QMS + C2K = TSA’s? A Shipper’s Perspective

Microsoft’s View on Transportation Service Providers and Visibility into the Supply Chain

C LIBERJim Patton

E- HOSJim PattonDirector – Global Trade Compliance and PolicyMarch 10, 2010

Microsoft Corporation

• Co-founded in 1975 by Bill Gates, Paul Allen. Now 92,000 employees• Original Mission: “A computer on every desk and in every home,

running Microsoft software.“• With release of Windows 7 in December 2009, Windows finished theWith release of Windows 7 in December 2009, Windows finished the

year with a 92.2 % share in operating systems.• World's largest software company by revenue, with $58.43 billion of

revenue in 2009revenue in 2009.• Now far more than a software company, with MSN, MSNBC, Xbox 360,

WindowsLive and Online Services• In 2008, Standard & Poor‘s upgraded the stock to AAA, the highest

possible rating and only the 5th US company to reach such rating.

Microsoft: Your Potential, Our Passion

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Microsoft Global Trade Organization: Scope

• 60% of sales outside of the US60% of sales outside of the US• Ship to 147 different countries

S l b idi i ti t• Sales subsidiaries on every continent• 4 Regional Operating Centers and Mini-OC’s• Hardware and software shipments employing

all modes of transportp• Third party management of supply chain

activityactivity

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Microsoft Global Trade Organization: Mission

• GTO Mission: Drive access to global marketsGTO Mission: Drive access to global markets and set the standard for world-class trade compliance with breakthrough approaches incompliance with breakthrough approaches in risk management, thought leader engagement and excellence in personalengagement, and excellence in personal leadership.

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Microsoft’s TSA Selection Criteria

• Ability to integrate service provision across supply chain

• Reliability and timeliness of services• Supply chain security• Regulatory compliance standardsg y p• Visibility for MS into goods movement• Performance measurement and data connectivity• Performance measurement and data connectivity• Price competitiveness

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Cargo 2000 Customer Service Aspects

• Provide a range of guaranteed door-to-door, time definite services globally at competitive price levels.

• Deliver as promised against agreed measurable criteria, deliver on-time deliver complete deliver secure contentsdeliver on-time, deliver complete, deliver secure contents, with no loss, damage or pilferage.

• Pro-actively communicate reliable and timely information, y yincluding 24 hour 365 day customer service.

• Simplify procedures industry wide while migrating to l t i t dielectronic trading.

• Ensure accurate billing and total cost transparency between all parties

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between all parties.

TSP Management from Set-up to Operations

TSP Onboarding• Corporate standard

Supply Chain Management• Regular meetings betweenCorporate standard

Transportation Services Agreement, SOW

Regular meetings between service providers and our managers

• Onboarding meetings between regional, corporate and TSP team.

• Data shared between transportation service provider, broker andand TSP team.

• Close coordination between MSFT trade and logistics t TSP’ d b k

provider, broker and importer

• Regular reporting of issues, d l d ith RCAteams, TSP’s and brokers

from onset.• Establishment of data

delays and errors, with RCA and corrective action plans trackedEstablishment of data

sharing standards upfront.

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Compliance/Infrastructure Projects to Meet Needs

C LIBER• Standardizes requirements for supply

chain activity

C LIBER

E- HOS chain activity• Establishes SME oversight of supply

chain management processes

E HOS• SAP back-end enhancements (invoicing and screening)

• Enables reporting and visibility into costs and payments (FCPA compliance, VAT recovery)

I t C li t d d

( g g)• TradeNet Compliance Documentation• Broker/Freight Forwarder Management system

Impacts: Compliance standards, itemized costs, auditable data and reporting, delivery speed

• Robust user interfaceImpacts: Tracking, screening, invoicing, reporting, delivery speed, record keeping,

f t d i t

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awareness of trade requirements

ETHOS Infrastructure: Leveraging MS Solutions

SAP• Cost and shipment delay

reductions

The Backbone- Compliance Screening- Enhanced and flexible

documentation- Electronic Invoices

BackboneBackbone

Brokers +Brokers +C t d ti / VAT

Trade Broker Database- Electronic feeds from

Brokers

Electronic Feeds

OS

OS

Trade DatabaseTrade DatabaseAccess to information and basis for reporting

Brokers + Brokers + Freight ForwardersFreight Forwarders

Electronic Feeds

• Cost reductions / VAT retrieval

Brokers- Data granularity & clarity- Access to data and

reporting enhancements

ETH

OET

HO

TradeNet PortalTradeNet Portal

• Data availability, management reporting, access to training

TradeNet Portal- Portal for all Trade

Information- Access point to product

information

UsersUsers

information- Feeds directly from

backbone for reporting

• Common IT infrastructure Base IT PlatformBase IT PlatformInfrastructure and Management LayerInfrastructure and Management Layer

© Microsoft Corporation, 2007

Uniform Standards, Data Reporting, & AuditCALIBER BROKERAGE MANAGEMENT Tier 1 Tier 2 Approved Brokers OnlyApproved Brokers Only

VendorCustoms

Broker

Broker Data

CALIBER BROKERAGE MANAGEMENT IMPROVEMENTS

Standard data reporting elements mandatory for all brokers and vendors

Standard data reporting elements mandatory for all brokers and vendorsCustoms

Clearance

El t i d i fEl t i d i f

XML

VendorSystems

Broker Systems

CustomsGovernment Agencies

Broker

Trade provides standards andTrade provides standards and

Opportunity to do direct filing to Customs through systemOpportunity to do direct filing to Customs through system

Broker Data

Freight Forwarder

VendorBroker

COO/etc. data from system to DTVsCOO/etc. data from system to DTVs

Electronic order info Transfer between systems

Electronic order info Transfer between systems

standards and conducts audits of brokerage community

standards and conducts audits of brokerage communityCustoms

Gov’t Agencies

__________________________

__________________________

AES Filing

AES__________________________

__________________________

SED Filing

SED

G/L Accounts accommodate Trade elementsG/L Accounts accommodate Trade elements

SAP/GTS Vendors engage a specific broker community whomeet Microsoft Trade Standards and 

d i

ETHOS SYSTEMS IMPROVEMENTS

Direct Filing

(Where appropriate)

Direct Filing

(Where appropriate)

Compliance Trade Management

undergo rigorous training and audit

Broker control…including Broker control…including

Global ProcessGlobal Process

ComplianceIncreased accuracyReal-time updatesData Access and granularity

Planning/Strategic ManagementManage brokerage for compliance and payment accuracyFCPA review

Broker Compliance Manager (GTO)

gvalidation of C-TPAT and

related compliance obligations.

gvalidation of C-TPAT and

related compliance obligations.

GTO

End State: Quality Service Delivery through Visibility and Data Integrations b ty a d ata teg at o

• The quality, visibility and reliability provided by your adoption of C2K standards enables MSFT to accelerate product development and delivery, reducing costs and uncertaintyreducing costs and uncertainty.

• Security and Compliance capacity are minimum thresholds for business with Microsoftthresholds for business with Microsoft.

• Your coming to the table with tracking, reporting and measurement systems ready for integration with ourmeasurement systems ready for integration with our systems = accelerated realization of benefits

• And hence QMS + C2K = TSA’sAnd hence … QMS + C2K TSA s

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QUESTIONS

Jim PattonDirector – Global Trade Compliance and Policy

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james.patton@microsoft.com