1. 1 Making Money Mitigating Risk Managing Logistics Tracey Lewis

2. 2 Agenda  Making Money  Mitigating Risk  Smartly Managing Logistics  Real Life Case Studies

3. 3 Making Money  Opportunity exist in Asia Pac due to GDP growth and domestic consumption, triple US rates.  Firms need an international strategy with executive support  Short Term Goals – Piloting  Long Term Goals – Market Entry  FTA Opportunities: Most AP economies have bilateral FTAs with each other. US has a significant focus on AP now.  Current FTA’s with Singapore and Korea and is negotiating the Trans-Pacific Partnership (TPP) involving Vietnam, Malaysia, Brunei, Australia, New Zealand, Japan among the total twelve.  US FTA’s create: Transparency, market access, investment protection, rule of law, regulatory harmonization.  Need to view FTAs as revenue creators: while still leveraging to reduce costs through smart supply chain management, consumer consumption now beneficial 

4. 4 Mitigating Risk  Import/Export Challenges: You could try and do it alone but be aware of the possible implications.  Compliance- Put in place internal compliance checks and processes; encourage vendors, suppliers, buyers to document processes and keep invoices, receipts etc.  Restricted items- By country lists, constantly changing & those deemed Dangerous Goods by IATA.  Intellectual Property Risk- Research best practice mechanisms to detect and reduce the risk of counterfeiting.  Localization Challenges- Some procurement policies require a percentage of goods and services to be locally sourced in order to be locally sold.

5. 5 Smartly Managing Logistics to Make Money  Exporting  Leverage FTAs: Rule of law and preferential duties  Documentation: Accurate & complete. Retain.  Send test shipments: Use Advanced Ruling mechanism.  Known shipper: Join trusted trader programs  Regulatory  Use existing resources to understand:  Foreign government resources  US Government resources U.S. & Foreign Commercial Service  U.S. Department of Commerce Market Access Compliance  U.S Embassy; Local trade associations.

6. 6  White board  Optimize your logistics process with UPS based on trends  Sales & Distribution  Leverage experience of MNCs - e.g. supply them and use their networks, sales channels, branding etc.  Explore different business models – e.g. License out, local partner, wholesale middlemen  Quality Control  Secure your supply chain - know your suppliers and customers; use reputable logistics providers.  Quality & Service - Competing on price is challenging in Asia, focus instead on excellent customer service. Smartly Managing Logistics to Make Money

7. Brazil: UPS’s Presence Key Milestones: ─Operations began 1989; UPS subsidiary established 1995 Operational Profile: ─Nationwide delivery coverage ─14 airports served (Belém, Belo Horizonte, Curitiba, Florianópolis, Fortaleza, Guarulhos, Joinville, Manaus, Navegantes, Porto Alegre, Rio de Janeiro, Salvador, Viracopos, Vitória) ─32 UPS operating facilities* ─16 UPS Supply Chain Solutions ® facilities ─Over 20 brokerage operations São Paulo UPS Facilities UPS Supply Chain Solutions Facilities Airports Manaus Belém Salvador Rio de Janeiro Porto Alegre Fortaleza Belo Horizonte Vitória Recife

8. 8 Real Life Supply Chain Mapping – Major High-tech Medical Device Manufacturer Cross functional participation - Accounting, Finance, Operations, Customer Service, Business Development Manufacturing, etc. Understand changes in Supply Chain – How it affects other departments Identify areas of opportunity – Found $600,000 monthly billing that was not reconciled because of operations process Found another $1.4 million opportunity in reverse logistics

9. 9 Real Life Compliance Strategy – Rapidly growing High Tech Electronic Components Company Philosophy is to make the world of electronics more accessible to the average person – With no regard to what their consumers might build Known Shipper Process – Manual and time consuming and ineffective Research tariff codes manually – 65% were coded incorrectly – at a cost of more than $500,000 a quarter Compliance was Customer Services job - With no expertise or training

10. 10 Real Life FTA Strategy – High-Tech Telecommunications Manufacturer Manufacturing in China and Taiwan – With finished goods coming back to the US Moved a portion of China manufacturing to South Korea - Saved $1.3 million in annual tariffs Leverage MNC relationships – Mitigating new relationship risk and intellectual property concerns

11. 11 Summary  Make Money  With a well thought out and supported International Strategy  Both Long term and short term goals  Use knowledge of FTAs and MFN to add to your profits  Mitigate Risk  Incorporate Compliance into your strategy  Understand regulatory issues and potential obstacles  Smartly Manage Logistics with a trusted partner  Insure your strategy works for every link in your supply chain

12. 12 Thank You