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General Accuride QLMS Overview

Accuride Utilizes Its Vision & Values

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Our Vision: Accuride will be the premier supplier of wheel-end system solutions to the global commercial vehicle industry

“GROW” (2015 – 2020) Profitable Global Growth

“FIX” (2011-2014) Significant Cultural, Operational

& Financial Improvements

Our Values: • Ethical & Respectful • Customer Centric • Technology & Quality Leaders • Cost Competitive • Safe, Progressive & Inclusive • Environmentally Conscious • Fiscally Conservative

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Accuride Quality/Lean Management System (QLMS)

• All Accuride sites align their QLMS strategies with corporate strategy • Extensive Visual Operating

Systems (VOS) are utilized to effect Standard Work (StdW)

• Process and Transactional Value Stream Maps (VSMs) are executed corporate-wide

• VSMs extend to external partners: Customers, Supply

• 3 sites win AME Awards: • 2015: Rockford, IL & Erie, PA • 2014: Henderson, KY

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Accuride Councils Leverages Strategic Planning to Execute to Plan

QLMS Quality/Lean Management System AQC Accuride Quality Council ALC Accuride Lean Council

Accuride’s Lean House

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Accuride Lean Path Model

Site X Site X Site X Site X Site X Site X

External Partners Accurate and On-Time Delivery of VOC Data and Supplied Materials

Operations (Product/Things) Efficient movement of correct products External Partners

Accurate and On-Time Delivery to Customer Demand

Transactional (Data/Information) Efficient movement of correct information (across all functional teams such as SCM, Sales, HR, Eng, Maint, QA, Legal, etc)

1. Lean “Manufacturing”. Focus on operations. Effective, Efficient flow of Product 2. Evolve into Transactional systems: Effective, Efficient flow of Data/Information (Transactional) 3. Align Key Value Streams across the Business Enterprise: Both Product & Transactional 4. Incorporate Partners: Customers, Supply Chain, Contract Services, etc.: Largely Transactional

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Maturation of Integrated Lean Management Systems

Quality & Lean Systems Correlate to Accuride’s Fix and Grow strategies

QLMS Strategic Alignment

2nd Level Tactics

To achieve the initiatives

YEAR Strategic Priorities

Fix & Grow Strategy by Completing the Job

Top Level

Initiatives KPIs

to Improve

Tactics are Executed across the Initiatives

Key Process Indicators (KPIs) Monitor Results using both Leading and Lagging Indicators

Aligned Initiatives Meet the Strategies

“Even if you’re on the right track, you’ll still get run over if you just sit there” Will Rogers

Several Functions are managed via an X-Matrix. Aka Hoshin Kanri

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QLMS Tactics are Tied to Accuride Strategy

QMS: It Must Be Right Before It Can Go

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Accuride’s QLMS leverages a three-point strategy: 1. Correct issues that are causing losses whether they be

product or process based (Lean Six Sigma (LSS), Greenbelts, Blackbelts, etc)

2. Design/Develop new products and processes so that issues are not “released” with issues that need later mitigation (Design for Six Sigma (DFSS), etc)

3. Train personnel effectively in both sets of skills: Corrective/Responsive actions and Preventive, Risk-Based Thinking (RBT) design

Accuride Status: • Continual YOY Skills Increase for QLMS Council

members. They must learn & manage the QLMS sciences to both manage down existing issues and install systems that prevent new issues

• Continual YOY COPE Decrease. COPE includes key “margin eroders” that are both product and process based. It can include losses such as Scrap, Rework, Premium Freight, E&O, Shrink, Lost Capacity, etc.

Record/Benchmark Performance In All Categories

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ACW Lean Results: Varied Processes

• Average Productivity increase of 60% across global business from baselines • Average CPU decrease of 27% for manufactured goods from baseline • Transactional process focus: Extreme LT reduction, Strong Ops impact • Batch process focus: Generally lowest LT reduction as a process type

“Time is Money” …for everyone in the supply chain. A Reduction in Lead Time (LT) results in an increase in Productivity and a Reduction in Cost/Unit (CPU). While the amount of LT reduction may seem to be dependent on process type, improvements in productivity and CPU are impactful:

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Lean Results Rely on Standard Work

Accuride teams evaluate Standard Work (StdW) at all locations with respect to: • Operator Balance: Direct labor that may or may not be tied to equipment • Machine Balance: Specifically tied to work performed on automated equipment • Indirect Labor: Material handling, maintenance, tooling, finance, engineering, etc

Almost all Operator and Machine balance roles have been evaluated across Accuride at least 2x

~60% of all IDL positions have been reviewed companywide

In 2015, 1.5% of workforce was redeployed via a blend of filling into growth positions, replacing attrition, and position transition

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StdW Process is Applied to Operator, Machine and IDL Processes

ACW sites manage over 20 Visual Operating Systems (VOS). These help to support site-based, inter-company and external partner performance

We can leverage these performance advantages with our customers… it’s not just about product, it’s also about process. A pull program with a key OE triggered a 50% reduction of inventory at their location. Lead times were reduced by 2.5 – 4.7 days on key SKUs. They have credited this program with $90K in cost reduction and have grown the program to include other ACW SKUs and sites

Lean Systems Enable Value

Leverage ACW QLMS Teams to Provide Value…Not just Sell Parts

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Leading Indicators Manage the Outcomes

OTD

LT

PPM

%CO

PE

TS/ISO

QM

S

What the Customer Sees

Leading: OEE Up YOY. Operational Equipment Effectiveness

Leading: %Pull to Plan >95% For All key Value Streams

Leading: 8D TTC Up YOY. Time To Close an External Concern

Leading: %KPIV @ 1.33 Cpk Up YOY. Key Process Indicator Variables. Specialized commercialization process: AccuLaunch

Leading: MTBF Up YOY. Mean Time Between Failure

Leading: QMS Bench Strength Up YOY. Quality/Lean Management System Skills

QMS/Lean 2015 Process Results

CRD

Lagging Indicators: Used Externally

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Focus on the Leading Indicators; The Lagging will Take Care of Themselves

CRD Customer Request Date

The Journey Never Ends!

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1. Your Associates Know Best What Can Be Improved Chinese proverb…if you know and do not do, you do not know a) Personnel that do the job are the subject matter experts … listen well b) Go to the gemba…where the work is done … watch well c) Execute the suggested improvements … do it well

2. Your Lean Transformation Should Include: 1. Operational Flow…The efficient movement of right things at the desired time 2. Transactional Flow… The efficient movement of right data at the desired time 3. Transactional and Operational Flow across the Enterprise…Treat your sister sites and/or

departments like the customers they are 4. Transactional and Operational Flow outside of the Enterprise…Customers, Suppliers,

Outside Service Providers. An organization cannot get to this level if the above 3 are not working well

3. World-Class Processes Can ALWAYS be Improved

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Accuride’s lean journey is continuous – it is never finished

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