>> Supply Chain Solutions that Deliver u Warehouse Product Offering

Key Learning Points Value of Warehousing to UTi Value of UTi Warehousing to Customer Types of Warehousing and Risks/Benefits Preferred Sales and Marketing Strategy Managing Warehousing from a Line Management View Implementing EXE

Value of Warehousing to UTi

Value of UTi Warehousing to Customer Provides opportunity to remove warehouse expense from company assets. As a non asset based provider, solutions are not focused on asset utilization, but rather optimized solution. Warehouse personnel issues are transferred to UTi. Dollars spent on warehouse infrastructure can be utilized to develop new products/markets/customers.

Value of UTi Warehousing to Customer UTi can provide a global solution with same processes/systems. UTi can implement best in class WMS in a consistent and global basis. –Rapid Implementation –Less Costly –Better ability to integrate all supply chain information into one pipeline. UTi can provide a “glass pipeline” of inventory information, in motion and at rest, globally. Existing relationship with UTi has proven partnership approach. UTi has committed to grow this market segment with large scale investment in technology. As “foundation customers” in warehouse offering, customer will enjoy high level of executive commitment.

Warehouse Business Models With Risks and Benefits Dedicated Shared Public Warehouse One Customer Facility A Few Key Customers Multiple customers with multiple terms

Dedicated Business Model Dedicated One Customer Facility Typically long term contract Risk of capital is shared Ability to have system connectivity is easier Personnel are focused on one customer’s needs Pricing typically open book, cost plus, or fixed variable. Margins typically 10-15% Best situation for UTi

Dedicated Business Model Benefits and Risks Dedicated One Customer Facility Benefits Risks 1.Both parties share risk 2.Focused on productivity and partnership 3.More flexible to handle change 4.Allows for long term focus 5.Keeps focus on one set of business issues 6.Lower cost possible for customer due to fixed/variable pricing approach 7.Easier to gain synergies from integrated systems. 1.Must have detailed contract 2.Requires open relationship. 3.Risk to customer if business falls dramatically 4.Risk to UTi if customer fails

Shared Business Model A Few Key Customers Long term contract with keystone customer Additional 1-2 customers that compliment keystone customer Often market niche facility Expanded enterprise supply chain Systems connectivity more involved Need to minimize capital risk - customer commitment Priced fixed, variable with minimum commitments Avoid per unit pricing due to fluctuation in volume OK for UTi with proper pricing controls Shared

Shared Business Model Benefits and Risks A Few Key Customers Shared Benefits Risks 1.Ability to develop market niche 2.If structured properly, keystone customer will share risk. 3.Can continue to get fixed/variable pricing 4.Customer enjoys market niche expertise 5.Works well in VMI concept. 1.Same business velocity creates capacity issues. 2.Per unit pricing still a challenge. 3.System connectivity more challenging.

Public Warehouse Business Model Multiple Customers with Multiple Terms Typically month to month pricing. UTi takes major capital risk. Customer requirements may vary dramatically Customers typically commodity price buyers. Service priced per unit. Accuracy of unit activity critical and often not accurate from customer. Empty space is an ongoing problem Easier to sell Pricing needs to factor in cost of planned empty space Hard to integrate systems or additional services.commitment UTi should avoid unless existing space. Then do so cautiously. Public Warehouse

Public Warehouse Business Model Benefits and Risks Multiple Customers with Multiple Terms Public Warehouse BenefitsRisks 1.Spread risk across multiple clients 2.Can generate high margins, if done correctly 1.Typically transaction priced 2.Accurate information for pricing is critical 3.Volume swings create havoc 4.Systems integration difficult 5.Fixed costs at risk 6.Difficult to differentiate 7.Competition is often local

Sales and Marketing Strategy UTi should focus on developing dedicated contract warehouse operations. Shared warehouse operations should be considered when there is a keystone customer who will share the risk/rewards of the extra space. Also could be considered for vendor hub or niche market warehouse. Public warehouse should only be considered when excess space is available. Business should be converted to contract as soon as practical and, as public, should carry higher margins for higher risk.

Sales and Marketing Plan Customer Selection Customer Locations Product Mix Seasonality Value Added UTi Relationship Capital Risk Sharing Warehouse Strategy Value Systems and Integrated Solution Single Location and LocalMulti location and Global Hazardous or SpecializedMinimal Special Requirements Highly SeasonalEven Flow Of Goods Bulk CommoditiesHigh Value Added New RelationshipExisting with Other Services No InterestUnderstands Risk Sharing Public WarehouseDedicated Operations Systems not ImportantValues Global System Time Focus Short Term ContractLong Term Strategy

Sales and Marketing Plan Perspective Customer Profile Large, multi national customer Requirements include multiple sites in various geographies. Requires value added services difficult to obtain in public warehouse environment Values quality and information in comparison to price. Willing to share risk and rewards. UTi already has an extensive and positive business relationship. Customer sees value in having dedicated space, people and systems. Focus on longer term gains as opposed to short term solutions.

Status of uWarehouse Implementation Asia Pacific - Melbourne Operational February Sydney Bowden Street March 2001 with Full RF - Plans to implement in Hong Kong for GN Netcom October Europe - Server and Software Installed in Reading June 2001 North America - Newark Operational October 2001 Sales - Included in solutions for GN Netcom, Owens Corning, GE Power Systems, Bristol Myers-Squibb, Bally Shoes

A Line Management Perspective Warehousing

UTi Australia, Warehouse & Distribution Philosophy To take on Warehouse & Distribution where it is an element of the integrated international Supply Chain Where we control the Supply Chain or Where we can control the Supply Chain

Some Operational Lessons - Melbourne New Facility Start Up Issues-Customer reluctance to commit or discuss their business when we havenothing to show. -Delays due to no WMS system or System implementation

Customer Service challenges in a WH that had not been capitalized (equipment) correctly Customer Service issues with no WMS Pricing models & levels for all Customers Complications arising when running a busy facility while installing a WMS Some Operational Lessons – Sydney

(1) PEOPLE : KEY oDevelop a profile of personnel we should employ to run these facilities. oGet the expertise – DON’T MAKE DO! (2) FACILITY Have a clear policy on establishing a facility. Some considerations / questions to be answered in this process: omust have a client base? omust have a base account? osystems must be in & ready with the building? Major Points

Warehousing - Implementation Key Learning Points Implementation process is all consuming & everything else goes on hold –Totally inwardly focused –Customers, profitability, service come 2 nd Commercial performance impacted for an extended period (inward focus) Group impact Annual effort Difficulties presented in a busy facility Planning implications People & cost issues Focus

Get the people/management right Type of people we employ in the Warehouse & Distribution areas Commercially oriented Operations Sales Skill Development / Knowledge Transfer – A New Company Change management Know what the system does and doesn’t do. Warehousing - Implementation

EXE Comprehensive & accurate identification of field operational requirements Criticality of detailed communication on functionality available from EXE Commercial impact of “Vanilla” version Commercial requirements must be identified & a strategy identified as an element of the implementation process uWarehouse

NEGATIVES  Functionality & scope of product not well communicated  E.C issues a major influence & not addressed in the project  Absence of report writer tools  Need to have bolt on products & the issues/complications that this raises:  ABS  Loftware  Communication – over do it  Poor understanding of work involved at the operational level to achieve a satisfactory implementation  Why we have the approach uWarehouse

uWarehouse POSITIVES  Product purchased now in place running with first class corporate & EXE support  Project Management & Technical skills of Tom Anderson  Hardware process & support from Terry Marsh  Great team effort:- Melbourne - Sydney  Knowledge transfer & skills base development well underway - Major bonus  Leading edge development Ozisoft

EXE – Some Implementation Suggestions  Allow a longer implementation timeframe extended beyond the WMS process  More training than the 3 days at EXE  Employ EXE experienced personnel  Undertake specific console operator training uWarehouse

This is a business we must be in Learn by our experience & use the Australian lessons Growth speed are much greater than in traditional environment Re-engineers/Change execution New people/skill sets Marketing benefits Summary