Excellence in Motion

Augusta State UniversityISC Management Class

Jim VincenzettiDirector Manufacturing Engineering,

Quality & Continuous Improvement

E-Z-GO

Excellence in Motion

Strategic Direction: Premier

E-Z-GO Mission To be the premier provider of light transportation vehicles

achieving global recognition as the benchmark for customer satisfaction and financial results

To fulfill these goals, E-Z-GO will exemplify Textron’s values

of integrity, trust, respect and the pursuit of excellence which will enable us to become the employer of choice in the industry

Textron VisionTo be the premier multi-industry company recognized for our

network of powerful brands, world-class enterprise processes and talented people

E-Z-GO Values StatementTo fulfill these goals, E-Z-GO will exemplify Textron’s values

of integrity, trust, respect and the pursuit of excellence which will enable us to become the employer of choice in the industry

Excellence in Motion

Our Family: Textron

The first E-Z-GO vehicles were powered by the same engines used to operate B-17 wind flaps Textron Inc (TXT) - $10.5 B Multi Industry Company, ~37,000

EmployeesOperating in 29 Countries

2010 Fortune 500 Rank: 220

Leading Branded Businesses, Attractive Growth Markets

Cessna

32% 27% 20% 18% 3%

Bell Helicopter Industrial

E-Z-GOGreenleeJacobsen

Kautex

Textron Systems

Textron Financial

Excellence in Motion

Our Company: E-Z-GO

Proud Recipient of the SHINGO Prize for Operational Excellence for Enterprise, 2009

• Founded in Augusta, Georgia in 1954 by brothers Billy and Beverly Dolan

• Acquired by Textron in 1960 – Oldest Textron Company

• 800+ full time employees – currently utilizing additional temps

• 650,000+ sq ft Headquarters and Manufacturing campus

• Multi-Channel Distribution Strategy• ISO 9001 and 14001 designation• Company tagline: Excellence in Motion

The first E-Z-GO vehicles were powered by the same engines used to operate B-17 wind flaps

Industry Week Top 10 Best Plants, 2009

Excellence in Motion

48% 7%12% 21% 4%4% 4%% of revenue

Brand

Business Overview

TransportTurfFleet Off-RoadCommercia

lIndustrial

Golf P&A CommercialConsumer

5

Competitors

Excellence in Motion

Strategic Summary

6

1. Build Brands

2. Grow Globally

3. Improve Golf Profitability

4. More Products Faster

5. Channel Expansion

6. Operational Excellence

Excellence in Motion

Macroeconomic Conditions

• Weakening of US $

• Unprecedented run in Commodity Markets– Lead– Plastics and Resins– Copper

• Globalization – Growth in Emerging Markets– China– India

USD vs Yen Down means weaker USD

Excellence in Motion

Why ISC Management Important

Excellence in Motion

ISC Strategic Plan Development Process

• ISC Strategic Plan supports the E-Z-GO mission and flows from the Business Environment

• The Manufacturing Strategy and Footprint flow from the Core/Context Analysis

• The Sourcing Strategy supports the Business Strategy and flows from the Manufacturing Strategy

Business Understanding

Manufacturing Strategy

Footprint Optimization

Sourcing Strategy

Execution & Control

Capture BU Strategy, Customer / Competitor

/ Market Information

Capture BU Strategy, Customer / Competitor

/ Market Information

Establish Manufacturing

Strategy

Establish Manufacturing

Strategy

Baseline Assets & Performance, Select

Recommended Footprint

Baseline Assets & Performance, Select

Recommended Footprint

Establish Sourcing Strategy

Establish Sourcing Strategy

Develop Detailed Action Plans,

Implement, & Measure Progress

Develop Detailed Action Plans,

Implement, & Measure Progress

Perform Core / Context Analysis &

Align Resources

Perform Core / Context Analysis &

Align Resources

Core/Context Analysis

Excellence in Motion

World Class Excellence in Supply Management Strategic & Enabling Processes

Core / ContextCore / Context

I

Develop Commodity Strategies

Develop Commodity Strategies

IISupply Base Design

Supply Base Design

III

Supplier Relationships

Supplier Relationships

IV

Integrate Suppliersinto the New Product Development Process

Integrate Suppliersinto the New Product Development Process

V

Integrate Suppliers into the Order Fulfillment Process

Integrate Suppliers into the Order Fulfillment Process

VI

SupplierDevelopmentand Quality

SupplierDevelopmentand Quality

VIIManage CostsStrategically acrossthe Supply Chain

Manage CostsStrategically acrossthe Supply Chain

VIII

Enabling Processes• Strategy Development• Organization Design• Policies & Procedures• Metrics• Process Automation• Talent Development• Risk Management

Critical Integrated Supply Chain Processes

Supply Management

Excellence in Motion

Delivery (Material Availability)

Quality (Supplier PPM)

Cost (YOY inflation)

# of Production Suppliers

% $$ on Contract

% $$ w/fav Pay terms

95%

2,100

6.7%

550

38%

40%

Yesterday 2006

99%

1,200

5.9%

280

85%

85%

Today 2011

Sourcing Strategy

Tomorrow 2012 & beyond

99.9%

<500

<CPI

<200

>95%

>95%

The Journey…

Phase 1 DEFINE – Supplier Rationalization Identifying the Best Suppliers in each Commodity

Phase 2 ALIGN– Establish Supplier PartnershipsNegotiating LTAs with Preferred SuppliersFocusing More and More Business into the Best Suppliers

Phase 3 IMPROVE – Help Suppliers ImproveDelivery Inventory ServiceCost Quality/Reliability

Phase 4 INTEGRATE– Integrate SuppliersE-commerceVendor Managed InventoryEarly Supplier InvolvementOn-site supplier personnel

Increased Supplier Performance

E-Z-GO Supplier

Long-Term Agreements

Electrical30%

Mech Comp & Assmbly

23%

Plastics & Rubber22%

Powertrain & Suspension

25%

Direct Material Spend by Commodity

Four Phase Strategic Sourcing ProcessThe Process…• Organize around 4 cross

functional commodity teams.

• Each team focused on a 4 phase Strategic Sourcing Process

Excellence in Motion

Sales, Inventory, Operations Monthly Process

1. Branches submit demand forecast2. Sales Mgmt reviews/changes demand3. Input Demand to Master Prod.

Schedule (MPS)4. Production reviews/smoothes MPS5. Financial Summary update6. Jr. SIOP Review Meeting7. Resolve/update issues8. Exec. SIOP Decision Meeting

ISC Prep

Supply/ DemandMeeting

ISC PrepFollow-Up

Executive SIOPMeeting

RHYTHMSIOP / Forecasting

Excellence in Motion

Supporting Functions

13

Quality

Logistics

Materials

ERP

Finance