Discussion on how Emerging Markets wil drive Logistics Solutions

1. Expanding Your Logistics
Network in Emerging Markets -
Opportunities and Constraints
“There's something happening here.
What it is ain't exactly clear”
Mike Madeleine
Flash Logistics Forward Focus
Santa Clara, California
6 May 2009
mike.madeleine@comcast.net

2. Agenda
• Emerging Markets
• Service Parts Network Implications
• Opportunities and Pitfalls
• Constraints Limiting Growth
• Observations
“I Get by with a Little Help from my Friends”

3. Emerging MarketsRanked by GDP (in Trillion USD)
2020
2005 2050
USA $ 16.4 CHN $ 44.5
USA $ 11.7
CHN $ 7.1 USA $ 35.2
JPN $ 4.4
JPN $ 5.2
IND $ 27.0
GDR $ 2.0 GER $ 2.5
RUS $ 5.9
CHN $ 1.7 UK $ 2.3
UK $ 3.8
IND $ 2.1
UK $ 1.7
FRA $ .9
FRA $ 1.5
ITA $ 1.2
“Money makes the World Go round”
30% International 80% International
2008 Shearson Study & 2009 McKinsey data

4. Emerging Markets - Who’s Next?
“Who’s Better, Who’s Best?”
• Five Largest
– China, India, Indonesia, Brazil and Russia
• Others
– Mexico, Argentina, South Africa, Poland, Turkey, South Korea and
Taiwan
• Next (FTSE Emerging Markets List)
– Chile, Colombia, Egypt, Malaysia, Morocco, Pakistan, Peru and
the Philippines
• Factors Driving Emergence
– Regional Economic Leaders
– Transitional Societies
– Growing (5 biggest 7.8% of Global GDP in 1992, 16.1% in 2020)
– Participating in International Politics, Looking to Share the Wealth
World Bank 2009

5. Emerging Markets - Issues
• Effect of Recent Economic Crisis
• Geo Political Changes
• Sustainability
– Pandemics, Energy and the Environment
• Security
– Disaster Recovery - Continuity of Operations
– Supply Chain - Cost of Continuity and Redundancy
• WWPD?
– Risk and Reward
– Regionalization
– Why Do You Rob Banks?
“It’s not easy being Green”

6. Agenda
• Emerging Markets
• Service Parts Network Implications
• Opportunities and Pitfalls
• Constraints Limiting Growth
• Observations
“Have it Your Way”

7. Service Parts Networks
• Where does the Customer fit in the Mission
Statement and Vision? Lead or Follow?
• What is the Design Criteria? B2B? B2C?
• Time is Money
– Optimization of Inventory Expense against
Transport and Logistics Cost
• Constantly Evolving
• Which Came First, the Part or the Data?
• Has Vertical Integration Gone Horizontal?
“I can see clearly now, the rain is gone”

8. Agenda
• Emerging Markets
• Service Parts Network Implications
• Opportunities and Pitfalls
• Constraints Limiting Growth
• Observations
“I Get by with a Little Help from my Friends”

9. Opportunities and Pitfalls
• Customer Expectations
• Expansion Through Partnership - Duties of the
Partners Each to the Other - Local Knowledge
• Attitude of Entitlement
• Understanding Scope and Outsourcing
– Service Level Agreements and Contracts
• How Often is the Monthly Review?
• Competitive Tension vs. Proactive Partnership
“If You Like it you should’ve put a ring on it”

10. Agenda
• Emerging Markets
• Service Parts Network Implications
• Opportunities and Pitfalls
• Constraints Limiting Growth
• Observations
“Stranger in Paradise”

11. Constraints on Logistics Network
• Regulatory Restrictions
– Fiscal Entity
– Currency Issues
• Infrastructure
– Physical, IT, Communication
• Hiring and Labor Practices
• Language Differences
– Where do you put the call center?
• Local Customs and Service Levels
– Bank Holidays, August, the 4th of July and Golden Week
“I Fought the Law and the Law Won”

12. Agenda
• Emerging Markets
• Service Parts Network Implications
• Opportunities and Pitfalls
• Constraints Limiting Growth
• Observations
“I can see for Miles and Miles”

13. Observations
• Logistics and Service are Strategic Partners
in Company Growth
• Technology has Changed the Game
– Customer Expectations are Higher
– Availability of Internet
– Interconnectivity of Entities (Companies, Governments
and Consumers)
• Cost Pressures are Changing the “Go
Global” Mantra of the 80’s and 90’s
• Supplier Management is not done from
Here “On the Road Again”

14. Obrigado
Merci
Colombia
Thank You
China
Gracias
Vielen Dank
Czech Rep.
Dank u Brazil
India
Ringraziarla
Takker De
Chile
Venezuela