Introduction to Ydatum Inc.

1. Ydatum Delivers
the Science to Achieve:
Human Development
Highest Quality
Shortest Lead Time
Lowest Cost
Rapid Innovation
Copyright Ydatum 2012

2. Toyota Production System (TPS):
A new industrial ‘datum’…a point of reference
from which to calculate, evaluate, reason.
19th & 20th Century
Mass production
High volume, low
diversification,
efficiency of assets,
de-humanization of labor,
5000 BC - 1800 low skill
Craftsmanship 21st Century
Low volume, high Combines mass production
diversification with craftsmanship
apprenticeship, expertise High volume, high diversification,
low cost, higher expertise
A new datum, from asset-driven to customer-focused
Copyright Ydatum 2012

3. What are you paying your people to do?
 Push buttons, move boxes, make reports
 Innovate through leadership and problem solving
in key areas of research, operations and distribution
Labor is ~¼ the cost in developing
countries vs. U.S. & Europe
What is your competitive advantage?
Copyright Ydatum 2012

4. Who We Are
• Seasoned experts with deep knowledge of Hoshin & Lean/TPS and a
reputation for effectiveness
– 40+ Toyota-trained partners in operations management
– Adept at using Hoshin/TPS method to fuse craftsmanship with mass production and build world-
class, customer-focused, innovative companies
• Diverse professionals with experience spanning from automotive to
pharmaceutical and aerospace regulated organizations:
– Merck, Pharma, vaccine, bio, API (human & animal health)
– Takata, automotive
– Moog, Aerospace
– More upon request…
• Able to service large, global companies without sacrificing results
Europe/EMEA
USA/Canada
Latin America
Asia Pacific
Copyright Ydatum 2012

5. Services
• Strategic TPS/Lean Operational Architecture Design, Integration & Alignment
• Map current condition, establish target, design A3, develop step-by-step plan
• Align strategic initiatives and integrate operational methods using Hoshin policy deployment
• Develop operational metrics and implement visual KPI
• TPS/Lean Pilot Execution & Large-Scale Implementation Support
• Successive operational transformation and skill transfer through Kaizen
• Improve operational quality, lead-time and cost for immediate and long-term results
• Provide shared knowledge and vision through change management and cultural transformation
• Human Development (OE) & Long-Term Sustainability
• Real-time executive operational coaching; Method is Socratic “learn by doing” with guidance of
an expert on the ground
• Deliver “mini boot-camp” and advanced seminar with hands-on simulation
• Lean Sigma Belt training – curriculum developed by sensei with hands-on experience
• Leadership development
Copyright Ydatum 2012

6. Hoshin & TPS Integration
We Bridge the Gap Between Strategy, Execution & Results
Leader is the teacher (C4 capability)
Knowledge sharing (C3 capability)
Problem solving (C2 capability)
Process design (C1 capability)
Process Owners
Hoshin Strategy Objective
Strategy TPS/Lean Deployment
 Clear opportunity
 Physical and mental safety
 Clear vision
Manager/director  Zero defects / Compliance
 Alignment & integration
Objective
Business  1x1
 Everyone engaged Units
Strategy  On demand
 Consistency of purpose
 In sequence
 Knowledge transfer
Specialist  100% value added
 Leadership Measures/budgets
Objective
Strategy
Develop Hoshin / A3
Gap evaluation
Develop image of target
Diagnose current condition
Copyright Ydatum 2012

7. Why Ydatum?
• Exceptionally deep expertise in Lean/TPS capability. No generalists.
– Bring tacit and explicit technical (and managerial) knowledge of Lean/TPS operational design and
management
– Ability to customize for industry and client needs
– Bring clarity to problems, and solutions to challenges
• Focus on business problems & driving results, not tools and presentations
– Able to connect tools and techniques to the P&L and cash flow
– Mini-transformations through rapid Kaizens = long-term, sustainable benefits
– Develop and innovate for new operational solutions with client
• Strong emphasis on knowledge transfer & sustainability
– 90% on the shop floor, shadow learn-by-doing; 10% in class
– Scientific, step-by-step measured “trial-and-results” approach under sensei guidance
– Cultural transformation, management to shop floor
– Leadership skills development to effectively manage the business
Copyright Ydatum 2012

8. Generic Level of Approach & Processes
Generic Process Steps
Weeks
Phases Activitis 1 2 3 4 5 6 7 8 9 10 11 12
Business need assessement
Introduction of activities
General / communication
Plan 1
Pilot selection
Current condition
Target condition
Plan / detail schedule
Do 2 Execution - Repeat - Improve
- People's work
- Machine's work
- Supply chain "value stream"
Check 3 Evaluation - Correction
Act 4 Yokoten (copy) / Renewal
Approach 1. Learn Problem Solving
• Commit to Self-Development
Transformation • Pursue the Ideal through
Sharing knowledge short, repeated learning
cycles
A P
Knowledge Management Transfer
Target Condition
2. Learn to Coach & Develop
4. Support Strategic/ Cross- • Pursuing The Ideal, and… Others
Functional • Everyone is a problem solver • Develop others to see and
Internal Leader • Problem Solving solve problems while they
• Create Ideal vision & align
• Leaders are Teachers & are small
goals vertically & horizontally Coaches • Challenge potential in others
(Hoshin Kanri) • Workforce is highly engaged through the Problem Solving
learning cycles
Internal Specialist
Ydatum
Mentor/Sensei
3. Support Day to Day D
C Problem Solving
Internal Associate • Build local capabilities
throughout for day to day
The strength of many operation

9. Example of Client Tangible Results
 Risk Reduction  Only humans can solve
 Safety improvements problems,
 Quality improvements expertise is necessary
 Operational lead time
reduction
 Cost Reduction  Ydatum helps build
 Inventory cost reduction operational experts at
 Labor cost reduction every level of the
 Capital cost reduction organization
 Increased capacity
 At the Center of TPS is
 Innovation Human Development
 Technical
 Cultural
ROI: At one of our clients, $6 invested
with Ydatum has yielded up to $1,000 in
savings, improvements & increased sales
Copyright Ydatum 2012

10. Assembly Before & After
Before (grasp, analyze deeply… “P”) Target (hypothesis, opinion… “D”) Test (try, do... “C and A”)
40.0 Balanced work chart w/o 40.0 40.0
fluctuation before kaizen cycle time Takt time cycle time Takt time
35.0 35.0 35.0
30.0 30.0 30.0
26 26 26
25.0 25.0 26 25.0 26
20.928
19.983
20.0 20.0 20.0 16.264
Finished or not
15.0 11.910 15.0 15.0
10.202 9.918
8.566 9.62 finished?
10.0 10.0 10.0
5.0 5.0 5.0
0 0 0 0 0
0.0 0.0 0.0
 Labor efficiency before = 48%  Labor efficiency after = 69.5%  Total cycle time after kaizen reduced by
14 %
 Eliminated missing component = 100%
quality
Confidential Confidential
 Reduced shop floor space by 70%
 Every product made every day, reduced
risk and lead-time by 5x (from 1 week to 1
day batch)
Copyright Ydatum 2012

11. Supplying to the Patiente
Actual Client Results
Tablets/Filmcoating 2012 Supply Defects 2012 Bulk
Business Case: Business Case: Business Case:
• 7 million tablets short in film coating per month • Customer use of trough to increase 2.5x to support • Customer demand not met for two key products: Problem
increased product demand stems from high-risk bulk production method, insufficient
• Significant overtime, weekend work, and safety capacity, and high manufacture cost
concerns were anticipated if the team didn’t act Initial Condition:
Initial Condition: Initial Condition:
• 50% defect rate at customer site
• Current vaccine practice follows traditional mass-
• Using TPS mindset and methodology, team utilized • Overproduction and safety inventory used to cover for production system “big batch” thinking. While this meets
gemba “go-see” to understand current condition, defects need for increased supply, it also increases risk and fails
developed a detailed process map and identified to reduce cost
filmcoating as the issue Target Condition:
• No defects shall be passed to customer (PBS) Target Condition:
Target Condition:
• Build quality into the process • Increase output by 30% without capital or labor increase
• Improve filmcoating output and decrease cycle time while reducing lead-time (risk)
without increasing headcount or purchasing additional Closing the gap through problem solving:
capital assets to meet overall goal • Identify point of cause through intense observation and Closing the gap
• Develop team within Pharmaceutical Operations to learn data collection • Deploy Hoshin to create one vision, a consistent method
and apply TPS/Lean methods • Warping of trough body and apply TPS /Lean principles
Closing the gap through process design: • Identify root cause • Create Global Franchise team to understand capacity
• Loading and load partner in autoclaves redesigned constraints from end to end
• Through ingenuity and creativity, team designed an
innovative standardized work model and eliminated waste, and standardized • Increase planting/harvest frequency from two to five times
unevenness and overburden a week without capital investment while reducing batch
size from 4,600 to 2,400 RB using TPS principles to
• By collaborating across functions, team redesigned roles increase capacity, shorten timeline and avoid large capital
and responsibilities expenditures
• Using Hoshin method, leaders increased employee • Utilize change management techniques to facilitate
expertise in Lean process design and problem solving frequent communication meetings with shop floor to
abilities generate cross-functional support and engagement
Results
Results Exceed Target Condition:  54% Cycle Time reduction Results
• Reduced pan unload time by 40% and increased monthly •$276-403M in additional annual revenue
output by 12 million tablets without increasing assets or  Elimination of Defects
headcount • $40M capital cost avoidance
•Improved employee ergonomic safety  98% OTIF supply of troughs to downstream operations • 30% output increase
• Excess capacity positioned Pharmaceutical Operations to • 47% reduction in Deviations
 50% Reduction in on-hand inventory
meet target goals sooner • 60% reduction in Document Defects
• “Activities transformed the culture of our people and the  Demonstration of the power of Standardized Work • 40% increase in robot efficiency
capability of our process. “ • $1.8 M Annual Value Capture
• 32% reduction in Cost of Goods Sold (COGS)
Time Series Plot of Unloading Time (hr) PBS Trough Defects by Month 100% on
5 Standardized
time, zero
Work 60
Risk, supply
4 50
defects
Defect Percentage
and cost are
Unloading Time (hr)
40
3
30 Defect Percentage
20 improved
2
10
0
1
Nov-11
Jan-11
Jun-11
Jul-11
Jan-12
Feb-11
M ar-11
Apr-11
M ay-11
Aug-11
Sep-11
Oct-11
Dec-11
Feb-12
0.7
0.5
0.3
Copyright
0
1 16 32 48 64 80
Index
96 112 128 144 160 Month
Ydatum 2012

12. Intangible (but valuable!) Results
– Strengthened leadership capability for today’s complex business
environment
– Deeper understanding by management of TPS thinking & its science
– Strengthened approach to kaizen and problem-solving
– Greater understanding of the impact of lead-time on quality and cost
– Improved operational profits, flexibility & long-term competitiveness
– Increased appreciation for how much the organization may or may
not know about TPS/Lean
“I have been learning lean concepts from Ydatum for 2 years now. They have been an
incredible asset to our TPS implementation, and I have seen our company make great
strides in continuous improvement initiatives. I would recommend Ydatum to any
enterprise.” J.R. Huffman.
Copyright Ydatum 2012

13. Industry & Process Experience
Partial Client List: Food & Beverage Process Experience:
Automotive Portola Packaging Assembly
Alpha Stamping Company Casting
Autoliv Garment Cutting
Delphi Automotive Coach Leather Customer Service
Gentex Corporation Development & Commercialization
ITT Industries Home Forging
Magna Corporation Viking Range Corporation Human Resources
MiCO Industries Herman Miller Information Systems
New United Motor Mfg. Inc. Machining
Plastikon Industries Power & Utility Media Plating
Summit Polymers KENETECH Windpower Medical Office
Toyota Motor Manufacturing, Ky PG&E Plastic Molding
Toyota Tistumi Printed Circuit Board
Toyota Gosei Pharmaceutical/Medical Pharma, vaccine, bio, API
Takata, Inc. Alza Corporation Product Development
Gates Corporation Merck Sharp & Dhome Production Planning
Genentech / Roche Production Preparation
Aerospace B. Braun Medical, Inc. Production Scheduling
Moog, Inc. Intervet Purchasing
Bayer Quality lab operations / systems
Capital Equipment Receiving, bulk, filling, blending,
ATMI pressing,
Sewing
Defense Scheduling
Texas Instruments, DSEG Soldering
Moog, Inc. Stamping
Sterile supply
Electronics Tanning, Training
Applied Materials Wafer Fabrication
Clear-Com Intercom Systems Welding
National Semiconductor Corp. Wire Forming
Paradigm Technologies
Read-Rite Corporation
Seagate Technology
Stratus Computer Copyright Ydatum 2012
Western Digital