1. MWUG – September 2013

2. TS Tech Global Locations Company Background Name: TS TECH CO.,LTD. Founded: December 5, 1960 Headquarters: Saitama, Japan President: Michio Inoue Employees: approx. 15,000 Main Business: automotive seating, interior trim

3. CompanyLoc.Launch Date TS Tech (Thailand) Co., Ltd.Thailand, SaraburiMay-2003 TS Tech Americas, Inc.U.S., OhioMar-2004 TS Tech Alabama, LLCU.S., AlabamaMar-2004 TS Tech Canada Inc.Canada, OntarioMay-2004 TS Tech USA CorporationU.S., OhioAug-2004 Guangzhou TS Automotive Interior Systems Co., Ltd.China, GuangzhouFeb-2005 Guangzhou Tech Interior Manufacturing Co., Ltd.China, GuangzhouJul-2006 Trimont Mfg. Inc.Canada, OntarioApr-2007 TS Tech UK Ltd.UK, SwindonSep-2007 Wuhan TS-GSK Auto Parts Co., Ltd.China, WuhanOct-2007 TS Tech Indiana, LLC*U.S., IndianaApr-2008 Ningbo EPZ TS Trimont Automotive Interior Inc.China, NingboJul-2008 Ningbo FTZ TS Trimont Automotive Interior Inc.China, NingboJul-2008 TS Tech Trim Philippines, Inc.Philippines, Biran LagunaDec-2009 Industrias Tricon de Mexico, S.A. de C.V.*Mexico, TamaulipasMay-2012 TST NA Trim LLC*U.S., TexasFeb-2013 TS Trim IndustriesU.S., OhioFeb-2014 (plan) TS Tech Group Companies Using QAD *Sites using Freedom ErrorProof

4. QAD Footprint at TS Tech in North America Boaz, AL Nuevo Laredo, Mexico* Hidalgo, TX* Irapuato, Mexico Newmarket, ON Reynoldsburg, OH (2) Athens, OH New Castle, IN*

5. TST NA Trim Company Profile Established: March, 1986 Plant Manager: Francisco Lopez Plant Size: 17,915m 2 Products: Seat covers for Honda and Acura Nuevo Laredo Plant Hidalgo Plant Established: April, 2012 President: Hiroshi Kitamura Plant Size: 12,449m 2 Products: Laminated fabric and UL for Honda, Acura, and Mazda

6. Business Case for QAD at Hidalgo Simple process – 3 components per BOM (vs. 10-20+) – 1 step process (vs. 3 steps) – Straight line (no WIP) – No system interface (e.g. production monitoring) – No KD lot numbers Young operation – Low transaction volume – Small number of associates – Bad habits not established Small scale – 11 suppliers – 62 RM parts – 126 FG parts ItemNuevo Laredo Hidalgo No. Suppliers58 11 No. RM Parts1,095 62 No. FG Parts624 126 Need to implement quickly -- less than 6-month window

7. Background of Lamination Production What is flame lamination? – Three-layers (face, foam, backing) – Semi-continuous process High product quality expectations – Incoming quality inspection Measure net roll length Check for spots or runs – Outgoing quality inspection Measure final length of material Re-check for spots, runs, de-lamination Face Foam Backing Not to scale Differing Lengths…

8. Trailer Yard Production Area Offices Shipping & Receiving Office Receiving Inspection FG Inventory Racks Raw Material Racks 2 nd Foam Staging Area Shipping Area Main Entrance N Hidalgo Plant Layout

9. Shop Floor Operations Raw Material Racks Finished Goods Racks Production Process Foam Roll Storage

10. Problem Statement No perpetual inventory All record-keeping performed in MS Excel – Not scalable – Lack of data entry validation – Data integrity concerns Time-consuming financial closing process due to manual record-keeping Time-consuming physical inventory process Difficult to consolidate financials at corporate level

11. A Powerful Tool… Excavator Shovel (damaged fiber-optic conduit)

12. Special Considerations RM serialized by vendor – Not license plate; no guarantee of uniqueness FG labels generated by internal QA inspection system (SQL database) FG quantity varies based on inspection result – Deductions for quality defects For shipping, actual length of rolls does not necessarily match the order quantity – Order quantity must be met, but slight overshipment allowed (max. one roll per item) 24-hour aging period after inspection

13. Why Freedom? Ensure accurate inventory control through real-time scanning Efficient scanning by label serial Faster tag inventory Serialized traceability of material Ensure accuracy of business processes – Receiving: validation against ASN – Shipping: picklist control; backflush validation Integration into final quality inspection system Potential for future introduction of full traceability system History of successful inventory control at Nuevo Laredo plant

14. Implementation Timeline Task Area 20122013 AugSepOctNovDecJanFeb Project initiation Business process design Statement of work creation EP Development Semi-static data loading User training CRP and testing Go-Live support* *Freedom on-site for 2 weeks, then remote support Go-Live!!! First Physical Project completed on-schedule and within budget

15. Design of Processes Step 1: Document current process state Step 2: Identify risks and controls Step 3: Apply best practices to future process (re-engineering) Step 4: Review and obtain buy-in

16. QAD Environment QAD Version: 2011 SE, Automotive Bundle Progress Version: 10.2B OS: Linux Red Hat ver. 5.8 Freedom Version: 7.70 Server (QAD): VM Ware (remote, in Reynoldsburg) Server (Freedom): VM Ware (remote, in Reynoldsburg) Other QAD Partners at Location: – Report Writing: Cyberquery ver. 3.50 – Uploading of PO Shippers, Customer Schedules: SIG Connect ver. 4.1A – EDI: Gentran 4.0.02 Repetitive scheduling (not discrete work orders)

17. Processes Using ErrorProof Physical Inventory Receiving Location Transfer Backflush Scrap Shipping Cycle Count Count by label serial Picklist print FIFO lookup ASN receipts Transfer by label serial (license plate or reprint) Transfer by serial WIP transfer Relabeling Interface w/QA inspection system Unplanned issue Tag inventory 100% scanning

18. Freedom Application Details ErrorProof Small Site License (max. 10 users) Installed on virtual server, hosted at Ohio data center Labels print to wired and wireless printers Telnet sessions on handheld scanners (7 scanners) Desktop application for generating picklist Administrator application on Windows – Daily reports (even Production Manager) – Inventory tag printing

19. Challenges and Lessons Learned Modifications needed to in-house developed final inspection database – Duplicated serial numbers, no indexes in tables Supply base not 100% controlled by company – Difficult to convert suppliers to required label format (license plate) – Over 50% of suppliers not EDI-capable (or willing) Only 1 in 4 customers using ERP/EDI – Customer requirements must be hand-keyed Success factors: – Thorough review of current and future processes – Daily wrap-up meetings – Production management heavily involved and using reporting tools – Accumulated experience of implementing Freedom and QAD at other trim facility

20. Inventory Variances After Launch Nuevo Laredo Hidalgo 99.8% accuracy!!!

21. Thank you for your attention!