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May 2012
   The Journey   Today’s LGS   Our Global Team   Our Roles   Merchandising Success Stories   What Can We Do - For You?
L G Sourcing, Inc. – The Journey                                                Became 6th Largest                        ...
Hong Kong16,409 sq. ft.                 Sales                                      Nearly $7 Billion                 % of ...
Our Sourcing Partners in India
1.   Understand merchant goals via collaboration with IM Team2.   Develop vendor / product sourcing strategies3.   Vendor ...
1.       Import PO execution     •       Containerization     •       Ensure pre-shipment inspection within ship window2. ...
1.   Shipment inspection and factory certification2.   Collaborate with factories to implement a QMS (Quality Management S...
1.   Coordinate and execute US packaging initiatives with global vendor partners to enhance Lowe’s     Private Brands2.   ...
   Building great relationships and success…    together!
“Fabulous trip all around!”           Bob Gfeller        EVP Merchandising
Outdoor Fashion “I would like to thank the U.S., Shanghai, and Hong Kong, for the best overseas trip I have experienced by...
Heating“The trip was very productive as we were able to review quite a bit of product ina very short window….” Jon Cline
IntentCURRENT STATE: “China Sourcing” – A China-      FUTURE STATE: “Flexible Sourcing” – We will centric sourcing organiz...
   Right mix of products for HI   Large offices, operational best practices   US Expat knows Lowe’s Merchandising and U...
Current state   LGS sourcing focus heavily dependent on China (91% shipments)Why diversify   Political and Economic risk...
   Focus categories for Mexico / South America   Increase time of Mexico team in US   1 dedicated US headcount focused ...
• Invest in small office – 8 peopleSouthEast Asia   • 1 Lowe’s Expat                 • 1 US headcountMex/S America    • So...
   Lowe’s Global Sourcing and International    Merchandising is available to support Lowe’s    Merchandising Teams with E...
   Together, with the International    Merchandising Team in Mooresville, we’re    open for business 24 hours* a day to s...
Never Stop Improving!
Lowe´s global sourcing   productos para la remodelación de hogar (materiales de construcción).
Lowe´s global sourcing   productos para la remodelación de hogar (materiales de construcción).
Lowe´s global sourcing   productos para la remodelación de hogar (materiales de construcción).
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Lowe´s global sourcing productos para la remodelación de hogar (materiales de construcción).

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Lowe´s global sourcing productos para la remodelación de hogar (materiales de construcción).

  1. 1. May 2012
  2. 2.  The Journey Today’s LGS Our Global Team Our Roles Merchandising Success Stories What Can We Do - For You?
  3. 3. L G Sourcing, Inc. – The Journey Became 6th Largest Became 4th Largest Volume Importer in U.S. Volume Importer in U.S.LGS DedicatedChartered Closed Int’l Logistics& Taiwan FunctionsOpen Began w/ & Expand Mexico OpenTaiwan J&J Agency Expand $ Mexico (3 staff) Hong Kong OpenedOffice in India Hong Kong Start-up Restructure Office Shanghai(14 staff) (12 staff) (26 staff) (1 staff) China Offices (12 Staff) Office1997 1998 1999 2000 2002 2003 2004 2005 2008 2009 2010 2011 2012 2016 $400m $800m $1 Billion $2 Billion $3+ Billion $3.5 Billion Shipments Shipments Shipments Shipments Shipments Shipments*Based on IM Projections
  4. 4. Hong Kong16,409 sq. ft. Sales Nearly $7 Billion % of Company Sales Nearly 14% SKUs 8,000New Delhi Countries 20 Suppliers 520 Factories 745 Ports 50 Shanghai Containers 100,000+16,223 sq. ft. Largest Office HKO, 61.7% of shipments Fastest Growing Country Taiwan, +171% vs. LY Monterrey Source: Global Sourcing Shipment Report
  5. 5. Our Sourcing Partners in India
  6. 6. 1. Understand merchant goals via collaboration with IM Team2. Develop vendor / product sourcing strategies3. Vendor sourcing / evaluation4. Negotiate superior pricing to achieve EDLC through innovative and quality programs with suppliers5. Educate vendors on Lowe’s needs / expectations and collaborate with suppliers to identify / solve operational issues6. Drive / manage product execution with the vendor and utilization of LGS / Lowe’s internal resources
  7. 7. 1. Import PO execution • Containerization • Ensure pre-shipment inspection within ship window2. Vendor Coordination • Monitor vendor production schedule • Provide vendor training • On time shipments3. Supply Chain Management • Customs regulations
  8. 8. 1. Shipment inspection and factory certification2. Collaborate with factories to implement a QMS (Quality Management System)3. Production Engineering team assists factories in troubleshooting quality issues4. Ensure all import merchandise can meet or exceed Lowe’s quality standards and customer satisfaction
  9. 9. 1. Coordinate and execute US packaging initiatives with global vendor partners to enhance Lowe’s Private Brands2. Printer sourcing / evaluation - evaluate printing location / capacity vs. vendor location / demand to ensure balance and sufficient resources3. Manage certified printers packaging quality to meet Lowe’s packaging standards4. Localized training and support for vendors5. Provide feedback to US on opportunities for improvement
  10. 10.  Building great relationships and success… together!
  11. 11. “Fabulous trip all around!” Bob Gfeller EVP Merchandising
  12. 12. Outdoor Fashion “I would like to thank the U.S., Shanghai, and Hong Kong, for the best overseas trip I have experienced by far. It was quite apparent that the teams had appropriately prepared the vendors to present complete programs that were appropriately assorted for our 2013 program strategy. For the first time, the vendors were aware of not only Lowe’s merchandising, but also our existing competitors’ and future competitors’ go-to-market strategy. Additionally, there was a much better understanding of our existing and planned customer segments than I had seen before in our LGS vendor base. The product presentations were very focused, on trend per our style guides, with attention given to cost pressures.”…..Paula Matlock
  13. 13. Heating“The trip was very productive as we were able to review quite a bit of product ina very short window….” Jon Cline
  14. 14. IntentCURRENT STATE: “China Sourcing” – A China- FUTURE STATE: “Flexible Sourcing” – We will centric sourcing organization that provides generate growth & profitability by providing low parent company, JV’s and subsidiaries cost / high quality and differentiated products quality, low cost import products in private from factories from around the globe. branded packaging.“Strategically diversify Lowe’s sourcing dependency from China by openingsourcing offices and expanding our presence in South Asia, India, Mexico andother sourced countries; to provide merchants high-quality, differentiatedproducts from around the world at the lowest effective acquisition cost.” 17
  15. 15.  Right mix of products for HI Large offices, operational best practices US Expat knows Lowe’s Merchandising and US Market Investment in superior next-generation staff Sourcing team category expertise Cultivating Vendor relationships Invest in Merchant travel 18
  16. 16. Current state LGS sourcing focus heavily dependent on China (91% shipments)Why diversify Political and Economic risks Legislative risks – Anti-Dumping or other counterveiling duties Some labor intensive products already movingImperative to change - Beyond China Current approach not yielding desired results Implement best practices from China in other countries on a smaller scale Incorporate best practices of other retailers Provide most competitive suppliers and acquisition costs 19
  17. 17.  Focus categories for Mexico / South America Increase time of Mexico team in US 1 dedicated US headcount focused on Mex/SA  Heavy travel  Extended stays in Mex/SA  Develop staff, Vendor relationships, focus categories Invest in Merchant travel Build US relationships 20
  18. 18. • Invest in small office – 8 peopleSouthEast Asia • 1 Lowe’s Expat • 1 US headcountMex/S America • Sourcing and Merchant travel • 1 US headcount India • Sourcing and Merchant travel Non-China $.3B $1.1B 21
  19. 19.  Lowe’s Global Sourcing and International Merchandising is available to support Lowe’s Merchandising Teams with EDLC opportunities to support EDLP? What can we do to help you?
  20. 20.  Together, with the International Merchandising Team in Mooresville, we’re open for business 24 hours* a day to support you!* considering the 12-hour time difference between Asia, Mexico, India and the US there’s only a small window over any given weekend when there isn’t an LGS /Lowe’s International Merchandising office open for business.
  21. 21. Never Stop Improving!

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