MES - Manufacturing Execution System Value Proposition MES - Manufacturing Execution System Value Proposition Integrated Machine Monitoring & Operations Management System Operator’s can manage the machine bed more efficiently Real-time machine visibility with OEE metrics on any Machine Dashboard for ease of viewing – reduce downtime Minimize rejects – root cause analysis Connect production floor to any ERP system on actual schedule MERLIN is communications platform of shop floor DNC software tools to manage program code Minimize Changeover Increase Productivity Embrace Lean Manufacturing Our MEMEX Value Proposition The tools we offer to help with these challenges OEE is a method of measuring productivity We provide VISABILITY we work to eliminate the Sneaker Net - DNC speeds program transfer speed and allows the operator to Pull programs , text messages to QA -Material Handling - Tool Room – maintenance Goal is to keep the operator at the machine and producing Management has the visibility to see what is happening on the shop floor all the time in real time and historically so problems can be identified and managed out for the future The goal – Increase Productivity 1

* Based on customer survey Value Proposition Production improvements in the 10% - 50% range* Financial Profit - EBITDA; 10% Operational improvement 20-60% Profit improvement Sales @ current & full capacity Breakeven ROI in < 3 months Real-time machine visibility + OEE numbers including alerts: 2 - 5% Operator Productivity increases: 1 - 10% Reduce Downtime: 3 - 8% Minimize Rejects: 2 - 4% Root Cause analysis: 2 - 4% Value stream data collection & analysis: 2 - 4% Labor productivity tracking: 3 - 6% Usage-based Preventive Maintenance: 1 - 2% Benchmark scheduling & value streaming: 2 - 6% 62% 21% To be clear we don’t try to tell you how to run your company We do tell you how your company is running. Your savings are going to be an aggregate of many small improvements and the wring out of lost time. * Based on customer survey 2

Efficiency Value Proposition Lean 6S, OEE, TEEP, TPM, Takt Time, TQM, Kaizen, Continuous Improvement All methodologies require data to support decision making Collect actual automated machine data to prove the case Real-time machine visibility with OEE metrics on any Machine Dashboard for ease of viewing – reduce downtime Connect production floor to any ERP system Shop Floor to Top Floor Increase Productivity Embrace Manufacturing Efficiency Whether subscribing to these methodologies or using your own, real, accurate data is the key, and the ability to analyze it is crucial. 3

The 6 Big Losses The improvement opportunities are always in one of the following “buckets” Breakdowns - Pro-active operator and trigger emails Setup - Modal capture, e-alerts, Downtime - Utilization and down time reasons (Pareto) Speed loss - in-cycle speed vs. product standards Small stops - Machine state monitoring and reporting Quality - Identified reject reasons captured by Merlin (One by one) Analyzing and focusing on these issues and their causes leads to……………… 4

Maximize Utilization … Find Hidden Capacity … Is there more? “Gut Feel” Improve Uptime Minimize Downtime due to unforeseen breakdown Predict when a machine will fail Online diagnostics for machine up and running faster Reduce Costs Embed Maintenance Records & Alerts Improve Profitability Analyze uptime for hidden capacity Identify Bottlenecks to improve throughput. Improve Quality Links to Quality Control On machine inspection & In-line Correction OEE (Overall Equipment Efficiency) = Availability x Performance x Quality = % Utilization x % Std Rate x % Yield Shows group or plant output as a % of maximum capacity World Class = 85% (= 95% x 95% x 95%) Find the hidden capacity – the column on the left is ideal – but the one on the right shows how the time gets eaten by the problems of the previous slide. 5

Reporting

Reporting

Reporting

Event Chart Historical and Real Time machine states 9

Real time shop floor visibility Shop Floor Designer Real time shop floor visibility 10

Data Table Screen User Definable data views Users can define any number of real time information screens created from 150 data elements. Once a screen is created it can be recalled from a table view drop down list. 11 User Definable data views Specific real-time data displayed Users merely select the data they want displayed Save the table view and its available every time the user logs on.

Web Client Access 12

Multi-Lingual Powerful Toolset allows Multi-Lingual and Customization 13

Documentation - Extensive The information required for the end user to own and manage and grow the system is included – our developers strive to make this a system that does not require someone with indepth knowledge to maintain it and make changes to anything that may evolve in the plant over time……. 14

Features Technology: Microsoft compliant Reporting – Crystal Reports Linked MS Office – email alerts Database SQL MS Studio 2010 development tools OLE for Process Control (OPC) Microsoft's OLE/COM technology Table driven Scalable & Flexible This is is not proprietary technology, and that’s why our customers love the system 15

Microsoft Dynamics AX to MERLIN MERLIN to Microsoft Dynamics AX ERP Integration Link production to any ERP, bi-synchronously Microsoft Dynamics AX to MERLIN MERLIN to Microsoft Dynamics AX Infor Visual to MERLIN Erp integration – work order to the floor, results reported back, making costing and scheduling for the next job easier based on your actual experience with each product )mention Boeing asking for cost cutting - and you know you can keep that business and be profitable because you figured out how to be more efficient making their parts – and beating out the competition because you got smarter………………) MERLIN to Infor Visual 16

Productivity Increases OEE Benefits Productivity Increases Productivity Increases Improve manufacturing productivity with real-time monitoring of production. Minimize unproductive labor with automated data collection and reporting. Improve inventory accuracy Give accurate delivery dates with visual production scheduling and job tracking. Identify problems fast, before production or quality suffers, with real-time displays. Link shop floor to any ERP - business system two-way link, to improve accuracy of information. Real-time Machine Detail lets you zero in on problems. OEE = % Performance x % Availability x % Quality 17

Productivity Increases OEE Benefits Productivity Increases Real-time monitoring of every production machine prevents problems from occurring. Eliminate manual data entry. Schedule and track job progress at individual machine level...in real-time. OEE Software is scalable and cost-effective you install only the capability you need. OEE Software is practical because it was designed by and for manufacturing users. Connect to any machine on the shop floor. Real-time display screens Data Tables as you run your business – your own KPI or OEE. 18

Productivity Increases OEE Benefits Productivity Increases Productivity Increases Determine real Job Standards to help improve your Job costing. Analyze causes for Downtime and Rejects then eliminate them. Preventive Maintenance scheduling based on real run time and cycle count data, rather than calendar. Visual, “drag and drop” production scheduling and Job tracking based on actual shop floor conditions. Machine operating history in detail with a “paperless” Strip Chart. Shift scheduling the way you run your plant. Monitor production schedule remotely or in multiple locations. Real-time Process Variable monitoring prevents problems and can control complex machines with programmed logic. Analyze operator and maintenance staff performance. 19

Productivity Increases: Customer Successes Productivity Increases: Precision machining company realized a 25% savings on whole plant Aerospace company realized 11% efficiency improvements in first 3 mo. 5% increase in productivity on 20 machines is equal to an extra machine. 32% faster using Memex products We save 3 hours per week per machining center. With 13 machining centers we save 2,000 hrs per year, representing over $200,000 per year. OEE went from 30% to now on average in the 60% range Large equipment manufacturer went from 24% to 62% OEE on machines Specialty Machining group went from 25% to 60% OEE Enterprise aerospace company saw a 25% overall improvement Fine tuning setup process went from 410 parts/week to 690, a 68% gain Furniture manufacturer 25% improvement, no overtime more production 20

PDCA – Corrective Action Project Plan 36.9% Plan 85% 2 months later These are real – before and after reports of how one of our customers went form ~%37 OEE to 85% once they acted on the data shown on the Merlin reports. 130% gain in OEE

Corrective Action Examples 1.High volume/hr programs targeted 2.Operators identify unnecessary M01s 3.Programmers removed M01s DO’s 1. Check Tool Barcode Added 2. Insert check interval set to 5 minutes 3. Email Alert System

COST OF MO1 & NOT_IN_MEMORY CHECKING INSERTS (BEFORE STATE – FEB 2013) Before: their improvements (note the M01 and not in mem) COST OF MO1 & NOT_IN_MEMORY CHECKING INSERTS (BEFORE STATE – FEB 2013) MACHINE DT CODE DT HOURS RATE/HOUR LOST $ 169 MO1 183.87 116 $21,328 187 248.48 $28,823 211 NOT IN MEM 74.64 $8,658

DT HOURS CURRENT (SEPT) Check MACHINE DT CODE DT HOURS CURRENT (SEPT) RATE/HOUR $ LOST $ ADDITIONAL $’S (FEB VS. SEPT) 169 MO1 20.51 116 $2,379 $15,981 CHECK TOOL 25.59 $2,968 187 9.81 $1,137 $22,994 40.45 $4,692 211 NOT IN MEM 35.4 $4,106 $1,673 24.82 $2,879 After – 450 down hours reduced to 220 – so far! More to go!

Real Time Snapshot of a Shift Why MO1’s – Programed optional stops; intended for operators to check the condition of the inserts. Observations Excessive amounts of M01s No set interval for how long a tool check should take OEE < 40 % ~$45,000 /month

Real Time Snapshot of a Shift Excessive M01 eliminated from program Operators scan in when performing a tool check; 5 minutes intervals allotted to check tools before an alert is sent out OEE > 85% Act PAST 4 MONTH Month Value Added ( vs. FEB) June $36,536 July $43,074 Aug $39,233 Sept $40,648