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David J. McDonaldCareer Portfolio
2
David J. McDonald- Quick Bio
President of Lakeside/IPD in Paragould Arkansas, a $30mil+ Sourcing/Logistics/Distribution
company (Privately owned).
Previouslyy, Senior Vice President of Operations at Hercules Tire, a $650mil tire distributor with
4 operating divisions. (PE owned.) Spent over 30+ years in Industry, 22+ of those years
in Senior Operating positions at Fortune Brands and Emerson (Electric) Corporation at 4
different Operating companies. Primarily focused on High growth Businesses.
Began career as a Management Trainee, worked up to Director of Operations in 8 years at
Liebert Corporation.
Extensive experience in guiding his companies through Operations/Supply chain strategies
including: Global Sourcing, Manufacturing Lean-Sigma, Global Logistics, and
restructuring efforts to gain strong Service Improvements & Cost
Competitiveness.
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Career Path & Key Facts
Liebert/ Emerson Deltec Emerson Fortune Brands
Mgt Trainee to Dir of
Ops $590milVP Ops-
$75mil
VP Ops- Knaack Corp $120mil
VP Ops- Inter-Metro $200mil
VP Ops- Louisville Ladder $75mil
VP SC- Therma Tru $560mil
VP SC & Mfg- WI $300mil
Operations:
•Columbus, OH
•Delaware, OH
•Fremont, CA
•Carson, CA
•Mexicali, MX
•Santa Ana, CA
Operations:
•San Diego, CA
(x2)
•Tijuana, MX
Operations:
•Louisville, KY (x2)
•City of Industry, CA
•8 DC’s
•Wilkes Barre, PA (x2)
•Fostoria, OH
•Rancho Cucamonga, CA
•Douglas, GA
•Toronto, Canada
•Cuhatemoc, MX
•Jiangmen, China
• 7 DC’s
•Crystal Lake, IL
•Rockford, IL
•Payson, UT
•Jiangmen, China
Operations:
•Sedalia, MO
•Pochahontas,
AR
•Muskogee, OK
•Nogales, MX
•3 DC’s
•Butler, IN (x2)
•Waterloo, IN
•Roland, OK
•Fredericksburg,
VA
•Matamoros, MX
•Edgerton, OH
•Bowling Green,
OH
•Houston, TX
•Ft. Wayne, IN
•Reno, NV
•Las Vegas, NV
Plant Summary:
• 40 Plants responsibilities
• 9 New Facilities (4 DC’s)
• 4 Relocated
• 4 Acquired plants
• 5 Mexican operations
• 3 Chinese operations
• 41 Stand alone DC’s
8 years 9 years4 years 5.5 years
LMSConsulting
1.5 years
Consulting
Operations:
•6 Companies
•12+ plants/DC’s
Hercules Tire
3.5 years
Sr. VP Ops-
$650mil
Operations:
•4 Divisions
Locations:
•15 US
• 6 Canada
• 2 International
Lakeside/
IPD
President
$30mil+
Operations:
•President of 2
companies,
COO of a 3rd
•Paragould, AR
• Sourcing/
Distribution/
Logistics
Locations:
• 2 DC’s
4+ years
Guiding Principals /Belief System
5
Sales & Marketing Customer Focus
• Ensure that you focus on what your Customer wants/needs
• Organize your teams to Service the Customer
• Drive for Stellar Quality, Delivery and Cost performance to the Customer
• Get face to face with your Customers
• Set up Customer driven Metrics
• Establish strong Marketing tools for your Sales team
6
New Product
Sales
Cost Reductions
It takes ~ 2x the new products Sales to equal the same benefit as $1 in CR’s
Balance between New Products & Cost Savings
The Goal is to keep these balanced. As $ are saved on the bottom line this allows investmentin the top line which keeps us growing and provides more opportunities for everyone.
•Sales growth•Happy customers•Innovation•Long term security•Winning!
•Profitability•Return on Sales•Investment opportunities•Growth•Winning!
General Management Principles
1. Drive Sales & Marketing to Grow, invest and assure success
2. Drive Operational Excellence in order to sponsor added growth.
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• Evaluate where you are
• Muscle-build the Organization
• Measure everything
• Utilize Lean techniques
• Establish strong Material Cost improvements
• Develop a quest for Learning
• Drive it continuously into the organization
• Harvest the success
The Overall Operational Blue Print
8
• Have burning reason for change, begin with a Charter to be More Competitive
• Develop a Supply Chain Strategy that includes Lean
• Train Management staff & Salaried staff on Lean
• Hire Consultants to help in Training & Implementation
• Develop Lean Champions reporting to Plant Mgr’s, establish Corporate Lean office & KPO’s in each Plant
• Have a plan- use the Value stream map as the guide to for the Plan
• Engage & Train the Workforce
• Use Kaizen breakthrough methodology- Act, just do it!
• Develop Flow Lines/ Cells and Reduce Movement
• Change many areas of the Plants & Supply Chain
• It is a journey, no end, need to develop a continuous improvement culture
Expect a 3-Year Improvement Plan,
Then Start Again...
The Blue Print for Lean Excellence
9
Business
Operations
Lean
Materials
Cost/ Levels
SC/Logistics
Footprint
Procurement Process-10 point plan
1. Strong leadership
2. Integrated teamwork/ cooperation
3. Trained team
4. Analyze spend Data and act upon it
5. Commodity strategies defined
6. Key indicators developed & utilized
7. Commodity basket tracking
8. 2- 4x annual commodity reviews
9. Use holistic procurement cost models
10. Set up no price increase pricing committee
10
Have a burning reason why
Begin with a strategy
Top-Down Involvement (Support)
Leadership (Ownership)
Must Have True Champions
Be Prepared for Cultural Backlash
Education/Training
Do It! Do Something!
Expect a 3-Year Improvement Plan,
Then Start Again...
Lean- Lessons Learned
Lakeside/IPD-Results
2013-2017
12
Lakeside/IPD Deliverables
• Established Operational disciplines, created KPI’s for Operations/Sales
• Improved Quality, PPM from 20,000 to less than 865 PPM
• Re-developed the Product Offering to provide a solid product that could be sold with confidence
• Increased Product offerings with new Manufacturing/Supplier base
• Strengthened the staff to handle growth and performance
• Reduced cycle time from Order to implementation by 40%
• Revitalized the Sales effort and rebuilt the Sales team
• Established Marketing tools
• Brochures, Hand-outs, Presentations, Booth materials
• Trade Show attendance, Yr1-0, Yr2-2, Yr3-4, Yr4-6
• Became much closer to our Customers and received manny referrals and broadened the base
• Added 12 new Customers in year 1-2, year three we added 15 new Customers
• Achieved Sales results
• Year1 -12%
• Year2 +10%
• Year3 +7%
• Year4 +12%
• Added a new Business, from zero dollars to $6mil in 3yrs, plan for $7.5mil in yr4
• Increased Profit, after challenges in Yr1, by 40%+
• Drove the Business to new heights of Professionalism, Planned Growth and sustained Profitability
Hercules Tire-Results
2009-2013
14
Hercules Tire- Deliverables
• Implemented an Operational Excellence strategy company-wide
• Recruited and developed Operations Teams to drive key improvement initiatives while consolidating Operational groups from 17 to 4
• Established a Freight and Logistics team to right-size capacity, revamp trucking fleet, and improve steamship direct logistics, resulting in over $5mil in annual savings
• Consolidated eight purchasing and inventory control teams to two, reducing costs by $500k
• Reduced frequency & severity of reportable accidents to drive >75% overall improvement in Safety
• Achieved 10% reduction in operating costs, totaling $4mil in annualized Operations efficiencies, to help drive improve total company Sales increases of 50% and doubled EBITDA in 3+ years
• Created a North China Mixing Warehouse, launched customer-direct shipments, driving 60%improvement in customer service, >50% of total customer volume and drove costs/inventory down
• Developed an Operational Excellence Lean Sigma CFD (Customer Focused Distribution) team that delivered significant process improvement in all facets of the Business
• Held 10 CFD events yr 1, trained 2 Champions
• Held 11 CFD events yr 2, trained 7 Champions
• Held 13 CFD events yr 3, trained 9 Champions
• Planning 19 CFD events yr 4, with 12 Champions
• Set the Company up for Higher Growth with a Simplified the Supply chain (See graphic)
Supported 50% Sales Growth and doubled EBITDA in 3+ years
15
AS-US DC
AS-US DC
AS-US DC
AS-US DC
Tech whse
CF
CF
CF
CF
CF
ComptonTDW
TDW
TDW
TDW
TDW
TDW
TDW
TDW
TDW
TDW
ChicagoTDW
Ohio HD Warehouse
Can CanInt’l Can
TDW
Can
US-F
ASF
ASF
ASF
CF
CF
Starting point
2009
US-F
US-F
15
ASF
16
AS-US DC
AS-US DC
AS-US DC
AS-US DC
China Mixing Whse
CF
CF
CF
CF
ComptonTDW
TDW
TDW
TDW
TDW
TDW
TDW
TDW
TDW
TDW
ChicagoTDW
Can CanInt’l &
Can
Can Can
US-F
ASF
ASF
ASF
CF
CF
Improved &
Expanded
2013
US-F
US-F
ASF
TDW
Ohio HD/TDW
Warehouse
TDW
CanCan
17
Financial Results
Fortune Brands-Results
2002-2008
19
19
Business
Operations
Lean
Supply Chain
Footprint
Materials
Cost/Levels
Our Approach has been to review the entire Value Chain
At Fortune Brands we saved
over $75mil, 3.2% of sales or
4.6% of COGS in 5+ years
The Approach was to review the entire Value
chain- develop a plan and execute changes
20
Business Overview
• Manufacture- Entry & Patio
door Systems
• 2006 Sales: $560M+
• Employees: 2,700+
• Sites/ Plants: 14
Manufacturing Overview
• 100,000+ End Items
• 10,000+ Components
• Core Operations:–Glass manufacture
–Door slab mfg
–Pre- Finishing
–Pre- Hanging
Therma-Tru Company Profile (Subsidiary of Fortune Brands)
Entry Door Systems Patio Door Systems
21
14
9
87
0
2
4
6
8
10
12
14
16
2004 2005 2006 2007
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Avg LT CSI %
Lead- time & Customer Service
Improving Service while decreasing Customer order Lead- times
22
Butler
BG
Mexico
Locations:
1. Butler Molding
2. Butler Door
3. Roland Door
4. Virginia Door
5. Bowling Green
6. Edgerton
7. Waterloo
8. Wales 1
9. Wales 2
10. HQ1- Maumee
11. HQ2- Maumee
12. Matamoras
13. North Carolina
14. Phoenix
15. Houston Ok1
16. Houston Ok 2
17. Reno
18. Ft. Wayne Roland
Virginia
ButlerWaterloo
EdgertonUK
UK
HQ HQ
Phoenix
NC
Supply Chain Footprint- 2005
Very Complex
Inv
Whse
Inv
Whse
Inv
Whse
Inv
Whse
Inv
Whse
Houston
Reno
FT Wayne
China ComponentsInv
Whse
Inv
Whse
Inv
Whse
Inv
Whse
Inv
Whse
Inv
Whse
Houston
16 - mfg
11- warehouses
23
TLI
TLIButler
Mexico
Locations:
1. Butler Door
2. Roland Door
3. Virginia Door
4. Edgerton
5. Maumee HQ
6. Matamoras
Roland
Virginia
Edgerton
HQ
Current Supply Chain Footprint- 2008
China
Components
Progress
4 - mfg (-75%)
0 - whses (-100%)
24
Therma Tru Manufacturing/Supply Chain Improvement
2004 2007 Delta
Service (CSI) 71% 92% +30%
Lead- time 14 8 -43%
Safety (TRI) 5.9 5.59 -5%
COQ 7% 5.9% -16%
Inv Turns 6 8.1 +35%
Average DICC 70 50 -29%
Facilities 14 4 -71%
Square footage 2.4mil 1.4mil -58%
Associates 2,330 1,400 -40%
Sales $ p/ Assoc $202 p/ assoc $286 p/ assoc +42%
Global sourcing (%MTL) 1.5% 3.5% +133%
Cost out ------------- $35mil ------------
25
Business Overview
• Manufacture- Tool Storage,
Workbenches, Garage Storage
• 2000 Sales: $300M
• Employees: 2,300
• Plants: 4
Manufacturing Overview
• 1,500 End Items
• 10,000+ Components
• Core Operations:–Fabrication
–Welding
–Finishing
–Assembly
Garage Storage & WB’s Limited Editions &
Specialty programs
Tool Storage
Waterloo Industries Company Profile(Subsidiary of Fortune Brands)
26
Waterloo Industries Manufacturing/Supply Chain Improvement
2002 2004 Delta
Service (CSI) 90% 95% +5%
Lead- time 21 7 -66%
Safety (TRI) 7.0 5.0 -29%
COQ 2.9% 2.7% -7%
Inv Turns 6.1 7.1 +16.4%
Average DICC 139 82 -41%
Facilities 4 2 -50%
Square footage 1.3mil .6mil -54%
Associates 1,500 1,100 -27%
COG $ p/ Assoc $413 p/ assoc $500 p/ assoc +21%
Global sourcing (%MTL) 1.0% 2.5% +150%
Cost out ------------- $40mil ------------
Results at Emerson (Electric)& Deltec (Subsidiary of Fiskars)
Over a 20+ year period
Supply Chain
Footprint
28
Business Overview
• Manufacture jobsite, truck and
van equipment
• 2000 Sales: $150M
• Employees: 900
• Plants: 3
• EMR Acquisition: March, 2000
Manufacturing Overview
• 454 end items
• 9,650 Components
• Core Operations:–Fabrication
–Welding
–Finishing
–Assembly
Jobsite Storage Truck Storage Van Storage
Knaack Manufacturing- (Division of Emerson)
29
Yr-1 Yr-3 Delta
Sales - - -20%
Hourly Headcount 649 405 -38%
Mfg Salaried 41 35 -15%
Inventory $12.2 $7.0 -45%
Inventory Turns 7.24 8.35 +15%
Days in Cash Cycle 63 35 -44%
Working Capital/Sales 25% 10% -60%
OP-$ +30%
In spite of tough economic times, results strengthened
the company and prepared it for future growth.
Knaack (Emerson Co.) Results
Won the Business Leaders Award in 2002
30
Paradigms were changed, assembly equipment improved,
TPM was embraced, organization was strengthened.
Challenge: Poor delivery, organizational strength, material flow and equipment uptime
Old line union company was able to change to a leaner company very rapidly.
Inventory Turns Increased 22%
– From 4.5 Turns to 5.5 Turns
OI Margins Grew 4 Points
– From 14.8% to 18.9%
On-Time Delivery
Educational Development &On-Time Delivery
60%
45%
70%
81%
90%
Yr1 Yr2 Yr3 Yr3 Yr4
Louisville Ladder- Emerson
31
Mexican Maquiladora and U.S. plant were able to operate effectively
as a team to serve the customer and reduce costs to enable high growth.
Challenge: Establishing a base for high growth with domestic & low cost facilities
Very adaptable staff needing leadership, direction and support and Lean techniques
Improved Service in High Growth
– Sales increased 35% per yr.
Inventory Turns Doubled
– From 2.4 turns to 4.8 turns
Margins Exploded
– From -1% to 15%+
Cost of Quality
Educational Development &Cost of Quality
5.1%4.4%
2.6% 2.5% 2.3%
2.9%
2.8%
2.8%
1.5%1.2%
1990 1991 1992 1993 1994
Deltec- subsidiary of Fiskars (Oldest Stock Co. in the world)
32
The desire for education and willingness to change helped us to
improve turns, productivity from 240 to 140 employees while
sales increased from $22mill to $65mill, OP from -0- to 15%+
Challenge: The first acquisition for a young company, profitability was elusive
Motivating the team to accept change and become profitable. They had lost $ for 9 of 10 years, used Lean techniques
18 of 22 supervisors & managers pursued higher levels of learning
– APICS Certification/ Training
– Bachelors Degrees
– Masters Degrees
– Technical Training (ASQC, ME/ IE.)
Liebert- Emerson
Inventory Turns
Educational Development &Inventory Turn Improvement
1.7
3.5
5.5
7.0
Yr1 Yr2 Yr3 Yr4