Presentation on environment surrounding and drivers influencing spare parts network design

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 2007

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

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 and South Korea, 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 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 Gracias China Vielen Dank Dank u Czech Rep. Brazil India Ringraziarla Takker De Chile Venezuela