1. Let’s Talk Freight Maryann Cassidy Kearns e-Commerce Sales United Parcel Service January 24, 2001

2. 2 Facing a virtual reality?

3. 3 Importance of Fulfillment Christmas 1999…items arrived later than promised- and some didn't arrive at all. It became apparent that E-business success depends more on capable back-end fulfillment systems than on flashy Web sites…” Information Week, September 2000 --Information Week, September 2000

4. 4 A Tradition of Watching Our Customers' Back-Ends Technology vision looks first at the back-end $11 billion investment

5. 5 The UPS Perspective 13 million packages each day Seven percent of US GDP A decade of applying technology to commerce

6. 6 Supplier Manufacturer Distributor Retailer End Consumer Supplier Manufacturer DistributorRetailer End Consumer Information Goods Funds …into pull value chains Supply chains are being transformed...

7. 7 Combining Three Flows of Commerce

8. 8 Characteristics of the new electronic supply chain Customized products and services Global visibility Agile Lightning velocity Managing multiple suppliers seamlessly

9. 9 Integration Throughout the Customer’s Business Process Order Entry Acct Process Inventory Pick, Pack & Ship Returns Internet EDI Phone Fax Mail Customer Service Select Service Rate & Validate Tracking Reference Number Tracking Time in Transit Proof of Delivery Electronic Payment Tracking Service Information Tracing Proof of Delivery Service Availability Interface to Inventory Systems Print Shipping Labels Send Shipping Detail Ship Notice to Facilitate Pmt Send Tracking Number and Package Count to Merchant Initiate Pickup Initiate pickup at customer’s location Verify pickup address Confirm pickup and route notice to merchant

10. 10 Electronic Billing Days Sales Outstanding Cash Flow Direct Integration Inbound and Outbound Real Time Visibility Planning and Forecasting accuracy Integrate transportation into enterprise finance system Tracking POD TNT Improve Customer Service Enhance Corporate Financials Improve Inventory Turns Eliminate Freight Bill Audit Integration = Process Improvement

11. 11 Consumer-Pull Globalization Two Strong Forces Creating Revolution in Commerce

12. 12 Consumer-Pull Globalization Two Strong Forces Creating Revolution in Commerce

13. 13 The UPS View: Drop the "E" in E- Commerce Computers can't cough up packages Technology can combine three commerce flows

14. 14 Applying Technologies For Customer Value Target the right customers Streamline business processes that impact the customer Let customers help themselves Help customers do their jobs

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16. 16 Applying Technologies For Customer Value Target the right customers Streamline business processes that impact the customer Let customers help themselves Help customers do their jobs

17. 17 17% 90% Thousands of Inquiries Electronically Connected Source: UPS CSC Analysis 51% 77% Total Peak Day Customer Inquiries

18. 18 Applying Technologies For Customer Value Target the right customers Streamline business processes that impact the customer Let customers help themselves Help customers do their jobs

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20. 20 Our Customers’ Cost of Tracking a Package: Phone – over $2.50 /occurrence Internet – under $0.10 /occurrence

21. 21 Applying Technologies For Customer Value Target the right customers Streamline business processes that impact the customer Let UPS customers help themselves Help customers do their jobs

22. 22 Ford and UPS Have A Better Idea Track vehicles from factory floor to dealership Reduce costs; improve customer service Manage Ford's transportation system to shorten time to market by 40 percent

23. 23 In Summary... Enabling Commerce Supply Chains are changing rapidly Evaluate all business processes for effectiveness and efficiency...

24. 24 Process Improvement is the Key to Value Creation Strapping New Technology to Old Business Processes Will Negatively Impact Value

25. 25 Questions? “Let’s Talk Freight”