kai USA ltd

Headquarters for: Kershaw, Zero Tolerance (ZT) and Brands Our Goal

To become THE ONE brand that consumers think of first when they think of sport , professional knives, and kitchen cutlery.

2 Overview of Company

In 1974, when first opened its doors in Lake Oswego, , the purpose was to design great hunting knives under the Kershaw brand name. Over 40 years later, much has changed. But not our desire to produce exceptional knives—not only for hunting, but also for home cooks and professional chefs, for everyday carrying, for tactical use, as well as for other specific uses.

kai USA ltd is solely owned by KAI Group of Japan, a 109-year-old company with a long history of manufacturing cutlery, beauty products and medical equipment. KAI Group has 16 divisions worldwide.

3 KAI Group Worldwide locations

4 Significant Dates in kai USA History

• 1974 Kershaw Knives established. Kershaw wanted to work with the best craftsmen in Japan to manufacture the highest quality knives on the market. KAI Group, known for its top quality products, began manufacturing the first knives for Kershaw. • 1977 Kershaw became solely owned by KAI Group • 1997 With annual sales of $9 million, KAI Group decided to invest in a US production facility in Wilsonville Oregon • 1998 Introduction of innovative SpeedSafe assisted opening technology

5 Significant Dates in kai USA History

• 2002 Shun Cutlery was established. Shun was designed to be superior kitchen cutlery, targeted to upper-income customers, from the professional chef to the high-end home cook. The brand’s hallmarks are premium materials, elegant design, and ergonomic comfort.

• 2004 kai USA ltd moves to a larger facility in Tualatin Oregon

• 2006 brand was established. The brand was originally created to meet the needs of military and public safety officers for premium, hard-use knives unmatched in quality and performance. • 2013 Expansion. Market success enabled kai USA to expand its factory capacity; an additional 25,350 sq.ft. were leased to house logistics, receiving inspection, and Shun packaging.

6 Significant Dates in kai USA History

• 2015 & 2016 Further expansion. kai USA leased the balance of the logistics building and moved the warehouse to that location. This move enabled both the factory and the warehouse to expand to meet demand. • 2016 Reaching goals. kai USA ended the year reaching our highest sales in the history of the company, exceeding $90 million. • 2017 Kershaw wins Best Buy of the Year with the Dividend and Shun wins Kitchen of the Year with the Ayu at • 2017 Went “Live” Dynamics AX 2012 R3 CU11 with Advanced WAX and TRAX

7 Pictorial Timeline

1974 2004

1997 2006

1998 2013

2017 2002

8 kai USA’s Two Divisions: Sport & Housewares

• The Sport Division is responsible for the Kershaw and Zero Tolerance brands.

• The Housewares Division is responsible for the Shun Cutlery brand, as well as PK2, Luna, Inspire and Wasabi cutlery products.

9 Sport Division

• KERSHAW • Advanced technology, top-quality materials & innovative design combine to create knives customers are proud to carry: With the SpeedSafe®system, Kershaw was the first brand to bring assisted opening knives to market, initiating a true revolution in .

The six original Kershaw knives

10 Sport Division

• ZERO TOLERANCE

• Designed and manufactured to stand up to heavy-duty use, ZT knives are built of premium and ultra-premium materials. The knives have earned a reputation among their devoted fans as being a "real beast" or even—proudly—"overbuilt".

11 Sport Division

• Both Kershaw and ZT brands: • Are winners of numerous awards • Work with top custom knife makers and skilled internal designers

Composite Blade Technology • Produce knives consumers love and trust Are known for pushing the envelop of technology today—looking forward to even more innovations tomorrow

2015 Overall Knife of the Year award ZT 0999

12 Housewares Division

• SHUN CUTLERY Inspired by the blade-making traditions of ancient Japan, today’s

highly skilled Shun artisans produce blades of unparalleled quality and exquisite

sharpness, each requiring at least 100 handcrafted steps to complete. Shun is fine

kitchen cutlery at the peak of perfection. All Shun knives are Handcrafted in

Japan.

13 Housewares Division

• Shun Cutlery and KAI Housewares products, such as Luna, PK2, Wasabi, and Inspire:

•Have won many industry and design awards

•Provide a wide spectrum of precision cutlery as well as a selection kitchen accessories

•Meet consumer needs from entry-level to mid-level to high-end

•Provide beauty and innovation unmatched by competitors

2015 of the Year Hana 2016 Kitchen Knife of the Year Hikari 2017 Kitchen Knife of the Year Ayu

14 Research & Development

• The R&D team includes:

• 3 in-house knife designers—2 for Sport, 1 for Housewares

• 2 engineer/machinists—who prove out designs, build prototypes & some high-end production

• We also work with 10-12 top-level custom knife makers—which expands our access to exciting new designs, technologies, and advanced materials.

15 The Knife Design Process

• DESIGN

• kai USA introduces and produces over 100 new knives each year.

• Design considerations include:

• Comfort in both use and carry Technologies that are attractive to consumers (for

example, assisted opening or KVT)

• Visual appeal

16 The Knife Design Process

• PROTOTYPING

• Once the design has been refined, it goes to prototyping—and we build a small number of the knives. When we are satisfied that the “protos” are good, the fixtures, which help us manufacture the knife parts, are designed and production materials, such as steel, aluminum, and G-10, are ordered. • We use the most modern equipment and systems to design, develop and prove out the products our consumers use every day.

17 Lean Line Manufacturing

• For maximum efficiency, production teams work in lean line systems dedicated to either the Kershaw or ZT brand. • Lean manufacturing: • Eliminates waste • Empowers workers to make good decisions • Partners with suppliers • Enables quicker changes to respond to market demand • Encourages continuous improvement

18 Quality. Quality. Quality

• The result of the work of our skilled personnel and state-of-the-art technology is a top- quality product. • To us, quality means not only that the knife functions perfectly, but that the “fit-and- finish”—how the knife looks and feels—is perfect, too. • Our lean lines exercise Quality Control throughout the manufacturing process. Fit-and- finish are checked at every step of the way. If a flaw in how the knife functions is found, we disassemble the knife and start over. If a flaw in any component of a knife is found, the component is scrapped and a new component is put into place. • This kind of care ensures that each knife lives us to the high quality for which our brands are well known.

19 Logistics

• In March 2013, kai USA leased 25,350 sq. ft. in a second building for logistics, incoming inspection, and Shun packaging. This expansion greatly streamlined our shipping process. • In 2015 and 2016, kai USA expanded further—bringing the total new space to 49,550 sq. ft. R&D and Marketing joined logistics in this expanded space.

20 Our Goal kai USA’s goal is to become THE ONE brand that consumers think of first when they think of sport knives, professional knives, and kitchen cutlery.

To that end, we support our corporate values, and implement them throughout our respective roles in the company.

Bringing delight to our customers

Encouraging pride in our associates

Working toward the well-being of society

Together with our partners, KAI is a continuously learning company.

21 Carl Wolcott IT Manager Dana Fowler IS Manager Co Project Leader – Co Project Leader – Focus on infrastructure and client deployment Focus on Implementation and business process 6 years with Kai 6 years with Kai + 5 Years as a contractor with Kai ERP replacement/AX project 2014 - will it ever end? ERP replacement/AX project 2014 - Retirement My favorite module Infrastructure

Hardware: Storage: Pure Storage M20 Network: 2 Cisco Nexus 7000 @ 10Gbs Servers: 4 Cisco UCSC – C220- M4S CPUs: 2 Xeon E5-2667 V3 @3.20GHz (8Core) VMware 6.5

Big thank you to Dameon Kirchhefer at Tool Group AX Environment(s) Stack Common to all environments: Windows 2012 R2 standard MS SQL 2014 AX 2012 R3 CU11

DEV: Production: Clients: All in one server 2 AOS Client servers Windows 2012 R2 terminal server 2 AOS Batch Servers Windows 7 TST: SQL Primary server Windows 10 All in one server SQL Report/SharePoint Web/SharePoint server EDI server Stage: BizTalk server All in one server TST2: AOS server SQL/Web Server EDI/BizTalk server VARs • Hitachi • Selected with AX by ERP replacement project team • Other ERP candidates where Sage and Epicor • Primary implementation and Sales teams • Focus on “Smart Step” implementation • Goal of a 9 month to 1 year implementation • June 2015- March/July 2016 VAR/ISVs Continued

• Blue Horseshoe Solutions: Advanced Wax and Trax • Join the project December 2015 • Brought in by Hitachi to implement Advanced Wax and Trax • Became Primary VAR November 2017 • HighJump EDI • Joined the project Jan 2016 • Brought in by Hitachi to implement EDI • eBECS • Joined the project 2017 • To review and strengthen the Production, MES and Financial Modules • Avalara Tax and Address Validation AX Mile Stones • June 2014 ERP project team formed • AX, Sage, and Epicor evaluated due to feature sets • May 2015 AX chosen for replacement ERP • June 2015 AX implementation start • Go live February 2016 with Contingency plans for June 2016 Go live • October 2015 Advanced Warehouse Module implementation start • January 2016 Blue Horseshoe Brought in to take over Warehouse • Go live pushed back to June 2016 • Go live pushed back to September 2016 • Go live pushed back to June 2017 – Due to black out dates • Go live June 5th 2017 AX Modules We are not using: Additional Modules: • Compliance • Blue horseshoe AWax • Fixed Assets • Blue Horseshoe ATrax • HR (only used for Workers) • Blue Horseshoe Shipping integration • Payroll • Highjump EDI • Project Management • Now Adding Avalara’s Address Validation • Retail (yet) and Tax Accounting • Travel and expense Team introductions

29 Matt Matsushima Director of Operations / Housewares

AX Implementation Role: Executive Sponsor / Head Cat Herder # of years with KAI: 6 years Lessons Learned from Implementation (Executive Sponsor) • Managing Internal Corporate Expectations • Developing a Timeline (then, add at least 50% more time) • Establish GoLive and post-GoLive benchmarks • What is a success • What is a failure

• Human Capital • Current Human Capital Allocation • Existing staff expectations balanced against current duties • Additional staffing needs (Internal / External) hire or contract

• Budget (Money and Time) – which is more important post GoLive? Lessons Learned from Implementation (Continued)

Develop a strong AX Network outside the company • AXUG • Other VAR’s • Recruiters (for Contract or Full Time Staffing)

Develop a Worst Case Contingency Plan • Are we failing in GoLive? Measures/Benchmark • … what if GoLive Fails • Worst case, when to revert to the old system • Post GoLive Contingency Plan Jeff Henry - Production Systems Coordinator & Standard Cost Administrator

10 years at Sysco Foodservices Started as an Order Selector Worked into Inventory Control

13 years at Kai USA in May First Inventory Control person at Kai USA; Built the department from scratch BOMs and Routes Production Costing Production Manager Production Systems Coordinator & Standard Cost Administrator Production, Master Planning and Costing Team-Lead (FTL) for AX implementation

Favorite Module? They’re all interesting . . . It’s how they’re integrated

Define the goal. Build Culture. Develop good procedures. Refine. Brittany Shanafelt – Customer Service, Sporting

10 years at Kai USA: • Receptionist • Customer Service Sporting • Warranty Lead • FTL for AX implementation– Both HW’s and Sporting Departments -Sales team

Favorite Module – Sales and Marketing or Warehouse Management

Tips and Tricks: • Before customizing anything see if the report or form can be personalized. • Never give up! • TEST, TEST, TEST!!! • Use all the short cuts you can • The ! takes items out • “” Looks up blanks Sarah Gabriel – Assistant Inventory Control Manager FTL for Inventory, Warehousing, Purchasing, Returns, Inspection, Warranty and Labels. Also worked with Master Scheduling and Housewares Production. 6 years at Kai as Housewares Customer Service, Inventory Control and …. Most Used modules Warehouse Management • Track all the inventory movement through out the system • See where parts are hung up or orphaned • Review work and location directives

Product Information Management

• One of the big gears in the AX system • Master Scheduling setting • Warehouse Management setting • Unit of conversion, barcode, GTIN and replenishment • Purchase order, job order and sales orders Tips and Tricks

Trick #1 – Ask the questions and look for examples from others. Trick #2 – Communication. For every change your area makes, it could affect many other areas. Know and understand the other departments processes and how they are using AX.

Trick #3 – Be Fearless, at least in the testing environments. Name: Phillip Neiman MSFT/Tech Background: .NET 4.5, .NET Core, C# (OOP), SQL, Azure, Visual Studio, TFS, Node.js, React.js Position: Junior Developer, Microsoft Dynamics AX 2012 R3 CU8/11/13 AX Implementation Role: SSMS.(Queries) => ‘Join tables to connect data points’ == reusable Views:

Examples: Customer_Addresses : Customer_Contacts : PriceDiscountAgreementJournal : WMSPickingLocation_WithoutInventory

AX Role Going Forward: As I immerse myself in X++ syntax, rules, I look to work in AOT to develop and maintain Security, the Data Dictionary, Forms, Classes, EDTs, in accordance with Kai’s Customization needs, and continue extracting data from SQL to improve productivity. Time at Kai: 12/18/17 – 1/18/17: 1 month

Favorite Module and Why: Sales/Marketing or Warehouse Mgmt for ordering complex real time transactions.

Tips and Tricks: Use Personalization function to figure out table ecosystem + Take advantage of CustomerSource AX Training videos/blogs! Q & A

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