1. Solutions for the concrete industry since 1985 1 The Business Case for Truly Lean Manufacturing Presented by J. McCoy Equipment Ltd.

2. Solutions for the concrete industry since 1985 2 J. McCoy Equipment Ltd.  Manufacturer of mixing systems for the concrete industry world-wide  Founded in 1985, now experiencing rapid growth, 70% of product is exported  President is John McCoy with 30 years experience in concrete manufacturing

3. Solutions for the concrete industry since 1985 3 From Components and Machines … Proprietary Concrete Construction Shapes Mixing MachinesMixing Stations

4. Solutions for the concrete industry since 1985 4 Large scale integrated mixing / batching installation Small-scale batching system … to Batching Systems …

5. Solutions for the concrete industry since 1985 5 Digital prototype of a complete plant Actual installation Add-on batch plant to an existing facility … to Complete Facilities

6. Solutions for the concrete industry since 1985 6 Some Background  The company’s founder managed a large concrete manufacturing plant for the first 20 years of his career  Daily issues included  Personnel conflicts  Bottlenecks and delays  Machine malfunctions  Dissatisfied customers

7. Solutions for the concrete industry since 1985 7 Some Observations  The cause of every business disruption was invariably due to human error  There was constant pressure to keep the plant running at peak capacity  Economic cycles drove repeated expansion and downsizing with major upheaval for people and profits

8. Solutions for the concrete industry since 1985 8 In the Final Analysis …  To be successful over the long term, a manufacturer must  Formalize every process in the operation, both on the Shop Floor and in the Front Office  Automate routine processes wherever possible  The true value of a business rests in its knowledge assets, not its physical assets

9. Solutions for the concrete industry since 1985 9 We are a virtual manufacturer with  No production facilities  Fast response to customer inquiries and market changes  Very low fixed operating cost  Rapid growth and healthy profit margins This Experience Makes Unique

10. Solutions for the concrete industry since 1985 10 Sales Engineering Production Installation Commissioning Shipping McCoy Equip. Subcontractors Typical custom project from start to finish LEGEND VISION: Own the product knowledge and the market, subcontract the rest Purchasing Our Business Model

11. Solutions for the concrete industry since 1985 11 J. McCoy Equipment leverages ‘know-how’ to create real value for its customers and its shareholders. 1. Sales, Engineering, and Commissioning functions require knowledge assets 2. Purchasing, Production, Shipping, and Installation require physical assets Emphasis on Core Competence

12. Solutions for the concrete industry since 1985 12 Overcoming the Classic Dilemma Many manufacturers in mature industries are  Saddled with extensive physical assets  Forced to ‘feed the beast’ of production  Unable to change product focus easily or quickly. … whereas knowledge-based companies don’t have to redirect profit to sustain physical assets (and the staff who manage them)

13. Solutions for the concrete industry since 1985 13 The #1 Obstacle to Our Success? 1. Custom products must be engineered by highly- skilled people to price, procure, and manufacture 2. Documentation must be timely, accurate and understandable to enable subcontracting Sales Engineering Production Installation Commissioning Shipping Purchasing Engineering Critical Issues The typical weak link

14. Solutions for the concrete industry since 1985 14 Overcoming the Obstacle There’s a new technology called enterprise resource automation, or ERA. It automates engineering work and delivers accurate, clear technical documentation throughout an engineer-to-order manufacturing company. We investigated, then selected a system based on its functionality and the strength of the vendor’s in-house engineering talent.

15. Solutions for the concrete industry since 1985 15 This is where We Apply ‘Lean’ Working with the NeXtreme Automation people, we’re continually formalizing our product knowledge to  Capture and leverage existing ‘know-how’  Automate engineering design to drive quoting, Bill of Material generation, and drawing production  Develop new product concepts without the expense of physical prototyping

16. Solutions for the concrete industry since 1985 16 Component Example Vendor Data CAD Variables Parametric Geometry Selected Model

17. Solutions for the concrete industry since 1985 17 Assembly Layout Example Lay out complex systems and test concepts before detailed design

18. Solutions for the concrete industry since 1985 18 Design Feedback Web browser review model

19. Solutions for the concrete industry since 1985 19 Digital Prototype Subassembly Every element sized and located in 3D space

20. Solutions for the concrete industry since 1985 20 Bill of Materials Design elements detailed for calculated costing

21. Solutions for the concrete industry since 1985 21 Detailed Drawings Shop- ready prints extracted from the digital prototype

22. Solutions for the concrete industry since 1985 22 Customer Approval Models Review a custom design in a web browser to confirm important details

23. Solutions for the concrete industry since 1985 23  Precise, repeatable results for any product family programmed into the ERA system  Rapid iteration of design options during quotation and pre-production planning  Elimination of time-consuming, routine engineering work which adds no value Internal Process Improvements

24. Solutions for the concrete industry since 1985 24 Benefits to Our Customers  Agility with instant reaction to demand  Since we manage what you’re buying and who’s making it, if a subcontractor runs out of capacity, we can assign another  Our process always gets you the best price and quality

25. Solutions for the concrete industry since 1985 25 Lean Benefits for Our Business  Very high level of Customer satisfaction  The company weathers economic change easily with very low fixed operating cost  The company never loses its real value, our ‘know-how’, because it’s captured in a knowledge platform that we own

26. Solutions for the concrete industry since 1985 26 The End Result?  Confidence to …  Distribute a detailed design and purchasing package to subcontractors quickly  Know all costs before committing to a Customer  Be sure of delivering quality product on time  Opportunity to address large volumes of business with minimal investment

27. Solutions for the concrete industry since 1985 27 Long-Term Vision  Our company operates on the belief that  A program of continuous improvement in engineering processes is imperative  Investment in technology to automate knowledge processes is essential to minimize fixed costs  Capture and leverage of knowledge is the surest path to profitability and growth

28. Solutions for the concrete industry since 1985 28 1. Faster customer response than any other manufacturer of like products 2. Lower cost operation enabling lower pricing with superior quality 3. Invulnerable to departure of key employees with specialized knowledge The Competitive Advantage

29. Solutions for the concrete industry since 1985 29 Contact John McCoy, President J. McCoy Equipment Ltd. 28 Woodbridge Circle Port Perry, Ontario L9L 2A9 Tel. (905) 985-0989 Email john@jmccoyequipment.com