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Strategic Review of Commodity Procurement in Aluminum and Zinc Casting – October 2007

This report details the key performance indicators and strategic initiatives discussed during the Commodity Review Meeting led by Alejandro Ramirez on October 19, 2007. It covers the current buying landscape for major suppliers in aluminum and zinc castings, procurement strategies, and initiatives aimed at cost savings and efficiency improvements. Key topics include local sourcing, exploring best cost country options, transitioning low-demand parts to sand casting, and enhancing inventory management through logistics optimization.

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Strategic Review of Commodity Procurement in Aluminum and Zinc Casting – October 2007

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  1. Commodity Review Meeting ALEJANDRO RAMIREZ Castings – Aluminum / Zinc October 19, 2007

  2. Key Performance Indicators

  3. Business Strategy • Breakdown Current Buy Major suppliers – Berntsen (WI) - $2,586 / year - 176 SKU’s Alloy DC (CA) - $2,400 / year - 39 SKU’s Diecasting Mex (MEX) - $1,603 / year – 100 SKU’s MMR (China) - $1,702 / year – 19 SKU’s • General Strategy • Bid locally (Mexico) • Explore best cost country options (India/China) • Transfer low demand parts to sand casting • Opportunities on cost savings / DPO improvement • Implementation of kanban with suppliers • Purchase parts complete (machined and painted) • Improve logistics and inventory cost (Sourcing Decision Tool)

  4. Key Suppliers

  5. Major Business Initiatives Alloy Die Casting Project Summary Current Buy – Alloy DC (CA) - $2,400 / year - 39 SKU’s • General Strategy • Bid in USA,Asia and Mexico • Explore BCC options (India/China) • Parts to be quoted raw and complete • 7 P/N’s moved from die-casting to sand-casting based on technical criteria, meeting was performed at Rosemont with the team. • An ES Event scheduled – Time line 10/26 – get all Off shore quotes from suppliers 11/02 – Price comparison analysis due to group including preliminary RFQ 11/09 – Team submits feedback on comparison analysis and RFQ 11/30 – Propose market baskets for auction 12/14 – Issue RFQ to suppliers 1/30 – Run e-Sourcing event • Preliminary market baskets defined with CO High Volume-CO Low Volume-CO All-CO and AT All-AT

  6. Major Business Initiatives Alloy Die Casting • Consolidate • Pentacast – spend FY07 / $215K – CO • Alpe – spend FY07 / $415 – CO Include $1.0 M for new tools • Identified suppliers based on capabilities Pace Chihuahua (MEX) • Allcast (WI) • Le Sueur (MN) • Sigma (India) • Elite Mould (China) • Risk • Completion tooling repair or replacement • Continuity of supply during supplier transition • Opportunities • Potential for inventory/logistics savings • Total Supply Chain Impact • Logistics/Inventory (Sourcing Decision Tool) • DPO – Current - Mode 5th 3rd / MPC 5th 3rd

  7. Major Business Initiatives Die Casting Mexicana Project Summary Current Buy – Die Casting Mexicana (MEX) - $1,603 / year - 100 SKU’s • General Strategy • Parts to be quoted raw and complete • Bid in Mexico • Replace/Repair toolings - $450K spend in FY07 (8 new molds and trimming dies) and $320K planned spend in FY08 • Get a supplier who includes the aluminum ingot • ES Event scheduled 1Q/08 • Identified suppliers based on capabilities • Compacto Metal • Mitec • Quezada • Amisa • Adak • Alpe • Risk • Completion tooling repair or replacement • Continuity of supply during supplier transition • Opportunities • Avoid risk due to supplier financial situation • Savings on piece price • Total Supply Chain Impact • Logistics/Inventory (Sourcing Decision Tool) • DPO – Current - Mode 5th 3rd / MPC 5th 3rd

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