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Quantigate AdvisorsOperations Strategy and Supply Chain

Management Business Advisory Services

Second Quarter 2006

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Major Headlines Our mission and vision Our people

Experience and background Demographics and profile Key attributes

Our expertise Projects Training and seminars

Our qualifications Articles and publications Patents

Becoming a Quantigate Advisor Employment Quantigate challenge

Contact information

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Our Mission And Vision

The foundation of Quantigate Advisors has been built based on an uncompromising commitment to the success of our clients. This commitment and our mission is consistently communicated and practiced at all levels within Quantigate Advisors. Our mission Quite simply: we want to help our clients. Our success is measured by the results of our projects, and ultimately by the success of our clients. We feel so strongly about our mission that we offer all our clients the option to enter performance-based fee arrangements, where no fees are paid unless certain objectives are met within a pre-determined date.  Our VisionOur ultimate vision is to be recognized and respected as the premier consulting company specializing in operation strategy and supply chain management.

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Our PeopleExperience and backgroundQuantigate Advisors possess a wide range of experiences and backgrounds. We are a diverse group and an interesting mix of people, to say the least. Our collective past covers: nuclear power plant designer, financial and operation analyst at numerous manufacturing companies, operation strategist, professor of visual and performing arts, big-5 managers and senior managers, AT Kearney senior manager, logistics and transportation managers, business planners, marketing managers, warehouse and distribution managers, inventory analysts, general manager of transportation, etc. Even though everyone at Quantigate Advisors is unique, two things we all have in common are our passion for work as demonstrated by our past successes and more importantly, our uncompromising commitment to create value for our current clients.

Demographics and profile:An average Quantigate Advisor possesses:

• 15 years of work experience• Advanced degree from top university programs; concentrations ranging from MBA and MS in Information Technology to PhD. in Operations

Key attributesQuantigate Advisors professionals are motivated and dedicated to the client’s success. Although we are highly educated and possess significant real work experience, personal commitment and positive attitudes are often cited as the most important and admirable attributes.

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Our Expertise (1 Of 6)

As a management consulting firm, we help our clients develop and implement operation strategy and streamline supply chains. Our advisors bring industry and consulting experiences that create real, measurable and sustainable value.

To demonstrate our unyielding commitment to the success of our clients, we encourage our clients to enter performance-based fee arrangements, where payments are linked to clearly set objectives. What we do can be broken down into two broad categories: projects and training/seminars.

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Our Expertise (2 Of 6)ProjectsWe concentrate in operation strategy and supply chain management especially for manufacturing companies. We assess our client’s industry, business and operations to identify improvement opportunities. On a day-to-day basis, our work involves performing various analyses and developing models, as well as helping our clients implementing specific recommendations and strategies. Our projects span all the links of the supply chain including: • product introduction and rationalization• sourcing and purchasing• lean manufacturing• transportation and distribution logistics Each of these are discussed in the following pages:

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Our Expertise (3 Of 6)Product introduction and rationalization• In your organization, is there an effective, consistent and well-understood

new product introduction process?• In your organization, is there an effective, consistent and well-understood

obsolescence process?• How do you know if you are offering the right mix of products?• What new products does the market need?• Will a new product cause cannibalization of sales of other products?• What are the proper prices for your products? Is your product volume and/or mix causing unnecessary complexity to your

manufacturing operations?• Are your marketing, manufacturing and distribution organizations

streamlined? These are the questions that must be asked by any organization that wants to

streamline supply chain. The answers to these questions are of the utmost significance since they consequently impact sourcing, manufacturing and distribution decisions.

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Our Expertise (4 Of 6)Strategic sourcing and procurement• Do you have the right suppliers providing you the right components?• Should a part be single sourced or does it make sense to have multiple suppliers?• Does your organization have a consistent and pragmatic process for evaluating suppliers and

vendors?• Does your organization have a long-term strategic partnership with the key suppliers? What does

a “long-term strategic partnership” mean in your organization?• Should an operation be outsourced?• Are you getting the best prices without sacrificing quality?• How do you communicate to your suppliers?• What suppliers are causing you to carry excess inventory?• What suppliers are causing you shortage or stock-stock out situations?• Is your organization aware of where the money is being spent?• What are the “spent” categories in your organization?• Which spent category represents the biggest improvement opportunity?  Direct material cost typically makes up approximately half of total cost - by developing long-term

strategic partnerships with suppliers, we can help our clients reduce costs without sacrificing quality. This means achieving the lowest overall company cost, not simply the best pricing. In addition to price, we define the lowest overall cost as a function of several factors, such as: lead time, product quality, attribute(s), design and technical support, if applicable.

Direct material cost is usually the largest bucket, there are, however abundant opportunities to reduce other indirect and overhead costs. We help our clients identify and implement these cost savings by evaluating feasibility of consolidation, outsourcing and contract negotiations.

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Our Expertise (5 Of 6)Lean manufacturing• What is the true capacity of your organization?• What is the optimal batch size for each of your processes?• What is the optimal sequence of parts?• Is your inventory level where it should be?• Is the layout of your facility optimal?• Is your organization aware of the dynamics of bottleneck(s)?• What is the effect of variability in set up time, cycle time and down time?• Do you have the right number of resources allocated to the proper operations?• Should one-piece flow be considered in your facilities?• Has your organization reaped the benefits from going through a kaizen event?• Is everyone in your organization fully aware of the benefits and possible shortfalls of

pull vs. push?• Are kanbans used effectively in your organization?• What type(s) of kanbans are best suited for your environment? We bring extensive, hands-on experience in setting and implementing the lean

manufacturing techniques derived mostly from Toyota Production System and various statistical methods.

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Our Expertise (6 Of 6)Transportation and distribution logistics• Does your organization have correct distribution network configuration?• Is your network optimized to met customer service requirements?• How do you select the best mode of transportation? Transportation and distribution frequently represent major and relatively rapid opportunities to

reduce overall costs, improve customer service and gain competitive advantage. Our approach generally involves performing network optimization, what-if scenarios and sensitivity analyses to determine the proper number and locations of distribution centers and inventory levels.

Training and seminarsIn addition to project work, we also provide on-site training covering supply chain concepts and

practices, especially as it relates to lean manufacturing. Approximately half the class is conducted as a seminar and the other half devoted to practical hands-on experiments to enhance and enforce learning. Depending on the level of detail desired, the classes can be configured to as short as a four-hour high-level overview or up to a five-day detailed review.

 The topics cover key supply chain concepts such as:• Little’s Law: relationship between WIP, throughput and cycle time• Pull vs. push (concept and actual on-hand practice); one-piece flow• Adverse impact of variability• Queueing effect• Local vs. global optimization• Proper batch size determination

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Our Qualifications (1 Of 4)

Our former clients and employers include: Westinghouse, Ford, Boeing, GE, Kennametal, Honeywell, Philips, K Line America, KPMG and AT Kearney. We have helped these companies in their efforts to reduce cycle time, reduce inventory, reduce transportation costs, reduce material costs, increase throughput and ultimately improve their bottom line. In addition to our deep knowledge and supply chain management experience, we have numerous white papers and a patent currently under review.

Articles and publications

The following is a sample of topics and short descriptions of white papers available within our library. Any organization interested in learning more should send an email to: info@quantigate.com with “Articles and publications” as the subject line.

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Our Qualifications (2 of 4)Derivations of APICS’ EOQ (Economic Order Quantity) FormulaThe widely used APICS formula for economic order quantity is discussed in greatly detail and comments are made on the embedded assumptions and the consequent possible short falls. To effectively and properly use the EOQ formula, how it was derived must first be fully understood. It is very easy to get lured into blindly plugging in numbers and making imprudent decisions based on the outcome. In this article, the EOQ formula is derived so the reader is fully aware how the formula came about. The assumptions made and the inherent short falls are also fully explained. Several pragmatic remedies are suggested as well as other comments to help modify the formula to provide truly meaningful output. Use of Statistics in Supply Chain Management: Demand Pattern RecognitionEven with the most sophisticated off the shelf supply chain packages, timing of the demands is often ignored or not fully accounted for. As a hypothetical example, consider the following two sets of 12 monthly demands:Scenario 1: 120, 110, 100, 90, 80, 70, 60, 50, 40, 30, 20, 10Scenario 2: 10, 20, 30, 40, 50, 60, 70, 80, 90, 100, 110, 120 Although the arithmetic average (65) and the standard deviation (36) are the same for both scenarios, these two demands behave very differently and should not be treated the same way. However, simply plugging numbers into the classic APICS inventory level calculation yields 124 as the proper level of inventory (assuming 95% customer service level and one month lead time). If the output from standard APICS calculation is blindly implemented, scenario 2 will soon result in shortage (which in turn results in unhappy customers and manufacturing expedite requests) and scenario 1 will inevitably result in excess inventory (and possibly obsolescence). In this white paper, we offer an alternative to the classic calculation, which can be inadequate at times. In addition, a technique for detecting certain patterns is also presented.

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Our Qualifications (3 Of 4)Local vs. Global Optimization: HeuristicsIn a network of multiple processes, improvement made on a single process may actually have an adverse impact on the whole. In this paper, such a case is presented as well as several techniques for identifying such instances. Examples of possible adverse impact of achieving local optimization in real life are also provided. Factory SimulationThis material is intended to be a training/seminar material and is best to have one of our advisors talk it through. In this presentation, key supply chain concepts are covered including:• Little’s Law: relationship between WIP, throughput and cycle time• Pull vs. push (concept and actual on-hand practice)• One-piece flow• Adverse impact of variability

• Set up time variability• Down time variability• Cycle time variability

• Queueing effect• Local vs. global optimization• Proper batch size determination 

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Our Qualifications (4 Of 4)Other topics currently in progress Fallacy of Commonly Used Performance MetricsIn this article, we offer the right set of metrics that will drive the desired/right behavior in your organization. Appropriateness of Normal Distribution AssumptionThe circumstances where normal distribution assumption is / is not appropriate are discussed as well as the impact on real life applications.

Patents

Transportation OptimizerTransportation and distribution are often overlooked areas. They frequently represent major and relatively rapid opportunities a client can employ to reduce overall costs, improve customer service and gain competitive advantage. A transportation model has been developed to minimize an organization’s transportation cost. Based on a destination zip code and the weight to be shipped, the model selects the best mode and the right box sizes. This model is currently going through a patent protection process. Any organization interested in a demonstration of this model should send an email to: info@quantigate.com with “Transportation Optimizer” as the subject line.

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Becoming A Quantigate Advisor (1 Of 2)

We are not a typical consulting firm, and being a part of Quantigate Advisors is not a typical career. Our advisors make a difference — both on projects for clients and internally in helping shape firm's direction and culture. The single most important attribute for success at Quantigate is commitment to our client’s success. Those who share this uncompromising attitude along with excellence in their line of expertise will go far within our firm.

 • Our goal is to recruit those who possess both competency and positive

demeanor. We want our people to stay and grow with us, and we want our advisors to collectively tackle the challenges and celebrate the successes.

 • Our work involves extensive travel and long work hours. However, we

believe sense of accomplishment from helping our clients become leaner and more efficient makes it all worthwhile.

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Becoming a Quantigate Advisor (2 of 2)The Quantigate challenge

Do you have what it takes? If you can figure out the following brainteaser within fifteen minutes, you are encouraged to apply (info@quantigate.com). Visit us often as these brainteasers are renewed every month. Determine who owns the fishThere are five houses in a row and in five different colors. In each house lives a person from different country. Each person drinks a certain drink, smokes a certain cigar and keeps a certain pet. No two people drink the same drink, smoke the same cigar or own the same pet.

• The Brit lives in a red house.• The Swede has a dog.• The Dane drinks tea.• The green house is on the left of the white house.• The green house owner drinks coffee.• The person who smokes Pall Mall has birds.• The owner of the yellow house smokes Dunhill.• The man living in the house right in the center drinks milk.• The Norwegian lives in the first house.• The man who smokes Blend lives next to the man who has cats.• The man who has horses lives next to the one who smokes Dunhill.• The man who smokes Bluemaster drinks beer.• The German smokes Prince.• The Norwegian lives next to the blue house.• The man who smokes Blend has a neighbor who drinks water. WHO OWNS THE FISH?To submit or to obtain the answer, email us at: info@quantigate.com with “Quantigate challenge” as the subject line. 

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Contact Information Interested in finding out more about our services? Thank you for taking your time to explore our world of Quantigate Advisors. If you want to hear more about our services and how Quantigate can make a difference, please

contact us:   Quantigate Advisors 92 Tillotson Road Fanwood, NJ 07023   Telephone: (908) 264-9316 Email: info@quantigate.com   Want more about a career with Quantigate? If you want to make a positive difference by becoming a Quantigate Advisor, and feel that you

meet our requirements, you are encouraged to apply. For further inquiries and resumes, send an email or regular mail to the following address (no phone inquiries):

  Quantigate Advisors 92 Tillotson Road Fanwood, NJ 07023   Email: info@quantigate.com (attach cover letter and resume as text or Word documents)