1. LLC LawHi Tech & Electronics SupplyChain European SummitSeptember 2007

2. Creating innovativecustomer centric 3PL & 4PL service contracts & collaborative frameworkswhilst raising profit: realisingthe elusive "Win-Win" 3. Focus: 3PL & 4 PL Innovation Customer satisfaction Increasing Profit Win-Win Creative frameworks 4. Our WorkLLCLLCMHEMHELogistics Logistics Private PrivateEquityEquity Comm CorpComm CorpCorp Comm MHE M&A Deals 3PL & 4PLProcurement Supply Agmts Joint VenturesOutsourcing OutsourcingPartnershipsAgency, distribution, TSAfranchiseShare/Business SalesWSAInvestment AgmtsIT AgmtsT&WSAShare Option AgmtsT&W+VASA ChecklistsIT Agmts 5. LLCs Contribution leveraging negotiating position Improve ROI Reduce risk Grooming for growth/investment/exit Understand, apply & deliver 6. Frameworks Contracts Adversarial Risk averse Point scoring Profit focussed I-Win c.f. Win-Win 7. Market Backdrop Services transactional Margins eroded Outsourcing growth Complexity 8. Variance in demandOrder Risk aversion batchingprocesses Time delays DuplicationPoor OTIFof activity operatingLargeProductstockpiles commoditisationGlobalisation 9. Market Backdrop Services transactional Margins eroded Outsourcing growth Complexity 25 % dissatisfaction Leveraging opportunities 10. Transactional Logistics Transport Inventory Warehousingmanagement Container handling LSP selection Stevedoring Coordination (4PL) Shipping Reverse logistics Freight forwarding Parts management Customs clearance 11. Transactional SLAs & KPIs Time compression Service Costs Service quality Flow of product Lower unit cost Capacity utilisation OTIF 12. Adding Value Project management Product re-processing Info management Local sourcing IT solutions Packaging reduction Product customisation CO2/ case delivered Compliance (e.g. RFID supportWEE) Returns logistics + + + + 13. Adding Value Effective processes Consumer focussed ? 14. Framework RoadmapOpen MarketCooperation Coordination CollaborationNegotiations Price based Fewer suppliers Info links S/C integration Adversarial Longer term WIP links Joint Planning contracts EDI Exchange Technology sharing 15. Collaborative Teams Objective Optimise solutions Product features Service features Reduce misalignment Info flows Manpower 16. Collaborative Teams Objectives Re-align asset utilisation Diagnose opportunities Integrated action plan Pro-active follow-through Engage in differentiation 17. Collaborative Value Add No 1e.g. postponed customisation@ UK warehouse by 3PL 18. Collaborative Value Add No 2 e.g. on-location spare parts fitting by in-bound transport 3PL 19. Collaborative Value Add No 3e.g. Transport LSP reduces Retail Usercarbon footprint 20. Collaborative Environments Create a culture of collaborationCreate the opportunity formanagers to think collaborativelyCreate a framework forcollaboration 21. Direction of Collaboration Vertical Collaboration eg transport management Vertical &Externalcollaborationhorizontal (suppliers)collaboration Holistic - source toExternalcollaboration InternalExternal HorizontalCollaborativecollaborationend-consumer(other organisations)collaboration(competitors)eg transportmanagement Non-transactional +transactional Externalcollaboration(customers)Source: Adapted from Barratt 2004 22. Plan for collaboration 23. Traditional Frameworks? Not the main LSA Negotiated arms length, adversarial Formal ITT, contract, renewal/termination Not geared to possibilities Transactional by nature Often relatively short term Risk averse Transactional SLAs & KPIs c.f. effectiveness Resource specific & constrained Traditionally static for term 24. CFAs a framework for Collaboration Constitution Steering committee Objectives Contributions Cost recovery IP ownership Liability + Rules / Code of Practice + Ops Guidelines 25. Characteristics of CFAs Trust & relationship based Planned goals Prescribed participation Resourced by Sponsor(s) Shared management Limited risk & liability 26. Characteristics of CFAs Own account participation Shared responsibility Multi-party c.f. dual party Multi-channel communication Specific outcomeapplications eg IP Joint guidelines eg IT 27. Characteristics of CFAs Strategic objectives -possibilities Reasonable endeavours Know-how sharing Confidential Shared benefits & rewards Long term Dynamic & flexible 28. Characteristics of CFAs Competition compliant &enhancing Non-solicitation codes Data protection Non-binding & Binding +dispute ADR Expulsion eg code breach Exclusion of agency, jointventure & partnership law Process & Consumer focussedc.f. cost 29. Collaborative Value Add No 4 ASN advance shipment RF communications (wirelessnotificationLAN) Automated storage & retrieval Electronic market placessystems (AS / RS) Extranets Electronic data interchange (EDI) Intranets XML / EDI Satellite communications Bar codingtechnology RFID tags Decision support systems (DSS, Voice input servicesdata warehousing) Portal technologies Warehouse management systems Internet applications etce.g. pooled IT applicationssourced from participants 30. Conventional Contract vs CFA Conventional Contract - LSA, TSA, WSA etc CFAssome outcomes extend LSA 31. Mission of S/C Collaboration Sponsors competitiveadvantage Customer focussed Improved processes 32. Non-CollaborationIndirect:Direct: EU WTD De-selected from bidder WEE Directivelist Congestion charges Profit / margin erosion Loading restrictions Loss of business H&S compliance No investors, sale or exit Price of fuel Driver shortages Insurance premiums Poor asset utilisation Environmental 33. vs CollaborationUpside: Relationships reinforced best practice spread Contracts & business grows Profits increase Value grows business,investor & exit Win-Win not I-Win 34. Creating innovativecustomer centric 3PL & 4PL service contracts & collaborative frameworkswhilst raising profit: realisingthe elusive "Win-Win"