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FEB 2019 STRATEGIC INITIATIVE UPDATE

IN THIS ISSUE Implementing our Strategic Initiative Update Strategic Imperatives 1 Implementing our Strategic Imperatives

Sales Success Story 4 D&V Electronics: Using the Positronic Dragonfly on the JBT-1 Alternator System

Global Moments 3 Auch Women’s Rugby Team Sponsorship 5 Springfield Multicultural Festival 6 Origins of Chinese New Year 7 Positronic Supports Local Sports Team 7 Springfield Tooth Truck In January, Positronic held its first full quarterly review of our Strategic 8 PISAS Celebrating the Holidays Imperatives. Leaders from all departments and across the globe participated in the 2-day meeting. The purpose of the meeting was to provide an update on the state of the company and share the progress that each Strategic Imperative Team has made. What Did We Talk About? Presentations were given about each of our eight strategic initiatives: 1. Performance Compliance – This initiative helps facilitate the construction and completion of our projects. You may have seen the new digital billboards that are being installed at our facilities. These billboards will provide an update on our progress for each initiative. Thermometers will be used to indicated progress (temperature gauge) and whether the project is on time (color will indicate status).

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2. Reduce Cost of Goods Sold – This project is without rework within the standard cycle time. Every a comprehensive review of our supply chain. scrap dollar we save has a direct, positive effect on Negotiations are being made to reduce delivered our margins and profit. Estimations are complete material costs, reduce our lead times, improve to understand our current status and the goal is to inbound quality, and improve terms. This team has improve this by 99.9%. Progress is being made and already made excellent progress to negotiate several improvement plans are being prioritized based on new agreements with our vendors and distributors their expected impact. to help us manage our raw material inventory and improve production efficiency. 6. Design for and Assembly – Identifying design improvements to reduce labor, scrap, 3. Implement Lean – We have been providing updates materials and rework means Positronic will improve on lean and kaizen events happening throughout the profit margin for our products. This team is the company and you may have already participated in one of these projects. What we learned about currently working on creating processes to realize this initiative is that “Lean works.” Smaller teams changes and savings. are looking at things like inventory reduction and 7. On Time Delivery – This team is solving the assembly set-up times. These efforts help improve challenges with late material, evaluating machine efficiency and drive down costs. processes and employee training procedures, and 4. Allocate Variances – This initiative will help us reducing late lines. One of the first questions our use data from our business systems in a more customers ask is, “what is the lead time?” and our goal comprehensive way. This team will be conducting is to be a leader in the industry for delivery times. exercises to review our processes and the data 8. Realized Gross Margin – Gross margin is the amount contained in our company systems. They will also use of sales income minus the cost of goods sold. This a modeling program to review different outcomes. team is evaluating the realized gross margin by part This effort empowers our decision making to control number and conducting an analysis of customer and manage costs and margins. behavior and sales results. The goal is to improve the 5. Quality – The Quality Team has been tasked with gross margin by at least $1 million in FY2019. increasing the percentage of conforming parts

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The amount of learning and sharing during the meeting we can help each other achieve the goals. When each was intense, and it was also clear that an incredible department or team wins, we all win. transformation was taking place. John Gentry recently In addition, an often-overlooked benefit of a face-to- shared his thoughts on the meeting in the “A Word from face team meeting at a global company is that it helps the CEO,” which can be found on our Intranet site: https:// build relationships and trust between locations and www.connectpositronic.com/en/intranet/a-word-from- the-ceo/#a-word-from-the-ceo-49. The review meeting departments. With a better understanding of each other provided the leaders attending with a chance to see and our journey, Positronic is on its way to becoming an the challenges that other departments face, how each even stronger, more successful company. Strategic Team was approaching their tasks, and how

PISAS/GLOBAL MOMENTS Auch Women’s Rugby Team Sponsorship In order to celebrate Positronic as a sponsor of the Auch Women’s Rugby Team, Stéphane Beline was invited to open the play. Thank you, Stéphane, for sharing your skills. We look forward to supporting the success of the team.

3 THE SCIENCE OF CERTAINTY. / www.connectpositronic.com SALES SUCCESS STORY D&V Electronics: Using the Positronic Dragonfly on the JBT-1 Alternator System by Scott Crawford, Americas Regional Sales Manager

D&V Electronics designs and manufactures state-of-the-art system! Each JBT-1 system uses 37 female Dragonfly and performance, endurance and production testing systems 2 male Dragonfly connectors, plus up to 7 contacts per for the global automotive industry. These are complete connector assembly, depending on the specific alternator systems for the advanced testing of electric and hybrid model to be tested. vehicle motors, inverters, batteries and E-axles. Positronic This opportunity with D&V is also expected to result in worked with our representative firm, Sigma Component future sales. Over 100 systems are now in the field for Design, to approach D&V about our connector products. testing, with 300 more to be built in Q1 2019. Overall, D&V was considered a key target customer for Positronic 1,000 systems are planned for production in 2019, with a in the automotive after-market equipment segment. growth potential of 5,000 systems in 2020 and 20,000 Steve Bass from Sigma and Scott Crawford, Regional systems in 2021. With AutoZone as the lead end customer, Sales Manager for Positronic, visited D&V last year, and additional potential sales opportunities exist at GM learned that they were developing a new evolutionary dealerships, NAPA, and O'Reilly Auto Parts. alternator tester that would be sold to many of the after- The successful market automotive supply companies, such as Auto Zone, engagement of NAPA (National Automotive Parts Association), and others. providing Dragonfly The device is called the JBT-1 and is designed to test connectors for D&V the latest generation computerized starters and “smart” involved efforts alternators with COM, BSS, LIN and RVC - PWM control from all Positronic signals. The JBT-1 will test 37 different varieties of late teams, including model automotive alternators. sales, production, The visit to D&V was successful, and the company chose engineering, product Positronic connectors for its JBT-1. This was a strategic management, and design win at D&V for the Positronic Dragonfly connector, customer service. and 39 Dragonfly cable connectors will be used on each D&V JBT-1 Alternator Tester

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Positronic has participated in the event for many years, Springfield and in 2019, we displayed our connectors to educate the community about the opportunities available Multicultural Festival in engineering and manufacturing. Positronic often Positronic participated in the Multicultural Festival in supports local activities, such as this, and we were Springfield, , on 21 January 2019. The festival able to engage the community and teach our future is an annual performing arts and community resource workforce that diversity is important in all aspects expo designed to provide access to cultural enrichment of lives, including the creativity needed to design through the visual and performing arts. The event also products and solve challenges that will make the world provides guests with a broader understanding and a better place. appreciation of the diverse resources and opportunities available in the Springfield area.

5 THE SCIENCE OF CERTAINTY. / www.connectpositronic.com PAPL/GLOBAL MOMENTS

Origins of Chinese New Year

PAPL celebrated the Chinese New Year from 4 We will be ushering in February to 7 February 2019. ZPEL, our Zhuhai facility, the Year of the Pig in also shut down for the celebration from 4 February 2019, and it has been 12 to 10 February. The Chinese New Year, also known years since the previous as the Lunar New Year, originated from . It time (2007). There are 12 is also celebrated in countries with a significant animals in the Chinese Chinese population, such as , Taiwan, Hong zodiac – Rat, Ox, Tiger, Kong, Thailand, Malaysia, Indonesia and Vietnam. Rabbit, Dragon, Snake, Traditionally, the new year lasts for 15 days and this Horse, Sheep, Monkey, tradition is still being practiced in China. However, in Rooster, Dog and Pig. The Year of the Pig Singapore, only the first two days of the new year are The animal of the year declared as public holidays. changes every Lunar New Year in this order and it is Being the biggest celebration among the Chinese believed that children born in that particular year would population, there are many practices and traditions bear certain characteristics of that animal. The zodiac associated with the Lunar New Year. On New Year’s is an integral part of Chinese culture, as the Chinese Eve, families thoroughly clean their houses to get rid of believe that your zodiac sign could affect your fortune, bad luck and decorate their houses with couplets that career, and marriage. bear auspicious greetings. Afterwards, families enjoy a PAPL team takes this opportunity to wish you a hearty reunion dinner together. prosperous, healthy and joyous new year. May this During the new year, the Chinese visit their families and new year bring you and your family happiness, luck, friends. When visiting houses, exchanging mandarin and good fortune. oranges and auspicious greetings are common practices. Additionally, elders give red packets (that contain money) to the younger generation. It is considered auspicious to don red-colored clothes during the new year, while darker hues (especially black) are deemed inauspicious and could potentially GONG XI FA CAI bring bad luck. Some popular snacks consumed during (Wishing you a year full of happiness and prosperity) Chinese New Year in Singapore include Bak Kwa (caramelized barbecued pork slices), pineapple tarts, and egg rolls.

THE SCIENCE OF CERTAINTY. / www.connectpositronic.com 6 7 PISAS/GLOBAL MOMENTS Positronic Supports Local Sports Team

Positronic supports local community activities throughout Last year, the Auch Foot-Fauteuil team participated in the the world. In , we are pleased to support the world championship, and we are proud to announce that Auch Foot-Fauteuil team and provide them with new they are Vice Champions. Congratulations to the team, sportswear. The game consists of four players (a team and we look forward to the next season! may also have up to four substitutes), three field players Team photo courtesy of https://auchfootfauteuil.fr/les- and one goalkeeper. Games are played on a basketball twisters-s-inclinent-de-peu-en-finale-de-coupe-d-. court, and players use their electric wheelchairs html equipped with a front bumper to hit and direct the ball.

PII/GLOBAL MOMENTS

toothpaste, and floss, along with other items, from their Springfield Tooth Truck operations budget. It was an awesome opportunity to be Positronic, along with Connell Insurance, recently provided able to donate something so small, yet something that a donation to the Springfield Tooth Truck. The Tooth Truck meant so much to many children in our community. provides over $1.5 million dollars worth of services, with Positronic donations allowed the Tooth Truck to purchase only about $250,000 covered by Medicaid. Medicaid is a 612 toothbrushes and 1,064 toothpaste tubes. Next year, U.S. healthcare program that provides care to low-income we hope to add 1,500 of both items and add floss as well. families, elderly, and people with disabilities. It is funded jointly by states and the federal government. The Tooth Truck services that are not covered by Medicaid funds are donated and paid for by donations. Any child between the ages of 3 and 18 that qualifies for the free/reduced school lunch program is eligible to receive free treatment on the Tooth Truck, regardless of whether they have Medicaid coverage. The Tooth Truck is available for qualifying children in its service area, no matter which school they attend. Last year, the Tooth Truck served about 1,500 students. The Tooth Truck must purchase tooth brushes,

7 THE SCIENCE OF CERTAINTY. / www.connectpositronic.com PISAS/GLOBAL MOMENTS PISAS Celebrating the Holidays

PISAS organized its traditional Christmas dinner on 14 December 2018. Thank you all for your participation and for the CSE members for this successful organization!

Visit our intranet to stay up-to-date on the latest news and information! connectpositronic.com/intranet password: kaizen A password is required for those logging in outside of the company. Please note: we change the password periodically.

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