1. PRESENTATION TO INDIANA UNIVERSITY SEPTEMBER 18, 2001 Indiana University Kelly School of Business

2. WWW.THEKEYSTONEGROUP.COM September 18, 2001 2 Today’s Agenda »Introductions »Consulting Overview »Consulting Environment »Keystone Overview »Small Firm versus Big Firm »Keystone experience in turnaround situations

3. WWW.THEKEYSTONEGROUP.COM September 18, 2001 3 Consulting Overview 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 Our clients are seeing a problem once, but we see it many times…

4. WWW.THEKEYSTONEGROUP.COM September 18, 2001 4 Consulting Environment »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 The consulting environment is characterized as a high energy, dynamic setting…

5. WWW.THEKEYSTONEGROUP.COM September 18, 2001 5 Consulting Environment »Analyst = Staff Consultant »Associate = Associate »Principal = Manager »Director = Partner The career path is well defined but less rigid than at a larger firm…

6. WWW.THEKEYSTONEGROUP.COM September 18, 2001 6 About Keystone Consulting Group »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 Keystone is a general management consulting firm based in Chicago and founded in 1991…

7. WWW.THEKEYSTONEGROUP.COM September 18, 2001 7 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.

8. WWW.THEKEYSTONEGROUP.COM September 18, 2001 8 Keystone vs. Other 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 Differences exist between Keystone and larger firms…

9. WWW.THEKEYSTONEGROUP.COM September 18, 2001 9 Analyst Project Experiences

10. WWW.THEKEYSTONEGROUP.COM September 18, 2001 10 Analyst Experience Consumer Product Manufacturer… »Client - $300 MM consumer product manufacturer in New York - cosmetics division »Project Team - Director, Senior Associate, Analyst »Client Problem - Order Fulfillment »Solution

11. WWW.THEKEYSTONEGROUP.COM September 18, 2001 11 Analyst roles on this project were... »Interviews »Concept Development »Data Analysis »Site Visits »Initial Conclusions »Industry Research »Presentation Analyst Experience

12. WWW.THEKEYSTONEGROUP.COM September 18, 2001 12 ISSUES Insufficient time to respond to changes Errors Bottleneck situation Late in ordering Missed ordering Insufficient use of forecast/poor forecasting FIXES 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 Why Product Does Not Ship On Time

13. WWW.THEKEYSTONEGROUP.COM September 18, 2001 13 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

14. WWW.THEKEYSTONEGROUP.COM September 18, 2001 14 I ssues »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

15. WWW.THEKEYSTONEGROUP.COM September 18, 2001 15 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 Analyst Experience

16. WWW.THEKEYSTONEGROUP.COM September 18, 2001 16 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 $$ Per Unit Produced decreased by 21.2% Analyst Experience

17. WWW.THEKEYSTONEGROUP.COM September 18, 2001 17 Senior Analyst roles on this project were... »Develop / manage the project plan & budget »Team Facilitator »Training of Team Members & Management »Interviewing »Data Collection and Analysis »Identifying Sources of Problems »Implementing Changes »Presentations to Management »Conceptual Integration with Existing Systems Analyst Experience

18. WWW.THEKEYSTONEGROUP.COM September 18, 2001 18 Contact Us Please contact us with further questions, or to submit a resume to interview with Keystone »Sarah Austin - saustin@thekeystonegroup.com »Brian Stewart- bstewart@thekeystonegroup.com »Joe Zito - jzito@thekeystonegroup.com »Ryan Windy - rwindy@thekeystonegroup.com On Campus Interview »November 1st