Roberts Tool Company, Inc.

1. Roberts Tool Company, Inc. 1.1.1 Strategic Planning Presented at SEA Webex January 10, 2011

2. AgendaLeadership and Culture: 1.1.1. Strategic Planning • Starting Point: Teamwork • Strategic Planning Cycle • Process Steps • Cascading of Objectives • Connecting Strategy to Daily Work • VSM / Kaizens • Quality System • Process Management • Resource Allocation

3. Starting Point: Teamwork World Class Performance: Ordinary people doing extraordinary things. Commitments monitored? Measured (time / qty./ qual.) Am I willing to be held accountable? Do we have the same set of facts? Am I willing to compromise? Do I stand firm when appropriate? Walk away – unresolved/no learning Walk toward – risk/potential negative outcome*/only path to consensus I know how he/she will respond The response is predictable. Words consistently translate into action Results Accountability Consensus Conflict Trust *When things go wrong, a choice must be made: find blame OR find solutions. Root causes are systemic - process driven. People errors are a part of the natural variation in any process, not the root cause.

4. Annual Strategic Planning Cycle Prepare Meet Brainstorm Plan Communicate Implement Check Complete

5. Annual Strategic Planning Cycle Prepare 1 Month Meet Brainstorm Plan 3 Days Communicate 2 Weeks Implement 4 Months Check 1 Day Complete 6 Months

6. Prepare February Preparation (1 Month) - QMS Review - Audit Trends - Customer Feedback Supplier Performance Reports Annual Customer Survey “Soft” Inputs - Continuous Improvement Plan Achievement - Metrics Performance Sales OTD Quality Productivity - Market Environment Economic Trends Industry Trends Future Outlook

7. Meet Brainstorm Plan March Strategy Meeting (4 days): Participants DAY 1 (8 Hours) Sales - Sales Review - Sales Budget DAY 2 (3 Hours) Sales, Mgrs & - Management Review (AS9100) Supervisors - Strategy Inputs Market Environment SWOT - Brainstorm Improvement Opportunities DAY 2 & 3 (12 Hours) Individuals - Workshops - Individual Investigation - Results Preparation DAY 4 (3 Hours) Sales, Mgrs & - Present Results Supervisors - Finalize Continuous Improvement Plan - Clarify Implementation Actions and Responsibilities - Adjourn

8. March Strategy Meeting: Outputs - Updated Vision Statement - Updated Strategy Statement - Updated SWOT - Continuous Improvement Plan - Departmental Objectives - Management Review – ACTIONS - Resource Requirements April Communication - All Hands Meeting - Posting - Flow-down through management and supervision. April – July Implementation - Work the plan - VSM and Kaizen Events July Strategy Update (1 Day) Aug – Dec Implementation Meet Brainstorm Plan Communicate Implement Check & Continue

9. Cascading of Objectives Monitoring / Metrics Strategy and Vision Annually Quarterly Monthly At each meeting Beginning, Middle, End Annual Review; Recognition; Disciplinary Continuous Improvement Plan Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Meetings / Action Items VSM / Kaizens Projects Staff Staff Staff Staff Staff

10. Cascading of Objectives Monitoring / Metrics Strategy and Vision Annually Quarterly Monthly At each meeting Beginning, Middle, End Annual Review; Recognition; Disciplinary Continuous Improvement Plan Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Mgmt/Dept Objectives Meetings / Action Items VSM / Kaizens Projects Staff Staff Staff Staff Staff

11. Why Meetings? • Where teamwork – conflict resolution/consensus/accountability – get done. • Understand differences / generate buy-in • Align effort - avoid double work and counterproductive action • Maximize results / minimize time • Accountability at the working level • Objectives provide high level direction and targets, but don’t get the work done. • Action items from meetings are “where the rubber meets the road.” • Meeting Minutes are the “Corporate Memory” • A record of agreements / policies established. • Evidence of actions taken / communications made. • Repetitive reminder of the Company vision, goals and objectives • A means of communicating to those not physically present

12. Meetings: Process / Tools • Meeting Format • 2. Meeting Schedule • 3. Basic Meeting Organizing Tool: Outlook • Setting meetings with Outlook • Guidelines • 4. Outlook Calendar • Use for company-wide events • Individual use • As time management tool

13. Continuous Improvement Map Value Stream Mapping / Kaizen Process Mgmt Quality Customer OTD/DPMO Supplier OTD/DPMO Internal OTD/DPMO Audit CAR’s Process Owners SCAR’s NCR’s 5 4 3 2 1 Pareto Process Maturity . . . Definition . . . Documentation . . . Standard Work . . . Training . . . Continuous Improvement . . . World Class Root Cause Engineered Solutions . . . Procedural Solutions . . . Kaizen . . . DMAIC / Six Sigma . . . Problem Solving

14. Process Assessment / Resource Allocation High Critical to Success? Low Low High Current Effectiveness

15. Process Assessment / Resource Allocation High Critical to Success? Low Low High Current Effectiveness

16. Process Assessment / Resource Allocation High Critical to Success? Low Low High Current Effectiveness

17. Process Assessment / Resource Allocation High Critical to Success? Low Low High Current Effectiveness

18. Process Assessment / Resource Allocation High Critical to Success? Low Low High Current Effectiveness

19. Annual Strategic Planning Cycle Prepare 1 Month Meet Brainstorm Plan 3 Days Communicate 2 Weeks Implement 4 Months Check 1 Day Complete 6 Months