DMAIC Project Update Team Charter Project Scope Problem

DMAIC Project Update Team Charter Project Scope Problem Statement Warranty returns on the “Cedar Essentials” product line are at 2. 6% of sales volume and increasing. Opportunities • A 50% reduction in the Cedar Essentials warranty rate equates a $247 K annual savings and a 2% increase in annual sales Overall Metric Total Warranty Rate = (Returned Qty / Shipped QTY) x 100 Project Metric Cedar Essentials Warranty Rate (same metric as above, but for Cedar Essentials line) Project Status • Historical and current warranty rate confirmed • Initial feedback gathered from sales team on top problems • Analysis of product returns scheduled for next week – meeting at returns center with engineering team • Pareto chart and root cause analysis will follow product teardown session Baseline Performance = 2. 6% Goal Performance = 1. 4% Actions / Open Issues Action Owner Timing Status Confirm warranty numbers JL Obtain sales team feedback RG Schedule product teardown JL Conduct teardown Team Present pareto & root cause summary Team 4 -Mar 16 -Mar 25 -Mar Complete On Track 15 -Apr On Track

DMAIC Project Update Baseline Performance Outdoor Essentials Warranty Rate 5, 0% 84% of this spike due to AD chairs product made in week 48 of 2010 – need to investigate further 4, 0% 3, 0% 2, 0% Project Goal = 1. 4% Warranty Return Rate 1, 0% 0, 0% 2010 Full Year Jan '11 Feb '11 Mar '11 Pareto by Product Family an m tto O ha i C al l. A D ct ire rs LS Sh i p an m D C tto O ha i rs irs Sm al l. A D N D C n ha Tb l l Tb 6' D Fl d Si de ha irs 0, 00% D 1, 00% Sm 2, 00% H 3, 00% Ac 4, 00% e 8, 00% 7, 00% 6, 00% 5, 00% 4, 00% 3, 00% 2, 00% 1, 00% 0, 00% 5, 00% C May '11 Pareto by Sales Location 6, 00% AD Apr '11

DMAIC Project Update Sub-Pareto Charts Analyze Phase – Sub-Pareto Charts for AD Chair Defects and Direct-Ship AD Chair Teardown Summary 35% 30% 25% 20% 15% 10% 5% 0% 70, 00% 60, 00% 50, 00% er D to m us C 30, 00% Al l. O th er As ag e d D ur in g ou nd t. F am D o N si ng H ef ec ar am D M is g pi n dw ag e at s Sl ck Ba Sh ip ed ar e m 40, 00% C ra ck Direct-Ship Returns Analysis 20, 00% 10, 00% Shipping Missing Damage Hardware Wrong Item All Other

DMAIC Project Update START OR END POINT PROCESS STEP DECISION POINT AND RESPONSE PATH

DMAIC Project Update Start RI Work Instructions Process Flow – Model AD Chair Manufacturing Inspect wood per RI plan 760 -11 A Verify parts & counts via template 2910 Drilling program DFA-3 Fixture 1247 -14 Receive Wood & Hardware CNC Cutting & Edge Routing Pre. Drilling Assemble Leg Supports Hardware on noinspect status ASM Work Instructions Fixture 1248 -14 Fixture 1249 -14 Template C 87 -0 Assemble Seat Back Inspect Alignment Verify parts & counts via template 3000 Add Hardware Package & Ship Stop