2. Schonberger & Associates Inventory Turnover – Paccar Up 2.1% per year for 38 years

3. Schonberger & Associates Terex Days of Inventory Bought Genie 10/02

4. The Confused State of Lean: Comparing Regions, Industries, Companies PDM, Puget Sound APICS Wednesday, Dec. 12, 2007 Presenter Richard J. Schonberger 177 107th Ave., N.E., #2101 Bellevue, WA 98004 USA – Tel/Fax +425-467-1143 Schonberger & Associates

5. This presentation includes research and topical materials incorporated into a forthcoming Richard Schonberger book (John Wiley & Sons): Best Practices in Lean Six Sigma Process Improvement: A Deeper Look . . . with Telling Evidence from the Leanness Studies Schonberger & Associates

11. Schonberger & Associates Long-term Lean : Compound Effects

12. Schonberger & Associates Inventory Turnover Up 2.0% per year for 32 years A B A Up 2.7% per year for 26 years

15. Schonberger & Associates Besides Dana . . . other major vehicular suppliers in or emergent from bankruptcy: Collins & Aikman, Delphi, Dura Automotive, Eagle-Picher, Federal Mogul, Modine, Tower Automotive Collins & Aikman, Eagle-Picher, Federal Mogul, Modine much better off because of many-year compounded lean benefits (insufficient data for Delphi, Dura, Tower)

16. Aerospace-Defense OEM’s Schonberger & Associates

17. Schonberger & Associates Inventory Turnover Turns C+ A C Up 5.7% per year 14 years

18. Schonberger & Associates Inventory Turnover Game-Changer Modular deliveries from modular, 1 st tier suppliers. Unloads millions of parts, reshuffles core competencies for mutual gain C C C

19. Aerospace-Defense Suppliers Schonberger & Associates

20. Schonberger & Associates Inventory Turnover Turns D+ C D

21. Schonberger & Associates Inventory Turnover Turns D C C

22. Car OEM’s Schonberger & Associates

23. Schonberger & Associates Inventory Turnover C D D Down 3.4% per year, 18 years Down 2.7% per year, 16 years Chrysler acquired by Daimler in ’98, sold in ‘07

24. Schonberger & Associates Inventory Turnover *Overstated – Based on sales, not cost of sales C C C

25. Schonberger & Associates Inventory Turnover Up 2.1% per year, 27 years D A C Down 4.0% per year, 13 years

27. Vehicular Components Producers (91 in Leanness Database*) Grades : 29 A’s 5 B’s 39 C’s 13 D’s 5 F’s *52 in Mergent list of 1000 largest global corporations Schonberger & Associates Car Assemblers (25 in Leanness Database) Grades : 4 A’s 2 B’s 12 C’s 5 D’s 2 F’s

28. Schonberger & Associates Inventory Turnover Up 3.0% per year for 24 years Up 3.1% per year for 26 years *Overstated: Based on sales, not cost of sales Up 2.7% per year for 27 years A A A

29. Schonberger & Associates Inventory Turnover Up 1.6% per year for 34 years A C B

30. Schonberger & Associates Inventory Turnover Up 2.1% per year for 30 years Up 2.7% per year for 26 years B A A

31. 54 Motor-Vehicle Companies Rated on Long-Term Leanness Schonberger & Associates Harley-Davidson Paccar-Kenworth Honda Tennant Magna Int’l. Thor Industries General Motors Hindustan Motors JLG Industries Ford Motor Hitachi Zosen Terex Tata Motors Kawasaki Heavy Kubota Iveco Nissan Fiat Renault Porsche Peugeot-Citroen Alvis Isuzu DaimlerChrysler AGCO Volvo Claas KgaA Nacco Industries Mitsubishi Motors Navistar Yamaha Motors Scania Winnebago Trinity Industries Toro Millat Tractors Polaris Komatsu Caterpillar Deere Audi BMW Manitowoc Fleetwood Enterpr. Suzuki Motors Nissan Diesel Daihatsu Motors* Fuji Heavy-Subaru Hino Motors* Volkswagen Toyota Motors Oshkosh Truck Champion Enterpr. Toyota Industries* As of 5-3-07 *Toyota subsidiaries

32. Autos, Crucible of Lean – Best to Worst Trends Schonberger & Associates 1 Harley Up 3.9%, 20 years 3 Honda Up 2.1%, 27 years 10 Ford Up 1.9%, 32 years (down sharply last 4 yrs.) 13 Tata Up 5.5%, 13 years (slump ’98-’03) 17 Nissan Up 2.8%, 11 years (after 20 years down) 23 Isuzu Flat erratically 28 years (up last few years) 26 Volvo Flat 12 years (after 10 bad yrs.; better last 6) 32 Scania Flat 11 years (after 6 good years) 36 Millat Tr. Flat very erratically, 17 years 40 Deere Down 2.8%, 13 years (up last few years) 42 BMW Down 3.4%, 18 years (less decline last 14) 51 VW Down 3.8%, 10 years (after good 16 years) 52 Toyota Down 4.0%, 13 years (after 6 flat years) As of 5-3-07

33. Unsung Stars of Lean – A Few Examples Schonberger & Associates American Greetings (greeting cards, etc.) Up 3.2% per yr. for 20 yrs. Andrew Corp. (satellite telecom equipment) Up 2.6%, 24 yrs. Applera (life-science instruments, consumables) Up 4.0%, 18 yrs. CCL Industries, Canada (aerosol containers, labels) Up 2.4%, 20 yrs. Cleveland: Brush Engineered Products (2.9, 20); Eaton (2.1, 30); Nordson (3.8, 17); Parker Hannifin (3.4, 17) Gunnebo, Sweden (cash/personal security equipt.) Up 3.1%, 24 yrs. Hitachi Cable, Japan (wire & cable) Up 1.8%, 26 yrs. Illinois Tool Works (diverse industrial products) Up 3.2%, 20 yrs. Kulicke & Soffa (wafer saws, die bonders, etc.) Up 4.4%, 20 yrs. L.S. Starrett (coordinate measuring machines, tools) Up 1.7%, 35 yrs. Messer Griesheim, Germany (metalworking, other) Up 1.9%, 32 yrs. Rolm & Haas (chemicals) Up 1.8%, 20 yrs. SKF, Sweden (bearings) Up 2.5%, 29 yrs. Thomas & Betts (electric connectors, steel towers) Up 2.5%, 30 yrs. Woolworths, Australia (supermarkets, other retail) Up 2.3%, 20 yrs. Xerox (copiers) Up 2.0%, 40 yrs. As of 10-25-07

34. The “lean core” (basic Toyota system) and other potent ways to get lean Schonberger & Associates

38. Schonberger & Associates Inventory Turnover Acquired by Danaher Fluke: Up 3.2% per year, 18 years Danaher: Faded lean star?

39. Schonberger & Associates Pipelines/Collaboration : Greatest Lean Opportunities

44. Schonberger & Associates Why Does Lean Fade? Are There Antidotes?

50. Schonberger & Associates Inventory Turnover – Dell Inc. 79 5.8%, 17 years

51. Schonberger & Associates Wal-Mart: Up 2.8% per year for 16 years Turns Inventory Turnover Illinois Tool: Up 3.2% per year for 20 years A A

54. Books by Richard Schonberger