1. © Copyright E2open, Inc. 2010

2. Agenda Framing the Challenge The Green Context of Supply Chain Operations The Need for a Public/Private Partnership 11 22 33 2 Case Studies and Best Practices 44

3. © Copyright E2open, Inc. 2010 The Need for a Paradigm Shift And Why It Has Not Taken Place Yet! The Imperative The Reality The Question / Dilemma The Question / Dilemma Can Green & Lean Co-Exist? Tell Me How You’ll Measure Me, I Will Tell You How I Will Behave! The Interpretation 3

4. © Copyright E2open, Inc. 2010 Why is Supply Chain Management a Good Starting Point? Source – http://www.eia.doe.gov/emeu/aer/pdf/aer.pdfhttp://www.eia.doe.gov/emeu/aer/pdf/aer.pdf

5. © Copyright E2open, Inc. 2010 Unfortunately, the Green SCM Revolution Remains Elusive Fortune 500 22 # of Fortune 500 companies that have initiated some Green SCM strategy # of Fortune 500 companies that have approached this with their trading partners 0 J ANUARY 2010 5

6. © Copyright E2open, Inc. 2010 Achieving this Paradigm Shift Requires a Perception Change of CO 2 as a Decision Variable DefectsInventoryWaitingExcess Motion Over ProductionOver ProcessingTransportation CO 2 / GHG 1234 567 88 Carbon in the Business Environment Needs to be De-Mystified Introducing Carbon as the 8 th Muda 6

7. © Copyright E2open, Inc. 2010 There Are Some Good Signs

8. © Copyright E2open, Inc. 2010 Agenda Framing the Challenge The Green Context of Supply Chain Operations The Need for a Public/Private Partnership 11 22 33 8 Case Studies and Best Practices 44

9. © Copyright E2open, Inc. 2010 Where is the Carbon in the Supply Chain? 9 Everywhere! Supply Chain activities create significant carbon emissions, making supply chain an important focus for clients seeking to reduce their carbon footprint Suppliers & Manufacturers Customers & Channels Design for the Environment Carbon footprint thinking throughout product lifecycle design Design for the Environment Carbon footprint thinking throughout product lifecycle design How can the total network be optimized considering service, cost, “green” tradeoffs What CO2 impact is there from various inventory concepts & planning methodologies How can the total network be optimized considering service, cost, “green” tradeoffs What CO2 impact is there from various inventory concepts & planning methodologies How can we best measure a supplier’s carbon impact (product, packaging, upstream logistics) and ultimately compliance with carbon reduction requirement? How should we evaluate carbon offsets? How can we best measure a supplier’s carbon impact (product, packaging, upstream logistics) and ultimately compliance with carbon reduction requirement? How should we evaluate carbon offsets? What operations strategy (facility location, operating model) provides the best trade-off between cost, service, carbon? Is there a role for sustainable factory / facility mgmt? What operations strategy (facility location, operating model) provides the best trade-off between cost, service, carbon? Is there a role for sustainable factory / facility mgmt? What distribution network strategy (facility locations, sizes, transport modes) provides the best tradeoff of cost, service and carbon? How can packaging be reduced and recycled? What distribution network strategy (facility locations, sizes, transport modes) provides the best tradeoff of cost, service and carbon? How can packaging be reduced and recycled? How can field service operations reduce carbon footprint with better routing and parts inventory tracking? Feedback loop to engineering to reduce impact Various strategies to reduce impact throughout lifecycle How can field service operations reduce carbon footprint with better routing and parts inventory tracking? Feedback loop to engineering to reduce impact Various strategies to reduce impact throughout lifecycle Flows: Product, Process, Information, Cash SC Strategy ProcurementProcurementLogisticsLogistics Integrated Ops PlanPlanSourceSourceMakeMakeDeliverDeliverDesignDesign Service & End-of-Life Asset Management Finance Sustainable facilities management: Green building & renewable energy; carbon footprint asset management; Asset utilization (Real-time data on energy usage; Carbon dashboard) Paperwork Reduction; Environmental Cost Accounting; Environmental Tax Benefits Tracking PLMPLM

10. © Copyright E2open, Inc. 2010 Carbon Distribution Model Carbon Analysis needs to be seen from a total Product Lifecycle View 10 Design & Sourcing Inbound Logistics Internal Operations Outbound Logistics Service and Use SCM Carbon Distribution Model Phased Product Lifecycle View Our goal can be formulated rather simply: Lower the Outer Edge

11. © Copyright E2open, Inc. 2010 Sustainable Supplier Strategy Development Volume Distance Carbon Impact Unit Cost Mexico ChinaAs-IsTo-Be New “Green” Value Equation = Actual Cost (Production + Transportation) + Corresponding Carbon Cost ABC, Inc Classic Value Equation = Least Production Cost despite the Transportation Cost ABC 11

12. © Copyright E2open, Inc. 2010 The Need to Embrace Carbon as a New Decision Variable

13. © Copyright E2open, Inc. 2010 The 3 Primary Supply Chain Variables …taken from a Green Perspective 13 John D.C. Little Institute Professor I Inventory I Inventory L Lead-Time L Lead-Time T Throughput T Throughput Suppliers Customers Lead Time T T Raw Materials Component Suppliers EMS Partners OEM’s / Brand Owners Warehouse(s) Retailers Your Company Cost and Environmental concerns are likely to create a trend for “supply chain collapsing / localization” Incentives need to be put in place to encourage creation of local and sustainable supply chain networks Observations

14. © Copyright E2open, Inc. 2010 A Value Chain Network View Carbon Reduction Needs to be a Value Chain Affair Prevailing View Our View Leverage +– What is a fabless company Carbon Footprint? What is its environmental responsibility? 14

15. © Copyright E2open, Inc. 2010 Noise in the Supply Chain is Neither Lean nor Green The Carbon Reverse Bullwhip Effect Extended Supply Chain View End Customers Suppliers Retailers Plants Caron Buildup Process Classic Bullwhip Effect True Customer Demand Inventory Produced Amount of Inventory Inefficiencies Carbon Produced Amount of Carbon Inefficiencies 15

16. © Copyright E2open, Inc. 2010 Value of a Network Approach BOM Analysis Tier2+ Partner Selection Channel / Distribution Reverse Operations Supply Substitutable components Sourcing choices Location choices Inventory policy Safety stocks Lot sizes Replenishment VMI/VMR Packaging Package size options Package recycling options Corrugated box Energy Embodied Energy GHG Regulatory $ Impact Transportation Modes Shipment frequency Load consolidation Carrier routing Processing Manufacturing process Quality control Processing Repair / refurbishment process Shipment process Quality control Processing Order fulfillment Shipment process QC process Organizational management process

17. © Copyright E2open, Inc. 2010 Provide performance KPI’s to customers Associate compliance to Orders & Inventory Automate Compliance Data Collection Sustainability & SC Integration Implementing a Network Solution 17

18. © Copyright E2open, Inc. 2010 Agenda Framing the Challenge The Green Context of Supply Chain Operations The Need for a Public/Private Partnership 11 22 33 18 Case Studies and Best Practices 44

19. © Copyright E2open, Inc. 2010 The Need for a Public / Private Sectors Partnership Regulatory Setups Under Consideration Your Company 3PL / 4PL Customer Tier 1 Supplier (e.g. CM, EMS) Tier 1 Supplier (e.g. CM, EMS) Tier 2 Supplier (Components) Tier 2 Supplier (Components) 4 Scenarios Supply Chain Generated Carbon Footprint Penalty Zone CO 2 Strict Cap Supply Chain Carbon Quota Tax Zone CO 2 ABC, Inc. Actual ABC, Inc. Quota ABC, Inc. CO 2 Savings XYZ, Inc. Quota XYZ, Inc. Actual XYZ, Inc. Excess CO 2 Trade Transaction XYZ, Inc. Quota XYZ, Inc. Actual XYZ, Inc. Excess CO 2 A – Strict CapB – Carbon TaxC – Cap & TradeD – CO 2 Offsets

20. © Copyright E2open, Inc. 2010 Some of the Key Questions that Need a Global Approach CCXCCX ECXECX APAP OCEOCE Observation # 1 Proliferation of CO 2 trading platforms will delay properly tackling the problem Carbon trading should be approached as a global commodity Observation # 2 Local and Regional Models need to be encouraged (less carbon footprint and less inventory as a result of reduced lead times) Local Model Regional Model Global Model

21. © Copyright E2open, Inc. 2010 Agenda Framing the Challenge The Green Context of Supply Chain Operations The Need for a Public/Private Partnership 11 22 33 21 Case Studies and Best Practices 44

22. © Copyright E2open, Inc. 2010 Epson’s Green Factory 2010 Project will reduce production energy consumption through scalable minimum Fabs Sharp will upgrade all their plants into green factories via their 10-step green factory concept Panasonic aims for zero emission clean factories Ricoh will reduce CO 2 emissions by 12%, far exceeding the pace agreed to in the Kyoto Protocol Fujitsu’s Green Policy 21 Themes include: Green Factory, Green Management, Green Products, Green Solutions, Green Earth Mitsubishi Electric uses their procurement and green factory policies to make a clear difference on the environment by eliminating the use of hazardous substances through the product lifecycle Canon has established an eco-factory certification system and is expanding this globally Top 5 Basic Sustainability Categories for Manufacturers: ● Material selection ● Sourcing policies ● Resource consumption and emissions ● End-of-life postponement and management ● Customer demand and fulfillment Source: “Making Sustainability Real”, IDC Company #MI211085, March 2008 Several Leading Japanese Companies seem to be taking the Green Challenge quite seriously 22

23. © Copyright E2open, Inc. 2010 Carbon labeling (Tesco, Timberland, Patagonia, Coca-Cola, Walkers, Coors, Wal-Mart) Standardization Will be a Key Enabler But Challenges Remain…

24. © Copyright E2open, Inc. 2010 Concurrently, Software Solutions are Starting to Be Developed – for Both Monitoring & Optimization

25. © Copyright E2open, Inc. 2010 12 Ideas to Make Your Supply Chain Greener 25

26. © Copyright E2open, Inc. 2010 Exploring the Ideas Redesign the productReconfigure ManufacturingShift to Green Suppliers Shorten Distances Alter service-level agreementsShrink packaging 26

27. © Copyright E2open, Inc. 2010 Exploring the Ideas (continued) Plan for reverse supply chain activityConsolidate shipmentsPlan smaller routes Start now: define a green strategyTake a life-cycle viewCoordinate with partners 27

28. © Copyright E2open, Inc. 2010 Network Optimization Strategy Market DemandPotential DC Locations Classic Optimization Approach Minimize Total Cost – select DC’s so as to minimize the total DC and transportation costs of meeting demands Green Optimization Approach Minimize CO 2 Emissions – objective function changes from minimization of total cost to minimization of total CO 2 emissions (equivalently, total miles traveled) Demand VolumeDC Location Vs. 28

29. © Copyright E2open, Inc. 2010 Case Study – Network Optimization Concurrently pursuing ‘Lean’ & ‘Green’ Objectives 100 DC’s 40 DC’s Logistics $’s CO 2 Emissions 29

30. © Copyright E2open, Inc. 2010 About the Presenter 30 Mondher Ben-Hamida, CPIM, CSCP Vice President – Strategy E2open (www.e2open.com)www.e2open.com EducationEducation 1997 1995 Master of Science in Industrial Engineering and Operations Research, University of Minnesota, Minneapolis, MN, USA. Master of Engineering in Industrial Engineering, ENIT, Tunis, Tunisia LanguagesLanguages English French Italian Arabic Fluent SpecializationSpecialization Supply Chain Strategy Global Issues in SCM Enterprise Sustainability Advanced Planning Tools Experience Overview Mondher is an Industrial Engineer and a Global Supply Chain Strategist with over 14 years of global management and manufacturing consulting experience. Primary focus has been the design and implementation of Supply Chain Management strategies and tools, Advanced Planning and Scheduling solutions and Theory-Of-Constraints initiatives. Mondher is a frequent speaker at various supply chain events (APICS, SCC, AMR, etc.) and has published a number of articles on various topics ranging from supply chain strategy to reducing the environmental impact of logistics operations. He is also a co-inventor of a supply chain carbon modeling tool (patent pending). Mondher is a universal citizen and his passion for solving global supply chain problems along with his fluency in 4 languages has led him to operate in five continents Sample Engagements Helped a leading Fortune 500 with its first Green Logistics strategic initiative which led to the development of a carbon modeling software Helped one of the world’s largest fabless companies (wireless phone chip segment) define and implement a comprehensive supply chain collaboration model (VMI, Consignment and Schedule Sharing) with three of its most strategic customers on 3 continents. Led a major supply chain strategy definition for one of Europe’s largest industrial conglomerates. Activities included assessing state of current operations model, compiling and documenting appropriate best practices and devising a novel supply chain vision that is customer centric (secured agreement on a new market segmentation) and emphasizes the agreed upon core competency (fulfillment). Led a major supply chain strategy redesign effort at a leading QSR company. This executive level initiative assessed competitive trends and provided a global vision for the future supply chain integration model along with a ‘playbook’ of practical steps to achieve the vision Served as the Make Best Practices Lead and co-author of SCOR 7.0