. Does the company offer other benefits? Yes _____ No _____

7) Do you pay overtime for salaried employees? Yes _____ No _____

Metal Powder Industries Federation105 College Road EastPrinceton, NJ 08540-6692

(609) 452-7700 Fax (609) 987-8523 www.mpif.org

BRIEF JOB DESCRIPTIONS TO ASSIST COMPANIES IN SUPPLYINGINFORMATION FOR THE WAGE & HOUR QUESTIONNAIRE

I. DIRECT HOURLY LABOR

A. COMPACTING SET-UP OPERATORSets up and operates one or more compacting presses. Monitors the quality and

quantity of parts produced to insure that partsmeet standards and specifications.

B. COMPACTING PRESS OPERATOROperates one or more compacting presses. Removes parts by hand or checks

chutes when parts are automatically ejected.Keeps hoppers filled with powder. Doesvisual and/or micrometer checks to determinequality of parts.

C. COMPUTER PRESS OPERATOROperates one or more computer presses

D. FURNACE LOADER/UNLOADERFurnace loading responsibilities include loading parts into trays or on to a

conveyer belt for sintering in furnaces andremoves sintered parts from furnace. Inspects

parts visually or with a micrometer todetermine quality.

E. SECONDARY EQUIPMENT OPERATOROperates one or more secondary machines for operation on a variety of parts

and/or performs assembly work. Typicalsecondary machines include lathes; singleand multiple spindle drill presses for drilling,tapping, reaming and countersinking; andmachines for assemblies, honing etc.

F. POWDER BLENDER/OPERATORBlends, screens and reprocesses powder using specified tools and equipment.Operates equipment such as lift truck, bulk pack inverter, barrel inverter, scales,blender feed system and dust collecting system. May keep powder inventory.

G. GRINDER LOADER/UNLOADERSets up and adjusts grinders and feeder. Loads, unloads and packs parts off

grinder. Uses hoists and hand tools whennecessary.

H. HEAT TREAT OPERATOROperates and adjusts heat treat, draw and generator equipment. Loads and

unloads parts using necessary equipment.Makes routine equipment checks andadjustments to furnace and quench, gas flows,pressure, etc.

I. PART TIME WORKERGenerally a student or a retired person who works less than the 40 hours per

week in an unskilled position such as partspacker, sorter, compacting press operator.For the purpose of accounting number ofemployees and wage data for part-timeworkers should be added together to establisha total of part-time workers.

J. PARTS PACKERVisually checks, sorts, counts and hand packs parts. Inspects parts for cracks,

burrs or other imperfections. Places finishedparts into bags, containers, or cartons forshipment.

K. FINISHING & TUMBLING OPERATOROperates all tumbling, drying and separating equipment. Selects the media and

the method of tumbling or finishing for each

type of part or condition. Maintains thenecessary hoisting and tumbling equipmentand media. May clean out and treatwater/waste settling containers.

L. SORTERSorts and inspects assigned production parts for tolerance compliance.

II. INDIRECT HOURLY LABOR

A. Production

1. COMPACTING SET UP A (Sr.)Sets up and adjusts various presses andmonitors the quality and quantity of partsproduced from one or more presses to insurethat parts meet standards and specifications.Periodically checks condition or presses inhis/her assigned group. Assists in training newdie setters and operators. Displays judgement,initiative and ingenuity in setting upcomplicated jobs.

2. COMPACTING SET UP B (Jr.)Sets up and adjusts various presses, not necessarily all presses, and monitors thequality and quantity of parts to insure that parts meet standards and specifications.Periodically checks condition or presses in his/her assigned group.

3. COMPACTING SET UP C (TRAINEE)Learning operations of presses and equipment. Actually run, mold and size onpresses as operators. Learn setting up procedures. Removes tooling.

4. SECONDARY EQUIPMENT SET-UPSets up and operates all types of secondary equipment. Changes drills, taps,reamers, cutters, etc. Checks and uses micrometers, gages, thread gages, andrelated tooling or inspection technique. Checks first runs.

5. MATERIAL HANDLER/LIFT TRUCK OPERATORMaintains correct quantity and type of powder, parts and supplies at presses andfurnaces. Operates necessary equipment. Identifies powder and keeps accurateinventory records for all materials used and scrap processes.

B. Production Control

1. SCHEDULERS/DISPATCHERS

Coordinates activities of planning, scheduling and expediting activities. Underdirection of Production Control Manager, works with Sales, Purchasing,Production Foremen and Traffic Manager. Maintains necessary records anddocuments.

2. METALLURGICAL TECHNICIANUnder the direction of the Metallurgist, assists with tests. Helps maintainnecessary records and documents.

3. SHIPPING/RECEIVING CLERKCoordinates activities in shipping and receiving. Responsible for counting,packing, loading and unloading trucks when necessary. Responsible for packingslips, bills of lading, and receiving slips. May be involved with finishingactivities such as dipping, waxing, impregnating, etc.

4. PRODUCTION CONTROL CLERKPrepares documents and reports. Processes acknowledgements, invoices adpacking lists, shipping lists and efficiency reports. Operates typewriter, computerterminal, calculator, and other office machines.

C. Quality Control

1. CHIEF/PRECISION/LAYOUT INSPECTORAbility to train, instruct, assist and assign duties to inspectors. Ability to performin-process and audit inspections on all parts. Will work with employees todevelop quality parts, methods and procedures.

2. IN-PROCESS INSPECTOR/PATROL INSPECTORPerforms in-process inspection of parts to master control specifications. Conductsmechanical, visual and density inspections. Verifies physical properties and sizeof parts.

3. FINAL INSPECTOR/QUALITY AUDITORPerforms final inspections of parts to customer specifications. Conducts hardnessand density checks as well as inspection of mechanical and visual characteristics.

4. PROCESS TECHNICIANAssists process engineer in preparing process methods and procedures with newjobs and revisions to existing jobs. Sets up and operates inspection and layoutequipment and documents findings.

D. Supervision - LEADPERSONSupervises personnel and activities within area of responsibility. Train personnelassigned to department. Maintains adequate inventory of operating supplies.

Makes daily discretionary decisions concerning scheduling of jobs and personnel.Is able to operate and maintain equipment when necessary.

E. Maintenance

1. MILLWRIGHTInstalls or moves machines such as presses, lathes, drill presses and millingmachines. Ability to prepare proper foundations, align and balance equipment.Checks operations when installed.

2. ELECTRICIANInstalls, maintains and repairs generating equipment, transmission equipment andlights. Is concerned with test and power circuits of varying design. Works fromwiring diagrams or schematic drawings.

3. GENERAL REPAIRMANTakes care of routine maintenance and repair of plant, grounds, and equipment.Has the ability to make minor repairs and oversee more extensive work. Hasmore responsibility for plant and grounds than equipment.

4. JANITOR/CUSTODIANCleans and services building, offices and shop areas, furniture and fixtures andlavatories. May do some minor maintenance work on buildings and fixtures.May maintain grounds and premises.

5. MAINTENANCE MECHANIC/REPAIRMANAbility to examine each machine, furnace, generator, air compressor andmechanical device and be capable of determining its condition and correct faults.Moderately skilled in several trades such as welding, electrical work, plumbing,carpentry, etc. Is able to direct more extensive repairs.

6. MAINTENANCE HELPERAssists the Maintenance Mechanic in whatever general maintenance and repairsare a routine part of the company. Routine work might include oiling andgreasing moving parts of mechanical equipment. Assists with plant maintenance.

F. Tool Room

1. TOOL & DIE MAKERSpecializes in the construction, repair, maintenance and calibration of tools, dies,jigs, fixtures and instruments. Operates various machine tools and performsprecision work such as laying out, fitting, and assembling parts. May train otheremployees in tool and knowledge.

2. TOOL & DIE MAKER TRAINEE

Assists in the construction, repair, maintenance and calibration of tools, dies, jigs,fixtures and instruments. Under supervision operates various machine tools. Maybe in an apprenticeship program.

3. MACHINISTOperates tool room milling machines, lathes, grinders and associated power andhand tools to produce various tooling adaptors, tool components and other itemsas instructed. Performs minor repairs of tool components and assists in varioustasks as assigned. Performs routine machine maintenance.

4. MACHINIST TRAINEEAssists the machinist with the objective of learning a machinist’s skills. Operatesvarious machines under close supervision.

5. TOOL CRIB ATTENDANT/TOOL CONTROLMaintains inventory of tooling to meet production schedules. Will pre-selecttools and adaptors to be used, checking fits and clearances. Makesrecommendations and follows through on necessary repair or replacements oftools and hardware. Cleans tooling and adaptors after production runs.

6. TOOL & GAUGE INSPECTOR/TOOL MAINTENANCE INSPECTORPerforms inspection and minor repair on all incoming tooling, gauging, and rawmaterial. Schedules and/or provides for calibration of quality control gauges andequipment. Ability to read blue prints and tool drawings.

III. SALARIED LABOR

A. Manufacturing Staff

1. MANUFACTURING MANAGERManages all plant and manufacturing activities. Schedules or approves allschedules of equipment and personnel to meet customers and plant requirements.Develops and supervises plans to train personnel. Develops and supervises plansfor new processes. Maintains and improves production standards. Works tocontrol costs.

2 . GENERAL FOREMAN/PRODUCTION CONTROL MANAGERSupervises and trains department and shift supervisors. Evaluates performance.Recommends organization changes. Coordinates production activities.Recommends additions or deletions to work force. Consults with othersupervisory people on equipment changes.

3. SHIFT FOREMAN

Supervises shift operations. Coordinates assigned personnel to meet productionand shipping schedules. Makes adjustments to equipment and machinery. Givesperformance reviews. Consults with supervisor on major problems.

4. QUALITY CONTROL MANAGEREstablishes and maintains standards of quality which are practical formanufacturing and acceptable to the customer. Supervises all inspectionactivities. Designs and develops test methods, gauging and measuring devicesand procedures. Compiles and maintains all inspection data and records.

5. ENGINEERING MANAGER/CHIEF ENGINEERResponsible for all engineering activity. Coordinates activities within engineeringdepartment and with sales, production, and customers. Supervises engineeringsubordinates. Selects sources and arranges for tool purchases and repair andmaintenance. Assists in improving and acquiring production equipment.

6. MANUFACTURING/PROCESS ENGINEERDevelops correct manufacturing processes for new jobs. Reviews, revises andupdates methods for old jobs. Analyzes production equipment needs and makesrecommendations for purchase of capital equipment.

7. INDUSTRIAL ENGINEERResponsible for planning, developing, maintaining and monitoring manufacturingprocesses and methods. Writes standard operational procedures. Analyzesexisting manufacturing practices and methods. Works for improved efficiency.

8. TOOL DESIGN ENGINEERResponsible for the design of dies, fixtures, adaptors and gauges and equipmentfor use in the company. Responsible for drafting, reproduction and maintenanceof tool design files. Responsible for working with process engineer and set uppeople for initial set UPS.

9. METALLURGISTEngages in varied research work having to do with powders and powder metalparts. Verifies that the proper blends of materials used meet chemical anddimensional requirements for assuring proper manufacturing processing. Adviseson different aspects of manufacturing such as sintering. Analyzes powders andparts by performing varied tests such as density, hardness and microstructuretests. Assists Engineering and Manufacturing Departments in solving problemsrelated to part structure after sintering and heat treating processes.

10. ESTIMATORPrepares quotations for final pricing. Interfaces with operations engineering toobtain sequence of operations, part weight and outside processing informationrequired to quote feasible parts. Review current jobs for pricing accuracy.

11. DRAFTSMAN SR.Under direction of designer prepares detail drawings. Makes changes in existingdrawings. Requires working knowledge of machines and tools, drafting methods,symbols, and procedures.

12. DRAFTSMAN JR.Makes detail drawings of simple to average parts and assemblies. Works underclose supervision.

13. PERSONNEL MANAGERResponsible for employment, benefits program, safety, training, wage and salaryadministration and medical activities. Handles grievances. In a union organizedplant, prepares for and participates in labor contract negotiations.

B. Office Staff

1. EXECUTIVE SECRETARYSecretary to major executive. May make minor administrative decisions based onknowledge of company’s organization, policies and personnel. Handles somecorrespondence. Maintains confidential files and arranges appointments. Mayinstruct and assign work to other clerical employees.

2. SECRETARYUnder direct supervision, acts as stenographer and typist. Is responsible forconfidential files, dictation and transcription, mail, locating information fromfiles, and preparing various reports for superior.

3. CONTROLLER/ACCOUNTING MANAGERIs responsible for all day to day accounting functions. Supervises costaccounting, accounting analyses, payroll, timekeeping, and usually dataprocessing.

4. BOOKKEEPERPosts and maintains books for accounts and related records in general accountingdepartment. May do payroll, trial balances and general ledger accounts.

C . Sales

1. SALES MANAGERDirects staffing, training, and performance evaluating to develop and control salesprograms. Controls sales expenditures to conform to budget. Establishes salesterritories, quotations and objectives. Participates in company publications, andsubmits periodic sales reports.

2. MARKETING MANAGER

Develops marketing strategies, analyzes sales statistics for making sales policy.Establishes sales goals by determining customer needs. Volume potentials, pricesand new market areas. Establish overall sales campaign to meet goals.

3. MANAGER CUSTOMER SERVICESDirects and coordinates customer service activities. Determines services neededby utilizing product knowledge within the confines of company policy. Readscorrespondence to determine needs of customer, confers with Engineering andProduction Departments to determine feasibility, cost and delivery. Talks to andcorresponds with customers on problems and requests.

4. SALESMANPerson who sells powdered metal parts. Makes direct sales calls on customers.Keeps track of sales histories.

5. SALES CORRESPONDENTMaintains daily, routine contact with customers regarding open and new orders,schedules and other general questions.

6. APPLICATIONS ENGINEERResponsible for reviewing new product applications. Discusses products withcustomers and consults with internal manufacturing and engineering and salespersonnel.

Dls:6/98

PMPA/WPI Report A:Expenses, Asset Management/End Market Sales Distribution

(Corporate Level)

Summer/Fall 2000

Please address any questions or comments about this report to Pete Johnson at MPIF, CraigPaullin at Pacific Sintered Metals, or Chick Kasouf at WPI/MPI.

Prepared for Company __________

This report summarizes the results of the 2000 MPIF/WPI Expenses, Asset Management and End MarketSales Distribution Study of the P/M Parts Industry. This is a corporate level project, i.e., companies withmultiple operations consolidate their reporting for this report.

After approval at the PMPA Winter Meeting in 2000, WPI and the PMPA statistics committee workedtogether to develop three annual questionnaires. This instrument was sent to official representatives of

PMPA member companies in August 2000. The Statistics Committee agreed to extend the deadline forparticipation beyond the Fall Management Conference to generate more responses. Data collection wasterminated in December 2000. This resulted in 24 participants, although some respondents did not answerall items. Data were collected through John Pavlovsky s office, and the research team did not know theidentity of any company. After completing the analysis, the reports were returned to Mr. Pavlovsky whoidentified them and returned them to the participants.

In the pages that follow, each variable is presented with summary statistics and a graphic breakdown ofsmall, medium, and large firms. For the purpose of this analysis, we developed the following categories:

Category Annual Net sales of P/M Parts(in reporting year)

Number ofparticipatingfirms

Small $5,000,000 and under 8Medium Over $5,000,000 up to

$20,000,0009

Large Over $20,000,000 7

Below the graphic breakdown of each variable is your company s response and a statistical summary thatincludes the mean, standard deviation and variance. (The latter two statistics are measures of dispersionabout the mean — the standard deviation is the square root of the variance. Large values mean highervariability in the reported values.) The table also includes, in most cases, the minimum and maximumvalues and the 25th, 50th, and 75th percentiles. These values are the points below which 25%, 50%, and 75%of respondents fall. The 50th percentile is the median — the value that divides the sample equally. In caseswith extreme values in either direction, the mean may be inflated or deflated and quite different from themedian. In some cases we did not include an extreme value in the graphic presentation because it woulddistort the graph. However, the value was included in the table.

To protect confidentiality, the minimum and maximum values were left out of the report in sensitive areas,i.e., sales and total assets) since few in the industry do not know the identity of the largest firm.

PMPA/WPI Report B:Operational Benchmarking Analysis

(Plant Level)

VI. Summer/Fall 2000

Please address any questions or comments about this report to Pete Johnson at MPIF, CraigPaullin at Pacific Sintered Metals, or Chick Kasouf at WPI/MPI.

Prepared for:

______________

This report summarizes the results of the 2000 MPIF/WPI Report B: Operational Benchmarking Analysisof the P/M Parts Industry. This is a plant level project, i.e., companies with multiple operations reportplants individually for this survey.

After approval at the PMPA Winter Meeting in 2000, WPI and the PMPA statistics committee workedtogether to develop three annual questionnaires. This instrument was sent to official representatives ofPMPA member companies in August 2000. The Statistics Committee agreed to extend the deadline forparticipation beyond the Fall Management Conference to generate more responses. Data collection wasterminated in December 2000. This resulted in 24 participants, although some respondents did not answerall items. Data were collected through John Pavlovsky s office, and the research team did not know theidentity of any company. After completing the analysis, the reports were returned to Mr. Pavlovsky whoidentified them and returned them to the participants.

In the pages that follow, each variable is presented with summary statistics and a graphic breakdown ofsmall, medium, and large firms. For the purpose of this analysis, we developed the following categories:

Category Annual Net sales of P/M Parts (inreporting year)

Number ofparticipatingplants

Medium netsales

Number ofemployees

Small $5,000,000 and under 8 $3,181,393 36Medium Over $5,000,000 up to $20,000,000 14 $10,300,000 94Large Over $20,000,000 9 $23,755,000 203

Below the graphic breakdown of each variable is your company s response and a statistical summary thatincludes the mean, standard deviation and variance. (The latter statistics is a measure of dispersion aboutthe mean. Large values mean higher variability in the reported values.) The table also includes, in mostcases, the minimum and maximum values and the 25th, 50th, and 75th percentiles. These values are thepoints below which 25%, 50%, and 75% of respondents fall. The 50th percentile is the median — the valuethat divides the sample equally. In cases with extreme values in either direction, the mean may be inflatedor deflated and quite different from the median. In some cases we did not include an extreme value in thegraphic presentation because it would distort the graph. However, the value was included in the table.

To protect confidentiality, the minimum and maximum values were left out of the report in sensitive areas,e.g., pound shipments, sales and total assets, since few in the industry do not know the identity of thelargest firm.