A Blink into Supply Chain of the Future Opportunities & Threats for Puerto Rico Jose E. Quinones Quintana October 5 th, 2012 LASCE 2012, San Juan, PR

Agenda Welcome and Intro Baseline The Institutions The New SC –Relationships –Technology –Logistics Put it together Q&A’s

A Focused Private Sector Source:

A Focused Private Sector Source:

Fertile Ground Source:

A Solid Foundation Act 73 of 2008 Source:

Platform for Growth Incentives for Puerto Rico Businesses Exporting Services 4% max corporate tax rate 100% tax exemption on dividends from export services businesses 60% exemption on municipal license taxes Decree of 20 years, guaranteeing these rates No federal taxes Act 20 of 2012 A Sample of Applicable Services: R&D Advertising and public relations Consulting Call centers Shared services centers Storage and distribution centers Educational and training services Architectural and engineering services and project management Professional services, such as legal, tax and accounting Centralized management services Centers for electronic data processing Any other service that is later decided to be treated as an eligible service because it is in the best interest of Puerto Rico Source:

Foreign Direct Investment Act 22 of 2012 Source:

A History of Supply Chain INFORMATION FLOW MATERIAL FLOW

A New Supply Chain Demand Source MakeDeliverUse INFORMATION FLOW MATERIAL FLOW

Connect to the Customer Connect with the Customer (CRM) – Understand the needs of the Customer, Feedback your Supply Chain & Your Customer Align or re-design your Supply Chain Never ignore a return Manage your Product Lifecycle – Be Socially Responsible DemandUse

An Integrated Supply in a Complex Environment Connect Your Supply Chain (incl. Suppliers) Sustainable Sourcing The World is flat – Air – Ocean Foreign Trade Agreements Inventory Management Cargo Security – Intermodal – Maritime Domain – Tracking Technology SourceDeliver

Supply Chain Strategy Maximize Your Tools (ERP, MRP, DRP) In Source vs. Out Source Control & Measure the process Lean Manufacturing / Continuous Improvement Driven by Customer Demand Align Organizational Culture Customer feedback is key – Innovate Make Goals Best Practices

Evolution of Supply Chain in the Future Today Supply Chain professionals Regulatory Agency Unit Cost Supplier Collaboration Order Fill Rate Order Management Inventory Management Improvements are opportunistic Tomorrow Highly Specialized Supply Chain Professionals Complex Regulatory Environment Total Cost of ownership Supplier Integration Customer Relationship Management New Technologies and automation will drive additional efficiencies Continuous drive for improved efficiencies

Wrapping Up We have the Geographical Advantage We have the People We have the Business Environment Foreign Investment will Drive Infrastructure Access to Technology We know the Risks Put it together and we have…

The Manufacturing & Services Hub for the Americas Source:

Thanks Jose E. Quinones Quintana