A discussion of management systems solutions to creating and sustaining competitive advantage in a global and regional economic crisis.

1. How to Beat the Recession Implementation Tips for Top Management

4. The Best Defense is a Good Offense An Aggressive Pro-Active Response is Essential to Survival

8. IMS* 9001, 18001, 14001 Lean Six Sigma Performance-Driven Culture Systems & Tools Employee Attitudes Integration of Systems, Methods & Tools 5S TPM Error- Proofing CRM BOS DFSS LPA SPC Problem Solving *IMS: Integrated Management System Copyright Omnex 2008

9. BOS: Alignment of Customer Requirements & Quality Objectives Copyright Omnex 2008 An Example

10. The Basic Operation of a BOS Copyright Omnex 2008

11. Basic Elements of a BOS Copyright Omnex 2008

12. Data Driven – Cascade To All Levels Copyright Omnex 2008 Key performance objectives cascade down while performance data pass upward for analysis and action at each operating level.

15. Copyright Omnex 2008 Profits Performance Process Projects People Scorecard Scorecard Scorecard Scorecard Scorecard Operations Excellence – Linked Scorecards Aligning Goals, Projects & People Planning Improving

16. Copyright Omnex 2008 Profits Process Projects People Scorecard Scorecard Scorecard Scorecard B.O.S. – Business Operating System Value Stream Maps Continuous Flow Supermarket Pull Six Sigma Breakthru SMED/TPM/Five S Standards Education Training Resources Feedback Planning for Improvement Performance Scorecard GAPS (PROJECT SELECTION)

17. Copyright Omnex 2008 Profits Process Projects People Scorecard Scorecard Scorecard Scorecard Achieving Improvement New Knowledge, Skill, Attitudes and Behaviors New Methods, Policies & Procedures Lean Productivity & Six Sigma Quality Improved Satisfaction Increased Sales Increased Margins Performance Scorecard

18. Copyright © Omnex 2008. Accounting Human Resources Operations Purchasing Sales Strategic Objective & Measures – V oice O f the C ustomer Process Variation Process Measures V oice O f the P rocess Leadership Team Objectives Lean Six Sigma Aligned with B.O.S. Projects

21. Copyright Omnex 2008 Extra Handling & Storage Costs Expediting Costs Premium Freight Charges Late Deliveries Long Lead-times Cost to Customer Excess Inventory Excess Scrap & Rework Excess Capacity Lost Customer loyalty Excess Labor Costs Opportunity cost if sales Potential is greater than Current capacity Cost of Poor Flow (COPF)

23. Operational Benefits of Lean Copyright Omnex 2008 General Motors Framingham Assembly Plant versus Toyota Takaoka Assembly Plant, 1986 Note: Gross assembly hours per car are calculated by dividing total hours of effort in the plant by the total number of cars produced. “ Adjusted assembly hours per car” incorporates the adjustments in standard activities and product attributes described in the text. Defects per car were estimated from the J.D. Power Initial Quality Survey for 1987. Assembly space per car is square feet per vehicle per year, corrected for vehicle size. Inventories are a rough average for major parts. GM Framingham Toyota Takaoka Gross Assembly Hours per Car 40.7 18.0 Adjusted assembly Hours per Car 31 16 Assembly Defects per 100 Cars 130 45 Assembly Space per Car 8.1 4.8 Inventories of parts (average) 2 weeks 2 hours

25. Copyright Omnex 2008 Example: Inventory Carrying Costs Inventory Cost Categories: Cost of Money 6-12% Taxes 2-6% Insurance 1-3% Warehouse 2-5% Handling 2-5% Clerical 3-6% Obsolescence 6-12% Loss 3-6% Total 25-55% Source: Strategic Logistics Management, 2 nd edition, 1987, Stock & Lambert, Irwin, Homewood Illinois.

28. Copyright Omnex 2008 Cost of Poor Quality (COPQ) We See Only the Tip of the Iceberg Quality engineering and administration Inspection/test (materials, equipment, labor) Expediting Scrap Rework Rejects Warranty claims Maintenance and service Cost to customer Excess inventory Additional labor hours Longer cycle times Quality audits Vendor control Lost customer loyalty Improvement program costs Process control Opportunity cost if sales greater than plant capacity

29. Sigma is Directly Correlated to Cost of Poor Quality Copyright Omnex 2008 Industry average is 20% COPQ for a 4 Sigma Company

30. What is Process Review? Systematic approach to analyzing and keeping “live” our Process Flows, PFMEAs, Control Plans, and Plant Floor Controls Copyright Omnex 2008

36. Root Cause Analysis and Methodologies Copyright 2008 Omnex. All rights reserved FMEA Disciplined Problem Solving DMAIC (DOE) Root Cause Known Root Cause Found yes no no Basic Intermediate Advanced yes

39. The Problem Solving Process Copyright 2007 Omnex. All Rights Reserved. “ No Problem” Is a Problem

42. Copyright 2008 Omnex. All Rights Reserved. [email_address] Any Questions? Thank You! Dave Watkins [email_address]