This document discusses how Flow Consulting impacts private equity holdings. [1] Flow uses experienced consultants and a data-driven analytical approach to partner with clients. [2] It works to transfer knowledge and skills to clients to increase self-sufficiency. [3] Examples of Flow's work with various investment firms and companies are provided.

1. Impacting Private Equity Holdings
How Flow Consulting
Impacts Private Equity Holdings

2. What Sets Flow Consulting Apart
Flow Consulting uses a distinctive model to bring talent and
insight to client engagements
! Experience
 All of our consultants have deep business and management experience
! Data-Based Analytical Approach
 Our assessments leverage data to objectively identify opportunities for cost
savings and upsides
! Partnership – We work as team members with our clients
 We teach client associates to gather initial data to make us cost effective
 We facilitate and partner in planning (e.g., kaizens) but ensure the client
owns solutions and implements to achieve results
 We work with our clients as necessary to ensure they achieve the expected
results
! Knowledge Transfer – We transfer knowledge and skills to our clients
to help them become as self sufficient as they desire to be
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3. Investment Based Clients
Riverside Company (Exclusive ‘Toolkit’ Provider)
Hampshire Equity Partners
Odyssey Investment Partners
Ulysses Management
Founder’s Equity
Citic Provident
Icahn Holdings
Dogwood Equity
Cortec
Century Park
Wincove
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4. Experiences with The Riverside Company – Page 1
Experient – Conference Services Company
! I ntegration of three companies into one
GreenLine – Fresh Green Bean and Herb Thyme Packaging and Sales
! Site consolidation and operational improvement
Richter – Pumps and Valves
! Due diligence and post close activity
Vokes Air – Industrial Air Filters
! Operational improvement and mentoring
Moss – Large Display Solutions for Trade Shows
! Business process analysis with focus on cycle time
WaterJel – Medical Burn Solutions
! Lean Manufacturing Assessment
Eemax– Instantaneous Hot Water Heaters
! Due diligence and operational improvement
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5. Experiences with Riverside – Page 2
Diatron – Medical Testing Devices - Hungary
! New product introduction cycle time
Veritext – Legal Deposition Scheduling and Reproduction
! Site consolidation analysis and recommendations
Thibaut – High End Wall Paper Manufacturer and Distributor
! Inventory reduction analysis and recommendations
Monesson Hearth – Fireplace and Woodstove Manufacturer
! Facility and business integration
Polar Windows – Weather Resistant Door and Window Manufacturer - Canada
! Operational improvement
KeyCast – Metal Castings
! Operational improvement
Sigg – Metal Water Bottle Manufacturer - Switzerland
! Operational improvement
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6. Additional Clients
Cameron – Oil Field Drilling Equipment
Gulf States Toyota Distribution – Five State Regional New
Car Distributor
SPX – Industrial Products
Lockheed Martin - Aerospace
Nokia - Telecom
SCJohnson – Consumer Goods
Unilever – Consumer Goods
Syncrude – Oil Recovery from Tar Sands
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7. Defining the Way We Work
Discovery – from the first visit to taking ownership
! Snapshot – during the first visit, develop our perspective on the
potential issues and opportunities within operations
! Due diligence – developing the next level of issues and opportunities
in the following areas
Diagnosis – Understanding the issues and opportunities
! Performed in an ‘operational baseline’ with key leaders in the business
! Ownership is transferred from Flow to the leadership team
! Develop the agreed upon priorities, timing, and ownership for an
operational strategic plan for the next 18 months
Delivery – Assisting the leadership team in delivering the
operational plan
! Transition from a high support role to a reduced role over
18 months 7

8. Operations Assessment During Due Diligence
First look, first visit, the ‘30,000 ft view’, our Snapshot
! Inventory levels – is inventory too high, is there an aging issue
! Labor levels – are there opportunities to significantly reduce using
Lean Six Sigma tools
! Supply chain – are their apparent logistics savings opportunities, is the
materials acquisition department being run professionally and
strategically
! Capacity and capital investment issues – can apparent capital needs be
deferred using lean tools and product flow improvements, is more floor
space really needed, or can the total footprint be reduced
! Operating systems – is it stable, is it helpful, does it need to be replaced
! Operational stability – is there chaos, is there a large past due backlog,
are there significant customer quality issues, is the product flowing
smoothly
Surface obvious issues, and
surface obvious upside
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9. Next Step – More Detailed Discovery- Inventory
Is there too much – raw, WIP, and finished goods, and why
Is there an aging issue – is it building, and why
Diligently locate ALL storage, ALL warehouses, ALL
inventory (nearly 100% of the time extra space has been
found AFTER the deal) – get all leases and get all owned or
leased property documented
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10. Labor
Perform random work sampling – estimate percentages of
wasted time – movement, transportation, walking,
searching, waiting, reworking, sorting – not adding value
Can labor be separated by product categories to understand
product profitability after ownership
What is the turnover rate, absentee rate
Are there critical work force elements, especially tied to the
bottlenecks, nearing retirement
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11. Supply Chain – Purchasing Focus
Is there professional well trained leadership responsible for
sourcing the materials needed to feed to product lines
Get a pareto chart of spend by supplier
Understand the significance of any single source issues
Is there benefit in a ‘low cost country’ sourcing aspect that is
not being considered
Is there kanban linkage to the floor on key high volume items
Is there too much effort being extended in PO documentation
versus long term agreements
Are there any supplier contracts and commitments for key
materials and components 11

12. Supply Chain – Logistics Focus
Has there been a third party professional analysis done on the
costs of logistics support
What are their logistics costs compared to industry
benchmarks
Is their logistics leader well trained and up to date on the latest
trends
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13. Capacity and Capital Investment Issues
Find the bottleneck(s) – observe the bottleneck and work to
gain information on operating percentages, shifts worked,
maintenance program, quality output
Study the work space – is there wasted areas, is there a lot of
walking, is there storage of noncritical support items or
files, illustrate with digital photos
Is there an effective well run preventive maintenance program
in place. If not, are key pieces of equipment at peril for
imminent replacement
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14. Operating Systems
What is the system, is it up to date, is it helpful, does it have
reports that help to manage the operations
Will the system need to be replaced or significantly enhanced
within the next 3-5 years
If multiple sites, are they all on the same system and are the
connections seamless
How easy is it to get data or reports, can users get data or only
the IT guy
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15. Operational Stability – Lack of Chaos
!
Is the operations manager a professional well trained and open minded leader
!
Are there process improvement personnel that are well trained and open
minded for improvements
!
Is there an S&OP (sales and operations planning) process linked to operations
capacity and sales trends
!
Are schedules clear, and are the schedules held
!
Are the schedules clearly communicated or are the schedules central to one key
person
!
Are the schedules where they need to be on the operations floor and highly
visible
!
Is there a daily detailed scheduled meeting and a weekly higher level schedule
meeting
!
Are there too many ‘production control’ and scheduling / move expediting
personnel on the shop floor
!
Is there an effective root cause and corrective action process leading to
continued improvement of quality – operations, logistics, sourced product,
warranties, etc. Is there a professional quality manager
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16. Outputs and Next Steps – the Deeper Dive
Outputs
! Key issues/concerns that needed to be factored into the potential
purchase of the company
! Upside potential ranges that may help in a competitive bidding process
The outputs may surface the need for a Deep Dive in one or
more of the operational areas?
! Narrow the range of the estimated upside
! Better understand the risks
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17. Diagnosis - If the Acquisition Proceeds Past Due Diligence
Prior to close:
! Estimate the consulting effort and the subsequent return on that effort
! Set the consulting effort aside as a reserve for the leadership team
! Give the new leadership team goals and incentives tied to the
improvement objectives identified
Just after close:
! Work with management to develop the 12-24 month operating strategy
and plan to reach the identified goals
! Set the consulting budget and schedule
! Plan the level of transfer of knowledge needed after the consultants
finish
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18. Delivery – Focus on the First 18 Months
Agree upon the action plan that focuses on the highest
priorities
! I mpact to EBITDA
! Impact to customer delivery issues and quality
! Impact on inventory to free up cash
Typically run 2-4 kaizens while coaching and training the
internal leadership to ‘fish’ themselves
Activity tapers from leading the kaizens to coaching the
internal team to run the kaizens
Many clients end with training programs on critical lean and
six sigma tools that are most applicable to their business
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19. Reese Bourgeois
reesebourgeois@flowconsulting.com
386.208.6146
www.flowconsulting.com
Tell me and I forget; Teach me and I remember; Involve me and I learn.
- Ben Franklin
CONFIDENTIALITY NOTICE: The contents of this document including all words, graphics, and other materials contained herein are the
exclusive confidential and proprietary property of Flow Consulting, Inc. No portion of the enclosed may be copied, reproduced, transmitted,
disseminated, or used in any manner without first obtaining the written permission of Flow Consulting, Inc. Live Oak, Fl, USA.

20. Case Study Background
New York Based Private Equity Firm
Had Signed Letter of Intent – Truck and Fire Engine
Equipment Manufacturer
Board Member and Existing Client Recommended Flow
Consulting to Study Operational Opportunities
Four Day Intensive Assessment Revealed the Following:
! was 50% of their business in cycle time on largest product line, which
Potential for 75% reduction
! Potential for 40% increase in labor effectiveness on largest product line
! which theto increase capacity by at least 50%withoutneed and mortar,
Potential
newly acquired company stated as a dire
brick
! Opportunity to reduce costs by at least 15% on 40% of their purchased
commodities through strategic sourcing
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21. Results
First Project – data collection and 2 kaizens
! Increased capacity in largest production from 65 units/shift to over 90
units/shift with a reduction of 2 employees
! Manufacturing cycle was reduced from 5 days to 4 hours
! The hourly crew was able to devote an hour nearly every day to
continuously improve by implementing the 150 action items identified
in the 2 kaizens
Second Project – data collection and 1 kaizen
! Increased capacity on second largest production line by 33% on one
product and 20% on second product
! They accomplished this with the same number of employees
! Manufacturing cycle decreased from 1 day to 2 hours
! I nternal operations team performed at least half of the kaizen
facilitation 21

22. Results
Purchasing Initiative
! Lean procurement was implemented with 10% price targets for over
40% of the purchases
! Increased payables from 10 days to 30 days to free up $600k in cash
! Trained all purchasing personnel and engineering personnel in
negotiations training and vendor contact controls
Training
! Trained all operations, finance, purchasing and material control
personal in Lean Sigma tools
! Trained one process engineer to Black Belt status in Lean Sigma
! Sold licensing fee for perpetual usage of Flow Consulting Lean Sigma
training materials
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23. In Conclusion
Within two years:
! Profitability increased by 20%
! Hourly productivity ultimately improved by 40%
Our client exited earlier than their targeted three year cycle,
but:
$9 million investment by our client
turned into $30 million in less than
three years. Client grew sales while
we added nearly free capacity
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