1. Supply Chain & Customer CollaborationPaul H. Graham

2. What is Collaboration? 2 col·lab·o·rate (kə-lāb'ə-rāt') 1. To work together, especially in a joint intellectual effort to achieve a common goal The American Heritage® Dictionary of the English Language, Fourth EditionCopyright © 2006 by Houghton Mifflin Company

3. 3 Agenda Market Overview – we are in a new economic paradigm Supply Chain & Customer Collaboration Cost Pressure Sustainability Technology End-Consumer Satisfaction Partnership Approach

5. 68% of the top 20 countries (relative to the number of households) are in Asia

6. 24% of the world’s countries exceeding 7% GDP growth are in Asia

7. Over a third of the top 20 manufacturing output countries are in Asia

8. 14 Asian countries are above the global average consumer confidence indexSource: AC Neilson

10. Asia may escape the worst of this crisis but it is still early days; China is the key player to determine regional confidence and growth

11. In this century we are witnessing the rise of the East and a shift of power (especially economic) to the developing world; not since the Industrial Revolution has such evocative change taken place

12. These economic challenges emphasize a greater need for collaboration5 Source: Nielsen Global Consumer Confidence Index, 1st Half, 2008

13. 6 Agenda Market Overview – we are in a new economic paradigm! Supply Chain & Customer Collaboration Cost Pressure Sustainability Technology End-Consumer Satisfaction Partnership Approach

14. 7 Supply Chain & Customer Collaboration Collaboration Cost pressure Customers continue to come under cost pressure due to the volatile price of fuel and general commodities End-Consumer Satisfaction Growth of modern trade in Asia will drive need for better supply chain performance; on shelf availability will drive customer satisfaction and thus increased brand loyalty Sustainability An increasing international and regional focus on sustainability and vehicle utilisation Technology Technology is and will continue to grow as the key driver for efficiency, collaboration and customer satisfaction Logistics companies are acting as the centre of collaborative efforts to reduce costs, increase sustainable supply chain footprints and aggregate efficiency, with the aim to increase customer satisfaction Partnership approachIncreased complexity of global supply chains create a greater need for strong partnerships and joint investment in people, systems and solutions

16. volatile global energy and property prices

17. rising commodity prices which impact grocery prices

18. volatile interest rates and cost of capital

19. increasing inflation or risk of deflation

20. Many successful companies continue to address cost pressures by outsourcing supply chain activities / processes to third-party logistics companies, allowing them to:

21. reach markets faster

22. leverage economies of scale

23. add flexibility to supply chains

24. increase global capabilities

25. focus on core competencies

26. Cost savings can be realized through network re-configuration, further collaborative initiatives in consolidation, fronthaul, backhaul and inventory optimization and utilization of more efficient vehicles Source: AC Neilson; Global Logistics Outsourcing trends: Challenges in managing 3PL relationship

28. Millions of Asians could face poverty, disease and hunger caused by rising temperatures and increased rainfall2

29. 125 million people in South Asia could be displaced by climate change3

30. Higher energy prices are promoting energy efficiency but also causing concern

31. Globally, sulfur dioxide (SO2) has decreased but its concentrations remain above the WHO threshold in many cities in developing countries

32. If global emissions continue on a ‘business as usual’ path for the rest of the century, Earth will warm by 14˚C by 21004Source: 1. 2008 Sustainability Yearbook; 2. World Health Organization; 2008; 3. CSR Asia Weekly 2008; 4. Washington Post, March 2008

34. DPWN, parent company of DHL, is spearheading the sustainable supply chain approach, having made a commitment to reduce its carbon footprint by 10% by 2012, and by 30% by 2020

36. Noise, vibration and light

37. Waste

38. Packaging use

39. CO2 emissions

40. Other emissions

41. Energy use

43. CO2 emissions & other emissions

44. Pollution risk from product and fuel spills

45. Noise and vibration

47. Employee training, monitoring

48. Water recycling (i.e. grey water)

49. Rail and intermodal transport

50. Urban logistics centers (consolidation)

51. High loading factors, KPI’s

52. Fleet optimization

53. Better management of energy use

54. New vehicles with diesel particle filters

55. Vehicles with alternative clean fuels / technologies (CNG, Hybrid, Biofuels, etc.)

56. Solar panel installation on building rooftops

58. RFID deployment will be demand driven; retailers will drive RFID adoption

59. Extending inventory visibility beyond the warehouse will be a differentiator for 3PLs

60. Considerable industry roll-outs with METRO, Sony and fashion customers in France

61. RFID will improve processes in the Supply Chain

62. Tracking promotional displays, reducing out-of-stocks and improving shipping and receiving accuracy

63. Fast and accurate handling in unit-tracking; speeding up lead time in the supply chain

64. Secure data and shipment quality providing increased transparency

65. Continual tests in various pilots leading to stability of sub-processes

66. DHL has ample experience to implement RFID technology in our supply chain operations

67. A variety of RFID projects have been implemented successfully

68. Standardized RFID solutions for specific sectors have been developed (i.e. fashion)

70. Temperature measurement unit with RFID interface

71. Designed for temperature sensitive products (i.e. drugs, food, flowers)

72. Unique wireless reading at inspection points of temperature / history data

73. Benefits

74. Full control of product quality along entire supply chain

75. Real time status information at inspection points

76. Convenient web portal to monitor status information

77. Ease of product handling due to comprehensive DHL services

78. Notification to customer / DHL in case of critical conditions allows proactive reaction

79. Product integrity from wireless reading without opening the package

81. 16 DHL Smart Shelf SolutionTemperature Tracking, Clinical Trials, Cool Chain Solutions Med Device Med Device Stock Stock Med Device Med Device Med Device RFID Smart Shelf Solution: consignment of pharmaceutical products Singapore Local Delivery Inbound Outbound Pharma Med Device Return Smart Shelf Hospitals EU Suppliers Med Device Healthcare Hub Med Device US Suppliers Return Smart Shelf Medical Devices Tag with RFID Tags Legend Order Fulfillment, DHL Information Flow

83. Project marks stepping stone for large-scale use of RFID in the logistics industry

84. METRO Group is a new partner of the DHL Innovation Initiative, this partnership will jointly advance technology projects and turn them into business successes

85. Full pallet RFID tracking for METRO Group in France

86. All DHL shipments to METRO Cash & Carry France will use RFID

89. Guaranteed next business day and day 2 service

90. Scheduled line-hauls each night between Bangkok and regional hubs

91. No minimum nor maximum number of orders

92. Centralized customer service contact

93. Web-based track and trace with immediate proof of delivery

95. Consolidation goods at collection hubOrder placed by telephone, fax or e-mail Collection of goods by closest hub to point of origin Local distribution by closest hub to point of destination Scheduled vehicles running daily between hubs Cross-dock operations onto delivery vehicles

96. 21 Agenda Market Overview – we are in a new economic paradigm! Supply Chain & Customer Collaboration Cost Pressure Sustainability Technology End-Consumer Satisfaction Partnership Approach

97. 22 Partnership Approach & Developing Relationships

99. Cost Savings

100. Sustainability

101. Technology

103. Customer access to partner 3PL’s information systems will provide them with visibility of available warehouse and trucking space, trucking destinations, etc., from point of supply to point of sale

105. We will see a growing trend of customers looking to outsource more and more of their supply chain activities – replenishment, manufacturing, data and financial management – increasing the need for closer economic and strategic ties between 3PL’s and their customers

106. Many of today’s companies will become pure ‘brand’ entities and will hand over the arms and legs of their physical operations to supply chain entities; a growing combination of strategic partnerships from sourcing to end-delivery will allow the ‘brand’ to focus purely on brand development and R&D

107. Asia will, in many ways, be a leader due to its long term growth, early adoption of new business models and huge tide of new consumers who will drive supply chain execution, excellence and excitement