1. Innovate or Die, Partner or Perish May 25, 2012 Istanbul, Turkey

2. 2 “OK, you invented the wheel, but what have you done for me lately?” time innovation 8,000 BC3,500 BCC2008 1903 1957 1969 Innovation Curve:

3. Innovation: What Made Long Distance Flying Possible? 3 Jet EnginesGPS EquipmentWide Body Aircraft The Toilet

4. 4 COLLABORATION “Partner or Perish” COLLABORATION “Partner or Perish” INNOVATION “Innovate or Die” INNOVATION “Innovate or Die” EXECUTION STRATEGY

5. 5 AGENDA Strategy Strategy and Innovation Strategy and Collaboration Collaboration Execution 5 Areas Where Innovation Will Occur

6. 6 Strategy Positions Client Intimacy Ops Excellence Low Cost Product Innovation Growth Op Margin ROIC Shareholder Value Average Growth & Margin Rate Client Target Value Proposition Service Delivery Operations

7. 7 0 10 Dell Focus 0 10 IBM Focus 0 10 Apple Focus SvcSalesDistQAMfgSCLProcPD EngR&D Admin SvcSalesDistQAMfgSCLProcPDEngR&D Admin SvcSalesDistQAMfgSCLProcPDEngR&D Admin Spend Varies by Market Position Source: Break Through Bill Davidson Client Intimacy Product Innovation Product Innovation

8. 8 AGENDA Strategy Strategy and Innovation Strategy and Collaboration Collaboration Execution 5 Areas Where Innovation Will Occur

9. 9 Strategy Positions & Innovation: Low Cost—BMW Story This approach to Specialization & Customization delivers for BMW a 20% Operating Ratio Seven Automobiles 325i Sedan M3 325i Sports Wagon Mini Cooper X3 325Ci Convertible 325Ci Coupe Specialization All on 1 Platform Multiple Options Leather VinylCloth Hub caps Aluminum Wheels Chrome Wheels RedGreen Blue Customization With “Plug & Play” Seven Markets Business People Racing Enthusiasts Families with Kids Urban Cowboys Outdoor Enthusiasts Sunshine Lovers Dating Couples

10. UTi Innovation Strategy: Innovation & Cost Management R&D & Innovation Client Requirements 80-90% Configuration Expand Configuration Drive Lower Operating Cost

11. 11 Strategy Positions: Product Innovation Microsoft Integration Word Processing Leader WordPerfect Spreadsheet Leader Lotus 1-2-3 Graphics Leader Harvard Graphics Database Leader Ashton Tate dBase Best of Breed Products How many of these products are left ? Best of Breed Solutions History shows the integrated solution wins (beats the competition), even if the individual products of the integrated suite are weaker than the “best of breed” Microsoft Office

12. Product Innovation: APPLE Adjacent Industry Integration 12 Movies Store ComputingBrowsing Player Apps

13. 13 Busy Exec On-The-Go Cultural Toilet Designer Throne Out House The First Toilet Client Intimacy Innovation: Innovation of a Commodity into a Solution

14. 14 Other 3PLs Do It Yourself Client Intimacy Operations Excellence Low Cost Product Innovation Strategy Positions: Client Intimacy—Spaghetti Dinner

15. 15 AGENDA Strategy Strategy and Innovation Strategy and Collaboration Collaboration Execution 5 Areas Where Innovation Will Occur

16. Partnership: Why Partner? 16 Why Partner? Reduce risk Fill a Gap Speed to market Gain expertise Solve a problem Operate at a lower cost Do it better Easier to get funding Supplier Buyer Why Not? Compete in collaborative networks already Rival each other in an industry Promote competing technologies or infrastructures; Create relationship exclusivity that prevents partners from working effectively with other partners. Share it Borrow It Rent it Lease it Own It Control

17. Control and Flexibility are Often at Odds: Can You Reach Prime with Collaboration 17 Control Flexibility Amount Of Flexibility & Control 100% 0%

18. 18 AGENDA Strategy Strategy and Innovation Strategy and Collaboration Collaboration Execution 5 Areas Where Innovation Will Occur

19. 19 Strategy & Collaboration: ( Cost / Quality (including risk) / Speed Tradeoff) SystemsExpertise Client Fixed Asset Operator Carrier Management Postponement & Distribution Network Optimization Network Design Network Optimization TM Inventory Optimization Postponement Order Management Service levels Risk reduction Experts Continuity / Staffing Pooling Shared Infrastructure Shared Systems Shared Expertise / Verticals Economic Advantage Visibility & Control Relationship Other 3PLs Do It Yourself Government & Regulatory Government & Regulatory Compliance Processes Systems Expertise

20. An Open Business Model (OBM) for Open Innovation (OI) 20 Establish Trust Build Goodwill Create Value Indispensable Dialogue Steps Ensure all internal departments are on board & not competing with the partnership Determine what can be shared Identify legal and anti-trust issues Assess whether the relationship can work Create & hold a similar vision Build & share IP together Determine the process for IP sharing in advance Supplier owns ingredients & technology (solution) Partner owns the application of the IP (smart application) Who gets what of the new monetized solution Communication, commitment, & transparency Explicit knowledge is easy to share but the value comes from tacit knowledge (real time Info sharing) Use a methodology View, Aim, Execute Idea Store Who will do what so each party knows their role By sharing and brainstorming build goodwill (win / win) The enemy is each partners competitors, not each other Has to create commercial value for participants Use project management to implement Need to develop a mindset of “sharing is winning” Need to focus on OI (Open Innovation by Leadership Strategy Partnership Champions Internal experts Customers

21. 21 Execution & Innovation: 5 Things To Focus on in the Future Systems Processes Systems Expertise Client Fixed Asset Operator Customs Expertise Network Design Network Optimization TM Inventory Postponement Order Management Service levels Risk reduction Experts Continuity / Staffing Pooling 1 Relationship Optimization Compliance Carrier Management Postponement & Distribution Network Economic Advantage Visibility & Control

22. 1) Network Design: 80-90% of Supply Chain Cost is Driven by Supply Chain Design 22

23. 23 Execution & Innovation: 5 Things To Focus on in the Future Systems Processes Systems Expertise Client Fixed Asset Operator Customs Expertise Optimization Compliance Network Design Network Optimization TM Inventory Postponement Order Management Service levels Risk reduction Experts Continuity / Staffing Pooling 1 2 Carrier Management Postponement & Distribution Network Relationship

24. 2) Static to Dynamic Execution—How We Do This? 24 Static Historical RFQ RFI Dynamic Execution Real Time Data Optimization Total Cost Key Metric: Purchase Price Variance Key Metric: Cost/Kg How do you get consistency in the cost / kg so you avoid answering the PPV Question? AgilityForecasting VUCA

25. 25 Execution & Innovation: 5 Things To Focus on in the Future Systems Processes Systems Expertise Client Fixed Asset Operator Customs Expertise Network Design Network Optimization TM Inventory Postponement Order Management Service levels Risk reduction Experts Continuity / Staffing Pooling 1 3 Optimization Compliance Carrier Management Postponement & Distribution Network Economic Advantage Visibility & Control Relationship 2

26. Compliance 26 Why Compliance is Important Foreign Corrupt Practice Act (FCPA) Anti-Bribery Laws Entry into new markets Emerging Markets (1 st world solutions) Increased & Changing Regulatory Requirements Increased compliance focus and penalties Why Compliance is Important Foreign Corrupt Practice Act (FCPA) Anti-Bribery Laws Entry into new markets Emerging Markets (1 st world solutions) Increased & Changing Regulatory Requirements Increased compliance focus and penalties What are the RISKS of Non-Compliance? Damage to company image Fines and penalties Sanctions Interruptions or loss of privileges Supply Chain Disruptions What are the RISKS of Non-Compliance? Damage to company image Fines and penalties Sanctions Interruptions or loss of privileges Supply Chain Disruptions What can a Supply Chain Partner do? Minimize Risk Act as buffer Knowledge and training Communication (Global) Processes Controls What can a Supply Chain Partner do? Minimize Risk Act as buffer Knowledge and training Communication (Global) Processes Controls

27. 27 Execution & Innovation: 5 Things To Focus on in the Future Systems Processes Systems Expertise Client Fixed Asset Operator Customs Expertise Network Design Network Optimization TM Inventory Postponement Order Management Service levels Risk reduction Experts Continuity / Staffing Pooling 1 3 Optimization Compliance Carrier Management Postponement & Distribution Network Economic Advantage Visibility & Control Relationship 2 4

28. Data to Knowledge 28 Control Optimization Real time execution SC Design Predictability = Reduce PPV SC disruptions Convergence & Combination

29. 29 Execution & Innovation: 5 Things To Focus on in the Future Systems Processes Systems Expertise Client Fixed Asset Operator Customs Expertise Network Design Network Optimization TM Inventory Postponement Order Management Service levels Risk reduction Experts Continuity / Staffing Pooling 1 5 3 Optimization Compliance Carrier Management Postponement & Distribution Network Economic Advantage Visibility & Control Relationship 2 4

30. Best Practice For ONE Industry Might Not be Innovative in Another Industry 30 "If Ford had kept up with technology like the computer industry has, we would all be driving $25 cars that got 1,000 miles to the gallon." Bill Gates Comdex

31. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #10: For no reason whatsoever, your car would crash......... Twice a day. 31

32. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #9: 32 Every time they repainted & updated the lines in the road, you would have to buy a new car.

33. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #8: 33 Occasionally your car would die on the freeway for no reason. You would have to pull to the side of the road, close all of the windows, shut off the car, restart it, and reopen the windows before you could continue. For some reason you would simply accept this.

34. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #7: 34 Occasionally, executing a maneuver such as a left turn would cause your car to shut down and refuse to restart, in which case you would have to reinstall the engine.!!!!

35. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #6: 35 Macintosh would make a car that was powered by the sun, was reliable, five times as fast and twice as easy to drive - but would run on only five percent of the roads.

36. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #5: 36 The oil, water temperature, and alternator warning lights would all be replaced by a single warning light... “This Car Has Performed An Illegal Operation”

37. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #4: 37 The airbag system would ask 'Are you sure?' before deploying.

38. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #3: 38 Occasionally, for no reason whatsoever, your car would lock you out and refuse to let you in until you simultaneously lifted the door handle, turned the key and grabbed hold of the radio antenna.

39. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #2: 39 Every time a new car was introduced car buyers would have to learn how to drive all over again because none of the controls would operate in the same manner as the old car.

40. If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics: #1: 40 You'd have to press the 'Start' button to turn the engine off.

41. Ford’s Final Comment … when all else fails, you could call 'customer service' in some foreign country and be instructed in some foreign language how to fix your car yourself!!!! 41

42. 42 COLLABORATION “Partner or Perish” COLLABORATION “Partner or Perish” INNOVATION “Innovate or Die” INNOVATION “Innovate or Die” EXECUTION STRATEGY