STRATEGICALLY CHANGING TO SUPPORT-Team Version 11-2013

STRATEGICALLY CHANGING TO SUPPORT

Better Thinking +

Better Technology =

BETTER RESULTS

THE FUTURE OF MANUFACTURING • Technology • Best Part of Lean • Economical Structured Market • Time to Market (Days vs. Weeks)

TECHNO

LOG

Y

TECHNO

LOG

Y

https://www.google.com/imgres?imgurl&imgrefurl=http://archive.worldskills.org/2007shizuoka/en/sponsors/index.html&h=0&w=0&sz=1&tbnid=bwnN7RitYX_aNM&tbnh=80&tbnw=160&zoom=1&docid=WHNv1YYKCOq4RM&hl=en&ei=Wz5XUr2uD82vigK44YCoAw&ved=0CAIQsCU

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Future of Manufacturing

Progressive with Overlapping & Divergent Paths

TechnologyCulture

CAPABLITY FOCUSBest Part of Lean

Economical Structured Market Market Variables

2

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REASON FOR CHANGEHEALTH CARE SECTOR

MEDICAL DEVICE Evolution 2-3 year cycles with possible

Complete transformation

Economical & Social DriversMarket Pricing

INDUSTRIAL SECTORAEROSPACE & DEFENSE PRODUCTION

7-10 year cycle remaining with possible continuous transformation &

shorter technology cycles. Likely super downturn to follow this super

upturn

GLOBAL COMPETITION &OFFSETS & SUPPLIER RQMTS

US Defense Budget sequestration

ENERGYOIL DRILLING EQUIPMENT

Evolution. 10-12 year cycles with possible transformation in

50% of applications

Social & Enviro driving Alternative energy

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STRATEGIC ELEMENTS & TRANSITIONS

FIXTURING TECHNOLOGY

PROCESSESAPPLICATIONS& DME -TOOLS

PROFESSIONAL SKILLS

FPY – OEE- UTILIZATION-ALL TOOLS

ENGINEERINGPROCESS MGMTFINANCIAL MGMT

CORE

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SPECIFICALLY HOW THIS HAS BECOME OUR NORM

2012-15 Path - Drive a Focused & Continuous Improvement Culture

Demonstrated OS tool proficiency drives

improvement

ImproveProcesses

Develop Strategy

Track Results

Monitor Progress

Establish Vision

PrioritizeOpportunities

Voice of the Customer (VOC) Key Input to the

Operating System (OS)

Define Metrics

Create RoadmapCommunicate

Goals & Objectives

Qualifying Learning Coaching, Teaching & Baselining

Using the tools; getting results andBuilding foundations

Bronze

Silver

Gold

Significantly improving business metrics

Year-over-year business metricsimprovements

Qualifying Learning Coaching, Teaching & Baselining

Using the tools; getting results andBuilding foundations

Bronze

Silver

Gold

Significantly improving business metrics

Year-over-year business metricsimprovements

Achievement Levels for Cells/Sites/Programs

Guide to Next LevelVOS Qualifying Level

0

1

3

1

1

211

1

2

11

200

1

2

3

4

5VOC - Voic e of t he Cust ome r Surve y

FOD Comp lianc e

MOS Imple ment at ion

VOS Aca d emy Training

5S

Vis ua l F act ory

VSM Current/ Fut ure

QCP C Impl eme nt a tion

Skills Training Ma t rix

RCC A Training

St and a rd W ork Implement at io n

TPM - Tota l Pro d uct ive Ma int enanceProg ram

De mand P ull S ys t em

Emplo yee D evelop ment

Identify Business Opportunities

DriveExecution

KMI

Ops MeasuresFinancial MeasuresTrend Data

Crew Plan / JDS Wkly Summary/Review

Drive product focus

Day to Day Task

Lean Model

G/O Milestone

2007 Vought Site Control Tower

Achieved Goal Yellow-Within 10% Red- Missed Target > 10% Not Applicable

Metrics

Target/Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act

July '07 1 1 100% 0% 100%100% $3.86 $2.46 11 9 90%80.0% 90% 55.9%100% 100% 298 279 208 207 10.0%21.8%5.0% 8.8% 50.8%50% 5.4 7.78 $17.5 $19.664

Aug '07 1 1 100%100%100%100% $3.86 $6.34 11 11 90%76.7% 90% 51.7%100% 100% 298 278 208 208 10.0%20.6%5.0% 9.3% 50.8%49% 5.4 7.25 $17.5 $21.109

Sept '07 1 1 100% 67% 100%100% $3.86 $5.24 11 9 90%73.7% 90% 46.5%100% 100% 298 276 208 212 10.0%27.4%5.0%11.0%50.8%53% 5.4 6.89 $17.5 $22.211

Oct-7 1 0 100% 100% $3.86 $2.67 11 8 90%72.6% 90% 45.7%100% 100% 298 277 208 217 10.0%27.7%5.0%11.8%50.8%52% 5.4 N/A $17.5 $20.145

Oct-14 1 1 100% 0% 100%100% $3.86 $2.62 11 7 90%79.3% 90% 42.3%100%94.7% 298 292 208 220 10.0%29.1%5.0%11.6%50.8%50% 5.4 N/A $17.5 $21.630

Oct-21 1 0 100% 100% $3.86 $3.24 11 10 90%77.0% 90% 50.2%100%87.0% 298 297 208 227 10.0%25.4%5.0% 9.9% 50.8%48% 5.4 N/A $17.5 $22.248

Oct-28 1 0 100% 100% $3.86 $3.47 11 9 90%81.7% 90% 52.1%100% 100% 298 297 208 235 10.0%24.7%5.0%12.3%50.8%50% 5.4 N/A $17.5 $22.712

% on TimeCA

R3 ($/Std hr)

Tot. Inventory (M)% Direct OT % Indirect OT

% Productivity

Non-Touch Headcount (Indirect)

Cost Working CapitalSchedule

Inventory TurnsFOB on Time

MTD Defects /1000 std hrs

Starts on Time

Completes on Time

Touch Headcount (Direct)

OSHARecordables

TimelinessReporting

Safety Quality

2007 Vought Site Control Tower

Achieved Goal Yellow-Within 10% Red- Missed Target > 10% Not Applicable

Metrics

Target/Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act Tar Act

July '07 1 1 100% 0% 100%100% $3.86 $2.46 11 9 90%80.0% 90% 55.9%100% 100% 298 279 208 207 10.0%21.8%5.0% 8.8% 50.8%50% 5.4 7.78 $17.5 $19.664

Aug '07 1 1 100%100%100%100% $3.86 $6.34 11 11 90%76.7% 90% 51.7%100% 100% 298 278 208 208 10.0%20.6%5.0% 9.3% 50.8%49% 5.4 7.25 $17.5 $21.109

Sept '07 1 1 100% 67% 100%100% $3.86 $5.24 11 9 90%73.7% 90% 46.5%100% 100% 298 276 208 212 10.0%27.4%5.0%11.0%50.8%53% 5.4 6.89 $17.5 $22.211

Oct-7 1 0 100% 100% $3.86 $2.67 11 8 90%72.6% 90% 45.7%100% 100% 298 277 208 217 10.0%27.7%5.0%11.8%50.8%52% 5.4 N/A $17.5 $20.145

Oct-14 1 1 100% 0% 100%100% $3.86 $2.62 11 7 90%79.3% 90% 42.3%100%94.7% 298 292 208 220 10.0%29.1%5.0%11.6%50.8%50% 5.4 N/A $17.5 $21.630

Oct-21 1 0 100% 100% $3.86 $3.24 11 10 90%77.0% 90% 50.2%100%87.0% 298 297 208 227 10.0%25.4%5.0% 9.9% 50.8%48% 5.4 N/A $17.5 $22.248

Oct-28 1 0 100% 100% $3.86 $3.47 11 9 90%81.7% 90% 52.1%100% 100% 298 297 208 235 10.0%24.7%5.0%12.3%50.8%50% 5.4 N/A $17.5 $22.712

% on TimeCA

R3 ($/Std hr)

Tot. Inventory (M)% Direct OT % Indirect OT

% Productivity

Non-Touch Headcount (Indirect)

Cost Working CapitalSchedule

Inventory TurnsFOB on Time

MTD Defects /1000 std hrs

Starts on Time

Completes on Time

Touch Headcount (Direct)

OSHARecordables

TimelinessReporting

Safety Quality

STRATEGIC ASSESSMENT& FOCUS

OBJECTIVES TIED TO STRATEGIES

EMBEDDED ACTION ITEMS

ALL THINGSLINKED

KEEPING TRACK OF PROGRESS

INCENTIVE

Assess & Understand

Develop Preliminary

Business Plan•Performance Assessment

Vision2013

$9million-capable 35% EBITDA

Identify Objectives

•Market Opportunity•Product

Develop Strategies

•Market Forecast &Focus•Product

Develop Resource Plan

•Labor•Expense•Capital

Establish Performance Measures

Deploy Plans

• Short Term

Determine Priorities

Assess Plan Effectiveness

November 12

March

Timeline

Technical Partnership

2014-2015 Vision & Direction

CONSIDERATIONS & KEY POINTS•MARKET STRATEGY-MUST DEFINE SPECIFICS IN EACH SECTOR AS TO POTENTIAL CUSTOMER & SALES VALUE•TRUE VALUE OF COMPANY IN INDUSTRIAL MARKET PLACE- 3X,4X OR 5X•SWOT-REASSESSMENT NEEDED TO ASSURE ORGANIZATION & CULTURE IS SUPPORTIVE OF “FACTORY OF FUTURE’ AND SUSTAINABLE•FINANCIAL STRUCTURE-FUNDEMENTALS / RATIOS MUST BE IN LINE WITH COMPETITORS•MANUFACTURING CAPABILITY & CAPACITY MUST EXHIBIT GROWTH POTENTIAL

FUTURE:

CustomerContract

Level Load(FINITE PLAN)

Supplier

Mthly ShipmentsOf R/M

Level ofInventory

Release/Distribute

R/M

Finished Parts

Max---

Min---

Assy/Ship

*Inventory Controlled using “Pull” System. “Visual Control”

VISUAL SYSTEMS

PARTNERING3PL

VISIONLEAN CULTURE & COMMITMENT FOR TOTAL TRANSFORMATION

TURN KEY PROVIDER THAT DELIVERSINNOVATIVE / QUALITY / RELIABLE PRODUCT

SMALL COMPANY STRUCTURE WITH BIG BUSINESS CAPABILITY

ABILITY TO COMPETE

Great CompleteSolution

GoodQualitySource

MARTON

Hire 5 people

Work like 10 People

Pay like 8 People

Core Competency

Best

PassionEconomical Driver

Disciplined People…Thoughts…Actions…Repetitative Cycles-Question / Debate / Decision / Autopsy

Strong level of ComprehensionPredict-Question-Visualize-Sequence-Compare-Cause / Effect-Summarize

=

Key Philosophy & Methodology

Group FacilitatorYou’re empowered

Task MasterHere is what to do &

How…do it!

Builder of Learning Organization

Here is our purpose & direction

I will guide & coach

Bureaucratic MgrFollow the rules

General ManagementExpertise

In-DepthUnderstandingOf Work

Top-

Dow

nDi

recti

ves

Botto

m -U

pDe

velo

pmen

t LEADERSHIP MODEL

Learning Enterprise

Enabling Systems

Clear Expectations

Stable, Reliable Processes

Fair and Honorable Business Relations

Next Level Of Improvement

Stabilility

•Map all elements together as a system•Sense of accountability throughout Value Stream•Coercive vs. Enabling•Focus on the Manual Process, then automate•Visual Control

People & Partners

Eliminate Process Waste

Philosophy-Long Term Thinking

Continuous

LEARN TO DEAL WITH DICSDriving / Inspiring / Cautious / Steady people•Driver•Expressive•Analytical•Amiable

= Reserved & Slow

= Outgoing & Fast

IDEAL STATEMENT

•4 HABITS- ALWAYS KEEP END STATE IN MIND / PROACTIVE / FIRST THINGS FIRST / UNDERSTAND, THEN BE UNDERSTOOD

•ABILITY TO COMPETE – 5 PEOPLE WORK LIKE 10, PAY LIKE 7

•STABLE & RELIABLE PROCESSES

•GOALS FOR ALL ELEMENTS OF COMPANY

•PARADIGM SHIFT UNDERSTOOD BY ALL –EVERYONE SEE’S NEED

•5 SEC LOOK TO UNDERSTAND ‘WHERE ARE WE”

Ideal State Vision

Future State Focus

Waste

Process Model Focus

Business Driver

Emp Subs

Emp Major Assy

Prop Sub

Prop Major Assy

EBU

Spare

Burning Platform

Affordability

Charter

Ideal Statement

Key Elements/

Requirements

Go Fwd

MOS/Lean Score

G/O Milestones

Lean Milestone/Plan

Ideal State

Market competitorControl Tower

VOS

Level

1

3

4

2

VOC Safety Quality Schdl Cost

SPF/Cell & People moving (crew cycling) to support demand +/-

•Affordability for ultimate customer•Timing to redeploy workforce•Balance workforce to market place

VISION BOARD

SIPO

1. Defined Strategic Elements / Strategic plan to support Marton Vision & Business Market

2. Structure organization to assure min overlap and complete ownership to assure 99.9 value add operations.

3. Complete SWOT, finalize TOP FIVE that have the most impact on the strategic direction and establish measures to track results of actions.

4. Establish Financial targets and budgets, then educate process owners on their relationship to financials. (visibility for each key decision maker)

5. Engage employees in an aggressive “lean” focus to eliminate process failures and to maximize the utilization of all employees with measured processes.

13

Establish “End State” & Get Understanding by Key Personnel

*Must Align to Strategic Business Plan

•Performance Mgmt•Competitive Analysis –Targeted Change

•Contracts Mgmt•Capacity Plan

•Job Performance•Machine•Assemble

Process Definition

Support Execute

Quality&OpsExcellence Operations

MgmtMfgEXPECTATION ENABLE EXECUTE

Redesign

Improve

Improve

Set Expectation

Process Design

& Execute

Performance Tracking

•Formal Review

CPI Projects:•LLI / NOV SPF•Visibility Bds

•Klune Cell Flow•Quality –FPY

•Ideal State Supt

Capacity Analysis

•3-6 mth plan

Skills Assessmt.• Hire KeyPosition

R/M Contracts•LTA-JIT

OP Suppliers•JIT / pull

system plan

Shop Load•Level load all

production cells

VMS•Implement OEE•Implement Job

Pack

ASSY Ld &Inv. Mgmt.(Kanban)

SMED(set up

Reduction)

Current Focus1-2

months

Near TermFocus(3-8

months)

TOP OBJECTIVES

TOP FIVE OBJECTIVES / ACTIONS & RELATIONSHIP TO ORGANIZATION STRUCTURE

LEADERSHIP MODEL & ROLES

R & DMarket Estimate & Quote

Procure

•R/M Buy•OP / OM

Tool Mgmt•Prekit

Bench Marking & Comparative

Analysis

Assure Competitiveness

Lean Structure with a Quality Focus

Assure Productivity

Supply Chain Alignment

Employee Involvement

Factory Flow

•Ideal state flow

Enhanced 5X Capability

•Inventory•Maintenance (Facility & Machine)•Tool Mgmt

•Job Planning•Schedule•Customer Status

•Continuous Improvement•CRM•QSM

MARTON END STATE 2015

HIGH & LOW VOLUME BUT CONTINUOUS

HIGH VOLUME , HIGH MIXBUT CONTINUOUS

SHORT RUN, HIGH MIX, LOW VOLUME

PROCESS ENGINEERING GROUPALL CPI FOCUSED

TECHNICAL R&D GROUPADDITIVE MFG

THREE ENABLERSFOR GROWTH & POSITIONING

1.SDWT-

2.TECHNICAL PARTNERS

3.TECHNOLOGY

Documents

STRATEGICALLY CHANGING TO SUPPORT-Team Version 11-2013