1. © 2013 DST Systems, Inc. All rights reserved. The California Adventure

2. © 2013 DST Systems, Inc. All rights reserved.  Before Lean  Pilot Program  Some of our improvements  What we have gained 2 Agenda

3. © 2013 DST Systems, Inc. All rights reserved.  No single point of scheduling  Material was precision picked by work unit and delivered to machines, operators would frequently run out of materials  Postal supplies were staged at several areas around the plant and operators would perform a necessary non value added task by leaving their machine to get their own postal supplies  There was not a effective method for delivering Printed work to the inserters  Packaging Large statements was three step process and not continuous flow  Consumables on the floor were not readily available to the operator in fact some had to be ordered at time of need 3 Before Lean

4. © 2013 DST Systems, Inc. All rights reserved.  Put together a core team of material and operations experts  Core team attended Lean Courses  Used one of our largest customers with daily cutoffs  Did a “Paper Kaizen” to map out the current and future state  Built a Plan for Every Part  Trained management and operators on the new process  Observed and reinforced the process 24/7 for 30 days  Made some mid course corrections (Old Habits were hard to break)  Results - Operator efficiency went up - Material shortages virtually eliminated  Results confirmed lean was the way to go 4 Pilot Program

5. © 2013 DST Systems, Inc. All rights reserved. 5 Production Control

6. © 2013 DST Systems, Inc. All rights reserved. 6 Material at the operators finger tips Easy material delivery

7. © 2013 DST Systems, Inc. All rights reserved. 7 Kanbans Throughout the factory Parts Supermarket

8. © 2013 DST Systems, Inc. All rights reserved. 8 Large statements packaged by continuous flow Material at operators fingers tips

9. © 2013 DST Systems, Inc. All rights reserved. 9 Postal Supplies Delivered to Machine Supplies for Job delivered to machine

10. © 2013 DST Systems, Inc. All rights reserved.  High speed MPS machines went from 40+% efficiency to 55+%  Materials management handled a increase of 35% in volume, took on additional tasks and still reduced staff by almost 45%  Special Handling PPLH went up 30%  Operator frustration due to running out of materials eliminated.  The pull delivery system allowed us to remove several non-value added steps from the process and reassign some other activities to keep the operators at their machines.  The pull delivery system also eliminated virtually all downtime previously associated with the inadequate supply of materials at the machines, while dramatically reducing the amount of work-in-process inventory on the floor.  52 percent gain in packages per hour, 62 percent increase in statements per hour, and a 71 percent increase in machine run time. 10 What was gained in California