Creating Enterprise Value Through Supply Chain Excellence

World Class Transformational Network Planning

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A Better Approach to Supply Chain Planning

What Is World Class Transformational Supply Chain Network Planning?

1. Supply Chain Network Planning: Determining the optimal practices, processes and structure to maximize customer satisfaction, revenue, profits and value creation

2. Transformational Supply Chain Network Planning: A redesign (as opposed to a refinement) of the supply chain network based upon a full understanding of the business objectives of the company

3. World Class Transformational Supply Chain Network Planning: A strategic redesign of the supply chain network leveraging expertise across multiple disciplines to address the full range of business requirements

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Multi-Disciplined Expertise Business Strategy

– Competitive intelligence – Market analysis – Growth strategy

Real Estate – Global reach – In-depth market knowledge – Transactional expertise

Supply Chain Strategy

– Sourcing – Tax effective supply chain management – Demand driven supply chain – Organizational strategy – Outsourcing

Sustainability – Strategic planning – Supply chain reporting – Benchmarking and public

disclosure – SEC guidance document

Supply Chain

– Transportation – Inventory – Distribution center design – Customs and duty – Manufacturing

Taxes and Incentives – Regional Economist – Corporate Tax Advisor – Government Affairs Specialist

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A Holistic Approach to Network Optimization

A. Financial Factors – The Balance Sheet

• Assets

• Capital efficiencies (fixed and working capital)

– The Income Statement • Revenues

• Expenses (including taxes, net of incentives)

• Cash flow

B. Organizational Factors – Sustainability Goals – Energy/Emissions Reductions – CC Risks and Opportunities – Reporting – Local/Regional Incentives – Knowledge Transfer

C. Operations Factors – Supply Chain and Logistics Costs

• Inventories • DCs/warehouses • Freight • Customs and trade • Labor • Technologies • Administration

– Other Costs • Energy • Real Estate • Taxes

– Customer Service • Product availability • Perfect orders

D. Business Expansion Factors – Scalability – Market Coverage and Potential – Value-added Services

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All the Pieces to the Puzzle

Global Supply Chain Expertise Benchmarking & Best Practices Implementation Tax-Effective Supply Chain

Management (TESCM)

Energy Procurement Advisory and Consulting

Conservation and Sustainability Strategies Utility Management and Reporting

Leading economic development grants and incentives advisory,

Corporate tax and government-side experience “Gold standard” economic and fiscal impact analysis, Proprietary incentives benchmarking data

Global Transaction Expertise Local Market Research Location Advisory and Incentive

Procurement Services

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Tompkins’ Integrated Approach

Identifying the best markets, products, and services to grow profitably

Determining how to improve supply chains to achieve profitable growth and operational excellence

Improving information and decision support for supply chain visibility, process excellence, and optimization

Achieving optimal, cost effective product flow through the distribution network

Strategic Market Planning

Supply Chain Information Technology

Material Handling Integration

Supply Chain Consulting

Benchmarking & Best Practices Understand SC strategies, operations, processes and performance

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Tompkins International For more than 35 years, Tompkins has evolved with the marketplace to become the leading provider of global supply chain services. Our clients count on our innovative, practical solutions that improve their supply chain performance and produce value-based results. Tompkins works closely with companies to ensure that their supply chains fully support their mission and business plans, as well as future growth.

Supply Chain Consulting Supply Chain IT Material Handling Integration

Strategic Market Planning

Strategy Inventory Management Strategy & Assessment Systems Design Growth Strategy

M&A Service Supply Chain Supply Chain Planning Turnkey Systems

Implementation

M&A Strategy, Qualification & Due Diligence

Strategic Sourcing & Procurement

Warehousing & Distribution

Global Trade Management & Supply Chain Visibility

Warehouse Control Systems

Distribution Assessment & Strategy

Manufacturing & Production Outsourcing Warehouse Management

Emerging Technology Center

Competitive Intelligence & SWOT

Asia Supply Chain Excellence

Organizational Excellence

Transportation Systems Management System Life Cycle Support Customer Assessment

Distribution Network Design Sustainability

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Cassidy Turley

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American Energy Solutions From budget consulting to sustainability services, American Energy Solutions delivers

customized energy management solutions to a wide range of industries, serving clients across the U.S., Canada, Puerto Rico, and Mexico.

– AES manages more than 600 energy contracts worth more than $100 million annually. – Since 2002, AES has managed over 350 energy efficiency projects worth over $50 million, resulting

in over 178 million kWh savings to clients.

Representative Clients Alco Stores AmerisourceBergen CAT Logistics

Covidien FedEx Interstate Brands

McKeeson Pharmaceuticals McLane Company Mobile County, AL

Omni Hotels Schwan Foods ServiceMaster

St. Luke’s Healthcare System US Foodservice USAA

Energy Procurement Cost Performance Review Risk Management & Budget Consulting Regulatory Advisory Infrastructure Consulting Utility Management & Reporting

Energy Conservation Audit, Design, & Engineering Services Turnkey Project Management Conservation & Efficiency Opportunities Greenhouse Gas Strategy

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M.R. Press Consulting, LLC M.R. Press Consulting provides a full complement of expertise to enable our clients to maximize their ROI through the cash grants, tax and other financial incentives offered by federal, state and local governments.

Comprehensive Business Incentive Identification Negotiation Strategy Representation and Expert Testimony in Public Forums Independent Economic & Fiscal Impact Analyses Site Selection Support & Comparative Location Cost

Modeling Thorough & Systematic Statutory Tax Credit Identification Strategies to Reduce Federal Taxes on Business Incentives Application Writing & Form Preparation Administrative Compliance

Representative Clients • Dupont • Shell Oil • PPG • Sears • Staples • Amazon • Verizon • AT&T • NBC • Cisco • Citibank • Fidelity • General Mills • Pfizer • Pepsi • Graybar • Sealy • GM • Boeing • Mercedes USA • Thyssen Krupp • Eaton

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Our Point of View on Network Planning

Improved Profitability and Shareholder Value: Ever-increasing financial and competitive pressures make supply chain optimization critical. A supply chain network planning initiative typically creates savings of 10% to 25% of logistics costs – warehousing, transportation and inventory.

Strategy Before Network: True supply chain optimization requires a clearly defined business or supply chain strategy. Tompkins’ strategic market planning services support the development of short and long-term growth goals through a robust assessment of growth potential and the necessary strategy and tactics to exploit it.

Focus on Total Profit Optimization: Increasingly, the supply chain is seen as a tool for maximizing profitability and return on capital. To do so requires evaluating multiple scenarios to see how changes in go-to-market plans, including both demand and supply strategies, will deliver total financial benefit.

Project vs. Ongoing Process: Supply chain network planning should not be a one-time project, but an ongoing process as a company evolves.

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Our Point of View on Network Planning

Costs Are Critical: The most impactful network projects consider the global supply chain. By going beyond an analysis of the typical costs – transportation, distribution center, inventory – and including taxes, custom tariffs and duties, and security compliance, we are able to deliver benefits beyond the savings of a typical network study.

Don’t Forget Incentives: An often missed but substantial element of network analysis are incentives that can be provided by state and local governments.

Cycle Times are Important: It is well understood that customer service times are important and network planning projects often take this into account. Considering other cycle times that are also important such as cash-to-cash and order-to-pay will not only help you deliver your product faster, but also get paid faster.

Global Sourcing Does Matter: Many clients (especially in North America) set the starting scope of their network project to be the port of entry. This is often shortsighted as it limits very viable options such as consolidation centers / DC in China (or other sourcing countries) or different ports of entry. It also does not capture the complete supply chain delivered costs. Clients should be encouraged to consider the global implications when doing a network project.

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Our Point of View on Network Planning “Wants” vs. “Needs”: Every organization understandably wants an optimal

network. Too often however, the costs for pursuing an optimal model outweigh any savings created. Our approach is to is to help our clients determine what is truly needed to yield the greatest return, ranging from a full network optimization to developing strategies for adding a China Hub or a West Coast deconsolidation center, or perhaps one or two LSPs to augment the current network.

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A Comprehensive Approach

Network Planning /

Optimization

Inventory Optimization

Network Simulation

Testing

Evaluate and Adjust as

Necessary

Understand the business, the business strategies and the supply chain strategies

Feasibility study to define the questions to be answered, the opportunity scope and magnitude, the project approach and value proposition

Network planning / optimization project to design the right network

Inventory optimization to deploy the right policies and inventory quantities by facility

Simulation to see how the network performs under real world conditions

Strategy / Feasibility Study

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Methodology: Network Planning

We will use an appropriate modeling tool to determine total logistics costs and to compare various logistics scenarios to one another. We will also use several other analysis tools, including: transportation analysis, economic analysis and sensitivity analysis.

Develop Path Forward

Analyze Alternative Scenarios

Baseline Modeling

Data Analysis and Validation

Project Launch & Data

Collection

Strategy/ Feasibility

Study