ORGANIZATION. PETER Chun. J.P. Jeon / TANE Lee. CONSULTANTS for Process Control Foreign Standards [KOREA] Active Vendor/ Partner Pool 3

February 17, 2009

INDEX

▌MISSION STATEMENT ... 2

▌ORGANIZATION ... 3

▌CAPABILITY & EXPERIENCE ... 4

▌WORK FLOW ... 5

▪ Vendor Survey ▪ RFQ & Cost Analysis ▪ Product Development ▪ Auditing Quality Control ▪ Schedule & Packing/Shipping ▪ After Service ▌APPENDIX ... 11 A. Form V008 : Vendor Survey Form

B. Form V010 : Cost Structure

C. Check List C165 : Production Support D. Check List C168 : Inspection Auditing E. Check List C170 : Packing/ Shipping F. List L002 : Customer Owned Tools

1

MISSION STATEMENT

As a sourcing specialist group, we serve OEM cus- tomers in North America looking for qualified parts at competitive cost.

▪ Searching Manufacturers

▪ Studying Cost Structures

▪ Supporting Production to vendors

▪ Consulting QC Program Development with vendors

▪ Control Production & Delivery Schedule

▪ Conducting QC Activities

▪ Providing After Service to customers

2

ORGANIZATION

PETER Chun

J.P. Jeon / TANE Lee

CONSULTANTS for Process Control Foreign Standards [KOREA]

3

Active Vendor/ Partner Pool

CAPABILITY & EXPERIENCE

Since it’s start in the year 2000 as a sourcing agent in Korea, we’ve served customers around the world.

Canadian operation was opened in 2005, and con- centrated on North America. Most of our staffs have engineering back- ground which makes easy communication with vendors and customers.

▪ Hehn & Associates LLC : Hydraulic Valves [ 2001~2002 ]

▪ Teleflex Canada Ltd, Canada : Al casting, and m/c parts [ 2002~2008 ]

▪ TVH, Belgium : Hydraulic Valves for forklift trucks [ 2003~2005 ]

▪ Applied Materials, Singapore : Al casting [ 2003 ]

▪ Edscha, USA : Progressive Stamping Die [ 2003 ]

▪ Hydraulic Repair and Design, USA : Hydraulic Pump Rotary Parts [ 2005~]

▪ CWS Industries, Canada : Fabrications, and hydraulic cylinders [ 2006 ]

▪ NOVA Hydraulics, USA : Hydraulic Pump Rotary Parts [ 2006~]

▪ Finning International, Canada : Hydraulic Valve and Tubes [ 2006~]

4

WORK FLOW

VENDOR SURVEY

Locate qualified vendor for a certain item/project, and it should understand the importance of qual- ity & communication. Size of vendor is important to attract the most interest for the business we bring.

A. Does a vendor has a good reputation in the industry before visiting.

a. Financial Problem?

b. Employee Problem, e.g. union?

c. Proper reaction to warranty problems?

B. To check if a vendor meet MAX’s criteria.

C. Does a vendor have strong desire to deal with different level of expectation from overseas customers?

Needs to talk to different level of employees, e.g. management, and shop floor worker.

Check List To use Form V008 [AppendixA]

5

WORK FLOW

RFQ & COST ANALYSIS

To get quotes from dual vendors for cost analysis, and third part’s opinion is necessary to check if the quote is reasonable.

A. Does a vendor understand drawings and specifications from customer? If not, provide enough information to a vendor, e.g. SAE standard, DIN standard, equivalent material & heat treatment specification.

B. Have a vendor provide Cost Structure for two purposes.

a. To check if the quote is reasonable and industry standard.

b. To check if necessary process has been considered.

If doubt, ask

Check List To use Form V010 [AppendixB]

6

WORK FLOW

PRODUCTION SUPPORT

To support vendors to be well prepared for production. Communication with customers are important.

A. Is drawing conversion necessary? If necessary, soft conversion is necessary.

Metric drawing should be generated by the vendor, and customer approval to be followed.

B. Translation service is necessary to the vendor. No assumption!

C. Is the vendor having trouble to find proper manufacturing tools? Locate proper tool supplier.

And, consult with MAX consulting groups for efficient inspection tools and methods.

Communication is the key!

Check List Check List C165

[Appendix C]

To use Form V010: Q3

7

WORK FLOW

AUDITING QUALITY CONTROL

To visit vendor on a regular base for checking in-process QA To check credibility of inspection reports for finished products.

A. SOP, Process Flow Chart, and QC Flow Chart is on the site?

B. Has FMEA been prepared?

C. Does a machine operator understand the critical dimensions?

D. Any nonconforming parts during the process? If yes, what’s the root cause of the problem.

FMEA needs to be updated.

E. To check if all the necessary inspection/rest reports are prepared.

F. To check the credibility of inspection & test reports.

G. Audit sampling inspection.

You can’t measure it, you can’t control it.

Check List To use Form V008: Q1 ~ Q8

8

Check List #168

[Appendix D]

SCHEDULE & PACKING/ SHIPPING

A. Would production schedule meet customer’s request date?

Communicate with customerr for the status.

B. To find most cost effective way for shipments. Weight and volume need to be considered.

- Courier, e.g. FedEx, DHL, UPS?

- Air Cargo or Ocean?

C. To check with a forwarder if on-boarding schedule is normal, e.g. trucker association’s strike, weather, and etc.

D. Is packing export seaworthy? Are they heat treated to ISPN#15?

Are the products properly handled during packing?

WORK FLOW

9 Check List # 170 [Appendix E]

Check List

AFTER SERVICE

A. In case of warranty claim, collect comprehensive facts from customer and forward to the vendor.

B. Corrective Action Plan needs to be submitted.

C. FMEA needs to be updated & submitted.

D. Secure customer’s tools and information.

WORK FLOW

Find the root cause!

10 To use UST L002 [Appendix F]

Check List

APPENDIX

A. Form V008 : Vendor Survey Form B. Form V010 : Cost Structure

C. Check List C165 : Production Support D. Check List C168 : Inspection Auditing E. Check List C170 : Packing/ Shipping F. List L002 : Customer Owened Tools

11

VENDOR SUR VEY FORM

Contact Point - Primary [실무자 연락처]▪ Name▪ Phone[핸드폰]▪ e-MailSecondary Contact Point[책임자 연락처]▪ Name▪ Phone[핸드폰]▪ e-Mail

Major Products/ Service[주 생산품 및 서비스]1. 2. 3. Products by Application[적용분야별 제품]1.2.3.CapabilityISO Registered[품질인증 여부]Software[사용 소프트웨어 2D/3D]

REMARK

COMMENT V008-08D 1/3

V008-08D 2/3

SUR VEY DET AILS

Q1Quality Management[관리자의 품질에 대한 이해도]RatingRemark1.1Written Policy on Quality?[품질 관리에 대한 규정집?]1.2Quality Personnel?[품질 관리 담당자 임명?]1.3Quality System Reviewed Regularly?[품질 시스템 주기적 변경?]1.4Quality Policy been trained?[품질에 대한 교육은?]

NOTE

Q3Technical ResourcesRatingRemark3.1Understanding of foreign standards?[외국 규격에 대한 이해?]3.2Technical information handling?[도면/ 스펙 관리 방안?]3.3Technical/ Machinist are well trained?[직원 교육?]3.4Evidence?[수행여부 확인!]

NOTE Q2Product Identification/ Traceabilty[부품/ 제품 식별 및 추적성]RatingRemark2.1Written procedure on site?[식별/ 추적 문서 현장 배치?]2.2Method of Identification?[식별 방법?]2.3Method of Trace?[추적 방법?]2.4Evidence?[수행 여부 확인!]

NOTE

Q4Customer’s products/drawingsRatingRemark4.1Storage and handling of drawings?[고객 도면 관리는?]4.2Distributed to subcontractors?[외주업체 배포 요령은?]4.3Document about customer owned tools?[고객 소유 치공구 보관증?]4.4Storage of customer owned tools?[고객 소유 치공구 보관은?]4.5Evidence?[수행여부 확인?]

NOTE

V008-08D 3/3

Q5Purchasing[외주/ 협력 업체 관리]RatingRemark5.1Quality record of suppliers?[외주업체 품질 기골 대장?]5.2Incoming part inspection?[수입 검사는 시행?]5.3Incoming parts’ storage/ handling?[수입 부품의 보관 요령?]5.4Evidence?[수행여부 확인!]

NOTE

Q7Inspection and Testing[검사 및 테스트]RatingRemark7.1Sampling Plan?[샘플링 검사 방법?]7.2Final Inspection System and Tool?[최종 검사 방법 및 도구는?]7.3Inspection Tool Calibrated regularly?[보정?]7.4Evidence?[수행여부 확인!]

NOTE Q6Process Control[공정 관리가 잘 되는지?]RatingRemark6.1Is factory clean and well organized?[공장 정리정돈?]6.2Process Flow Chart on site?[작업표준서는 현장 비치?]6.3QC Flow Chart prepared?[품질관리 업무 흐름도?]6.4Standard Operating Procedure on site?[작업표준서는 현장 비치?]6.5FMEA prepared, and documented?[FMEA 준비 되었는지?]6.6In-process inspection System and Tool?[공정간 검사 도구는?]6.7Corrective Action Plan?[부적합 보고서]6.8Evidence?[수행 여부 확인!]

NOTE

Q8Control of Nonconforming ProductsRatingRemark8.1Records of them?[불량품 기록?]8.2Reworked/repaired parts qualification?[수정품의 품질 체크?]8.3Storage/Handling of them?[불량품의 보관?]8.4Root cause applied to FMEA and trained?[불량 요소의 제거 방법?]8.5Evidence?[수행여부 확인!]

NOTE

COST STRUCTURE

Unit Price EAU Tooling Cost per EA

Part NO. Dwg NO.

Description Raw Material

Specification - on the drawing ^{[원도 소재]}

Equivalent Material - JIS/KS ^{[대체 소재]}

Dimensions - m/m

V010-09 1/1

Material Process

Process # # 11 # 12 # 13 # 14 # 15 # 16 # 17

Sub Total Code

Cost

Tooling Cost

Item # # 01 # 02 # 03 # 04 # 05 # 06 # 07 Sub Total

Description Cost

Machining Process

# 21 # 22 # 23 # 24 # 25 # 26 # 27 # 28 # 29

# 30 # 31 # 32 # 33 # 34 # 35 # 36 # 37

Sub Total

Tooling Cost ^MC

LD BM P SHSL BRTC

Cutting Lathe Turning Drilling Boring Milling Plaining Shaping Slotting Broaching Gear Cutting, Turn

G GEGI GSGCL GL GTGH GSP

Grinding External Grinding Internal Grinding Surface Grinding CL Grinding Lapping Gear Grinding Honing Super Finishing

F FFFD

Forging Free Forging Die Forging

C CSCM CPCD CCR CL

Casting Sand Casting Metal Mold Casting Precision Casting Die Casting Centrifugal Casting Low P. Casting

F FFFL FSFCA FR

Finishing Finish F Finish Lapping Scraping Coated Abrasive Reaming

H HNRHA HQHT HG HCHNT

Heat Treatment Normalizing Annealing Quenching Tempering Aging Carburizing Nitriding

ZI ZTZC ZD

Inspection Testing Chamfering Deburring

PRODUCTION SUPPOR T CHK LIST

Checked by Part NO.Dwg NO.[Quoted Rev.]Description

Type of DrawingMetricImperialOther1. Conversion Necessary?2. Soft Conversion Due DateStandards UsedJISDINSAEMILASTMANSIBSISOOTHER

3. All specifications to the standards prepared?4. PIC for the preparation of all the necessary specifications.

Type of tools/NameFabricated

Purchased

5. Tools to be purchased locally?6. PIC for the purchasing of tools. C165-08G 1/1Revision HistoryCustomerVendorRev. NO.Rev. DateDescriptionDatePersonnelRemark

QUALITY CONTROL CHK LIST

Checked by Part NO.Dwg NO.[Quoted Rev.]Description1. Pre-Process1.1. SOP prepared?1.2. Process Flow Chart prepared?1.3. QC Flow Chart prepared?1.4. FMEA prepared?2. In-Process2.1. SOP on site for each process?2.2. Process Flow Chart on site?2.3. QC Flow Chart on site?2.4. Any non-conforming products?2.5. FMEA being updated?

3. Finish Product3.1 Inspection & test reports prepared? Mill Certificate Heat Treatment Report Material Test Report Dim. Inspection Report Test Bench Report Others3.2 Result of auditing inspection with QC personnel on site.

3.3 List of inspection/test methods. Type of tools needs to be marked on inspection report.

3.3 List of inspection/test methods. Type of tools needs to be marked on inspection report. C165-08F 1/1

PACKING/ SHIPPING CHK LIST

Vendor NameCHK Date

Checked by Part NO.QtyDwg NO.[Final Rev.]DescriptionFreight ForwarderPIC[Tel.]Standards UsedDocument Closing byCargo Closing byOn-Boarding dateETA

CourierAir CargoOcean

1. Freight Forwarder1.1. Number of Carton/Crates/Wooden Box1.2. Overall Dimensions/ Gross Weight of Each Carton/Crate/Wooden Box# 1# 2# 3# 4# 5# 6TotalDim(mm)W(kg)1.3. Gross WeightNet Weight1.4 Type of PackingCarton BoxCratesWooden Box

2. Packaging2.1. Stuffings to prevent damages? (Internal)2.2. Export Seaworthy packing? (External)2.3. Heat Treated woods to ISPN#15?2.4. Plastic or Steel Strap?2.5. Others C170-08F 1/1

CUSTOMER OWNED TOOLS LIST

Date MAX PIC

Customer Customer Buyer

Vendor Vendor PIC

[ signature/ date ] L002-08C 1/1

ID# Part Number Drawing NO. Drawing Rev. Tool Type* Tool ID Mfg. Process Est Tool Life(qty) Qty Used Prod. Start Date Tool Condition Tool Review Date Vendor Initial** Comment

품번 도번 개정 타입 관리번호 사용공정 수명 사용회수 사용개시일 상태 점검일 확인사인 비고

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

* Tool Detail Form per Tool Type : MC to form L203

C to form L204

** Vendor Initial : 각 라인별 형/ 공구 보관 담당자 약식 사인 후 우측 상단에 최종 사인 필용.