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Intercontinental Logistics Network Program

Intercontinental Logistics Network Program. Jorge Longa Director International Logistics. Intercontinental Network - >$135 Mil Spend Gaining Credibility, Saving Money, Increasing Speed. Intercontinental Ocean >$70Mil Intercontinental Air >$65Mil

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Intercontinental Logistics Network Program

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  1. Intercontinental Logistics Network Program Jorge Longa Director International Logistics

  2. Intercontinental Network - >$135 Mil SpendGaining Credibility, Saving Money, Increasing Speed • Intercontinental Ocean >$70Mil • Intercontinental Air >$65Mil • Consolidating Shipments thru an Extensive Logistics Network to: • Maximize Container Utilization • Minimize Product Unit Cost of Transportation • Minimize Service Variability and Increase Reliability • Increase End-to-End Visibility

  3. How The Ocean Program Was Started Liebert Light/Volumetric Under Utilized Loads Copeland Avg. 50% Utilization Small/Dense Consolidated Container Optimized Loads 25% - 35% Cost Savings >80% Utilization The Need For Speed and Cost Reduction Achieved Through Division Communication and Collaboration

  4. Customer Division Customer Division Customer Division Material Network Supply Chain FlowEmerson Derived Model Shanghai Hub Shenzhen Hub Bangkok Hub Canada MCC Taiwan Hub Chennai Hub 40’ O/B SCC Hub I/B Hub Supplier/Division Docks Origin Port Dest. Port CY U.S. 40’ Customs Clearance Multiple Suppliers/Multiple Locations Customs Clearance (w/ FTZ) Multi-Country Consolidation Single Country Consolidation Multiple Consignees & Importers 4 Mexico

  5. Intercontinental Ocean Network

  6. “Visibility” P.O. Information Advanced Shipping Notice PACER PACER PACER PACER The Program Is Made Up Of An Integrated Network Of 3PL’s Release Advise, Metrics, CHB Bill Import Entry, Manifest U.S. Customs Shipment Status Report Delivery Order, BL ACS123 APL MOL MSL P&O OOCL OMC or Designated Trucker UPS SCS APL Logistics UPS SCS CAT Logistics (Liebert) ETH Booking Customs Clearance & Freight Payment Ocean Freight De-Consolidation Consolidation Division Customer DC Delivery Suppliers And Divisions Divisions ASN 3PL’s Rely Upon Accurate & Timely Data For An Efficient Network Operation

  7. Pacer Event Management 4PL Concept – Managing The 3PL’s Event Management, Execution, & Metrics DESTN. ORIGIN Carrier Performance Ocean Air Trucker Transit Time On-Time Service US Customs & Broker Performance Clearance Prior to Arrival Origin ASN Consolidator Performance Documents Cross Dock Turn Around & Routing Performance Shipment Turn Around Time On Time Delivery Expedite Just-in-Time Division Single Point of Contact for: 24 x 7 Shipment Information Expedite , 3PL Performance Metrics Managing The Complexities In The Logistics Chain

  8. Significant Savings in OptimizationFisher Regulator Example Cubed Out Doing Everything Correctly Optimizing with other Divisions Need Connectivity & Visibility to Optimize this Program

  9. The Program Performance Next Steps • Asia Supplier Training - 100 Suppliers Trained in October • 19 Divisions in Process of Communicating Through ETH • Accelerating Asia to Europe • Establishing Linkages With Free Trade Zone Warehouses And Emerson Express Trucking Targeting > 15,000 consolidated containers in 2006 >$3.0 Mil Since Start Through Consolidation >$1 Mil Container Rate Reduction >15% Decrease In Transit Time Less than 15% of Our Shipments Have Been Optimized

  10. UPS Broker- Release Trends And Improvement Plan UPS Improvement Plan • Goals and Deliverables • Increase bandwidth by 50% over current capabilities • Answer incoming phone calls • Adopt RLF (remote filing) model • Improved pre-file performance • More control • All Memphis clearances will take place from CLE by Feb 6th • All LA clearances will take place from CLE by Feb 13th • Training period for new analysts will take 2-4 weeks • Additional resources will be added to support 2006 NSC growth plans Dedicated Emerson Team Established To Focus On Improving Service

  11. Asian Supplier Education Conducted Last October 2005 • Objective: • To educate all Asian suppliers with the Emerson standard supply chain guidelines and its contents clearly understood and adhered to. • To document and communicate Emerson’s logistical requirements with regard to: • Preparation and Packing for Shipment • Designated Carriers & Routing Guide • Communications & Notifications • Documentation Requirements & Distribution

  12. Asian Supplier Education • Contents or Supplier Guidelines: • Scope • Purpose • Reference Documents • Definitions/Terms • Packaging Rules • Supply Chain Security Requirements (C-TPAT) • Routing Guide • Consigning Instructions • Document Preparation and Distribution Instructions • Emerson Logistics Contact • Retention and Records • Attachment/Exhibits

  13. NSC Asia Vendor Education Program • Objectives: • To communicate Emerson’s deployment of supply chain requirements around: • Preparation and Packing for Shipment • Designated Carriers & Routing Guide • Communications & Notification • Documentation Requirements & Distribution • Security and regulations • Terms and Conditions • Scope: • All suppliers and Emerson Asia Mfg Divisions currently shipping under the Emerson NSC Asia to North America and Europe • All supplier and Emerson Asia Manufacturing Divisions confirmed to start shipping by end of Dec 05’

  14. NSC Asia Vendor Education ProgramAdhering to C-TPAT Ocean Container Inspection Process Container Seal Inspection Process

  15. NSC Asia Vendor Education ProgramCommercial Invoice Content

  16. Commercial Invoice Data Vs. Import Entry Gaps Broker Data Entry Via ABI • Seller • Shipper • Sold To – The IOR.  Customs will look to see if the IOR matches the Sold To • Consignee • Carrier Information • Currency • Part # - if requested by Emerson division the part #s are submitted • HTS • Description • Quantity • Unit of Measure • Unit Price • Total Price • Additional Pricing if applicable • Wood Packing Invoice Information Gaps DOCS HOLD All Data Fields Need To Be Correct…… The Paperwork For These Areas Must Match The Customs Entry

  17. Commercial Invoice Cleanup….Next Steps • Strategy • Work with UPS to correlate historical data on customs hold and documents required • Review findings with Trade Compliance Team • Prioritize the order in which we will address standardization by key document data elements • Develop plan and processes for ongoing corrective action

  18. Intercontinental Air

  19. Air Freight Program Opportunities….Leverage, leverage, leverage! • 2005 Data Collected from 3PL’s • UPS Cleared >11,500 Air Shipments

  20. Air Freight SummaryOver $11 Mil in Savings in 2 Years Thru E-Sourcing ! More Savings Opportunities Through Consolidation 20

  21. Current Division Airfreight Flow ORD SFO LAX MEM Carlsbad Calexico DFW El Paso Laredo McAllen >12,000 Shipments Per Annum Multiple 3PL’s, Underleveraged Program

  22. Future Consolidated Airfreight Flow CHI LAX Carson Carlsbad Calexico ATL El Paso Laredo McAllen Pilot HKG-LAX Service Expansion Mirror And Leverage Ocean Network To Gain Better Cost, Efficiency And Visibility

  23. Emerson Divisions EU ASIA NA eSourcing Logistics Suppliers 24 x 7 Air E-Sourcing Service Support Actions & Results To Date • Built Infrastructure And Management Team • Use of Low Cost Resources in GMDC/APPO • Standardize Template And Process • Supply Base Education Next Steps • Expand Globally • 24/7 GMDC Capability • Data Analysis To Drive Mode Shift And Further Lane Consolidation GMDC/APPO

  24. Air & Ocean Logistics Network – Future State • Multiple Consolidation and Deconsolidation Hubs • Full integration of shipments into the North American Transportation Program • Carson/Southaven Emerson Express • Carson Various hubs • Carson FTZ SMI Warehouses • Supplier Milk Runs at Origin • Standardized Operating and Documentation Procedures • One or Two Brokers Only

  25. Critical Elements To Be Successful • Standardized Shipping Processes Across EMR • Connectivity to Emerson Transaction Hub • Making All Freight (Ocean & Air) Available For Shipping through the Program • Supplier Education and On-boarding • Standardized Documentation (Data Requirements) • Collaboration • Logistics, Procurement & Trade Compliance • Division, Business & Corporate • Use the Program to Drive Inventory Reduction

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