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PWlI – APLL Strategic Drivers

Three Strategic DriversVISIBILITYSCALEORGANIZATIONOutcome:Enable Emerson and APLL to consistently optimize decision makingLower transportation costs and reduced cycle timeLong term partnership and knowledge gain creates efficiency, innovation, flexibility and faster response timesHow?:Data AggregationProcess ManagementCommunicationExpanded SCCEnhanced PricingEnhance NetworkFully allocated teamProgram ManagementFlat, Cross Functional Structure

High Level View Services Actions Analysis Consolidation

Create Logistics Procedure (LP)Identify the divisions to be involvedDeconsolidationCreate deconsolidation hub optionsIdentify traffic patternDistributionConvert LTL into FTLIdentify distribution destinationsCHBReduce number of brokersDetermine how the brokers are deployedFreight AnalysisFocus on ocean importsOcean contract managementIdentify ocean lanesFull container pricingApply full container ratesFCL volume/rate infoLess than container pricingCBM PricingMimic FCL modelAccount ManagementTwo levels of management plannedAssess account management structure

APLL Proposal Outlined

Action PlanDetail the project teamDefine the scope of the projectOutline the first 100 daysIdentify new opportunities to optimize the programReview ocean transportation managemenpricingPresent destination cross dock and delivery optionsPresent customs brokerage recommendations

Expand Current Program

Drive more freight through the consolidation networkMulti country consolidation (MCC)Single country consolidation (SCC)Less than container shipmentsFocus on managing the area of greatest impact.Asia to North AmericaAsia to EuropeTarget divisions to participateDesign LP template to apply to the new divisionsBegin mapping Purchase orders (850’s) into APLL operating system (ACS123)

APLL Proposal Outlined

Action PlanDetail the project teamDefine the scope of the projectOutline the first 100 daysIdentify new opportunities to optimize the programReview ocean transportation managemenpricingPresent destination cross dock and delivery optionsPresent customs brokerage recommendations

Expand Current Program

Drive more freight through the consolidation networkMulti country consolidation (MCC)Single country consolidation (SCC)Less than container shipmentsFocus on managing the area of greatest impact.Asia to North AmericaAsia to EuropeTarget divisions to participateDesign LP template to apply to the new divisionsBegin mapping Purchase orders (850’s) into APLL operating system (ACS123)

PWlIt Chart: 100 Day Plan

Primary focus is to maximize SCC shipments
First 100 daysPrimary focus is to maximize SCC shipmentsOptimize loadability of the containerTarget consolidating freight into 40’ containersTarget utilization 48 cubic meters or 40,000#’sUse the less than container program as a value addMinimize dwell timeContinue the MCC program as neededExample: Philippines and Taiwan

Identify New Opportunities

Identify new areas to reduce cost Could result from divisional meetings International freight that was not previously identified Convert air freight to ocean freight Determine new ways to reduce cost Optimize distribution/cross dock locations Review the options and benefits with Implementing the changes

PWlIt Chart: 100 Day Plan

Primary focus is to maximize SCC shipments
First 100 daysPrimary focus is to maximize SCC shipmentsOptimize loadability of the containerTarget consolidating freight into 40’ containersTarget utilization 48 cubic meters or 40,000#’sUse the less than container program as a value addMinimize dwell timeContinue the MCC program as neededExample: Philippines and Taiwan

Identify New Opportunities

Identify new areas to reduce cost Could result from divisional meetings International freight that was not previously identified Convert air freight to ocean freight Determine new ways to reduce cost Optimize distribution/cross dock locations Review the options and benefits with Implementing the changes

Review Of PWLi Ocean Contracts

Reviewed the ocean contract information provided by PwLi Reviewed the port pairings and volumes provided Compared Emerson contracts with APLL carrier contracts

Analysis of Data Provided

Sample Data SummarySize 20’ 40’ 40HC 45’
UnitsTier 1 Tier 2 Emerson ocean spend $2,638, $2,638,666 APLL contract rates $2,576, $2,379,293
Immediate Savings $62, $259,372 Percentage 

Observations:Good potential to reduce the number of 20’ containersIncrease savings by APLL negotiating future Tier 2 contracts

Full Container Pricing Develop Predictable CBM Pricing

Consolidation and ocean freight combinedPrice by lane – container freight station to distribution center doorQuicker transit than MCCLoadability variablesHeavy weight commoditiesService and transit requirementsDivision specific packaging Proposed FeesTarget average rate of $88 per cbm/rev. ton for consolidated shipmentsSingle Country Consolidation$2.00 cbm/RT for all origins currently in the program$4.00 North and central China$3.50 India$3.50 Japan$60 Factory Loads GloballyMulti Country Consolidation (to be phased out)$12.00 cbm/RTSee ChangeTransactional Fee .70/cbmMapping is an additional charge$4000 per division for standard EDI mappings$5000 per division for Flat File or non standard format

Cubic Meter Pricing – Overflow

Destination Cross Dock and Delivery

Continue to cross dock in Carlsbad and SouthavenPropose improved cross docking strategyFirst priority is to shift Carlsbad to LA (Torrance)Add additional cross dock destinationsNeed better understanding of volumes to destinations for best pricing

Straight transload into LTL truck No storage included

LiebertStraight transload into LTL truckNo storage includedRe-evaluate rates for programs involving sortation

COMMUNITY

Supporting Our Global & Local Communities

AT PWLI WE BELIEVE THAT WE OUR HARD WORK AND SUCCESS SHOULD REFLECT BACK ON THE COMMUNITIES THAT WE OPERATE IN.
Which is why we go out of our way to reduce our impact on the environment as well as contribute back to worthy charities in a variety of ways.

Taking Social Responsibility Beyond The Norm

Working with our employees and matching their contributions, we make regular donations to a number of local, national, and global charitable organizations including:

• African relief agencies
– offering palliative and respite care services for sick children and their families in Ontario