Your Company’s Secret Weapon ISM® 2006 Northeast Supply Chain Conference & Educational Exhibition October 2006 “Supply Chain” Your Company’s Secret Weapon Shelley Stewart, Jr. Senior Vice President, Operational Excellence & Chief Procurement Officer Tyco International (US), Inc.

The Evolution of Supply Chain From Tactical to Strategic Creation of the CPO Level Globalization of Supply Chains Engagement in Non-Traditional Spend HR Legal IT “Bravely” Using Technology Talent Skill Shift November 29, 2018

Attacking all of the Opportunity Total Cost Driven Purchase Price Administration Payment-terms Inventory Set up Scrap Quality Expediting Planning Maintenance eNablers Revenue Recognition Mfg Efficiencies Capacity Warehousing Lead-time Specifications Attacking all of the Opportunity November 29, 2018

Signing the Contract is only the Start! Strategic Sourcing Time Non-Compliance Supplier Performance Management Supplier Collaboration Six Sigma Value Engineering ESI Value Creation Contract Signed Supplier Value Scenarios Up to 75 percent of Sourcing Savings can disappear within 18 months Different Types of Supplier Value Management 1 2 3 Source: Geller & Company; PSC November 29, 2018

Taking it Straight to the Bottom Line™ – Some of the Key Elements November 29, 2018 Taking it Straight to the Bottom Line™ – Some of the Key Elements Procurement Role Objectives Best Practices Core Part of Corporate Strategy Aggressive Stretch Objectives Total Cost of Ownership perspective ROIC goals Objectives Shared Across Entire Organization Incentives/Consequences Supplier Performance Metrics Strategic Sourcing Negotiations Management All Spend Categories in Scope Risk Management Partnerships with Suppliers Supplier Recognition Contract Management & Supplier Centric Strategies Cost Reduction Planning/Tracking Budget Adjustments to Preserve Cost Reductions Low-Cost Country Sourcing Consortium Buying Asset Recovery Selective Outsourcing $ Good Leadership The Right Leader Leadership Culture at all Levels Bias to Action and Results Innovation & Technology Optimized Organization Spend Analysis & Category Management Demand Aggregation Electronic RFIs, RFPs Reverse Auctions Optimization & Decision Support Contract Mgmt & Compliance Results Tracking & Reporting Supplier Performance Evaluation Project Mgmt & Executive Dashboard Structure that works in your culture Cross-functional involvement Speaking with One Voice Commitment to Continuous Learning Professional Career Track Excerpted from the book “Straight to the Bottom Line” November 29, 2018

Significant Worldwide Presence November 29, 2018 A Global Business $21.2 $5.8 $11 $2.2 Asia-Pacific 14% Europe 27% Other Americas 5% US 54% Broad geographic sales mix - $40.0 Billion Facilities in over 60 countries More than 40% of sales are outside the US More than 50% of employees are outside the US When we say Tyco is a global company, we aren’t kidding…. Over 50% of our employee base is located outside of the US, And 43% of our sales are generated outside the US. Our global reach and diversity are essential components to Tyco’s success. We better understand our global customer requirements by having employees located globally. (based on FY2004 data) Significant Worldwide Presence November 29, 2018

Diverse Portfolio of Leading Brands Electronics Healthcare Fire & Security Engineered Products Our Brands Are Well Known and Respected November 29, 2018

People - Processes - Technology Key Areas of Focus Strategic Roadmap Global Commodity Strategy/Teams Leadership Engagement Emerging Market Sourcing eSourcing Strategies Talent Development People - Processes - Technology November 29, 2018

Expanding Toolkit and Scope November 29, 2018 Strategic Roadmap 2003 2004 2005 2006+ “Build the Foundation” “Expand the Core” “Accelerate the Impact” “Sustain the Gains” Segment C Segment D Segment E Segment F Segment A Segment B Segment EMEA China India Latin America Geography North America Eastern Europe Volume Leverage eSourcing Low Cost Country Sourcing Supplier Development Emerging Market Expansion Indirect Compliance Working Capital (DPO) Strategies Traditional “Purchasing” “Global Sourcing” Continue Global Expansion 55% Spend Addressed “Segment Specific” - 10 Teams - Limited Spend 22 Teams/110+ Sub-Teams Begin Global Expansion Scope Trade Compliance IT Contract Six Sigma Sourcing Competency Training New Product Development Training 7 Step Sourcing Process eSourcing Leadership Training Expanding Toolkit and Scope November 29, 2018

Strategic Sourcing Teams November 29, 2018 Strategic Sourcing Teams North America Capital Equipment Chemicals Commercial Print Corp Commodities Electronics Energy Facilities Fleet IT Metal Forming Molded Plastics MRO Office Equipment Office Supplies Packaging Resins Telecom Temporary Labor Tooling Transportation Travel EMEA Capital Equipment Castings (New) Electronics Energy Fleet Inj. Molding (New) IT Metal Forming MRO Office Consumables Office Supplies Packaging Steel Tubes (New) Telecom Temporary Labor Transportation Travel Latin America Energy Fleet MRO Packaging Telecom Temporary Labor Transportation Travel Asia Electronics Fleet Packaging Telecom Temporary Labor Tooling Transportation Travel 30 Category Teams, 229 Initiatives November 29, 2018

Electronics Category Team Electronics Steering Committee Team Leader TE TFS THC TEPS IPO (Reps) Analyst Category Initiatives PCBs PCBAs Caps Cables Conn. Etc.. Electronics Category Team Initiative Leaders Resource #1 Resource #3 Resource #2 IPO Offices TE TFS THC TEPS Segment Council Business Stakeholders November 29, 2018

IT Sourcing Team Structure IT Sourcing Steering Committee CIO Council Infrastructure Apps/ Enabling Security Hardware Telecom Software Resellers Sourcing Sub-Teams Tyco Sourcing Leadership Team (TSLT) November 29, 2018

Leadership Engagement Category Executive Sponsor CAPEX SVP, Operational Excellence Chemicals Segment President Commercial Print SVP Communications Electronics Segment President Fleet Segment President IT SVP, Chief Information Officer Legal EVP, Chief Counsel MRO SVP, Investor Relations Packaging Segment President Resins Segment President Telecom Chairman & Chief Executive Officer Temp Labor SVP, Operational Excellence Travel EVP, Chief Financial Officer Transportation SVP, Corporate Governance Senior Leaders Actively Involved November 29, 2018

Selecting Regions Based on Total Cost, Quality & Delivery November 29, 2018 Global Sourcing Regions & Commodities Asia Electronic components Cables / Harnesses Auto parts / stamping Molded parts / Tooling PCB / PCBA Textile Contract mfg. - Hi Volume Castings Eastern Europe Raw material Metal parts fabrication Castings Tooling China India Mexico / Latin America Molds & Dies, Molded Parts Metal parts / Machining Chemicals / Resins Pharma & Bio-tech IT & ITES Textiles Castings & Forgings Metal parts Cable Harnesses Assemblies Selecting Regions Based on Total Cost, Quality & Delivery November 29, 2018

Strategic Sourcing – Global Sourcing Spend 2004-2005 Focus on Asia … IPOs established in China and India: Tooling Electronics Metal forming Chemicals Expanding to Eastern Europe, Latin America & Southeast Asia in ’05 through ‘07 Developing local talent via ongoing training … Sourcing, Integrity, Trade Compliance Raising awareness & overcoming internal resistance in high cost countries 2003 2004 2005 2006 Big Opportunity Ahead November 29, 2018

Spend Management Roadmap 2006-2007 eSourcing Datawarehouse eProcurement Contract Mgmt Supplier Portal 2005-2006 eSourcing Datawarehouse eProcurement Contract Mgmt COMPLETE 2004-2005 eSourcing COMPLETE 2003-2004 eSourcing Datawarehouse Sourcing Applications Building Blocks November 29, 2018

What’s Next ?? Supplier Network Tyco ERP & AP Systems Contract Compliance Spend Visibility eSourcing Contract Management eInvoicing ePayment eProcurement Category Procurement Catalog Tyco ERP & AP Systems Suppliers Invoices / PO’s GL / Cost Center Item, etc System 1 System 2 System 3 System N November 29, 2018

Competency - Based Training Commitment to Continuous Learning November 29, 2018 Competency - Based Training Commitment to Continuous Learning Fact - Based Decision Making Supplier Performance Management Total Cost Management Strategic Sourcing Team Management Supply Chain Competencies: 1. Leadership / Behavior Results-Oriented Leadership X Communications and Relationships Data Management & Analysis Disciplined Problem Solving 2. Sourcing Supplier Management Purchasing Strategic Sourcing Advanced Procurement 3. Supply Chain Logistics and Distribution Inventory Management Demand Management Optimized Organization November 29, 2018

The Future of Supply Chain More Strategic Roles in Supply Chain Extended Collaboration with Supply Base More Aggressive use of Technology Continued Globalization of the Supply Chain Larger Talent Pool from Universities with Supply Chain Specialization November 29, 2018

My job is saving you money. I love my job! Saving Money ©GEICO November 29, 2018