1. ATC Logistics & Electronics
IS OUT SOURCING THE WAY
TO SUPPLY CHAIN EXCELLENCE?
Prepared For:
LQ SYMPOSIUM
Prepared By:
Bill Conley
President
(817)
November 9, 2006

2. IS OUTSOURCING “THE WAY” ???
Introduction to ATC Logistics & Electronics
Is Outsourcing “The Way” to Supply Chain Excellence
ATCLE Conclusion

3. WHO IS ATCLE ?
ATC Logistics & Electronics Proprietary Information - This slide may not be altered

4. Who We Are Parent Company – ATC Structure NuVinci Logistic Services
Engineered
Products
Drivetrain
Drivetrain Operations
Logistic Services
Electronics
Material Recovery
NuVinci
ATC Logistics & Electronics Proprietary Information - This slide may not be altered
Aftermarket Technology Corp., Downers Grove, IL
Specializes in supply chain management, forward and reverse logistics, electronics repair and remanufacturing, and powertrain, transmission, and engine remanufacturing
3,280 Employees
2005 Revenue: $442 million
Publicly Traded on NASDAQ as ATAC

5. Who We Are
ATCLE - Full Service Value Add Supply Chain Management Company
1. Customers
2. Forward Logistics/New Product Suppliers
Customer / Stores
Web site
Call Center
Advanced Exchange
Returns management
Outbound Fulfillment
Direct to Consumer and Bulk Fulfillment
New and Refurbished
Warehouse and Inventory Management
Kitting and Light Assembly
Outbound Finished Goods
OE quality and specification
Specialized technology
4. Test / Repair / Refurbish
3. Reverse Logistics
Value Added Services
Testing and sorting
Quality inspection
Return product inspection
Packaging
ATCLE Customer Value Proposition
Growth
End-User
Satisfaction
Enhanced
Profits
Supply Chain Velocity
Quality

6. Who We Are
ATCLE Customer Listing by

7. IS OUT SOURCING “THE WAY” TO SUPPLY CHAIN EXCELLENCE
ATC Logistics & Electronics Proprietary Information - This slide may not be altered

8. YES AND NO Is Out Sourcing “THE WAY” To Supply Chain Excellence?
OR more correctly stated: Can you achieve superior supply chain performance, serve your customers, maintain control over costs, maintain expertise over the process, and deliver exceptional results through a service provider and better utilize critical corporate resources for core competencies that improve your competitive position ???
YES AND NO

9. IT ALL STARTS WITH THE CUSTOMER AND THE CUSTOMER’S CUSTOMER
Is Out Sourcing “THE WAY” To Supply Chain Excellence?
IT ALL STARTS WITH THE CUSTOMER
AND THE CUSTOMER’S CUSTOMER
DO YOU REALLY KNOW THEM ?

10. Is Out Sourcing “THE WAY” To Supply Chain Excellence?
THE BASIC QUESTIONS ARE OFTEN LEFT UNANSWERED
Who are they
What do they do best
What is their long term strategy
Where are they located
What do they need
Why do they need it
Why do they buy your product or service
What happens if it does not work
What is the best way to serve them
What keeps them up at night

11. IT IS ABOUT EXPECTATIONS
Is Out Sourcing “THE WAY” To Supply Chain Excellence?
IT IS ABOUT EXPECTATIONS
WHAT DO THE CUSTOMER’S EXPECT ?
HOW DO YOU MANAGE EXPECTATIONS?

12. Is Out Sourcing “THE WAY” To Supply Chain Excellence?
Do Customer Expectations Conflict With Corporate Goals ?
CUSTOMERS
They want it at the lowest cost
They want it tomorrow or soon
They need after sales and service
They expect total visibility to orders
They need information
CORPORATE
Expand market share in new locations
Introduce new products or services
Drive Lean, Continuous Improvement
Lower Costs
Reduce Headcount
Focus on core competencies
Capital for non-core hard to secure
IT resources dedicated to production
Outsourcing Is A Way To Close The Gap Between Customer
Expectations And Corporate Competencies/Resources

13. Is Out Sourcing “THE WAY” To Supply Chain Excellence?
There is a belief that outsourcing can solve the ills of the past
and pave the way to the future
YES
If you have well understood and documented processes
If you have a clear understanding of what you want to accomplish
If you have executive commitment to resources
If you have specific metrics you wish to achieve NO
If you answer NO to any of the items to the left
Many Companies Outsource For All the Wrong Reasons
That May Have Seemed Like The Right Reasons

14. Is Out Sourcing “THE WAY” To Supply Chain Excellence?
REASONS GIVEN TO OUTSOURCE:
Cut Costs
Reduce Capital Expenditures
Upgrade IT
Improve Service Performance
Improve Quality
Reduce Obsolescence
Lower Headcount
The Reasons Will Vary With Each Situation:
Should You Still Outsource To Achieve Excellence?

15. FIRST, DEFINE WHAT IS EXCELLENCE?
Is Out Sourcing “THE WAY” To Supply Chain Excellence?
YES, IF …
FIRST, DEFINE WHAT IS EXCELLENCE?
“THE QUALITY OF BEING EMINENTLY GOOD, FIRST CLASS, SUPERIOR”
Merriam-Webster
Look For Best In Class Performance And
Never Settle for Second Best

16. Is Out Sourcing “THE WAY” To Supply Chain Excellence?
EXCELLENCE IS IN THE EYES OF THE BEHOLDER
Order to Delivery
Dock to Stock
On Time Delivery
Perfect Order
Inventory Turns
First Pass Yield
RMA Order Processing
Cycle Count Accuracy
Return on Assets
Return on Invested Capital
EBIT/EBITDA
You Have To Know What You Want To Achieve

17. Next: List the Services That You Need To Serve Your Customers
Dedicated and Multi-Client Contract Warehousing and Distribution
Logistics and Supply Chain Consulting
E-commerce Order Fulfillment
B2B and B2C deliveries
Inventory management
Collateral distribution
Web store design, hosting, and management
Fulfillment Services
Direct and bulk fulfillment
Turnkey fulfillment solutions
Insurance Replacement Program
Configuration and bundling services
Kit-to-order (KTO) fulfillment
Custom seasonal kitting
Cycle counting
Inspection – over, short, and damaged
Reverse Logistics Programs
Advance exchange
Post exchange
Same unit repair
Cradle-to-grave serial number tracking
Asset recovery
Recall management
Contract Repair Services and Logistics
Repair center management
Test and repair
Services parts support
Billing
Credit line management
Invoicing
Receivable collection
Web-based Reporting
Other Value-Add Services
Testing and sorting
Quality inspection
Return product inspection
Packaging
Procurement Services
Operating supplies
Transportation
Multi-modal and carrier neutral
International (Mexico and Canada)
Same day special delivery courier
Integrated with FedEx and UPS
Next day and two day (air/truck)
ATC Logistics & Electronics Proprietary Information - This slide may not be altered
Call Center
24/7
Credit card transactions
Client specific script

18. Next: Divide And Conquer. Determine What To Outsource and What To Keep
Be Realistic In Expectations, and Evaluations Of Capability
Ensure That There Is Corporate Buy-In And Support
Establish Realistic Project Plans and Road Map To Success
Be Clear From The Start On Roles And Responsibilities
Secure The Proper Resources At All Levels
Be Prepared For Contingencies And Potential Road Blocks
Stay Focused On The Customer And The Goal
Communicate, Communicate, Communicate

19. Finally:Establish Agreed Upon Performance Goals And Make Them Reality
Customer Expectations Are Defined In Quality Metrics
Everyone Is Measured Off The Same Dashboard

20. Conclusion
ATC Logistics & Electronics Proprietary Information - This slide may not be altered

21. Conclusion Features Benefits
Supply Chain Excellence Can Be Achieved By Outsourcing
Features
Best-in-class service and quality
Fully Integrated Turn Key Solution
Full Integration with the customer
Fully integrated with FedEx, UPS, DHL, and the USPS
Experienced responsive operations and transition team
Proven ability to deliver and exceed quality SLAs at high volumes
Option to have returns and test/repair activity co-located
Green friendly programs
Cradle to grave serial number tracking
ISO 9001:2000 certified processes
Carrier and geography neutral
Ability to flex and scale
Benefits
Improved customer experience and satisfaction
Improved control and visibility
Single point of accountability
Compressed turn-around times
Reduced handoffs
Reduction of total stock days on-hand
Reduced risk of obsolescence
Improved velocity of the supply chain

22. Conclusion Supply Chain Excellence Can Be Achieved By Outsourcing
IT ALL DEPENDS ON THE CUSTOMER
AND HOW YOU MANAGE THE EXPECTATIONS

23. ATC Logistics & Electronics
IS OUT SOURCING THE WAY
TO SUPPLY CHAIN EXCELLENCE?
Prepared For:
LQ SYMPOSIUM
Prepared By:
Bill Conley
President
(817)
November 9, 2006