Strategic Goal Deployment Process

X-Matrix Development

Agenda

• Strategic Goal Deployment

• Objectives & Purpose

• Process Overview

• Next Steps & Timeline

 Strategic Goal Deployment Process
Objective & Purpose

Develop & Execut Operating System Standard Work

to Achieve Ducommun Way Vision & Breakthrough Results
Foundational Transformational
Strategic Goal Deployment Process
Objective & Purpose
TTI

Transformational

KPI
Foundational
 Strategic Goal Deployment Process
Objective & Purpose

• Strategy Deployment is a systematic approach to define & align 3 year breakthrough

objectives to Operating System / Lean Enterprise execution.
• Defines specific critical areas of process improvement to facilitate standard work, synergy and
breakthrough transformational results.

• X-Matrix aligns priorities, targets, processes, standard work and resources across Ducommun
Enterprise.

Without Aligned Strategy Deployment Enterprise Strategy Deployment

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 TTI Priority Results Focus
There will always be more good ideas than you have
capacity to execute

NUMBER OF
TTI GOALS 1-3 4-10 11-20

NUMBER OF TTI GOALS

ACHIEVED WITH 1-3 1-2 0
EXCELLENCE

TTI Goals: 4 Direct Flow Down Plus 1 SBU Developed

• Base Priority Selection Upon Impact to the Business and Customer
 Strategic Goal Deployment Process:
Vision, Strategy, Alignment & Results Driven

Top Level X Matrix

Strategic Process Priorities
Achievement of TTI Breakthrough Objectives

T T T T T
T T Priority Process & TTI Linkage T T T
I I I I I

SBU’s (7)
SDI ICS CBS EIS SAS SSS BCS
Conduct S.W.O.T Brainstorming Analysis, Identify Strategic Process Priorities & TTI’s
SWOT = Strengths; Weaknesses; Opportunities; Threats
Operating Centers
Conduct S.W.O.T Brainstorming Analysis, Identify Strategic Process Priorities

Strategic Process Priorities in our own words

 Strategy Directed & Results Focused through Process Standard Work

Vision - Usually provided by

senior leadership
Measurements Process & Results
directionally aligned to Achievement:
Strategy to Process
Vision Achieve Vision Priorities
measure process Transformation
priority improvements Roadmap & Detail
(TTI’s) Action Plans

X-Matrix, TTI’s, Transformational Roadmap & Aligned Actions Plans

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 Strategic Goal Deployment
X-Matrix Clock Definitions Level

X-Matrix – Clock Definitions

Strategic Process Priorities, Breakthrough Objectives, Measurements & Ownership

1. What? 6:00 o’clock How? - Step #3

12:00 o'clock
• Sr. Leadership Vision / Breakthrough Objectives
Corp Level
• Establishes Enterprise Wide Results Priorities How?

• Ties to Implementation of Ducommun Way &

OOE/Lean Enterprise Execution Top Level

Measures & Timing - Step #4

How Far this Year? - Step #2
Strategic Process
2. How Far this Year? 9:00 o’clock Priorities

Measures & Timing?

How Far this Year?
9:00 o'clock

3:00 o'clock
Corp Level
• Progressive Objectives Leading to 3 year Breakthrough Results

Corp Level
• Consolidated Level Objectives Annual Breakthrough
Targets to Improve
Objectives
(2016)
3. How? 12:00 o’clock
•Strategic Processes & Priorities aligned to achieve 3 yr Breakthrough
Annual transformation objectives Objectives
-

4. Measures & Timing? 3:00 o’clock What?

•TTI’s: Specific “SMART” Measurements Corp Level

6:00 o'clock
Who? What? - Step #1

• Direct Process & TTI Owners

 SGDP X Matrix Linkage and Alignment

Operations
Corp Level SBU Level
Center

12:00 o'clock 12:00 o'clock 12:00 o'clock

Corp Level SBU Level Operations Center Level

How? How? How?

SBU Operations Center

Top Level
Strategic Process Strategic Process
Strategic Process
Priorities Priorities

Operations Center Level

Priorities
Measures & Timing?

Measures & Timing?

How Far this Year?

Measures & Timing?

SBU
3:00 o'clock
9:00 o'clock

9:00 o'clock

3:00 o'clock
Corp Level

SBU Level
9:00 o'clock

3:00 o'clock
DCO Level

SBU Level
Top Level SBU Top Level Operations Center
Corp Level

Annual
Breakthrough
Targetsto Improve Strategic Processes Targetsto Improve Strategic Processes Target to
s Improve
Objectives
(2016) (2016) (2016)

SBU
3 yrBreakthrough Corp Targetsto Improve
Objectives Targetsto Improve (2016)
(2016)

What? What?
What?
Corp Level SBU Level
Corp Level
6:00 o'clock 6:00 o'clock 6:00 o'clock

Simple deployment, followed by Catchball……

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 Simpler deployment
X-Matrix Levels
Step 1 Step 2 Step 3

Corp SBU *Operations Centers Included in SBU Operations Center *Support Centers Functional Shared
Top Level X 2nd Level X 2nd Level-X 3rd Level X Included in 3rd Level-X Services

Division or Business Unit:

Location 1
ICS: Interconnect Solutions
Location 2

CBS: Circuit Board Solutions Location 4

Pittsburg
Phoenix
Functional
Huntsville
CORP EIS: Electronic Integrated Solutions Shared
Carson Thailand
Services
OFS
Parsons
SAS: Structural Assembly Solutions
Coxsackie
Top Level-X Gardena
2nd Level-X SSS: Structural Systems Solutions Orange
3rd Level-X El Mirage
Shared Services Monrovia
BCS: Bonded Component Solutions
Guaymas

Matrix Level Count

Top Level-X: 1 2nd Level-X: 7 3rd Level-X: 11 Total: 18 + Top Level-X

*Additional integration of Operations Centers into SBU 2nd Level-X

and/or

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 1. X-Matrix
X-Matrix Process Overview 2. TTI Bowler
3. Process Improvement A3
Strategic Goal Deployment
Customer
Corp- Top Level X
Service & Profitable Growth
- Matrix
4. Transformation Roadmap
DCO Level
How?
5. Detail Action Plan

VP, Controller & Chief Accounting Officer: Doug Groves

2016 Strategic Goal Deployment, Top Level-X TTI's
Customer Service & Profitable Growth

VP, Supply Chain Management: Michelle Stein

VP, Advanced Systems Group: Mike Stanfield
Executive Vice President & COO: Joel Benkie

V.P. General Council & Secretary: Jim Heiser

Top Level

VP, Operational Excellence: Jerry Redondo

Chairman, President & CEO: Tony Reardon
DCO

VP, Program Management: Tisha Mitchell

VP, HR & Org Development: Rose Rogers
Strategic Process
2016 Metric/TTI TTI Owner JOP YTD JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC

Measures & Timing?

Priorities
How Far this Year?

Plan
DCO Level

DCO Level

VP, Treasurer & CFO: Joe Bellino

TTI #1 Actual

TTI # 3
TTI #1
TTI #2

TTI #4
Delta
Annual Brealthrough Targets to Improve Plan
Objectives TTI #2 Actual
Delta
Plan

3 yr Breakthrough
TTI #3 Actual
Delta

SBU VP's
Objectives Plan
(2016- 2019) TTI #4 Actual
Delta
Resource Deployment Plan
l Process & TTI Leadership Responsibility Actual
Process & Secondary TTI Leadership Responsibility Delta
m Leadership Engagement & Support

What?
≥ 100% of Plan
DCO Level
l Direct or Major Correlation
m Indirect or Minor Correlation
Minimal Correlation

Lean Enterprise
Transformation Operational Excellence/Lean Enterprise Transformation Roadmap

TT 3
TT 4
5
2
I#
I#
I#
1
I#
I#
Roadmap Strategic Process Priorities

TT
TT
TT
Priority
Develop S&OP Processl l m l Top Level X-Matrix Roadmap Detail Action Plan
Lean Enterprise Process l l l Operational Excellence
Profitable Growth
Organizational Development
Planned Results Completion
Plan Actual Start Targeted Measurement
# TTI Strategic Process Priority Linkage Action(s) Action Leader Completion Impact
Start Date Date Result Outcome % Status
Month Week Project Impact to TTI's Process Owner Status Date Date
Jan 1 l l m l Supply Chain Manager
Kaizen Workshop: S&OP Process Flow Map 1 0%
Jan 1 Supply Chain Manager
Develop Standard Work Master Scheduler
2 25%
Jan 2 l l l OE Leader
Lean Enterprise Training

Jan 3 6S Kaizen m l m Operations Leader 3 50%

Jan 4
4 75%
Feb 1

Feb 2 6 100%

Rolling 90 Day Plan 25 50 75 100

4 5
3 A3 Process Approach

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 SGDP Standard Work Process

1 2 3

Strategic Process Detail A3

X-Matrix TTI Bowler Process
Approach

1. Strategic Process Priorities Monthly TTI

2. 3 Year Breakthrough Objectives Performance Results Tracking
3.
4.
Annual Breakthrough Objectives
Targets to Improve 4 Transformation
Roadmap

Lean Enterprise
Process Transformation Roadmap
Rolling 90 Day Process Level Plan Detail
Action
Plan
5

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Strategic Process Innovation
Through Strategy Goal Deployment

Improvement
Priority
Annual Breakthrough
Objective We apply A3 problem
solving techniques to
Why? identify the key process
G that drives the
Why? improvement priority.
A
Why? P This will enable us to reach
Why?
our overall annual
Why? breakthrough objective.
Current Situation

Identify Strategic Process Innovation

 Strategic Process Priorities: Proactive A3 Approach
Take a proactive A3 process approach for each strategic process priority
at the point of targeted impact (SBU/OpCtr/Functional level) to drive
sustainable TTI results
• Define Leading Indicator Metrics on A3: 1 to 2 per each Strategic
Process Priority & Aligned TTI

• If Not Achieving a TTI

– Focus on Proactive A3
Process Approach
– No 3 UP Needed

• However, If Not Achieving

a KPI Need
Countermeasures
– 3UP Action Plans

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 Strategic Process Innovation Through Strategy Goal Deployment

High

• A3 Process Improvement • 3UP Countermeasures

R
• Transformation Roadmap
E • Structured Standard Work
S Execution
U
L
T
S

• Daily Firefighting
• Reacting to Problems

Low High
Daily Management

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 Strategic Process Priority A3: S&OP Example
Strategic Process Priority: Develop and Implement S&OP Process Start Date: OTD

Team: SBU Leader, Supply Chain Manager, Program Management, engineering

Owner: Supply Chain Manage r Manager, Operations Manager, Master Scheduler, Business Development Revision Date:

Objective / Problem Statement Desired State

DCO is Not Meeting Inventory and On Time Delivery Develop S&OP process including Demand Review, Supply Review and Rough Cut Capacity to support planning process by value stream
Breakthrough Objectives
Objective to improve on time delivery and inventory
Desired State
Current State GAP Analysis
Business consists of high mix demand with inconsistent
Order & Carry Excess Inventory
forecasts Level Load Process, Improve On Time
to Cover Unknowns
Contracts vary from LTA to Monthly Book and Bill
DCO operating centers have multiple ERP systems.
Current Why? Delivery and Inventory Therefore
Leading
Supply Base is over 3K suppliers in multiple geographies
Product applications are high mix and vary by SBU State Why? GAP AnalysisImplement Master Scheduling
Customer requested lead-time
may be shorter than supply Therefore Indicator
Contracts vary from 5
LTAWhy
to & TTI
Analysis (Pareto / Fishbone / 5 Why / Process Map
Why? Monthly Book and Bill Review Supply & Rough Cut Capacity Therefore
A. IIII IIII I II What?
When? B
Demand is high mix with
Trend Charts
Tools: Where?
B. IIII III How?
C. IIII
Who?
Inputs/Outputs?
Why? inconsistent forecast Formalize Demand Review Therefore
Check Sheet Pareto Control Chart Scatter Diagram VSM Others
Team
No Formal S&OP Process
Why? Develop S&OP Process Therefore
A. I I I I I I What?
When? B Why?
Innovative Process Solutions & Implementation Plan
To ls: B. I I I Where? Y = f(x)
How? Man Method Measure Why?

Who?
C. I I Inputs/Outputs? Why? Action Initiative Jan Feb Mar April May June July Aug Sept Oct Nov Dec Status Responsible
Machine Materials M. Nature

Check She t Pareto Control Chart ScatterDiagram VSM Others Why?

Business
1 Formalize Demand Review
Development

Analysis & 2
Supply Review
& Rough Cut Capacity
Supply Chain

Proposed 3
Establish S&OP Process by
SBU Leader
Business Unit
Strategic
Solutions
Actions &
4 Implement Master Scheduling Supply Chain

5
Timing Lead Time
Trend Chart
6

Evaluation: Performance Measures

Measure KPI / TTI / Leading Indicators Current State Target Actual
1 KPI: On Time Delivery 80% 99% 80%
2 KPI: Inventory (DSI) 84 50 84
3
4
LI: Forecast Accuracy
LI: Sales Linearity
TTI Goals X
X
Y
Y
X
X
5 Lead Time X Y X

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 Continuous Improvement: Transformation Roadmap

Lean Enterprise
Transformation Priority
Roadmap Strategic Process Priorities
Develop S&OP Process l l m l
Lean Enterprise Process l l l Operational Excellence
Profitable Growth
Organizational Development

Month Week Project Impact to TTI's Process Owner Status

Jan 1 l l m l Supply Chain Manager

Kaizen Workshop: S&OP Process Flow Map

Jan 1 Supply Chain Manager

Develop Standard Work Master Scheduler
Jan 2 l l l OE Leader
Lean Enterprise Training
Jan 3 m l m Operations Leader
6S Kaizen
Jan 4

Feb 1

Feb 2

Rolling 90 Day Plan 25 50 75 100

• 90 Day Rolling Plan

• Include Detailed Lean Activities to Support Strategic Process Initiatives
• Include Continuous Improvement Activities to Drive TTI Improvements

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 Results Focused SGD Management Review Process

SBU Level
• Monthly Strategic Process Priority & TTI Review
• Review Forum: SBU Rollup & Supporting Operations Centers
• Results:
• TTI Bowling Chart
• Methodology & Execution:
• Lean Transformation Road Map
• Strategic Process Priority A3’s
DCO Level
• Quarterly TTI Results, DCO & SBU Level
• Process Innovation: Accomplishments, Best Practices, Challenges
 Strategic Goal Deployment
Next Steps: X-Matrix Development
Standard Work & Timeline

Oct 13
CORP
CORP
Corp Vision Top
Top Level
Level X-Matrix
X-Matrix
33 yr
yr Goals
Goals 2016
2016 TTI’s
TTI’s
Owner: EXEC team Owner: Sr. Corp Leadership Team

Oct 30 Nov 13 Nov 30

SBU’s Operations
Operations Centers
Centers Shared
Shared Services
Services
2 Level X-Matrix
nd
33 Level
rd
rd
Level X-Matrix
X-Matrix X-Matrix
X-Matrix
Development Development
Development Development
Development
Owner: SBU Leaders Owner: SBU & Operations Center Leaders Owner: OOE & Functional Leadership

Dec 2016 2016

X-Matrix
X-Matrix Recurring
Recurring TTI
TTI Results
Results
Linkage
LinkageAlignment
Alignment A3
A3 Process
Process Improvement
Improvement Focused
Focused Execution
Execution
Reviews
Reviews &
& Roadmap
Roadmap Development
Development
Owner: VP OOE & SBU Leaders

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