3t Detailed Presentation

Contents

• How we Save Money

• Systems

• Carrier Selection

• Management Reports

What we do…

• 3t take good logistics operations and turn them into a better ones

• We do this through the implementation of a business model which is designed to maximise profitability

• We ensure every component of the operation is using the optimum: process, service provider and automation available

• We enable clients to exploit the next level of sustainable supply chain savings once traditional methods have been exhausted• Greater scope and deeper integration of supply chain

• Harnessing the expertise of the service provider's• We believe there is no single optimum logistics provider

• We translate the efficiencies into real accountable measurements: cost, service, time, carbon footprint.

What we do: Simplify complexity

InternalActivity

Vehicle utilisation: carton, pallet, part load, FTL, parcelMode of Transport: Route, Road, Air, Sea, Specials, expedite, multi modeDisruption: OTIF, returnable packaging, manufacturing issues, KPIsStock levels: inbound and outbound, right place, visibility

ExternalActivity

Customer demands: changing schedules, OTIF Road: Congestion, legislation, fuel increases, environmentalCarrier: Driver shortages, vehicle costs, unbalanced transport routes, exchange rates, international road taxes, regional tariffs

Misalignment

Margin on margin: carrier sub contractingCarrier objectives: make more revenue when you want savingsOverlapping initiatives: IT systems, change management

Cost

Transport operations typically represent between 5-10% of turnover

Every 10% saved is between 0.5 to 1% on the bottom lineThis does not take into account all the non value added issues that effect transport but no systems capture this true cost (30%+)

What 3t offer…

• A solution that to a single company can reduce its transport costs by 10-15%

• A solution that with collaboration can reduce transport cost by 25-30%

• A solution that is environmentally friendly and will reduce a companies carbon footprint

• A solution that aims to put at least 1% on a companies bottom line

How we do it…

• Account Management• Process improvements• Savings initiatives

• Management reports• Visibility of costs• Identification of issues

• Administration• Automation of administration• 100% invoice audit• Faster communication

• Planning• Aligned objectives• Advanced visibility• Load fill calculation

• Rates• Multi carriers• Reduced empty running• Volume leverage• Return loading

5%

10%

15%

20%

25%

Rates

Planning

Administration

ManagementReports

AccountManagement

Savings break down

Our approach?

• We fully understand the demands of your business, the processes and procedures in every detail, we reengineer the process to identify ways in which inefficiency can be driven out

• We choose the right carrier for the right transport request• Initial tender during implementation followed by regular tenders

• Different carriers for different modes and geographies

• We optimise the transport planning using our state of the art transport management system (GCM)

• We provide detailed management reports and a review structure to identify savings opportunities and monitor previous initiatives

Introduction to Global Carrier Manager

• 3t have developed a best in class propriety transport management system

• It has been developed over 9 years to meet the transportation needs of 3t clients

• It fully integrated with clients ERP systems

• Tool for managing the order process, from availability of product to fulfilment of the delivery

• Interface with carriers

• Via Web or full integration – carriers capability

• Interface with Despatch function

• Despatch planning

• Transport pricing and cost allocation

GCM offerings…

• Systems integration• Full integration allows us to automate many costly processes

• Order consolidation• Full loads, regional consolidation and plan reengineering

• Auto planning• Reducing headcount, optimal price, strict rule adherence, knowledge transfer to

system• Carrier communication

• Online POD’s, self billing process, dispute resolution, 48 hour cost agreement, stored rates

• Despatch organisation• Optimal despatch load planning, standard manifests, issue logging

• PODs• 48 hour POD return, customer access to online database, searchable by multiple

fields• Invoice audit

• Complete management of invoice process, accurate accruals, 100% carrier adherence to fast process, accurate data for management reporting

All of the above averagely saves 2-5% of your transport Spend !

Carrier selection

• Choosing the right carrier for every consignment• Price, service, geography and size

• Annual tenders – service provision, relationship management

• Vehicle fill optimisation• Packaging types, stackability, compatibility, parts database

• Transport Planning• Groupage vs full load / multi drop / milk runs

• Rates are agreed for the duration of a year and agreed with carriers we have long standing relationships with. All additional costs are managed and visible.

• If new carriers are sourced, they must go through the 3t audit process.

• If there are long established relationships with carriers that offer competitive prices and service, 3t will continue exploit those relationships for the client.

Carrier selection

• Tailored Invitation to tender for each client• Data profile to encourage best quotes

• Operational profile to ensure service is matched

• Carriers short-listed from 3t database, the customer and local/ regional market research

• Responses analysed against profile of data to ensure best price for the service

• Carrier audits undertaken of carriers not known to customer and / or 3t

• Carrier decision matrix generated including price and service elements

• Further short-listing, negotiation and target tariffs

• Presentation of recommendation to customer and selection

3T is positioned in the middle of your operation

The 4PL system and process is an integral part of our customers operational infrastructure and the transport planners are based and work closely with the customer services and manufacturing planning

Sales Transportation

Manufacturing

Customer Service DespatchTransport Planning

3T GCM

Inventory

Customers ERP

Reporting and systems integration

Management reporting process

KPIreporting

Improvementinitiatives

ExploratoryAnalysis

Tracking &Review

• Monthly Accrual• Cost Summary• Performance mgt

• Cost to Serve• Top 10

winners & losers

• Delivery Diary• Service realignment• Consolidation

• Monthly meeting

• Weekly micro reports

Systems integration

ClientERP system GCM

www.3t-europe.com

THE WEB

www.3t-europe.com

THE WEB

Account Management

ReportingIssue resolutionPerformance mgt

Operations

Order mgtPlanning & bookingIssue managementDay to day control

CustomerPOD searchTracking tracingDespatch scheduleWeb order entry

CarrierLoad manifestsDelivery confirmationSelf billLoading schedule

Collection timesDelivery confirmation

New orders, updates, cancellationsConfirmed despatched quantities

Benefits of integration continued…

1. Our system receives shipment data from the client ERP

2. GCM creates and optimum plan and sends the data back to client ERP for despatch

3. This information is stored in our system and allows us to weight costs against customers

4. Acc managers can generate generic reports which allow them to design tailored savings initiatives for our clients.

Geographical analysis

UK Domestic Deliveries - Summary by Region

RegionDeliveri

esCustomer

PalletsVolume

Std Pallet spaces

Unit measurment Transport CostCost per

Unit

East Anglia 55 1,792 2,884 1,005 913 14,970 £ 16.4

Midlands 182 4,196 5,927 1,987 1,556 29,303 £ 18.8

North 10 241 387 132 90 2,488 £ 27.7

North East 1 12 17 6 3 236 £ 68.7

North West 3 14 18 6 5 181 £ 35.6

South 111 2,612 3,866 1,324 1,006 15,377 £ 15.3

South East 170 4,227 6,314 2,112 1,380 26,582 £ 19.3

South West 76 2,472 3,258 1,105 754 13,834 £ 18.4

DOMESTIC TOTAL 608 15,566 22,671 7,676 5,707 £102,971

Understanding your geographical profile can helps understand your costs and allows us to target regions to reduce cost

Transport summaries

  Q1 2008 Q2 2008 Q3 2008 Q4 2008 Jan-09  

Domestic Freight (inc shunting/ fuel) £336,185 £327,468 £344,235 £319,096 £102,971  

Collection (Returns) £313 £0 £0 £0 £0  

Cost per KSM £23.73 £20.17 £19.42 £18.86 £18.04  

Insurance Costs         £ -  

             

Historical Domestic Freight £345,152 £381,684 £421,596 £413,215 £142,984  

Historical Cost per KSM £24.36 £23.51 £23.78 £24.43 £25.05  

             

Total Deliveries 2,039 1,913 2,016 1,858 608  

Total Pallets 46,364 49,704 52,592 50,218 15,566  

Total Volume 67,275 73,012 78,326 74,030 22,671  

Total Std Pallet Spaces 22,860 24,957 26,679 25,256 7,676  

Total Domestic KSM's Planned 14,169 16,234 17,730 16,916 5,707  

             

Gross Domestic Saving £10,069 £54,217 £77,361 £94,120 £40,013  

Reports break down monthly summaries by domestic, export, fuel costs and pallet returns

Carbon emissions reporting

Destination NameDestination

Country Code

Carbon emissions

Carbon Emissions per pallet

kms per load

Carbon emissions full

load

opt pallets per load

Optimum carbon

emissions per pallet

Inefficiency

Customer 1 GB 5,671 6.08 215

204.90 52.37 3.91 2,024.45

Customer 2 GB 2,262 6.32 151

143.91 53.35 2.70 1,296.72

Customer 3 GB 3,959 3.72 155

147.72 58.45 2.53 1,272.65

Customer 4 GB 1,783 3.22 54

51.46 50.39 1.02 1,218.27

Customer 5 GB 1,946 8.65 180

171.55 50.85 3.37 1,186.53

Customer 6 GB 2,853 4.36 126

120.08 46.28 2.59 1,155.65

Customer 7 GB 5,481 9.06 288

274.48 38.09 7.21 1,121.02

Customer 8 GB 1,639 1.51 51

48.61 59.99 0.81 758.01

Customer 9 BE 3,552 18.48 410

390.75 25.42 15.37 645.39

Customer 10 GB 1,832 2.72 105

100.07 55.18 1.81 609.51

We can put you in a great position to deal with carbon emission taxation that is due to come into place in the next year. Reducing you carbon footprint can

save you money, we can demonstrate that with EU approved formulas

Cost to serve

CustName DestRegion

Shipments

Pln HU Qty

Pln Volume

Pln Area (Unit)

GrossCost Cost per Unit

Customer 1 Midlands 9 170 248.3 51.0 £ 1,281.48 £ 25.11

Customer 2 South 3 34 49.6 13.7 £ 282.23 £ 20.61

Customer 3 Midlands 15 448 643.3 113.3 £ 2,733.52 £ 24.12

Customer 4 South East 3 82 130.4 35.4 £ 578.69 £ 16.35

Customer 5 South 1 10 13.6 2.9 £ 91.43 £ 31.73

Customer 6 South 3 48 72.7 10.0 £ 268.48 £ 26.92

Customer 7 Midlands 17 515 747.3 192.4 £ 2,902.52 £ 15.09

Customer 8 South 28 1188 1509.2 341.2 £ 4,718.40 £ 13.83

Customer 9 Midlands 2 2 2.9 0.8 £ 35.03 £ 41.31

Customer 10 North West 1 2 3.0 0.7 £ 14.75 £ 22.03

Cost to serve reporting allows you to indentify true customer profitability by allocating accurate transport cost to customers

Cost of issues

CusLocCode

Category Desc Reason Desc Issues Deductions Cost Proportion

50015 Customer Late modification to order 1 0 £ 75

50015 Customer Late order 3 0 £ 714

50015 Customer Late order entry 4 0 £ 767

50015 Customer Part Refusal, Customer 2 0 £ 165

50015 IT - Customer Late order 1 0 £ 232

50015 Customer Services Communication 4 1.1 £ 69

50015 Customer Services Customer Services 1 0 £ 40

50015 Customer Services Late modification to order 1 0 £ 27

50015 Customer Services Late order entry 2 0 £ 289

           

Total 49 1.1 £ 8,374

One issue per 13.76 deliveries

Hidden costs to transport can also be identified through the system

Initiatives

• 3t use the data behind the reports to design cost savings initiatives

• The are presented on a monthly basis and are monitored

• At the next meeting, new analysis is prepared to show whether there have been improvements.

• The process then begins again and more initiatives are devised.

• Our gainshare is dependent on lowering your costs

3T is positioned in the middle of your operation

Due to the position of our business being at the heart of yours, we believe we can help choose the most cost effective solution, whilst

maintaining a high service level

Sales Transportation

Manufacturing

Customer Service DespatchTransport Planning

3T GCM

Inventory

Customers ERP

Managing multi plant operations

4

1

5

3

2

• Complex

• No synergy

• Independent

• Minimal visibility

• Little information

3t information flow & control

4

1

4

3

2

• Simple process

• Maximise synergies

• Central control

• Complete visibility

• Management information

1. Data capture and analysis• Transport profile• First stage optimisation

2. Operational overview• Operational constraints• Push / Pull order receipt

3. Carrier tender

4. Process redesign

5. Operational set-up

6. Systems integration

3t implementation stages

0 2 4 6 8 10 12

weeks

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