Welcome!

1. Welcome! Michael Hipsher Director of Operations TEAM Industries

2. What Has Changed ?? My Aunt Nondus TEAM Industries Overview TEAM Industries Story: The lean journey begins Getting some momentum Speed Bump: Change the Game Going forward Questions Agenda

3. Name Position Company How long has your company been working on lean? On a scale of 1-10 (10 being lean nirvana) how are you doing? What is your most difficult part of lean? 5S Identifying Kaizen events Upper management buy in/support Time/Resources Sustainment Changing the culture What has changed ??

4. My Aunt Nondus (It’s a small world out there)

5. TEAM IndustriesOverview

6. Founded in 1967 by Don Ricke ESOP company (30% owned by associates) Seven Manufacturing Locations (6 Minnesota, 1 North Carolina) 1250 Associates $240 Million Sales TEAM Industries Overview

7. TEAM Industries Overview

8. TEAM Industries Overview • Agricultural Equipment • Chassis & Suspension • Hydraulic Motor and Valve • Industrial Power Transmission & • Gear Reduction • Marine • Materials Handling • Medium & Heavy Truck • Off Road Equipment • Performance Products • Portable & Standby Power Generation • Recreational Vehicles • Second Tier Automotive • Turf Care, Lawn & Garden

9. TEAM Industries Overview

10. TEAM Industries Lean Story

11. The Lean Journey begins at Cambridge • Researched information, benchmarking, consulting analysis (July 2004) • Development of Lean Steering Committee (9.2004) • Established Lean Engineering Position – Christopher Olson • Conducted 4-hour Lean Overview Training for Entire Facility (9.2004-11.2004) • Continued with Lean Education using the Train-the-Trainer Approach.

12. Kaizen activity – 1 major event/month/100 employees CI support – 1% to 2% of plant headcount Training – 20 to 40 hours of training per associate per year Visible waste hunt, point kaizen, daily improvement happening every day Initial Expectations & Intensity

13. Training Statistics Development Training

14. Training Statistics Events Related Training

15. Three Formal Set-Up Reduction Kaizen Events Completed to Date. Total Labor Hours savings of 54 – 88% Machine Time (machine down time for set-up) improvements of 52 -80% Estimated annual savings of $74,000 Six Formal Production Process Kaizen Events Completed to Date and Two Process Preparation (2P) Events Reduction in WIP of 44-99% Reduction in Standard Cost of 2-14% Floor Space Reduction of 12-41% Travel Distance Reduction of 18-31% $1,164,000 in cost avoidance (2P) Over $413,400 in annualized cost savings. InitialResults!

16. More Results • Four Formal Business Process Kaizen Events Completed to Date: • $23,500 in estimated annual savings (note: the savings has not been reported yet for (1) event). • Conducted Waste Hunt Projects (7-wastes) in 14 areas • Annualized savings not calculated. • Conducted 1 BP (Best Practices) Project • Savings not calculated at this time.

17. Let’s Compare…

18. CI Support Throughout TEAM Andrews Full-time Lean Facilitator - Open Audubon Full-time Lean Facilitator – In place 2nd Full-time Position – In place Bagley Full-time Lean Facilitator – In place 2nd Full –time Position - Open Park Rapids Full-time Lean Facilitator – In place Cambridge Full-time Lean Facilitator/Engineer – In place Full-time Lean Coordinator – In place DL Full-time Lean Facilitator – In Place Baxter Full-time Lean Facilitator – In Place

19. Speed Bump in our Lean Journey

20. Top Line Sales Growing Bottom Line results declining Pricing pressures from customers Commodity surcharges, insurance cost, pricing issues, etc., etc., etc. Looked in the mirror and our baby (TEAM Industries) wasn’t so pretty Need to Change the game Speed Bump

21. If we do what we’ve always done, We’ll always get what we’ve always got. And we will always do what we’ve always done, If we always think the way we’ve always thought.

22. SustainableGrowth Model Customers Satisfied Loyal Culture Committed Cooperative Creative Sustainable Growth Leadership Empowering Freeing Serving = + + BM

23. OLD GAME Directive Bureaucratic Conservative No Risks The Same Self-Protection and Promotion “Me” – Silos Entitlement Top Down, Command and Control Low Trust Blame CYA Hoarding Mentality (Scarcity) NEWGAME Open-Team Flexible Collaborative Sharing of Information Growth! Trust - safety Risk Taking Awake and being fully present There are no egos or sacred cows FUN! Honest Filled with confidence

24. Get into the ZONE! Get out of the Comfort Zone and into the Learning Zone!

25. InterFERence

26. F.L.A.G. BM

27. INTENSIFY LEAN ACTION Participate, Support and Sustain! LEAN = Teams Working Smart

28. You did 1.5 “qualified” events / 100 employees / month Each event saved $4000 / month (hard savings) You sustained the results What If?

29. Here would be the results… Plants & Activity

30. Committed to 18 Kaizen events per month with a savings of $4,000/mo/event in the next 6 months. The savings realized in 2007 would be $72,000 (6+5+4+3+2+1)=$1,512,000 The 2007 Potential

31. Factories Office Processes “Corporate” Value Streams Process Development (Quoting  Release) Product Development Every person in the company must be able to produce 15% more year over year Where will we find the savings?

32. Going Forward

33. CompanyInitiatives

34. Standardized Metrics

35. Standardized Tracking

36. Standardized Reporting

37. Monthly meeting with CI Group High Performance Supervision (HPS) Training Change focus, direction, responsibility Sustain, Sustain, Sustain Strategy Development Y=F(X) What is going to make TEAM Industries unique? Focus on Culture Change Soft Side Focus Also

38. Questions?