the presentation

INDUSTRY-LEADING COMMERCIAL VEHICLE PRODUCTS
Tri-State Manufacturers’ Alliance – Aug. 27, 2015
Rick Dauch, President & CEO
accuridecorp.com
Accuride Wheel End Leadership
Steel
Wheels
#1
Aluminum
Wheels
#2
Brake
Drums
#3
Disc Wheel
Hubs
#3
Slack
Adjusters
#3
Rotors
& Spoke
Wheels
2014 Revenue Breakout - $705.2 Million
Business Unit
Customers
Market Segment
0.9%
10.2%
14.1%
18.7%
13.2%
57.0%
24.3%
36.0%
21.5%
55.6%
10.5%
6.5%
31.5%
Wheels
Gunite
Brillion
Navistar
PACCAR
Daimler
Other
AccurideCorp.com
Volvo/Mack
Aftermarket
Trailer
Class 5-8
Military
2
Other
2
Accuride Vision & Values
Our Vision: Accuride will be the premier supplier of wheel-end system solutions to
the global commercial vehicle industry
“GROW” (2015 – 2020)
Profitable Global Growth
Our Values:
•
•
•
•
•
•
•
Ethical & Respectful
Customer Centric
Technology & Quality Leaders
Cost Competitive
Safe, Progressive & Inclusive
Environmentally Conscious
Fiscally Conservative
“FIX” (2011-2014)
Significant Cultural, Operational
& Financial Improvements
AccurideCorp.com
3
“Fix” – Accomplishments 2011-14
Create a Competitive Cost Structure & LEAN Operating Culture
Create a Competitive
Cost Structure &
LEAN Operating Culture
•
•
•
•
All business units operating at world class operating metrics
•
Quality: < 25-50 PPM
•
Delivery: > 99% OTD; reduced lead-times (3-10 days)
Common QMS, EHS, LEAN MFG systems implemented
Corporate led Supply Chain initiatives & leverage
Negotiated competitive new CBA’s - BIW, Erie, Rockford, London
Divest Non-Core Assets , Fix Core Business & Operations
Divest Non-Core Assets
Fix Core Business & Operations
•
•
•
4 non-core assets divested since Q4 2010
Over $180 million invested in core business units to upgrade
equipment and improve efficiencies, capacity and capability:
•
Steel wheel capacity consolidated, new coating technology
•
Aluminum wheel capacity doubled, small acquisition
•
Gunite restructured from 3 to 1 operating facilities
Implementing common ERP & CRM systems (2013-15)
Customer Centric, Technology Leader
Customer Centric, Technology Leadership
•
•
•
Sales organization restructured – more customer touch points
Significant upgrade in engineering, manufacturing & quality
“Living” 3-yr product development & CAPEX roadmaps in place
Ethical People, Selfless Leaders, Team Oriented
Ethical People, Selfless Leaders, Team Oriented
New executive leadership team – 7 of 8 positions since ‘11
•
New
board members
– 4our
of 7“Fix
(diverse
global plan!
experience)
Our efforts will increasingly focus on
the
“Grow”
portion of
& Grow”
•
Plant leadership teams upgraded – 20-80% personnel change
•
AccurideCorp.com
4
Accuride Organization – 2015
R. Dauch
President & CEO
S. Martin
SVP, HR & Legal
P. Wright
DIR, IT Systems
•
•
•
•
•
•
•
•
HR & Benefits
Labor Relations
Legal
Communications
Hardware
Software
Network
PLEX Project
G. Risch
SVP, CFO
•
•
•
•
•
Treasury & IR
Controller/FPA
Pricing
Tax & Reporting
Audit
S. Hazlett
SVP, Operations
•
•
•
•
P. Wittgen
Admin Asst
C. Monroe
VP, Sales & Mktg
Jd. Marhevko
VP, Quality/Lean/EHS
• OEM Sales
• Market Analysis
• Business Dev
•
•
•
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Quality & Warranty
LEAN Systems
Field Service
Safety
M. Blair
SVP, SC
•
•
•
•
•
Purchasing
Distribution
Customer Service
Logistics
Inventory
D. Adams
SVP, BIW/CTO
Wheels Operations
Gunite Operations
Regional & AM Sales
Wheel-end Engineering
•
•
•
•
BIW Operations
BIW Engineering
BIW Sales & Marketing
Business Development
Two Business Units With Functional Support Teams
AccurideCorp.com
5
Accuride Facilities
Office
Manufacturing
Distribution
Rockford, IL
Wheel Ends
Brillion, WI
Iron Foundry
Batavia, IL
Distribution Center
London, ON
Steel Wheels
Evansville, IN
Corporate HQ
Monterrey, Mexico
Steel & Al. Wheels
Erie, PA
Aluminum Wheels
Henderson, KY
Steel Wheels
AccurideCorp.com
Springfield, OH
Wheel Assembly
Camden, SC
Aluminum Wheels
6
Accuride Facility Honors 2014-15
AME Manufacturing Excellence Award
Premier award based on Lean and Quality Systems.
 2014 Henderson KY. Awarded September 2014
 One of 4 in N.A. and 2 in U.S. to receive
Accuride Henderson Operations
Daimler Trucks North America Masters of
Quality (MOQ) Award
 Camden & Monterrey awarded for 2013
performance in August 2014
 Fourth MOQ for Accuride de Mexico; first MOQ for
Camden since becoming part of Accuride in 2011
Accuride de Mexico - Monterrey
Accuride Camden Operations
2015 Plex Impact Award for Transformation
 ERP implementation to modernize information
and Manufacturing Execution systems
Plex Systems 2015 Impact Award - Transformation
AccurideCorp.com
7
7
Accuride’s Lean Journey
AccurideCorp.com
8
Lean Reference Materials
These Form the Fundamentals of Lean Learning at Accuride
AccurideCorp.com
9
Accuride’s Lean House
AccurideCorp.com
10
Lean Path Model (Horizontal)
Site X
External Partners
Accurate and OnTime Delivery of
VOC Data and
Supplied
Materials
1.
2.
3.
4.
Site X
Site X
Site X
Site X
Site X
Operations (Product/Things)
Efficient movement of correct products
Transactional (Data/Information)
Efficient movement of correct information
(across all functional teams such as SCM,
Sales, HR, Eng, Maint, QA, Legal, etc)
External Partners
Accurate and OnTime Delivery to
Customer
Demand
Lean “Manufacturing”. Focus on operations. Effective, Efficient flow of Product
Evolve into Transactional systems: Effective, Efficient flow of Data/Information (Transactional)
Align Key Value Streams across the Business Enterprise: Both Product & Transactional
Incorporate Partners: Customers, Supply Chain, Contract Services, etc.: Largely Transactional
Maturation of Integrated Lean Management Systems
AccurideCorp.com
11
Accuride Lean Council Actions
• All Accuride sites align their lean strategies with corporate strategy
• Extensive Visual Operating
Systems (VOS) are utilized
• Expanding VSM Flow Focus
to external partners
• Increased transactional
VSMs across functional
support teams
• 3 sites win AME Awards:
• 2015: Rockford, IL & Erie, PA
• 2014: Henderson, KY
Accuride Lean Council (ALC) Leverages Strategic Planning to Execute to Plan
AccurideCorp.com
12
QMS/Lean Strategic Alignment
“Even if you’re on the right track, you’ll still get run over if you just sit there”
Will Rogers
24 Tactics Executed
across the Initiatives
8 Aligned
Initiatives
to Meet the
Strategies
2nd Level
Tactics
To achieve the
initiatives
Top
Level
Initiatives
KPIs
to Improve
YEAR
Strategic Priorities
Fix & Grow Strategy by
Completing the Job
20 Key Process
Indicators (KPIs)
Monitor Results
using both
Leading and
Lagging Indicators
Quality & Lean Systems
Correlate to Accuride’s
6 Fix and Grow strategies
Several Functions are
managed via an X-Matrix
Quality and Lean Systems are Tied to Accuride Strategy
AccurideCorp.com
13
Lean Systems Enable Value
ACW sites manage over 20 Visual Operating Systems (VOS). These help to support sitebased, inter-company and external partner performance
We can leverage these performance advantages with our customers… it’s not just about
product, it’s also about process. A pull program with a key OE triggered a 50% reduction of
inventory at their location. Lead times were reduced by 2.5 – 4.7 days on key SKUs. They
have credited this program with $90K in cost reduction and have grown the program to
include other ACW SKUs and sites
Leverage ACW QLMS Teams to Provide Value…Not just Sell Parts
AccurideCorp.com
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QMS Capability and Warranty




For flow (lean) to occur, products and processes must be right the first time
System inefficiencies happen as containment and recovery actions are taken
Accuride leverages a six sigma system on its internal processes and external returns.
A key leading indicator is the Key Process Indicator Variable (KPIV) which monitors
Critical to Quality (CTQ) features that need to meet or exceed a Cpk of 1.33.
 Returns are classified by Time of Manufacture (TOM) via predicative warranty analysis.
Engineering, Operations and Supply Chain have cross-functionally achieved doubledigit Y-O-Y reductions in returns across Accuride.
AccurideCorp.com
15
Accuride: DIOH, Lead Time
% Lead Time Reduction: Baseline:2Q15
Lead Time Reduction: Intense Focus
 Impact has ranged from 15% - 89%
 Funds tied up in Raw Materials, Work In
Process (WIP) and Finished Goods (FG)
significantly reduced
 Reduces footprint required; 5S
improvements are a natural by-product
 Engage external partners: Customers,
Suppliers, Outside Service Providers
Accuride DIOH 2012:2Q15
DIOH Reduction: 47% to Date
 Manage with Plan For Every Part (PFEP)
& Time To Replenish (TTR) build cycles
(aka Heijunke)
 DIOH continues to decline
Target = 23
AccurideCorp.com
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Power of Lean at Accuride Sites
Accuride is exploring a model where 75% Reduction in Lead Time generally results in
Doubled Productivity (2x) and/or 20% Reduction in Cost/Unit. (75, 2x, 20). As Accuride has
executed its VOS systems in over 9 key value streams, its teams have demonstrated that:
If Lead Time is reduced by 40%, productivity
may be generally increased by more than
40%...almost double
If Lead Time is reduced by 40%, Cost/Unit may
be generally decreased by more than 20%.
Affirming the reason to do it again
QUALITY (6s) Product Delivered in the QUANTITY (PFEP) Requested WHEN
(TTR/Kanban) Requested Yields Impactful Results
AccurideCorp.com
17
StdW: Operator & Machine Balance
All Accuride teams evaluate StdW in the following areas:
• Operator Balance: Direct labor that may or may not be tied to equipment
• Machine Balance: Specifically tied to work performed on automated equipment
• Indirect Labor: Material handling, packing, maintenance, tooling, finance, engineering, etc
Over 40% of all IDL positions
have been reviewed companywide
In 2015, 1.5% of workforce will be
redeployed via a blend of filling into
growth positions, replacing attrition,
and position transition
StdW Process is Applied to Operator, Machine and IDL Processes
AccurideCorp.com
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QMS/Lean 1H 2015 Process Results
Lagging Indicators: Used Externally
QMS
TS/ISO
%COPE
PPM
LT
What the Customer Sees 
OTD
Leading Indicators
Manage the Outcomes
CRD
Leading: OEE
Operational Equipment Effectiveness
Leading: %Pull to Plan
All key Value Streams are on PFEP/TTR
Leading: 8D TTC
Time To Close an External Concern
Leading: %KPIV @ 1.33 Cpk
Key Process Indicator Variables (89% for
~1000 variables). AccuLaunch
Leading: MTBF
All sites improved YOY
Leading: QMS Bench Strength
Quality/Lean Management System Skills
Focus on the Leading Indicators; The Lagging will Take Care of Themselves
AccurideCorp.com
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Aluminum Capacity Expanded to Meet
Market Demand
$55 Million Capital Investment
Base Capacity
6/24 Increment
7/24 Increment
1,600,000
1,500,000
1,400,000
Wheels
1,200,000
Current
Utilization
1,150,000
1,000,000
870,000
800,000
600,000
1,120,000
860,000
400,000
640,000
700,000
2010
2011
200,000
-
AccurideCorp.com
2012
2013
Today
20
Facility Lean Transformation
Erie Operations
AccurideCorp.com
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Erie Enterprise VSM – June 2011
Lead Time = 19.5 Days – Manual Scheduling
AccurideCorp.com
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Erie Enterprise VSM – Aug. 2015
69% Lead Time Reduction
AccurideCorp.com
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Erie Lean Impact Summary
75%, 2x (50%) and 20%
ERIE Impact from 2011 to 2Q15
100%
90%
80%
70%
83%
69%
60%
50%
40%
28%
30%
20%
10%
0%
Lead Time
Productivity
Cost/Unit
Unit Cost Reduction of 28%
AccurideCorp.com
24
HD Steel Wheel Capacity
Base Capacity
6/24 Increment
7/24 Increment
4,000,000
3,500,000
3,400,000
Recently
increased by
200k units
annually
Wheels
3,000,000
2,500,000
2,500,000
Current
Utilization
2,000,000
Idle capacity
for Heavy
Duty steel
wheels in
Canada
1,382,000
1,500,000
972,000
1,000,000
500,000
1,035,000
675,000
Mexico
Canada
Henderson
AccurideCorp.com
25
Facility Lean Transformation
Henderson Operations
AccurideCorp.com
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Henderson AME Award Video
To View AME Video:
https://youtu.be/qie2DsSZWF0?list=PLjkqCNs4h_W2eHw4UyjmFZ2mjRse6MDIW
AccurideCorp.com
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Henderson VSM - June 2011
Customer Order
input process
PC&L
Weekly
Opr.Mgr.
Suppliers
Pow der
2,800/day
E-Coat
7,300/day
London -
10 Trucks /Day
No Coat
Gallatin -
10 Coils /Day
Base Part #'s 26 (156 Finished P/N)
100/day
Schedule
at
pacemaker
Daily
Spinners
7 Machines
Blanks = 4.25 days
Disc
.95 days
4 Cells
CT-7.28 sec
CT-6.4 sec
CT-51.0 sec
CT-16.4 sec
UT-98.0%
UT 92.0%
Scrap -.03%
Scrap-.04%
9 Part #'s
19 Part #'s
.76 days
6.8 days
Assembly
3 Lines
Rim
Rim = 2.1 days
Raw
Mat'l
Mkt.
Finish
goods
Mkt.
E-Coat
.65 days
Powder
2 Lines
4.8 days
1 Line
CT-5.8 sec
CT-6.7 sec
CT-25.7 sec
CT-17.4 sec
Rej.-.02%
UT-82.0%
2 Lines
UT-94.0%
UT-94.0%
Rej.-2.7%
CT-5.25
Scrap-.12%
50 Part #'s
4 Colors
CT-10.3
RW-.01%
UT-93.1%
.98 days
7 Part #'s
2 Shifts
Uptime
Improvement
.95 Days 1.5 days
51 Sec
Material
Flow , tied
e-coat to
Ass'y
lines, 2.5
25 Part #'s
Mill Scrap- 50/day
4.25 Days
100 Part #'s
C/O-15 min
Scrap-.08%
2.1 days
22.4
Eliminate
3rd.
Assembly
.65 Days
16.4
2.6 days
6.8 Days
6.7 Sec
16.3 Days
117.7 Sec
21.2 Sec
June 15, 2011
AccurideCorp.com
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Henderson VSM - June 2015
67% Reduction in Lead Time
AccurideCorp.com
29
Henderson Lean Impact Summary
75%, 2x (50%) and 20%
Henderson Impact from 2011 to 2Q15
100%
90%
80%
70%
67%
60%
50%
37%
40%
30%
22%
20%
10%
0%
Lead Time
Productivity
Cost/Unit
Unit Cost Reduction of 22%
AccurideCorp.com
30
E-VSM Steel Current State 06/2015
Macro Flow: London, Henderson, AdM, AOT, ADC…
• Leveraged article: Enterprise-wide Value
Stream Mapping: Create a Vision of Your
Company That Really Puts Your Customers
First, by Jonathon Chong
• Scope: Order Entry through Customer
delivery
• Key “micro” VSMs completed and processes
are performing well
• Incorporates Material Suppliers, Outside
Service Providers, Sister ACW sites, and
External Customers
• Using E-VSM to streamline transactional
data processes and to manage shipping
logistics
Accuride Steel Wheel Enterprise VSM (Order Entry to Customer Delivery)
Strategic Planning
X-Matrix
Supply Chain
Management
Research and
Development
Sales and Marketing
Supplier Development
AccuLaunch
Cost Accounting /
Pricing
Demand Forecasting
and Planning
Customers
Note: This not connected to reduce complexity
ADM, London, Henderson create separate
forecasts and send to their supply base
ACW Internal Sales
Receiving
Production Planning
Weekly
Forecast
E-Mail / Fax
P/T: x days
L/T: x day
% C&A: xx%
% AOP: xx%
# Associates:
IT Systems:
ACW Operational Planning
P/T: x days
L/T: x day
% C&A: xx%
% AOP: xx%
# Associates:
IT Systems:
Demand : 14,737/Daily
Total Base PN: 53
Customers: 1,089
Daily Takt Time: 5.9"
Orders: X/Week Total
% EDI:
Avg Leadtime Request:
EDI
PLEX
Ind. Trevigo
Sales
Forecast
Ternium Coil
Daily Production: 20
Daily Shipment
ADM: 20
DIOH: 0 Days
Daily Production:
Daily Shipment
ADM: 17 Coils
MP
DIOH: 5 Days
MP
Rock
ADC
Daily Production (Takt): 50 min
Daily Shipments: 1,022
Leadtime: 11.24 Days
DIOH: 26 Days
ADM
Worthington Coil
Daily Production (Takt): 20.3"
Daily Shipment: 3,377
ADC: 96
AOT: 420
Customers: 2,861
Daily Production:
Daily Shipment
ADM: 17 Coils
Henderson: 21.5 Coils
DIOH:
MP
AOT
Daily Production (Takt): 26.2"
Daily Shipments: 1,000
Leadtime: 4.9 Hours
DIOH: 1 Day
Production Leadtime: 11.34 Days
Days Blanks: 7.4 Days
Days Coils: 6 Days
Days Finished Goods: 4.89 Days
Heidtman Coil
A & A Metal Cleaning
Daily Production:
Daily Shipment
Henderson: 9.2 Coils
DIOH:
Daily Production: 18
Daily Shipment
London: 18
DIOH: 0 Days
Dofasco Coil
Daily Production:
Daily Shipment
London: 25 Coils
DIOH: 1.5 Days
London Blanks
80%
Algoma Coil
Daily Production:
Daily Shipment
London: 7 Coils
DIOH: 1.5 Days
MP
Daily Production: 14,500
Daily Shipment
ADM: 3,350 Blanks
London: 1,700 Blanks
Henderson: 8,850 Blanks
DIOH: 2.2 Days
20%
London
Daily Production (Takt): 9.5"
Daily Shipment: 2,800
ADC: 280
AOT: 40
Direct Customers: 2,480
Metokote
Daily Production: 1
Daily Shipment
London: 1
DIOH: 0
Production Leadtime: 9.4 Days
Days Blank Coils: 1.3 Days
Days Rim Coils: 4.3 Days
Days Finished Goods:: 1.1 Days
Kingsville Stamping
Select Finishing
Daily Production:
Daily Shipment
London: 200 Discs
Daily Production: 500
Daily Shipment
London: 500
DIOH: 4 Days
DIOH: 4 Days
MP
OVM Blanks
Henderson
Daily Production (Takt): 8.1"
Daily Shipment: 8,850
ADC: 646
ADM: 80
Aftermarket Direct: 460
AOT: 750
OEM Customers: 6,911
Production Leadtime: 5.44 Days
Days Blanks: 1 Day
Days Coils: 1.4 Days
Days Finished Goods: 3.22 Days
Daily Production:
Daily Shipment
ADM:
London: 140 Blanks
Henderson: 193 Blanks
DIOH: 5 Days
Craddock (CARC)
Daily Production: 3
Daily Shipment
Customer: 3
DIOH:
Information Flow
Pull Signal
X Days
X Days
X Sec
11.34 Days
X Sec
1 Day
20.3 Sec
11.24 Days
1 Day
3,000 Sec
Lead Time = X Days
Process Time = X Sec
E-VSM Draft for Steel Wheels
AccurideCorp.com
31
Wheels Financial Performance
Performance Prior to Investment






On Time Delivery: < 93%
Quality: >0.8% scrap; >50 ppm External
Lead Times: 20.6 days average (all wheels)
2 quality spills
Average OEE 67%
Overall COPE: 4.4%
Performance After Investment







On Time Delivery: >99%
Quality: <0.6% scrap; <50 ppm External
Lead Times: 7.3 average (all wheels) ~64% overall
No major quality spills
Average OEE 80% (up 19% since start)
Overall COPE: 2.5% (down 43% since start)
No building/expansions for capex executions
Adjusted EBITDA (2011-2014)
Revenue (2011-2014)
Solid Wheels Operating Performance
accuridecorp.com
32
Facility Lean Transformation
Gunite
Rockford Operations
AccurideCorp.com
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Gunite Conditions Pre-Investment
Gunite was a capital-starved business; poor working conditions, product quality & delivery
AccurideCorp.com
34
Investment in Gunite: $61M
•
Facility Improvements – $9.5M
- Roof and Floor
- Air Management System
- Associate Work Areas
- Office Renovation
•
Foundry Upgrades – $13.1M
- Air Quality Upgrade
- Wiring & Controls Upgrades
- Cupola Rebuilds
- Drum Auto-Grinding & LEAN
•
Machining Upgrades – $35.8M
- Merrill Drum Machining
- Maus Hub Machining
- Relocate Hub Machining
•
Slack Assembly Line – $2.6M
- New Slack Assembly Line
- Slack Line Work Area
Significant Equipment & Process Upgrades
2011-14 investment of $61M supported Gunite’s performance turnaround
accuridecorp.com
35
Gunite Value Stream 2012
LT = 36.82 Days
AccurideCorp.com
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Drum Current State – Sept. 2011
LT = 36.82 Days
Cells 4, 5, 6, 7
12.74
0.68
184.0
0.68
37.0
0.50
25.0
2.2
LT = 16.8
264.0
HS Cell 2AB
0.54
6.94
185.0
4.45
0.25
25.0
LT = 12.18
264
Merrill Cells 1, 2, 3
5.94
1.9
LT = 7.84
264
32.66
AccurideCorp.com
37
Drum Current State – Aug. 2015
Rockford Drum Current State
July 2015
OP INPUTS
12.75 Days LT
VALUE STREAM MAP
Production Control
Daily Demand:
Daily Production
Meeting
7,000
# Shifts/Day:
Daily Writtin
Schedule
18 Suppliers
OEM
Aftermarket
Batch Kanban
2
Direct Ship
16 PNs
25 PNs
Avail. Time
per Shift (hr):
Merrill 1, 2 & 3
10.5
Cycle Time: 22 Sec
C/O Time: 60 Min
# Shifts: 2
# Operators: 10
# Machines: 2
Uptime: 85%
Scrap: 0.44%
Work Days/Wk:
Foundry
4
Cycle Time: 16 Sec
C/O Time: 3,600 Sec
# Shifts: 2
# Operators: 28
# Machines: 1
Uptime: 95%
Scrap: 1%
2.5 Days
Merrill 4A & 4B
34,754
0.2 days GRIND
not shown
Takt Time:
Band & Wrap
Cycle Time: 64 Sec
C/O Time: 0 Sec
# Shifts: 2
# Operators: 1
# Machines: 1
Uptime: 96%
Scrap: 0%
6.23 Sec
Cycle Time: 60 Sec
C/O Time: 50 Min
# Shifts: 2
# Operators: 8
# Machines: 2
Uptime: 86%
Scrap: 0.44%
ADC
Volvo North
Volvo South
PULL
32 PNs
37,330
Timeline
Days
Lead Time
Thruput:
2.50
408 Units/Hr
4.9
27
0.02
60
5.33
64.0
Min
Value Added Time
NOTES
Sustain VSM Pull activities for VS - Maintain % Pull to Plan at 98%, Maintain inventory levels within Min/Max, Develop LPA for Kanban, Identify next bottleneck to reduce
C/O
Establishmarkets and pulls with key outside processors for a minimum of 1-2 HV products by 3Q. Develop a standard training package for the vendors by 4Q.
Complete 100% Op/Mach Bal roll-out plan for key VS's (indirect). Identify transactional flows within each VS.
See X-Matrix 4SQ for further Notes on improving VS.
Time Summary
Lead Time
Total Value Added
12.75
151
Days
Min
Value Added %
0.82
%
Takt Time
6.23 Sec
Sec
65% Reduction in Drum Lead Time
AccurideCorp.com
38
Rockford Lean Impact Summary
75%, 2x (50%) and 20%
Rockford Impact from 2011 to 2Q15
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Drums
Foundry
66%
60%
50%
52%
40%
19%
Lead Time
Productivity
Cost/Unit
Unit Cost Reduction of 19% Drums and 40% in Foundry
AccurideCorp.com
39
Gunite’s Improved Performance
Performance Prior to Investment






Performance After Investment
On Time Delivery: < 40%
Quality: >10% scrap > 12,000 ppm
Lead Times: 6-7 weeks and past due
2 major quality spills ($8-10M cost)
Lost standard position at Navistar, Paccar
Three manufacturing locations







On Time Delivery: 99%
Quality: <2.5% scrap; 50 ppm
Quality Spills: Zero since 2011
Lead Times: 1-14 days
Recent wins: Daimler Aftermarket Parts
Significant OE, aftermarket quoting activity
One manufacturing location
Gunite Adjusted EBITDA (2011-2014)
Gunite Revenue (2011-2014)
$25.0
$300.0
$251.1
$250.0
$21.5
12.6%
$20.0
12.0%
$222.0
10.0%
$15.0
$200.0
$169.0
8.0%
$171.3
$10.0
$150.0
$5.0
4.9%
$6.6
$8.2
6.0%
4.0%
2.6%
$100.0
2.0%
$0.0
2011
$50.0
($5.0)
$0.0
2011
2012
14.0%
2013
2014
2012
($4.2)
2013
2014
(1.9%)
($10.0)
0.0%
(2.0%)
(4.0%)
Gunite Operating Performance Restoring Reputation, Securing New Business
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Securing New Business
2014

Multi-year Agreement With Major North American Buying Group
Brake Drum and Wheel End Components
2015

Multi-Year Agreement With Daimler Trucks North America
Primary Brake Drum Supplier to – Aftermarket Parts Group

2015: Multi-year Agreement With U.S. Commercial Vehicle Dealer Group
Primary Supplier of Brake Drums

2015: Renewed LTA With Major Commercial Vehicle OEM
Primary Supplier of Brake Drums

Continue to see strong customer interest in Gunite®-brand components
Restoring “Genuine Gunite” Reputation, Regaining Trust, Securing New Business
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Lean Impact: Financial Results
Second Quarter
2013
Net Sales
$181.6
$185.4
$6.0
$12.3
$14.2
% to Revenue
3.3%
$6.1
($0.11)
$0.11
$0.13
$23.3
$25.9
$17.8
9.9%
$316.8
Debt to LTM Adjusted EBITDA
7.1x
Available Liquidity
7.7%
$5.1
Percent to Sales
Net Debt
6.8%
($5.1)
Earnings Per Share
Adjusted EBITDA
2015
$179.9
Operating Income
Net Income (Loss)
2014
$74.1
Trade Working Capital % of Sales
8.2%
12.8%
$308.8
5.0x
$72.0
7.4%
14.0%
$285.9
3.4x
$90.2
6.3%
• Cash flow generation: Improved by $20+ million year over year through June 30
• Trade Working Capital as a % of sales: Continuing to set period record lows
• Improved financial position: Well poised to refinance debt at lower coupon
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2015 Priorities
1.
Achieve or Exceed Guidance
-
2.
Maintain World-Class Operating Standards
-
3.
On-time delivery, Lead times, Quality, Safety and Scrap
Complete Plex ERP Implementation
-
4.
Revenue - $725 million to $775 million
Adjusted EBITDA - $85 million to $95 million
Free cash flow - $15 million to $25 million
Successfully launched Accuride Distribution Center and London, Ontario 1Q 20150
2H – Monterrey, Mexico & Rockford, IL
Organically Grow Revenue by 3% to 5%
-
OEM – Securing long-term agreements – Original Equipment & Private Label (ex: DTNA)
Fleet conversion to Accuride wheels and wheel end technologies
Aftermarket – support across multiple channels
5.
Develop & Introduce Industry Leading Product Technology
6.
Explore and Execute Global Growth Initiatives
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The Journey Never Ends!
1.
Your Associates Know Best What Can Be Improved
Chinese proverb…if you know and do not do, you do not know
a)
b)
c)
2.
Your Lean Transformation Should Include:
1.
2.
3.
4.
3.
Personnel that do the job are the subject matter experts … listen well
Go to the gemba…where the work is done … watch well
Execute the suggested improvement … do it well
Operational Flow…The efficient movement of right things at the desired time
Transactional Flow… The efficient movement of right data at the desired time
Transactional and Operational Flow across the Enterprise…Treat your sister sites and/or
departments like the customers they are
Transactional and Operational Flow outside of the Enterprise…Customers, Suppliers,
Outside Service Providers. An organization cannot get to this level if the above 3 are
not working well
World-Class Processes Can ALWAYS be Improved
Accuride’s lean journey is continuous – it is never finished
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Getting Lean Requires
1.
2.
Senior Leadership Buy-in & Support at the CEO & CFO level
Training of key site & functional leaders in LEAN fundamentals by experienced
LEAN practitioners (not consultants or professors!)
3. Replacement of key leaders who can not or will not learn, adapt to or lead LEAN
(expect >30% attrition within 2 years)
4. Establishing clear Lean standards, metrics, policies, procedures & systems across
the organization ... and then enforcing adherence to them
5. Regular Senior Leadership oversight (Monthly - plant level; quarterly - corporate
and divisional levels)
6. Investment in capital (building, equipment, systems), people (training, staff),
inventory to enable Lean to be implemented, adapted and take root
7. Freedom to: 1) experiment and fail … 2) follow-up and succeed
8. Training and cross-pollination of people across functions and locations
9. Focus on both operations (MFG, Supply Chain, Product Engineering, IT) AND
administrative functions (Finance, HR)
10. Patience and persistence
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Lean Status (Vertical)
Lean Path
Operations
Transactional
Partners
D1 Define: Strategic Alignment, Glass Walls, Visual Status
D2 Define: Cell Kiosks/Relevant Area Data Boards
M1 Measure/Evaluate Value Streams: E-VSM
M2 Measure/Evaluate Value Streams: KPIs Effective
A1 Analyze/Flow: C-VSMs for ALL key value streams
A2 Analyze/Flow: F-VSMs for ALL key value streams
A3 Analyze/Flow: PFEP > 80%, TTR > 80%
A4 Analyze/Flow: VOS Hr by Hr, Owner/Oper Boards, Other Key Data
A5 Analyze/Flow: VOS Schedule Boards, Kan Bans/Pull, Ship Boards
A6 Analyze/Flow: VOS StdW, Op/Mach Bal > 80%
A7 Analyze/Flow: VOS 5S
Improve/Pull: StdW, PM Boards, TPM, Error Proof
C1 Control/Sustain: Audit (Baseline), LPA, SPC, Accountability
C2 Control/Sustain: Cross-Training
Standardized Visual Format for a Site to Evaluate Lean Systems Maturity
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INDUSTRY-LEADING COMMERCIAL VEHICLE PRODUCTS
Tri-State Manufacturers’ Alliance – Aug. 27, 2015
Rick Dauch, President & CEO
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