Optimising Costs Through A Synchronised Supply Chain

1. Optimising Costs Through A Synchronised Supply Chain Shaun Grantham Marketing Manager UPS South Europe

2. Who is UPS - Small Package delivery Founded August 28, 1907, Seattle Headquarters Atlanta, USA 2006 revenue 47,5 billion USD Employees 427,700 Package operations • 2006 delivery volume 3,9 billion packages and documents • Daily delivery volume 15,6 million packages and documents • Service area more than 200 countris and terriotries • Customers 7,9 million daily • Operating facilities 1,788 • Delivery fleet 94,542 • UPS jet aircraft 282, 8th larget airline in the world

3. Who is UPS - Supply chain and freight Supply Chain Solutions • Key services Logistics and distribution; transportation and freight (air, sea, ground, rail); freight forwarding; international trade management, and customs brokerage. • Specialty services: Service parts logistics; technical repair and configuration; supply chain design and planning, returns management • Facilities 936 facilities in more than 120 countries; 10.7 million sq. m. Freight • Key services Leading provider of less-than-truckload services coast-to-coast • Delivery Fleet 6,792 tractors; 22,846 trailers • Facilities more than 215 service centres

4. Global trends and logistics • Increased global trade • Asia and China as manufacturers of goods and massive potential markets • Consumer pull – power increasingly resides with individuals • Complex and continuously changing business environment • Five universal business plan challenges: • Growing by accessing new markets • Improving customer service • Differentiation • Improving cash position • Enhancing productivity • Supply chain executives can drive profitability if they closely align their supply chain strategies to the five universal challenges • The supply chain as a key driver of a company’s value and a revenue generator

5. Traditional Supply Chain New Supply Chain • Hierarchical • Inflexible • One-step IT • In-house Logistics • Multiple Carriers • Dynamic/complex • Flexible • Supply-chain IT • Collaborative 3rd Party Logistics • Single Integrated Carrier

6. UPS: A single source service provider covering the entire supply chain • E-Commerce • Financial Services • Network Management • Logistics • Supply Chain Management • Freight Forwarding • Customs Brokerage Package Delivery

7. Offering integrated services across the supply chain

8. Synchronising global commerce • Today’s global and complex supply chains require the movement and management of… Goods Information Funds • Regardless whether you are selling goods to a couple of customers out of your garage or if you are running a multinational organisation with thousands of customers all over the world.

9. UPS Customer – NXP Semiconductors The Company • Based in Eindhoven, The Netherlands • More than 37,000 employees • Present in 20 countries, sales organization covering 60 countries • Annual revenue of $4,96 billion in 2006 • Producing semiconductors and software for mobile communications, consumer electronics, security applications, contactless connectivity, in-car entertainment and networking

10. UPS Customer - NXP Semiconductors The Challenge • 5 industrial warehouses across Asia • Service components and parts need to be rapidly and reliably shipped from one continent to another, Asia to Europe • Fragmented European supply chain with 12 logistics providers • Lack of reliability and flexibility • Limited visibility and control of the transportation and distribution process • Lengthy order to delivery time and high rate of error due to manual processes

11. UPS Customer - NXP Semiconductors The UPS Solution • Redesign of the Asia to Europe distribution infrastructure to optimise the transportation chain • Single logistics provider offering a complete service on a global scale • One streamlined dock-to-door solution • Direct delivery to retailers in the destination country (last mile) • An integrated, multi-modal service that combines air freight and customs clearance with package and LTL delivery

12. Consolidate Shipment Freight ClearCustoms Deconsolidate Shipment Multimodal Transportation Delivery To End Customer Full Visibility: End-to-end tracking provided throughout the supply chain UPS Customer - NXP Semiconductors The UPS Solution – Trade Direct Air

13. UPS Customer - NXP Semiconductors The UPS Solution – Benefits • Faster time to market – from 48 to 72 hours instead of 8 days • Less paperwork and reduced customs fees (consolidated customs clearance) • Reduced transportation costs (consolidated air transportation) • Less bureaucracy, lower costs (one integrated bill for all transportation costs) • Reduced inventory costs • Streamlined process: no need to manage multiple vendors • Single contact for the entire distribution process, one point of accountability • Full end-to-end visibility with UPS technology • Optimised customer service

14. UPS Customer– YOOX.com The Company • Based in Milan, Italy • Founded in September 2000, now established as the global e-commerce partner for leading fashion Brands • Has operations on three continents: Europe, North America and Asia • Serves 28 countries • Employees: appr. 100 • More than 230,000 satisfied customers • Received 13 awards as best e-commerce site • Sells exclusive products from Italian and international designers online, a savvy selection of end-of-season clothing and accessories at accessible prices including vintage collectibles

15. UPS Customer – YOOX.com The Challenge • A growing business, revenue has doubled each year for the past six years • Continuously changing needs and customer expectations • Need of a logistics partner able to reach reliably, rapidly and efficiently a growing number of customers and markets • Assessing new markets, reducing need for local investment • Customer satisfaction and loyalty as a key to success and growth

16. UPS Customer – YOOX.com The Solution • The right product mix (flexibility): UPS Express, which offers time definite delivery and UPS Expedited, which offers day definite scheduled delivery • UPS Returns – pre-printed label added in the outbound shipments with necessary information for a customer return, or printable via Yoox website • UPS COD: customer can pay upon receipt • UPS Quantum View: customers are proactively alerted in case of delivery exceptions • UPS World Ease: multiple packages to many destinations in the same country clear customs as one consolidated master shipment and then consolidated for final delivery directly to end customers

17. UPS Customer – YOOX.com Benefits • Global services able to meet changing needs • Excellent customer service • Saving time and money • Costs reduction for warehousing, inventory and shipping • Increased focus on core competencies as UPS manages shipping process • Reliability • Value added servcies at no extra cost

18. UPS Customer – YOOX.com Customer Benefits “YOOX’ multinational technological supply chain platform has reached a high level of effectiveness and performance resulting in the 98% of in time deliveries worldwide. This is possible thanks to a consolidated partnership with UPS for international deliveries.” Federico Marchetti, Founder and CEO of YOOX

19. Recap • Globalisation impacts transportation and logistics industry • Supply chain is a key to success allowing drastic cost reductions through: • Streamlined distribution processes • Optimised asset utilisation • Managing uncertainty through flexibility • Supply chain is a key driver for increacing profitability through: • Increased customer satisfaction and loyalty • Enabling competitive differentiation • Allowing companies to focus on their core competencies

20. "It's no longer about taking advantage of economies of scale, but more about taking advantage of economies of expertise” Bob Moffat, Senior Vice President of Integrated Supply Chain, IBM