VpCI™ Packaging Solutions Rock Star Global Supply Solutions World Sales Meeting 2009

Rock Star Global Supply Outline What is a Global Supply Chain Solution? What are the difficulties? What is the Opportunity? Global Dreams create local Nightmares! Recent Successes How can you be a Global Supply Rock Star?

What is a Global Supply Chain Solution? Where is a Ford manufactured? John Deere? iPod? Dell? As companies go global, they invite several problems: –Corrosion is more of an issue –While outsourcing alleviates problems, it creates others—quality, consistency A Global Supply Chain Solution should: –Offer a universal solution –Offer the SAME quality and availability anywhere in the world –Be serviced and supported globally in a way that does not compromise cost, service, support or technology –Address the specifying company’s goals, which vary considerably!

Rock Star Difficulties Manufacturers sourcing globally suffer from: 1.Corrosion More likely with international shipments 2.Lead time Many customers ship their suppliers preservation 3.Lack of serviceable quality Who do they call if a problem arises? 4.Multiple specifications (packed, oiled) Impossible to have a single process when multiple methods used 5.Cost shifting Are low cost parts actually cheaper if they require derusting? Who pays for preservation? 6.JIT Effects How much do they need to buy? 7.Lack of discretion on packaging/preservation Can they tell their suppliers how to preserve? 8.Everyone’s problem is nobody’s responsibility

Turn Difficulties into Rock Star Opportunity Cortec and distributor partners are in a unique position to: 1.Deliver the highest quality products 2.Deliver the lowest total cost options 3.Anywhere in the world 4.Serviced locally 5.Global sole-specifications 6.Reduce lead times

Why aren’t we doing it now? Some of us are! But…frequently we’re caught up in: 1.I cannot service [insert “foreign” company] 2.How do I make money when they don’t buy here? 3.Urgent trumps Important 4.Customer politics 5.How? 6.We simply overlook one of our strongest competitive advantages and value-add

Rock Star Dreams Become Local Nightmares Although opportunity exists… 1.It is really, really hard to communicate across the globe 2.How is a “global account” managed by Cortec? a.k.a “Whose account is it?” 3.How do global needs step on local toes?

Points to Consider 1.No distributor anywhere in the world can meet 100% of the demand for Cortec—even in a small market. 2.Cortec CAN produce 100% of any customer or distributor demand for VCI/VpCI, but cannot distribute it. If we are to capitalize on this market together we have to change how we do things. “It’s a synergistic relationship, not an equal one.”

Recent Success: Cameron Valve Customer Situation: CAM dedicated 30% of the floor space to cleaning and staging to remove rust preventative fluids and oils. Customer Goal: CAM wanted to reallocate floor space by demanding clean, dry (and rust free) inbound supply from over 20 suppliers worldwide.

Cameron Continued Trials: Shipments were made with 3 types of VCI. Two passed, including Cortec. Cameron purchased non-Cortec VCI in Oklahoma, waited 5 weeks for receipt, shipped to Taiwan (5 weeks). Non-Cortec VCI supplier could not meet with the supplier.

Cameron Continued Implementation of Cortec Solution: Cortec’s rep and distributor met with CAM in OK. Cortec’s OK rep and distributor coordinated with distribution in China and Taiwan. Within 72 hours, suppliers were contacted by Cortec distribution. JIT established with those suppliers locally from existing and new stock. Cortec’s distributors in Asia supplied notes and made detailed recommendations to their accounts.

Cameron Results End State: In March 2009, CAM’s 6 Sigma for inbound suppliers “trained” all other CAM engineers on the new method of preservation. Cortec then coordinated efforts at 12 suppliers located in USA, Canada, Europe, Asia and India. Orders commenced in April Cameron developing sole specification for Cortec.

Other Successful Implementations Tribotec with Automotive (Sweden, Mexico, USA) Nefab with Telecomm (Asia, Europe, N America) Military Preservation Mothballing in Mongolia Turn-key Service Young Touchstone (USA, Spain) Others?

Discussion & Conclusion The market for global supply chain is big! There are many issues that exist… What suggestions do you have? What questions do you have? Any other success stories or “nightmares?”