1. www.gxs.comGlobal eXchange Services – Confidential Information Why Manufacturing Companies Will Create and Join B2B Trading Networks David Kraemer, Vice President, Global Industry Marketing

2. www.gxs.com Global eXchange Services – Confidential Information Some Common Background Premises Shorter cycle times reduce costs. Inventory “postponement” reduces costs. Logistics services increase profit, differentiation. Coordination of physical, data, and financial flows speed time to money. Information (vs. data) is needed to manage complexity. Process management has replaced transaction speed.

3. www.gxs.com Global eXchange Services – Confidential Information Upshot Non-core activities are being outsourced or managed by partners. Information is necessary to manage these processes. The Enterprise Extends Suppliers Customers Factories & Manufacturing Partners Retailers Logistics Other Private Nets Virtual Storefronts Manufacturing Pain Points: Mastering Global Value Chain Complexity

4. www.gxs.com Global eXchange Services – Confidential Information 86% of Manufacturers Today’s Global Value Chain Profiting From Complexity Courtesy Deloitte: “Mastering Complexity in Global Manufacturing” Global Value Chain Complexity Value Chain CapabilitiesLowHigh Low High (37%) 17% more profitable 100% = base profit (49% of manufacturers) (7%) 73% more profitable (7%) 19% more profitable Profiting From Complexity Deloitte Research

5. www.gxs.com Global eXchange Services – Confidential Information Manufacturing Pain Points: Profitable Revenue Growth Upshot Consumer products are characterized by high volumes and variability – this is new to the industrial manufacturing way of thinking. EXAMPLE Supplying to Industrial Computing was easy and predictable. AMKOR, a supplier to chip makers, is affected by how cameras, autos, laptops, and cell phones are made NOKIA must handle 30 million components -- a DAY! 2004 CONSUMER ELECTRONICS SHOW BREAKS ALL RECORDS! With hundreds of new products and technologies announced this January in Las Vegas, the 2004 International CES spanned 1.38 million net square feet and brought together: 129,000+ industry professionals 2,400+ exhibiting companies 18,000 international travelers from 110 countries

6. www.gxs.com Global eXchange Services – Confidential Information Manufacturing Pain Points: Reducing Time to Market Upshot Life cycles are short and profits are made early in the cycle. Reduction of unnecessary delays is needed to hit market windows. Time Volume Product Lifecycle Product Lifecycle Time Volume/Profit Product Lifecycle Product Lifecycle Profit Margin Profit Margin Example Sony has eight week life for each PC model. They plan for 75 weeks and purchase 36 weeks before production. Process data such as supplier product and availability information integrated into their system weekly helps them succeed. Sony’s catalogue of products must be constantly updated and republished.

7. www.gxs.com Global eXchange Services – Confidential Information Manufacturing Pain Points: Aligning Supply and Demand Across the Value Chain Upshot Inventory anywhere in the value chain will be a charge against profits and will become obsolete due to new technology and substitution products. Lost Sales And Profits Inventory Build Time Volume Manufacturing Demand EXAMPLE Cisco Systems scrapped 2+ Billion dollars of excess component inventory which was acquired in advance for builds which were not forecast. Avnet must manage inventory for their customers and is accountable for missed deliveries to DEMAND — even if not forecasted.

8. www.gxs.com Global eXchange Services – Confidential Information designer distributors suppliers customer Business Process: More Than Exchanging DataFiles Material Purchasing Order Release Work Order/Pick Creation WIP Status Updates Shipping Notifications Invoicing Material Purchasing Order Release Work Order/Pick Creation WIP Status Updates Shipping Notifications Invoicing Shipping Notifications Material Receipt Package Documentation Invoicing Shipping Notifications Material Receipt Package Documentation Invoicing Collaborative Engineering & Testing Design Logistics Suppliers Customers WIP Status Updates Inventory Reconciliation Sales Order Distribution Demand Forecast Sharing WIP Status Updates Inventory Reconciliation Sales Order Distribution Demand Forecast Sharing

9. www.gxs.com Global eXchange Services – Confidential Information GXS Value Proposition By integrating their complex global value chains, GXS helps manufacturers become “Complexity Masters” that:  Are better informed and make decisions faster;  Bring more products to market quicker than their competitors;  Satisfy demand for their products while minimizing excess inventory;  Deliver superior revenue growth and profitability for their shareholders.

10. www.gxs.com Global eXchange Services – Confidential Information Protoypical Case Studies Findings from Deloitte: Advantages of utilizing and mastering Increased supply chain complexity Seagate Connects with 11 suppliers and 1 Logistics Services Company LGSiltron Connects with Samsung

11. www.gxs.com Global eXchange Services – Confidential Information 86% of Manufacturers Today’s Global Value Chain Profiting From Complexity Courtesy Deloitte: “Mastering Complexity in Global Manufacturing” Global Value Chain Complexity Value Chain CapabilitiesLowHigh Low High (37%) 17% more profitable 100% = base profit (49% of manufacturers) (7%) 73% more profitable (7%) 19% more profitable Profiting From Complexity Deloitte Research

12. www.gxs.com Global eXchange Services – Confidential Information Seagate: VMI Automation with RosettaNet 11 Suppliers Third Party Logistics Provider Seagate

13. www.gxs.com Global eXchange Services – Confidential Information Seagate: VMI Automation with RosettaNet Suppliers Third Party Logistics Provider Delivery Replenishment Physical Goods Movement Information Flow Legend: 3.Inventory Reporting (PIP 4C1) 4.Shipment Receipt (PIP 4B2) 4.Shipment Receipt (PIP 4B2) 7. Consumption Reporting (PIP 4B2) 8.Invoice (PIP 3C3) 2. Forecast Acceptance (PIP 4A5) 1. Notify of Forecast (PIP 4A2) 5,6.Request and Fulfill Demand (PIP 3B2) Seagate

14. www.gxs.com Global eXchange Services – Confidential Information Seagate: 12 Trading Partners Survey Note: Information compiled by and provided independent of Seagate. IT Staff Existing ERP Internet Connection Solution Installed Other B2B Plans 0-2 3-6Yes No 128K PC ServerYes No 6 6 6 6 2 2 812 0 7 5

15. www.gxs.com Global eXchange Services – Confidential Information Lucky Gold Star (LG) Siltron & Samsung B2B Implementation PIP3A4 Sales Order PO Confirm VMI, Purchase Order PO Confirm P/O S/O P/O Confirm P2 PIP4A4 PIP4A5 PIP3A1 PIP3A7 PIP3A8 PIP3C3 PIP3C4 PIP4B2 PIP3B2 PIP3C6 Demand Planning Forecast Response Receive Inquiry Quotation PO Pending PO Change Billing Billing Cancel Delivery of Goods G/R Settlement confirm Weekly Forecast Domestic Forecast Forecast Confirm RFQ Quotation PO Pending PO Change I/V I/V Cancel 입 고 확 인입 고 확 인 G/R Settlement Forecast RFQ P/O Change Invoice Reject Goods Receipt Payment Forecast Reply Storage In Quotation P/O Pending Invoice P0 P1 Samsung Semiconductor LG Siltron B2Bi

16. www.gxs.com Global eXchange Services – Confidential Information LG Siltron Benefits. Reduce Out-of-stocks. Improve customer services through accurate delivery promise. Reduce Out-of-stocks. Improve customer services through accurate delivery promise. Reduce raw material costs by decreasing unplanned purchasing. Reduce time by decreasing unplanned repetitive purchasing. Reduce raw material costs by decreasing unplanned purchasing. Reduce time by decreasing unplanned repetitive purchasing. Reduce uncertain business process procedure. Value creation via the fast response for PO. Reduce errors which occurs by the manual processes and repetitive jobs. Reduce Cycle Time of Purchasing / Manufacturing / Sales. Reduce uncertain business process procedure. Value creation via the fast response for PO. Reduce errors which occurs by the manual processes and repetitive jobs. Reduce Cycle Time of Purchasing / Manufacturing / Sales. Increase customer satisfaction which provides for the location and quality of the products at the proper time. Reduce manual jobs through the analysis of product location and circumstance which customers request. Increase customer satisfaction which provides for the location and quality of the products at the proper time. Reduce manual jobs through the analysis of product location and circumstance which customers request. Increase customer satisfaction which provides for delivery information at the proper time. Increase customer satisfaction through on time delivery of the order. Increase customer satisfaction which provides for delivery information at the proper time. Increase customer satisfaction through on time delivery of the order Collaborative Forecasting Demand Allocation Order Management Product Configuration Logistics Management

17. www.gxs.com Global eXchange Services – Confidential Information LG Siltron Business Process Impact Possible to analyze change history which is requested by customers using database and use analysis of customer’s trend. Customer requests data through the system and operator receives response right away. Customer can verify the result through Web UI by Real Time. Automatic/Real Time processing based on the integrated system which has EAI concept Automatic processing through system to system structure After ImprovementBefore ImprovementIndicators Not possible to maintain statistics /history leaving Forecast & PO data which customer sends in the operator PC by the file format. Maintenance of change history such as Forecast, PO etc Enter data which is requested by customer and verify openness of Customer Satisfaction of FA Request/Analysis On/Off Line parallel processing which needs processing time by operator using FAX or e-Mail Real Time Processing Manual input processing using Fax or e-Mail Level of System Automation Possible to analyze change history which is requested by customers using database and use analysis of customer’s trend. Customer requests data through the system and operator receives response right away. Customer can verify the result through Web UI by Real Time. Automatic/Real Time processing based on the integrated system which has EAI concept. Automatic processing through system to system structure. After ImprovementBefore ImprovementIndicators Not possible to maintain statistics /history leaving Forecast & PO data which customer sends in the operator PC by the file format. Maintenance of change history such as Forecast, PO etc Enter data which is requested by customer and verify openness of data, then inform customers. Customer Satisfaction of FA Request/Analysis On/Off Line parallel processing which needs processing time by operator using FAX or e-Mail. Real Time Processing Manual input processing using Fax or e-Mail. Level of System Automation