Leadership Forum - Providing Solutions

1. continue Leadership Forum - Providing Solutions Raytheon and Natel working together, to our Customers through Integrated Supply Chain Management and Raytheon Six Sigma providing solutions

2. continue Leadership Forum 29 January 2004 • Natel was invited to participate in Raytheon Leadership Forum • Natel was identified as a model for Solution based approach to Vendor/Customer relationship • Natel was the only vendor/subcontractor invited to participate • Natel’s story was used as example to be duplicated across Raytheon • Natel received recognition from highest levels at Raytheon for providing solutions at speeds unachievable by Raytheon on their own

3. continue Raytheon/Natel History of Solutions • RMS Stinger Engagement • Low Temperature Co-Fired Ceramic, Reactive • Aluminum Nitride, Proactive • Air Force Program, Proactive • Microelectronics Transition

4. continue What they are saying !!! “In my career, I can count on one hand the number of suppliers to gain trust and sustain quality and performance across a myriad of programs. Natel is part of that handful. They’re small enough to work with, yet large enough to pack clout. They have initiated “Lean Manufacturing” and it works. They do what they say they will do!” Major Prime, Program Materials Director For more details see “An Outsourcing Success Story” article

5. continue The Answers How is Natel able to offer solutions and still remain profitable?

6. continue Recipe for Success How is Natel different? • Implementation of Lean and 6 Sigma • 1 hour of focused, individual and one-on-one anomaly and recurrent training; per employee per week • Training emphasizes quality, not quantity • Never accept current solution as final, always looking for better, faster solution • Always searching for problems/pitfalls and addressing them before they happen • Aggressive culture of “Lean Enterprise”

7. continue Program Management Tightly organized, Lean Management Team • Highly motivated to support all disciplines • Up to 25 years experience working as a team • Historical and verifiable success stories tied to large transitions • Demonstrated facilitator of Prime/Natel solution oriented relationships

8. continue Implementation Strategies • Development of key relationships (open and candid) • Executive Level involvement • Clear objectives identified • Dedicated senior level program involvement

9. continue Subcontracts and Material • Develop long term relationships • Detailed forecasting and future buy commitment strategies • Continuous lead time reduction efforts • Continuous price reduction efforts • Demonstrated savings(15-20%) and lead time reductions(50-75%)

10. continue Summary • Goal of 96% percent first pass yields • Goal of 1 day cycle time for assembly • Increased emphasis on non production “Lean Initiatives” • Natel is never satisfied with the current state • Speed and agility coupled with the highest possible customer satisfaction • As a result, Natel’s sales have increased from under 17 million in 1999 to over 46 million in 2003

11. President VP’s and Managers Supervisors Operators continue The Explanation Quality First !!! Anomaly Based Training Performed Immediately Application of Six Sigma Training and Programs All this has contributed to a proactive evolution of: Lean Enterprise Lean Management Lean Manufacturing Lean Operations

12. continue The Explanation, cont. • “Lean” suggests that there are 7 main areas of waste • Initial success achieved by going after the “low hanging fruit” • Additional refinements made in: • In-Line and balanced assembly: Eliminated Waste in transportation and handling and reduced wait times • Uncluttered/Organized Production Lines: Speeds efficiencies and improves morale • Reduced cycle times: • Assembly cycle time is down to 3-4 days; industry average is 60 days • This eliminates excess inventory and material handling • Also provides near real time identification of process/component problems

13. continue The Explanation, cont. • Material cost reduction’s of up to 20% on 15 year historical numbers achieved by: • Creating spend concentrations • Long term commitments to reduced supplier base • Providing detailed multi-year forecasts • Significant material lead time reductions achieved

14. continue 6 Sigma/Lean Results

15. continue The Implementation Can this be replicated in any operation or application? YES! Most defense electronics operations today are running at less than 50% efficiency!

16. continue The Implementation, cont. What does it take to make an organization successfully lean? • Commitment from all levels of the organization to support change • Empowerment by Management of all levels of organization to effect change • Removing barriers that crop up during times of change

17. continue The Result - Summary Small organizations committed to a lean structure, can take advantage of these principles and achieve the success described. Natel’s focus on its specific and special manufacturing niche has allowed it to become an expert. This allows Natel results that “Big Companies” may not be able to achieve. Also it allows big companies (or prime contractors) to focus on their core competencies of system development and integration.

18. continue The Future • Through “Lean Manufacturing”, Natel is and will continue to realize significant improvements in all business metrics • Our demonstrated success brings us up the learning curve, positioning Natel to move deftly and quickly • Proven ability to mitigate risk and prevent product flow disruption is ready to serve again • Significant capacity immediately available, with two separate facilities available • Natel’s robust infrastructure and experience is poised to add to your success

19. Finish More About Natel Click a link to read more…… Natel’s Business Summary (8 Slides) Natel’s Manufacturing Highlights (11 Slides)

20. continue Hybrids Multi Chip Modules Microwave Integrated Circuits

21. continue Evolution Of A Solution Oriented Partnership • Natel History: • Started in 1975 • A small minority owned business • Evolved To Become: • A Model of Integrated Supply Chain • Through Raytheon Six Sigma • Collective risk taking and problem solving • A DoD Supplier Diversity success story: Awarded 2003 Subcontractor of the Year for Region IX by the SBA • A collaborative link in providing real value to customer Back to More about Natel

22. continue COMPANY HISTORY • MIL-PRF-38534 Certified in 1990 • ISO 9001 Certified in 1998 • ISO 9001:2000 Certified 2003 • Acquired Power Microelectronics Division from Semtech in 1992 • Acquired Powercube from Unitrode in 1994 • Acquired Scrantom Engineering, Inc. from Solectron in 2003 Back to More about Natel

23. continue MISSION STATEMENT T o be the value and quality leader in our industry, as viewed by our customers. IQS Innovation Quality Service Back to More about Natel

24. continue Marketing Focus • Space Level RAD-HARD Hybrids • Military Hybrids • Medical Hybrids • Power Hybrids • COB, SMT, MCM, BGA & Flip Chip • DC-DC Converters • Microwave Integrated Circuits • RF/Microwave Hybrids • Photonics/Optoelectronics • Circuit Card Assembly • System/Box Level Assembly Back to More about Natel

25. continue MAJOR MICROELECTRONICS PROGRAMS • F15/F18 – Radar (Raytheon) • Patriot Missile (Raytheon) • Sparrow Missile (Raytheon) • STD Missile MHIP (BLK-III) (Raytheon) • Space Level 8482 and 5155 Classified (TRW) • Stinger (General Dynamics/Raytheon) • Lantirn (Martin Marietta) • F-16 Radar (Westinghouse) • F-15 Avionics Integrator (McDonnell Douglas) • Pivad (Lockheed Electronics) • MIL-STAR (Raytheon) • Aegis (Raytheon & RCA) • Sea Fire (Texas Instruments) • Roland (Boeing) • ASRAAM(Hughes) • AMRAAM(Raytheon) • Pacemakers (TPS) • Defibrillators (Telectronics Pty Limited) Back to More about Natel

26. continue KEY BUSINESS RELATIONSHIPS Back to More about Natel

27. continue Risk Mitigation • Multiple locations capable of production • Disaster recovery success demonstrated • Redundant technical and process support • Data/Documentation storage and recovery strategies Back to More about Natel

28. continue CUSTOMER RECOGNITIONS • Region IX U.S. SBA Contractor of the Year (US Small Business Administration) 2003 Systems Command Medallion – Outstanding Member APG-73 Program Team (Raytheon & US Naval Air Command – Admiral James Goodwin) • Surface Navy & Electronic Warfare - Outstanding Performance in Engineering & Manufacturing SLQ 32 (Raytheon Goleta) • Cert of Appreciation – Outstanding Support to Operation Enduring Freedom (DCMA – Diane J. Diekman – Capt., USN. Commander) • Outstanding Support – Standard Missile Program (Raytheon Tuscon) 2001Supplier Excellence Award F-15 & F/A-18 Radar Programs(Raytheon El Segundo) Back to More about Natel

29. continue CUSTOMER RECOGNITIONS (cont.) 20001X1024 Test System(Schlumberger) 1999 Quality System Qualification Declaration (DCMC) • HS601 & ICO Satellite Program(Hughes Space & Communications) 1997F-22 Program Aircraft 4001(Boeing) 1995 Outstanding Supplier (Hughes) 1975-1995 More than 20 customer awards and recognitions Back to More about Natel

30. This is only a glimpse of what Natel can offer. Please let us have the opportunity to share more on how Natel is right for your outsourcing needs … The End Fill out a Contact Request Form Go to Natel Website Homepage Go to Leadership Page on Natel Website