Research Support School of Business Administration Nov. 1994 QUALITY IN THE GLOBAL PICTURE TUBE INDUSTRY Working Paper #9409-39 Anil Khurana & Brian Talbot University of Michigan

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Preface The report that comprises this working paper is the first effort to document the results of our two-year study of quality and productivity practices in the global picture tube industry. Customized confidential versions of this report were sent to each participating manager comparing their plant's responses to summary statistics for the entire industry on the several hundred questions answered in the surveys. In order to protect confidentiality, the enclosed working paper version contains realistic, but fictitious, data for a hypothetical plant, which we call "A Picture Tube Company - Plant Number I". Although data for this specific plant are fictitious, all industry-wide summary data in the working paper are real. We have just scratched the surface in analyzing the rich data base we have assembled on this industry, and would welcome suggestions from managers or academic colleagues on fruitful paths to explore. Prof. Anil Khurana Prof. Brian Talbot School of Management School of Business Administration Boston University University of Michigan 621 Commonwealth Ave. Ann Arbor, Michigan 48109-1234 Boston, Massachusetts 02215

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Graduate School of Business Administration Department of Operations Management The University of Michigan Quality in the Global Picture Tube Industry Customized and Confidential Project Report for: A Picture Tube Company - Plant Number 1 Prepared by: Date: Anil Khurana & Brian Talbot School of Business Administration The University of Michigan Ann Arbor, MI 48109-1234 U.S.A. Phone: (313) 764-6842; Fax: 763-5688 September 18, 1994 Copyright 1994 by A. Khurana and B. Talbot. All rights reserved.

Executive Summary This study of the global color picture tube industry was undertaken to assess current approaches to quality and manufacturing practices in this industry. The study was originally conducted in three phases, the last of which was a mail survey sent to 50 of 53 color picture tube factories in the world. This includes all factories in the world except those in Eastern Europe, the ex-Soviet Republics, and China. Forty-eight of these 50 plants responded to the survey, the results of which are summarized in this report. Subsequently, in 1994, color picture tube plants in China, Eastern Europe and the former Soviet Union agreed to participate. However, these data have not yet been received and analyzed, and are not included in this report. The basic findings pertain to nearly a dozen factory practices and policies that are associated with superior quality and productivity performance at the plant level. The findings are rich in their detail, and are stated in the context of this industry. Furthermore, this report is customized for each factory. That is, along with findings for the whole industry, we describe where your factory stands with respect to the rest of the industry on key quality and manufacturing practices. No one outside of your company will receive a copy of this confidential customized report for your factory from us. Hence, to maintain confidentiality it is important that you do not copy or distribute the copies we have sent to you. Based on this report, your factory can identify strengths and weaknesses, and take steps to rectify your weaknesses, and reinforce your strengths. We expect that managers at all color picture tube factories, will be able to use the findings presented in this report to improve factory practices, and hence improve quality and productivity performance. In addition to our emphasis on current factory quality and manufacturing practices, we also attempt to look into the future. What kinds of factory practices will yield the maximum benefits in the future? Will color picture tube factories see a major shift in their product mix as a result of radical changes in technology, e.g., the advent of flat-panel displays? Our report throws some light on these interesting and challenging issues. -----— ~ ---- ~ --- — ---------------— ` -I~""~IICI —~ ----~~"~- ~T1II- I

Table of Contents A. TABLE OF CONTENTS................................................... i B. PREFACE & ACKNOWLEDGMENTS..............................................ii C. HOW TO USE THIS REPORT............................................................iii Project Report I. INTRODUCTION................................................... II. METHODOLOGY........................................................... 2 III. INDUSTRY OVERVIEW................................... IV. MANUFACTURING PERFORMANCE & FACTORY RANKINGS....... 6 V. COMPANY & FACTORY MANUFACTURING STRATEGIES.............13 VI. MANAGERIAL BEST PRACTICES: QUALITY & PRODUCTIVITY.. 15 VII. SUMMARY & CONCLUSIONS.....................................29 VIII. SELECTED REFERENCES.....................................................30 Appendices I. INDUSTRY CHARACTERISTICS..................................... 33 II. DEFINITIONS OF LABOR PRODUCTIVITY AND QUALITY.............. 49 III. DETAILED SURVEY STATISTICAL RESULTS..................................... 55 IV. LIST OF IDENTIFIED PICTURE TUBE PLANTS IN THE WORLD..... 6 KHURANA and TALBOT: Global Color Picture Tube Industry Study 1

Preface and Acknowledgments This study was made possible through the active participation of many managers in the industry. For reasons of confidentiality, we will not name any of them, but we offer our sincere thanks to them, for making this study possible, and even more importantly, for teaching us so much about the industry. A few people from outside the industry also helped us in our endeavors, and we are grateful to them, in particular, to Mr. Peter Keller (Tektronix), Mr. Duane Welch (Coming), and Mr. S. Baidyaroy (consultant). Prof. Roger Johnson at The Michigan Business School was a member of Anil Khurana's Ph.D. dissertation committee and provided both encouragement and intellectual support for this research for which we are very grateful. We also acknowledge the financial and research support of the Michigan Business School, the Center for International Business Education at the University of Michigan, the Executive Education Center at the University of Michigan, and the Office of the Vice President of Research at the University of Michigan. We would also like to thank one of the companies in the industry for providing a generous grant to support Mr. Khurana's doctoral thesis. Finally, we acknowledge the super research support provided by Mr. Masaaki Yasukawa (MBA '93), Mr. Robert Rodriguez (MBA '95), Mr. Ishwari Prasad Singh (MBA '94), and Mr. Leland Smith (MBA '96) at The University of Michigan Business School. Ms. Edna Corby and Ms. Jackie Bolgos, both at The Michigan Business School were unflinching and efficient in providing secretarial support during the duration of this research project for which we thank them. We also thank the members of the Document Processing group at The Michigan Business School, in particular Ms. Melinda Stuber, for helping with the production of this document. Anil Khurana Brian Talbot Boston, Massachusetts Ann Arbor, Michigan KHURANA and TALBOT: Global Color Picture Tube Industry Study ii

How to Use This Report This report has been prepared specifically for your factory. In addition to understanding what the rest of the industry is doing, you will probably be interested in knowing where your facility ranks relative to the other factories based on our data. To accomplish this, please turn to the section on manufacturing performance and factory rankings (Section IV, pg. 6) to see where you stand on the two dimensions of internal quality and overall labor factory productivity. (Please note that if one or more of the managers at your factory did not respond fully to some of the key questions, it was impossible for us to calculate a score for your factory. If this was the case, we list your factory's score as "UNKNOWN".) After you have looked at these data, and confirmed the validity of the numbers provided there, you would probably like to know what improvements your factory can make. The section on best practices for quality and productivity (Section VI, pg. 14) outlines the various practices and policies that we identified as being associated with superior performance, and should help you understand where you can improve. This is probably the key section, since it provides a basis for continuous improvement activities. Among the other sections, Section III presents an industry overview (this description is supplemented by the Appendix I). Section V describes which quality and manufacturing approaches were used by color picture tube factories in the past 3 years, and how much emphasis is likely to be placed on these in the next few years. We hope these provide you with some ideas on practices your factory can adopt to improve your operations. Selected references are given in Section VIII. KHURANA and TALBOT: Global Color Picture Tube Industry Study iii..

INTRODUCTION I. Introduction This study of the global color picture tube industry assesses current approaches to quality and manufacturing practices in this industry. Most managers in the industry agree that the industry is in a state of flux. Some of the influencing factors include changing product standards, increasing pressures from environmental regulation agencies, new competition in the form of recent entrants into the industry, and new technologies such as flat-panel displays emerging as a feasible technological alternative. Given this, it becomes clear that manufacturing strategies for companies in this industry should focus on achieving better quality and productivity through the use of efficient automation, continuous improvement of product designs, a better understanding of the production processes and technologies, and more effective use of labor. We believe that we have some suggestions that may apply to your company. Though managers in various color picture tube companies are likely to be aware of the strengths and wveaknesses of their companies, the results from our study are presented in such a form as to assist you and other managers to become aware of the keys to success, and identify opportunities for improvement for your factory. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 1

METHODOLOGY II. Methodology This study was conducted in three phases. In Phase one, a detailed study of quality improvements at one picture tube factory was carried out. Both quantitative data from factory archives, and qualitative data (based on interviews with more than 30 managers, engineers, and supervisors) were gathered. Engineering documentation on product and process was studied to gain a better understanding of the manufacturing process, and key manufacturing issues. Engineers and managers, including those who had worked in other industries, were interviewed about differences in the nature of the manufacturing process, and their perceptions about the complexity of the process. A study of the past few years' issues of the Electronics Industries Association (EIA) newsletter provided further industry background. In Phase two we visited 10 color picture tube factories in N. America, Europe, and Japan. A structured questionnaire was used to compare practices, identify trends, and develop a framework (and survey items) that would help explain quality and manufacturing performance differences across plants. In Phase three, a detailed study of quality and manufacturing practices in the color picture tube industry was carried out using four detailed mail questionnaires that were designed on the basis of prior research and the field interviews. Four key managers - plant manager, production manager, quality manager, and engineering manager - in all of the plants in the non-communist world were requested to complete these questionnaires. In March 1993, these four questionnaires were mailed to 50 of the 53 factories in the non-communist countries. Forty eight of these 50 responded to the questionnaires, giving a 91% response rate, and making it a near-census of the industry. The data from these factories were supplemented by performance data obtained from Consumer Reports for 1986 to 1993 (Consumer Reports 1987, 1988, 1992, 1993). Partial validation of the data, especially performance data, was done via interviews with two industry experts. Subsequently, in January 1994, we obtained access to a few of the plants in Eastern Europe and China, and survey data are being collected from those plants. During June and July 1994, the authors visited some of these factories in Eastern Europe, China and India to interview managers and collect data. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 2

INDUSTRY OVERVIEW III. Industry Overview The following paragraphs give a brief overview of the color picture tube industry, as interpreted by our research team. This description is intended to narrate to you an outsider's view of the industry, and is based on our interviews with managers, and an industry analysis based on publicly available data. For further details, please see Appendix I at the end of this report. Market Demand and Production Capacity The global color picture tube industry is in its mature phase, marked by cut-throat competition. The main players are European (4), Japanese (7), and Korean (3). In all, there are approximately 20 companies in the world that manufacture TV color picture tubes (excluding the old communist bloc - China, ex-Soviet Union, and E. Europe), though at one time the U.S. alone had more than 75 color picture tube manufacturers. China, E. Europe, and some of the ex-Soviet republics have another 15 companies, most of these being joint ventures. The lion's share of the worldwide demand for televisions originates in N. America and W. Europe. Together, they consume half the world's production of TVs (but manufacture only 33%). Over the past few years, TV production capacity first moved overseas - to Japan and Korea - and then, as a result of increasing tariffs and trade disputes, is moving back into N. America and Europe. Due to relatively inexpensive dedicated automation, and low wages, Korea still produces 15 million TV sets (about 13% of worldwide production). Also, much of the production capacity even in N. America and Europe is Japanese and Korean owned. A similar situation exists for TV color tubes. Again, Korea produces a major share of TV color picture tubes; in fact, at 24 million tubes (29 million if computer monitor tubes are also included), it has the largest TV tube production capacity (21% of world production). N. America produces enough tubes to supply domestic TV assembly plants, but W. Europe imports approximately 6 million tubes for TV sets that are assembled in W. Europe. Production capacity for both TV sets and TV color tubes in N. America is expected to increase: to satisfy increased demand, in response to the North American Free Trade Agreement (NAFTA), and also to prepare for the emerging HDTV markets. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 3

INDUSTRY OVERVIEW Competitiveness In today's market, conformance quality, manufacturing costs, and tube design performance are all important priorities. Given that conformance and price are both key competitive dimensions, it immediately becomes evident that a quality-driven approach is the preferred one. A factory can try to follow an approach of cutting costs on materials and process refinement, and inspect all outgoing tubes, but it is likely to end up spending much more money. Industry Projections Today, the total market for electronic displays is $15 billion; by 1997, it is expected to reach $24 billion. Flat panel displays are expected to grow from about 25% ($3.75 billion ) today to 35% by 1997 ($9 billion). Brightness, contrast, display size, pixel count and resolution are expected to remain the primary measurements of quality, but will increasingly be redefined for flat-panel displays. Clearly, the share of flat-panel displays will increase at the expense of CRTs. Even though the absolute market will increase from $11 billion in 1993 to $16 billion by 1997, the CRT market share will drop from 75% to 65% of the total display market. The cost-effectiveness of CRTs will not be enough of an asset to enable CRTs to maintain their current hold on the market (though if picture tube manufacturers are unable to maintain or improve cost and conformance performance, the demise of the CRT may be hastened). The bulk and weight of CRTs is heavy baggage in many current and potential applications, and CRTs are being gradually replaced by flat-panel displays, or are not even being considered for new display applications. Neither is the CRT environmentally friendly; leaded glass is used to minimize the effect of harmful X-ray radiation. If environmental concerns pertaining to its disposal increase, and CRT manufacturers are required to set up disposal and recycling systems, tube costs are likely to go up. The same will be the case if pollution prevention requirements for the picture tube manufacturing process become stricter. On the other hand, the benefits of the mature CRT are its simplicity, broad utility, high luminance, excellent image quality, and cost-effectiveness. Some of the large market segments - KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 4

INDUSTRY OVERVIEW business systems, industrial products, medical equipment, computer products, and TV receivers - are expected to continue to use CRTs into the foreseeable future, and thus support CRT sales. Production Process Complexity Picture tubes have often been described as "the most complex and difficult consumer product ever made by mankind", primarily because the production process is complex. Color picture tubes have only about 2 dozen primary components, none of them complex by themselves, except for the electron gun which is generally manufactured by suppliers or in a separate factory. However, these components do have somewhat complex and multiple interactions, as also mentioned by managers during our interviews (see the Appendix 1 for a detailed discussion). Such complex processes require a higher knowledge at different stages of the process. Consequently, they benefit from multiskilling, place a premium on complex engineering knowledge, and highlight the need to share knowledge and data. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 5

MANUFACTURING PERFORMANCE AND FACTORY RANKINGS IV. Manufacturing Performance and Factory Rankings Dimensions of Manufacturing Performance We collected data on multiple dimensions of factory manufacturing performance, but due to limited responses, we focus our discussion on three key dimensions. The first is internal quality at the factory, as measured by consumption of four critical picture tube components - glass panels, masks, electron guns, and glass funnels. The measure of internal quality we report here is a simple average of the material consumption for these four components. During our interviews with managers, we identified component material consumption as a much more reliable measure of internal quality than factory-reported measures of yields. The second performance measure we report is customer quality, or line rejects, expressed in parts per million (ppm). We derived our third measure, productivity, using data on factory production volumes, factory employment, product mix (e.g., tube sizes), degree of outsourcing of components, and differences in process design. The measurement unit for our productivity measure, as used in this report, is tubes produced per employee-hour. Overall labor productivity is the measure we use for this report (though we have data on direct and indirect productivity also). Formulas for our measures of productivity and quality are given in Appendix II. We also sought data on other measures of performance, such as tube emission, and field failures. However, we received limited responses from engineers and managers on these questions; thus, we decided not to use these measures for the current analysis. We hope to obtain these data through follow-up letters to factory managers. Factory Rankings The factory rankings in this report were done on the basis of two sets of information. First, we used the data provided by managers on the consumption of the four key components used in picture tube manufacturing - glass panels, masks, funnels, and electron guns - to compute a score for internal, or factory quality. However, we did not correct for tube size while computing the different internal quality scores. A separate analysis of internal quality and tube size did indicate that larger tube sizes are likely to have poorer internal quality. More specifically, every inch increase in size KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 6

MANUFACTURING PERFORMANCE AND FACTORY RANKINGS causes an increase of approximately 2 units in material consumption. Thus, if your factory produces tubes larger than 21 inches, subtract 2 units from your factory's current score for every inch greater than 21 inches to make it comparable to the numbers used in this report; if your factory's typical tube size is smaller than 21 inches, for every inch smaller than 21 inches add 2 units to your factory's current score. Once this measure was calculated, we ranked all factories on this dimension and split them into three groups; lowest 1/3 middle, middle 1/3, and highest 1/3, labeling them respectively, Low, Average, and High performers. This internal quality-based ranking and grouping is what we use for most of the subsequent analysis in this report. Second, we computed a score for factory productivity based on data on annual production volume, product mix (tube sizes), and factory employment. As for internal quality, we ranked all factories on factory productivity and split them into three groups: lowest 1/3, middle 1/3 and highest 1/3; labeling them respectively, "Low," "Average," and "High" performers. Factory Internal Quality: Material Consumption The factory internal quality scores are based on the material consumption for each factory, i.e., the number of tube components (glass panels, masks, funnels, and guns) that were used for every 1000 good picture tubes manufactured. However, when evaluating your own factory's performance, please remember that if your factory typically manufactures large picture tubes (greater than 25"), the material consumption is likely to be higher. Thus, your factory's internal quality score and rank, when corrected for the larger size, are likely to be better than what we indicate here. In general, compared to an average size of 21", the material consumption is 2 units higher for every inch beyond this size. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 7

MANUFACTURING PERFORMANCE AND FACTORY RANKINGS Weighted Quality Ranking KiO.Peeomet 1029.0 Average Prnt _is 1063 29 Low Pecdmem 1155.20 0 200 400 600 800 1000 1200 1400 Sub-Component Needed for 1.000 Tube Compared to the scores shown above, your factory's score is 1,072.05 which is a "Averae Performer" on the quality ranking above. Your facility ranked 19 out of 47 factories on this quality score. However, please do keep in mind that the tube size typically manufactured by your factory is different from the average tube size of 21 inches that we have used to indicate the rankings and scores. Customer Quality: Line Rejects Customer line rejects for tubes is a key measure that managers at picture tube plants use to evaluate factory effectiveness. Clearly, this measure represents customer requirements, and is the end result of activities contributing to the design of product (the tube itself) and process, choice and implementation of factory production technology, extent of technical knowledge of engineers at the factory and in the picture tube business unit, and the extent to which production workers are knowledgeable and motivated. Also, though there are some differences in customer quality standards, our interviews and survey responses indicate that these differences across the four key economic regions of the world - Europe, Japan, N. America, and the Newly Industrialized Countries (NICs), are not very significant. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 8

MANUFACTURING PERFORMANCE AND FACTORY RANKINGS Customer Reject Level Measured in Parts per Million gh 0 1000 2000 3000 4000 5000 6000 Avags Psflonwwra M4U Low Psfoummrs _ 4926.25 0 1000 2000 3000 4000 5000 6000 Note: One part per million (ppm) = 0.0001%. I.e., 1% = 10,000 (ppm) The figure above indicates the range of scores that the low, average, and high performers obtained. Unlike the case for internal quality measures, customer rejects are not higher for larger tube sizes; rather, larger tubes typically have lower customer rejects, possibly because tube manufacturers pay more attention to bigger tubes. For every inch increase in tube size beyond 21", the customer reject level goes down by 50 ppm. You can use this rule of thumb to compute your factory's score for comparison purposes; the absolute score for your factory is 2,450 (in ppm rejects). Due to continuous improvements being made by the factories, as well as enhancements in production technology, performance measurements are a moving target. Hence, it is important to note that all plants reported 1992 data. At the end of 1992, average customer line rejects for the high performers (top one-third factories) were approximately 2900 ppm, for the average performers this number was 3400 ppm, while the bottom one-third factories had an average customer reject level of 5000 ppm. In general, we found that factories that also manufacture computer monitor tubes have a higher customer reject level than those that do not. So, if your factory manufactures computer monitors, your customer reject level if you manufactured TV (entertainment) color picture tubes only would be somewhat lower (about 150 ppm lower for every 10% of capacity that is devoted to computer monitor tubes). KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 9

MANUFACTURING PERFORMANCE AND FACTORY RANKINGS Factory Productivity: Overall Employee Productivity Labor productivity is a figure that production managers typically use to evaluate factory performance. We report the results on this measure (we use overall employee productivity, i.e., both direct and indirect), though we would like to emphasize that direct labor costs are only about 12% of total tube production costs, and indirect labor is 7% of tube production costs.. Further, automation influences labor productivity; we do not report productivity measures after correcting for automation, because there is no systematic way of doing so. However, factory scores on automation are reported in Section VI. During discussions with managers, we realized that even though the generic picture tube is quite similar across the world, there are differences in factory activities that account for different productivity levels. For example, some factories do not have the "black matrix" process, others do not do yoke-matching, and a few factories also assemble electron guns, manufacture masks and steel bands in the picture tube factory itself For the purpose of our calculations here, we have taken only the common set of activities while computing factory employment levels (i.e., we excluded employees working in black matrix, yoke-matching, gun manufacture, etc.). Weighted Productivity Ranking Tube Manufactured Pr Empoyo Hour HghPwbmwm |111 _ 1 1.94 iii ~ P i _ | 1.07 0 I 2 Tub" Manufactured Pr Emlpoyee Hour The measurement unit in the above figure is tubes/employee-hour. Thus, the high performers, with an average productivity of 1.94, are four times as productive as the low performers, keeping in mind, however, that these are labor productivity scores. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 10

MANUFACTURING PERFORMANCE AND FACTORY RANKINGS Compared to the scores for the whole industry, your factory's productivity score is 1.55, and that places your factory as a "High Performer" on the productivity rating chart above. Further, your factory's score was ranked 2 out of 45 possible factories. Regional Ownership and Location, and Factory Performance The figures on the next page give a regional breakout of factories that are high, average, and low performers, on internal quality. The breakout is given both by ownership and by location. As one can see from these figures, not all of the "best-performing" factories are Japanese factories; some of the Taiwanese-owned factories are among the best performers. Also, some of the Japaneseowned factories do not perform well. Further, contrary to popular belief, factory location does not correlate with performance, e.g., factories in Singapore, Malaysia, and Taiwan are among the highperforming factories. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 11

MANUFACTURING PERFORMANCE AND FACTORY RANKINGS Factory Performance in Different World Regions: Quality Regional Ownership of High Performance Factories Location of High Performance Factories N.1 C. (4) Jo (4) Regional Ownership of Average Performance Factories Wown Ewerpe (4):-,4...., I:..,:. I' As N.'~. ~..~~.; ~' Location of Average Performance Factories Regional Ownership of Low Performance Factories Location of Low Performance Factories p-s(5) Noh Allwto).~m(1) of, (4) 00- _ 4) Odr D a, IC.o3) Note: NIC = Newly Industrialized Countries = Singapore, Thailand, Taiwan, Malaysia, etc. Other = South America, India, Eastern Europe KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 12

COMPANY AND FACTORY MANUFACTURING STRATEGIES V. Company and Factory Manufacturing Strategies One of the issues that emerged from our interviews with managers was the future of the factory for the next generation of display technologies. In particular, color picture factories may start manufacturing color monitors, or as some managers suggested, may even start production of flat displays. Though we did not focus on this issue for our research, we did ask managers as to the nature of their company's and factory's future strategies. The responses are indeed interesting. Eight of the 48 responding plant managers expected that their factory would start manufacturing liquid crystal displays (LCDs) of one kind or another. Thirty-five of the 48 managers said that they expected their factories to start producing color computer monitors or tubes. It appears that most managers believe that the CRT will ultimately (but not very soon) be replaced by flat-panel displays, and expect their factories to take steps to respond to the change gradually. We also asked managers to respond to questions about the utility and effectiveness of a variety of factory quality practices. Naturally, there was a lot of variation in what managers perceived to be useful. However, some of the trends are interesting. The table below highlights the trends by presenting the average measures for each category. The scale used for this table is 1=Little Benefit/Emphasis, 3=Some Benefit/Emphasis, 5=Great Benefit/Emphasis. Factory Quality Practice Benefits in last 2 years Emphasis in next 2 years Using Statistical Process Control charts 3.38 4.13 Use of experimentation (e.g. Taguchi) 2.37 3.56 Use of cross-functional teams 3.67 4.26 Use of customer quality teams 3.32 4.16 Use of work teams, quality circles, etc. 3.33 4.04 Use of job rotation 2.85 3.38 Systematic preventive maintenance 3.72 4.57 Use of information systems for quality 3.63 4.44 Use of bar coding systems 2.13 3.72 KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 13

COMPANY AND FACTORY MANUFACTURING STRATEGIES The preceding table indicates that managers expect to emphasize most of the tools and practices listed there. For example, the use of Statistical Process Control (SPC) charts is expected to be even more greatly emphasized, even though some of the benefits from using SPC charts have been realized in the past 2 years. The list also indicates that the greatest relative emphasis is expected to be on increasing experimentation, improving preventive maintenance, enhancing quality information systems, and using bar code systems. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 14

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY VI. Managerial Best Practices: Quality and Productivity Based on the study, several key management practices were identified as influencing quality and productivity at color picture tube plants world wide. We grouped these practices into two sets. The first is a set of activities that appears to influence both quality and productivity, while the second set of activities influences productivity, but does not appear to be strongly associated with quality. Factory Practices that Influence Quality and Productivity There are seven practices that correspond to production sites having both high quality and high productivity ratings. These seven practices pertain to: 1. Use of automated materials handling processes 2. Use of process automation 3. Implementation of process automation 4. Strategic planning for quality 5. Quality policies 6. Organization of engineers at factories 7. Use of quality information systems A brief description of each of these seven practices is given in the following pages. 1. Automated Materials Handling Processes. Factories that have higher material handling automation in the production process also achieve higher quality and productivity. In fact, statistical analysis of the data indicated that at least 10% of the variation in performance was explained by differences in automated material handling. As the figure below indicates, low performers had higher manual material handling than the high or average performers. Compared to the numbers in this figure, your factory's score was 1.1. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 15

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY Manual Materials Handling Low Pedocnm.... — er " 2.10 0 1 2 3 4 5 Level of Influence (Means) ==> An indication of what aspects of the process may be important is provided by graphing two of the components of material handling automation: the number of times a picture tube or its components are manually handled before and after the frit-sealing process step. In high performing factories, the number of times a picture tube is manually handled is nearly half the number of times it is manually handled in the average performing factories. Compared to the numbers in these figures, your factory's scores were 2.0 for manual handling of the mask before the frit-seal step, and 1.5 for manual handling of the picture tube after frit-sealing. Before Frit Sealing, How Many Times Is The Mask Moved Manually HfpP etio3 mw 1.13 Aw.Ptm. _ |ed o 125 0L P bm~1 2 3 4 i 0L 1 2 3 4 5( ftwe at Iduwm (d p) - I After Frit Sealing, How Many Times Is The Picture Tube Moved Manually Ho ft kor =a I |Aege P l 219 o 0 1 2 3 4 5 Lvae kdwluwnceMear} ) > KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 16

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY 2. Use of Process Automation The second key factor that explains quality and productivity differences across color picture tube factories, is the degree to which the production equipment and process control are automated. That is, what percentage of production equipment is programmable, self monitoring, and possibly self correcting? High-performing color picture tube factories are 15-30% more automated than low and average performing factories. The figure below indicates this difference. Your factory's score was 2.6. Automation of Production Equipment HghPwtn m 2.61 Aveang Pedaomwn |* 2.49 Low Pedon 2.38 0 1 2 3 4 5 Level of Influence (Means) ==> Two key indicators of the degree of production equipment automation are the extent to which black-matrix and lacquer/aluminizing machines are automated. As the figures below indicate, the difference between the low and high performers is particularly large for the extent of automation of lacquer and aluminizing machines. On these dimensions, your factory's scores were 3.1 and 3.0, respectively. Automation of Black Matrix Machines, I ^-Psmr 293 I La. Pob.t.a 2.56 0 1 2 3 4 S Lo d. (nkunt (Mnr.) - Automation of Lacquer & Aluminizatlon Machinn _i I I.,.i4 0 1 2 3 4 5 LOW dco r*k (Mr.) - KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 17

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY 3. Implementation of Process Automation The third most important factor that influences quality and productivity was also associated with factory automation: the care and attention with which process automation is designed and implemented. The high-performers paid close attention to these tasks, while the low-performers focused fewer resources on these key activities. You can compare your factory's performance by knowing that your factory's score was 3.6. Implementation of Process Automation Hiot PMUwU 4.20 OaW Psdaernm 3. 1 ---- I 0 1 2 3 4 5 Degr of Implenmntation => Three examples of how the high-performers implement production automation are: a) the extent to which the production equipment is tested and operated by engineers before installation, b) the extent to which operating procedures for the production equipment are rewritten and verified before and after equipment installation, and c) the degree to which equipment engineers work with factory engineers to specify equipment specifications. On these dimensions, your factory's scores were 4.0. 5.0. and 5.0 respectively. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 18 tn

Equipment is Tested and Operated by Engineers Before Installation AIaIv Pekw. C.& ~Ba88888889~8 ~I397 0 1 2 3 4 5 og ) dt hle cn o (a) MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY Operatng Procedures are Rewritten and Verified After Equipment Installation ghPa. EE 4.53 L owp Pe l l3mm 0 1 2 3 4 (b) d blmb -l (b) Engineers Work Closely to Modify Equipment Specs After Installation 0 1ghPo s -7ovi4.5msB 4.53 lA ----;~ _Pw _~-.- 4.50 0ow:P o 2I 4 13 O 1 2 3 4 5 Le.wd MaCa N(Utm) (C) Other components of this key factor are: a) the amount of training production and maintenance workers are given for the operation and care of the new machinery, b) the extent to which design, equipment, and factory engineers work together to ensure compatibility of product, process, and equipment designs, and, c) the extent to which factories select test equipment which is similar to customer factories. 4. Strategic Planning for Quality An important factor that influences quality and productivity is the manner in which an organization plans for quality. This includes practices such as setting quality objectives for inclusion in long-term planning, including quality managers in strategic planning, and incorporating quality in formal financial reports. The overall measure for this practice indicates that the high-performers do a somewhat better job of planning for quality than the average or low-performing color picture tube factories (please see figure below). Compared to the mean score of 4.50 for the high-performing factories, your factory's score was 3.0. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 19

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY Strategic Planning of Quality ihPtokmem 4.50 aP r Podmer 4.19 Lo FI..... 419 1 2 3 4 S e d InrdluM (MwN) -o As an example of what particular activities constitute such strategic planning, we present graphs for two of these: the extent to which quality is mentioned in financial reports, and the extent to which quality objectives are included in multi-year plans for the factory. For the first one, compared to the score of 4.53 for the high-performers, and 3.88 for low-performers, your factory's score was 3.0. For the second practice of including quality objectives in multi-year plans, compared to the high-performer score of 4.73 and low-performer score of 4.44 (the difference is not great), your factory's score was 4.5. Quality Is Mntkoned hi Formal FinancIal Reports or he Factory o I 2 *3 4 Lwd otf h (Mr-) 1 - Quality Oblectives Ar Included In Muli-Year Plarn for th Factory LrC~1cn L~e I ~ B~E~P~b~P"I I I I 0 1 2 3 4 5 Ledl of WN (Meor) o. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 20

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY 5. Quality Policies We use "quality policies" as a broad description for a set of practices that shape employee incentives, use of quality programs, and the effectiveness of some emerging practices such as the use of work teams. We group these quality policies into three categories: a) Use of quality-based financial incentives b) Use of teams. c) Use of complementary quality programs. Use of Quality-based Financial Incentives The data reveal that the use of financial incentives for quality is associated with superior quality performance, i.e., the higher the level of quality-related financial incentives, the better the quality performance. Though this should not come as a surprise, it does contradict what some of the quality gurus such as Deming have been saying, e.g." don't set financial rewards....". However, as the figure below indicates, the extent to which factories use quality-based financial incentives is limited, and there is certainly scope for improvement. The score for high-performers on the use of quality-based financial incentives was only 2.83. In comparison to this score, your factory had a score of 1.6. Use of Quality Based Financial Incentives at the Factory AmOa Ps.ms 2.-. I C:...... 0 1 2 3 4 5 Lulw d WA. nce acee Two examples of how factories use financial incentives for quality are the extent to which managers and workers are financially rewarded based on quality performance. On the first measure, of how managers are rewarded on qualitvy performance, the high performing KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 21

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY factories had a score of 2.60 whereas your factory scored a 1.0. On the second measure of worker rewards for quality performance, your factory's score was 3.0 whereas the highperformers scored, on average, a 3.07. Managers Get Rewarded Based on the Factory's Quality Performance Aw9m_ p A_ I E m I --- I0 1 2 3f R 4 5m Sa 2.0 0 1 2 3(n 4 LHvI d Anlr m em) - Workers Get Rewarded Based on the Factory's Quality Improvements I.ghP.4... 0 1 2 3 4 5 Lsld l Incm(Mom) - Use of Teams Quality improvement efforts have long since recognized the importance of teams. The data that we collected for the color picture tube industry also supported this contention. Thus, factories that actively used worker teams had higher quality than factories that did not use teams. Further, we discovered that factories use teams in various ways. Some'factories use self-directed work teams, others use quality circles, while still others use customer-focused teams of managers and supervisors. While studying the use of teams, we found that the degree of responsibility given to worker teams often is a strong indicator of how well the factory performs. This is due to two reasons. The first, of course is the fact that when teams are given greater responsibility, team members are able to solve problems quicker, come up with better solutions, and are likely to be more motivated. Second, factories that give greater responsibility to their worker teams, do so because they have faith in the capabilities of their workers. As a result of both these factors, factories that give greater responsibility to their workers are likely to have higher quality. An example is provided in the figure below, which indicates the extent to which teams identify and implement the use of new technology in the factory. At the high-performing factories, teams played a bigger role in selecting and adopting production technologies. Your factory's score on this dimension was 4.0 compared to the average score of 2.87 for the high-performing factories. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 22 1-,

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY At the Factory, Teams Identify and Implement the Use of Technology High pokurim 2.57 Low _wkmp m 2.41 0 1 2 3 4 5 Lmv d ok*u wM a) s.-) Using Complementary Quality Programs A key observation that we had made during our interviews with managers at the 10 factories was that maintaining a balance and consistency between different quality programs was important, e.g., between the use of SPC and the focus on work teams. The data from the survey support this observation, in that we found that the high-performing factories tend to implement quality programs such that they are complementary and consistent with each other and the overall factory strategy. The difference, as the figure below indicates, is not great, but that may be because of the bias managers may have while reporting the information pertaining to this issue. In other words, we might expect the better-performers to say that they want more complementarity among quality programs than currently exists, so that they can improve faster. In order to give your factory an idea of how you rank on this criteria, we analyzed these data and found that your factory's score is 2.9 while the high-performer's score is 3.80. At the Factory, Current Quality Programs Complement Each Other H01 P234 A,,Bmage Poilmom sr ~ ~w~l~8aupma~wwspLl s 3 56M La_|9P _~ormm '= - - --— r i - _i 3S i O t 2 3 4 S LI d hasruw (M ).y KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 23

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY 6. Organization of engineers atfactories The sixth important factor that influences quality and productivity is the manner in which engineers are organized and work. During our field interviews, we had discovered that, due to the complexity of the production process, engineers benefit greatly by being familiar with technical knowledge in other production areas and functions. Furthermore, the interactions between different process steps and performance dimensions require extensive coordination between technical personnel in different areas. The survey data confirm this observation as the figure below indicates. High-performers had a substantially higher score on this dimension, than the average and low performers. What is even more important is that very few of the factories in the picture tube industry have explored the potential of this factor, as the low scores for all the factories indicate. Thus, we find that picture tube factories can reap rich rewards by exploring the potential of this engineering practice. Your factory's score on this dimension was 2.3. Training & Responsibility of Enginering Ho1. Ap-v. 0 1 2 3 4 5 LdO i 2 3qx 4 5 LrvW d Posrpar blty A TNq -g An example of a key dimensions of this important factor is the frequency with which design and production engineers are rotated across these functions. This is depicted in the following figure. On this dimension, your factory's score was 1.0. Rotation of Engineers through Dei)gn and Production Every 3 Years 0 1 2 3 4 5 LmOd hrtI. (Mdr). — KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 24

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY Other important elements of this practice of creating a core of technical knowledge among engineers, as well as production workers, are: a) Having engineers spend a larger percentage of the time on the production floor, b) Requiring engineers to train production personnel to solve process and quality related problems, and, c) Ensuring that the results of problem-solving by engineers are communicated to production workers. 7. Use of Quality Information Systems Frequent and factory-wide information use and dissemination influences quality and productivity to a great extent; nearly 20% of the performance differences (quality and productivity) across color picture tube factories in the world are due to differences in the effectiveness with which quality information is gathered and used. On this dimension, your factory had a score of 4.5: the high-performers scored a 3.53. Use of Quality Information Kopedmw, 3. 53~r e 3.53 LOw Prfom 213 0 1~2.3 4 0 1 2 3 4 5 Level d Influence (Means) ==> Some of the other individual elements of this factor are shop-floor practices such as: a) Sharing root cause analysis of customer-returned tubes among factory engineers, b) Analysis of field failures data provided by TV set factories, and, c) Having production workers and technicians use computers to identify quality problems, and then conduct root cause analysis to resolve them. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 25

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY The following two figures report the scores for the high, average, and low performers on the first two of these elements. orresondin to theese figures your factory's scores were 4.0, and 5.0 respectively. Root Cause Analysis Is Performed on Tubes Returned from Customers NOh Pwbffn l If z3 AwaW Pw kw., w i 3.!, 0 1 2 3 4 5 LIvd hlum n(Mw) TV Set Factories Provided You Data on Field Failures Mwng~R ~..g.P.4........ ~ 3.00 0 1 2 3 4 5 L od bdutnM (M ) -s Factory Practices that Influence Quality, but not Productivity There were two factors among the various factors we studied, that influence quality, but are not strongly associated with productivity. These are: 1. Product and Process Design Release Practices Given the complexity of the production process, and the fact that tube conformance and reliability are highly influenced by tube design, we wanted to focus on design issues and design management practices. This, however, was not possible because only a few of the factories actually design picture tubes. Hence we narrowed our focus to study a typical factory's role in the design process —namely design implementation at the factory. During our field interviews, we found that some factories spent a lot of time and effort creating new product and process designs or modifying existing ones, but when it came to implementation, they seemed to slacken off. We identified a set of practices that we call "Product and Process Design Release Practices." On this dimension, low performers had a mean score of 3.58 while high-performers had a mean score of 4.43. Your factory scored 4.6 on this dimension. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 26

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY Information Exchange and Product & Process Changes H9h P4km im 4.43 Avrage P -e- _A Ow Potkmne O L 2 3 4 5 Levl d n (Mo ) -co In order to give you a better sense of this factor, we have graphed two of the key practices that describe this factor. The first is the frequency and care with which various departments are informed of design changes, and the second is the frequency with which production engineers and managers have to sign-off and approve design changes before they are implemented. For the figures given below, your factory's scores were 5.0 and 5.0 respectively. Departments Are Informed of the Schedule for Design Changes A...g. ~ I - j3. AwgpPorfo l _ 4.13 0 --— b~7 1 2 — 3.73 0 1 2 3 4 5 L|' of IrdLu.ncw (Md m). - Production Engineers & Manager Approve Design Changes 0 1 2 3 4 5 Ie G l LMun I(Me) -c KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 27

MANAGERIAL BEST PRACTICES: QUALITY AND PRODUCTIVITY 2. Customer Focus Though we measured the degree of focus in a number of different ways, one reasonable definition provided us with an unexpected result. We asked production managers the extent to which they focus on customer quality teams. When we correlated this variable with quality performance, we found a negative correlation. This result is pictorially represented in the figure below. Your factory's score on this factor was 3.5. Customer Focus H4g Pferonrtm 2.00 Anvge PD C orkm s 2.38 01 2 3 4 5 Level od Influence (Mean) => However, data from production managers do suggest there is a strong positive relationship between quality and the number of visits each engineer and production supervisor makes to customer facilities. Further, there is a weak relationship between the quality and the number of visits each manager makes to customer facilities. On these measures, the difference between the number of visits by high quality plants and low quality plants was very significant. On average, the personnel from the high quality plants were visiting their customers four times more often than personnel from low quality plants. Based on these results, it seems quality is more likely to be affected positively by visiting the customer than establishing and using customer quality teams. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 28

SUMMARY AND CONCLUSIONS VII. Summary and Conclusions This study of the global color picture tube industry reveals that regional differences in quality performance are small, compared to a few years ago. A number of non-Japanese factories in our study were among the high-performing factories in the world, whereas many Japanese factories did not perform particularly well. Thus, the search for best practices can no longer be limited to Japanese companies and factories. It is in this spirit that we analyzed the influence of a variety of quality and manufacturing practices on quality performance, and found that certain practices were associated with higher quality. Key factors include factory automation, effective adoption and implementation of automation, multi-disciplinary organization of engineers at factories, the use of quality information, quality planning, and a number of quality policies. This study also raises some important questions for managers and researchers. Should color picture tube factories diversify to manufacture color monitors? What should be the approach of factory managers towards adopting a manufacturing strategy that recognizes the emergence of flatpanel technologies? And various other issues! KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 29

SUMMARY AND CONCLUSIONS VIII. Selected References Bechs, Dennis J. (1991), "CRT technology survey," Information Display, 7, 12, December, 8-12. Buzzell, R. D. and B. T. Gale (1987), The PIMS Principles: Linking Strategy to Performance, The Free Press, New York, NY. Cameron, Kim S. (1991), "Quality Culture Types and Performance," Academy of Management Meeting, 1991. Chew, W. Bruce, Dorothy Leonard-Barton, Roger E. Bohn (1991), "Beating Murphy's Law," Sloan Management Review, 32, Spring, 5-16. Clausing, Don and Genichi Taguchi (1990), "Robust Quality," Harvard Business Review, 68, JanFeb, 65-72. Cole, Robert (1990), "U.S. Quality Improvement in the Auto Industry: Close but No Cigar," California Management Review, Summer, 71-85. Crosby, P. B. (1980), Quality is Free: The Art of Making Quality Certain, McGraw-Hill, New York, NY. Deming, W. E. (1986), Out of the Crisis, MIT, Centerfor Advanced Engineering Study, Cambridge, MA. Denison, Daniel R. (1990), Corporate Culture and Organizational Effectiveness, John Wiley, New York, NY. Ettlie, John E. and Ernesto M. Reza (1992), "Organizational Integration and Process Innovation," Academy of Management Journal, Dec. Fiegenaum, A. V. (1983), Total Quality Control, McGraw-Hill, New York, NY. Garvin, D. (1983), "Quality on the Line," Harvard Business Review, 61, 5, Sept-Oct, 65-75. Hayes, Robert H. and Kim B. Clark (1986), "Why Some Factories are More Productive Than Others," Harvard Business Review, Sept-Oct, 66-73. Hayes, Robert H., Steven C. Wheelwright, and Kim B. Clark (1988), Dynamic Manufacturing: Creating the Learning Organization, The Free Press, A Division of Macmillan, Inc., New York, NY. Imai, M. (1986), KAIZEN: The Key to Japan's Competitive Success, Random House, New York, NY. Ishikawa, K. (1985), What is Total Quality Control (The Japanese Way), Prentice-Hall, Inc., Englewood Cliffs, NJ. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 30

SUMMARY AND CONCLUSIONS Juran, J. M. (1978), "Japanese and Western Quality: A Contrast," Quality Progress, 10-18. Juran, J. M. and Frank M. Gyma (1980), Quality Planning and Analysis, McGraw-Hill, New York, NY. Keller, Peter (1993), Cathode Ray Tube, The Palisaedes Institute Press, New York, NY. Leonard-Barton, Dorothy (1989), "Implementing New Product Technologies: Exercises in Corporate Learning," Managing Complexity in High Technology Industries: Systems and People, eds. M. Von Glinow and S. Mohrman, Oxford Press, London. MacDuffie, John Paul and John F. Kracik (1992), "Integrating Technology and Human Resources for High-Performance Manufacturing: Evidence from the International Industry," Transforming Organizations (eds. Thomas A. Kochan and Michael Useem), Oxford University Press, New York, NY, 209-225. Manufacturing Studies Board (1992), Dispelling the Manufacturing Myth: American Factories CAN Compete in the Global Marketplace, National Academy Press, Washington, D.C. Mizuno, S. (1988), Company-Wide Total Quality Control, Asian Productivity Organization, QR Quality Resources, White Plains, New York, NY. Pascale, R. (1985), "The Paradox of "Corporate Culture": Reconciling Ourselves to Socialization," California Management Review, 27, 2, 26-41. Perrow, Charles (1967), Complex Organizations (3rd ed.), Random House: New York, NY. Peters, T. J. and R. H. Waterman (1982), In Search of Excellence, Harper and Row: New York, NY. Porter, Michael (1983), "The U.S. Television Set Market," Cases in Competitive Strategy, Free Press: New York, NY, 511. Saffold III, Guy S. (1988), "Culture Traits, Strength, and Organizational Performance: Moving Beyond "Strong" Culture," Academy of Management Review, 13, 4, 546-558. Schein, E. H. (1985), Organizational Culture and Leadership, Jossey-Bass, San Francisco, CA. Sherkenbach, W. W. (1987), The Deming Route to Quality and Productivity: Road Maps and Road Blocks, CEEPress, Washington, D.C. Schonberger, Richard J. (1982), Japanese Manufacturing Techniques, The Free Press, New York, NY. Suzaki, Kiyoshi (1987), The New Manufacturing Challenge: Techniques for Continuous Improvement, The Free Press, New York, NY. Taguchi, Genichi and Yu-In Wu (1980), Introduction to Off-line Quality Control Systems, Central Japan Q. C. Association, Nagoya, Japan; and American Supplier Institute, Dearborn, MI. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 31

SUMMARY AND CONCLUSIONS Teboul, James (1991), Managing Quality Dynamics, Prentice-Hall: New York, NY. Walton, M. (1986), The Deming Management Method, Dodd, Mead, New York, NY. Weber, Max (translation by Talcott Parsons (1930), The Protestant Ethic and the Spirit of Capitalism, Scribners: New York, NY. Weick, Karl E. (1987), "Organizational Culture as a Source of High Reliability," California Management Review, 29, 112-127. Weick, Karl E. (1990), "Technology as Equivoque: Sensemaking in New Technologies," Technology and Organizations (Paul S. Goodman, Lee S. Sproull, and Associates), JosseyBass Publishers, San Francisco, CA, 1-44. Wheelwright, S. C. and Robert H. Hayes (1985), "Competing Through Manufacturing," Harvard Business Review, January-February, 99-109. Womack, James P., Daniel T. Jones, and Daniel Roos (1990), The Machine That Changed the World, Maxwell Macmillan International: New York, NY. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 32

INDUSTRY CHARACTERISTICS Appendix 1: Industry Characteristics This section first describes the industry structure - market shares, global demand and supply - and its evolution. Next, the competitive priorities for industry competitors, and also how these priorities have evolved since the commercialization of color television are identified. What is the best strategy for achieving these priorities? Based on managerial interviews, we suggest that a qualitybased approach should be adopted. Finally, based on published data and interviews with managers, we speculate on the future of the industry. Industry Overview Today, the global color picture tube industry is in its mature phase, marked by cut-throat competition. The main players are European (4), Japanese (7), and Korean (3). Figure 1 below gives 1992 market shares for the major TV color picture tube competitors, worldwide. [Others I E d_ [Toshiba (4.0% 6.8%) Ei? 34 (112%e) E Erope (6.2%) srny.4 (8.9) H hi ).............(8.0.%)!-Matsuita j A'____ a(2.6%) (4.04%)NEC EI TV color picture tube market shares for leading competitors Figure 1 Sources: Survey, industry reports, company documents. Today there are approximately 20 companies in the world that manufacture TV color picture tubes (excluding the old communist bloc - China, ex-Soviet Union, and E. Europe), though at one time the U.S. alone had more than 75 color picture tube manufacturers. The economics of manufacturing in this industry favor multi-million tube capacity factories. Investments in new factories run into hundreds of millions of dollars (Typical examples are those of KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 33

INDUSTRY CHARACTERISTICS Matsushita's $150 million factory at Troy, OH built in 1988 with an annual capacity of 2 million tubes, and Toshiba's Horseheads factory whose 3 million unit capacity cost $220 million in 1986). Given high scale economies, high capital requirements, and the competitive nature of this industry, it is no surprise that there are very few players in the industry, and few factories in the world. There are approximately 70 factories in the world today; of these 20 are in China, Eastern Europe, and the former Soviet Union. The industry is also marked by high levels of vertical integration. Except for an Indian firm, and some of the Chinese and ex-U.S.S.R. firms, all other picture tube manufacturers also assemble and sell TVs and half of the sixty odd TV set makers in the world have their own picture tube factories. Upstream integration is also high: most of the picture tube business units also own their own glass and gun manufacturing units. Further, due to requirements for high quality and flexible delivery, picture tube business units typically have very close relationships with their suppliers2. Another very important characteristic of the industry is the extent of cross-flows of picture tubes among competitors. Thus, for example, Matsushita sells color picture tubes to Hitachi and buys from Philips and Toshiba, among others. Global markets: Demand and Capacity The lion's share of the worldwide demand for televisions originates in N. America and W. Europe. Together, they consume half the world's production of TVs (but manufacture only 33%). Over the past few years, TV production capacity first moved overseas - to Japan and Korea - and then, as a result of increasing tariffs and trade disputes, is moving back into N. America and Europe. Due to relatively inexpensive dedicated automation, and low wages, Korea still produces 15 million TV sets (about 13% of worldwide production). Also, much of the production capacity even in N. Vertical integration was important for survival in the TV industry because it enabled lower costs, and control over supply of key components. The same is true of the picture tube industry: many surviving companies have their own glass factories that can meet all or part of their glass demand (or, in the case of Japanese manufacturers, longstanding relations and stock ownership with the glass manufacturers). 2 Economists and business researchers contend that the more mature, stable, and competitive the industry (e.g. the TV and picture tube industries), the greater the desire for tighter control over the value chain among surviving firms in the industry. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 34

INDUSTRY CHARACTERISTICS America and Europe is Japanese and Korean owned. A similar situation exists for TV color tubes, as Table 1 shows. Again, Korea produces a major share of TV color picture tubes; in fact, at 24 million tubes (29 million if computer monitor tubes are also included), it has the largest TV tube production capacity (21% of world production). N. America produces enough tubes to supply domestic TV assembly plants, but W. Europe imports approximately 6 million tubes for TV sets 3 assembled in W. Europe. Production capacity for both TV sets and TV color tubes in N. America is expected to increase: to satisfy increased demand, in response to the North American Free Trade Agreement (NAFTA), and prepare for HDTV markets. Table 2 presents the same data in terms of net exports and imports. From the first 4 columns, we see that Japan, Korea, Taiwan, China, and S.E. Asia are net exporters. Korea and China are expected to play an increasingly important role in the next few years. An interesting observation comes from looking at the last 2 columns of Table 2; there appears to be a regional imbalance in the location of picture tube and TV assembly plants, possibly due to different labor intensities and different wage levels for the manufacturing processes for picture tubes and TV assembly. Korea has a much higher picture tube capacity than TV assembly capacity, while W. Europe has a much smaller tube capacity than its TV assembly capacity, possibly because W. Europe emphasizes production of large size tubes. This imbalance has an important implication for this study: specifications and conformance standards are quite similar across the world. Certainly there are differences: NTSC (in the U.S.) and PAL/SECAM (in Europe) require different screen line counts (525 vs. 635); European set makers emphasize white field purity much more than others; and the U.S. and Japan were the first ones to use black matrix - Europe followed a few years later. However, overall requirements are somewhat similar, as our field interviews, and the survey data reveal. This difference is\ probably because of different tariff rates. The United States and Canada impose heavy duties of 5-10%, (and 15% under NAFTA), whereas European duties are lower (<5%). KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 35

INDUSTRY CHARACTERISTICS Worldwide TV Demand Actual 1992 Forecast 1996 Country/ millions percent millions percent Region of units % of units % N. America 21.7 22.75 24.8 21.27 S. America 5.0 5.24 6.5 5.57 W. Europe 24.8 26.00 28 24.01 E. Europe 9.1 9.54 11.5 9.86 Japan 9.0 9.43 9.0 7.72 Korea 1.5 1.57 2.0 1.72 Taiwan 1.0 1.05 1.5 1.29 China 9.2 9.64 13 11.15 S.E. Asia 7.0 7.34 9.0 7.72 Other Asia 1.5 1.57 2.5 2.14 Africa 5.6 5.87 8.8 7.55 95.4 100.00 116.6 100.00 Worldwide TV Capacity Actual Forecast 1992 1996_ millions percent millions percent of units % of units % 18.0 15.93 22.0 16.79 4.0 3.54 4.0 3.05 21.0 18.58 23.0 17.56 9.0 7.96 13.0 9.92 11.0 9.73 11.0 8.40 15.0 13.27 13.0 9.92 3.0 2.65 3.0 2.29 12.0 10.62 15.0 11.45 18.0 15.93 23.0 17.56 2.0 1.77 4.0 3.05 0.0 0.00 0.0 0.00 113.0 100.00 131.0 100.00 Worldwide TV Tube Capacity Actual Forecast 1992 1996 millions percent millions percent of units % of units % 19.5 16.70 21.0 15.97 4.0 3.42 4.0 3.04 15.0 12.84 18.0 13.69 9.0 7.71 11.0 8.37 13.0 11.30 11.0 8.75 24.0 20.55 21.0 15.97 3.0 2.57 2.0 1.52 13.0 11.13 17.0 12.93 14.0 12.07 23.0 17.49 2.0 1.71 3.0 2.28 0.0 0.00 0.0 0.00 116.8 100.00 131.5 100.00 Worldwide demand and production capacity for color TVs and color TV tubes Table 1 Source: Survey, industry reports, company documents KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 36

INDUSTRY CHARACTERISTICS Net TV exports (imports) TV capacity - demand Net TV tube exports (imports) Tube capacity - TV demand Actual 1992 Forecast 1996 Country/ millions of units millions of units Region.... N. America (3.70) (2.80) S. America (1.00) (2.50) W. Europe (3.80) (5.00) E. Europe (0.10) 1.50 Japan 2.00 2.00 Korea 13.50 11.00 Taiwan 2.00 1.51.50 China 2.80 2.00 S.E. Asia 11.00 14.00 Other Asia 0.50 1.50 Africa (5.60)(8.80) Actual Forecast 1992 1996 millions of units millions of units (2.20) (3.80) (1.00) (2.50) (9.80) (10.00) (0.10) (0.50) 4.20 2.50 22.5 19.00 2.00 0.50 3.80 4.00 7.10 14.00 0.50 0.50 (5.60) (8.80) Net outbound tubes (inbound) Tube capacity - TV capacity Actual Forecast 1992 1996 millions of units millions of units 1.50 (1.00) 0.00 0.00 (6.00) (5.00) 0.00 (2.00) 2.20 0.50 9.00 8.00 0.00 (1.00) 1.00 2.00 (3.90) 0.00 0.00 (1.00) 0.00 0.00 Worldwide trade in color TVs & picture tubes, and transportation of color TV tubes Table 2 Source: Survey, industry reports, company documents KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 37

APPENDIX 1: INDUSTRY CHARACTERISTICS Competitive Priorities Industry competitive priorities - quality and others In today's market, conformance quality, manufacturing costs, and tube design performance are all important priorities. Data from the past few years' Consumer Reports were compiled and analyzed with the objective of identifying major competitive priorities. The Consumer Reports data are available for TV sets, but some of the performance dimensions are primarily picture tube characteristics. An analysis of these data indicates that features such as interface (as exemplified by inputoutput devices), convenience (as reflected in the ease of use of the set and remote), and receiver sophistication (which comprises color correction, color control, and adjacent channel interference protection capabilities), explain a substantial fraction of price variance. However, picture tube performance characteristics (clarity, color fidelity, contrast, brightness), reflecting design and manufacturing excellence, do explain about 15-20% of the variance before correcting for TV size, and 25-30% after correcting for TV size, and are significant predictors of the price of TV sets. Since tube performance is evaluated using actual sets, these scores (for tube performance) actually represent a combination of tube design performance and tube manufacturing conformance (further, tube conformance also affects costs). The above analysis does not identify all the competitive priorities for picture tube manufacturers. For one, customers see a composite product: a TV's performance is the net result of the individual performances of the picture tube, the receiver circuitry, the display circuitry, and design and inclusion of certain features. Second, some of the demands placed on picture tube manufacturers may be important only to TV set makers, and never have significance for the customer; for example, picture tube delivery and flexibility requirements do not have much to do with final customer needs. Thus, the following few paragraphs attempt to specify the important dimensions on which tube manufacturers compete. Earlier we mentioned that TV and picture tube manufacturers have close relationships with suppliers, possibly resulting from a desire to control cost and quality in the upstream stages of the value chain. Given this desire to control the value-chain, it is interesting to observe the relationships KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 38 t

APPENDIX 1: INDUSTRY CHARACTERISTICS between TV set manufacturers and picture tube supplier plants. The initial decision by a TV assembly plant to source picture tubes is based on a number of factors, the most important of which are issues pertaining to product performance, quality, cost, and delivery. Discussions with managers revealed that during the sourcing decision, product performance and delivery are order qualifiers, whereas conformance and price are order winners4 5. Once the customer-supplier relationship is established, TV set factories resist changing picture tube suppliers. The perceived cost of switching picture tube suppliers is high because TV chassis designs may need to be modified, new testing procedures have to be established, and new logistical arrangements must be made. As a result, during the later stages of the customer-supplier relationship, the distinction between order winners and order qualifiers disappears; picture tube plants must not only improve conformance and maintain low prices, but also remain at par with other tube manufacturers on tube designs and the ability to make deliveries quickly and flexibly. Thus, in today's market, conformance quality, manufacturing costs, and tube design performance are all important priorities. These requirements are reflective of the industry's current position along the product life cycle: both industry demands and management emphasis change as a result, as the next section shows. Changes in competitive priorities Along with the evolution of product and process technology, evolution of the product life cycle, and changes in industry organization, competitive priorities have also changed in the color picture tube industry. Initially (1928-1959), the focus was on product innovation. In the next stage (1959-1969), product performance became a primary goal. In the mature stage (1969-1985), conformance and cost became important6. And in the present stage of possible industry decline 4 We asked this question of plant managers at 9 tube plants in 5 companies in the U.S., Europe, and Japan during our field interviews. This is possibly because TV set manufacturers believe that product performance and delivery characteristics are the most dynamic requirements - tube designs may change every few months and so may market conditions that govern delivery - whereas high conformance quality and low costs are reflective of a plant's basic capabilities and cannot be easily improved over a short period of time. 6 Continuous improvement efforts, especially by Japanese tube manufacturers, have led to improved conformance and lower cost. Customer returns have come down from about 70,000 ppm in 1980 to less than 5,000 ppm in 1992. And this, inspite of tightening conformance specifications and increasing product performance requirements. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 39

APPENDIX 1: INDUSTRY CHARACTERISTICS (1986-present), product innovations along with conformance and cost have all become important; conformance requirements, which have become much more stringent, are seen as a prerequisite for cost reduction and customer satisfaction, as exemplified by the growing importance of "customer line efficiency" as a performance objective7. The above evolution represents changing definitions of quality over the product life cycle. Changing quality requirements are naturally accompanied by an evolution of management practices. In the initial trajectory stage, the focus was on tube development and launching of new processes. Management paid close attention to the performance of the R&D group, and the emphasis was on tube development, and refining manufacturing processes that could make proposed product features feasible. During the market growth stage, engineers focused on pushing picture tube performance as far as possible within a reasonably stable "envelope" of technology, i.e., without making major changes in the basic concept of the CRT. Thus engineers sought improvements in brightness, contrast, corner focus, and other aspects of tube performance without changing the basic CRT design. On the production side, pressured by marketing, the emphasis was on shipping tubes of reasonable quality as fast as possible. Not having much time to invest in process improvements such as SPC, plants resorted to inspection to ensure a minimum level of product quality; this was primarily the responsibility of the quality engineering department. Thus, many of the quality testing and inspection procedures were developed during this phase. Most process improvements, such as the use of SPC, and the tightening of process specifications, occurred during the early stages of maturity. Later, process optimization and continuous improvement through detailed engineering, problem-solving and employee involvement were carried out. The entry of most Japanese tube manufacturers in world and U.S. markets coincided with the late market growth and early maturity phases of the product life cycle for TV and picture tubes (late 1960s); Sony was the first one to enter the U.S. market. As in automobile and TV industries, Japanese companies have played a major role in changing the nature of competition in 7 Customer line efficiency is a measure of the degree to which TV assembly plants have to reprocess or retest TV sets if tube parameters are not at nominal specifications, even if they do fall within the specifications limits. Thus, it measures the amount of rework or extra effort at the set factory caused by tube parameters not being at nominal values. It is conceptually similar to Taguchi's loss function. The Sony (San Diego) factory has adopted this measure as a key indicator of customer focus. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 40

APPENDIX 1: INDUSTRY CHARACTERISTICS color picture tube manufacturing. Realizing that automation would give them quality and cost advantages, they invested their resources into the development of automated manufacturing equipment, and tube designs that would be a force to reckon with. They have redefined what conformance means. For example, the Sony factory in San Diego (which is located next to their TV set assembly factory) has three measures of conformance: in-house rejects, returns from TV factory, and customer line efficiency (based on publicly available information). At present, the industry is in the declining stage: sales are growing slowly or stagnating, and competition is tougher. At the same time, alternate technologies pose an immediate threat to the future of picture tubes. In today's competitive picture tube market, characterized by a number of alternate technologies, the emphasis by the best companies is on world class designs, world class manufacturing, and world class innovations. The market wants everything. The question is: can the efforts to improve design and manufacturing performance enable picture tubes to survive longer that they otherwise would? The maturity and decline phases of the product life cycle for TV and picture tubes also happen to coincide with the quality movement that has revolutionized manufacturing all over the world during the last 10-15 years. Thus, the adoption of higher quality standards, extensive use of statistical process control, and emphasis on manufacturability also reflect this quality emphasis. Achieving competitiveness Given that conformance and price are both key competitive dimensions, it immediately becomes evident that a quality-driven approach is arguably the preferred one. A factory can try to follow an approach of cutting costs on materials and process refinement, and inspect all outgoing tubes, but it is likely to end up spending more money. First, yields will still be low, especially since little rework or rectification is possible in picture tube manufacturing. Second, if conformance efforts are relaxed, tubes are likely to have high variability around the nominal values even if tubes are within specifications. This will result in high costs of rework at the TV set assembly plant (since many of the process steps in TV assembly and testing involve matching picture tube to the chassis, KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 41

APPENDIX 1: INDUSTRY CHARACTERISTICS larger deviations from nominal lead to rework loops during assembly8). Finally, if tube conformance is poor, TV assembly plants are expected to inspect all incoming tubes; otherwise, they would not need to have 100% inspection, thus cutting costs. Thus, efforts to improve quality are a key to manufacturing and business performance9. Environmental concerns for the CRT industry The picture tube manufacturing process uses a number of solvents and coatings, phosphor compounds, aluminum and other metal sprays. Many of these are toxic and cause problems during manufacturing - ground seepage, atmospheric exhaust, and skin problems. As a result, manufacturers have devised many solutions to reduce their impact, though not always cost-effective solutions. Also, a the major problem arises when the CRT has to be disposed either because it was rejected at the plant or after its life is over10. Not only do the chemicals and toxic materials used during manufacture need to be taken care of, the lead in the CRT glass must also be treated or reused. Industry members and governmental regulatory bodies have contradictory opinions about the impact of lead in display glass. Whereas governmental bodies claim that the lead in the glass is a threat to the atmosphere and people, industry members claim that the lead in the glass is in a form that prevents it from being dissolved into the ground (in landfills). A few countries, notably Germany, have already initiated legislation that makes the picture tube or TV/monitor manufacturer 0 This is the rationale behind using the customer line efficiency performance measure for picture tube manufacturing conformance. This issue may require a study of the economics of the situation: How much does a defective tube "really" cost the TV set assembler, either for retesting, or due to a line interruption? How much does it cost the tube manufacturer to inspect the outgoing tubes more thoroughly? And what is the nature of the "loss function" for a difficult-to-assemble tube, as compared to the potential investment in equipment to improve process capability (unless that can be done without any investment)? TV set assemblers can easily determine this cost. First, they can correlate costs with tube defects, and the number of times a tube goes through a recycle or retest loop. Based on the cost-of-quality system or other accounting data, the direct and overhead costs for each stage of the production process can be determined. The cost of the inefficient interface can be estimated by correlating stage-wise costs with incoming tube defects, and the number of times a tube goes through recycle or retesting. 9 This approach to manufacturing competitiveness - cost through quality - is applicable to a cluster of industries and manufacturing processes, especially where rework is limited, and thus yields are important. Examples include display glass manufacturing, semi-conductors, plastics, and chemicals. In the U.S. alone, 200 million CRTs are in use; the problem is worse if we add the 20 million TVs that are sold annually. Thus, in 10 years we will have more than 400 million CRTs to dispose off. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 42

APPENDIX 1: INDUSTRY CHARACTERISTICS responsible for disposal of their products after they have been used (the widely-discussed 1991 Product Responsibility Act). For CRTs, there are two alternatives to disposal: remanufacturing and recycling. Tubes that cannot be remanufactured must be recycled. Some companies have come up with the necessary innovations to resolve the two issues in safe recycling: discovering a restorative or recycling technology, and finding a market for the recycled material. For example, for CRT glass, Digital Equipment Corporation (DEC) supplies the glass to be recycled, Envirocycle has developed a patented process, and Coming Asahi has developed the technology to use recycled glass in the manufacture of color picture tube glass; the recycling technology also allows the glass to be freed of all chemicals and lead. Industry projections Today, the total market for electronic displays is $15 billion; by 1997, it is expected to reach $24 billion. Flat panel displays are expected to grow from about 25% ($3.75 billion ) today to 36% by 1997 ($9 billion). Brightness, contrast, display size, pixel count and resolution are expected to remain the primary measurements of quality, but will increasingly be redefined for flat-panel displays. CRT industry projections As mentioned above, the share of flat-panel displays will increase at the expense of CRTs. Even though the absolute market for CRT's will increase from $11.25 billion in 1993 to $15 billion by 1997, the CRT market share will drop from 75% to 65% of the total display market. The costeffectiveness of CRTs will not be enough of an asset to enable CRTs to maintain their current hold on the market (though if picture tube manufacturers are unable to maintain or improve cost and conformance performance, and reduce the environmental side effects of tubes, the demise of the CRT may be hastened). The bulk and weight of CRTs is heavy baggage in many current and potential applications, and CRTs are being gradually replaced by flat-panel displays, or are not even being considered for new display applications. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 43

APPENDIX 1: INDUSTRY CHARACTERISTICS Neither is the CRT environmentally friendly: as mentioned earlier, leaded glass is used to minimize the effect of harmful X-ray radiation, and various toxic chemicals are used in manufacturing. The manufacturing process is energy intensive, if environmental concerns pertaining to its disposal increase, and CRT manufacturers are required to set up disposal and recycling systems, tube costs are likely to go up. The same will be the case if pollution prevention requirements for the picture tube manufacturing process become stricter. On the other hand, the benefits of the mature CRT technology are its simplicity, broad utility, high luminance, excellent image quality, and cost-effectiveness. Some of the large market segments - business systems, industrial products, medical equipment, computer products, and TV receivers - are expected to continue to use CRTs into the foreseeable future, and thus support CRT sales. HDTV and picture tubes For color picture tubes, as for color TV, the potential emergence of high definition television (HDTV) as an industry standard is likely to change the nature of business strategies. Some firms that would not have otherwise survived, continue to exist because of the potential returns from participating in HDTV markets. In some cases, they have been able to raise enough capital to survive for a while longer. In other cases, they have teamed up with stable firms that want to enter the market. At the same time other firms are waiting in the wings to enter the high-definition TV and picture tube markets by taking advantage of the window of opportunity resulting from this technological change. The point to be made here is that HDTV is a technological change event that comes both as an opportunity and a threat. If CRT tubes continue to be used for HDTV, it will be an opportunity to rejuvenate the product life cycle for TV and picture tubes, in which case it will be competenceenhancing for current TV and picture tube manufacturers. If CRT manufacturers are unable to make substantial advances to compete with flat-panel and other display alternatives, CRT tubes will become obsolete, and HDTV will end up destroying the competence of existing competitors. It is at present unclear what the impact of HDTV on the color picture tube industry will be. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 44

APPENDIX 1: INDUSTRY CHARACTERISTICS Picture tubes and alternate display technologies This section on industry projections will be incomplete without a brief discussion of some of the alternate display technologies for television, which are quite likely to be competence-destroying technological discontinuities. Essentially, the objective of these alternate technologies is to develop flatter and lighter displays that also consume lesser power. There are clearly problems with the older CRT technology: thick, heavy glass is required to withstand the partial vacuum in the CRT; problems with wide-angle focus mean that the picture tube is fairly long; due to active emission technology, power consumption is high; and environmental concerns are increasing. In contrast to the miniaturization that is ongoing in the electronics and computer worlds, the CRT is a dinosaur, and not a very "green" one either! But the alternatives are also not very attractive at this moment. Nearly everyone agrees that LCDs, especially active matrix LCDs, are the technology of the future; active matrix LCDs are expected to grow in revenues from 0.8% in 1987 to about 10% in 1997. What is not so evident is the manner in which the LCD should be triggered by the input signal. Thin-film transistors (TFTs) are the popular solution, but there are dozens of different TFTs, each with different problems of response speed, temperature stability, cost, and manufacturability. Examples include: amorphous-Silicon (or a-Si) TFTs, polycrystalline TFTs, Cadmium-based TFTs, and magnetic or MAG LCDs. None of these is dominant yet: none of them is the clear performance leader; all of them have embarrassingly low yields; and none of them is particularly friendly to the glass substrate to be used to hold these TFTs. Some are more manufacturable than others, others have slightly higher yields, and others can be repaired with some ease. The dominant TFT is still to be found! Ferroelectric LCDs provide a faster and thinner alternative to AMLCDs, but have not yet been developed to the point where they are reliable. Electroluminiscent displays (ELDs), though better than LCDs in that they are not light filters, have posed problems while trying to control the electric current and capacitance that are required while breaking down the phosphor electrically. Plasma display panels (PDPs) are similar to ELDs, except that the phosphors are not excited directly but through creation of ultraviolet light by breaking down the gas molecules. Field emitter displays KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 45

APPENDIX 1: INDUSTRY CHARACTERISTICS (FEDs) are promising, but still being developed. FEDs provide all the advantages of CRTs - brightness, robustness, and purity - while being flat, thin, light-wright, and robust. Most of the problems with AMLCDs and most display devices arise from having poor brightness, low yields, and high costs: an LCD consumes 10 times more energy than a light bulb and still cannot attain the luminosity of a CRT; yields are still in the low 30 percentage range for smaller LCDs (<12") and 10-20% for LCDs of 14" or so. As a result of these problems, and the uncertainty of the impact of HDTV, the CRT is likely to dominate the display industries - for most TV displays, and for most desktop monitors - for at least a few years. Most industry managers are ready to bet its survival for another 20 years. And nearly all the leading competitors have backed up this projection by introducing larger tubes, flatter tubes, and 16x9 tubes. Process Complexity Picture tubes have often been described as "the most complex and difficult consumer product ever made by mankind", primarily because the production process is complex. Color picture tubes have only about 2 dozen components, none of them complex by themselves, except for the electron gun which is generally manufactured by suppliers or in a separate factory. However, these components do have somewhat complex and multiple interactions, as also mentioned by managers during our interviews. The manufacturing process consists of more than 200 major operation steps, not counting suppliers' manufacturing steps (a majority of these are processing steps and not simply assembly tasks). It brings together more than two dozen process technologies, including chemical, electrical, optical, and physical. Identifying problems at each process step may either be too difficult or too expensive. Thus, the process is difficult to analyze. Second, different process steps also have multiple and difficult-to-understand interactions. It is difficult to understand the independent contribution of each step of the process to tube conformance and performance; each individual processing step may appear to be correct, but the combination of process steps could Philips, Matsushita, Toshiba, and Thomson-RCA already manufacture 16x9 tubes. All the U.S., European, and Japanese competitors manufacture jumbo-sized (>31") tubes. And nearly everyone is in a race to manufacture a reasonably-priced perfectly "flat" tube. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 46

APPENDIX 1: INDUSTRY CHARACTERISTICS reveal the existence of problems. Third, little rework is possible; the only form of recovery is reprocessing, which entails additional material and capacity usage. Furthermore, the manufacturing and testing equipment requires an understanding of state-of-the-art technologies, implying constant demands on engineers and designers, as in most high-tech processes. Finally, driven by intense competition on cost, conformance, and tube performance, the process is in a continuous state of change. Examples of observations made by managers during our field interviews are: ".... Picture tube manufacturing is like black magic". - European Quality Manager "..... we probably should have only engineers to run the plant". - U.S. Engineering Manager.... knowledge is the basis for process control in picture tube manufacturing". - Japanese Production Manager "...A change in one part of the process has unexpected effects on other parts of the process. There is a strong 'ripple effect'........ - European Production Manager..... It takes years to understand the process". - Japanese Engineering Manager ".... By the time we optimize a particular process parameter, some other process dimensions have changed and due to the 'ripple effect' we have to start all over again.......". - U.S. Engineering Manager Further, heavy capital investments mean that there are strong incentives to maintain high capacity utilization. Thus, line speeds are high - a typical picture tube line produces 300 to 1000 tubes per hour. Competitive industry pricing makes the challenge of maintaining high capacity utilization even more important. Margins are small, and managers must do everything to cut costs and minimize waste while maintaining quality standards. Thus, managers and workers do not have the luxury of being able to shut down the line for a few hours while resolving problems. This requires timely preventive maintenance and extensive engineering knowledge and capabilities. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 47

APPENDIX 1: INDUSTRY CHARACTERISTICS Such complex processes require a higher knowledge at different stages of the process. Consequently, they benefit from multiskilling, place a premium on complex engineering knowledge, and highlight the need to share knowledge and data. KHURANA and TALBOT: Global Color Picture Tube Industry Study Page 48

APPENDIX 2: DERIVATION OF FORMULAS Appendix 2: Derivation of Formulas Throughout this report we have referred to productivity and quality. Appendix 2 explains the derivation of these performance variables. a.) Productivity - Labor Productivity For this study, productivity refers specifically to labor productivity (hence, it does not measure capital productivity or other partial input factor productivities). The productivity rankings assigned to each plant were based on the following formula for labor productivity: Labor Productivity = Total Volume for 1992 Total Employment Total Employment = (T-D) x (((Weeks/Yr) - 1) x (Hours/Week) x (1 - Absenteeism Rate) + (Avg. Overtime/Yr/Employee)) where, T = Total Number of Employees D = Direct Employees in Black Matrix, Gun or Component Manufacturing, Band Manufacturing, Yoke Manufacturing, Yoke Matching, Salvage and Regun, and Life Testing. Not all factories carry out these activities. Formulas and Data The sources of all these variables are taken from responses by the production managers. The individual questions are from the production manager's questionnaire Pages 2. 3. and 5 and are equivalent to the preceding variables as follows: Total Volume for 1992 = G18. TOTAL or the sum of G18a. through G18i. Volume for 1992, whichever was larger Total Employment = (T-D) x (((G6. Weeks/Yr) - 1) x (G7a.) x (1 -(.01 x W5a.)) + (G8.)) where, T = G5a. Total number of employees working at your factory in 1992 D = G17a. + G17b. + G17c. + G17d. + G17e.+ G17f. + G17g. b.) Quality - Internal Quality For this study, quality refers specifically to internal quality. The quality rankings assigned to each plant were based on the following formula for internal quality: Internal Quality = MATCONS Panels + MATCONS Masks + MATCONS Funnels +MATCONS Guns 4 where, MATCONS indicates overall material consumption per 1000 good tubes. KHURANA & TALBOT: Global Color Picture Tube Industry Page 49

APPENDIX 2: DERIVATION OF FORMULAS MATCONS Panels, MATCONS Masks, and MATCONS Funnels are all derived from the same basic formula. As such variable "Y" will represent: Y = Panels, Masks, or Funnels MATCONS Y= (# of purchased Y material to make 1000 good units) + (reclaimed Y after salvage) + (1 - Y Yields - Y Rejects) x (1 - Y Yields) x 1000) Y Yields = (3 - J(9 - (4 x (3 (# of purchased Y material to make 1000 good units + reclaimed Y after salvage)/1000))))/2 Y Rejects = (# of purchased Y material to make 1000 good units -1000)/1000 (2 - Y Yields) Because guns are not reclaimed, the formula is much simpler: MATCONS Guns = # of purchased gun material to make 1000 good units Formulas and Data The sources of all these variables are taken from responses by the engineering managers. The individual questions are from the engineering manager's questionnaire Page 7 Question P5. and are equivalent to the preceding variables as follows: Internal Quality = MATCONS Panels + MATCONS Masks + MATCONS Funnels + MATCONS Guns 4 MATCONS Panels, MATCONS Masks, and MATCONS Funnels are all derived from the same basic formula. As such variable "Y" will represent: Y = a.,b., orc., where, P5a. represents panels, P5b. represent masks, and P5c. represents funnels. MATCONS Y = (P5 Y Purchased materials used) + (P5 Y Salvaged materials used) + (1 - Y Yields - Y Rejects) x (1 - Y Yields) x 1000) Y Yields = (3 - (9 - (4 x (3 (P5 Y Purchased materials used + P5 Y Salvaged materials used)/1000))))/2 Y Rejects = (P5 Y Purchased materials used -1000)/1000 (2 - Y Yields) Again, for guns, the formula is much simpler: MATCONS Guns = P5d. Purchased materials used KHURANA & TALBOT: Global Color Picture Tube Industry Page 50

APPENDIX 3: SUMMARY STATISTICS Appendix 3: Summary Statistics On the following pages are the summary results of the questionnaires addressed to the plant directors, engineering managers, production managers, and quality managers. Reduced photocopies of the original questionnaires have been returned with this report to the plant director. You may wish to refer to these when examining the summary results. Your Plant Response: This column provides unique, individual responses to each of the questions on the questionnaire. No other facility will see the responses to these questions, they are unique to your facility's report. For Yes/No questions a response of "0" is No and "1" is Yes. On those questions where you can respond "unknown", and your response was "unknown" it was recorded as "O". For questions that ask for a percent, the raw number is shown without the "%" (i.e., 32% is recorded as 32). Finally, if the question does not follow any of these formats, a key is provided immediately preceding the question. a: This column highlights the questions that show a statistically significant relationship with quality. As expected most responses arsese blank, reflecting that most do not have a strong mathematical correlation with quality. However, if there is a numeric response in the row, it can be interpreted as follows: * 0.05 means there is less than a 5% chance the positive relationship between this question and quality is due to mere chance. * 0.01 means there is less than a 1% chance the positive relationship between quality and this question is due to mere chance. * (0.05) means there is less than a 5% chance the negative relationship between this question and quality is due to mere chance. * (0.01) means-there is less than a 1% chance the negative relationship between quality and this question is due to mere chance. For a positive relationship, as the values for an individual question increases, quality increases. For a negative relationship, as the values for an individual question increases, quality decreases. Overall Average: This column provides the mean of all the responses to a question. For Yes/No questions, this column provides the percentage of respondents who responded "Yes". Productivity Averages: As was discussed on pages 9 and 10, all factories were ranked from lowest to highest on labor productivity. This ranked list was then divided into three equal groups: lowest 1/3, middle 1/3, and highest 1/3. The means of each of these groups are reported, respectively under low, average, or high productivity averages. If "ERR" is in a column, there were no responses by any members of the subdivision. For Yes/No questions, the percentage for each subdivision is the percentage of respondents who responded "Yes". KHURANA & TALBOT: Global Color Picture Tube Industry Page 51

APPENDIX 3: SUMMARY STATISTICS Quality Averages: As was discussed on pages 7 and 8, all factories were ranked from lowest to highest on quality. This ranked list was then divided into three equal groups: lowest 1/3, middle 1/3, and highest 1/3. The means of each of these groups are reported, respectively under low, average, or high quality averages. If "ERR" is in a column, there were no responses by any members of the subdivision. For Yes/No questions, the percentage for each subdivision is the percentage of respondents who responded "Yes". Exception Question G2 under Plant Director/VP (Operations)/General Manager Seniormost Manager at Plant is an exception to this normal format. Instead of providing a significance level and various averages, it lists the number of results by respondents who did not know where to rank a plant, or ranked it in the top 6. For further explanation, please see Example 3 below. Examples Immediately following are some hypothetical examples of questions and possible interpretations: Hyothetical Example 1 Engineering Manager Using the data you provided and the productivity and quality formulas in Appendix 2, your plant falls in the following categories for productivity and quality. Please refer to these rankings when interpreting the summary data. Productivity: High Quality: Low Your Plant a Overall Productivity Average Quality Average Response Average Low Average High Low Average High HII. Technology and Automation T2. E3T2 45 0.01 58% 58% 40% 74% 41% 64% 70% The first thing to do is look in the upper left hand comer of the page to determine which questionnaire to cross reference. From this, we determine we are analyzing Question T2. of the Engineering Manager, which asks What percent of equipment in the FRONT END (before frit seal) can run unmanned (i.e., without operator attention)? Productivity: This hypothetical plant is ranked as having high labor productivity. Quality: This hypothetical plant is ranked as having low quality. Your Plant Response: For this hypothetical plant, the response was 45% of the equipment in the front end (before frit seal) can run unmanned. a: There is less than a 1% chance the positive relationship between quality and the percent of front end equipment that can run unmanned is due to mere chance. KHURANA & TALBOT: Global Color Picture Tube Industry Page 52

APPENDIX 3: SUMMARY STATISTICS Productivity Average: Low: 58% is the arithmetic mean of responses by plants regarded as low labor productivity performers. Average: 40% is the arithmetic mean of responses by plants regarded as average labor productivity performers. High: 74% is the arithmetic mean of responses by plants regarded as high labor productivity performers. Quality Average: Low: 41% is the arithmetic mean of responses by plants ranked in the bottom third of quality performers Average: 64% is the arithmetic mean of responses by plants ranked in the middle third of quality performers High: 70% is the arithmetic mean of responses by plants ranked in the top third of quality performers Because there is less than a 1% chance the positive relationship between quality and the percentage of front end equipment that can run unmanned is due to mere chance, this is an important question to analyze. Two columns suggest this is an area of possible improvement for this hypothetical plant. First, the overall average is 58% and the plant's response was 45%. Obviously, this plant's front end automation is less than average. Second, this plant has a level of equipment automation as the plants ranked in the bottom third for quality (45% versus 41%). This is consistent with this hypothetical plant's ranking as a low quality performer. These interpretations suggest that increasing the automation of the front end would be a likely way to increase overall quality. Hvothetical Example 2 Engineering Manager Using the data you provided and the productivity and quality formulas in Appendix 2, your plant falls in the following categories for productivity and quality. Please refer to these rankings when interpreting the summary data. Productivity: High Quality: Low Your Plant a Overall Productivity Average Quality Average Response Average Low Average High Low Average High I Engineering Input and Problem Solving E4. EIE4 1 93% 100% 92% 87% 93% 100% 86% Again, the first thing to do is look in the upper left hand corner of the page to determine which questionnaire to cross reference. From this, we determine we are analyzing Question E4. of the Engineering Manager that asks Yes/ No Does rotation of engineers give them a broad process understanding? Productivity: This hypothetical plant is ranked as having high labor productivity. Quality: This hypothetical plant is ranked as having low quality. KHURANA & TALBOT: Global Color Picture Tube Industry Page 53

APPENDIX 3: SUMMARY STATISTICS Your Plant Response: For this hypothetical plant, the response was 1, which means the plant felt rotation of engineers gives them a broad process understanding. a: Because there is no value in this column, it does not appear as if there is a statistically significant relationship between quality and this question. From this information, it can be inferred 93% of all respondents agreed with this hypothetical plant's response to this question. Further, 87% of the respondents in the same productivity ranking as this plant agreed rotation of engineers gives them a broad process understanding. Finally, 93% of the respondents in the same quality-ranking as this plant agreed rotation of engineers gives them a broad process understanding. Hvothetical Example3 Plant Director/VP (Operations)/General Manager Seniormost Manager at Plant Using the data you provided and the productivity and quality formulas in Appendix 2 your plant falls in the following categories for productivity and quality. Please refer to these rankings when interpreting the summary data Productivity: High Quality: Low Your Plant a Response Unknown 1 2 3 4 5 6 I. Global Comparisons G2. Rank of Tube Design Manufacturability (0 = Unknown) Sony, USA 0 19 4 4 1 1 0 2 This question is an example of the exception mentioned earlier on page 47. Productivity: This hypothetical plant is ranked as having high labor productivity. Quality: This hypothetical plant is ranked as having low quality. Your Plant Response: This hypothetical plant's response to the question was "O", which means "unknown" (i.e., this plant did not know where to rank Sony, USA). a: Because there is no value in this column, it does not appear as if there is a statistically significant relationship between quality and this question. Unknown: A total of 19 respondents did not know where to rank Sony, USA. 1: Four plants thought it should be ranked first for design manufacturability. 2: Four plants thought it should be ranked second for design manufacturability. 3: One plant thought it should be ranked third for design manufacturability. 4: One plant thought it should be ranked fourth for design manufacturability. 5: No plants thought it should be ranked fifth for design manufacturability. 6: Two plants thought it should be ranked sixth for design manufacturability. KHURANA & TALBOT: Global Color Picture Tube Industry Page 54

APPENDIX 3: Summary Statistics Seniormost Manager at: A Picture Tube Company - Plant Number 1 Using the data you provided and the productivity and quality formulas in Appendix 2, your plant falls in the following categories for productivity and quality. Please refer to these categories when interpreting the summary data. Productivity: High Quality: Average I. Quality Practices Q1. KEY DETERMINANTS P1Q11A P1Q11B P1Q11C MAJOR BARRIERS P1Q12A P1Q12B P1Q12C Your Plant Response Production Technology Equipement Capability Workmanship Parts quality Preventive maintenance Design capability Summary Results of KEY DETERMINANTS: Product Design Process Control Product and Process Technology Equipment Reliability Factory Automation Training Equipment Maintenance Equipment Capability Skilled Manpower Top Management/Mgt Commitment Standardization Customer Orientation Human Resources Summary Results of MAJOR BARRIERS: Insufficient Skills Unreliable Equipment/Maintenance Performance Parts Quality Lack of Money Too Many Models Contamination Prevention/Circumstance Control Quantitative Orientation Low Mechanization Levels Poor Design Lack of Top Management Commitment Number of Responses 14 8 6 6 5 5 4 3 3 3 3 3 3 Number of Responses 14 14 7 6 5 5 4 4 4 3 Q2. Relative Benefits During Last 2 years SPC charts Factorial experiments Cross-functional teams Customer teams Work teams, quality circles, etc. Job rotation Broad worker responsibilities Preventive maintenance Equip. & Mat. Handling Automation Factory information systems Bar coding systems Degree of Emphasis During Next 2 years SPC charts Factorial experiments Cross-functional teams Customer teams Work teams, quality circles, etc. Job rotation Broad worker responsibilities Preventive maintenance Equip. & Mat. Handling Automation Factory information systems Bar coding systems II. Strategy S1. P2S1 S2. Tube Performance (design) Conformance Quality at delivery Factory Yields On-time delivery Flexibility, even in small batches S3. P2S3 S4. P2S4A (0 =No and 1 =Yes) P2S4B (0 = No and 1 = Yes) P2S4C (0 = No and 1 = Yes) S5. P2S5A P2S5B P2S5C P2S5D S6. P2S6A P2S6B P2S6C P2S6D Your Plant7 a Overall Response l! Average! 3.38 2.37 3.67 3.32 3.33 2.85 3.04 3.72 3.48 3.63 2.13 4.13 3.56 4.26 4.16 4.04 3.38 3.96 4.57 3.96 4.43 3.71 4.52 2.42 1.93 2.78 3.17 3.96 112596 23% 18% 85% 21% 12% 10% 23% 63% 12% 7% 18% Productivity Average Low Average High 3.69 3.00 3.53 2.08 2.53 2.46 3.54 3.60 3.67 3.38 3.07 3.38 3.31 3.60 3.07 2.62 2.87 3.00 3.15 2.87 3.20 4.08 3.27 3.93 3.23 3.33 3.87 3.54 3.40 4.00 1.75 3.00 1.60 4.46 3.93 4.13 3.90 3.53 3.38 4.23 4.13 4.33 4.38 3.93 4.15 4.38 4.07 3.87 3.23 3.07 3.67 3.92 3.87 4.07 4.77 4.27 4.67 3.92 3.80 4.00 4.46 4.33 4.47 3.75 4.00 3.40 4.54 4.50 4.64 3.18 2.21 2.20 2.23 1.67 1.87 2.77 2.67 2.80 3.92 2.93 2.53 3.92 4.20 3.87 36 219105 133353 9% 25% 21% 18% 25% 7% 91% 75% 87% 20% 15% 28% 14% 11% 11% 12% 7% 10% 28% 19% 23% 64% 60% 64% 8% 15% 11% 6% 9% 5% 21% 15% 19% Quality Average Low Average High 3.60 3.38 3.08 2.50 2.13 2.64 3.60 3.13 4.31 3.07 3.25 3.55 3.40 3.19 3.31 2.67 2.94 3.15 2.67 3.07 3.46 3.33 3.81 4.15 3.33 3.75 3.54 3.40 3.50 4.00 3.29 2.00 1.15 4.27 3.94 4.15 3.64 3.53 3.45 4.13 4.19 4.38 4.00 4.25 4.18 4.40 3.81 3.85 2.93 3.31 4.08 3.67 3.94 4.31 4.47 4.50 4.77 3.93 3.75 4.23 4.47 4.38 4.38 4.29 3.69 3.15 4.36 4.73 4.54 3.23 2.38 1.75 1.93 1.56 2.46 2.60 3.00 2.62 3.20 3.25 3.00 3.93 3.63 4.23 36405 198930 94645 23% 14% 33% 23% 21% 0% 85% 73% 100% 12% 22% 29% 7% 13% 14% 6% 10% 14% 22% 23% 25% 59% 63% 67% 14% 12% 9% 9% 5% 6% 18% 20% 17% KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 55

APPENDIX 3: Summary Statistics Seniormost Manager at: A Picture Tube Company - Plant Number 1 III. Global Comparisons G1. Customer Rejects W. Europe Japan Korea/Taiwan Rest of Asia N. America S. America Yields W. Europe Japan Korea/Taiwan Rest of Asia N. America S. America Your Plant Overall Productivity Average I Quality Average Response | Averagel Low Average High I Low Average High 3158 4318 3143 2467 4143 1629 3692 4530 5583 4577 3960 5107 2820 6042 3438 4208 3150 3029 3154 1889 5292 3279 4875 2627 2587 3583 1597 5042 2934 3200 3646 2173 3875 1553 3542 2699 3111 3045 2131 3200 1329 3542 91% 89% 91% 91% 91% 93% 87% 84% 86% 87% 88% 90% 92% 91% 93% 93% 93% 93% 93% 91% 93% 94% 93% 94% 88% 86% 88% 88% 90% 90% 95% 92% 93% 94% 93% 95% 89% 88% 90% 91% 91% 92% G2. Rank of Tube Design Manufacturability (0 = Unknown) Chungwa, Taiwan Goldstar, Korea Hitachi JCT, India Matsushita/Panasonic Mitsubishi Nokia, Germany Orion, Korea Philips, Netherlands Philips. U.S.A. Thomson/RCA. U.S.A. Samsung, Korea Samtel, India Sony, Japan Sony. U.S.A. Thomson, France Toshiba Zenith G2. Rank of Manufacturing Process Capability (0 = Unknown) Chungwa, Taiwan Goldstar, Korea Hitachi JCT. India Matsushita/Panasonic Mitsubishi Nokia, Germany Orion. Korea Philips. Netherlands Philips, U.S.A. Thomson/RCA. U.S.A. Samsung. Korea Samtel. India Sony, Japan Sony, U.S.A. Thomson, France Toshiba Zenith IV. Performance P1. 1989 I Unknown 1 2 3 4 5 6 17 0 1 0 2 0 1 18 1 0 1 1 0 1 5 9 6 6 6 2 3 32 0 1 0 1 0 0 9 8 6 6 4 2 2 12 0 1 2 3 6 5 27 0 1 1 0 2 0 20 0 1 0 1 0 1 12 2 3 9 3 6 3 22 0 2 3 1 2 2 14 3 6 5 2 2 5 19 0 0 0 1 1 0 31 0 0 1 1 0 0 9 12 6 2 3 0 0 19 4 4 1 1 0 2 18 0 2 2 3 3 5 5 4 3 10 7 6 1 15 2 3 0 2 2 0 20 0 1 0 0 2 0 15 0 2 1 0 1 5 6 12 5 10 4 1 0 32 0 1 0 1 0 0 10 9 7 5 4 1 2 13 0 2 5 4 3 5 29 1 0 2 0 2 0 26 0 0 0 1 0 1 13 1 5 2 1 9 6 23 0 1 2 0 0 2 19 0 3 4 2 3 2 22 0 0 1 1 2 1 34 0 0 0 2 0 0 13 6 3 3 7 5 2 23 4 5 0 1 0 0 19 0 1 3 4 2 2 9 6 7 7 3 4 0 17 0 0 0 1 3 0 Overall Productivity Average i A I Average Low Average Highl 83% 69% 87% 87% 80% 88% 74% 84% 72% 88% 91% 79% 92% 75% 88% 82% 89% 92% 82% 93% 88% 89% 84% 90% 92% 85% 93% 89% 72% 56% 70% 82% 67% 78% 65% 72% 56% 70% 86% 63% 83% 66% 77% 70% 73% 87% 68% 84% 79% 80% 76% 75% 87% 72% 84% 83% 5832 4719 6551 5873 6216 5109 6787 5563 7956 5797 3971 7843 4434 4617 6495 13539 5074 3206 10774 3900 4207 4039 5992 4008 2562 5948 2979 3224 3.67 3.69 3.67 3.73 3.93 3.63 3.46 3.09 2.77 3.33 3.13 3.13 3.00 3.15 3.51 3.64 3.40 3.57 3.43 3.57 3.92 3.24 3.30 3.27 3.21 3.29 3.14 3.58 3.03 3.00 3.07 2.92 2.79 3.00 3.60 3.15 3.25 3.67 2.71 3.77 3.00 3.00 3.51 3.60 3.33 3.62 3.50 3.75 3.62 85% 83% 84% 88% 88% 83% 88% 31% 24% 12% 58% 14% 49% 49% 7.00% 4.17% 11.66% 2.38% 11.32% 1.15% 3.00% 3.96% 1.77% 7.08% 1.41% 9.86% 0.98% -0.36% P2. P3.. P4. P4P4A P4P4B P5. P4P5A P4P5B P4P5C P4P5D P4P5E P6. P4P6 P7. P4P7 P8. P4P8 P9. P4P9 1990 1991 1992 1989 1990 1991 1992 1989 1990 1991 1992 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 56

APPENDIX 3: Summary Statistics Production Manger at: A Picture Tube Company Plant Number 1 Using the data you provided and the productivity and quality formulas in Appendix 2, your plant falls in the following categories for product quality. Please refer to these categories when interpreting the summary data. Productivity: High Quality: Average I. General Your Plant a Overall Productivity Average Quality Average Response IAveragesd Low Average High Low Average High G1. P1G1 1975.28 1977.267 1967.933 1979.733 G2. P1G2 1978.78 1982 1973 1980.667 G3. P1G3A 2311170 1277233 3071500 2522933 P1G3B 2158542 1608836 2708700 2192453 G4. P1G4 266 247 281 268 G5. TOTAL 1378 1547 1728 890 DIRECT PRODUCTION 861 792 1131 666 Before the frit-oven 332 300 415 283 INDIRECT EMPLOYEES Quality Control & Inspection 71.87 72.20 85.33 60.20 Production supervision 49.09 44.40 71.80 33.07 All engineering 80.70 62.27 115.13 63.00 Management 27.91 19.40 43.87 22.13 Others 76.09 85.67 95.40 51.53 P1G5B1 (0 = No and 1 = Yes) I 51% 27% 53% 73% G6. WEEKS/YEAR 48.23 48.97 48.90 46.63 DAYS/WEEK 12.08 5.85 24.76 6.05 HOURS/DAY 22.32 20.88 22.40 23.48 G7. P1G7A 44.15 47.83 40.25 44.11 P1G7B 252 256 249 248 G8. P1G8 128 148 167 83 G9. P1G9 23% 13% 17% 35% G10. P1G10 2.78 2.57 2.93 3.00 G11. P1G11 4.17 1.73 4.47 6.40 G12. P1G12 12.08 4.10 8.79 24.27 G13. P1G13 7.64 3.07 9.43 11.14 G14. P1G14A 74779976 60405456 81572515 75480108 P1G14B 156175197 101612523 229770559 126808333 G15. PIG15 17668351 18178679 29133252 7166727 G16. PIG16 22.42 18.64 18.60 29.40 G17. P1G 17A 60.67 40.50 97.27 46.27 P1G17B 67.20 85.57 73.33 45.53 P1G17C 28.35 6.14 44.73 28.07 P1G17D 21.30 18.79 25.20 22.60 P1G17E 68.11 33.64 101.07 46.40 P1G17F 33.46 24.93 45.80 17.53 P1G17G 8.72 16.93 7.20 2.20 018. TV Tube Size P1G181A Smallest size 40.29 43.64 43.33 37.57 P1G181B 45.96 54.36 47.77 42.27 P1G181C 51.89 54.00 56.08 51.69 P1G181D 50.26 38.67 61.45 43.50 P1G181E 50.74 30.50 59.67 49.30 P1G181F 52.08 38.00 62.20 51.20 P1G181G 52.39 43.00 69.25 43.50 P1G181H 58.75 63.00 73.67 53.67 P1G1811 Largestsize 73.25 68.00 87.00 65.83 TV or computer monitor (1 = TV,2 = Monitor, and 3 = HDTV) P1G182A Smallest size 1.20 1.00 1.13 1.47 P1G182B 1.21 1.00 1.23 1.23 P1G182C 1.14 1.00 1.00 1.31 P1G182D 1.26 1.00 1.18 1.38 P1G182E 1.35 1.50 1.22 1.40 P1G182F 1.33 2.00 1.20 1.20 P1G182G 1.33 2.00 1.00 1.33 P1G182H 1.38 1.00 1.33 1.33 P1G1821 Largestsize 1.17 1.00 1.00 1.33 Volume for 1992 P1G183A Smallest size 709404 471715 824256 848796 P1G183B 546304 425956 523689 513673 P1G183C 535676 144234 751435 533554 P1G183D 367393 4701 411844 396945 P1G 183E 232085 20669 170067 386000 P1G183F 154517 ERR 90034 219000 P1G183G 391571 ERR 320000 487000 P1G183H 352300 ERR 175333 529267 P1G1831 Largestsize 204060 ERR 28000 321433 Invar mask? (0 = No, I = Yes, and 2 = Sony Aperture Grill) P1G184A Smallest size 0.31 0.08 0.33 0.53 P1G184B 0.47 0.22 0.54 0.69 P1G 184C 0.55 0.20 0.62 0.69 P1G184D 0.77 0.50 0.82 0.88 P1G 184E 0.50 0.00 0.67 0.40 P1G184F 0.75 1.00 0.80 0.80 P1G184G 0.78 1.00 0.75 1.00 P1G184H 0.88 1.00 1.00 1.00 P1G1841 Largestsize 1.17 1.00 1.50 1.00 I F I I I I 0 1 I I I I 43.50 116.73 61.73 50.38 55.33 44.53 83.88 78.00 84.73 18.31 46.27 21.33 60.44 91.20 79.93 44% 53% 53% 48.57 47.97 48.03 5.89 24.90 5.94 22.13 22.95 22.88 41.57 44.83 46.46 250 245 264 118 110 153 7% 16% 47% 2.72 2.53 3.00 3.13 5.27 4.36 4.00 20.80 12.10 8.27 6.00 8.80 84369733 59190596 83297514 241312500 103900508 145567514 31294644 7299341 15225388 18.27 18.86 31.13 70.75 64.64 50.27 69.50 51.86 54.33 40.25 9.07 35.53 22.63 19.64 22.87 79.94 49.64 77.00 47.88 16.07 36.47 17.06 2.21 6.40 1972.125 1977.533 1976.8 1976.733 1979.467 1980.733 2019688 2373100 2658267 1702221 2388433 2545294 266 260 273 1402 1402 1379 937 840 854 326 339 351 46.19 51.77 55.18 62.57 61.83 63.50 66.00 68.00 89.00 1.06 1.15 1.00 1.14 1.17 1.00 1.00 1.00 1.00 41.67 46.54 51.17 45.89 45.71 49.57 52.50 57.80 75.00 1.29 1.17 1.25 1.33 1.57 1.43 1.33 1.60 1.33 34.43 41.65 52.27 47.50 48.50 50.33 45.25 56.50 62.75 1.27 1.31 1.18 1.33 1.33 1.33 1.50 1.00 1.00 600095 630779 962187 351183 323452 1021981 481336 697287 460174 440097 354938 357232 201667 348433 80000 212000 25195 485000 361000 392000 420000 494000 104950 1200000 4000 138767 600000 0.06 0.67 0.21 0.23 0.92 0.25 0.27 0.92 0.40 0.57 1.00 0.67 0.33 0.86 0.00 0.50 0.86 0.67 0.00 1.00 0.50 1.00 1.00 0.50 1.00 1.67 0.50 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 57

APPENDIX 3: Summary Statistics Production Manger at: A Picture Tube Company - Plant Number 1 G18. Screen Radius? P1G185A Smallest size P1G185B P1G185C P1G185D PIG185E P1G185F P1G185G P1G185H P1G1851 Largest size TOTAL G19. P1G19A P1G19B P1G19C G20. P1G20 II. Strategic Quality S1. P2S1A P2S1B P2S1C P2S1D P2S1E S2. P2S2A P2S2B P2S2C P2S2D S3. P2S3A P2S3B P2S3C P2S3D S4. P2S4 S5. P2S5A (0 = No and 1 = Yes) P2S5B P2S5C P2S5D P2S5E P2S5F P2S5G P2S5H (0 = No and 1 = Yes) S6. P2S6A P2S6B $7. P2S7A P2S7B P2S7C P2S7D P2S7E P2S7F P2S7G P2S7H S8. P2S8A P2S88 P2S8C P2S8D P2S8E ill. Selection & Training, and Work Organizatic W1. P3W1 W2. P3W2 W3. P3W3A P3W3B W4. P3W4 W5. P3W5A P3W5B W6. P3W6 Your Plant a Overall Productivity Average [ ResDonse I Averaes Low Average High 1.36 1.50 1.13 1.50 1.38 1.39 1.41 1.33 1.40 1.40 1.35 1.46 1.77 4.00 1.78 1.48 1.80 ERR 2.29 1.12 1.55 ERR 1.50 1.60 1.79 ERR 2.38 1.00 1.70 ERR 1.57 1.83 1.76 ERR 1.75 1.77 2019117 874352 2673828 2447643 589.49 15.63 1672.50 5.00 106.57 3.77 301.73 0.67 7.59 23.25 1.40 1.25 26.85 22.30 31.88 23.39 4.23 4.27 3.87 4.53 4.68 4.73 4.53 4.80 4.34 4.20 4.20 4.53 3.96 3.73 3.73 4.33 4.45 4.47 4.07 4.73 4.36 4.20 4.25 4.60 4.23 4.07 4.20 4.40 4.66 4.47 4.60 4.93 4.41 4.20 4.37 4.67 2.67 2.20 2.79 3.00 2.99 2.80 3.23 3.20 3.17 3.13 3.20 3.13 4.13 4.07 3.93 4.40 3.87 3.77 3.80 4.00 83% 73% 93% 80% 48% 65% 44% 37% 38% 51% 38% 28% 9.63 18.46 3.09 7.43 5.25 7.95 2.32 5.43 2.60 4.07 1.29 2.68 39% 40% 35% 39% 73% 73% 77% 79% 3.72 3.71 3.53 4.07 2.89 3.00 2.87 2.73 4.27 4.33 4.20 4.33 3.46 3.73 3.33 3.33 3.78 3.67 3.70 4.00 3.79 3.67 3.60 4.13 2.38 2.13 2.47 2.47 3.53 3.13 3.70 3.73 2.53 2.47 2.60 2.50 3.61 3.40 3.54 3.87 23% 24% 24% 23% 23% 25% 24% 18% 16% 19% 13% 15% 15% 17% 12% 14% 22% 16% 21% 29% )n 59% 73% 51% 54% 50.90 55.40 52.13 48.33 121.13 345.96 20.38 25.40 25.43 47.36 10.12 21.07 5.62 4.53 6.87 5.80 6.46% 8.44% 6.29% 4.54% 5.55% 6.24% 6.42% 4.16% 3.25 3.27 3.27 3.20 Quality Average Low Average High 1.09 1.52 1.50 1.23 1.53 1.38 1.25 1.38 1.56 1.40 2.19 1.46 1.63 2.13 1.15 1.50 1.42 2.00 1.50 2.00 1.00 2.00 1.55 2.00 1.50 1.77 2.00 1704185 2061227 2436392 3.93 1928.96 6.25 2.67 348.70 0.67 1.67 2.77 1.82 17.94 40.00 24.57 4.19 4.56 4.25 3.75 4.06 4.23 3.88 4.44 4.47 2.73 3.09 3.19 4.06 3.75 88% 47% 33% 2.45 2.15 0.64 38% 64% 3.56 2.75 4.25 3.31 3.91 3.50 2.63 3.66 2.63 3.30 22% 26% 12% 12% 25% 60% 43.38 20.15 12.35 7.19 8.06% 6.66% 3.00 3.93 4.53 4.67 4.80 4.00 4.73 3.93 4.20 4.60 4.67 4.40 4.40 4.27 4.53 4.80 4.73 4.40 4.33 2.73 2.67 2.80 3.20 3.00 3.33 4.13 4.27 3.87 4.00 87% 73% 48% 46% 38% 40% 6.54 11.97 4.28 8.45 2.31 4.10 36% 38% 69% 85% 3.56 4.07 2.69 3.21 4.25 4.33 3.25 3.80 3.19 4.27 3.81 4.07 2.56 1.93 3.63 3.40 2.31 2.57 3.81 3.67 21% 27% 25% 17% 16% 18% 15% 17% 23% 18% 59% 63% 59.94 50.00 25.13 310.20 19.50 30.13 4.27 5.47 3.56% 7.57% 4.38% 5.54% 3.56 3.20 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 58

APPENDIX 3: Summary Statistics Production Manger at: A Picture Tube Company - Plant Number 1 Your Plant a O verall Productivity Average Response Averages I Low Average High I W7. P3W7A P3W7B P3W7C P3W7D P3W7E W8. P3W8A P3W8B P3W8C W9. P3W9A P3W9B P3W9C W10. P3W1OA P3W1OB P3W10OC P3W1OD W11. P3W11 (O = No and 1 = Yes) W12. P3W12 W13. P3W13 W14. P3W14 W15. P3W15 W16. P3W16 W17. P3W17A P3W17B P3W17C P3W17D P3W17E W18. P3W18A P3W18B P3W 18C P3W18D P3W18E W19. P3W19A P3W19B P3W19C W20. P3W20A P3W20B P3W20C P3W20D P3W20E W21. P3W21A P3W21B P3W21C P3W21D P3W21E P3W21F P3W21G P3W21H P3W211 P3W21J IV. Technology and Automation T1. P4T1A P4T1 B P4T1C P4T1D T2. P4T2A P4T2B P4T2C P4T2D P4T2E P4T2F T3. P4T3A P4T3B P4T3C P4T3D T4. P4T4A P4T4B P4T4C P4T4D P4T4E P4T4F P4T4G P4T4H P4T41 P4T4J P4T4K T5. P4T5A P4T5B P4T5C 2.56 2.67 3.52 3.67 3.85 3.93 3.46 3.00 3.55 3.20 4.33 4.47 3.45 3.07 3.20 2.67 2.38 2.40 3.79 3.60 3.52 3.40 2.31 2.33 2.40 2.40 3.33 3.33 2.58 2.07 94% 86% 25.13 52.27 64% 62% 47% 40% 4.52 3.67 4.11 4.63 48% 52% 38% 32% 37% 41% 34% 35% 41% 45% 2.83 2.27 3.25 3.00 3.15 2.93 3.36 3.27 3.69 3.13 4.35 4.27 3.53 3.13 2.93 2.47 51% 31% 5.65 4.57 19.57 18.11 3.75 2.90 5.38 5.07 3.73 3.50 3.50 3.50 2.77 2.64 2.87 2.93 3.39 3.50 3.68 3.43 2.59 2.71 2.95 2.93 1.76 2.00 1.42 1.57 3.04 3.00 3.49 3.40 3.04 3.07 3.06 2.93 4.01 3.73 3.65 3.40 3.68 3.67 3.26 3.33 3.39 3.53 3.38 3.20 4.03 3.93 4.03 4.07 3.68 3.80 4.14 4.13 3.97 3.38 3.28 3.23 3.47 2.69 3.03 2.85 3.89 3.69 2.20 2.15 2.21 2.08 2.61 2.54 2.54 2.23 2.24 1.92 4.23 3.85 3.54 3.85 3.61 3.85 2.61 2.54 2.67 3.80 3.87 3.20 3.57 4.07 3.50 3.43 1.93 4.07 3.73 2.40 2.47 3.47 2.93 100% 7.32 59% 51% 5.03 3.90 37% 30% 38% 33% 34% 2.87 3.00 3.07 3.50 4.00 4.47 3.77 2.90 62% 6.03 16.57 4.97 6.47 4.10 3.67 2.70 2.80 3.53 3.97 2.47 2.97 1.47 1.23 2.70 3.37 2.77 2.90 3.97 3.87 3.57 2.83 3.03 3.40 4.03 4.03 3.47 4.10 3.96 3.33 3.83 3.03 4.07 1.93 2.27 2.57 2.40 2.20 4.37 3.47 3.53 2.67 2.40 3.13 3.93 4.07 3.93 4.47 3.67 3.60 2.73 3.93 3.47 2.20 2.40 3.33 2.67 93% 17.25 71% 53% 4.93 3.87 57% 49% 36% 35% 49% 3.40 3.80 3.53 3.47 3.93 4.47 3.73 3.40 61% 6.60 22.21 3.42 4.67 3.67 3.53 3.00 2.87 3.20 3.67 2.40 2.73 1.87 1.47 3.75 3.96 3.46 3.39 4.47 3.87 3.80 3.53 3.47 3.40 4.20 4.13 3.86 4.27 4.53 3.27 3.73 3.20 3.87 2.27 2.27 2.67 2.87 2.60 4.53 3.40 3.47 2.40 Quality Average Low Average Hih 2.63 3.06 2.00 4.06 3.31 3.13 3.94 3.75 3.80 3.00 4.00 3.47 3.34 4.00 3.47 4.25 4.25 4.47 3.34 3.56 3.40 3.09 3.13 3.27 1.94 2.56 2.73 3.81 3.81 3.67 3.75 3.31 3.53 2.25 2.38 2.20 2.38 2.63 2.20 3.13 3.31 3.67 2.38 2.94 2.47 81% 88% 113% 11.63 10.25 18.61 59% 75% 56% 46% 49% 46% 3.13 5.47 5.23 3.72 4.73 4.10 38% 61% 48% 24% 46% 47% 38% 42% 35% 27% 41% 37% 35% 51% 39% 2.44 3.63 2.53 3.06 4.06 2.73 2.66 3.78 2.93 3.25 3.84 2.93 3.69 4.06 3.27 4.50 4.25 4.27 3.47 3.44 3.60 2.50 3.78 2.60 50% 43% 64% 4.68 4.32 8.17 i5.80 15.36 27.27 4.06 3.69 3.60 4.06 8.27 4.20 3.83 3.27 4.07 3.53 3.20 3.73 2.57 2.93 2.87 3.00 2.80 2.93 3.47 3.20 3.47 3.87 3.37 3.80 2.60 2.47 2.67 3.00 2.77 3.00 1.47 1.80 2.00 1.33 1.37 1.60 2.59 3.27 3.37 2.91 4.00 3.70 2.84 3.40 2.97 2.91 3.27 3.10 3.66 4.13 4.20 3.75 3.81 3.27 3.34 4.00 3.60 2.91 3.31 3.53 3.22 3.31 3.53 3.31 3.50 3.33 4.09 4.00 4.00 3.97 4.00 4.07 3.63 3.81 3.57 4.16 4.13 4.07 3.81 4.13 3.87 3.29 3.38 3.13 3.54 3.75 3.20 3.04 3.19 2.93 4.07 3.81 3.79 2.29 2.13 2.27 2.21 2.50 2.00 2.46 2.73 2.73 2.14 2.94 2.40 2.14 2.80 1.87 4.18 4.38 4.13 3.64 3.38 3.60 3.57 3.63 3.60 2.86 2.88 2.13 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 59

APPENDIX 3: Summary Statistics Production Manger at: A Picture Tube Company - Plant Number 1 Your Plant a Response L Avei T6. P4T6 T7. Number of breakdowns Screening/flowcoat Frit-lehr Exhaust machine Conveyors Number of MAJOR breakdowns Screening/flowcoat Frlt-lehr Exhaust machine Conveyors V. Performance P1. P5P1 P2. P5P2 P3. P5P3 P4. P5P4A P5P4B P5. Tube Size P5P51A Smallest size P5P51B P5P51C ~ P5P51D P5P51E P5P51F ~ P5P51G P5P51H Largest size Invar mask? (0 = No, 1 = Yes, and 2 = Sony Aperture Grill) P5P5SA Smallest size P5P5SB P5P5SC PSPSSD P5P5SE P5P5SF P5P5SG P5P5SH Largest size TV or computer monitor (1 = TV,2 = Monitor, and 3 = HDTV) P5P52A Smallest size P5P52B P5P52C P5P52D P5P52E P5P52F P5P52G P5P52H Largest size Factory Yield P5P53A Smallest size P5P53B P5P53C P5P53D P5P53E P5P53F P5P53G P5P53H Largest size Customer rejects? P5P54A Smallest size P5P54B P5P54C P5P54D P5P54E P5P54F; P5P54G P5P54H Largest size P6. Tube size 4 Invar or not (0 = No and 1 = Yes) I Panel radius P7. P5P7A 198 P5P7B 198, P5P7C 198' P8. P5P8 2 P9. P5P9 14 verall Productivity Average rages Low Average High 17% 16% 17% 18% 89.81 52.19 189.27 33.00 23.95 8.68 63.47 1.73 14.52 3.82 35.60 4.88 33.24 8.71 76.00 17.67 3.98 2.69 4.33 4.21 0.47 0.39 0.63 0.39 0.65 0.29 1.13 0.33 2.84 1.25 2.67 4.96 Quality Average Low Average Hih 21% 13% 46.16 175.64 45.38 24.14 15.31 24.45 10.63 89.86 3.38 4.29 0.47 0.77 1.00 0.78 2.25 5.65 18% 56.27 2.43 5.10 6.73 4.33 0.17 0.20 1.23 9643 105 284 13.12 54% 8371 212 361 4.78 51% 6752 120 295 1.34 48% 10537 335 578 4.71 52% 8147 192 219 8.11 49% 7234 135 415 0.48 52% 8736 390 410 1.82 53% 39.43 43.64 43.73 34.47 17.21 55.55 48.00 41.85 52.06 54.17 56.08 49.85 51.41 32.67 61.64 48.14 52.67 30.50 61.11 53.00 55.38 38.00 58.33 69.00 58.80 43.00 76.50 49.00 62.00 68.00 85.00 73.00 0.34 0.08 0.33 0.53 0.49 0.22 0.46 0.69 0.58 0.20 0.69 0.62 0.65 0.00 0.64 0.86 0.77 0.00 0.78 1.00 1.00 1.00 1.00 1.00 0.80 1.00 1.00 0.50 1.50 1.00 2.00 1.00 1.18 1.00 1.20 1.27 1.16 1.00 1.23 1.21 1.03 1.00 1.00 1.08 1.27 1.00 1.36 1.29 1.27 1.50 1.22 1.33 1.50 2.00 1.33 1.67 1.80 2.00 1.50 2.00 1.00 1.00 1.00 1.00 88% 82% 89% 92% 87% 83% 86% 91% 89% 89% 87% 89% 90% 94% 89% 89% 89% 89% 91% 80% 88% 85% 82% 88% 79% 90% 72% 83% 85% 87% 84% 83% 1302 6264 3872 2453 3808 5327 3878 2554 3210 3308 3847 2577 4232 10067 4249 1707 1729 6850 4636 3533 2425 3150 2350 2233 3480 4200 4800 1800 3700 1000 2300 3000 9.19 50.36 52.00 50.13 37% 0% 36% 73% 1.42 1.25 1.62 1.40 6.30 1987.57 1984.93 1986.13 3.87 1984.54 1984.00 1982.73 9.38 1990.56 1989.21 1988.71 1.68 17.52 18.47 25.93 1851 21907 14780 9782 46.50 38.93 34.47 55.10 45.31 44.75 59.63 49.00 53.00 62.60 45.57 51.29 64.50 50.00 41.50 59.00 59.20 44.00 ERR 74.33 35.50 22.00 79.00 68.00 0.14 0.71 0.21 0.10 1.00 0.27 0.38 1.00 0.30 0.20 1.33 0.43 0.75 1.20 0.00 0.00 1.50 0.50 ERR 1.00 0.50 2.00 1.50 1.00 1.08 1.21 1.27 1.10 1.25 1.08 1.00 1.08 1.00 1.20 1.57 1.14 1.25 1.33 1.50 1.00 1.60 1.50 ERR 2.00 1.50 ERR 1.00 '1.00 81% 92% 90% 79% 90% 91% 85% 88% 91% 87% 88% 93% 90% 86% 94% 98% ERR ERR 84% 71% 83% 92% 90% 88% 6262 2748 3982 5511 2941 3201 3750 3221 2641 4125 3783 1736 3900 3825 2700 2500 2133 2825 ERR 3567 3350 8500 2650 1000 52.14 50.67 45.93 0% 87% 27% 1.27 1.57 1.42 1987.43 1986.60 1986.07 1986.92 1983.07 1983.20 1989.70 1990.14 1988.57 22.32 26.43 18.10 16779 14214 13502 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 60

APPENDIX 3: Summary Statistics Production Manger at: A Picture Tube Company. Plant Number 1 Your Plant a Overall Productivity Average Quality Average Response Averages I Low Average High Low Average Hiqh P10. P5P1OA P5P1OB PSP10C P5P1OD P5P1OE P5P1OF P5P1OG P5P1OH P5P10I P5010J PSP1OK P5P1OL P5P10M P5P1ON P5P100 PSP1OP P5P1OQ P5P1OR P5P1OS P5P1OT P 1. P5P11.1 P5P11.2 P5P11.3 P5PI1.4 P5P11.5 P5P11.6 P5P11.7 P5P11.8 P5P11.9 VI. Product and Process Design PD1. P6PD1A P6PD 1B P6PD1C P6PD1 D P6PD1E P6PD 1F P6PD1G PD2. P6PD2A P6PD2B P6PD2C P6PD2D P6PD2E PD3. P6PD3A P6PD3B P6PD3C P6PD3D P6PD3E 927 937 915 51.85 55.23 54.17 932 912 936 59.09 72.69 57.07 952 965 952 28.28 21.38 42.93 982 974 988 983 975 989 27.24 79.62 4.65 979 971 987 6.83 6.12 3.77 4.84 7.54 3.46 899 853 959 57.15 115.15 34.23 933 910 924 30.12 49.23 28.92 26.03 19.08 37.85 951 944 941 18.24 14.71 18.83 17.75 12.91 38.03 10.63 8.45 13.54 9.30 8.55 8.23 2.90 3.52 2.92 2.60 2.81 1.77 21.45 18.42 25.62 10.78 10.02 12.46 17.03 18.72 16.77 8.67 6.87 10.12 11.94 12.51 8.58 4.29 4.14 4.32 3.73 3.64 3.82 3.49 3.46 3.36 4.15 4.07 4.21 4.07 4.15 3.71 3.93 3.71 4.00 2.88 2.79 3.32 4.18 3.92 4.21 4.30 4.38 4,18 4.09 4.08 3.93 4.31 3.92 4.57 4.34 4.31 4.46 2.93 2.73 3.11 3.51 3.80 3.29 3.23 3.47 3.07 3.48 3.53 3.46 3.32 3.47 3.11 950 41.14 948 49.07 971 19.93 982 982 4.60 974 10.73 4.27 885 30.23 958 15.27 17.36 975 12.60 7.40 10.69 10.74 2.43 3.33 20.87 8.25 14.61 9.28 15.25 4.47 3.73 3.80 4.13 4.47 4.27 2.60 4.47 4.40 4.27 4.40 4.27 2.96 3.43 3.25 3.57 3.50 904 71.31 915 77.29 926 36.79 988 992 4.50 989 4.65 3.54 946 44.54 906 36.79 41.36 942 19.55 37.78 9.48 7.52 2.20 2.58 20.73 13.52 20.66 5.69 8.95 3.88 3.29 3.08 4.00 3.50 3.50 3.04 3.75 4.13 3.67 4.08 4.21 2.79 3.17 3.08 3.21 2.79 963 919 22.64 59.87 947 934 44.62 53.80 973 956 18.50 29.13 984 972 984 970 2.92 76.36 976 968 5.46 11.43 4.54 7.14 804 935 18.04 106.21 963 933 13.23 32.36 15.00 23.15 963 947 10.10 19.60 7.30 11.20 12.19 8.82 10.50 9.04 2.79 2.79 3.11 2.46 21.07 23.14 10.04 9.07 13.92 17.35 10.06 7.07 16.11 12.39 4.44 4.33 3.56 4.00 3.56 3.64 4.19 4.07 4.06 4.43 3.94 4.07 3.13 2.53 4.25 4.36 4.25 4.36 4.38 4.07 4.31 4.36 4.31 4.36 2.67 3.23 3.53 3.80 3.33 3.23 3.40 3.73 3.40 3.67 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 61

APPENDIX 3: Summary Statistics Engineering Manager at: A Picture Tube Company - Plant Number 1 Using the data you provided and the productivity and quality formulas in Appendix 2, your plant falls in the following categories for productivity and qualit Please refer to these categories when interpreting the summary data. Productivity: High Quality: Average I. Engineering Input and Problem Solving El. ElE1A ElE1B E1E1C E2. E1E2 E3. E1E3 E4. ElE4 (0 = No and 1 =Yes) E5. E1E5 E6. E1E6 E7. E1E7 E8. E1E8 E9. E1E9 E10. E1E10 Ell. ElE11 E12. E1E12A E1E12B E1E12C E1E12D E1E12E E13. E1E13 E14. E1E14 E15. E1E15 E16. E1E16A E1E16B ElE16C ElE16D E1E16E EIE16F E1El6G ElE16H II. Product/Process Design and Engineering DEl. E2DEIA E2DE1B DE2. E2DE2 DE3. E2DE3 DE4. E2DE4A E2DE4B E2DE4C E2DE4D E2DE4E DE5. Design change E2DE51 A E2DE51B E2DE51C E2DE51D E2DE51E New Design E2DE52A E2DE52B E2DE52C E2DE52D E2DE52E DE6. E2DE6 DE7. E2DE7A E2DE7B E2DE7C E2DE7D E2DE7E E2DE7F E2DE7G E2DE7H E2DE71 E2DE7J E2DE7K E2DE7L E2DE7M E2DE7N DE8. E2DE8A E2DE8B E2DE8C E2DE8D E2DE8E Your Plant a Overal Prouctivity Averavege Quality Average Response L_ Averages Low Average High Low Average High 22.61 29.00 13.93 21.27 27.70 35.43 25.00 16.53 30.30 28.79 36.53 21.07 56% 64% 56% 47% 14% 15% 8% 15% 93% 100% 92% 87% 3.84 4.07 3.46 3.87 96.57 127.43 65.21 84.67 14% 18% 11% 99o 58% 70% 56% 50% 8.22 7.82 10.63 6.66 28% 26% 23% 35% 23% 26% 13% 28% 16% 13% 15% 19%o 23% 26% 25% 18% 26% 27% 27% 25% 10% 10% 13% 8% 24% 24% 20% 30% 25.55 17.19 20.81 39.93 44% 52o 34o% 47% 15.09 10.77 23.60 10.80 2.79 3.07 2.38 2.67 2.40 2.50 2.07 2.20 4.89 5.00 4.87 4.93 6.40 7.21 6.27 6.00 5.53 5.43 5.87 5.33 4.91 4.57 5.07 5.00 3.74 3.21 4.07 3.87 4.43 5.21 3.80 4.21 45.34 39.09 35.15 64.43 168 117 172 222 6% 2% 3% 9% 17% 28% 15% 12%o 3.11 3.00 3.13 3.20 3.29 3.50 2.83 3.53 3.26 3.57 2.87 3.47 3.67 4.07 3.37 3.73 3.24 3.29 3.03 3.47 35.20 10.70 32.11 62.08 314 103 683 188 3.75 4.17 3.69 3.46 12.52 13.17 11.15 10.80 8.67 10.54 9.88 6.33 9.88 31.07 29.13 24.63 21.81 41.44 56% 59% 7% 15% 93% 100% 3.33 4.03 91.47 108.44 17% 12% 67% 52% 10.44 7.56 26% 29% 21% 19% 14% 15% 28% 19% 26% 33% 10% 11% 22% 23% 15.44 17.54 40% 48% 16.06 17.50 2.67 2.77 2.00 2.31 5.19 4.50 6.69 6.50 6.06 6.13 5.19 5.31 3.44 3.31 4.38 3.67 23.54 43.44 145 180 2% 4% 31% 11% 3.09 3.16 3.03 3.19 2.94 3.38 3.44 3.84 2.81 3.34 32.18 61.38 606 294 3.64 3.07 12.79 9.87 12.71 6.87 27.73 29.47 27.47 53% 20% 86%1 4.13 89.00 11% 54% 6.57 27% 31% 20% 23% 20% 10% 27% 43.81 44% 11.21 2.93 2.93 5.00 6.00 4.33 4.20 4.53 5.27 71.50 176 14% 10% 3.07 3.67 3.47 3.73 3.60 9.61 67 4.67 15.31 6.38 13.05 66.71 5.25 27.62 25.73 3.57 4.14 3.21 4.14 3.36 4.21 4.00 3.93 4.79 3.57 4.14 3.64 4.36 3.07 2.86 4.50 4.64 4.07 4.86 4.14 118.90 21.00 136.88 225.60 1124.80 120.55 2440.70 1018.64 4.59 4.90 4.27 5.00 22.08 16.50 21.91 27.23 23.47 27.45 16.42 24.62 3.63 3.46 3.17 3.93 4.13 4.08 4.29 4.20 3.22 2.69 3.47 3.53 4.34 4.38 4.30 4.47 3.62 3.62 3.57 3.73 4.00 3.77 3.93 4.33 4.30 4.62 4.54 4.13 3.99 4.15 4.03 4.07 4.71 4.77 4.50 5.00 3.33 3.23 3.00 3.67 4.11 3.46 4.43 4.40 3.70 3.92 3.54 3.80 4.34 4.38 4.32 4.47 2.89 2.54 2.71 3.27 2.94 2.77 2.96 3.07 4.24 4.38 3.86 4.47 4.47 4.31 4.36 4.80 3.91 4.38 3.29 4.33 4.68 4.77 4.54 4.80 4.24 4.46 4.21 4.27 91.83 263.91 2154.00 1343.45 4.00 4.42 19.00 18.92 22.45 22.08 3.54 3.75 4.00 4.25 2.94 3.50 4.09 4.75 3.73 3.75 3.67 4.13 4.57 4.31 4.25 3.78 4.47 4.88 2.93 3.50 4.20 4.00 3.47 3.97 4.27 4.41 2.44 3.20 3.13 2.84 4.20 4.06 4.40 4.38 3.40 4.25 4.67 4.53 4.40 4.19 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 62

APPENDIX 3: Summary Statistics Engineering Manager at: A Picture Tube Company - Plant Number 1 III. Technology and Automation T1. E3T1 T2. E3T2 T3 E3T3 T4. E3T4 T5. E3T5 T6. E3T6 T7. E3T7 T8. E3T8A E3T8B E3T8C T9. E3T9A E3T9B E3T9C T10. E3T10 T11. E3T11 T12. E3T12 T13. E3T13 T14. E3T14A E3T14B E3T14C E3T 14D T15. E3T15A E3T15B E3T15C E3T15D E3T15E E3T15F T16. E3T16A E3T16B E3T16C E3T16D T17. E3T17A E3T17B E3T17C E3T17D E3T17E E3T17F E3T17G E3T17H E3T171 E3T17J E3T17K T18. E3T18A E3T18B E3T18C T19. E3T19 T20. E3T20 IV. Performance P1. E4P1A E4P1B(0= Noand 1 =Yes) E4P1C E4P1D E4P1E E4P1F P2. E4P2 P3. E4P3 P4. Particles Other screen defects Surface defects such as scratches Emission Convergence Purity Focus Miscellaneous P5. Purchased materials used E4P51A E4P51B E4P51C E4P51D Salvaged materials used E4P52A E4P52B E4P52C Your Plant a Overall Productivity Average Response JAverages Low Average High 9.78 7.93 11.20 10.37 58% 58% 40% 74% 7.52 7.96 9.43 3.30 5.66 8.27 4.00 5.87 7.43 7.82 8.73 3.70 10.05 13.46 9.20 9.73 6.35 7.43 5.63 3.60 29% 30% 33% 25% 48% 57% 38% 50% 26% 19% 34% 25% 2.98 3.00 2.85 3.00 2.83 3.00 2.67 2.80 3.09 3.29 2.60 3.40 0.75 0.92 0.75 0.68 7.95 7.23 10.92 6.38 33% 19% 27% 44% 48% 49% 45% 54% 3.00 3.00 2.67 3.53 3.40 3.57 3.07 3.80 2.97 3.14 2.50 3.40 3.03 3.00 2.77 3.50 4.43 4.57 4.00 4.73 4.04 4.21 3.53 4.33 4.07 4.07 3.77 4.27 3.53 3.50 3.20 3.87 3.65 4.00 3.00 3.87 3.43 3.50 3.20 3.47 4.38 4.14 4.33 4.73 4.15 4.07 3.93 4.47 3.61 3.64 3.37 3.73 4.32 4.21 4.33 4.40 4.24 4.21 3.83 4.73 2.99 3.07 2.77 3.07 3.56 3.29 3.43 3.87 2.90 2.50 2.57 3.47 3.77 3.50 3.61 4.20 2.59 2.21 2.29 3.00 2.43 2.14 2.43 2.60 2.41 2.29 2.65 2.47 2.90 2.79 3.04 2.87 2.52 2.50 2.36 2.67 4.28 3.93 4.29 4.53 3.64 3.58 3.58 3.80 3.64 3.91 3.62 3.47 2.68 2.67 3.00 2.40 18% 21% 19% 11% 2.88 3.00 2.68 2.93 55.02 56.07 58.80 53.40 39% 15% 40% 67% 1.44 1.29 1.60 1.50 1987.23 1988.29 1985.40 1988.13 1984.83 1986.08 1983.53 1985.40 1989.37 1990.36 1989.79 1988.47 3.07 2.79 3.15 3.43 3670 4777 3718 2455 1104 1520 965 818 322 326 341 271 264 300 418 108 649 842 525 242 192 184 245 122 238 295 324 119 235 306 225 159 565 500 ERR 630 1040 1033 1065 1021 1074 1077 1122 1023 1051 1024 1118 1013 1072 1062 1119 1038 36.05 30.93 46.25 28.73 25.76 21.00 31.57 25.27 31.04 29.86 43.99 20.73 Quality Average Low Average 10.56 9.19 41% 64% 11.28 5.34 3.87 2.34 10.38 6.16 7.50 2.22 8.75 5.16 42% 18% 38% 52% 26% 29% 2.73 3.31 2.63 2.94 2.56 3.25 0.80 1.05 6.14 13.42 20% 47% 45% 46% 2.50 3.56 2.94 3.75 2.47 3.31 2.78 3.25 4.13 4.75 3.63 4.38 3.75 3.97 3.44 3.50 3.27 3.88 2.94 3.63 4.13 4.50 3.94 4.13 3.50 3.28 4.25 4.38 4.13 4.41 2.69 3.34 3.00 4.03 2.56 3.47 3.60 3.97 2.53 2.63 2.60 2.56 2.14 2.91 3.00 2.97 2.07 2.69 4.27 4.38 3.31 3.91 3.67 3.50 3.14 2.44 19% 16% 2.80 2.97 9.57 70%O 5.83 11.00 5.63 21.13 5.07 26% 56% 24% 2.93 2.93 3.47 0.41 4.68 32% 53% 2.93 3.53 3.13 3.07 4.40 4.13 4.53 3.67 3.80 3.73 4.53 4.40 4.07 4.33 4.20 2.93 3.67 2.67 3.73 2.60 2.13 2.13 2.73 2.79 4.20 3.64 3.79 2.50 18% 2.87 60.06 52.19 52.67 13% 69% 33% 1.28 1.60 1.46 1986.00 1988.13 1987.60 1983.31 1985.44 1985.86 1989.93 1989.13 1989.08 2.64 3.44 3.07 5330 2664 3043 1604 524 1222 341 286 340 338 260 195 939 601 412 313 147 120 331 155 234 298 134 281 ERR 500 630 1079 1034 1005 1160 1049 1009 1119 1024 1007 1118 1068 1027 52.56 30.30 24.20 29.22 23.50 24.33 48.02 26.37 17.60 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 63

APPENDIX 3: Summary Statistics Engineering Manager at: A Picture Tube Company - Plant Number 1 P7. E4P7A1 E4P7A2 E4P7B E4P7C P8. E4P8A E4P8B E4P8C E4P8D P9. E4P9 V. External Learning EX1. E5EX1 EX2. E5EX2A E5EX2B E5EX2C E5EX2D E5EX2E E5EX2F EX3. E5EX3A E5EX3B ESEX3C ESEX3D ESEX3E E5EX3F1 EX4. E5EX4A E5EX4B E5EX4C E5EX4D E5EX4E E5EX4F1 EX5. E5EX5A E5EX5B E5EX5C E5EX5D E5EX5E E5EX5F E5EX5G EX6. E5EX6 EX7. E5EX7A (0 = No and 1 = Yes) EX8. E5EX8 (0 = No and 1 = Yes) EX9. E5EX9 VI. Strategic Quality S1. E6S1A E6S B E6S1 S2. E6S2A E6S2B E6S2C E6S2D S3. E6S3A E6S3B E6S3C E6S3D S4. E6S4 S5. E6S5A (0 = No and 1 = Yes) E6S5B E6S5C E6S5D E6S5E E6S5F E6S5G E6S5H (0 = No and 1 = Yes) S6. E6S6A E6S6B S7. E6S7A E6S7B E6S7C E6S7D E6S7E E6S7F E6S7G E6S7H S8. E6S8A E6S8B E6S8C E6S8D E6S8E Your Plant a Overall Productivity Average Quality Average Response ___ Averages Low Average High Low Average High 81% 87% 73% 89% 72Y 84% 87% 6.64 6.86 6.56 6.56 6.62 6.52 6.86 22482 17767 21000 23133 26086 21688 19786 2505 2040 4555 1398 2858 3214 1385 4.34 4.50 4.53 4.07 4.75 4.06 4.20 3.90 4.14 3.83 3.87 4.19 3.66 3.87 3.73 3.57 3.70 3.80 3.56 3.78 3.87 4.26 4.43 4.20 4.13 4.31 4.31 4.13 1.47% 1.99% 0.90% 1.34% 1.34% 2.06% 0.97% 27% 12% 29% 21% 13% 8% 5% 35% 16% 13% 15% 10% 1% 37% 22% 12% 7% 6% 6% 4% 4% 6% 5% 6% 1% 3% 3.85 49% 96% 7.59 4.28 4.60 4.30 3.89 4.49 4.27 3.78 4.44 4.24 2.26 2.73 3.01 3.50 3.94 94% 54% 36% 20.95 7.14 4.45 41% 85% 4.00 2.78 4.16 2.98 3.72 3.91 2.87 3.60 2.65 3.49 31% 24% 16% 14% 7% 46% 18% 9% 16% 38% 36% 24% 22% 15% 6% 9%o 7% 6% 5% 43% 37% 11% 22% 11% 17% 9% 18% 24% 4% 2% 0% 44% 41% 25% 22% 16% 10%o 3% 8% 6% 5% 7% 11% 5% 2% 5% 3% 9% 2% 6% 2% 7% 2% 1% 1% 2% 1% 3.90 4.38 60% 46% 100% 87% 4.54 4.55 4.36 3.87 4.79 4.33 4.57 4.20 3.86 3.47 4.64 4.40 4.36 4.10 4.00 3.50 4.71 4.17 4.50 4.10 2.14 2.13 2.43 2.90 2.93 3.10 3.79 3.25 4.07 3.73 86% 100% 72% 38% 36% 28% 21.46 13.05 5.93 5.51 2.46 1.97 35% 32% 71% 87% 4.00 3.93 2.64 2.70 4.36 3.97 3.36 2.80 3.86 3.73 4.00 3.87 2.71 2.87 3.86 3.47 2.57 2.57 3.71 3.13 36% 30% 22% 20% 16% 14% 15% 11% 7% 7% 21% 1 2Yo 12% 20% 20% 16% 8% 3% 32% 14% 10% 15% 7% 1% 32% 22% 13% 8% 6% 3% 4% 5% 7% 5% 7% 1% 2% 3.37 47% 100% 11.00 4.67 4.73 4.20 4.33 4.47 4.47 3.87 4.60 4.27 2.57 2.80 3.20 3.50 4.13 93% 51% 36% 18.90 7.58 6.17 56% 93% 4.13 2.93 4.27 2.87 3.73 3.87 2.93 3.47 2.67 3.67 27% 30%o 16% 16% 9% 29% 12% 39% 24% 8% 5% 5% 38% 15% 17% 12% 12% 0% 34% 27% 10% 7% 6% 13% 3% 3% 3% 3% 3% 1% 1% 5.54 42% 88% 5.00 4.38 4.38 4.19 3.63 4.50 4.31 3.63 4.19 4.38 2.00 2.56 3.00 3.40 3.75 100% 58% 33% 17.79 5.84 2.38 32% 88% 4.06 2.44 4.06 3.06 3.81 3.88 3.00 3.63 2.63 3.19 37% 25% 12% 10%9 6% 28% 18% 25% 16% 11% 9% 7% 30% 21% 11% 15% 10% 2% 46% 17% 11% 7% 9% 4% 4% 5% 7% 8% 8% 2% 5% 3.22 63% 100% 12.79 3.88 4.63 4.19 4.06 4.44 4.09 3.78 4.53 4.09 2.20 2.59 2.78 3.37 4.06 88% 41% 29% 3.85 3.65 2.34 45% 81% 4.00 2.78 4.28 2.75 3.63 4.00 2.81 3.56 2.53 3.44 23% 25% 20% 17% 10% 26% 5% 25% 24% 18% 8% 2% 39% 11% 10% 16% 9% 0% 29% 25% 17% 5% 4% 3% 4% 5% 8% 5% 6% 1% 1% 3.08 38% 100% 4.43 4.60 4.80 4.53 4.00 4.53 4.40 3.93 4.60 4.27 2.60 3.07 3.27 3.73 4.00 93%1 65% 45% 42.57 12.23 8.90 46% 87%1 3.93 3.13 4.13 3.13 3.73 3.87 2.80 3.60 2.80 3.87 33% 21% 15% 15% 7% KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 64

APPENDIX 3: Summary Statistics Quality Manager at: A Picture Tube Company - Plant Number 1 Using the data you provided and the productivity and quality formulas in Appendix 2, your plant falls in the following categories for prodL and quality. Please refer to these categories when interpreting the summary data: Productivity: High Quality: Average I. Strategic Quality S1. Q1S1A Q1S1B Q1S1C Q1S1D Q1S1E S2. Q1S2A Q1S2B Q1S2C Q1S2D S3. Q1S3A Q1S3B Q1S3C Q1S3D S4. Q1S4 S5. Q1S5A (0 = No and 1 = Yes) Q1S5B Q1SSC Q1S5D Q1S5E Q1S5F' Q1S5G Q1S5H (0 = No and 1 = Yes) S6. Q1S6A Q1S6B S7. Q1S7A Q1S7B Q1S7C Q1S7D Q1S7E Q1S7F Q1S7G Q1S7H S8. Q1S8A Q1S8B Q1S8C Q1S8D Q1S8E II. Vendor Quality Management V1. Q2V1A Glass Panels Q2V1B Funnels Q2VIC Masks Q2V1D Electron guns V2. (1=None, 2=Sample, 3= 100%) Q2V2A Glass Panels Q2V2B Funnels Q2V2C Masks Q2V2D Electron guns V3. Discovered at incoming inspection Q2V31A Glass Panels Q2V31B Funnels Q2V31C Masks Q2V31D Electron guns Discovered in-process Q2V32A Glass Panels Q2V32B Funnels Q2V32C Masks Q2V32D Electron guns V4. Q2V4 V5. Q2V5 V6. Q2V6 V7. Q2V7 V8. Q2V8 V9. Q2V9 V10. Q2V10 VI 1. Q2V11 V12. Q2V12 Your Plant a Overall Productivity Average Response Aveages Low Low rage High 4.50 4.40 4.47 4.67 4.50 4.73 4.47 4.27 4.31 4.53 4.27 4.27 3.83 3.60 3.67 4.13 4.50 4.53 4.53 4.47 4.25 4.40 4.27 4.20 3.76 3.87 4.00 3.27 4.38 4.47 4.27 4.40 4.04 4.27 4.20 3.80 2.60 2.79 2.33 2.80 3.47 3.57 3.67 3.13 3.30 3.43 3.33 3.20 3.77 3.87 3.93 3.53 4.11 4.23 4.13 3.87 90% 93% 100%o 73% 51% 57% 50% 44% 36% 35% 37% 30% 18.06 24.98 6.56 22.07 8.24 9.23 4.87 8.47 5.27 4.93 2.21 6.00 43% 50% 36% 43% 89% 69% 100% 93% 3.55 3.64 3.67 3.40 2.72 2.71 2.60 2.93 4.42 4.13 4.67 4.60 3.21 3.13 3.20 3.27 3.77 3.73 3.93 3.67 3.98 3.80 4.13 4.07 2.29 2.20 2.20 2.40 3.65 3.73 3.80 3.47 2.60 2.60 2.67 2.60 3.63 3.47 3.80 3.60 29% 32% 28% 26% 9% 11% 10% 7% 23% 21% 23% 25% 21% 22% 20o% 22% 17% 15% 15% 21% 18% 22% 31% 4% 19% 18% 31% 3% 33% 33% 28% 43% 83% 68% 96% 83% 1.50 1.67 1.50 1.36 1.36 1.47 1.33 1.29 1.59 1.60 1.63 1.57 1.94 2.40 1.73 1.79 5308 7756 7911 251 513 857 0 151 2890 4456 3650 571 6708 10664 1725 3520 2992 2450 2362 3375 726 423 888 787 2994 2636 2899 3531 4144 3150 3468 5032 2.73 2.80 2.83 2.64 61% 56% 67% 52% 42.87 56.50 29.87 44.86 13.47 11.67 14.53 12.14 8.30% 5.20% 14.53% 6.14% 3.87 3.93 3.50 4.14 4.04 4.07 4.27 3.64 4.09 3.87 3.93 4,57 2.30 2.20 2.40 2.36 Quality Average Low Average High 4.56 4.19 4.80 4.69 4.38 4.47 4.44 4.31 4.20 3.81 4.00 3.60 4.81 4.56 4.20 4.44 4.38 3.93 4.07 3.93 3.20 4.31 4.81 3.93 4.38 4.31 3.40 2.13 2.80 3.00 3.50 3.40 3.67 3.31 3.53 3.20 3.75 3.88 3.73 4.31 4.13 3.85 100% 94% 80% 61% 48% 43% 37% 41% 32% 5.90 12.54 31.47 5.06 5.44 11.83 1.27 4.05 9.87 36% 45% 45% 87% 94% 86%9 3.63 3.69 3.29 2.44 2.88 2.93 4.31 4.56 4.47 3.25 3.06 3.27 4.00 3.25 4.00 4.00 4.19 3.73 2.38 2.50 2.07 3.56 3.50 3.87 2.94 2.19 2.60 3.56 3.63 3.67 31% 24% 31% 10% 10% 7% 22% 25% 22% 18% 22% 23% 15% 19% 18% 23% 19% 7% 27% 18% 5% 23% 33% 40% 88% 77% 83% 1.41 1.40 1.60 1.25 1.27 1.47 1.47 1.33 1.87 1.56 1.73 2.47 10745 580 1000 40 5025 1900 1000 2244 3010 3476 611 1352 3062 2400 2505 3354 3.03 2.63 69% 55% 42.19 63.14 19.06 16.07 7.20% 12.07% 3.40 4.33 4.38 3.80 3.80 4.33 2.06 2.73 346 253 1191 6600 2547 306 3673 6550 2.50 60% 27.40 5.60 2.87% 3.87 3.93 4.20 2.00 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 65

APPENDIX 3: Summary Statistics Quality Manager at: A Picture Tube Company - Plant Number 1 Your Plani IlI. Quality Information Systems Response Q1. Q3Q1 Q2. Q3Q2 Q3. Q3Q3A Q3Q3B Q4. Q3Q4 Q5. Q3Q5A Q3Q5B Q3Q5C Q3Q5D Q3Q5E Q3Q5F Q3Q5G Q3Q5H Q6. Q3Q6A Q3Q6B Q3Q6C Q3Q6D Q3Q6E Q7. Q3Q7 Q8. Q3Q8 (0= No and 1 = Yes) Q9. Q3Q9 Q10. Q3Q10A Q3Q10B Q3Q10C Qll. Q3Qll IV. Product and Process Design PD1. Q4PD1A Q4PD1B Q4PD1C Q4PD1D Q4PD1E Q4PD1F Q4PD1G Q4PD1H Q4PD1 Q4PD1J Q4PD1K PD2. Q4PD2A Q4PD2B Q4PD2C PD3. Q4PD3A Q4PD3B Q4PD3C Q4PD3D Q4PD3E V. Performance P1. Tube size Invar or not (0=No, 1=Yes) Panel radius P2. Q5P2 P3. Q5P31 Q5P32 P4; Q5P4A1 Q5P4A2 Q5P4B Q5P4C P5. Q5P5 P6. Particles Other surface defects Emission Convergence Purity Focus Miscellaneous P7. (O = Lower, 1 = Higher, and 2 = Unchanged) Q5P7A1 Q5P7A2 Q5P7B1 Q5P7B2 P8. Q5P8A Tubes Q5P8B Panels Q5P8C Masks Q5P8D Funnels > 1 lAverages Low Average High Low Average High --.-. — -- -1 -- 120 79.60 177.00 96.93 57% 67% 33% 63% 47% 49% 29% 59% 57% 59% 49% 56% 40% 37% 26% 52% 3.81 3.8 387 3.87 3.67 3.13 3.00 3.20 3.07 4.17 4.07 4.47 4.00 4.33 4.47 4.53 4.13 2.67 2.67 2.67 2.60 2.98 3.00 2.67 3.20 3.48 3.69 3.73 3.00 2.71 2.70 2.69 2.67 3.40 3.47 3.60 3.07 2.52 2.47 2.60 2.33 2.12 2.00 1.82 2.27 2.80 2.73 2.77 2.80 3.54 3.33 3.73 3.47 59% 55% 36%o 79% 48% 31% 73% 40% 39.22 24.60 68.69 29.07 219 190 332 177 2.81 3.24 3.75 1.81 156 137 154 197 18.34 13.58 23.73 16.08 126.00 130.31 46% 71% 30% 54% 61% 55% 26% 50% 3.88 3.81 2.94 3.44 4.50 4.25 4,56 4.38 2.81 2.44 2.63 3.25 3.75 3.71 2.54 3.07 3.44 3.44 2.63 2.56 1.97 1.88 2.59 2.88 3.88 3.38 40% 65% 60% 50% 51.79 45.56 296 168 5.41 1.20 160 161 29.00 10.17 104.40 56% 54% 54% 42% 3.67 2.93 3.67 4.00 2.73 3.00 2.93 2.46 3.27 2.33 2.47 2.93 3.33 73% 29%| 23.07 191 1.37 159 16.17 4.07 4.00 3.73 4.20 4.60 4.67 4.60 3.40 3.73 3.93 2.73 3.80 3.67 4.47 3.07 3.40 3.07 3.53 3.87 4.35 4.27 4.38 4.53 4.06 3.87 4.25 4.13 4.77 4.73 4.60 4.60 4.67 4.33 3.54 3.13 4.13 3.80 3.96 3.80 2.75 2.60 4.38 4.27 3.96 3.67 4.50 4.47 3.21 3.33 3.40 3.53 3.29 3.33 3.67 3.60 3.54 3.73 4.40 4.47 4.33 4.33 4.33 3.93 4.33 4.40 4.87 4.67 4.53 4.60 4.87 4.73 3.60 3.93 4.40 4.27 4.00 4.00 2.80 2.60 4.53 4.27 3.93 4.20 4.47 4.60 3.13 3.20 3.20 3.53 3.27 3.40 3.53 4.00 3.33 3.67 4.38 4.56 4.44 4.63 4.00 4.38 4.25 4.31 4.88 4.81 4.63 4.56 4.69 4.75 3.19 4.00 4.31 4.38 4.00 3.94 2.69 2.81 4.56 4.69 3.88 4.38 4.44 4.69 3.38 3.19 3.31 3.56 3.19 3.63 3.56 3.88 3.44 3.38 52.31 51.67 53.73 53.13 37% 14% 36% 67% 1.39 1.39 1.33 1.43 1987.40 1988.60 1986.13 1987.67 1985.44 1986.07 1985.27 1985.40 1989.95 1990.22 1989.54 1990.00 88% 86% 91% 89% 6.89 6.96 7.17 6.65 20501 20091 21335 21267 2962 1680 5118 2008 4089 4252 5221 2860 1180 1282 1228 1020 623 909 778 257 514 744 427 330 234 214 272 167 262 323 286 166 745 349 1583 333 450.00 400 500 ERR 4401.43 942 7436 3494 0.91 1.00 1.00 0.70 899.85 1333 1000 540 1.00 0.50 2.00 0.50 70% 62% 89% 59% 72Yo 77% 79% 65% 60 70%Yo 65% 54% 70% 79% 74% 63% 54.00 54.13 50.73 13% 69Y% 27% 1.28 1.37 1.53 1986.94 1988.25 1987.27 1985.50 1986.88 1984.87 1990.36 1990.43 1989.08 91% 89% 85% 7.37 6.40 6.89 19068 24800 17429 2739 3884 2279 4856 4019 3147 1660 888 940 542 710 425 761 311 388 326 174 211 369 167 241 307 1516 478 500 500 300 1375 6504 5650 1.10 0.77 0.90 500 375 1300 2.00 0.67 0.33 93% 51% 62% 81% 67% 67% 66% 59% 57% 82'%o 62% 66% KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 66

APPENDIX 3: Summary Statistics Quality Manager at: A Picture Tube Company - Plant Number 1 VI. External Learning EXl. Q6EX1 EX2. Q6EX2A Q6EX2B Q6EX2C Q6EX2D Q6EX2E Q6EX2F EX3. Q6EX3A Q6EX3B Q6EX3C Q6EX3D Q6EX3E Q6EX3FA EX4. Q6EX4A Q6EX4B Q6EX4C Q6EX4D Q6EX4E Q6EX4F EX5. Q6EX5A Q6EX5B Q6EX5C Q6EX5D Q6EX5E Q6EX5F Q6EX5G EX6. Q6EX6 EX7. Q6EX7A (0 = No and 1 = Yes) EX8. Q6EX8 (O = No and 1 = Yes) EX9. Q6EX9 Your Plant a Overall Productivity Average Response IAverages Low Average High 26% 30% 15% 29% 14% 15% 13% 16% 26% 35% 34% 15% 18% 10% 19% 17% 13% 18% 12% 12% 8% 8% 5% 9% 7% 5% 3% 11% 34% 42% 38% 29% 17% 21% 14% 18% 11% 13% 7% 12% 16%6 11% 20% 16% 10% 11% 2% 10% 4% 4% 5% 3% 40% 43% 37% 37% 25% 30% 26% 20% 9% 10% 7% 8% 8% 6% 7% 10% 7% 4% 6% 9% 5% 5% 13% 2% 3.17 4.42 1.83 3.33 3.74 5.79 2.08 3.87 7.00 13.83 2.13 6.17 4.28 7.25 1.55 3.73 3.49 4.09 2.28 3.86 1.33 1.29 1.64 1.18 4.87 7.30 2.43 5.32 3.90 3.66 3.63 3.77 47% 31% 62% 47% 96% 100% 87% 100% 7.08 5.23 6.10 10.67 Quality Average Low Average 23% 31% 13% 15% 36% 24% 10% 12% 15% 11% 3% 13% 4% 7% 43% 29% 15% 20% 6% 15% 13% 15% 3% 11% 8% 3% 38% 35% 33% 20% 3% 11% 6% 11% 4% 13% 12% 5% 2.27 4.50 2.23 3.89 1.68 7.89 2.64 5.00 2.85 4.00 0.91 2.27 2.60 2.69 4.02 3.36 38% 80% 88% 100% 4.41 11.84 High| 24% 15% 19% 31% 14% 5% 9% 33% 17% 11% 20% 13% 1% 48% 22% 11% 6% 3% 1% 2.67 4.90 10.40 4.93 3.53 0.68 8.82 4.31 520% 100% 5.20 KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 67

APPENDIX 4: PICTURE TUBE PLANT PARTICIPANTS Appendix 4: Picture Tube Plants of the World Plant Facility Site AMEC (American Matushita Electronics Corp.) U.S.A Beijing Matsushita Color Tube Company China Caihong Electronics Company China Chunghwa Picture Tubes Ltd. (Malaysia) Malaysia Chunghwa Picture Tubes, Ltd. C-CRT Plant(Taoyuan Taiwan(R.O.C) Chunghwa Picture Tubes, Ltd.-Yangmei Taiwan(R.O.C) ETT Videocolor SPA (Thomson) Italy Foshan Tube Company China Gold Star Co., Changwon Korea Gold Star Co., Kumi Korea Hitachi Electronics Devices (U.S.A) Inc. USA Hitachi Electronics Devices(S) Pte. Ltd. Singapore Hitachi, Mobara Works Japan Hua Fei Color Display Company China JCT Electronics India Kineskop Ukraine Matushita Electronics Co., Hiraide Plant Japan Matushita Electronics Co., Kiyohara Plant Japan Matushita Electronics Corp (M) Sdn Bhd Malaysia Matushita Electronics Corp., Takatsuki Plant Japan Mitsubishi Electronics Industries Japan Mitsubishi Electronics Industries Japan Mitsubishi Electronics Industries Thailand Mitsubishi Electronics industries Canada Inc. Canada Nippon Electric Company Japan Nippon Electric Company Japan Nokia Display Technics GmbH Germany Orion Electric Co. Ltd., Gumi Plant Korea Philips Components Display-S.J. Dos Campos Brazil Philips Components GmbH Germany Philips Components Ltd. Austria Philips Components Ltd. U.K. Philips Composants France Philips Display Components Ltd. U.S.A Philips Electronics Industries(Taiwan) Ltd. Taiwan(R.O.C) Philips Components - Miniwatt. S.A. Spain Samsung Electronic Tube Co. (Berlin) Germany Samsung Electronic Tube Co., Buson Korea Samsung Electronic Tube Co., Suwon Korea Samsung Malaysia Malaysia Samtel Color Ltd. India Shanghai Novel CPT Company China Shenzhen SEG Hitachi China Sony BGD DD Plant U.K. Sony Display Device Singapore Sony Display Tube Corp. U.S.A Sony Inazawa Corp. Japan Sony Mizunami Corporation Japan Thomson Consumer Electronics VLS-Marion U.S.A Thomson Consumer Electronics, Marion U.S.A Thomson Consumer Electronics, Scranton U.S.A Thomson Polkolor Poland Thomson Tube Components de Mexico SA de CU Mexico Toshiba Corp., Himmeji Works Japan Toshiba Corporation Fukaya Display Devices Japan Toshiba Display Devices (Thailand) Co. Ltd. Thailand Toshiba Display Devices, Inc. U.S.A Uptron India Zenith Electronics Corp., (Rauland Div.) U.S.A Ownership Japan China/Japan China Taiwan (R.O.C.) Taiwan (R.O.C.) Taiwan (R.O.C.) France China Korea Korea Japan Japan Japan China/Holland India/Japan Ukraine Japan Japan Japan Japan Japan Japan Japan Japan Japan Japan Germany Korea Holland Holland Holland Holland Holland Holland Holland Holland Korea Korea Korea Korea India China China/Japan Japan Japan Japan Japan Japan France France France France/Poland France Japan Japan Japan Japan India U.S.A Note: Multiple listings for the same country and company indicate multiple facilities. KHURANA & TALBOT: Global Color Picture Tube Industry Study Page 68

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