Overview Presentation Supply Chain Operations Referencemodel SCOR April

Overview Presentation Supply Chain Operations Reference-model (SCOR) April 1999 - Version 2. 0 1

• The SCC is an independent, not-for-profit, global corporation with membership open to all companies and organizations interested in applying and advancing state-of-the-art supply chain management systems and practices. • Over 800 Company Members • Cross-industry representation • Chapters in Australia/New Zealand, Brazil, Europe, Japan, North America, Southern Africa, and South East Asia with petitions for additional chapters pending. • The Supply-Chain Council (SCC) has developed and endorsed the Supply Chain Operations Reference-model (SCOR) as the crossindustry standard for supply chain management SCOR Overview July 2004 2

What is a process reference model? n Process reference models integrate the well-known concepts of business process reengineering, benchmarking, and process measurement into a crossfunctional framework Business Process Reengineering Capture the “as-is” state of a process and derive the desired “to-be” future state SCOR Overview July 2004 Best Practices Analysis Benchmarking Process Reference Model Capture the “as-is” state of a process and derive the desired “to-be” future state Quantify the operational performance of similar companies and establish internal targets based on “best-inclass” results Characterize the management practices and software solutions that result in “bestin-class” performance 3 Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results Characterize the management practices and software solutions that result in “best-inclass” performance

SCOR is structured around five distinct management processes Plan Deliver Return Suppliers’ Supplier Source Make Return Deliver Return Your Company Source Make Return Source Return Customer Internal or External SCOR Model Building Block Approach Processes Metrics Best Practice SCOR Overview July 2004 Deliver 4 Technology Customer’s Customer

Supply-Chain Operations Reference-model (SCOR) 6. 1 - Processes Plan P 1 Plan Supply Chain Source S 1 Source Stocked Products S 2 Source MTO Products S 3 Source ETO Products P 4 Plan Deliver P 3 Plan Make M 1 Make-to-Stock M 2 Make-to-Order M 3 Engineer-to-Order P 5 Plan Returns Deliver D 1 Deliver Stocked Products D 2 Deliver MTO Products D 3 Deliver ETO Products D 4 Deliver Retail Products Return Deliver Return Source Enable SCOR Overview July 2004 5 Customers Suppliers P 2 Plan Source

SCOR Boundaries n SCOR Spans: • All supplier / customer interactions n Order entry through paid invoice • All physical material transactions n From your supplier’s supplier to your customer’s customer, including equipment, supplies, spare parts, bulk product, software, etc. • All market interactions n From the understanding of aggregate demand to the fulfillment of each order • Returns SCOR Overview July 2004 6

SCOR Project Roadmap Analyze Basis of Competition Configure supply chain Align Performance Levels, Practices, and Systems Operations Strategy • Competitive Performance Requirements • Performance Metrics • Supply Chain Scorecard • Scorecard Gap Analysis • Project Plan Material Flow • AS IS Geographic Map • AS IS Thread Diagram • Design Specifications • TO BE Thread Diagram • TO BE Geographic Map Information and Work Flow Implement supply chain Processes and Systems SCOR Overview July 2004 SCOR Level 1 • AS IS Level 2, 3, and 4 Maps • Disconnects • Design Specifications • TO BE Level 2, 3, and 4 Maps Develop, Test, and Roll Out 7 SCOR Level 2 • Organization • Technology • Process • People SCOR Level 3

Mapping material flow (S 1, D 1) (SR 1, DR 3) Manufacturing Warehouse (S 1, S 2, M 1, D 1) (SR 1, , DR 1) (SR 1, SR 3) Warehouse (S 1, D 1) (SR 1, DR 3) Other Suppliers (D 1) Warehouse (S 1, D 1) (SR 1, DR 3) SCOR Overview July 2004 Warehouse (S 1, D 1) (SR 1, DR 3) Latin American Suppliers (D 1) (SR 1, SR 3) (S 1) (SR 1, SR 3) 8 European Supplier (S 1) (D 2) (SR 1, SR 3) (DR 1)

Mapping the execution processes Americas Distributors S 1 SR 1 European RM Supplier S 2 M 2 D 2 SR 3 S 2 M 1 DR 1 D 1 S 1 SR 1 DR 3 SR 3 S 1 Key Other RM Suppliers S 1 M 1 D 1 RM Suppliers SCOR Overview July 2004 ALPHA 9 Alpha Regional Warehouses Distributors

Identifying Plan Activities P 1 P 1 P 3 P 2 P 4 P 2 European RM Supplier Key Other RM Suppliers S 2 M 2 S 1 M 1 P 4 D 2 D 1 S 2 M 1 D 1 S 1 S 1 RM Suppliers SCOR Overview July 2004 ALPHA 10 Alpha Regional Warehouses Consumer Distributors

Supply Chain Scorecard & Gap Analysis Supply Chain SCORcard Overview Metrics SCOR Level 1 Metrics EXTERNAL Supply Chain Reliability Responsiveness Flexibility Actual Parity Advantage Superior Delivery Performance to Commit Date 50% 85% 90% 95% Fill Rates 63% 94% 96% 98% Perfect Order Fulfillment 0% 85% 90% Order Fulfillment Lead times 35 days 7 days 5 days 3 days INTERNAL $30 M Revenue Key enabler to cost and asset improvements 82 days 55 days 13 days Production Flexibility 45 days 30 days 25 days 20 days 19% 13% 8% Warranty Cost NA NA NA Value Added Employee Productivity NA $156 K $306 K $460 K NA 119 days 55 days 38 days 22 days NA 196 days 80 days 46 days 28 days 2. 2 turns 8 turns 12 turns 19 turns Cash-to-Cash Cycle Time Net Asset Turns (Working Capital) SCOR Overview July 2004 $30 M Revenue 97 days Inventory Days of Supply Assets Value from Improvements Supply Chain Response Time Total SCM Management Cost Performance Versus Competitive Population 11 3% $30 M Indirect Cost $7 M Capital Charge NA

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