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Making Money Mitigating Risk

Managing Logistics

Tracey Lewis

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Agenda

Making Money

Mitigating Risk

Smartly Managing Logistics

Real Life Case Studies

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Making Money

Opportunity exist in Asia Pac due to GDP growth and domestic

consumption, triple US rates.

Firms need an international strategy with executive support

Short Term Goals – Piloting

Long Term Goals – Market Entry

FTA Opportunities: Most AP economies have bilateral FTAs

with each other. US has a significant focus on AP now.

Current FTA’s with Singapore and Korea and is negotiating the Trans-

Pacific Partnership (TPP) involving Vietnam, Malaysia, Brunei,

Australia, New Zealand, Japan among the total twelve.

US FTA’s create: Transparency, market access, investment

protection, rule of law, regulatory harmonization.

Need to view FTAs as revenue creators: while still leveraging

to reduce costs through smart supply chain management,

consumer consumption now beneficial

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Mitigating Risk

Import/Export Challenges: You could try and do it alone but be aware of the possible implications.

Compliance- Put in place internal compliance checks and processes; encourage vendors, suppliers, buyers to document processes and keep invoices, receipts etc.

Restricted items- By country lists, constantly changing & those deemed Dangerous Goods by IATA.

Intellectual Property Risk- Research best practice mechanisms to detect and reduce the risk of counterfeiting.

Localization Challenges- Some procurement policies require a percentage of goods and services to be locally sourced in order to be locally sold.

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Smartly Managing Logistics to Make Money

Exporting Leverage FTAs: Rule of law and preferential

duties Documentation: Accurate & complete. Retain. Send test shipments: Use Advanced Ruling

mechanism. Known shipper: Join trusted trader programs

Regulatory Use existing resources to understand:

Foreign government resources

US Government resources U.S. & Foreign Commercial

Service

U.S. Department of Commerce Market Access

Compliance

U.S Embassy; Local trade associations.

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White board Optimize your logistics process with UPS based on trends

Sales & Distribution Leverage experience of MNCs - e.g. supply them and use

their networks, sales channels, branding etc.

Explore different business models – e.g. License out, local partner, wholesale middlemen

Quality Control

Secure your supply chain - know your suppliers and

customers; use reputable logistics providers.

Quality & Service - Competing on price is challenging in

Asia, focus instead on excellent customer service.

Smartly Managing Logistics to Make Money

Brazil: UPS’s Presence Key Milestones:

─ Operations began 1989;

UPS subsidiary established 1995

Operational Profile:

─ Nationwide delivery coverage

─ 14 airports served (Belém, Belo Horizonte,

Curitiba, Florianópolis, Fortaleza, Guarulhos,

Joinville, Manaus, Navegantes, Porto Alegre,

Rio de Janeiro, Salvador, Viracopos, Vitória)

─ 32 UPS operating facilities*

─ 16 UPS Supply Chain Solutions® facilities

─ Over 20 brokerage operations São Paulo

UPS Facilities

UPS Supply Chain Solutions Facilities

Airports

ManausBelém

Salvador

Rio de Janeiro

Porto Alegre

Fortaleza

Belo Horizonte

Vitória

Recife

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Real Life

Supply Chain Mapping – Major High-tech Medical Device Manufacturer

Cross functional participation -Accounting, Finance, Operations, Customer Service, Business Development Manufacturing, etc.

• Understand changes in Supply Chain –

• How it affects other departments

• Identify areas of opportunity – Found $600,000 monthly billing that was not reconciled because of operations process

• Found another $1.4 million opportunity in reverse logistics

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Real LifeCompliance Strategy – Rapidly growing High Tech Electronic Components

• Company Philosophy is to make the

world of electronics more accessible to

the average person – With no regard to what

their consumers might build

• Known Shipper Process – Manual and time

consuming and ineffective

• Research tariff codes manually – 65%

were coded incorrectly – at a cost of more than

$500,000 a quarter

• Compliance was Customer Services job

- With no expertise or training

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Real Life

FTA Strategy – High-Tech Telecommunications Manufacturer

• Manufacturing in China and Taiwan – With finished goods coming back to the US

• Moved a portion of China manufacturing to South Korea - Saved $1.3 million in annual tariffs

• Leverage MNC relationships – Mitigating new relationship risk and intellectual property concerns

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Summary

Make Money

With a well thought out and supported International Strategy

Both Long term and short term goals

Use knowledge of FTAs and MFN to add to your profits

Mitigate Risk

Incorporate Compliance into your strategy

Understand regulatory issues and potential obstacles

Smartly Manage Logistics with a trusted partner

Insure your strategy works for every link in your supply

chain

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Thank You