Optimising Costs Through A Synchronised Supply Chain

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Optimising Costs Through A Synchronised Supply
Chain

• Shaun Grantham
• Marketing Manager
• UPS South Europe

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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

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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

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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 companys
  value and a revenue generator

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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

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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
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Offering integrated services across the supply
chain
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Synchronising global commerce

• Todays 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.

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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

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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

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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

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UPS Customer - NXP Semiconductors The UPS
Solution Trade Direct Air
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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

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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

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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

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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

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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

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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

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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

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• "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