How GTS Will Help Create Millions of Jobs and Keep the World Safe

1. How GTS Will Help Create Millions of Jobs and Keep the World Safe Robert Waldrop: EntryPoint Consulting

2. EntryPoint Global Trade Practice • Longest-standing SAP GTS Partner Practice in the US and leader in market share and client references, including the following 42 GTS clients . . . • Goodrich, Avaya, Microsoft, Cooper Industries, Entegris, Carefusion • Littelfuse, Nike, Perkin Elmer, Dow Corning, IFF, Grundfos Pumps • McCormick, CommScope, Tenneco, AkzoNobel, Tellabs, EFI • ITT, Heat and Controls, Citrix, Henkel, WR Grace, Conoco Phillips • Texas Instruments, Dow Chemical, Sun, Life Technologies • LSI, Medrad, NVIDIA, Rhodia, Tyson, Intel • Northrop Grumman, Bose, Danisco, Computer Associates • Fonterra , Ingram Micro, Sanofi-Aventis, Hughes Network Systems • Practice employs industry-trained, compliance-savvy GTS consultants, each with a minimum of five full GTS deployments, along with trade compliance specialists supporting clients’ trade operations.

3. What is Happening? There are two major initiatives being enacted by the Obama Administration that will impact virtually every US business: • The National Export Initiative (NEI) • The Export Control Reform Initiative (ECR) Both have the goals of greatly increasing US exports, US competitiveness and US jobs. • The NEI will do this through increased promotion, advocacy and financing to spur US exports, along with efforts to remove trade barriers and enforce trade rules. • The ECR will accomplish these goals by streamlining the rules and institutions that control US exports to make US goods easier to export and more attractive to non-US customers, while also enhancing the controls and measures for ensuring national security and global threats.

4. Why do you care? • These initiatives will be responsible for the most dynamic period in US trade since the passing of the Tariff Act of 1789. Though we all want the US to achieve the above goals, what we're most interested in is whether our company is dynamic enough to take advantage of this high-change, high-export environment. • This will require that your company's management, employees, processes and technology are all sufficiently nimble to keep up with these changes and to handle your growth in cross-border transactions. • The topic of this presentation is how SAP Global Trade Services (GTS), along with a smart design and a strong consulting partner is your first step in ensuring you have the organizational speed to stay in compliance and improve your competitive position as these changes rollout in the next few months and years.

5. What is GTS? GTS gets your products across international borders by integrating with your inbound and outbound supply chain activity to ensure that you: • Follow the laws applicable to your company • Minimize your payment of duties, fees and taxes • Communicate with customs, customers, suppliers and logistics providers GTS provides your company the ability to drive process efficiencies and overall competitiveness through integration, automation and standardization in the following areas: • Support of Future Growth/Complexity • Supply chain and overall process improvement • Bottom-line cost savings • Audit Support & Risk Avoidance • Intelligence & Reporting

6. Why GTS? You don’t need GTS in much the same way you didn’t need SAP before you had SAP. You can outsource, perform manual processes and self-blind. You don’t need GTS if: • You derive no cost benefits or competitive advantages from your supply chain • You’re not planning to expand your geography, product lines or distribution channels anytime soon. • You believe that the cost savings you got from outsourcing outweighs the loss of control and visibility of your global operations. • You have a cheap compliance team, but expensive lawyers

7. Why is GTS different from competitors? Why is GTS different? • GTS provides the framework for controlling, calculating and communicating against any trade regulation, for any company and any country. • If done well, it becomes the world’s most nimble, most robust global trade solution. Licensing • It’s a big matching tool. It’s a business rule generator. It’s how you separate exceptions from rules. • Just for the US, it controls shipments under ITAR, EAR, OFAC, FDA, FCC, DOA, NRC, DOE, DEA, TSCA, ATF and ITA. • It can support any global, regional, country, state, local, company regulation or rule.

8. Example 1: Encryption Regulations • Major changes in 2009, 2010, with continued changes this year and next will make it faster and easier to export most encryption products, while not removing a single word from the overall regulations. • With the last change, there are now 17 ways you can treat an encryption product under US regulations. • Each change requires that you adjust how you control and report on your encryption exports (and sometimes, imports). • Every country has different regulations, and exports from these other countries often require US regulations to also be applied. • GTS allows each of these changes to be easily reflected in the software with just a few intelligent tweaks to master data and configuration. No waiting for your vendor to reflect these changes in their software and no need to block all orders so they can be reviewed against the new regulations.

9. Example 2: Free Trade Agreements • The US has free trade agreements (FTAs) in place with 17 partners, with three more being worked on as part of the NEI. • Up until the last version, GTS could support trade with just two of these partners. It can now support trade with all of them. • A major emphasis of the NEI will be expanding existing agreements, activating new ones and promoting their use (while aggressively enforcing their proper use). • It is extremely difficult to take full advantage of FTAs while remaining fully compliant with the regulations using manual processes. • GTS allows you to institute a single structure and workflow to support all of your agreements. • GTS will allow you to take direct financial benefit of your products’ preference status and provide this benefit to your customers.

10. Example 3: ITAR and EAR Consolidation • The ECR Initiative will develop a new Single Control List • Will replace both dual-use (EAR) and military (ITAR) lists • Will replace flat lists with tiered structure to define level of control • Products will be classified based on measurable qualities as opposed to use or design intent. • How products are classified and licensed will be radically changed, which would happen over time (it has already started). • GTS allows each of these changes to be easily reflected in the software with just a few intelligent tweaks to master data and configuration. No waiting for your vendor to reflect these changes in their software and no need to block all orders so they can be reviewed against the new regulations.

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