1. ADTRAN: The Network Access Company

2. Telecommunications Multi-billion dollar industry
Voice and digital data transmission
Carrier and End User

3. Where we are today Product portfolio - 1,400
16 year profitability history
2004 revenue - $454 million
2004 units produced million
1,674 employees
Huntsville, Alabama

4. “Disruptive” Market Strategy
Identify proven, high-volume market opportunities
Out-engineer the competition
Re-engineer/cost-reduce products
Drive for market share leadership

5. Solid Customer Base
Carrier Global Enterprise

6. The Winning Edge Engineering innovation Manufacturing efficiencies
In-house silicon development
Instrumental in industry standards development
Proven engineer development program
Culture of cost engineering
Released 241 new products in 2003
Manufacturing efficiencies
Advanced supply chain management
High-volume production
Superior customer support
Attentive pre- and post-sales technical support
Comprehensive training programs
Supportive installation and maintenance programs
2Mbps DSU/CSU
39%: Worldwide Wide Area Networks Market Share and Forecast, 2000, Gartner Group, October 9, 2000
64 Kbps DSU/CSU
46%: Worldwide Wide Area Networks Market Share and Forecast, 2000, Gartner Group, October 9, 2000
TDM IAD
59%: Packet IADs Capitalize on TDM’ Legacy, In-STAT MDR, April 2003
HDSL/HDSL2
70%: Internal Company Estimates based on actual equipment sold and number of installed lines
64%: North America: Access Systems, 2002, Gartner, Inc. July, 2002
ISDN
87%: Internal company estimates
DDS
93%: Internal company estimates

7. Supply Chain Overview 200 Employees Planning Purchasing
Transportation / Logistics
Manufacturing / Outsourcing
Raw Material / Finished Goods Warehouses
Finance
Systems

8. Supply Chain Mission & Strategy
Charter
To Be A World Class Telecommunications Supply Chain Focused On Customer Service, Quality And Financial Performance
Mission
Our Mission Is To Develop And Implement “Best In Class” Supply Chain Processes and Strategies

9. OUTSOURCE MANAGEMENT

10. OUTSOURCING CONSIDERATIONS
Global Services Supply Chain
Align Outsourcing Strategy with Corporate Strategy
Define Scope
Manufacturing
Supply Chain Management / Logistics
BPO
Define Specific Objectives
Tactical
Reduce Operating Costs; Reduce Capital Expense; Demand Variability Management; Supply Chain Optimization
Strategic
Leverage CM Core-Competency; Improve Internal Business Focus; Shared Risks; Supply Chain Leverage; Global Footprint Benefits DF Model

11. OUTSOURCING CONSIDERATIONS
Service Provider Selection
Considerations
Global Footprint; Process Maturity; Sectors Serviced; Scope of Services; Certification / Industry Specifics; Process Controls; IT- System Capabilities, Integration Opportunities; Supply Chain - Organization, Annual Spend, Processes
Partnership Model
Drives Best Long-Term ROI
Involvement in business goals and development of associated strategy
Improves Risk Management
Contingency planning
Associated Communication Flow Process
Robust data exchange
Focused resources
Supply Chain Initiatives
Cost reduction
Enhance flexibility / Reduce liability

12. ADTRAN GLOBAL MANUFACTURING
PARTNERING FOR SUCCESS

13. Supply Chain Logistics
MIGRANE

14. Negative Impacts Asia Trade Lane Capacity-Congestion
Supply Chain Complexity
Security Regulations-Initiatives
Carriers Market
U.S. Logistics Infrastructure

15. Offensive Logistics Strategy
Leveraging your transportation spend
Plan what-if scenarios with executive management
Partner only with 1-2 major service providers
Take control of your inbound freight spend

16. Offensive Logistics Strategy
Offer incentive based contracts
Share capacity forecast with primary carriers, daily, weekly, monthly
Plan alternate ocean methods to intercept or transfer containers on the west coast

17. Offensive Logistics Strategy
All water routes through the Panama Canal to East Coast Ports
Negotiate flat all-in rates to include surcharges, with tiered pricing negotiated in advance for Peak
Set clearly defined performance expectations with carriers

18. Offensive Logistics Strategy
Maintain high corporate visibility at VP and CEO level
Campus visit and supply chain operations tour
Establish penalties for damaged, late, bumped freight