Consulting environment Keystone overview Small firm versus big firm Today’s Agenda Introductions Consulting overview Consulting environment Keystone overview Small firm versus big firm Keystone experience in turnaround situations

Our clients are seeing a problem once, but we see it many times… Consulting Overview Our clients are seeing a problem once, but we see it many times… Business Issues Business stops growing Profitability is poor Specific problem Operational issues Poor manufacturing throughput Inventory issues Other Strategy Our Tools Interviews Access to client personnel Data collection Analysis Benchmarking Strategy Focus Client team Implementation plan

Consulting Environment The consulting environment is characterized as a high energy, dynamic setting… High intensity and energy Client result focused Deadline focused High expectations Forefront of new business solutions Team problem solving Creative ideas and problem solving emphasis New clients, new problems, new solutions Travel flexibility expected

Consulting Environment The career path is well defined, but less rigid than at a larger firm… Analyst Associate Principal Director Staff Consultant Associate Manager Partner

About Keystone Consulting Group Keystone is a general management consulting firm based in Chicago and founded in 1991… Focused on middle market manufacturing and distribution companies Keystone’s premise is to offer “Major League” consulting services to the middle market Pragmatic vs. theoretical Highly experienced, un-leveraged teams “Work with” versus “tell” clients

About Keystone Consulting Group Our marketing focus is oriented towards middle market manufacturing and distribution companies… …we define middle market as companies with $50M to $1B in sales.

Keystone vs. Other Firms Differences exist between Keystone and larger firms… Keystone On the job training Small project team Hands-on: heavy client interaction and dependence Regional market focus Self-paced career progression Work directly with Senior Managers Larger Firms Training program Large hierarchical project teams Consulting firm team: lower client interaction dependence Wider market focus “Lock-step” career progression Work with division or department management

Analyst Project Experiences

Consumer product manufacturer… Analyst Experience Consumer product manufacturer… Client - $300MM consumer product manufacturer in New York - cosmetics division Project Team - Director, Senior Associate, Analyst Client Problem - Order Fulfillment

Interviews Concept development Data analysis Site visits Analyst Experience Analyst roles on this project were... Interviews Concept development Data analysis Site visits Initial conclusions Industry research Presentation

Why product does not ship on time… Analyst Experience Why product does not ship on time… ISSUES FIXES Insufficient time to respond to changes Errors Bottleneck situation Late in ordering Missed ordering Insufficient use of forecast/poor forecasting Diligent weekly review “Real time” info on missed shipments Heightened focus on delivery targets Scheduling review, exception report Promo limits - number of changes Limit overrides and changes to schedule Prioritize vendors; review planning needs

Analyst Experience Automotive Supplier… Client - $100 MM Tier 1 automotive supplier specializing in steering linkage systems Project Team - Director, Analyst Client Problem - Throughput, Customer Pressures Solution - Lean Manufacturing Results

Issues: Key customer demanding annual cost reductions Analyst Experience Issues: Key customer demanding annual cost reductions Initial attempt at Lean production went nowhere Belief that better use of MRP system was the solution Work force concerned that Lean equals layoffs Piece-rate incentive system

Analyst Experience Solutions: Implementation of Keystone’s Flow Design methodology to energize Lean efforts Implemented a smooth flow of materials to minimize excess handling and Work-In-Process Implemented a raw material kanban system with visual pull scheduling Developed an incentive pay system centered around performance to plan, delivery and quality

How did we get those savings? Analyst Experience Results: Benefits began within 6 months of project initiation Annual cost savings of $850,000 on $33 Million in sales How did we get those savings? Inventory turns increased by 18.2% Scrap decreased by 57% Rework decreased by 92% Labor cost per unit produced decreased by 21.2%

Senior Analyst roles on this project were... Analyst Experience Senior Analyst roles on this project were... Develop and manage the project plan and budget Team facilitator Training of team members and management Interviewing Data collection and analysis Identifying sources of problems Implementing changes Presentations to management Conceptual integration with existing systems

Andrew Ferreri AFerreri@thekeystonegroup.com Contact Us Please contact us with further questions, or to submit a resume to interview with Keystone. Jennifer Tedrow JTedrow@thekeystonegroup.com Andrew Ferreri AFerreri@thekeystonegroup.com On campus interviews are October 27th.