DavidJ McDonald Career Portfolio

David J. McDonaldCareer Portfolio

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David J. McDonald- Quick Bio

President of Lakeside/IPD in Paragould Arkansas, a $30mil+ Sourcing/Logistics/Distribution

company (Privately owned).

Previouslyy, Senior Vice President of Operations at Hercules Tire, a $650mil tire distributor with

4 operating divisions. (PE owned.) Spent over 30+ years in Industry, 22+ of those years

in Senior Operating positions at Fortune Brands and Emerson (Electric) Corporation at 4

different Operating companies. Primarily focused on High growth Businesses.

Began career as a Management Trainee, worked up to Director of Operations in 8 years at

Liebert Corporation.

Extensive experience in guiding his companies through Operations/Supply chain strategies

including: Global Sourcing, Manufacturing Lean-Sigma, Global Logistics, and

restructuring efforts to gain strong Service Improvements & Cost

Competitiveness.

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Career Path & Key Facts

Liebert/ Emerson Deltec Emerson Fortune Brands

Mgt Trainee to Dir of

Ops $590milVP Ops-

$75mil

VP Ops- Knaack Corp $120mil

VP Ops- Inter-Metro $200mil

VP Ops- Louisville Ladder $75mil

VP SC- Therma Tru $560mil

VP SC & Mfg- WI $300mil

Operations:

•Columbus, OH

•Delaware, OH

•Fremont, CA

•Carson, CA

•Mexicali, MX

•Santa Ana, CA

Operations:

•San Diego, CA

(x2)

•Tijuana, MX

Operations:

•Louisville, KY (x2)

•City of Industry, CA

•8 DC’s

•Wilkes Barre, PA (x2)

•Fostoria, OH

•Rancho Cucamonga, CA

•Douglas, GA

•Toronto, Canada

•Cuhatemoc, MX

•Jiangmen, China

• 7 DC’s

•Crystal Lake, IL

•Rockford, IL

•Payson, UT

•Jiangmen, China

Operations:

•Sedalia, MO

•Pochahontas,

AR

•Muskogee, OK

•Nogales, MX

•3 DC’s

•Butler, IN (x2)

•Waterloo, IN

•Roland, OK

•Fredericksburg,

VA

•Matamoros, MX

•Edgerton, OH

•Bowling Green,

OH

•Houston, TX

•Ft. Wayne, IN

•Reno, NV

•Las Vegas, NV

Plant Summary:

• 40 Plants responsibilities

• 9 New Facilities (4 DC’s)

• 4 Relocated

• 4 Acquired plants

• 5 Mexican operations

• 3 Chinese operations

• 41 Stand alone DC’s

8 years 9 years4 years 5.5 years

LMSConsulting

1.5 years

Consulting

Operations:

•6 Companies

•12+ plants/DC’s

Hercules Tire

3.5 years

Sr. VP Ops-

$650mil

Operations:

•4 Divisions

Locations:

•15 US

• 6 Canada

• 2 International

Lakeside/

IPD

President

$30mil+

Operations:

•President of 2

companies,

COO of a 3rd

•Paragould, AR

• Sourcing/

Distribution/

Logistics

Locations:

• 2 DC’s

4+ years

Guiding Principals /Belief System

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Sales & Marketing Customer Focus

• Ensure that you focus on what your Customer wants/needs

• Organize your teams to Service the Customer

• Drive for Stellar Quality, Delivery and Cost performance to the Customer

• Get face to face with your Customers

• Set up Customer driven Metrics

• Establish strong Marketing tools for your Sales team

6

New Product

Sales

Cost Reductions

It takes ~ 2x the new products Sales to equal the same benefit as $1 in CR’s

Balance between New Products & Cost Savings

The Goal is to keep these balanced. As $ are saved on the bottom line this allows investmentin the top line which keeps us growing and provides more opportunities for everyone.

•Sales growth•Happy customers•Innovation•Long term security•Winning!

•Profitability•Return on Sales•Investment opportunities•Growth•Winning!

General Management Principles

1. Drive Sales & Marketing to Grow, invest and assure success

2. Drive Operational Excellence in order to sponsor added growth.

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• Evaluate where you are

• Muscle-build the Organization

• Measure everything

• Utilize Lean techniques

• Establish strong Material Cost improvements

• Develop a quest for Learning

• Drive it continuously into the organization

• Harvest the success

The Overall Operational Blue Print

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• Have burning reason for change, begin with a Charter to be More Competitive

• Develop a Supply Chain Strategy that includes Lean

• Train Management staff & Salaried staff on Lean

• Hire Consultants to help in Training & Implementation

• Develop Lean Champions reporting to Plant Mgr’s, establish Corporate Lean office & KPO’s in each Plant

• Have a plan- use the Value stream map as the guide to for the Plan

• Engage & Train the Workforce

• Use Kaizen breakthrough methodology- Act, just do it!

• Develop Flow Lines/ Cells and Reduce Movement

• Change many areas of the Plants & Supply Chain

• It is a journey, no end, need to develop a continuous improvement culture

Expect a 3-Year Improvement Plan,

Then Start Again...

The Blue Print for Lean Excellence

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Business

Operations

Lean

Materials

Cost/ Levels

SC/Logistics

Footprint

Procurement Process-10 point plan

1. Strong leadership

2. Integrated teamwork/ cooperation

3. Trained team

4. Analyze spend Data and act upon it

5. Commodity strategies defined

6. Key indicators developed & utilized

7. Commodity basket tracking

8. 2- 4x annual commodity reviews

9. Use holistic procurement cost models

10. Set up no price increase pricing committee

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Have a burning reason why

Begin with a strategy

Top-Down Involvement (Support)

Leadership (Ownership)

Must Have True Champions

Be Prepared for Cultural Backlash

Education/Training

Do It! Do Something!

Expect a 3-Year Improvement Plan,

Then Start Again...

Lean- Lessons Learned

Lakeside/IPD-Results

2013-2017

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Lakeside/IPD Deliverables

• Established Operational disciplines, created KPI’s for Operations/Sales

• Improved Quality, PPM from 20,000 to less than 865 PPM

• Re-developed the Product Offering to provide a solid product that could be sold with confidence

• Increased Product offerings with new Manufacturing/Supplier base

• Strengthened the staff to handle growth and performance

• Reduced cycle time from Order to implementation by 40%

• Revitalized the Sales effort and rebuilt the Sales team

• Established Marketing tools

• Brochures, Hand-outs, Presentations, Booth materials

• Trade Show attendance, Yr1-0, Yr2-2, Yr3-4, Yr4-6

• Became much closer to our Customers and received manny referrals and broadened the base

• Added 12 new Customers in year 1-2, year three we added 15 new Customers

• Achieved Sales results

• Year1 -12%

• Year2 +10%

• Year3 +7%

• Year4 +12%

• Added a new Business, from zero dollars to $6mil in 3yrs, plan for $7.5mil in yr4

• Increased Profit, after challenges in Yr1, by 40%+

• Drove the Business to new heights of Professionalism, Planned Growth and sustained Profitability

Hercules Tire-Results

2009-2013

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Hercules Tire- Deliverables

• Implemented an Operational Excellence strategy company-wide

• Recruited and developed Operations Teams to drive key improvement initiatives while consolidating Operational groups from 17 to 4

• Established a Freight and Logistics team to right-size capacity, revamp trucking fleet, and improve steamship direct logistics, resulting in over $5mil in annual savings

• Consolidated eight purchasing and inventory control teams to two, reducing costs by $500k

• Reduced frequency & severity of reportable accidents to drive >75% overall improvement in Safety

• Achieved 10% reduction in operating costs, totaling $4mil in annualized Operations efficiencies, to help drive improve total company Sales increases of 50% and doubled EBITDA in 3+ years

• Created a North China Mixing Warehouse, launched customer-direct shipments, driving 60%improvement in customer service, >50% of total customer volume and drove costs/inventory down

• Developed an Operational Excellence Lean Sigma CFD (Customer Focused Distribution) team that delivered significant process improvement in all facets of the Business

• Held 10 CFD events yr 1, trained 2 Champions



• Planning 19 CFD events yr 4, with 12 Champions

• Set the Company up for Higher Growth with a Simplified the Supply chain (See graphic)

Supported 50% Sales Growth and doubled EBITDA in 3+ years

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AS-US DC

AS-US DC

AS-US DC

AS-US DC

Tech whse

CF

CF

CF

CF

CF

ComptonTDW

TDW

TDW

TDW

TDW

TDW

TDW

TDW

TDW

TDW

ChicagoTDW

Ohio HD Warehouse

Can CanInt’l Can

TDW

Can

US-F

ASF

ASF

ASF

CF

CF

Starting point

2009

US-F

US-F

15

ASF

16

AS-US DC

AS-US DC

AS-US DC

AS-US DC

China Mixing Whse

CF

CF

CF

CF

ComptonTDW

TDW

TDW

TDW

TDW

TDW

TDW

TDW

TDW

TDW

ChicagoTDW

Can CanInt’l &

Can

Can Can

US-F

ASF

ASF

ASF

CF

CF

Improved &

Expanded

2013

US-F

US-F

ASF

TDW

Ohio HD/TDW

Warehouse

TDW

CanCan

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Financial Results

Fortune Brands-Results

2002-2008

19

19

Business

Operations

Lean

Supply Chain

Footprint

Materials

Cost/Levels

Our Approach has been to review the entire Value Chain

At Fortune Brands we saved

over $75mil, 3.2% of sales or

4.6% of COGS in 5+ years

The Approach was to review the entire Value

chain- develop a plan and execute changes

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Business Overview

• Manufacture- Entry & Patio

door Systems

• 2006 Sales: $560M+

• Employees: 2,700+

• Sites/ Plants: 14

Manufacturing Overview

• 100,000+ End Items

• 10,000+ Components

• Core Operations:–Glass manufacture

–Door slab mfg

–Pre- Finishing

–Pre- Hanging

Therma-Tru Company Profile (Subsidiary of Fortune Brands)

Entry Door Systems Patio Door Systems

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14

9

87

0

2

4

6

8

10

12

14

16

2004 2005 2006 2007

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Avg LT CSI %

Lead- time & Customer Service

Improving Service while decreasing Customer order Lead- times

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Butler

BG

Mexico

Locations:

1. Butler Molding

2. Butler Door

3. Roland Door

4. Virginia Door

5. Bowling Green

6. Edgerton

7. Waterloo

8. Wales 1

9. Wales 2

10. HQ1- Maumee

11. HQ2- Maumee

12. Matamoras

13. North Carolina

14. Phoenix

15. Houston Ok1

16. Houston Ok 2

17. Reno

18. Ft. Wayne Roland

Virginia

ButlerWaterloo

EdgertonUK

UK

HQ HQ

Phoenix

NC

Supply Chain Footprint- 2005

Very Complex

Inv

Whse

Inv

Whse

Inv

Whse

Inv

Whse

Inv

Whse

Houston

Reno

FT Wayne

China ComponentsInv

Whse

Inv

Whse

Inv

Whse

Inv

Whse

Inv

Whse

Inv

Whse

Houston

16 - mfg

11- warehouses

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TLI

TLIButler

Mexico

Locations:

1. Butler Door

2. Roland Door

3. Virginia Door

4. Edgerton

5. Maumee HQ

6. Matamoras

Roland

Virginia

Edgerton

HQ

Current Supply Chain Footprint- 2008

China

Components

Progress

4 - mfg (-75%)

0 - whses (-100%)

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Therma Tru Manufacturing/Supply Chain Improvement

2004 2007 Delta

Service (CSI) 71% 92% +30%

Lead- time 14 8 -43%

Safety (TRI) 5.9 5.59 -5%

COQ 7% 5.9% -16%

Inv Turns 6 8.1 +35%

Average DICC 70 50 -29%

Facilities 14 4 -71%

Square footage 2.4mil 1.4mil -58%

Associates 2,330 1,400 -40%

Sales $ p/ Assoc $202 p/ assoc $286 p/ assoc +42%

Global sourcing (%MTL) 1.5% 3.5% +133%

Cost out ------------- $35mil ------------

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Business Overview

• Manufacture- Tool Storage,

Workbenches, Garage Storage

• 2000 Sales: $300M

• Employees: 2,300

• Plants: 4


• 1,500 End Items

• 10,000+ Components

• Core Operations:–Fabrication

–Welding

–Finishing

–Assembly

Garage Storage & WB’s Limited Editions &

Specialty programs

Tool Storage

Waterloo Industries Company Profile(Subsidiary of Fortune Brands)

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Waterloo Industries Manufacturing/Supply Chain Improvement

2002 2004 Delta

Service (CSI) 90% 95% +5%

Lead- time 21 7 -66%

Safety (TRI) 7.0 5.0 -29%

COQ 2.9% 2.7% -7%

Inv Turns 6.1 7.1 +16.4%

Average DICC 139 82 -41%

Facilities 4 2 -50%

Square footage 1.3mil .6mil -54%

Associates 1,500 1,100 -27%

COG $ p/ Assoc $413 p/ assoc $500 p/ assoc +21%

Global sourcing (%MTL) 1.0% 2.5% +150%

Cost out ------------- $40mil ------------

Results at Emerson (Electric)& Deltec (Subsidiary of Fiskars)

Over a 20+ year period

Supply Chain

Footprint

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Business Overview

• Manufacture jobsite, truck and

van equipment

• 2000 Sales: $150M

• Employees: 900

• Plants: 3

• EMR Acquisition: March, 2000


• 454 end items

• 9,650 Components

• Core Operations:–Fabrication

–Welding

–Finishing

–Assembly

Jobsite Storage Truck Storage Van Storage

Knaack Manufacturing- (Division of Emerson)

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Yr-1 Yr-3 Delta

Sales - - -20%

Hourly Headcount 649 405 -38%

Mfg Salaried 41 35 -15%

Inventory $12.2 $7.0 -45%

Inventory Turns 7.24 8.35 +15%

Days in Cash Cycle 63 35 -44%

Working Capital/Sales 25% 10% -60%

OP-$ +30%

In spite of tough economic times, results strengthened

the company and prepared it for future growth.

Knaack (Emerson Co.) Results

Won the Business Leaders Award in 2002

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Paradigms were changed, assembly equipment improved,

TPM was embraced, organization was strengthened.

Challenge: Poor delivery, organizational strength, material flow and equipment uptime

Old line union company was able to change to a leaner company very rapidly.

Inventory Turns Increased 22%

– From 4.5 Turns to 5.5 Turns

OI Margins Grew 4 Points

– From 14.8% to 18.9%

On-Time Delivery

Educational Development &On-Time Delivery

60%

45%

70%

81%

90%

Yr1 Yr2 Yr3 Yr3 Yr4

Louisville Ladder- Emerson

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Mexican Maquiladora and U.S. plant were able to operate effectively

as a team to serve the customer and reduce costs to enable high growth.

Challenge: Establishing a base for high growth with domestic & low cost facilities

Very adaptable staff needing leadership, direction and support and Lean techniques

Improved Service in High Growth

– Sales increased 35% per yr.

Inventory Turns Doubled

– From 2.4 turns to 4.8 turns

Margins Exploded

– From -1% to 15%+

Cost of Quality

Educational Development &Cost of Quality

5.1%4.4%

2.6% 2.5% 2.3%

2.9%

2.8%

2.8%

1.5%1.2%

1990 1991 1992 1993 1994

Deltec- subsidiary of Fiskars (Oldest Stock Co. in the world)

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The desire for education and willingness to change helped us to

improve turns, productivity from 240 to 140 employees while

sales increased from $22mill to $65mill, OP from -0- to 15%+

Challenge: The first acquisition for a young company, profitability was elusive

Motivating the team to accept change and become profitable. They had lost $ for 9 of 10 years, used Lean techniques

18 of 22 supervisors & managers pursued higher levels of learning

– APICS Certification/ Training

– Bachelors Degrees

– Masters Degrees

– Technical Training (ASQC, ME/ IE.)

Liebert- Emerson

Inventory Turns

Educational Development &Inventory Turn Improvement

1.7

3.5

5.5

7.0

Yr1 Yr2 Yr3 Yr4

DavidJ McDonald Career Portfolio

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