1. THE IMPACT OF TECHNOLOGY IN THE PROCESS INDUSTRIES 2002 OSIsoft User’s Conference March 13, 2002 Monterey, California Millennium Chemicals Inc. Roy Lyford-Pike Vice President - IT & CIO

2. Millennium Chemicals Inc. 2 MILLENNIUM CHEMICALS IN BRIEF Position Share TiO 2 2 in the world16% 2 in the US23% Acetyls2 in the US19% Terpene-based fragrance chemicals1 in the worldn/a Equistar* Ethylene 1 in the US17% Polyethylene2 in the US15% * 29.5% owned

3. Millennium Chemicals Inc. 3 A GLOBAL COMPANY Baltimore, MD Perth/ Bunbury, WA Bahia Paraiba Ashtabula, OH Thann LeHavre Stallingborough Jacksonville, FL Houston, TX Shanghai

4. Millennium Chemicals Inc. 4 Millennium Chemicals’ Vision E-Business Vision Growth Cost Contain- ment Create value by linking enterprises and supply chains in a new collaborative business model that adds value to our customers and ourselves E-BUSINESS Helps Drive The Vision Working Capital Utilization Improve EVA ®

5. Millennium Chemicals Inc. 5 E-BUSINESS VISION To create value by linking enterprises and supply chains in a new collaborative business model that adds value to our customers and ourselves Transformation Cost reduction Growth

6. Millennium Chemicals Inc. 6 TRANSFORMATION LED BY IT Let’s look at where we came from to see where we are going -evolution of IT -old business model -new business model -characteristics of virtual enterprises -infrastructure issues

7. Millennium Chemicals Inc. 7 USE OF IT IN BUSINESS 1960’s to 1970’s: -emphasis on data processing -operating on mainframes -aimed at functional requirements -Material Requirements Planning (MRP) -linear, batch processing -user written

8. Millennium Chemicals Inc. 8 USE OF IT IN BUSINESS (cont’d) 1980’s: -MRP II considered capacity and resource constrains -manufacturing centric -purchased specialized programs -online aimed at functional requirements -still mainframe based, w/ network PC’s -emphasis on business applications

9. Millennium Chemicals Inc. 9 USE OF IT IN BUSINESS (cont’d) 1990’s: -Enterprise Resource Planning (ERP) packaged systems -single, real-time interface -integrated systems with reengineered processes -driven by globalization -client/server architecture -with point-to-point EDI

10. Millennium Chemicals Inc. 10 USE OF IT IN BUSINESS 2000’s: -ERP Adv Planning Supply Chain integration -real-time web-enabled interface to transactional and plant systems (OSIsoft PI) -enterprise linking and collaboration -driven by need for speed and agility -connect one-to-many and many-to-one -arrival of e-commerce and the virtual enterprise

11. Millennium Chemicals Inc. 11 BUSINESS TRANSFORMATION: Old model Suppliers Customers Sales Warehouse Distribution Company A MFG Assy R&D Engineering IT Infrastructure Supply Chain Mat’l Info Mat’l Info

12. Millennium Chemicals Inc. 12 Sales Whse Assy Distrib BUSINESS TRANSFORMATION: New model for Virtual Enterprise Value Chain Customers R&D Eng Suppliers MFG Assy Market Place Sales IT Co. E Co. A Co. B Co. D Co. C Mat’l Info

13. Millennium Chemicals Inc. 13 VIRTUAL ENTERPRISE Partner companies behave as one Information flows through Internet Driven by need for speed, cost reduction Give up competencies, people, assets, infrastructure From inter-enterprise to inter-value connections Information flows seamlessly between companies

14. Millennium Chemicals Inc. 14 WHAT’S NEEDED FOR VIRTUAL ENTERPRISES TO SUCCEED? Enabling infrastructure Agile, robust, e-business architecture Service level agreements

15. Millennium Chemicals Inc. 15 ENABLING INFRASTRUCTURE Be open for business 24x7x365 Rapid response to any and all Provide secure environment for transactions and data transfer Link to extended enterprise Protect customer privacy Make it scalable to be cost effective

16. Millennium Chemicals Inc. 16 AGILE, ROBUST E-COMMERCE ARCHITECTURE Access to workflow depends on user profile Tasks and workflow configured dynamically Governed by business rules Need multiple player access to corporate ERP and plant systems ( OSIsoft PI is our standard ) Framework must allow fast upgrades

17. Millennium Chemicals Inc. 17 SERVICE LEVEL AGREEMENTS Needed to define business network performance -communications protocols -data exchange formats -response times -management of change -problem resolution -measurement

18. Millennium Chemicals Inc. 18 TWO BIG QUESTIONS Who “owns” the extended business process? (i.e who will keep it all together?) How to share gains when one part of the chain incurs the costs and the other reaps the benefits?

19. Millennium Chemicals Inc.