Renaissance Repair & Supply Inc.Remanufacturing, Repair, & Support

BackgroundBackground

HistoryHistory5 years of Operation under dTel branded name.5 years of Operation under dTel branded name.

First 3 years focusing on New / Used material at a component levelFirst 3 years focusing on New / Used material at a component level

2 Years of focus on Secondary/Remanufactured and Services2 Years of focus on Secondary/Remanufactured and Services

Central hubs and warehousesCentral hubs and warehousesMultiple warehouse locations for grooming returns and staging shipmentsMultiple warehouse locations for grooming returns and staging shipments

1 Re-man/Repair center in Canada servicing Canada/ EMEA/ USA/ CALA1 Re-man/Repair center in Canada servicing Canada/ EMEA/ USA/ CALA

1 Outsourced hub for test and repair (Texas) for non core material1 Outsourced hub for test and repair (Texas) for non core material

1 UK partner for Warehousing /Logistics and Installation 1 UK partner for Warehousing /Logistics and Installation

Target Market / Sizing / Global CoverageTarget Market / Sizing / Global CoverageSwitching, Optical, Wireless, Access, Supply Chain and ServicesSwitching, Optical, Wireless, Access, Supply Chain and Services

Total $4B potential in market annually (All Vendors, includes Services..not repair)Total $4B potential in market annually (All Vendors, includes Services..not repair)

NA(45%) CALA(15%) EMEA (35%) Asia Pacific (5%)NA(45%) CALA(15%) EMEA (35%) Asia Pacific (5%)

Business DriversBusiness DriversMost networks installed during technology boom (1990’s) based on Most networks installed during technology boom (1990’s) based on increase “new revenue” driven by internet.increase “new revenue” driven by internet.

Networks have become aged.Networks have become aged.

~80% of installed base of equipment driving your and my phone and ~80% of installed base of equipment driving your and my phone and internet services runs on equipment that the OEM has discontinuedinternet services runs on equipment that the OEM has discontinued

Current market is not one of growth justifying the replacement of Current market is not one of growth justifying the replacement of Optical and Switching Systems. This is not an emerging market Optical and Switching Systems. This is not an emerging market with new services being offered.with new services being offered.

Given that budgets are tight Customers are seeking an alternative Given that budgets are tight Customers are seeking an alternative supply source for additional spares and infill for legacy network.supply source for additional spares and infill for legacy network.

Material exists in the market in excess pockets to fill demand.Material exists in the market in excess pockets to fill demand.

Equipment was originally built to 5 nines reliability…..it does not Equipment was originally built to 5 nines reliability…..it does not break or fail. Stated failure rates on legacy equipment is ~1 to 3%break or fail. Stated failure rates on legacy equipment is ~1 to 3%

dTel is enabling Customers to manage legacy networks by offering dTel is enabling Customers to manage legacy networks by offering an “Alternative Supply Chain” and repair/replacement services.an “Alternative Supply Chain” and repair/replacement services.

05

10

15202530

354045

Market Deployment Mfg Cost RMfg Cost

Remanufacture Vs. New ArchitectureRemanufacture Vs. New Architecture(A time for all offerings)(A time for all offerings)

New ArchitectureNew Architecture Higher CapacityHigher Capacity Market Driven FeaturesMarket Driven Features Bleeding edgeBleeding edge Some Current TechnologySome Current Technology

Remanufactured ArchitectureRemanufactured Architecture Low/ Moderate VolumeLow/ Moderate Volume Discontinued PlatformsDiscontinued Platforms Stable platformsStable platforms IB saturated from previous IB saturated from previous

Product PurchasesProduct Purchases Cap on spending so as not to Cap on spending so as not to

drive over supplydrive over supply Start rotating and migrating Start rotating and migrating

your stockyour stock

Market Deployment Saturation

Bridge into alternative supply chain at lower cost

Turn focus to next Gen

Why pay a premium for products that will soon Migrate!

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What is Reman in Relation to A class and RepairWhat is Reman in Relation to A class and Repair

A Class Reman Repair

A Class MFG CM•High Speed MFG•Next/ Current Gen•Incremental Foot Print•High Cost•Low FG Inventory (JIT)•Component re-engineering•Demand Driven•Low OM Flexibility•Heavy Infrastructure

Geared to Repetitive Business

Repair CM•Surgical/ low speed•90% Break/Fix•Current Generation•No new Foot Print•High Cost•Moderate FG Inventory•Long Lead Time•Risk avoided with Cost•No OM Flexibility•Heavy InfrastructureService Based Business

Remanufacturing•85%Test/ Certify•Sourcing Specialists•Current/Md’d Gen•Incremental Foot Print•Low Cost•High FG Inventory•Quick Turnaround•Order Re-engineering•High OM Flexibility•Low InfrastructureAlternative Supply Chain

Reman is a hybrid between A Class and Repair….A Different Supply Chain and a Different Skill Set

Some Installed Base Data, Some Installed Base Data, why can I not get efficient repair from the OEM on older platforms?why can I not get efficient repair from the OEM on older platforms?

Installed Base RationalizationInstalled Base Rationalization ~80% of the Installed Base consists of MD or EOL ~80% of the Installed Base consists of MD or EOL

Material Material Customers keeping equipment in service for Customers keeping equipment in service for

significantly longer than planned for or anticipatedsignificantly longer than planned for or anticipated Typical stocking for Repair post Md is 5 yearsTypical stocking for Repair post Md is 5 years EOL material not stockedEOL material not stocked Support plans now including EOL materialSupport plans now including EOL material Material does not exist in the repair pipeline to Material does not exist in the repair pipeline to

facilitate repair volume expectations facilitate repair volume expectations Components required to repair are now obsolete Components required to repair are now obsolete

(ASIC, and Passives)(ASIC, and Passives)

End Results Of not using End Results Of not using AlternativeAlternative Stocking Stocking SolutionSolution

As Customer aged installed base is higher than As Customer aged installed base is higher than planned Lead times increase as does back logplanned Lead times increase as does back log

Cost associated to repair increase on Md and EOL Cost associated to repair increase on Md and EOL FRU’s as components to repair no longer existFRU’s as components to repair no longer exist

Traction from Customer Base is dwindling as Traction from Customer Base is dwindling as confidence in ability is lost although Repair is sold confidence in ability is lost although Repair is sold from OEM at a Premium.from OEM at a Premium.

As majority of Alternative Supply is on Md or EOL As majority of Alternative Supply is on Md or EOL (90%) direct impact is not to warranty provision but (90%) direct impact is not to warranty provision but to Bottom Line Support Plan Cost and Revenueto Bottom Line Support Plan Cost and Revenue

Capabilities & Services Capabilities & Services

Repair & RemanufactureRepair & RemanufactureCapable of handling many Multi Vendor platforms through our repair and re-manufacturing process.

All Products that have been repaired or re-manufactured by d-Tel come with a 1 year warranty.

Alternative Supply ChainAlternative Supply ChainMulti vendor supply for Manufactured Discontinued platform sparesRemanufactured material tested to SpecPack or System level deploymentServices with 1 yr warranty

Asset/Logistics ManagementAsset/Logistics ManagementInventory material (Part, lot, serial number)Manage return LogisticsDistribution of repair to current vendor setUse excess to drive lead time reduction in repairUse excess material to cost reduce repair process

Inventory Redeployment/Resale ServicesInventory Redeployment/Resale ServicesInventoryStore / resell assets displaced by Next Gen deploymentReconfigure and Remanufactured to d-Tel SpecRedeploy strategically in whole or in part elsewhere in the network with 1 yr warranty

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What is Remanufacturing?What is Remanufacturing?Cracking the Reman Code…….Cracking the Reman Code…….

Inventory + Reman Process + = Alternative Supply Chain

MV Supply Chain SolutionMV Supply Chain SolutionBuyback

•Lucent•Nortel•Cisco•Alcatel•Other

Recycle•Telecom•Non Telecom•Hazardous

Customer owned•Telecom•Non Telecom

Consignment•Telecom•Non Telecom

Recycle Execution•Sort•Wipe•Dismantle•Shred/Smelt•Dispose•Destruction Certificate•97% efficiency•3% to Land Fill

Warehousing & Reverse Logistics

Cost Reduction

RemanufactureProcess•Repair•Test•Reconfig•Support Plan•FG Consumable

MV Repair CR Lab MV Supply MV Sparing

Customer Supply Chain Svs.

37 Global distribution sites CA, US, EMEA

•All material tracked in the warehouse by Lot, Part All material tracked in the warehouse by Lot, Part and Serial Number.and Serial Number.

•All material is visually inspectedAll material is visually inspected

•Check for external damageCheck for external damage

•Check interconnect for disruption, damage or Check interconnect for disruption, damage or corrosioncorrosion

•Check all latches and catchesCheck all latches and catches

•Check all gasketsCheck all gaskets

•All material integrated to Customer SpecAll material integrated to Customer Spec

•All material is functionally testedAll material is functionally tested

•Functional test at a card level and/ orFunctional test at a card level and/ or

•Functional integrated testFunctional integrated test

•Material is repackaged in standard proper ESD Material is repackaged in standard proper ESD packaging.packaging.

•All Material is sold with a 1 year Warranty.All Material is sold with a 1 year Warranty.

•Md’d and EOL Material available.Md’d and EOL Material available.

Remanufacturing SpecRemanufacturing Spec

Repair High Level ProcessRepair High Level ProcessPhysical Inspection and Cleaning:Physical Inspection and Cleaning:

All Cards, Frames and Bays are physically inspected for, corrosion, damage, missing components, pad All Cards, Frames and Bays are physically inspected for, corrosion, damage, missing components, pad damage, delaminating, gasket seals, latches and catches.damage, delaminating, gasket seals, latches and catches.

All interconnects are cleaned and/or scoped (fibre, connectors, pins)All interconnects are cleaned and/or scoped (fibre, connectors, pins) All wiring and harnesses are inspected for jacket stretching, corrosion and continuity.All wiring and harnesses are inspected for jacket stretching, corrosion and continuity.

System/Card Level Test:System/Card Level Test: All Cards, Frames and Bays are tested for continuity, Bit Error, Loop Back, Power in/out, Fibre Cut and All Cards, Frames and Bays are tested for continuity, Bit Error, Loop Back, Power in/out, Fibre Cut and

Forced Switch. Dithering cards are soaked for 8 hours to recreate errors. Forced Switch. Dithering cards are soaked for 8 hours to recreate errors. Tests are performed to A class installation procedure on SLAT.Tests are performed to A class installation procedure on SLAT.

Card Level debug:Card Level debug: Cards failing system test are physically debugged for loss of circuit continuity or power/ signal degradation Cards failing system test are physically debugged for loss of circuit continuity or power/ signal degradation

or loss.or loss. Component level failures are demarked for physical replacement or repair. Component level failures are demarked for physical replacement or repair.

Physical Repair:Physical Repair: Component replacement to IPC 610 class II.Component replacement to IPC 610 class II. ROHS or Non ROHS (Leaded)ROHS or Non ROHS (Leaded) BGA bumping and replacement (outsourced)BGA bumping and replacement (outsourced)

Packaging/ Warehousing/ Distribution:Packaging/ Warehousing/ Distribution: All material is packaged to OEM standards (ESD, Anti-Static)All material is packaged to OEM standards (ESD, Anti-Static) Material Stocked by Part, Serial and BarcodeMaterial Stocked by Part, Serial and Barcode Finished goods segregated from Feed Stock and RMA StockFinished goods segregated from Feed Stock and RMA Stock 37 Global Storage Locations (Partnered with UPS)37 Global Storage Locations (Partnered with UPS)

The right fit The right fit (Legacy Planning)(Legacy Planning)

Network Lifecycle ManagementNetwork Lifecycle Management Planning at a network as well as card level Planning at a network as well as card level Evaluation & prioritization of Network ConvergenceEvaluation & prioritization of Network Convergence Advisory input (supply, support, remove)Advisory input (supply, support, remove) Legacy reconfig/ redistribution (moves & changes)Legacy reconfig/ redistribution (moves & changes)

Stability of SupplyStability of Supply Priority Stocking (limited availability material)Priority Stocking (limited availability material)

Consistent PricingConsistent Pricing Predictive SourcingPredictive Sourcing Buying in the troughBuying in the trough

Process Quality Process Quality OEM Standards (IPC610, IPC rework)OEM Standards (IPC610, IPC rework) ““The alternative supply chain”The alternative supply chain” Legacy Repair Supply ChainLegacy Repair Supply Chain

Current Repair CapabilityCurrent Repair Capability

NortelNortel•OpticalOptical

• OC3/ 12/ TBMOC3/ 12/ TBM• OC48 classicOC48 classic• OC192 ClassicOC192 Classic• MORMOR• MOR+MOR+• LH1600LH1600• LH1600GLH1600G• DXDX• OM3K SeriesOM3K Series• OM5K SeriesOM5K Series• OM4K SeriesOM4K Series• OME6500OME6500• TN1X, 4X, 16X, 64XTN1X, 4X, 16X, 64X

•PassportPassport• 6K Series6K Series• 7K Series7K Series• 8K Series8K Series• 15K15K

•DMSDMS• 100, 250, 500, XA Core100, 250, 500, XA Core• SuccessionSuccession• CS1K, 2KCS1K, 2K

ALUALU•3610036100

• 74707470• 76707670• 36003600• 16801680

•Wave starWave star• OLS400OLS400• OLS800OLS800• 2.5G2.5G

•DSLMDSLM

FUJIFUJI•FLMFLM•FlashwaveFlashwave

SycamoreSycamore•SN3000SN3000•SN16000SN16000•DNXDNX

CienaCiena•Core DirectorCore Director•Metro Director K2Metro Director K2

PDSIPDSI

SUNSUN

BAY AVAYABAY AVAYA

CiscoCisco•1000 Series1000 Series•2000 Series2000 Series

•3000 Series3000 Series•AS5300AS5300•55055505

•55095509•60006000•65006500

•6500-E6500-E•6504-E6504-E•75007500

•1010 Lightspan1010 Lightspan•1200012000•GSR all generationsGSR all generations

•15454 all generations15454 all generations

CentigramCentigram

SS8, SC3100SS8, SC3100

Fore Systems, MarconiFore Systems, Marconi

Redback 800, 1900Redback 800, 1900