PresentationJune 16, 2010

Welcomes

“Is Fortune in the Future for ACME?”

Karen Allec

Good Leadership Corporate Culture is open to change Currently competing effectively despite

identifiable financial and operational waste.

Push System Costly Warehouse and Transportation Outdated IT systems

Industry Trends Research

Competitors Economic

Conditions Political

Influences Analytical Tools

Citation; GIS in Logistics & Fleet Management, Karl Terry ERSI

Streamline Operations Reduce Supply Chain cost Open new markets - E Commerce Environmental Awareness Automate systems Improve GP Increase cash flow

REACHING OUR REACHING OUR GOALGOAL•To combine “best practices” of the nations largest retailers to create a unique, integrated retail supply chain model for ACME.

INFORMATION TECHNOLOGYINFORMATION TECHNOLOGY

“A journey of a thousand miles, begins with a single step.”

Lao Tzu

Septiadi “Andy” Tjahjono

THE BASIC IDEATHE BASIC IDEA

ERP: What Is It?

ACME current situation Inconsistent, Inefficient Processes Stand alone application Inventory Management

The key of ERP is INTEGRATION Unification of all key operational systems

CURRENT ACME CURRENT ACME ERPERP

Logistic MGR

Finance Dept

Store Receiving Clerk

Head OfficeDistribution Center

PROPOSED ACME HOSTED PROPOSED ACME HOSTED ERPERP

Head Office

Store

Data Storage

ANSI X12Trading Partners

EDIFACTTrading Partner

XMLTrading Partners

EDI Webhosted ERP

Web Based Report

SCREEN SHOOT HOSTED SCREEN SHOOT HOSTED ERPERP

BENEFITS HOSTED ERPBENEFITS HOSTED ERP

Improve access to information Improve workflow and efficiency Improve controls and program alerts Process reengineering -- update old

processes Foundation for new processes, such

as e-procurement, with significant ROI

BENEFITS OF AUTOMATION + INCREASING BENEFITS OF AUTOMATION + INCREASING EFFICIENCYEFFICIENCY

= REDUCED COSTS = REDUCED COSTS

Increase CFT capacity Reduce Sq.Ft.

Reduced Errors Reduce Overtime

Increase Operation Efficiency

IncreasedProductivity

No WMS

New WMS

Warehouse/Distribution

  ACME Current Cost ILC Hosted model

Server hardware and OS Upgrade $100K and up Host provides

IT Salaries (Programer, data base etc) $60K to $150K Bill @perhour rate

Support & Help Desk $45K to $75K Host provides

Translator Software $100K and up Host provides

EDI Mapping Tools $100K and up Host provides

Transaction Data Backup $300K Host provides

Updates & Changes (Software) $250K

Changes may be a fee or free and are automatically made available to

all through the central hosting service

Late Fee & Charge back $500K - $1M

Significantly reduced by increased accuracy and timely transaction

processing

Maintenance Fee $1M - $2M $700K

COST HOSTED ERPCOST HOSTED ERP

ASNCargo Receiving

Receiving and Checking Barcode Scanning

Sortation ConveyorsBarcode ControlledAuto PalletizerInventory Control

Inventory ControlLocation ControlQC

Sortatiion Conveyers

Sorting, Barcode Scanning

Automation Inventory Control

Integrates and Unifiesdata into onecentralizeddatabase

AmericaUnifies Freight,Accounting andWarehousing

Systems

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Europe

Unified Freight

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EDICustomers,

Vendors, Govt.Agencies

EDI

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Security Reports

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Tracking &Tracing

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He who will not economize, will agonize.

Confucius

Chinese philosopher & reformer (551 BC - 479 BC)

Distribution / WarehousingSpeaker:

Dan Phillips

Combine “best practices” of the nations largest retailers to create a unique, cohesive working retail supply chain model.

WalmartWalmart TargetTarget JCPenney’sJCPenney’s 4200 stores 1740 Stores Utilization of 3rd Party

DC’s 42 DC’s 37 DC’s Direct to Store 100 Stores / DC 47 Stores / DC

Cost Containment / Cost Savings: Consolidate Orient Suppliers Increase ocean DIM / Reduce # of containers / Reduced Emissions, Carbon Decrease Travel Time / Reduced Emissions, Carbon Reduce DC’s / Reduced Carbon footprint

Origin

Current Model> 800 stores40 DC’s

Hong KongPusanShanghaiManilaTaiwan

1316 FEU’s (40’ D

ry)

1228 FEU’s (40’ Dry)

Total FEU’s:2544 (40’ Dry)

Origin

Phase I Distribution Closures40 DC’s will convert to; 3 Import Whse / Market Areas 32 Regional's

Hong KongPusanShanghai

LA/LB 40% * West 120 stores * South 180 stores

Open3) Imports – Los Angeles, Chicago, Dallas1) Regional – Seattle, WAClose9) Las Vegas, NV – San Francisco, CA – Phoenix, AZ – Denver CO – Kansas, KS – La Grange, GA –Savannah, GA – Baton Rouge, LA – Spokane, WA

1336

FEU

’s (4

0’ H

C)

Prince Rupert 60% * Chicago 500 stores

890 FEU’s (40’ H

C) 534 FEU’s (40’ HC)

Total FEU’s:2226 (40’ HC)

Origin

Hong KongPusanShanghai

Phase I Distribution Closures35 DC’s will convert to;26 Regional's (one being E-com)

Conversion1) DC to E-commerce – Louisville, KYClose9) Wilmington, DE – Rockford, IL – Normal, IL – Baltimore, MD – Northbridge, MA – East Orange, NJ – Moon, PA – Macon, GA – Springfield, IL

LA/LB 40% * West 120 stores * South 180 stores

1336

FEU

’s (4

0’ H

C)

Prince Rupert 60% * Chicago 500 stores

890 FEU’s (40’ H

C) 534 FEU’s (40’ HC)

Total FEU’s:2226 (40’ HC)

Origin

Hong KongPusanShanghai

Phase I Distribution Closures26 DC’s will convert to;13 Regional's (one being E-com)

Final 13Los Angeles, CA – Seattle, WA – Dallas, TX – Louisville, KY – Atlanta, GA – Hartford, CT – Edison, NJ – Little Rock, AK – Charleston, SC – Chicago, IL – Akron, OH – Des Moines, IA – Indianapolis, IN

Open0) Close13) Clearwater, FL – St. Paul, MN – Raleigh, NC –Albany, NY – Washington, DC - Miami, FL – Birmingham, AL – Plymouth, PA – Tulsa, OK – Salt Lake City, UT – Houston, TX – Albuquerque, NM – Detroit, MI

Total FEU’s:2226 (40’ HC)

“If we face our tasks with the resolution to solve them, who shall say that anything is impossible.”    

Sven von Borries

Sir Wilfred Thomason Grenfell

New Rate negotiation (Ocean Freight) Change from 5 to 3 suppliers (SHA/HKG/PUS) -> ABP have

same /lower rate Change from 40’ DRY to 40’ HC -> less 318 Containers / year New Distribution model (Intermodal) Total Savings of USD 2.8 million

Origin

Hong KongPusanShanghai

Total Feu’s:2226 (40’ HC)

“The most dangerous kind of waste is…….

the waste we do not recognize.” 

  

Shigeo Shingo

Sokchanda Im 

What drives green initiatives?

Government Policies & Regulations

Social Factors Long-term Cost Savings

Distribution Centers Lighting

Light Emitting Diodes (LED) Light Sensors Skylights

Water Conservation Transportation Improved Freight Logistics Smart Driving Practices Increase Railway Use

35

TRAILERS BY TRAIN (LA to Chicago) TRAILERS BY TRUCK (LA to Chicago)

1 train carrying 123 trailers 123 trucks

2,200 rail miles 2,015 highway miles

Consuming 19,400 gallons of diesel fuel Consuming 38,100 gallons of diesel fuel

274 metric tons CO2e carbon footprint 535 metric tons CO2e carbon footprint

49%49%Transporting by rail, you reduced this shipment’s carbon footprint by 49%

Transporting by rail, you reduced this shipment’s carbon footprint by 49%

Source: The U.S. EPA’s Climate Leaders program emission factors (Direct Emissions from Mobile Combustion Sources, May 2008); BNSF’s carbon emission estimator was formed in collaboration with ClearCarbon Consulting, Inc.; Other sources include BNSF shipment history and internal shipping metrics, along with route mileage calculation programs, trucking system averages (Truck Assumption: 6.5 mpg highway), and other data sources.

Carbon Savings | BNSF Intermodal Trailers vs OTR

36

CONTAINERS BY TRAIN (LA to Chicago)

CONTAINERS BY TRUCK

(LA to Chicago)

1 train carrying 256 units 256 trucks

2,200 rail miles 2,015 highway miles

Consuming 25,400 gallons of diesel fuel Consuming 79,400 gallons of diesel fuel

420 metric tons CO2e carbon footprint 1,113 metric tons CO2e carbon footprint

Source: The U.S. EPA’s Climate Leaders program emission factors (Direct Emissions from Mobile Combustion Sources, May 2008); BNSF’s carbon emission estimator was formed in collaboration with ClearCarbon Consulting, Inc.; Other sources include BNSF shipment history and internal shipping metrics, along with route mileage calculation programs, trucking system averages (Truck Assumption: 6.5 mpg highway), and other data sources.

62%62%Transporting by rail, you reduced this shipment’s carbon footprint by 62%

Transporting by rail, you reduced this shipment’s carbon footprint by 62%

Carbon Savings | BNSF Intermodal Containers vs OTR

  

FOREIGN TRADE ZONES

  

BONDED WAREHOUSES

Bonded WarehouseRemarks

Goods are entered and stored without Customs formalities or control.

YES NO Formal entry is made. Goods are under continuous customs control.

Goods are not in US for Customs and excise taxes purposes.

YES NO Goods are in US for Customs purposes.

Imported goods may be manipulated, processed mixed with other foreign or domestic goods, without Customs supervision or expense.

YES NO Foreign dutiable goods are stored and manipulated under constant customs supervision at Owner Expense. Specific authorization needed for each lot.Goods may be withdrawn in any amounts

and any size package, or may be repacked.

YES NO Goods may be withdrawn only in an entire bale, case, box, etc. and in original package. Permission needed to repack.

Liquidation occurs at the time goods enter Customs territory. No permission needed to manipulate.

YES NO Liquidation occurs at the time goods enter Warehouse. Permission is needed to manipulate.

Any goods free or dutiable that may legally enter the US may enter an FTZ.

YES NO Only dutiable merchandise may enter.

Public utilities rates are published same to all clients.

YES NO Rates are not usually regulated.

Relatively unrestricted movement of goods in and out of zone.

YES NO Limited movement of goods, specific Customs approval is required for each movement.

No Bond required, even for durable goods. YES NO A bond for double the amount of estimated duty on each entry must be posted.

Goods may remain without limit of time. YES NO Five year maximum limit.

Panama - FTZ vs Traditional Bonded Warehouse

LOW CUSTOMER

SATISFACTION

POOR SUPPORT

LOW QUALITY PRODUCT HIGH PRICING

CAUSES OF LOW CUSTOMER SATISFACTION

Cost of Materials

Ineffective Marketing

IncompetentEmployees

Bad Design

Poor Materials

Wrong Answers

Long Hold Times

Fee Structure

“A man who misses his opportunity, and monkey who misses his branch, cannot be saved.” “Hindu Proverb”

Greg Matthews

Open new markets – Ecommerce, Western US, Central & South America

We look forward to working with you.