1. Supply Chain Professionals Driving Complex Change ®

2. ASIL, Inc. Proprietary Information2 Winds Of Change Reorganization Audit Findings New Processes New Product Release Attrition Acquisition Merger Downsizing Management Change System Implementation Cost Reductions Outsourcing New Support Structure There are many reasons why change occurs in the business world.

3. ASIL, Inc. Proprietary Information3 Change Must Be Transparent To Customers Reorganization Merger Downsizing System Implementation Outsourcing New Product Release Attrition Cost Reductions New Support Structure Audit FindingsManagement Change Customer A Faster TAT Higher Quality Increased Services Lower Costs Customer C Customer B Customers should only see the benefits of change, not any turmoil associated with change. Customer Satisfaction and future revenue opportunities depend on smooth transitions during major change initiatives.

4. ASIL, Inc. Proprietary Information4 Challenges of Change False Starts Inability to Implement Change Missed Expectations Frustration Missed Opportunity Slow Change Resentment Anxiety Confusion Chaos Finger Pointing

5. ASIL, Inc. Proprietary Information5 The Consultant Factor Call in a Consultant – The Pros Brings knowledge, process and tools with them Instantly adds manpower where needed Can scale as needed to address your specific needs Call in a Consultant – The Cons $$$ - Expensive Expensive Expensive Usually requires time for your team to bring the consultants up to speed Gained knowledge and skills leave when the consultant leaves

6. ASIL, Inc. Proprietary Information6 Its Not Magic Successful change requires: - Focus - Clarity - Participation - Commitment - Execution

7. ASIL, Inc. Proprietary Information7 Life Cycle of Change VisionMissionStrategies To support the Mission to achieve The vision Goals Customer Sat. Cost Performance Delivery (on time) Quality Asset Performance Measures Key Performance Indicators Defining the critical few Score Carding (For People/Process/Provider) Integrated goals and measures Weighted distribution Confidence limits Dashboard Oriented Trended Performance Corrective Action Assessments Planning Budgets Auto Alerts (red) CAR Database Closed Loop Process Scorecard Interact tm Trended Performance Dashboard Oriented Reporting Presentation Frequency Exception Based Dashboard Oriented Trended Performance

8. ASIL, Inc. Proprietary Information8 Driving Complex Change ® tm

9. ASIL, Inc. Proprietary Information9 Driving Complex Change ® Direction Ability Incentive Resources Structure Action Question 1 Question 2 Question 3 Question 4 Question 5 Conditions Observations Actions Absolutely Somewhat Not Yet Not Sure Not Required Recommendations ElementsQuestionsO R A Methodology Overview

10. ASIL, Inc. Proprietary Information10 Elements Aligned Potential for Effective Change + + + + + ResourcesStructureActionIncentiveAbilityDirection

11. ASIL, Inc. Proprietary Information11 Direction 1)Do you have an agreed upon Vision and strategies defined to support change? 2)Do you have Executive Stakeholder alignment and support? 3)Do your strategies map to your Customer Value Proposition? 4)Do you have a cross-functional team to lead this effort? 5)Will this decision increase shareholder value?

12. ASIL, Inc. Proprietary Information12 Direction Chaos and Confusion Direction

13. ASIL, Inc. Proprietary Information13 Ability 1)Do you have a process to understand and identify your core competencies? 2)Do your core competencies support your Customer Value Proposition? 3)Are your non-core competent areas well defined and measured for results? 4)Do your core competencies tie to your capital investment strategies? 5)Do you have a change plan for your non core competency areas?

14. ASIL, Inc. Proprietary Information14 Ability Anxiety and Resentment Ability

15. ASIL, Inc. Proprietary Information15 Incentive 1)Have you defined the goals and objectives for this effort? 2)Are these goals and objective measurable and achievable? 3)Do you have an internal reward system in place to support desired outcomes? 4)Do you have a predictable and sustainable measurement and reporting process? 5)Do you have an external reward system in place to support desired outcomes?

16. ASIL, Inc. Proprietary Information16 Incentive Slow Change and Missed Opportunity Incentive

17. ASIL, Inc. Proprietary Information17 Resources 1)Have you established a plan detailing all required resources? (Headcount, Capital, etc.) 2)Has your resource plan been approved by the Executive Stakeholders and is it being funded in the current budget? 3)Do you have the tools and skills to manage the resources for this effort? 4)Do you have a mechanism in place for communication and status reporting activities? 5)Are the resources available for the timeframe that you require?

18. ASIL, Inc. Proprietary Information18 Resources Frustration and Missed Expectations Resources

19. ASIL, Inc. Proprietary Information19 Structure 1)Do you have a documented Quality Management System in place for all key processes and procedures? 2)Do you have a Service Level Agreement (SLA) with your internal service providers? (ex. IT) 3)Do you have a thorough understanding of the processes that you are considering for change? 4)Is today’s process measured, goaled and rewarded based on performance? 5)Do you have a documented information flow for systems capture?

20. ASIL, Inc. Proprietary Information20 Structure No Ability to Change Structure

21. ASIL, Inc. Proprietary Information21 Action 1)Is your project approved, funded, and resourced? 2)Do you have a communication strategy to manage stakeholder expectations? 3)Do you have a process to manage shortfalls, issues, and escalations? 4)Do you have the program management skills & resources to deliver this effort? 5)Do you thoroughly understand the enabler processes required to obtain and utilize the project resources? (Capital Equipment, H/C, IT development, funding, etc.)

22. ASIL, Inc. Proprietary Information22 Action False Starts and Finger Pointing Action

23. ASIL, Inc. Proprietary Information23 Driving Complex Change ® Potential for Effective Change Chaos and Confusion Anxiety and Resentment Gradual Change and Missed Opportunity Frustration and Missed Expectations No Ability to Change False Starts and Finger Pointing Direction = + + + + + = + + + = + + + + = + + + + = + + + + = + + + + = + + + + + + Ability + + + + + Incentive Resources Structure Action

24. ASIL, Inc. Proprietary Information24 Direction Question Do you have Executive Stakeholder alignment and support? Absolutely Some What Not Yet Not Sure Not Required

25. ASIL, Inc. Proprietary Information25 Direction Question Do you have Executive Stakeholder alignment and support? Observations: Confirmation that you are on track with this item Definition of what alignment and support means - Defined and agreed upon Vision, Strategies, Plan, and Budget - Clear communication and reporting channels - Understanding measurement for success Recommendations: Update Executive Stakeholders on progress versus plan, goals, etc Monitor sign off process Track costs against planned spend Validate communication plan Absolutely

26. ASIL, Inc. Proprietary Information26 Direction Question Actions:

27. ASIL, Inc. Proprietary Information27 Direction Question Do you have Executive Stakeholder alignment and support? Observations: Alert that you may have a business exposure related to this item Description of why you may have a business exposure Definition of what alignment and support means Recommendations: Meet with Executive Stakeholders to gain perspective Assess current state and determine where gaps exist Resolve gaps and drive for Exec Stakeholder alignment Keep Exec Stakeholder updated Closely follow signoff process Track costs against planned spend Validate communication plan Not Sure

28. Actions:

29. Driving Complex Change ® Company Name: User Name: Project Name: Date Report Ran: tm

30. ASIL, Inc. Proprietary Information30 Summary  Change is ever present  Effective change management is not magic  Six key elements must be assessed  Observations, Recommendations, Actions  Self Assessment, knowledge is reusable  Driving Complex Change® measures change readiness

31. ASIL, Inc. Proprietary Information31 Questions and Wrap Up ASIL, Inc. 2901 Tasman Drive, Suite 117 Santa Clara, CA 95054 (408) 980-9904 Michael Singleton VP, Operations, msingleton@asil-inc.com Pete Pazmany CEO, ppazmany@asil-inc.com