What the Customers Want

1. On-time delivery

a. Develop more effective process for ensuring all Customer orders are produced on-time and are traceable throughout the production cycle to give updates as needed.

b. Streamline order-entry/engineering/materials/production/subcontract/QC cycle.

c. Begin to utilize Vista (our MRP software) Production Schedule module to plan all jobs.

i. Upgrade to Vista 9.0 to get latest capability.

ii. Require Customer Service department to keep all Customer due dates current (weekly effort) based on ever-changing Customer schedules.

iii. Use Vista Production Schedule Report to create visual image of all Customer requirements and when they are do, and use this report to prioritize jobs running through shop.

iv. Prioritize jobs by due date and group jobs by material for maximum production and subcontracting efficiencies.

d. Review Customer On-Time performance ratings regularly and ensure results are positive. Challenge Customer “hits” to it’s performance which are not warranted (happens often).

2. Quality output with 100% conformance to customer specs

a. Involve production staff in Quality Inspection throughout manufacturing process to ensure parts are geometrically in-tolerance with Customer requirement. Incentives?

b. Involve production staff in First Article Inspection report to reduce QC inspection time.

c. Evaluate current QC staff processes and procedures to determine if they can be more effective in spotting defective parts prior to Customer shipment.

d. Review Customer Quality performance ratings regularly and ensure results are positive. Challenge Customer “hits” to it’s performance which are not warranted.

e. Hold monthly Rejection Review Meetings (covering both internal and customer rejections) with goal of preventing future rejections of similar nature.

f. Evaluate utilizing Quality module in Vista to more effectively manage QC department.

3. Company is to serve as an “Integrator” and “program manager” rather than just a sub-contractor for sheet metal

a. Emphasis on sub-assemblies rather than just details – table top assemblies primarily.

b. Kitting programs as required.

c. Company to sub-contract work that it can’t do in-house on Customers’ behalf. Company to source, purchase, inspect, markup and sell product to Customer rather than no-bid. Risks?

Shareholder Objectives

 4. Grow sales to maximize current open capacity – our goal is to reach $25 million in annual revenue while maintaining our profit margins

a. Ensure Quoting Is A Priority– all quotes should be responded to (affirmatively or no-bid) on-time and accurately. Is staffing sufficient? Who OK’s pricing?

b. Ensure that all Quotes submitted to Customers are followed up on by Customer Service, and that these conversations ask for outcome, pricing feedback, and other RFQ possibilities.

c. Communicate with Customers regularly, both by phone and in-person.

d. Develop a Marketing Plan that includes existing Customers (marketing to current and other locations), small or dormant accounts (these can become larger opportunities), and potential new Customers. In-house sales effort, outside reps, or both?

e. Become an industry expert – know what aircraft programs are growing, which Customers are busy and are likely to have subcontracting opportunities, and what overall industry trends are.

f. Potential new capabilities (CNC machining, stretch-forming, hot forming, heat treating).

g. Potential development of a product line(s).

h. Identify potential complimentary add-on acquisitions.

5. Maximize cash flow – controlled expenses, working capital

a. Monitor and control inventory at all levels – Raw, WIP, Finished Goods

i. Control job quantities to ensure production runs are optimized after considering historical and projected Customer demand (production – and inventory - has exceeded demand in past due to mis-management, carelessness at all levels)

ii. Require competitive quotes for all outside purchases – raw material, sub-contracting.

iii. Just-In-Time Inventory from suppliers as possible, potential consignment or min/max arrangements.

b. Watch for and eliminate wasteful spending – at all levels waste has occurred (office supplies, shipping costs abused – i.e. unnecessary FedEx overnight or courier usage, office supplies). This needs to be constantly watched for and squashed with vengeance.

c. Review accounts receivable aging on a regular basis and maximize vendor discounts where available.

d. Watch for inappropriate vendor relationships, in particular with local machine shops that are “friends” with company employees. Dynamic Tool is example thus far where abuse has occurred due to mis-management and carelessness.

e. Monitor and question all Overtime – this has also been abused in the past and missed by management. OT is fine when justifiable, but is not an entitlement nor is it a way for employees to earn more money by extending their hours.

f. Constantly monitor and review for parts that lose money – this can be achieved by monthly review of Vista Gross Margin report.

6. Promote healthy, effective corporate culture

a. Establishing metrics for all departments and holding those department heads (Managers) accountable for performance on regular basis – weekly, monthly, etc. Develop compensation plans that reward employees based on success in those items measured.

b. Create incentives to reward for stellar performance.

c. Encourage culture of open, positive communication.

d. Emphasis the need for profitable growth – to achieve all stakeholder’s financial objectives.

e. Communication has been weak in the past. Certain “factions” have felt they are more important than others – led to unhealthy environment.

f. Every employee must receive a written performance review on an annual basis (at a minimum).

g. Relate any and all relevant information to shareholders with respect to operations, financials quality, business climate, HR issues and anything else related to the business.

7. Build and Maintain Leading Organization

a. Use Lean Principals throughout office, manufacturing floor, inventory storage, and quality control to maximize efficiency, reduce waste, and create a clean, organized, efficient company.

b. Treat people fairly and involve them in the process of improving and being great. Reward those who respond (either immediately or after encouragement) and replace those who do not.

c. Represent Company’s best interests with customers and vendors at all times.

d. Lead by example in terms of displaying integrity, honesty and fairness at all times and in all capacities throughout the organization.

e. Develop aggressive but achievable goals so employees know what you/ownership are trying to achieve.

f. Constantly be questioning the status quo (ask the “5 Why’s”) – our processes are far from perfect.

g. Create an organization that we can be proud to bring our Customers through and make them want to send us more work.