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Asco-Numatics Asia Activity

Asco-Numatics Asia Activity. Al Middeke. WHO IS ASCO?. The world’s leading manufacturer of quality solenoid valve systems $600M in Sales Founded in 1888 Global organization Over 3000 employees Manufacturing and sales in over 42 countries 17 Factory Locations

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Asco-Numatics Asia Activity

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  1. Asco-NumaticsAsia Activity Al Middeke

  2. WHO IS ASCO? • The world’s leading manufacturer of quality solenoid valve systems • $600M in Sales • Founded in 1888 • Global organization • Over 3000 employees • Manufacturing and sales in over 42 countries • 17 Factory Locations • ASCO's heritage of innovation has resulted in an extensive line of products that range from two position on/off valves to entire flow control solutions.

  3. WHO IS NUMATICS? • North & South America: • $150M in Sales • 9 manufacturing facilities • World Headquarters – Highland, MI • European/African & Asian Operations: • 7 Factory Locations • 31 stocking distributors • 15 countries • Asian Operations Based in Taiwan • Pneumatic products manufactured by Numatics: • Valves, Air Preparation, Cylinders, Motion Control and Accessories

  4. ASCO Spend OverviewLow Volume, High Mix, Difficult Parts TEAM MANAGED 59% DIVISION MANAGED 41% 4

  5. Global OverviewFY’07 - A Year of Change • In FY’06 Asco and Numatics Spent ~ $190M Globally • $25M of Spend in Asia • Originally Managed as Separate Entities • Asco USA, Europe, China, Japan, Brazil, Numatics USA/Taiwan • Duplicating Internal Resources, APPO Resources and Suppliers • Large Opportunity for Leverage Exists • Similar Parts, Processes, Few Common Suppliers • Global Materials Organization Established Late FY’06 • Beginning to Leveraging Key Commodities • Leveraging Opportunities in Asia – Great Team in APPO and Taiwan • Hiring First Shared SQE Resource in South China • Working Together With Numatics Taiwan to Build Joint Supplier Base • Asia Team in Development - Need True Asia Team

  6. GMDC Global Commodity Mgmt GMDC BCC Sourcing BCC Quality Engineering BCC Sourcing BCC Quality Engineering ASCO-Numatics Global MaterialsEvolving Through Worldwide Support Global Materials Numatics N. America D. Wagner Asco USA P. Dayton Numatics Asia W. Lin Asco Europe T. Colom Asco ROW L. Jiang - Ch C. Rosinelli - Br K. Yamada - Jap

  7. APPO Asia OrganizationDiverse Teams Working Together R. Wu – SQE E. Yu- SQE A. Xu - Pur L. Jiang –Shanghai (not shown) R. Wu – SQE (not shown) China A. Rayapan – SQE/Mal R. Lonhe – SQE/India Quality Focused, Cost Driven, Supply Chain SEA Taiwan W. Lin - GM A. Lin – Pur/Eng Mgr R. Lin – Pur Eng W. Chu – Pur Eng C. Lin – Tooling Mgr J. Quirap C. Diones-Cortes S. Simon G. Mascardo Philippines

  8. $ True Added Value $ ANALYTICS TECHNICAL • Metrics Reports • Parts Consolidation • Parametric Data • RoHS • Material Analysis • Reporting • MIN/ RA Support LOGISTICS QUALITY • Materials Analysis • FA Inspection • Material Equivalence • Failure Analysis • NSC Asia to NA • Spot Air RA’s • Air Freight RA’s • NSC Supplier Training • Intra Asia Transit • Metrics Reports • Parts Consolidation • Parametric Data Building The Base • Materials Analysis • FA Inspection • Source Inspection • Supplier Audits • Supplier Development • Supplier Approvals • Process Improvement • Green Belt • NSC Asia to NA • Spot Air RA’s • Air Freight RA’s • Source Inspection • Supplier Audits • Supplier Development • Source Identification • RA Support • Transition Management • Contract Support • Supply Programs • Negotiation • Global Leverage • Source Identification • RA Support • Transition Management • Contract Support ASCO-Numatics Asia ActivityPrepared for Progress PURCHASING • Source Identification • RA Support • Transition Support • Source Identification 2000 2002 2004 2006

  9. ASCO-Numatics Asia Spend GrowthContinuous Growth Improvement $8.7MGrowth! Continued Average of ~25% Savings to Asia BCC

  10. Suppliers in ASIASignificant Growth Has Occurred (11) MeiDe, Jin Cheng, Autoway, G-Shank, Daido, Skyrock, Chen Ren, Escort,Shallop, Taihai (2) JiTai, HCPC (11) Tien Po, Jetcrown, Engtek, Yuxin, Cathay, Seimetsu, Chung Hing, MMR, Magtek, GSC, JL (5) KGK, Shaily, Sanmar, Shanmugha, Zircast (1) New Era 1 1 (1) Essen Tech 21 23 5 (21) Weko, ZSP, CPD, HHW, Solen, HSC, JC,CF, Summit, CH, III… (9) Alpha, Brimal, E&W, Hicom, Joon Hee, MMI, Polyparts, Sena, Wong 9 60 Current Suppliers Definite Opportunities for Leverage

  11. Savings of 20% Over Market Rates Reduction in transit Times of up to 50% Improved Visibility with 4PL Management, Reporting And Prealerts Supplier Development And Education Programs Building a World-Class Supply Chain with the Right tools and Trading partners. Logistics Programs Facilitating Trade Intercontinental Air Program Intra-Asia Logistics NSC Ocean Program “Getting Capital in the right hands” Reverse Auctions Standardized SOPs Global Forwarders LCL to FCL Defined Routings Approved Carriers

  12. APPO Technology and Quality ServicesEnabling Growth in Individual Organizations • Technology Services Engaged With ASCO Since FY’03 • 35-60 Projects Per Year • Critical to ASCO Shanghai’s Local Sourcing Development • Great Support as Asco WW Expands Into Asia • Failure Analysis, Material Equivalence, Material Composition, Performance Testing, Root Cause Analysis, Dimension Inspection and First Article Inspection • Utilized Independently by ASCO Divisions • Best Practices Must Be Shared By All ASCO Locations • Quality Support and Source Inspection • Key to Supplier Development • Supporting Numatics Early in Emerson Engagement • Great Source for Training Local ASCO-Numatics Resources • SQE Green Belt Activity Progressing

  13. APPO & ASCO Quality TeamA Quality Process • Total Of 5 APPO SQE’s + Taiwan Team • APPO Resources Receive Over 100 Hours Of Training Per Year On Asco Products And Processes. (In Our Factories) • Additional Knowledge Sharing With Asco Shanghai and Taiwan • Still Room for Improvement • ASCO USA Suppliers Have Quality Data Online • Non-Conformance Communication and Balanced Scorecard • Implementing X-Functional Transition Procedure WW • Continuous Improvement Process for Developing and Managing Online Bidding and SupplierTransitions • Asia Suppliers Quality And Delivery Performance Equal To Or Better Than Domestic Suppliers • No Sacrifice of Quality for Best Cost!

  14. APPO and ES Impact on NPDEnabled by Resources in Asia • 5 Major Bids Executed Within 4 Weeks of Design Freeze • Worked Closely With APPO and Emerson Commodity Teams to Identify Preferred Supply Base • Limited Bidding to Emerson Known Suppliers to Reduce Timing and Risk ES Activities Improved GP by 8 points - Still the Best Tool to Determine Market Price At Current Volumes - ~$5M Targeted for Asia!

  15. Asco-Numatics GMDC Asco/Numatics GMDC OrganizationSupply Chain and Engineering Focus GMDC SUPPORT ASCO ENGINEERING ASCO PROCUREMENT Theresa Ocampo GMDC Head Craig Patterson Engineering Director Al Middeke VP Global Materials TBD Business Group Mgr. Cristine Diones GMDC-IA Team Lead Arthur De Castro ASCO Eng Analyst Peter Dayton North America Jennifer Quirap ASCO NA Analyst Frederick Co Hai Pin ASCO Eng Analyst Dave Wagner Numatics Sherlyn Simon Numatics Analyst Thierry Colom Joucomatic Marites dela Cruz ASCO EU Analyst

  16. 4.Supplier Systems Training 1.ROHS 2. NAFTA 3.Metals Tracking GMDC JourneyQuickly Picking Up Speed • Lead Time Analysis • Supplier Education : Supply Chain System • Global Procurement Exhibits Review • Parts HTS Classification • New Product/ Part Development Support • Preferred Parts Management • Global Parametric Data Management • Material Variance • Inflation Model • Parts Gate Keeping • MIN Extracts Upload • Logistics: Data Gathering • Logistics: Supplier Audit • BOM Optimization • C-TPAT Extreme Growth • ROHS • NAFTA • Material Cost Analysis • Supplier Performance • MIN Data Quality • MIN VS. Finance Analysis • Data Base Automation • Hedge Report • Alternate Part Identification • E-Sourcing Support • COO • DPO • ECN Support • Parametric Data Gathering • MPN Clean-up • Parts Consolidation 2004 2005 2006 2007

  17. Metal Cost Tracking INPUT DATA • SALES/ MARKETING • Cost Impact to End Product SUPPLIER CONTRACT METAL CONTENT ANNUAL GROSS REQMT. METALS TRACKING TOOL METAL INDICES • PROCUREMENT • Quarterly New Pricing • Cost Impact per Supplier • Gives Better Visibility of Metal Price Change Impact to Spend • Enables Purchasing to Drive Price Changes With Suppliers

  18. Closed, 249 68% Analyzed, 22,669 46% RoHSProcurement & Engineering Supplier Survey Engineering Parts Analysis 391 Suppliers Contacted Spend Captured: 94% ($36,460K) 48,068 Parts Targeted Parts Analyzed: 47% (22,669 parts)

  19. NAFTA ComplianceASCO and Numatics Focus GMDC ASCO Valve/ Numatics PROCUREMENT Classify End Products based on HTS code Collect NAFTA Certificates from Suppliers North American Free Trade Agreement (NAFTA) Validate Harmonized Tariff Schedule (HTS) code Issue NAFTA Certificate to Customers / Interplant (MX) ASCO Valve Targets: 20,850 Parts 236 Suppliers 24 NA OEM Customers Numatics Targets: 2,922 Parts 177 Suppliers Maintain Supplier NAFTA Data Base ENGINEERING PROCESS FLOW Classify ASCO Parts Based on HTS Code

  20. Supplier Portal Asco Supplier TrainingEducation and Information – Current Missing Link Digital Drawings Online Systems Training Training Manual or One on One New Suppliers New Hires E-KanBan Expedite Reports PO Information Online Quality

  21. Next Steps In AsiaCritical to Further Growth • Continue to Expand Resources Within Asia • Commercial Resources Needed in SEA • Assess Current Resources and Future Needs • 1-2 Additional GMDC Heads • Coordinate Efforts Between Asco and Numatics Entities • Build BCC “Asco-Numatics Asia” • Currently Approximately $25M FY’07 – $40M By FY’10 • Focus on Sharing Best Practices and Resources • Rationalize Supply Base in Asia Within Asco-Numatics • Leverage Key Commodities • Excellent Pool of 60 Suppliers Today • Rationalization and Improvement Opportunities

  22. 5 Keys to Success in Asia • Online Supply Chain Systems • Must Expand Throughout Asco and Numatics • Stringent Guidelines for Quality Worldwide and Strict Guidelines for New Supplier Selection • Full Utilization Of APPO Resources: Technical Center, Logistics, Quality and Commodity Teams • Logistics Solutions To Ensure Speed, Consistency, Low Cost and Visibility • Local Decision Making By World Class Employees

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