Organizational Organizational Performance ReviewPerformance Review

February 11, 2011February 11, 2011

Jason CoxChief Technical OfficerCox Machine, Inc.

Aerospace components and assemblies since 1954

130 employees

~20M sales

Machining in Wichita, KS

Sheet-metal in Harper, KS

Major customers Spirit, Cessna, Vought, Gulfstream, HBC, Boeing

Organizational Performance Organizational Performance Review Process (TLD 1-1-3)Review Process (TLD 1-1-3)

Section 2—Definitions Corporate Scorecard

The scorecard is a balanced measure of performance in the following categories:

Financial PerformanceCustomer PerformanceInternal PerformanceLearning & Growth

The categories are divided into weighted subcategories, and assigned a score from 1 to 5 (1 being best). Scores of a 4 or 5 requires that corrective actions be added to the Action Item List.

Organizational PerformanceOrganizational PerformanceOverview (TLD 1-1-3)Overview (TLD 1-1-3)

Organizational Performance Organizational Performance Review Process (TLD 1-1-3)Review Process (TLD 1-1-3)

Scorecard ReviewSenior and Division management meet monthly to review the scorecard for continuous improvement, add any necessary action items, and review the progress on previous action items. The information is flowed throughout the divisions using scheduled meetings, and the scorecards themselves are posted by division.

Components of the Organizational Performance Review Process

Corporate ScorecardDivisional ScorecardsAction Item List

Organizational PerformanceOrganizational PerformanceOverview (TLD 1-1-3)Overview (TLD 1-1-3)

Inventory TurnsEmployee SurveySales per Employee

QualityDeliveryOEELTA Business GrowthTurnover

Customer PerformanceCustomer Satisfaction

Profit MarginCash FlowSales Increase

Standard Meeting AgendaStandard Meeting AgendaScorecard Review

Profit, Cash flow, Sales Increase (COO)Customer Performance (CTO)Customer Satisfaction (VP, Business Development)Quality (PPM, Scrap $, COV) (VP, Quality) On-time completion, OEE (CTO)LTA Business Growth, Turnover (VP, Business Development)Inventory turns (CTO)Employee Survey (VP, Business Development)Sales per Employee (CTO)

Review Action Items from Previous MeetingAssign New Action Items

ScorecardScorecard

ScorecardScorecard

SOPsSOPs4.2.1.3.3 Management Commitment-Responsibility, Authority and Communication

In addition to the suggestion program stated above, the SLT holds meeting primarily on a weekly basis, and monthly meeting are held by the SLT with Division Management to review division scorecards. Division Management in turn holds periodic meetings with shop Supervision to flow down communication content. On an annual basis, Cox Machine holds an off-site “All Hands” meeting with all personnel throughout the organization to flow down communications.

4.1.1 Continuous Improvement System Performance Measures

Performance Measures: Cox Machine, Inc. shall develop and document a continuous improvement system. This system is to include performance measures to promote customer satisfaction, such as customer satisfaction, internal scrap, waste, internal quality ratings (ppm), production metrics such as past due hours, standard hours vs. actual hours, and capacity metrics.