Explanation and Examples of Corporate Policy 1 2

Explanation and Examples of Corporate Policy 1. 2 Program Management Policy

Program Management Policy q Purpose: q q Scope: q q The operating divisions of Quadion Corporation are covered by the policy including North American and international locations. Opportunity: q q The purpose of this policy is to define a Program Management system that will provide the standard framework, guidelines and procedures to complete defined Programs that are professional, timely, profitable and satisfy the customer. Program Management has been identified as an opportunity to enhance the successful deployment of value added projects and programs to support profitable growth. Reference: q 1. 10 Corporate Policy, The Quadion Project Management Process, Quadion Corporation Policy and Procedure

Program Management Policy q Responsibilities: q The Chief Executive Officer of Quadion Corporation is responsible for ensuring that this policy and procedure are followed. q Each Division Head is responsible for implementing this procedure within the division/subsidiary. q Each Engineering Staff Member is responsible for completing a specific role and other Staff Members are responsible for participation, decision-making and/or conflict resolution as required in successful execution of this procedure. q Each Program Manager, following appointment, functioning as a Project Engineer, is responsible for directing the successful completion of the program utilizing the Project Management Policy and Procedure and the Program Management Policy and Procedure. Communications on the Program progress will be made in the official database on Program Management to be established on the “R” Share Drive.

Program Management Policy q Responsibilities cont’d: q Manages all activities related to a program with focus on manufacturing and/or modification of existing product, and timely internal and external communications. q Ensures that required deliverables, products, and services are delivered on time and within cost, while meeting performance requirements in accordance with customer specifications. q May act as a point of contact for interface with customers, senior, and corporate-level management on assorted (primarily technical) issues. q Each Program Team Member, following appointment, will make the program their highest priority, is accountable to the Program Manager and other Team Members to successfully complete assigned tasks, and to provide feedback to the team on risks, issues and problems.

Program Management Policy q Definitions: q Program: A Program is an elevated status assigned to a complex project or customer of strategic importance that is assigned a team leader (Program Manager) and allocated a cross functional / cross divisional team of resources authorized and responsible for managing and completing the program in a professional, timely and profitable manner while satisfying the customer. q q q A Program is comprised of a series of projects. Program Management may be assigned to any employee within the division with the prerequisites being he/she is qualified in Project Management and possesses program specific qualifications required to complete the assignment. Project: A Project is an individual set of tasks associated with a single part, over mold or assembly of low complexity that flows within the normal day to day product launch procedures typically managed by a Project Engineer.

Program Management Policy q Characteristics of Program status: q The following factors are used to determine if Program status is warranted and therefore assigned. The criteria are assessed and a thorough business case study is analyzed prior assigning Program Management status and resources. q q q q q The strategic fit with core competencies The size and scope Strategic customers and/or market New technology requirements Profitability assessment Risk assessment Number of divisions / plants / suppliers involved Requires a cross-functional team Intangible criteria

Program Management Policy q Procedure: q The Division that owns the Program is defined as follows: q If multiple divisions are involved, the program is owned by Minnesota Rubber & Plastics North America (MR&PNA); q If there is any question on who owns the program, the CEO will determine it. q A new product or existing project is assigned Program status by the Program Review Team, made up of the CEO, VP of Sales and Marketing, and Directors of Engineering at the regularly scheduled Program Review Meetings held within MR&PNA. q The Program Review Team appoints the Program Manager and communicates this throughout the company.

Program Management Policy q Procedure cont’d: q The Program Manager places Program Management accountability at the top of his/her priority list and uses the existing organization to select a team through contacting the proposed member’s supervisor and completes the Program using the Project Management process. q The procedure to be followed on a new/revised RFQ on a designated Program is as follows: q Rubber and Plastics Engineering will have the following identical procedure if an RFQ has already been entered for the same or similar part or assembly and a Program Manager has been appointed. A new/revised RFQ can only be entered into the system after input from the Program Manager who will review it with his/her Program Team, Engineering Head and Sales Representative and/or Sales Management to determine what the best course of action is for the business.

Program Management Policy q Procedure cont’d: q A Program is concluded and the Program Manager assignment is completed in either of two cases: q q A program is abandoned and/or the customer has formally stated that Quadion will not obtain the program, or, A program has been completed because the program is in production with a financially viable process that manufacturing has implemented.

Program Management Policy q Program Examples q Customer satisfaction continues to build on value added activities that clearly differentiate Quadion as viewed by the customer. q Program Management has been identified as an opportunity to enhance the successful deployment of value added projects and programs. q Recognizing that there are numerous examples of past Programs to derive lessons learned, the following three were selected to illustrate the attributes of the launch, the opportunities for improvement and the lessons learned that were considered by the team drafting the Program Management Policy.

Program Management Policy Examples q Delta Faucet – q q q (Prior to Program Management Policy) Cam & Packing Assembly This program initiated the need for a strategy and process to support interdivisional projects = “easy to do business with”. Assessing the program as a “strategic fit” q q q q Fit with core competencies: YES Size & scope: Large, replacing current production Strategic customer: YES New Technology Requirements: Packaging Profitability assessment: Did not achieve ROA objectives Risk Assessment: Normal Number of Plants: Litchfield, River Falls, Component Supplier, Reynosa Intangible Criteria: q q Replacement of current production item in WTN Value add profit contribution improvement for Quadion.

Program Management Policy Examples q Delta Faucet – q Attributes of a launch q q q (Prior to Program Management Policy) Single point of contact – “Program Manager” Cross functional cooperation Project launch viewed as successful without a formal system. Communications – lack of a formal medium required individual initiative. Opportunities for Improvement q q Communications – Project management is now a tool utilized to formalize the complete project documentation, tasks, timeline and communications Project launch opportunities for improvement defined and lessons learned initiated a formalized strategy, system and structure.

Program Management Policy Examples q Delta Faucet – q (Prior to Program Management Policy) Lessons Learned q q This program was viewed as successful though dependence on individual initiative and top management visibility drove the project to complete by working very, very hard. The need was identified for a robust and standardized system addressing programs.

Program Management Policy Examples q Semi Tool – q q (Program Management Beta Test) 300 mm Wafer Transfer Ring This project was not identified as a program until late in the RFQ cycle. It was assumed to be dead. The customer needed a harder VA technical sell with support from the team. Assessing the program as a “strategic fit” q q q q Fit with core competencies: Stretched current capabilities Size & scope: Large, New customer and market Strategic customer: No New Technology Requirements: Low volume, large size, machining, “clean” over mold (white FKM) Profitability assessment: Large value add opportunity. Risk Assessment: Normal Number of Plants: Litchfield, River Falls, Secondary Operation Supplier Intangible Criteria: q q “WOW” factor of new product and market commercialization. Other growth opportunities pending

Program Management Policy Examples q Semi Tool – q Attributes of a launch q q q (Program Management Beta Test) We now have a single point of contact – “Program Manager” – which is driving results…. . PO’s Cross division and cross functional cooperation Project launch adapted to the formal Program Management system in process. This has driven clarity and results…. Communications – formalized with the appointment of a Program Manager utilizing Project Management tools. (Documented, communicated, updated and distributed within the team). Opportunities for Improvement q q q Communications – Define as a program and the program manager earlier in the process. Roles and responsibilities of those involved. Ownership confusion.

Program Management Policy Examples q Semi Tool – q (Program Management Beta Test) Lessons Learned q q This opportunity was viewed as a project when the scope of the opportunity should have assessed this customer as a strategic program requiring Program Management. Clarity of ownership and roles and responsibilities of team participants is key to driving success.

Program Management Policy Examples q Parata – q q (After Program Management Policy Deployed) Pharmaceutical drug dispenser (Rx Pharmacist vending machine) This project was identified as strategic immediately and a Program Manager was appointed. The customer needed our VA capability… Assessing the program as a “strategic fit” q q q q Fit with core competencies: YES – As a result of Program Management competency deployment. Size & scope: Large, New customer and medical market Strategic customer: Not targeted. New Technology Requirements: GEG Plastic Assembly Profitability assessment: Large value add opportunity. Risk Assessment: Normal Number of Plants: Eden Prairie, River Falls, Litchfield, GEG Intangible Criteria: q Parata’s current four plastic suppliers do NOT possess Program Management competency to design, prototype, astound and delight the customer.

Program Management Policy Examples q Parata – q Attributes of a launch q q q Single point of contact immediately appointed. Cross functional team established. Project launch utilized the formal Program Management system. This has driven clarity and results…. Communications – formalized with the immediate appointment of a Program Manager utilizing Project Management tools. (Documented, communicated, updated and distributed within the team). Opportunities for Improvement q q (After Program Management Policy Deployed) TBD Lessons Learned q q Identify Programs at the earliest possible point. The result is the efficient allocation of resources and timely responses. Enhances ROA opportunity