Flexsteel Results Presentation

1. CONNECT EVERYTHING
2020
Product
Development
System
Assessment
FlexSteel Results Presentation
2/25/2020

2. Agenda
– EAC
– PDS Assessment
– Assessment Results
– Potential Solutions & Roadmap
– Next Steps

3. Our Mission

4. The EAC Value Model
• About you
• About us
• Business &
Improvement Initiatives
• People, Process,
Team, &Tools
• Plan
• Deliverables
• BusinessCase
• Measures
• Accountability
• Problem Solve
• Process Improvement
• Installation &
Configuration
• Educate
• Design & Develop
• Learn, LEAN,Optimize
• Go!
• Measure
• Validate
• Get it right

5. Positive Business Outcomes PBO
• Achieve optimal Customer Success and satisfaction.
• Decrease product development Cost.
• Accelerate product introduction timing.
• Increase Growth and Market Share by optimizing internal
processes and systems.

6. Agenda
– EAC
– PDS Assessment
– Assessment Results
– Potential Solutions & Roadmap
– Next Steps

7. PDSA Input & Output
PDS
Assessment
• PDSA
Questionnaire
• Interview(s)
with Process
Stakeholders
• Prioritized Business
Value Opportunities
• Consolidated
Improvement Initiatives
• Process Capability GAP
Assessment
• Recommended PDS
Roadmap
• Potential Financial
Impact

8. Agenda
– EAC
– PDS Assessment
– Assessment Results
– Potential Solutions & Roadmap
– Next Steps

9. Who we heard from…
Thank you to the 20+ team members
for participating!
Special thanks to JagThethy and Dale
Marietta for sponsoring & hosting this
event.
EACTeam:
Mike, Dan, Chris, Bill, Steve

10. From questionnaire - Ranking the importance of the following strategic business objectives to your business.
Strategic Business Objectives
Value
Growth
Profitability
Grow by protecting market share
Grow by more efficient order fulfillment
Grow market share
Grow through innovation
Grow & profit from product value
Grow consumable sales and after-market
Profit from efficient product lifecycle costs
Profit from efficient use of asset base
Profit from product cost efficiencies
1
2
3
4
5
6
7
8
9
6.3
3.6
3.6
4.1
1.9
2.5
2.5
2.9
3.5

11. Listed
in
order
of
Importance
from
Top
Active Improvement Initiatives (top 10)
From questionnaire - Please score your sense of the relative importance of the following improvement initiatives to your company.
Improve collaboration with manufacturing
Improve internal engineering collaboration and concurrent engineering
Reduce the time to generate customer quotes
Apply standard work within product development
Improve collaboration with the supply chain
Standardize the product development processes
Improve product cost management and the product lifecycle cost management
Improve cross-discipline collaboration among CAD and software groups
Improve idea capture and management
Improve agency and regulatory compliance
10.0
9.5
8.4
7.3
6.2
5.9
5.7
5.7
4.6
4.1

12. Consolidated Process Maturity
Level 3 equates to systematic operation of Processes Some Processes are more mature in execution than others
Each process scored on a maturity level scale of 1-4 (4 is Most Mature)
as is
to be

13. “What We Heard”
“If 2 or 3 people quit, we’d be in huge trouble. Few of our processes are recorded or able to
be duplicated, it’s all tribal knowledge”
“We don’t have written instructions, we simply
hire people who are mechanically inclined”
“We could easily be twice as
efficient with a properly
implemented PLM system”
“Our service is terrible. Our documentation is terrible or
non-existent or wrong. EVERYTHING is done manually with
emails. There is no BOM.”
“We’re trying to do PLM
manually, but purchasing
doesn’t know what to
order and manufacturing
doesn’t know what
they’re making.
Everything is reactive.”
“We crippled production because of a
small engineering problem and the lack
of a system to catch it”
Our customer: “We love your products, but
we hate you and everything about you!”
“If everyone is doing their part right, it
could take weeks to do it with our
current method. IT COULD TAKE HOURS
IF A PLM SYSTEM WAS USED!”
“We had to completely redo
400 hours of work because of
wrong engineering data!”
“We’re constantly fire fighting”
“We kill manufacturing everyday
we’re delayed, they have to work
double time once material is sourced
and finally arrives”
“At least 50% of our customer
deliveries are late”
“We waste tons of money flying
materials, paying expediting fees
and working overtime because
procurement is out of the loop”
Our customer: “We love your
products, but we hate you and
everything about you!”

14. Magic Wand Responses
• Protected Intellectual Property
• Seamless Communications
• Fast Customer Responses
• Integrated System for Self-Serve
• Latest Info on Product Changes
• Get Info at a Fingertip

15. • In 2019 there were 821 ECNs or 3 ECNs per day wasting a minimum of 2 hours per day
searching for information to process these ECNs for anyone working on an ECN.
• Much of our processes are managed via email and manual efforts, easily adding a week to
every ECN to completion on average.
• There could be at least a 50% productivity improvement in processes if we had clean, linked,
automated product and process management—could easily double our speed.
• Hired one full time employee just to handle manual effort and research required to ensure
proper creation of a service NCR.
• We had 400 hrs. in manufacturing a fitting for a custom order, only to find out it was not
what the customer asked for and we had to put in another 400 hrs. to remake them.
“What We Heard”… Metrics Summary

16. PDM/PLM Improvements
Average Improvements in Manufacturing according to:
Product Info Search
40% Reduction
Manual Data Entry
60% Reduction
Part Reuse
20% Increase
Gross Margin
2% Increase
BOM
65% Increase in Accuracy
50% Decrease in Cost & Mgmt
Time To Market (TTM)
25% Reduction
New Part Introduction
10% Reduction in new part introduction
20% Reduction in part cost introduction
Product Life Cycle Capacity (Productivity)
20% Increase in capacity
ECO Volume, Cost, Cycle Time
25% Reduction in volume
25% Reduction in cost
60% Reduction in cycle time
Scrap and Rework
15% Reduction in scrap and rework
Client’s actual % improvements will depend on their current As-Is situation

17. Estimated based on average benefits results
from real world industry examples for these
categories using information given by
FlexSteel in questionnaires.
• Part/Design Reuse
• Redundant Data Entry
• Product Information Search
• Design Review Meetings
• Engineering Rework
• Manufacturing Scrap & Rework
• Legacy System Support
• GCR CycleTime
• Physical Prototypes
• Supply Chain Coordination
• Doc Repository Support
• Document Distribution & Mailings
• Legacy System Maintenance
• InventoryObsolescence
• WarrantyClaims
• New ProductCycleTime
• Time to Market
• Manufacturing Downtime
Potential Financial Benefits
PDS Potential Benefit Summary
REVENUE $500,000,000
Min Max
Total Potential Benefit Range $8,865,000 $22,952,000
Direct Cost Benefits
Total $656,000 $1,942,000
Productivity Benefits
Total $6,994,000 $17,081,000
Additional Revenue/Profit Benefit
Total $1,215,000 $3,929,000
Benefits per Year

18. Flexsteel Key Takeaways
• Industry leading products.
• Successful due to the incredible efforts of key employees.
• While customers love your product, they have extreme difficulty working
with your company.
• Data and process management methods are not at the same level as your
business.
• Majority of your process and business knowledge is not documented and
rely heavily on a handful of key employees.

19. Capture and manage key lifecycle
information from your product fleet
using Digital Twins
Apply predictive data analytics to
improve current and future products
Improved products, both in the field and
future generations
Proactively improve customer outcomes
New business models from evergreen
products
New revenue opportunities from product
performance data
Lowered costs based on insights from
product operation
Enable in-context access to all relevant data for better engineering decisions
Introduce AR/VR technologies into the design process
Create the complete digital design that satisfies requirements for all stakeholders
Drive business results and continuous innovation by
transforming your engineering practices and
product designs
How to get there Results
Use system and functional modeling to design for connectivity
and innovation
Analyze and optimize products using massive data sets about
similar designs and their performance in the field
Use platform-based product design to easily deliver product
variations
Design to take advantage of additive manufacturing capabilities
in production
Lowered development costs and time-to-market
New product and service model opportunities
Usage-based requirements drive better product
development
Improved efficiency of product development
Reduced cost
Improved quality
Data Driven
Design
Digital Product
Traceability
UNDERSTAND
ADVANCE
OUTPERFORM
Digital
Twin
Predictive
Performance
Improvements
Distributed AR/VR
Product Review
Constant
Analysis
Collaborative
AR/VR Design
Design for
Connectivity
Digital
Product
Definition
Performance
Based
Analysis
Universal Data
Access
Outcome-Based
Design
TODAY
Design Transformation Path

20. Take the next step with EAC

21. Complete Transformation
Design Manufacturing Service

22. Manufacturing Journey
Improve and perfect production processes
Improve profitability
Reduce unplanned downtime
Shorten lead times
Improve agility and responsiveness
Enhance existing infrastructure with smart sensors and modern technologies
Simplify data in up-to-the-minute role-based views of operational performance
Broadcast real-time alerts about assets and performance anomalies
Connect diverse and disparate assets, sensors, business systems and external data
sources in real time
Continuously improve your operations
performance and flexibility through digital
manufacturing, real-time intelligence and
predictive analytics.
How to get there Results
Utilize analytics to recommend actions that
optimize performance
Synchronize resources to ensure flawless
execution of production
Implement consistent KPIs and corporate-
wide performance benchmarking to identify and
deploy best practices
Extend real-time visibility and control across the
supply
Utilize agile methodologies to rapidly create & continuously
evolve manufacturing applications
Digitally design your manufacturing processes & quality plans
Employ intuitive, in-context 3D and augmented reality to
guide workers
Apply predictive analytics to machine health and quality processes
Accelerate continuous improvement
Increased speed and flexibility
Increased workforce efficiency
Improved product quality
Optimized maintenance processes
Digital
Thread
Predictive
Analytics
UNDERSTAND
ADVANCE
OUTPERFORM
Performance
Benchmarking
Synchronized
Operations
Agile
Innovation
AR Enabled
Operations
TODAY
Unified
Connectivity
Real-Time Issue
Identification
Operational
Intelligence
Prescriptive
Analytics
Supply Chain
Visibility

23. Change your go-to-market approach to position
for product-as-service and develop outcome-
based contracts
Create and deploy new value-added
service offerings
Restructure and retrain your organization
as needed Customer lifetime value and retention
increases
Increased revenue streams and growth from
new offerings
Visualize enterprise service data in a unified role-based view
Incorporate insights to take action and improve service processes
Instantaneously track and monitor product location, performance, utilization,
and condition
Access up-to-date digital service information and part catalogs for seamless
identification and ordering
Drive unprecedented value for your customers and
your organization by
redefining the entire service model
How to get there Results
Apply connectivity and predictive analytics to new data sets in
order to drive proactive service and automate scheduling
Empower technicians with up-to-date content and AR/VR
guidance
Enable remote service and software updates
Optimize parts forecasting and pricing through advanced
modeling
Reduced cost of ownership for customers
Increased product uptime and output
Lowered total cost to serve and improved utilization
of technicians
UNDERSTAND
ADVANCE
OUTPERFORM
TODAY
Service
Visibility
Digital
Service
Content
Real-Time
Product
Data
Optimized
Inventory
Remote
Service
Proactive &
Predictive
Maintenance
Optimized
Technical
Workforce
Digital
Twin
Product as a
Service
Constant
Analytics
New Revenue
Streams
More Profitable
Contracts
Service Journey

24. Agenda
– EAC
– PDS Assessment
– Assessment Results
– Potential Solutions & Roadmap
– Next Steps

25. Potential Solutions & Roadmap
• The following is a high-level roadmap defining a recommended
path for Flexsteel to optimize:
– Design
– Manufacturing
– Service data.
• By following this roadmap you can expect to correct most of
the pains outlined in this presentation to this point.

26. Phase 2
Manufacturing Planning
• Manufacturing BoM
• Manufacturing Planning /
Work instructions
• Operator Advisor
• Tooling and Machine data
management and linking
• Enhance Integration to
ERP/CRM
Pilot
Product Management Pilot
• Work with single sample
product
• Windchill CAD Data
Management
• EBoM, MBoM and SBoM
Product Management
• Manufacturing process
planning and work
instructions
• Integration to ERP/CRM
Phase 3
Service Information
Management
• Service BoM Management
• Service Parts List
Management / Part
Catalogs
• Electronic Service
Information delivery
contactors and customers
• Optimize CRM and ERP
integrations
Timelines are estimated. Actual timeline to be defined during service project engagement.
Recommended Flexsteel Roadmap - PLM
Product Management
Foundation
• Windchill CAD Data
Management
• Engineering BoM and
Product Management
• ECR ECN Process
Management
• Quality processes, NCR,
CAPA
Phase 1